Lunch at the Tribeca Grill with: Arthur Levitt Jr.
Published by The New York Sun on 2005-07-08
Arthur Levitt Jr., who flourished on Wall Street and later became longest serving chairman of the Securities and Exchange Commission, still remembers selling cows in Kansas City.
In fact, the 74-year-old Mr. Levitt even testified once before Congress on behalf of the cattle industry.
"For someone who grew up in Brooklyn's Crown Heights to be selling cows - that would be unimaginable," Mr. Levitt said. "But as I look back on my life, I accepted every job that I've been offered. I have a theory - opportunities don't appear once in a lifetime. They're there every single day. People who succeed are usually ones that recognize and grab those opportunities. I don't think I let too many opportunities go by."
This week, another substantial opportunity came his way. He was asked by the beleaguered American International Group to become an adviser. His assignment includes helping with the selection of new independent board members. Mr. Levitt will also make recommendations concerning corporate governance. AIG restated its accounts this past May, eliminating $1.3 billion of net income that had been reported by the giant insurance company earlier.
With the restatement, some $2.3 billion of shareholder equity was wiped out.
One would think that a man who's been successful in the world of finance, whose advice has been sought not only by entities like AIG, the Carlyle Group, and the National Hockey League, but also cities like San Diego - where he's head of the audit committee - would have been an aficionado of economics from an early age.
"Actually, I majored in English, with a specialization in drama," Mr. Levitt, who graduated Phi Beta Kappa from Williams College, said. "I regret that I didn't take economics courses at college."
From college it was on to journalism: he wrote for the Berkshire Eagle - which has long served as an incubator for journalistic talent - and then worked for Time-Life for five years in that organization's advertising, marketing and promotional sections. (In later years, he was to become owner of Roll Call, an influential Washington newspaper.) After journalism, Mr. Levitt headed to cow country in Kansas.
"Genetically, I've always had a huge wellspring of energy and aggressiveness," he said. "If you can sell cows, you can sell stocks."
That's exactly what Mr. Levitt proceeded to do after his Kansas stint. Perhaps it was his DNA that enabled him to do well in finance - his father was the legendary Arthur Levitt, a longtime state comptroller - or maybe it was his ambition.
"As a child growing up in a middle-class environment, I was constantly striving to succeed," Mr. Levitt said. "I was taught to believe that anything is possible. My father was a very ambitious and competitive man - and I've been very competitive all my life."
His colleagues on Wall Street included other men also known for their fierce competitive spirit - Sanford Weill, chairman of Citigroup, and Arthur Carter, publisher of The New York Observer. After 16 years during which he became president of Carter Berlind & Well, and Shearson Hayden Stone Inc., Mr. Levitt accepted the position of president of the American Stock Exchange.
He spent 11 years there, after which he was appointed chairman of the New York City Economic Development Corporation. He had held that job for 14 years, when President Clinton asked him to become the SEC's 25th chairman. He served for 8 years, the longest tenure of any commission chief.
"I'd always been intrigued with the concept of doing different things," Mr. Levitt said. "Public service has been a very important part of my life, even though that involves making economic sacrifices. Besides being state comptroller, my father was head of the Board of Education. He was totally nonpartisan, and a symbol of integrity. So public service is something I grew up with."
At the SEC, Mr. Levitt reformed the debt markets, improved broker sales and pay practices, promoted the use of plain English in investment literature and SEC communications with the public, pushed for the independence of accountants, and encouraged foreign companies to list on U.S. markets.
"If I have any outstanding talents, it's the ability to bring people together, the ability to build a consensus," he said. "I think I made markets better and friendlier for small investors. I hope that will be my legacy."
But what about the turmoil of recent years in the financial and corporate communities?
"Very few business leaders are recognized by most Americans as symbols of integrity because of these abuses," Mr. Levitt said. "There may not be very many corporate heroes in the mold of Pete Peterson [now senior chairman of the Blackstone Group] or John Whitehouse, or the late Walter Wriston, all of whom worked within the system and were role models.
"Nevertheless, there are lots of heroes out there that you're not reading about," he said. "They work in quiet ways, serving on commissions and boards, away from the glamour of media headlines. I don't want to be held up as 'Mister Ethics,' but I don't despair for America. There will be lasting reforms. I'm not beating my breast. I'm optimistic."
He had a warning, however.
"America's supremacy in capital markets can no longer be taken for granted," Mr. Levitt said. "We're moving toward fully electronic trading. Americans need to look beyond just U.S. stocks."
And what would he advise young people deciding which career to pursue?
"Flip a coin," Mr. Levitt said. "It doesn't matter what your first job is. It's the fourth or fifth one that will matter most."
Senior Writer and Global-Affairs Columnist