Sandy Weill completes circle in Baltimore

He started successful Citigroup career here and ended it with Citi's big Legg Mason swap

December 10, 2006|By Laura Smitherman | Laura Smitherman,Sun reporter

In some ways, the iconic career of Sanford I. "Sandy" Weill, who built Citigroup Inc. into the world's largest financial services company, began and ended in Baltimore.

Although Weill officially started as a runner at Bear Stearns and sold a securities firm he helped create to American Express, he would really cut his teeth as an empire builder when he took over consumer lender Commercial Credit Corp. in Baltimore in 1986. On that foundation, through a series of mergers, Citigroup was born.

Two decades later, Weill came full circle when Citigroup swapped its asset management unit for the brokerage business of Baltimore-based Legg Mason Inc. Weill had given up the CEO post but retained the title of chairman and had a hand in arranging the deal that would be his last.

And so it was that Weill breezed through Baltimore recently to speak at a "private" luncheon for 200 Citigroup employees and clients. It marked another stop on his book tour, a road show that has taken him to a dozen cities from Boston to San Francisco, to plug his memoir, The Real Deal: My Life in Business and Philanthropy.

The 500-page book, written with the help of former Merrill Lynch analyst Judah S. Kraushaar, takes readers through a detailed accounting of his life in global finance and charity. It also includes a section by his wife, Joan, whom he affectionately calls "Joanie." Theirs was one merger he didn't propose - she popped the question to him.

Weill shares anecdotes about his successes, his famous temper and relationship gone bad with protege James "Jamie" Dimon, now head of JPMorgan Chase & Co., and his run-ins with regulators as Citigroup became ensnared in the Enron and WorldCom scandals.

Among the yarns is a nod to former Baltimore Mayor William Donald Schaefer, though not by name. When Weill arrived at "sleepy" Commercial Credit, he says the bus schedule to the suburbs effectively made quitting time 4:30 p.m. So he sought the help of Schaefer, and with a nudge from the politico, he says the times were changed.

That kind of service didn't convince Weill to stay in Baltimore, however, and he says Schaefer didn't give him a "guilty conscience" when the decision was made to move the headquarters to New York. Weill is quick to point out that the company's Baltimore subsidiary, CitiFinancial, has far bigger operations than predecessor Commercial Credit ever did. The subsidiary employs about 1,000 people in the city.

The Sun sat down with Weill, who retired this year at 73, at the Harbor Court Hotel. Below are excerpts from that talk:

What was your role in the Legg Mason-Citigroup deal?

I've known [Raymond A.] Chip Mason for many decades. And when Citigroup decided that it might make sense for them to exit the asset management business, I thought that Legg Mason could possibly be a very good potential candidate. I spoke to Chip and got the conversation started between him and [then Citigroup President] Bob Willumstad.

You are regarded as the father of the "financial supermarket," yet that deal could be seen as a dismantling of the concept.

I don't believe in supermarkets. I hate that expression, and the reason is that supermarkets have very low margins. It's a company that would make maybe 1 percent on its sales, and the financial services business is one with pretty high margins. ... We haven't given up anything. It's like a store that would sell branded merchandise rather than a store that would sell private label merchandise.

What about Baltimore ... ?

You mean Bal'more?

Yes, thank you for correcting me. How did you end up here?

There was an article in Fortune, and the headline was, "Sanford Weill: Experienced Manager, Good References." A couple of people that worked in the financial group at Commercial Credit saw this article and called me up. I said that I had looked at their company a couple of years before and didn't think it was anything we would be interested in, but they said the company had changed and that I could be the perfect person for it. I agreed to meet with them. And that's how it started.

Did you ever consider moving to Baltimore?

I lived here in this hotel for a little over a year. When I came down here, I really felt that this was where the company was headquartered. My wife and I looked at condos and were thinking about getting a place maybe on the Eastern Shore, and we had every intention to come down here. But it turned out that a lot of the people we thought we would need to grow the business were not part of the company, and therefore we were going to have to attract a lot of new people that didn't live in Baltimore.

Maybe we, could we switch gears to talk about ...

The book?

We could do that ...

You are talking to a best-selling author.

Why don't you start with what inspired you to do the book?

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