Today’s must-read is the WSJ’s account of CIT’s multi-prong effort to secure a DC bailout in the months before its collapse.
On June 17, Jeffrey Peek, chief executive officer of CIT Group Inc., spoke at a conference in the nation’s capital where the keynote speakers were Federal Reserve chief Ben Bernanke and Federal Deposit Insurance Corp. Chairman Sheila Bair. His real mission there, Mr. Peek told others, was to raise his profile among Washington’s movers and shakers.
CIT had been trying for months to improve its connections in Washington. It spent close to $90,000 last year on lobbying, and $60,000 in the first quarter of 2009. It brought onto its board of directors former Congressman Christopher Shays, a Connecticut Republican.
Ah, Remember that guy, the Congressman from Hedgefundistan, CT?
We actually wondered, back in January, where he might end up, since in this day and age, a guy with his Washington connections would be invaluable. Guess there was a limit to his power, though.
CIT’s failure: It was too small to be systemic, and Washington DCers weren’t familiar enough with it, to believe it was important, which of course means that anyone else now knows that to get help, you must be larger, and more entwined with DC.
Like, really, Jeff Peek, speaking at a conference on June 17. Should been doing that months ago.
Meanwhile, the article has more bad stuff to say about Peek’s strategy of taking CIT from a quiety company, to a big time NYC name-brand firm.
At the centre of the storm is Mr. Peek, who friends and colleagues say has been looking worn-down of late. Back in 2004, when he was named CEO of CIT, he appeared to revel in taking a higher profile after holding senior positions at Merrill Lynch and Credit Suisse First Boston.
He installed CIT’s top brass in a glitzy office building on Manhattan’s Fifth Avenue, eschewing the company’s historical base near a big shopping mall in Livingston, N.J., and brought CIT into his high-society orbit as well. CIT became a sponsor of the New York City Opera. Its role as a donor to the Metropolitan Museum of Art may have helped Mr. Peek win a prestigious spot as a museum trustee in 2008.
Mr. Peek threw parties both at the office and in his home. At an Edwardian-themed fete at his home on Valentine’s Day 2008, male guests donned top hats provided by the Peeks.
Mr. Peek is a “personable, likable guy” who showed incredible recall for names and personal details, said one former top CIT executive. When he arrived, Mr. Peek criticised CIT’s culture, which he deemed too cautious, says the former executive. He hired a psychological-evaluation firm to “understand us,” the executive recalled, and used the results to hire hundreds of new sales people who didn’t fit the old CIT mould.
Everything about that, from the top hats to the psychological-evaluation just screams: awful.
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