Grubstakers - Episode 161 Unlocked: Sandy Weill and Citigroup (Part 2)

Episode Date: May 5, 2020

Part 2 of our profile on Sanford I Weill and his role at Citigroup we will take a longer look at Citi group in our last part of this trilogy. This episode covers Sandy Weill’s children and their misdeeds into falling upward in a no consequence system. The tarnished relationship between sandy and his former protégé Jamie Dimon and we close out the episode with the end of Glass-Steagall Act. The primary source for this episode was the biography "Tearing down the Walls" by Monica Langley: www.barnesandnoble.com/w/tearing-dow…ey/1023673999

It's the kind of thing that makes the average citizen puke. I look at this system and say, yeah, you know, what's going on? I don't know anything about this man except I've read bad stuff about him. And I don't like, you know, I don't like what I read about him. We are more than just one coin. We create the world around this coin. Cop. Invention. Cop. Cop. In 5, 4, 3, two, the evil has gone.

Hello, welcome to Grubstakers, the podcast about billionaires. This is the premium side, and this is part two of our episode about Citigroup and its billionaire former CEO, Sandy Weil. I'm Sean P. McCarthy, joined here by my co-hosts. Steve Jeffers. Yogi Paywall. And so we're going to kind of pick up the biography of Sandy Weil from where we left off in part one, just to kind of bring you up to speed, refresh your memory. Sandy Weil was, you know, kicked out of American Express. He went and he bought up a loan sharking business in Baltimore.

This was called Commercial Credit. He took over Commercial credit in 1986. We went through all the different cost cutting that he put into effect, such as dumping out the coffee pots and throwing the Wall Street Journal subscriptions out the window and, you know, slashing the medical benefits, raiding $50 million from the pension fund. You know, all those kinds of things you need to be a business genius and on the cover of Fortune magazine. But yeah, so like he raids commercial credit and his slashing all these expenses to the bone works pretty well. And he also, like we also mentioned, he starts introducing all these other

variable rate loan products and he's making a good business on the retail lending market where you know these kind of blue-collar workers who can't always get a loan at a traditional bank they walk into his offices and he's got his team and he's teaching them hey you got to cross sell them on a million different products and you know this is a loan sharking 101 you just get your teeth into them and you keep it going forever so by by 1987, this company is profitable and the stock is up and he's doing very well. And basically what happens is in 1987, there's the massive Black Monday crash, the largest crash in a single day in the history of the stock market. And this is a good buying opportunity for him because commercial credit puts Sandy Weil in

the position where he has the liquidity to wait until the market goes bad for other people and then start snapping up other companies similar to carl icon buying a lot of oil right now as it's been crashing for the last handful of weeks oh i didn't know icons been buying oil yeah i saw that in the news recently and i was like oh icons on into oil well isn't this a mighty interesting that basically tells you like yeah he talked to somebody in the trump administration who was like we're gonna bail this out next week so yeah we'll we'll try to get this out this episode out fast so our listeners can buy oil on the stock tip we've just given you i i was looking at research on jamie diamond and sandy wheel and they have a

bitter feud and in that article it talked about how bill ackman and carl icon have buried their hatchet and what that means that's how i got stuck into looking at carl icon buying oil stocks right now but i mean you know the system is rigged and the people within the network know how to rig it for themselves yeah oh this is oil stocks and not oil itself. Okay. Yes. Yeah, yeah. Sorry if I didn't make that clear.

I was going to say it might be, it's actually, they'll give you a dollar or two to buy an oil barrel future. I hope they do. I hope they give me more than that. Well, at least they did. You might have missed out on actually being paid to take oil carl icon has been stashing oil barrels in his fourth and fifth bedrooms uh but so you know and so we'll kind of run through the sandy wild biography we'll uh see how much we get through in this part and then probably the part three will focus more on city

group the company itself uh dealing with the 2008 financial crisis and the current coronavirus crisis. But, you know, so when we're talking about Sandy Weil and Citigroup, we're going through these moves, and this is all leading towards him taking over a company called Travelers Insurance, merging it with Citibank, and creating Citigroup. So we'll kind of go without too much detail through the process of him getting there and changing the banking system forever. But commercial credit, this company was the springboard. And then in 1987, the stock market crashes and he starts buying up more things and incorporating them into his empire. And sorry i should just say again my source for

the biography here is the book tearing down the walls by monica langley but the stock market crash comes he buys up a company called gulf insurance um and then he buys up a brokerage called smith barney incorporated uh its parent company was called uh pre-america like pre-america or something p-r-i-m-e-r-i-c-a it's interesting how i like remember all of these companies but for like the weirdest reasons like i feel like travelers insurance logo was like a red umbrella or something like that right it was like pre-america i remember seeing them on like nysc coverage and like it you And I just presume those companies went under for whatever reason. But you go into a handful of billionaire bios and live stories, and it becomes pretty obvious that a good chunk of them just get bought and merged into something else.

Very private equity-esque. Well, it's like travelers in America, they end up getting bought and merged into larger companies. Their branding is still, I don't know what it was about, like 90s TV or something, but the branding seemed to have stuck in people's minds. but Traveler's Insurance, Yogi mentioned the red umbrella. The red umbrella is like a historic symbol. It was more than 100 years old, I think 130 years old at the time he buys Traveler's Insurance. It's so associated with the red umbrella. So what they do is, you know, when they merge with Citibank and they become Citigroup, this new massive criminal fraud scheme

takes the red umbrella. And we're like, hey, we're the mafia, but we have a very nice icon that you associate with your childhood and a trustworthy insurance salesman up the street and not only that after 9-11 actually city group uh i think a year or two after spins off travelers insurance but they keep the red umbrella wow so they're like you can be your own but we're taking your 130 years of trust in history because you know that's the whole thing with symbols and they even talk about this in the monica langley book you can essentially buy trust by just buying a company that has a 100 or 50 year

whatever reputation and buying its symbol and putting that on your shit and people assume oh well this must be the same trustworthy long-standing brand when it's not at all yeah the land of lakes butter removed their native american woman from their brand but they added like established over 100 years ago onto the labeling which i found you know whenever some company has a racist symbol i presume they're old so the fact that they were like well they want to let you know we're still pretty old it was very interesting to me yeah the uh land of lakes native american butter woman had uh had to leave because she got into harvard law school she was elected senator from massachusetts so she had to step down from her position at land of

lakes i thought she was protesting another pipeline. We got to get her off the butter. That would be great. They should add a pipeline to the Land of Lakes butter. They do it in stages. So there's like protesters, and then you see like people being sprayed with fire hoses, and then there's a pipeline on the butter.

It's in like the background. The water slowly starts becoming murkier and murkier as time goes on this is south dakota what happened to this water uh that native american woman stopped kneeling in front of it and guess what they took over couples like getting into arguments like this butter is burning my eyes did you buy the tear gas flavor again but uh so sandy while uh we we mentioned so in the late 80s he's going on this buying spree after the stock market goes down again he buys um uh pre-america he buys smith barney as a brokerage he buys an insurance company called al williams and just quoting from the monica langley book here having all these different companies gives gave him entry to every stratum of the american economy commercial credit catered to

blue-collar workers hard-pressed for other sources of money al williams sold insurance aimed squarely at the middle class smith barney offered brokerage and money management service to the wealthy while also providing investment banking services for companies seeking to raise capital or do mergers and acquisitions so and that's the entire idea where he puts all these different companies together and suddenly he has a conglomerate that's aimed at all these different sectors and strata of the american economy so this very quickly becomes a machine for printing money. And, you know, this is the 80s. This is corporate consolidation.

This is the government is not going to step in and hassle you if you are suppressing unions or anything. So this is a great time for him to be doing it. And these are billion-dollar acquisitions. Like in 87, or in 88, he paid $1.5 billion for Preamerica. And in 89, he acquired Drexel Burnham. Like, you know, hundreds of millions of dollars are being moved when he's merging these companies together. Right. And, you know, for any listeners who haven't checked out our Michael Milken episode, that'll give you the full history of Drexel Burnham Lampart, which, as Yogi mentioned, Sandy Weil buys out of bankruptcy in 1989.

But Drexel Burnham Lampart went bankrupt because it was a massive criminal conspiracy that the government shut down. So he buys it out of bankruptcy for pennies on the dollar, and he gets all these thousands of hardened criminal brokers to join his brokerage firm like all of these guys who were you know working for a criminal conspiracy and suddenly it gets shut down they all joined sandy wild's firm in 1989 and most of them eventually end up at what would become city group so when we talk about you know criminality at city group well the guy hired thousands of criminals on the cheap uh in 1989 yeah he he uh hired bagged and tagged a bunch of thugs and then empowered them with wealth that they could not have at their previous companies i mean it's kind of genius you gotta have dogs to fucking build your army he hired them right right he did the pablo escobar thing and he wrote plomo or platos on their contracts and they signed on

the dotted line and he got a bunch of fucking button men. Some of his lieutenants in the city would later go on to take part in the control frauds that led to the subprime meltdown in 2007 and 2008. Oh, really? Yeah. We'll get to that in part three i guess yeah yeah and it is just something where uh there's a new york times article i quoted from in part one where sandy wild kind of the meltdown of city group his entire thing is oh if i was still the manager i would have fixed it

but he just throws the other managers under the bus. But it's like, no, you set up this system and it blew up within two years of you leaving. Less than two years. It's a huge institution. So, I mean, it wasn't that long ago that he left before there were real problems. So, like, a huge institution takes, like, I don't know, a decade to, like, change, like, a huge bank like that, just because he wasn't there doesn't mean his presence wasn't felt as far as like the risk management of the company. Right. And that's the thing, like the best defense you can summon up of this guy is that he didn't know all these crimes that were going on. But the thing is like, you just look at the fact that we

need a three part episode to cover Citigroup. That's's how much crime we need three hours to get to just give you the cliff notes version of the amount of crime at city group and and yeah like so the best thing you can say for him is that he didn't know about worldcom and enron which they were both involved in he didn't know about the 2008 financial crisis the mortgage fraud he didn't know about. They were laundering money for Mexican drug cartels out of this Mexican bank that he bought in 2000. So like, and the list goes on and on and on. So the best thing you can say about him is he had no idea what was going on, but it's kind of inevitable that when you set up a company this big that incorporates everything, at minimum, you're going to have divisions that you don't know what the fuck they're doing.

But I think he's certainly more culpable than he lets on, and I think he has a convenient little excuse for his own actions. Yes, last episode I said his middle initial I was for indefensible. I think this time I'm going to go with I for ignorant. Yeah, his middle initial stands for I do not recall, which is what his lawyers told him to say under every deposition.

He takes over these companies we mentioned in the 80s. He has access to every strata of the American economy. He puts in the usual playbook, you know, slash payrolls 10 or 15 percent, slash out all the benefits so it sucks ass to work there you know uh cut everything to the bone you know throw them onto the public rolls for health care throw them onto a 401k instead of a defined benefit pension um but he also does things to maximize profits so quoting from the monica langley book after he sets up you know al williams commercial credit smith barney uh next on his agenda, he was shocked to find that only one-third of Smith Barney's retail customers bought stock, quote, on margin.

That is, borrowing money from Smith Barney to buy securities, which became the collateral for the loan. That's what I want, margin, Sandy told a group of executives. I can lend them money be the bank and have the best possible collateral their stock portfolio interest generated on margin debt would increase profitability if the value of the customer's portfolio declined and a margin call wasn't met smith barney made itself whole by liquidating the assets in the customer's account to pay the debt at sandy's behest smith barney launched a marketing campaign to encourage customers to borrow money against their portfolios to not just to buy securities but also to buy consumer items anything you normally get through the bank so essentially

this smith barney's is a respected institution that's supposed to be helping people retire and make investments and he's like slamming his brokers and telling them, no, you got to get on the phone and tell them to take out a loan with us, take out a loan to buy stock, take out a loan to buy a fridge. It doesn't matter because if they can't pay the loan, we can just fucking yank things out of their stock portfolio.

We can just yank their retirement. So they are pushing people into debt and a loan shark. So this is like, these products are things that you would only ever offer like a bank would only ever offer under normal um less exuberant time periods to like extremely wealthy people who have basically no debt but over the course of time like stability breeds instability right so eventually um after all of these series of mergers with insurance companies and other like prop trading firms and stuff like solomon brothers

eventually um uh these banks were offering these products to just anyone and like they they basically just ignored like what was right in of them, that it was too risky. That's wild. Right. And speaking of what was right in front of them, we talked a lot on the previous episode about Sandy Weil's cost cutting. This is an obsession of his. But I did just like this anecdote. So he takes over Primerica, and then he gets all the executives together to have a retreat and a strategy discussion. And a part of this is he gives them this speech where he says, quote,

good times are the best time to screw everything down. He urged them to be brutal with each unit's headcount and pair every expense. Of course, headcount means fire every employee you can. We'll never have a quarter when we'll feel free to blow money away, Sandy assured them. Be disciplined. And then they went through a presentation as to what were their biggest expenses and uh near the top i believe even number one was aviation because of sandy's personal gulfstream 4 private jet and all the employees associated with flying that and the fuel costs and so they actually brought this up to his face.

You know, they were just kind of joshing him a little bit, but he got extremely pissed at the suggestion that they should pare back his private jet, which apparently even the executives were not allowed to buy first-class tickets. So this is a private jet for him and him only, and it was one of the largest expense items at his companies. But, you know, of course he gives all these speeches about, you know, and it was one of the largest expense items at his companies. But, you know, of course he gives all these speeches about, you know, we've got to be brutal with each unit's headcount. I learned from superyachtfan.com, my favorite site on billionaires,

that his yacht April Fool, which is the day he met his wife, in it it says that the $50 million Bombardier Global 6000 aircraft can adopt 16 passengers and the jet is registered to Citigroup. So it mentions on this website that the jet was registered to the company instead of him. And this, I don't know,

probably adding to the problem, oil price was a bit elevated at that time. Just throwing it out there. Right. But again, it's cost-cutting for thee, but not for me. And to continue the story, Art Williams, it's just kind of a side anecdote, but we mentioned he bought this insurance company, A.L. Williams. The head, Art Williams, was actually charged by the fbi around this time uh they accused him of masterminding a quote dirty

tricks campaign to uh or i think he was actually never actually charged but he was accused uh and investigated by the government for masterminding a quote dirty tricks campaign to drive a former employee's insurance company out of business by burying it with hundreds of bogus life insurance policy he policies he allegedly ordered certain loyal agents whom he dubbed his spy teams and hit squads to infiltrate the competitor's organization ameri-share investors incorporated of jacksonville florida and attack it from within by writing fictitious life policies and receiving generous commissions. What? So this is like one of, basically one of the people

who's running one of the divisions within Sandy Weil's empire was sending out his agents to join the competitors and write up bogus life insurance policies and sabotage them from within. But he has to resign over that. And actually, apparently half of his workforce quits because they were so loyal to him within that one particular life insurance division.

But that's just kind of an example of the kind of people he had working for him. And again, when you have a boss who doesn't really give a shit about anything except for cost control and profits up, at minimum, you're going to get subordinates who are encouraged to take shortcuts and cook the books and engage in less than savory or even illegal tactics to meet these targets. It's the pigs from Animal Farm all over again you can't sleep inside but i can you can't

buy first class tickets but i can have my own private jet registered to city group i mean it it's so blatantly i'm better than you so fuck you it's interesting how the entire building of the brand that is i'm a smart genius billionaire doesn't really take that much accomplishment before you can kind of do whatever you want in sanford ignorant willie's case and the employees looked from golf stream four to sandy while and from sandy while to golf stream four and back again but they could no longer tell which was which to continue the story after he buys pre-america he makes jamie diamond jamie diamond is the um was his at this point protege he's currently the ceo of jp morgan chase also a billionaire uh but sandy weill makes jp diamond

the um president and cfo of this new company, Primerica, which is part of his wider empire. But he also makes his dipshit son, Sandy Wiles' dipshit son, VP, Vice President of Investments, at this new Primerica company. So he has a multi-million dollar salary, which he mostly sends to Columbia and various spots around New York City.

Mark Wheel is a tragic case of a man openly an abuser of cocaine on the street of Wall, if you know what I mean. He leaves his job in 2000 for rehab for a cocaine addiction and now has a website and twitter and blog that doesn't get more hits than grub stakers does which is so fucking sad when you think about it like obviously this guy's a fail son but at the same time he's only got like 130 followers on twitter like that doesn't mean anything nobody should care about how many followers a person has but at the same time to be person that at one point managed

billions of dollars and then to now tweet articles being like it turns out that nutrition and poor neighborhoods is because they don't have access to food zero faves zero retweets it's like oh just because you admitted that you were into cocaine too much and now nobody on wall street trusts you nearly as much as they should wild cut yogi you just painted a bleaker picture than citizen kane billionaires downfall to a 100 follower twitter account that just tweets out bland poor neighborhood nutrition articles yeah i mean that's that's what it is i mean like uh to continue on if you dig you can find a profile on forbes which is in pictures highlights of mark whale's mineral collection because a man that loves crack rock also loves minerals apparently and like he's got this this

like and it's i mean i don't know much about geology i took took acid at Sasquatch and didn't pass my classes. But he's got blue tourmaline, a super rare gem blue species from Brazil. He got it for $450,000. Today it's worth in excess of $750,000. He's got something called rhodochrosite. It's from Sweet Home Mine, I think Columbia. It's worth $850,000. Some Tanzanite, relatively newfound gemstone,

first discovered in the 70s in Tanzania. It's now worth $350,000. T-A-N-Z-A-N-I-A. Tanzania, I think you're right. But I mean, motherfucker just collects rocks. And like, you know, not like your aunt collects crystals and they make her feel better and not have bad dreams at night. I mean, like, this man has spent hundreds of thousands of dollars of minerals.

And like, he got some pyrite from Peru. The best piece is worth around $175,000. Like, he spent, you know, between $150,000. I mean, like, the man just loves buying rocks. And you know what? When you're the son of a billionaire and people fucking don't fuck with you anymore, you just go into the rock game, if you know what I mean. Maybe he had a pet rock when he was little.

It would be funny if that was an actual strategy his therapist set him up with to get over his addiction to crack rock. What if you just go to South America and rob native governments? No one's drug addiction should be penalized. But I will say that it just seems so fucking wild to me that he had to leave his position overseeing the $113 billion investment portfolio after erratic behavior at business functions and amid a battle with cocaine addiction, which was reported in the Wall Street Journal in November of 2000. He relapses and he tries to smoke a $150,000 mineral. Puts it directly in the crack pipe and destroys a priceless artifact. I mean, both him and his sister seem to have been given jobs

through their father's connections. And Jessica Bibliot has not dealt with the crack addiction that her brother has been famously ousted for. And she, from a New York Post article, she's now, this is from 1999 actually, she's 39 in 1999, and at that time, she became the chief executive officer of National Financial Partners, a Leon Black-backed firm that manages money for rich people. So, like, you know, I'm sure that these people graduated from whatever schools they went to with honors or whatever, but the moment they were eligible, they had an opportunity

to work on Wall Street at a capacity that nobody in their class would have been able to because of their father connections. And the fact that Mark Wheel was like, I'm fucking doing crack too much is indicative of how not only are billionaires and the elite geniuses, they're not geniuses, but their fail sons are more regular than we would ever believe. And the idea that legacy is somehow more than the fact that they come from money is bullshit. I like that Jessica is working for Leon Black, who, if you listen to our episode on billionaire Leon Black, you will know, gave $10 million to Jeffrey Epstein and nobody knows why. Typically the children are worse than the father in these episodes when we research them. At least the elder whale was like he, I mean, his job is to fire people en masse or delete their benefits.

And that takes, for most people, that's a skill that you have to work on where you just don't care about ruining thousands of people's lives and then other people though they're just a natural at it and i'm kind of wondering what those the case for him he seems like he's enough of a psychopath to where it just came naturally so yeah he hires both of his kids mark and jessica and gives them these multi-million dollar salaries while he you know, slashing everybody else and throwing everybody else up on the curb. Like he doesn't even need he's a multimillionaire in his own right.

These kids don't have to work. They don't have to draw on company resources. But again, it's the same thing with his Gulfstream jet. It's all just hypocrisy and it's all just the media and the business press allow him to present this image of himself as a genius when in reality he's, I mean, just a dirty hypocrite who doesn't give a shit about his employees or anything but his own bottom line and those of the shareholders. His relationship with Jamie Diamond became tarnished because of a promotion for his daughter that wasn't given. Right, Sean? Right, yeah.

So Mark is the one with the cocaine addiction. I also believe, like, I think there was a New York Post headline about how he had, like, a stripper. I don't know if it was a baby mama or something. But there was also, like, strippers and stuff involved. So it was like a tabloid scandal. One other thing. He had a divorce from Edie Hill, the Fox News reporter. She's Edith.

Her name's Edith something Hill. But they have a child together. And there's like clips of Edie Hill, one of them being like some guy from Australia, putting her in a dunk tank, like throwing the ball. And so she hits and falls. But then the other thing that they put in, which tank like uh throwing the ball and so she she hits and falls but then the other thing that they they put in which i'll put it in in in the post here is at one point she says uh was obama's tiger woods fist pump a terrorist fist pump and she had to apologize for saying that uh so you know it uh at one point Mark wheel was hooking up with a lady

that said Obama's fist pump could have been a terrorist fist bump will she apologize for a fist bump a pound a terrorist fist jab the gesture everyone seems to interpret differently we'll show you some interesting body communication and find out what it really says. I want to start the show by clarifying something I said on the show last Friday about an upcoming body language segment. Now, I mentioned various ways the Obama's fist pump in St. Paul had been characterized in the media. I apologize because, unfortunately, some thought I personally had characterized it inappropriately. I regret that. It was not my intention, and I certainly didn't mean to associate the word terrorist in any way with Senator Obama and his wife.

Tiger, I liked what you did with the USS Cole. Put her there. But yeah, and Mark Wheel, if you are listening, I will sell you 100 Twitter followers for $100,000. I think you can easily break a thousand and my rates are very reasonable you can host the show i want some of your uncut gems i want one of mark wheels rocks that he's not willing to give up for a fucking appearance on the show i know you got it mark just pay an influencer like ten thousand dollars to promote you or something.

That bothers me that he has so few followers. Because he doesn't give a fuck, Steven. I think that one thing I've never been able to process until recently was that every, like, I don't know, let's say 10% of billionaire kids got some sort of conscious. Like when we did the David Green story, the Hobby Lobby CEOs, one of their sons didn't clap when they won the Supreme Court ruling because he was like, I know what the fuck we just did. And I think with Mark Wheel,

he was like, I don't want to fucking be this guy anymore. And I can't kill myself because I got appearances and reputations to maintain and stuff. Who will water my rocks? I have like geodes and shit that I need to take care of. I do think that there is some amount of conscious that billionaire kids can occasionally have.

But I don't know. Maybe I'm being too nice on him. But, so yeah, Jessica didn't, Sandy Weill's daughter, Sandy Weill's daughter, Jessica, didn't have a drug problem, but she was kind of a dipshit employee. So he ends up hiring her and she reports to Jamie Dimon, as we mentioned, you know, the president and CFO of this conglomerate. And Jamie Dimon passes her over for promotion. And that's eventually what frays the, and Jamie Dimon passes her over for promotion. And that's eventually what frays the relationship between Jamie Dimon and his mentor, Sandy Weil. But we'll get to that in just one second. In 1992, Sandy Weil buys Travelers Insurance. And this is made possible because of Hurricane Andrew hits Florida in 1992, and Travelers Insurance has to make a huge payout

and financially it's in trouble for a minute there. So he's able to go in, Sandy Weil's able to go in and buy Travelers Insurance. He makes a visit to Hartford to their headquarters in Connecticut and he'd already demanded a huge amount of job cuts in order to take it over. It was actually like a strategy where at first he didn't own it outright. He buys, I believe, like 28% or something like that, but he becomes de facto influential enough to take it over eventually. It's like when Hitler carved up Czechoslovakia. We all know he's going to take over the whole thing,

but he doesn't take it all over at once right from the genealogy website says that he pays 722 million to buy a 27 share of travelers insurance and then in 93 after a few more acquisitions he completely takes over travelers corp in a four billion stock deal and officially begins calling his corporation travelers group incorporated right so yeah he like yogi said he put about 722 million in there he demands 3 300 jobs be slashed as a condition for his investment and then he flies out there and says we gotta slash another 1 700 jobs so he this deal, and then he's like, no, we got to cut more jobs. Fucking ruthless.

So again, this is his MO. Is he not just, like, cutting out the fat too much, and then merging and or selling the company, even though they can't really operate in their current state. Is that not what kindly is going on? It's like I'm going to buy PlayStation 4s, and I'm going to take out the memory, the disc reader, and a few other things,

and I'm going to sell it to Sean as a discount on used, but then once he gets it, then I'm like, oh, sorry, bro, that shit don't work. This is yours now buddy you know i mean like it just seems like he he's stripping companies and getting rid of them before anyone notices steven like tell that to the middle managers at those firms who are left to deal with like all of the same work but with fewer people right yeah no to complete yogi's analogy he's like selling you a ps4 controller like you only need one of these joysticks bro you only need you don't need the

the square butt you just use the x button most of the time yeah all the pros use it without the triggers no triggers just one stick and half of the buttons. But yeah, so the travelers take over, though we should mention he also, in this time period, this is the early 90s, he goes on another acquisition spree. Because this is kind of his MO. He slashes his books to the bone and then he just waits for the economy to tank. He hands you a Mad cat's controller right like when when the economy goes bad then suddenly a bunch of acquisition targets come up and in fact we're of course seeing this with this current coronavirus crisis and you have to imagine there will be lots of buyouts of big companies particularly ones that are getting bailout money from the federal

government are going to go snap up smaller companies, perhaps that are not getting bailout money or not getting as much bailout money from the federal government. So economic distress is always a good time to go on a buying spree and get discounts and buy things for pennies on the dollar. But he also buys this, or he rebuys Shearson. We mentioned it briefly on the previous episode. In the 1970s, before he got bought out by American Express, he took over a brokerage firm named Shearson, Hamill, and Company. He merged it with his own company. They had office space in the World Trade Center for a bit.

And then he merged the entire conglomerate. He sold it to American Express. So he moved into American express and he moved on but he was able to in the early 90s i believe around the same time 92 93 93 he rebuys shearson so he buys this thing he sells it to american express he gets kicked out of american express but then he buys it back yes for, for $1.2 billion. The story is, again, from the Monica Langley book. Sandy had sold Shearson to American Express in 1981 for $930 million. Then American Express more than doubled its brokerage force by purchasing Lehman Brothers and E.F. Hutton

and spent billions of dollars more on the unit. Shearson also had built two state-of-the-art office buildings in downtown Manhattan, valued at more than 600 million now sandy was set to buy this much larger company and all its real estate all for about a billion dollars so he gets a steal on this thing because the executives had run up the credit card a bit too much over there and he's able to buy it for only about a hundred million more than american express bought it from him a decade ago with all this added value on its books so he manages to get a several different steals throughout his career i'll sell it to you for two dollars i'll buy it back from

you for 210 but it's actually worth five dollars now essentially and then uh before we move on to travelers i just want to note that there's like an odd anecdote in this book about he has lunch with jamie diamond's secretary and the secretary assured her that sandy was indeed inviting her to lunch and set the date for them uh but then she warned her quote don't be nervous if people look at you strangely when you walk in unquote why she asked tentatively because sandy doesn't have lunch with women unquote um and you know this is just corporate america in the 80s but he was also a member of the augusta national golf club which didn't admit women until very recently actually yeah all those men are on Mike Pence style rules if your wife isn't the one sitting

next to you you in trouble son yeah people are still like that actually in corporate America in Congress yeah I mean well it it's indicative of like it was like two like like two years ago was there was like some senators like i don't want to be in the same room with a woman without another woman president or something right so yeah sandy weill is uh like an avid golfer as well as you know many of these people are so he was a member of the augusta national golf club and augusta national golf club didn't admit women until 2012 uh so very recently and it's just funny this is the biography the monica langley biography it's rather sympathetic towards him uh probably because it was written before the 2008 financial crisis uh but so this is written in 2004,

and it explains him staying a member of the Augusta National Golf Club, even despite all these protests by women organizations, by female organizations, women's organizations. It explains him staying a member because he's working to change it from the inside. That's right. Wow. We can.

And, you know, he really, really put the screws on, and it took them another decade to adjust the policy. But, yeah, I mean, it's just a thing where you see this with, like, all sorts of organizations that do wrong where people who like i don't want to quit i like being in the little exclusive no women you know club uh i'm gonna i'm gonna lobby to change it from the inside and then when the people who run it say no fuck off i'm gonna say no all right well i tried i'm not associated with this, but I'm going to still golf here and go here for all my vacations. That's like this podcast.

And have Citigroup sponsor the thing. To return to the takeover of Traveler's Insurance, we mentioned he slashes all these jobs. He apparently, he did, however, keep the the traveler's helicopter he apparently loved zooming from his home in greenwich to hartford in the uh sikorsky aircraft considered uh one of the best styles of corporate choppers all around all around uh so he he did this guy has been drinking and smoking cigars his entire life and getting on helicopters after he lays off 20% of the workforce in every company he takes over. So he's been, uh, he's been rolling, you know, triple sixes for his entire life so far and hasn't stumbled once. I mean, this is the type of

life you get to lead when you're not someone who's notorious for, uh, having sex with children and getting caught. I mean, if you just focus on the job, then you can just live a lavish lifestyle, even though your job is fucking over people constantly. And if you're not caught having sexual relations with minors or people that are your subordinates, then you can also be someone that drinks gin every day, eats steak, then tells your employees that they're not good enough to have coffee at work. This is karma.

He's like, he could definitely be in a child sex ring, but as far as we can tell, he's not directly. And you know what? He's being rewarded, likeically yeah because he's been on he's been on helicopter rides like sounds like a couple times a week or so for several years and nothing happened see this is because he befriended tiger woods and as long as you're friendly with tiger woods tiger woods will not sabotage your helicopter so that's the first step if you want to be a helicopter passenger uh travelers insurance when he takes it over we mentioned this had you know more than 130

year history with the red umbrella and all that so all of these kind of i shouldn't say all of but many of the old companies in amer America have a particular corporate culture where quoting from the Monica Langley book, uh, work, uh, one of the employees at Travelers said, working at Travelers was always very paternalistic. As long as you kept your nose clean, you could work here forever. Now it's, what is your worth? What are you producing? And so he puts, you know, we mentioned all the layoffs but he sends you know one of his deputies out there to do the the standard sandy weill mo where like for example they find out the fountain

is leaking and it's going to cost x thousand dollars to replace it so he's like no fuck uh his sandy weill's deputy says no fuck that take the fountain out and put some dirt and put a tree in it just put like a $20 tree in the employee fountain so there's no water fountain at the shop anymore because you know they don't want to spend I think it was like 60 grand they quoted it at

because there was water damage or something an amount that they could afford very easily to fix a fucking water fountain I as a person who has seen water scarcity in their life Yeah, an amount that they could afford very easily to fix a fucking water fountain. I, as a person who has seen water scarcity in their life to a very scary degree, hate the notion of water fountains. But the fact that a guy that's a billionaire and is acquiring companies for hundreds of millions of dollars is like a water feature, uh-uh. My employees don't need to see water moving.

They can't be relaxed on their breaks i need them to see a shitty tree well like during the negotiate like he's willing to like spend more than 60 000 on the negotiations concerning the fountain and he's just like okay well what if we just have stagnant water you know they can still have water. It's not running. There was, like, so there was also a tower, like, in the Traveler's Building that local Girl Scout troops would take field trips to so they could look out the tower and see, you know, throughout Hartford, Connecticut. And he shut down the tower, but then had to reopen it because there was such community outrage that this fucking asshole was like telling the girl scouts to fuck off basically wild um yeah and i'll just like and again you know we could go through these anecdotes all day i hope they're illustrative of the general mo whenever this guy

takes over any company which he's taken over a lot of. He transforms them from a company where, like the traveler's employee said, you could work there your entire life. You could retire with decent benefits as long as you did the right thing. He turns these all into companies where you could be thrown out on your ass at any moment, and all of your benefits are slashed to shit, and your job sucks and is stressful and is overworking. And again, I think any American worker listening to this can relate. But here's one last story from Travelers, the takeover. The guy, his deputy, Lip, when he goes out there, L-I-P-P was his name. He was the guy who was running Travelers for Sandy Weil. When he crossed the three-story all-glass rotunda,

a charming woman who appeared to be in her 50s offered to hang up Lip's coat. What a waste of money, he thought. When he found out that she was paid $20 an hour, he replaced her with a $10-an-hour security guard with a gun. The abrupt disappearance of the hostess, who knew everyone's name, touched a raw nerve among employees.

Chuck Clark, who early in Lip's tenure at Travelers had warned him about undermining the culture, now scolded him again. You're cutting the innards out of the place. She was a fabulous lady, one of us, part of our culture. So, you know, he just throws a woman who takes the coats, who's been working there probably decades right just throws her out on the on her ass and replaces her with a guy with a gun who makes half as much uh so you know this is this is the sandy wild playbook i can't believe you can pay a man less

to have a gun and stand in your building than you can to have someone be polite and take people's coats off i mean there's really nothing more american than courtesy cost twice as much as a man with a gun it sounds like she's doing a bit more than just um taking people's coats i mean everyone said they loved her so right yeah no the coat lady was like look i'll i'll get a firearm permit i can have a gun you don't need to cut my job i can take coats and have a gun no but people like that are the glue of a business they they make sure that everyone that's working there is you know i mean most jobs that i didn't leave because they sucked were because they there were people there that made it worth it.

The suffering was not nearly as traumatic as wanting to leave to fuck over the other people I was working with. And I think most people deal with this where people don't really leave bad jobs. They leave bad managers and bad work environments. I'm pretty willing to do a shitty job if everybody i work with is kind of awesome and a person like this individual seems like somebody that held together that place in the normalcy that they had and now they have to look at fucking bob the man with a gun well yeah and again this is the kind of the theme of these episodes this is a transition in american capitalism where people used to be able to work for a company like Travelers their entire career. But now, you know, people in America leave their jobs every two or three years. examples of what was going on in the larger economy as a switch from defined defined benefits

to defined contributions writ large so like it wasn't um that wasn't just for people like switching from pension funds to 401ks which is where that which where those terms came from but like um the neoliberal turn in late 70s to 80s going up to now so like my whole life um our whole lives is like can at least as far as how businesses are conducted can be characterized in this way of like getting rid of security any any type of security beyond just like you're there and you get a wage while you're there is like uh stripped away you were asking earlier about like him being invited to you know epstein sex parties and i was thinking this biography talks so much about how he like never shuts the fuck about up about business and city group and the stock market so i like have to imagine they were like no that guy's too annoying let's let's just keep him off of lolita island so it's just a

complete accident that he's not on the flight logs because he could just never shut the fuck up about the stock he like he doesn't seem to have any interest except for companies and next quarter's profits. And then all the articles that are written about him in retirement are like, yeah, he still watches Citigroup stock excessively. He doesn't know what to do with himself except for follow this fucking stock market. And he entirely defines himself, his life, his entire worth as a human being based on these arbitrary numbers what if he was in he was invited to epstein's um one of epstein's compounds but he kept like telling him how he could save money and he's just like

yeah you don't have to have three girls in here you can have just two or something yeah i noticed you're paying a 22 year old french girl but i'm pretty sure you would get two 12 year olds for the same price yeah steve's like no i can't fire the coat girl she's a co-conspirator how many times do i have to tell you these people are involved in serious crimes they have a culture we want to maintain a culture here yeah like he just he didn't care about that god as i realize that jeffrey epstein's uh black male empire is like the last american corporation to really have lifetime employment with benefits uh and a cradle to-grave employment guarantee in the U.S. economy. Sandy calls Jeffrey Epstein's cell phone, and it goes to voicemail, and Sandy's just like,

Jeff, I know you've heard this from me before, but I'm telling you, you can fire that Ghislaine Maxwell girl, and Kyle hired a couple of guys with guns. I'm telling you, I've done this before. It's a strategy that works. You just get a couple of guys with guns. I'm telling you, I've done this before. It's a strategy that works. You just get a few mooks with guns. It's just as good as a good looking lady that takes your coat on. I promise you it'll work out. I was calling Jeffrey Epstein from a 1930s gangster film.

Yeah, I have to get back on set see but yeah and so at traveler's insurance he apparently sells uh out of health insurance sandy weill has a meeting with hillary clinton and he tells the other executives quote she wants us to ensure everybody whether we make money or not this is when they were trying to get the hillary care thing passed it of, of course, crashed and burned. But he sold out of Travelers Health Insurance. And it also might have been because, from the Monica Langley book, Travelers became enmeshed in dozens of lawsuits

accusing the insurance company of denying benefits. Several courts had ruled that regardless of what the health insurance policy stated, Travelers and other insurance companies would be required to pay dozens of claims for experimental chemotherapy for breast cancer victims. Wow. So this is also famous cost cutter Sandy Weil is saying, no, fuck off, I'm not paying for your chemotherapy. You can go die.

And actually several courts forced him to pay for chemotherapy, so he gets out of the health insurance business. But this is a model that is sadly still with us today in the United States. What a piece of shit. But we mentioned his daughter working for Jamie Dimon. Sandy Weil's daughter Jessica becomes executive vice president for Jamie Dimon, his daughter, Sandy Weil's daughter, Jessica, becomes executive vice president under Jamie Dimon. Like her brother, they're drawing multi-million dollar salaries under pure nepotism. And Jamie Dimon, like, thinks she's good on TV.

She apparently goes on TV a lot to promote Sandy Weil's companies. And she's a good interviewer, so she gets invited on a lot of these programs. But Jamie Dimon doesn't think she really has it or doesn't think she understands the analytics and the numbers well enough. He doesn't really think she's that good of an employee. Under Jessica, and then quoting from the book, under Jessica's administration, Smith Barney's mutual funds weren't attracting new investment dollars as fast as many competing fund companies. This was due, at least in part, to sub-performance of the funds, which were noticeably lagging behind the results of similar funds offered by competitors. So in 1997, Jamie Dimon passes her over for promotion, and then Sandy Weil starts a permanent feud.

Or no, not in 1997. First, Jamie Dimon passes her over for promotion. Then she qu not in 1997 first jamie diamond passes her over for promotion then she quits in 1997 uh and then this kind of starts a feud between jamie diamond and sandy weill this is a jumping ahead slightly but uh from a article in deal breaker uh from 2019 it says that sandy wheel regrets destroying jamie diamond's ability to ever open up and trust a bank CEO again. Here's a quote from Sandy. I wish Jamie and I had been able to work out our issues and that it didn't have to end up in a breakup because it was a very good relationship by Weill shortly after the Travelers and City Group merger in 98, abruptly ending a 15-year partnership that saw them build a financial services empire like no other at the time. I mean, Sandy knows he fucks up, but also what, is he going to fucking throw his daughter to the wolves because she sucks?

No. The man is a psychopath. Right. Yeah, but I mean, yeah, it's just something where I just hate that he's able to present himself in the press like uh you know I had to slash the salaries and I had to fucking deny the chemotherapy payments to the dying women who had breast cancer I had to do that for the health of the company I'm I don't have emotions I just think about the health of the company and meanwhile we're like yeah you have to pay my dipshit fail daughter three million a year and uh make sure to gas up my uh my gulfstream four with premium

uh on let it none of this fucking uh halfway shit i want i want the good stuff and i want i want the best chef on board uh at least at least three michelin stars. Minimum. If I don't have a glass with gin in it, I will beat the shit out of everyone in the room. I don't care who they are or who they work for. I have several men with guns in my car that have replaced women that were pleasant to me. Do you know how much it costs me to get a man with a gun here? Just $ dollars an hour

you don't want to fuck with me okay uh but yeah so and part of what this is his feud with jamie diamond jamie diamond has been his protege his right hand man throughout this entire time since his exile in the early 80s um jamie diamond's been there and then jamie diamond passes his daughter over for for promotion uh and then we get to this merger that creates city group which is kind of the meat of it we're getting into it but before this happens he tells jamie diamond you're not going to be on the board of the new company and then he schemes with uh john reed was the other ceo of what became city group he schemes with him to push

out Jamie Dimon, ostensibly for getting into an argument with another executive at a party, at a company party, but really because he passed over his daughter. So, you know, they push out a guy who, by the rules of the game, clearly knows what he's doing and goes on to take over JPMorgan Chase for completely petty reasons. But we can get into, again, the meat of the episode and really why this guy is relevant, which is the repeal of Glass-Steagall. Just to remind the listeners, Glass-Steagall is a 1933 law passed in the United States, which separated commercial from investment banks. You know, banks that take deposits can't merge with banks that

do proprietary trading it also prevents banks from entering the securities and insurance business so he has travelers insurance he wants to merge it with city bank and then his lawyers come up with kind of a weird workaround where they say if you can get the federal reserve to classify city bank as a bank holding company not a bank then you have two to five years before you have to disentangle these two so they're like so sandy weill approaches the ceo of city bank uh John Reed, and he says, hey, my lawyers came up with this strategy. We'll merge, we'll be co-CEOs, and then we have two to five years to get Congress to change the law. And if they don't, then we just have to break up. But, you know, so this is just entirely a play to be like, let's just do this merger and then let's lobby the shit out of Congress

and see if it works. And in fact, you know, one of the first calls he makes when he's considering this is directly to Federal Reserve Chairman at the time, Alan Greenspan. So Sandy Weil lobbies him directly to be like, hey, could you classify us as a bank holding company? Can you do this weird workaround that was clearly not the way the law was intended? And of course, the Federal Reserve under Alan Greenspan goes along with this plan. I mean, he just finds a loophole and exploits it to the nth degree.

But from what it sounds like, it would be like two sports teams being like, we're going to pretend to merge, and if they say we can't, then fuck it, but we'll just put our best players on one team and then take over the fucking league. I mean, I know that's a very, like, not at all linear way to look at it, but it seems to me that they're breaking the rules and not getting caught. They're breaking the rules and then choosing to misuse the laws in place to allow themselves to prosper from it. So that ended up being a $76 billion merger between Travelers and Citicorp.

They ended up doing what's called a stock split where all of the Travelers stock would become Citigr stock at like a certain rate and at the time of the merger the stock price i kind of charted out the stock price versus like important events in the company's history nice um we'll get we'll get to it i guess more in part three but just for now like the stock price at the time of the merger was at about like two

two hundred or so and within one year it post merger it reached about three fifty holy

yeah it took about a year and a half maybe but it went from 200 or so to 350 and i think like investors were sort of um buying into the idea that maybe glass steagle would be in on its way out like uh this wasn't the first time people have thought about repealing glass deagle that's been there's like the the super wealthy have like from the moment it was passed in 1933 with the banking act um they just launched basically like an intergenerational campaign

to one day eventually get rid of Glass-Steagall. And I guess Will decided to take a risk, basically, and say, like, well, it is still the law for now, but I don't know. We have a lot more allies who want it gone. So with the holding company, at least it gives us, like, five years to see if we can um uh lobby the state of congress like sean said right right and so uh like steve was mentioning there this merger was uh

announced in april 1998 it was at the time the largest merger in u.S. corporate history up to that time. So it's announced April 1998, and then in the year 2000, Glass-Steagall's repealed. So like right when the two-year limit's about to expire, they put the lobbying into overdrive. And we should just mention briefly, he also buys Salomon Brothers in 1997, but that's kind of a, it's relevant relevant but it's a smaller part of the larger picture city bank as it was called was originally founded as city corp by the rockefeller family in 1812 so it has a very long history but he's he convinces the ceo john reed to do this and then he actually calls his old partner we mentioned mentioned in part one, one of his first business partners was Arthur Levitt, who was at this time the chairman of the SEC, the Securities and Exchange Commission. This is supposed to be the cop regulating Wall Street.

He calls him to be like, hey, we're doing this clearly illegal merger. That's cool, right? And of course, his old partner says, yeah, we're not going to do anything about it what do we look like some sort of government enforcement arm that is supposed to prevent criminal activity from the banks you severely misunderstand the function of this agency but so yeah his regulator is his old business partner his old buddy and he calls him uh he calls greenspan and he actually gets former president gerald for Ford to lobby for this. Quoting from the Monica Langley book, Gerald Ford spent his life as a career politician who never had much money. Ford had been a director of Sandy's growing empire for years and felt a great loyalty to Sandy for making him rich with stock for his board service. So he made a former president rich and suddenly that former president is calling people in Washington being like, hey, you should

help my buddy out with this Glass-Steagall repeal thing. So that's a big part of it. Another thing, so Gerald Ford was the Republican they had and then Robert Rubin, Secretary of Treasury during Clinton's administration, was the Democratic side that he recruited to take down Glass-Steagall. And this is the man that has a wood frame engraved with the phrase, the shatterer of Glass-Steagall. And from this genealogy website, it says that Weill denies that the repeal of Glass-Ste steagle played a role in the recent financial crisis so the motherfucker not only prospered from this but when pressed on hey do you think this hurt the economy he's like no i don't see why it would do that at all it just made me and my friends a whole bunch of money say yeah and so they do this merger in 1998 and as yogi mentioned uh robert rubin was the famous

treasury secretary under bill clinton actually you know we talk about wall street bailouts we'll explore this more in a future episode but there was another bailout in the 90s called long-term capital management was a hedge fund that went bust and got bailed out uh under the direction of robert Rubin as Bill Clinton's Treasury Secretary. And of course, the Clinton administration lobbies to repeal Glass Deagle. And then Robert Rubin goes and cashes in and makes millions of dollars as, I believe, chairman at Citigroup on the board, working part time. And we'll discuss that in just a second. But they do this merger in 98,

and then when it comes to the year 2000, if it's not repealed by then, this would have to break up. If Glass-Steagall's not repealed by 2000, it would have to break up. So he has all this lobbying power on his side. But according to the Monica Langley book, one of the people who really pushes it over the edge is Jesse Jackson. So the book talks about how Sandy is lobbying for the legislation. He called on Treasury officials and congressional leaders, often accompanied by other financial executives. It doesn't hurt that all of them are making huge financial donations to these congressional officials and legislators.

You know, the financial service industry is really just unleashed for donations throughout the 1990s. And they, in Jesse Jackson's case, they use non-profit and charities as kind of like the fulcrum to influence him. Right. If I'm not mistaken. And, you know, just continue.

Yeah. Right. And yeah, just continuing from the Monica Langley book, he played his most important trump card. Years earlier, just continuing from the Monica Langley book, he played his most important trump card. Years earlier, with no fanfare, Sandy had founded a charity aimed at training inner city high school students for jobs in the financial industry. The gesture, a nod to the difficulties Sandy had experienced breaking into the deeply discriminatory

finance business, attracted the attention of Jesse Jackson, the outspoken civil rights leader who recruited Sandy as the first co-chairman of his own fledgling Wall Street project, an effort to create more diversity within the big banks and brokerages. During the past six years, the white Jewish mogul and the African-American Christian activists had become friends and mutual allies in various projects, including the Alvin A. Lee American Dance Theater, the acclaimed modern dance troupe consisting mostly of black performers for which Sandy's wife served as chairwoman. Now Jackson came to the defense of his old friend. privately to tell the committee chairman that he would support a watered-down version of the community reinvestment provision, a move to signal to other consumer groups to follow his lead. And the Community Reinvestment Act is an act that passed Congress that required banks to verify,

to make more loans to low-income neighborhoods and provide documentation that they were doing this. Republicans were like, hey, we want to get rid of this as part of Glass-Steagall. Jesse Jackson meets with Phil Graham and says, okay, I will talk to some community groups and I will lobby to say, hey, let's water this down so that we can get Glass-Steagall repealed. And that's the compromise they eventually ended up at. After the pressure that Whale and other banking insurance industry executives were able to put on various Congress members, including, unfortunately, Jesse Jackson, get the Graham-Leach-Bliley Act, which was aimed at repealing the Glass-Steagall bill into consideration in late 1999. It was eventually signed into law on November 12, 1999. But there's kind of a buildup where there's a debate in the House of Reps. Representative John Dingell of Michigan argued that the bill would result in banks becoming, quote, too big to fail.

Dingell further argued that this would necessarily sort of result in a bailout by the federal government. Quite prescient, I would say. Yeah. The House went on to pass its version of what's called the Financial Services Act of 1999 on July 1st, 1999. A bipartisan vote, 340. Overall, 343 to 86. Two months after the Senate had already passed its version of the bill on May 6th in a much narrower vote, 54-44. There was some sort of finagling over some specifics, but overall it was seen as this it was seen as sort of this like common sense

bipartisan thing eventually which is unfortunate because like i mean as you can see like representative dingle was basically laying out like what would happen nine years nine years later right like so there were late night negotiations again according to the monica langley book apparently sandy weill placed a call directly to bill clinton late at night to tell him that the bill was the bill coveted by wall street was on the verge of collapse and needed him to compromise which is of course we mentioned you know the kind of watering down of the community reinvestment act that was part of it was the compromise that the Democrats reached with the Republicans.

Because this is the American Labor Party is like our compromises. We'll water down our low income loans program just to get Wall Street repeal. And that's a real Wall Street regulation repeal. That's a real win for American workers. But from the book, apparently John Reed and Sandy Weil are at this point co-CEOs of Citigroup. They don't really get along that well, but they issue a joint statement praising Washington for, quote, liberating our financial companies from an antiquated regulatory structure to unleash the creativity of our industry and ensure global competitiveness.

And unleash the creativity of our industry, it certainly did just about eight years later. And of course, this legislation being repealed allows J.P. Morgan to merge with Chase, now becomes J.P. Morgan Chase, and you see a lot of these other mergers where these banks get so big that by the time of 9-11, Citigroup controls one in every five credit card transactions done in the United States. Like, one in every five credit card transactions in the U.S. at about the year 2001 is done through Citigroup or a subsidiary. So these things get very huge very quickly. And we mentioned Treasury Secretary Robert Rubin during the Clinton

administration. Right after this Glass-Steagall repeal, Robert Rubin is hired and he becomes, quote, a Citigroup director, chairman of the executive committee, and a member of the newly created office of the chairman. Rubin, already a wealthy man as a result of his career at Goldman Sachs, would go from the $150,000 he earned as treasury secretary to a combined package of salary bonus and stock options worth at least $33 million a year for part-time work. But yeah, and I mean, mean like this is just so fucking crooked and corrupt to the core and it's also something where you constantly hear people

tell this ridiculous lie that the 2008 financial crisis like glass deagle had nothing to do with it well these too big to fail institutions could not exist if Glass-Steagall was still on the books, you know? And so it's just, it's such an insult to your intelligence for people to tell you that this law that basically prevented financial crises for about 60 years, or at least prevented major ones, and now it's been repealed and we've had two in a row in uh 20 20 years i just can't believe robert rubin was able to produce beastie boys jay-z and have a hand in dismantling our financial system robert rubin's like sorry i wasn't watching the asia markets i was getting the newest samples for License to Ill. So we're going to wrap this one up, this part two.

We'll continue in part three. We'll talk about September 11th, Enron, Citigroup's involvement there, their involvement in narcotics, money laundering, their involvement in mortgage-backed security fraud foreclosure fraud we'll we'll see how much crime we can get through in an hour yeah sean it sounds like you're saying everything terrible that has involved millions upon millions of dollars that has happened over the last two and a half decades is somehow one way or another linked to city bank

basically why your life was like in a profound sense ruined. Like if you're like a middle millennial age person, um, we're going to explain like a relatively large chunk of why that's the case. But I did want to just mention before we close out here, uh, we've talked so much about the benefits and of course the same thing happens at Citigroup and, uh, briefly, you know, John Reed and Sandy Weiler, the co-CEOs. John Reed is a more traditional CEO. He believes five years down the line. Sandy Reed doesn't really. So they have arguments about these benefits for Citigroup employees. And eventually, Sandy Weil's playbook does not change ever. And from the Monica Langley book, the first thing Sandy Weil wanted to do is scale back on Citigroup's benefits. It would be a quick way to achieve cost saving. Citing a moral obligation to employees, Reed took the question under advisement and began an analysis of the situation. Sandy Weil wanted to slash costs by reducing benefits and replacing them with

stock options. Citigroup like other big global banks provided generous benefits. Uh, eventually Reed agreed to a plan that relied more heavily on stop stock options and less on direct expenditures from Citigroup's coffers. Uh, so, you know, it's like everywhere else it's the same playbook we've gone through a million examples but for most run-of-the-mill employees at city group they're not the ones seeing this money it's just the people at the top and everybody else even within these kind of evil corporate structures are for the most part getting

fucked over and with that this has been grub stakers i'm yogi paywall i'm steve jeffries i'm shumpy mccarthy stay tuned for part three bye