Goldman-Sachs

Goldman-Sachs headquarters

In 1988, after about two and a half years on the job at Goldman-Sachs, I received a zero percent salary increase. I heard through the grapevine that if you didn’t get a raise, it would be a good idea to dust off your resume.

Goldman had recently hired a new Information Technology director named Rick Adam and his personnel manager gave a talk to our department outlining a new policy. She reported that Rick wanted to cut costs by replacing experienced, senior developers just like me with recent college graduates who they would train. I regret that I didn’t have a tape recorder going when she spoke to us, since I could have sued the bastards for age discrimination.

Adam was a class A prick who had the reputation for being some kind of genius. I guess the partners at Goldman were impressed with the fact was a triathlete, had graduated from West Point and worked on computer support for Apollo Space Missions. Considering the fiascos at NASA in recent years, I can’t say that I am totally surprised that Adam had to leave Goldman not long after I did.

Adam had hired a deputy director named Jim Burns, who had previously worked for the software consulting arm of Arthur Anderson Consulting (now called Accenture to separate itself from the stench of the defunct accounting division implicated in the Enron scandal.) Shortly after Burns arrived, Goldman was flooded with these snot-nosed kids from Arthur Anderson wearing suspenders and “power ties”. They looked like what central casting had turned up for Oliver Stone’s “Wall Street”. None of them really knew what the hell they were doing, but Arthur Anderson charged Goldman $1000 per day for their services. I always suspected that Burns was getting kickbacks from Arthur Anderson, but could never prove it.

After getting my zero percent increase, I resigned from Goldman and consulted for a couple of years until I crash-landed at Columbia University, where I have been for about 18 years. In my first year at Columbia, I was picking up a coffee and muffin in the Business School cafeteria when I was stunned to see Jimmy Primavera sitting at a table in blue jeans, work boots and a flannel shirt. Jimmy had been the manager of trading systems at Goldman, where he had worked for 20 years or so. Like a lot of Goldman veterans, Jimmy had no college degree and joined the firm right out of the army. Not long after Rick Adam arrived, word went out that they were trying to get rid of managers with last names ending in a vowel. During a job interview at Bear-Stearns, I had run into another manager who had gotten the boot from Goldman and who was there interviewing as well. He was a Greek-American who felt like he had been stabbed in the back. Guys like him and Jimmy used to work 60 hours a week and were gung-ho believers in the firm.

When I asked Jimmy what he was doing at Columbia, he said that he was washing windows and without missing a beat added that he was not kidding. He told me about the bloodbath that had left him and the Greek-American jobless.

One morning they came in and tried to log into PROFS, an IBM mainframe email system that predated the Internet. If the word PROFS rings a bell, that’s because it is what Oliver North used for communications during the Iran-Contra conspiracy. The Senate Investigating Committee subpoenaed the PROFS tapes and got the goods on Reagan’s boys.

Jimmy and about a dozen other managers and senior employees found that their login wasn’t working. What could be wrong? They soon found out. One by one, they were called into personnel to discover that their services were no longer needed and were then escorted back to their desk by security guards. After they put their belongings into cartons, they were escorted out of the building and put into a long string of town cars and driven home.

Robert Rubin ran Goldman at the time. He was responsible for hiring Rick Adam and for giving the green light to fire a bunch of loyal employees because they did not fit the waspy Ivy League image that the firm was trying to project. When Rubin went to work for Bill Clinton, it spoke volumes about the kind of liberalism that was being run out of the White House. What Clinton would do to the American people, Rubin had already done to people like Jimmy Primavera.

The story of the mass firings at Goldman, I should add, ended up in an early issue of Counterpunch. Jeff St. Clair, Cockburn’s partner at the time, read my account on PEN-L and asked me if he could write it up for Counterpunch. Sure, I said. Anything to tarnish their reputation was fine by me.

Every so often I like to check out what ever happened to Rick Adam. Shortly after he left Goldman, he started an aircraft company based in Colorado. He must have gotten a hell of a golden parachute to get something like that going. He had the bright idea to build corporate jets using carbon composite material. Given carbon composite’s light weight, the planes were supposed to use less fuel. Sounds like a good idea in light of the price of fuel today, right?

Well, apparently there was a gap between the good idea and the execution:

A single bulk buyer is being touted by trustees as the preferred choice to acquire the assets of bankrupt aircraft developer Adam Aircraft, which are being put up for sale on 4 April.

The lowest auction bid for the Denver, Colorado-based start-up which entered Chaper 7 bankruptcy last month, is $10 million. Each interested party must place $250,000 into an escrow account managed by trustee Jeffrey Weinman before bidding starts on 3 April.

General Capital Partners is soliciting interest, and Weinman’s hired attorney John Smiley says the trustees favour “an enterprise sale of this entire business. If that doesn’t produce satisfactory results, then the trustees will sell the assets on a piece or lot-sale basis,” he says. Assets do not include buildings or property, as all three manufacturing sites were leased. The sale is of aircraft, aircraft parts, intellectual property licences and patents, customer and vendor contracts, aircraft certifications, manufacturing equipment and backlog orders.

–Flight International, March 25, 2008

And I took even greater pleasure in reading this soon afterwards:

Bankrupt Adam Aircraft Industries Inc. is revving up its jet engines once again now that a Russian private equity firm has been cleared to restart its business.

The defunct maker of ultralight business jets won approval Wednesday, April 9, from the U.S. Bankruptcy Court for the District of Colorado in Denver to sell its assets to AAI Acquisition Inc.

AAI is identified in court papers as being affiliated with Moscow-based private equity firm Industrial Investors and was formed solely for the acquisition of Adam Aircraft. AAI was the only qualified bidder to step forward by Adam Aircraft’s bidding deadline, winning the assets with a $10 million offer.

–Daily Deal, April 11, 2008 Friday

The new owners did not retain Rick Adam’s dubious services. He got his walking papers right after the Rooskies took over and he has now started a new software company with Jim Burns, his old number two at Goldman, at his side once again. The company, called Recondo, is involved with setting up database systems to guard against indigent people getting hospital care using invalid Medicaid identification, just the ticket for a creep like Rick Adam.

I look back at the time I spent at Goldman and am amazed how corrupted I was by that experience. I spent a ton of money on fancy Paul Stuart suits and shoes that I gave to a thrift shop not long after starting at Columbia. The only “yuppie” artifact of my time spent there is a Mount Blanc ballpoint pen that I never use since the refills are so expensive.

The only thing that mattered to me at the time was the Sandinista revolution in Nicaragua. By day I worked at Goldman and by night I helped to organize Tecnica, a technical aid project, out of my living room. At one point, Newsday did a big article on Nicaragua solidarity in New York and the reporter came to visit me at Goldman. This is what he wrote:

Lou Proyect works in a Wall Street investment bank, one of 25 “database administrators” who sit in a numbing row of fluorescent-blanched cubicles and stares at computers until the end of the day. It is the latest variation on the kind of job he has held for 19 years. Tacked to the wall of his cubicle is the latest article cut out from PC Week, a personal computer trade magazine: “IBM’s PS/2s aren’t all that revolutionary.” Neither, he says, is Lou Proyect.

I can’t even remember what point I was trying to make at the time. Was I trying to say that I was not some stupid sectarian blathering about revolution? Or was I just trying to make sure that Goldman did not decide to fire me after the article appeared?

At any rate, they did get rid of me not long afterwards but not because of my politics. Looking back at my miserable but well-paid experience there, I have to say that it is the biggest favor that they could have done for me.

UPDATE

http://cbs4denver.com/local/adam.aircraft.pueblo.2.699343.html

Apr 14, 2008

Pueblo Pursues $2M After Adam Aircraft Bankruptcy

PUEBLO, Colo. (AP) ― Pueblo officials say they will continue to pursue $2 million they say the city is owed after small-plane maker Adam Aircraft filed for bankruptcy.

Adam Aircraft shut down its operations at Pueblo, Englewood and Ogden, Utah, this year. AAI Acquisition Inc. won approval from a bankruptcy judge to buy the company last week.

AAI says the company will reopen at Centennial but has no immediate plans to restart operations in Pueblo or Ogden.

Pueblo City Attorney Tom Jagger says the city gave Adam Aircraft $1.4 million in exchange for a pledge to create 440 jobs in the city. Pueblo also bought and remodeled a building for the company.

Jagger says the city will try to recoup the money in court.