New SEC Chair Wm. H. Donaldson's Connections
New appointee to SEC lauded by Wall Street. Not only does he have close ties to the Bush family in several different ways (employed by them, educated at Yale with them), but he also worked under Henry Kissinger in the Nixon State Dept. during Watergate.
More recently, the investment bank he founded has merged into Credit Suisse, which is the underwriting partner of the sucessor to his first employer--G.H. Walker & Co.--the history of which is detailed below. These two banks underwrote the last major equity issue of stock for Enron, in which money was fraudulently taken from the general public to pay Enron creditors.
Shortly thereafter the stock was deemed to be totally useless. Donaldson is needed to further the Enron cover-up. The money went to pay creditors. We need to learn who those creditors are.
- Linda Minor
President George W. Bush presides over the swearing-in of William Donaldson as the new chairman of the Securities and Exchange Commission in the Roosevelt Room Tuesday, Feb. 18, 2003. White House photo by Tina Hager.
William Henry Donaldson
Birth: June 2, 1931 in Buffalo
Occupation: financial executive, insurance company executive
Source: The Complete Marquis Who's Who TM. Marquis Who's Who, 2001.
Family: s. Eames and Guida (Marx) D.; m. Sept. 17, 1960; children: Adam, Kimberly, Matthew. Education: BA, Yale U., 1953; MA (hon.), Yale U., 1970; MBA with distinction, Harvard U., 1958; LLD (hon.), Webster U., 1992; DPhil (hon.), St. Lawrence U., 1995; DHL (hon.), Alfred U., 1995. Civil/Military Service: Trustee, chmn. fin. com. Ford Found., N.Y.C., 1968-80; trustee Yale U., New Haven, 1970-75; ptnr. N.Y.C. Partnership; bd. dirs. Bus. Coun. of State of N.Y., 1990-96, Lincoln Ctr. for Performing Arts, N.Y.C.; trustee N.Y. Police Found., Marine Corps Univ. Found., Aspen Inst.; gov. Fgn. Policy Assn.; chmn. Carnegie Endowment for Internat. Peace, 1999. 1st lt. USMC, 1953-55. Memberships: Mem. Inst. CFAs, Yale Mgmt. Sch. (chmn. bd. advisors 1995), Coun. on Fgn. Rels. Addresses: Office, 277 Park Ave, New York, NY, 10172-0003; Address, Aetna Inc, 151 Farmington Ave, Hartford, CT, 06156-0001.
Recipient Pres.'s Disting. Svc. award SUNY, 1976; named Businessman of Yr., AP, 1969.
Positions Held: chair., pres., CEO, Aetna Inc., Hartford, 2000; founder, sr. advisor, Donaldson, Lufkin and Jenrette, Inc., 1996-2000; chmn., chief exec., N.Y. Stock Exch., N.Y.C., 1990-95; chmn., CEO, Donaldson Enterprises, Inc., N.Y.C., 1980-90; dean, Beinecke prof. mgmt., Yale Grad. Mgmt. Sch., New Haven, 1975-80; spl. cons. to v.p. of U.S., Washington, 1974; undersec. of state, U.S. Dept. State, Washington, 1973-74; chmn., chief exec., Donaldson, Lufkin & Jenrette, Inc., N.Y.C., 1959-73. Career-Related: bd. dirs. Aetna Life & Casualty, Bright Horizons Family Solutions, Inc., Mail.com Inc.
Donaldson was chairman of the New York Stock Exchange from 1990-95 and a co-founder of Donaldson, Lufkin & Jenrette, a well-known investment banking firms....
Barbara Roper, director of investor protection for Consumer Federation of America, said Donaldson's background isn't in itself a problem. She noted that Arthur Levitt, the SEC chairman during the Clinton years, had come to the agency from Wall Street and became an activist chairman in pushing for investor protection.
Donaldson's Wall Street background is potentially helpful, suggested Georgetown University securities law professor Donald Langevoort, a former special counsel at the SEC. "The question is, is he going to distance himself from it?" Langevoort said. "Otherwise, he's going to be tarred with the insider label."
Rep. Michael Oxley, R-Ohio, chairman of the House Financial Services Committee, said Donaldson's Wall Street background was among the things that made him a "first-rate choice for SEC chairman."
...Shortly before he took over as chairman of the New York Stock Exchange on Jan. 1, 1991, Donaldson described the great bull market of the 1980s as "a somewhat ribald party" that left the securities industry - and the U.S. economy - with a severe hangover.
He also once decried the "chauffeured limousines lined up outside fancy, new glass towers, while the homeless congregated in Grand Central Station, and lavish Park Avenue parties that made headlines while the lines lengthened at the soup kitchens."
A native of Buffalo, N.Y., Donaldson's first job on Wall Street was at the old brokerage G.H. Walker & Co., run by former President Bush's uncle, Herbert Walker. Donaldson was a classmate of the former president's brother, Jonathan, at Yale University. He also is a former undersecretary of state.
Donaldson was a founder of Yale University's Graduate School of Management, served as its first dean and held a tenured chair as the William S. Beinecke Professor of Management from 1975 to 1980.
He served in the Marines from 1953 to 1955 in Japan and Korea as a rifle platoon commander. A Yale graduate who received his MBA from Harvard, Donaldson is a chartered financial analyst and director of a number of public and private and philanthropic corporations.
FOR IMMEDIATE RELEASE: Monday, May 4, 1998
HOUSTON - Enron Corp. announced that its registration statement filed with the Securities and Exchange Commission relating to the equity offering of 15 million shares of common stock was declared effective today. The offering price is $50 per share.
The managing underwriters are Donaldson, Lufkin & Jenrette Securities Corporation; Credit Suisse First Boston; Goldman, Sachs & Co.; Lehman Brothers; Merrill Lynch & Co.; PaineWebber Incorporated; and Jefferies & Company, Inc. Enron has granted the underwriters an over-allotment option for an additional 2.25 million shares of common stock.
Subject to customary closing conditions, net proceeds to Enron from the public offering are expected to be approximately $727,500,000. If the over-allotment option is exercised in full, the net proceeds to Enron are expected to be approximately $836,625,000. Proceeds from the sale will be used to reduce debt and for general corporate purposes, including capital expenditures.
Enron is the world's leading integrated natural gas and electricity company. The company owns approximately $23 billion in energy related assets and delivers physical commodities and risk management and financial services to provide energy solutions to customers around the world. Enron's internet address is www.enron.com, and the stock is traded under the ticker symbol, "ENE."
...Donaldson founded Donaldson Lufkin & Jenrette Inc., an investment banking firm that, in 1970, was the first New York Stock Exchange member to go public. He also co-founded Yale University's Graduate School of Management in 1975, and recently served as chairman and chief executive at Aetna Inc., a managed health-care provider. A longtime friend of the Bush family, Donaldson was a Yale classmate of the former President Bush's brother, Jonathan. His first Wall Street job was at G.H. Walker & Co., run by Herbert Walker, the former president's uncle. Senate confirmation is expected within two months....Nevertheless, Donaldson's career has not been without controversy. Last year, he was named in a New York class action filed by Aetna shareholders alleging he hid financial problems while he was chairman of the company. The Wall Street Journal has reported that floor brokers exploited their knowledge of pending stock orders when Donaldson headed the NYSE.
First Vice President of White Weld with the acquisition of G. H. Walker in 1974. Following the acquisition of White Weld by Merrill Lynch in 1978...
...the underwriter merged into another firm to be G.H. Walker, Laird & Co. Another few months and that firm was acquired by White, Weld & Co., a much larger brokerage firm. Not much later, White, Weld was absorbed into Merrill Lynch, the largest securities broker-dealer in the country.
..."I think he's a great choice," said Michael King, a partner at New York-based Weil Gotshal & Manges. "You need someone like him who's a good communicator because the big job is going to be to try to reverse the cynicism [toward Wall Street], particularly among the small investors." ...
His first job was at the brokerage house G.H. Walker & Co., headed by former President George H.W. Bush's uncle Herbert Walker. In 1959, he founded Donaldson, Lufkin & Jenrette with classmates Dan Lufkin and Richard Jenrette, with a focus on stock research. The firm later expanded into investment banking and other financial services. It was bought by Credit Suisse First Boston in 2000 for $13.4 billion.
Donaldson also served as the first dean of the Yale School of Management for five years starting in 1975. Before that, he was undersecretary of State to Henry Kissinger from 1973 to 1975.
Wall Street investment bank Credit Suisse First Boston has defended its role in advising Enron, the bankrupt energy giant, after reportedly handing over documents to Congressional investigators.
CSFB played a central role in creating the controversial partnerships that Enron used to hold billions of dollars of unprofitable assets and that eventually contributed to its bankruptcy, the Financial Times newspaper reported.
In response, CSFB acknowledged its links to Enron but said its work was reviewed by lawyers, auditors and credit ratings agencies.
"The partnerships that CSFB worked on were reviewed by the ratings agencies, outside counsels, and the accounting firms," a CSFB spokesman said.
Enron depended heavily on a team within CSFB, known as the structured products group, to engineer the partnerships, according to the FT report.
It said the team worked closely with Andrew Fastow, Enron's ex-chief financial officer, and his deputies to develop partnerships that shielded unprofitable Enron assets.
It reportedly devised three partnerships, known as Osprey, Marlin and Firefly, which held a total of $4bn (£2.8bn) in assets.
The team was part of US firm Donaldson Lufkin & Jenrette (DLJ), which merged with CSFB in 2000.
Enron reportedly paid $250m in fees to banks in 2000, with DLJ and CSFB featuring among six banks that received more than $20m, the FT reported.
CSFB has said it is co-operating with Congressional investigators and has handed over documents about its work for Enron.
Furthermore, it insists that "Enron knew and understood the partnership structures we worked on," according to a CSFB spokesman cited by the FT.
Former Enron chief executive Jeff Skilling has told Congressional investigators he did not fully understand the complex web of partnerships.
"Whistle-blower" Sherron Watkins has also told Congressional panels of her belief that Ken Lay, Enron's ex-chairman, did not understand them.
Joseph Berardino, chief executive of Enron's audit firm Andersen, has denied that his firm helped Enron to set up a series of complex external financial partnerships to squirrel away millions of dollars of undisclosed debt.
He told the House Financial Services Committee in Washington: "We did not help to establish. We reviewed the accounting that others developed."
The history of Credit Suisse First Boston dates back to 1932, when The First of Boston Corporation was established as a subsidiary of The First National Bank of Boston. In 1923, as a result of the 1933 Glass-Steagall Act, The First of Boston Corporation severed its ties with The First National Bank of Boston, changed its name to The First Boston Corporation, and became the first (and for many years, the only) publicly-owned major investment banking firm. Several key members of Chase Harris Forbes Corporation, the securities affiliate of Chase National Bank, joined the new investment bank. With 650 employees and $9 million in capital, the firm soon became a leading bond underwriter and trader.
In 1946, Mellon Securities Corporation merged into The First Boston Corporation. Mellon's franchise with industrial clients led to some major deals: initial debt offers for the World Bank, Hydro Quebec, and a 2.2 million share offering for Gulf Oil Corporation in 1948 (the largest equity offering until that time). By 1947, The First Boston Corporation surpassed $1 billion in new capital issues, and in 1959 it reintroduced the credit of Japan to the American markets with the first offerings by its government since 1930. This led to significant expansion in operations for The First Boston Corporation. By 1970, the Firm was raising more than $10 billion in new capital annually. In 1971, The First Boston Corporation joined the New York Stock Exchange, developed its equity, sales, research, and trading operations and soon established an equity business to compliment its debt operations.
In 1978, The First Boston Corporation took the first step in its affiliation with Credit Suisse by replacing White Weld & Co. as a shareholder of Financiére Crédit Suisse-First Boston (formerly Société Anonyme du Credit Suisse et de White Weld), a leading international trading, investment banking and asset management group in Europe. Financiére Crédit Suisse-First Boston's main subsidiary, Credit Suisse First Boston Limited in London, became one of the premier Eurobond houses. In 1988, in conjunction with the combination of the firm's parent company, CS Holding. The First Boston Corporation became a privately-held company, renamed CS First Boston, Inc. Ownership of Financiére Crédit Suisse-First Boston passed entirely to The First Boston Corporation and, at the same time, The First Boston Corporation acquired all its own shares held by the public. As a result of this reorganization, CS Holding became a direct shareholder of the newly renamed CS First Boston, Inc.
From 1989 to 1993, CS First Boston operated through its three main regional subsidiaries: The First Boston Corporation in the United States, Financiére Crédit Suisse-First Boston in Europe and CS First Boston Pacific in the Asia/Pacific region. In 1993, CS First Boston integrated the three regional operations into one global investment bank and operated under a single name, CS First Boston until 1997.
On January 1, 1997, CS First Boston and Credit Suisse consolidated businesses into Credit Suisse First Boston (CSFB) and the parent company was renamed Credit Suisse Group. Today, CSFP is a leading global investment banking firm and provides a comprehensive range of financial advisory, capital-raising, sales and trading and financial products for users and suppliers of capital around the world. In 1998, CSFB had over 12,000 employees in over 50 offices and over 30 countries. Credit Suisse First Boston is one of the world's largest securities firms in terms of financial resources, with approximately $7.1 billion in revenues in 1997, $7.3 billion in equity capital and $310 billion in assets as of December 31, 1997.
Mellon Securities had merged into First Boston in 1946, and as of about 1980, the Scaife family held about 6% of First Boston, and the combined Mellon and Scaife families about 13%. First Boston's principal law firm was Sullivan and Cromwell, out of which Allen Dulles ran U.S. intelligence after the termination of the OSS and until the creation of the CIA. This is also Paul Mellon's law firm; his and much of the Mellon family's financial affairs were run by Stoddard Stevens of Sullivan and Cromwell, who has been described as Paul's ``father figure.''
Dickie Scaife was brought into this system by his OSS relatives no later than 1973, and in 1979 he was placed on the board of directors of First Boston, where he remained until 1987. At that time, 40% of First Boston was owned by Crédit Suisse-White Weld (of the dope-running family of former Justice Department official William Weld). In 1988, First Boston became CS First Boston, and the size of the board was apparently considerably reduced. ...
William Weld is married to a Roosevelt, Susan, the daughter of another OSS veteran, Quentin Roosevelt.
The Oyster Bay branch of the Roosevelt family is deeply enmeshed in this OSS-Wall Street intelligence apparatus, and they are especially close to Cord Meyer, a key operative of this network who shows up again and again as a top operative with responsibility for handling ``CIA'' front organizations. It was Teddy Roosevelt's grandson Kermit (``Kim'') Roosevelt, who had proposed the creation of a ``propaganda and intelligence agency'' to Wall Street lawyer William Donovan during World War II.
Kermit subsequently worked with British intelligence to overthrow the Mossadegh government in Iran in 1953, an action which worked to the financial benefit of not only British Petroleum, but also of Gulf Oil, a Mellon family enterprise which was closely tied to First Boston after the 1946 Mellon Securities merger. In 1958, Kermit ``retired'' to take the strategic position of vice president for government relations with Gulf Oil.
[Uncle Herbie's son. So Uncle Herbie was married to Mary Carter? Did she own the paint company?]
George Herbert Walker, III
Birth: March 16, 1931 in St. Louis
Occupation: investment banking company executive, lawyer
Source: The Complete Marquis Who's Who TM. Marquis Who's Who, 2001.
Family: s. George H. and Mary (Carter) W.; m. Sandra E. Canning, Dec. 23, 1955 (div. Oct. 1962); children: Mary Elizabeth, Wendy, Isabelle; m. Kimberly Gedge, July 27, 1968 (div. Jan. 1977); children: George H. IV, Carter; m. Carol Banta, Feb. 21, 1987. Education: B.A., Yale U., 1953; LL.B., Harvard U., 1956. Certification: Bar: Conn. 1956 Civil/Military Service: Bd. dirs. Downtown St. Louis Inc., 1975-90, chmn., 1984-86; bd. dirs. Webster U., chmn. bd., 1987-92; trustee Mo. Hist. Soc., St. Louis Children's Hosp., 1972-92, Jefferson Nat. Expansion Meml. Assn., 1992; vestryman St. Ann's Ch., Kennebunkport, Maine; mem. Mo. Rep. Ctrl. Com., 1983; adv. bd. St. Louis Area coun. Boy Scouts Am., 1989; trustee investment trust Episcopal Diocese of Mo.; hon. bd. dirs. Anti-Drug Abuse Edn. Fund, Inc., 1990; bd. dirs. St. Louis Zoo, 1992. With USAF, 1956-58. Memberships: Mem. Rotary (St. Louis club). Addresses: Home, 19 Portland Pl, Saint Louis, MO, 63108-1203; Office, Stifel Fin Corp, 501 N Broadway, Saint Louis, MO, 63102-2102.
Positions Held: also bd. dirs., Stifel Nicolaus & Co.; chmn., Stifel Nicolaus & Co., 1982; pres., CEO, Stifel Nicolaus & Co., 1978-92; exec. v.p., Stifel Nicolaus & Co., 1976-78; chmn. bd. dirs., G.H. Walker & Co., 1973-74; sr. v.p., also bd. dirs., White, Weld & Co. Inc., 1974-75; gen. ptnr., G.H. Walker & Co. (later G.H. Walker, Laird Inc.), 1961-74. Career-Related: civilian aide to sec. U.S. Army for Ea. Mo., 1973-80; bd. dirs. Laidlaw Corp., Laclede Steel Co., Eck-Adams Corp.; bd. govs. Midwest Stock Exch., 1982-88.