The Bloomberg Chronicles

In the early 1970′s, Richard Levy was working on the equity

trading desk at Salomon Brothers, a subordinate to Michael Bloomberg, the

desk’s second in command. Mr. Levy’s grandfather had died, and the funeral was

the next day-the same day a large client was planning a heavy amount of

trading.

“Michael Bloomberg said, ‘Would you mind having them change

the funeral?’” Mr. Levy recalled. Mr. Levy refused. Under Jewish law, burial

must take place within 24 hours of death.

“Two hours later,” Mr. Levy said, “he apologized. But it was

too late.”

Some years later, when Mr. Levy’s son was born, the infant

was admitted to intensive care and was facing a blood transfusion.

“I called up work and said, ‘I’m staying until he’s out of

intensive care,’” Mr. Levy said. But when he arrived home later, Mr. Bloomberg

was calling. “He asked me, ‘Where have you been?’ I said, ‘I was in intensive

care.’ He said, ‘No other father took time off when their kid was born.’”

Some years later, after Mr. Bloomberg had children of his

own-two daughters-he again admitted to Mr. Levy that he’d been wrong, Mr. Levy

said.

“He’s the most brilliant guy I ever worked for, but he’s the

biggest bastard I ever worked for,” said Mr. Levy, who is now an independent

financial adviser. And yet to this day, Mr. Levy expresses a certain rueful

fondness for his old boss. “I have his number at the office,” Mr. Levy said.

“He’ll take my calls.”

In television and radio commercials, Michael Bloomberg sells

himself as an experienced businessman who knows how to

run things, who can bring people together to get the tough tasks done. And,

indeed, his record as the founder of Bloomberg L.P. and his own personal

fortune attest to his success in the business world.

But what kind of man is Michael Bloomberg? Has he indeed

brought people together, as he boasts? And what was he like in his formative

years at Salomon Brothers, before he left in 1981 and founded his eponymous

financial-information company, with more than 8,000 employees around the world?

In a normal campaign, these questions would have been

answered long ago. With just three weeks to go until the general election, in

which Mr. Bloomberg is the Republican nominee for New York

City’s Mayor, voters would have had both a clearer

sense of his business acumen and his proposals for New

York City. They would have had a better understanding

of whether he is well suited for the second-hardest job in the world at the

hardest time ever in its history.

But little in this Mayoral campaign has gone according to

plan. And for Mr. Bloomberg, it has been either a curse or a blessing,

depending on the Nov. 6 outcome.

Here he was, on Oct. 15, in Harlem

with Representative Charles Rangel. It should have been a pure boost for Mr.

Bloomberg, who cannot win without a huge Democratic crossover. Instead, Mr.

Bloomberg stood by while Mr. Rangel lambasted Democratic Mayoral candidate Mark

Green, giving reporters a different story for the day and again leaving Mr. Bloomberg

in the shadows.

But interviews with those who once worked with Mr. Bloomberg

start to bring him into focus. He is a product of his age and his profession-a

hard-charging businessman formed in the Wall Street culture of the 1970′s. His

former colleagues describe a dazzling and talented star, a hard worker, an

original thinker with little patience for those who couldn’t keep up (whether

he worked for them or they for him) with an extremely

profane mouth. “Abrasive,” “irritating” and “brash.” Also “brilliant,” a “genius,” a “self-starter.” John

Gutfreund, Salomon Brothers’ managing partner, called him “an eager beaver.”

And yet, almost every one of the more than a dozen

co-workers from the 1960′s and 1970′s interviewed professed a lingering

affection for Mr. Bloomberg, calling him generous with

friendship and loyalty (not to mention money).

Asked to comment, Mr. Bloomberg’s spokesman, William

Cunningham, downplayed the relevance of the recollections.

“If these are their memories of a hectic trading floor and

that lifestyle, that’s their memories,” Mr. Cunningham said. “We’re focused on

making sure the entire city comes together and is better than it was Sept. 11.

In a normal campaign, what a guy did 20 years ago might be interesting, but now

I think people are very focused on how you take the city forward.”

Mr. Bloomberg, however, was more willing to embrace his

trader’s roots.

“It was 15 years of my life,” he said, when stopped while

out on the campaign trail. “I always feel proud of my association with Salomon.”

Does he think he’s the same person he was back then?

“Yeah, I do. I mean, you mature, you grow, you evolve, but

basically I am the same person I was then.”

First Harvard M.B.A.

Mr. Bloomberg was at Salomon 15 years, almost as long as he

has owned Bloomberg L.P. And yet those years have merited little more than a

paragraph or two in most profiles and only a slim chapter in Mr. Bloomberg’s

autobiography, Bloomberg by Bloomberg.

He came to Salomon in 1966, a Harvard M.B.A.-the first at

Salomon, he likes to say. Whether this is true is irrelevant. “That’s when

Salomon was converting from a hard-nosed, tough, high-school-educated,

rough-around-the-edges outfit to one where a university background meant more.

Michael Bloomberg came in well-educated, and so probably people had it out for

him just on that basis,” recalled a former colleague, who asked that his name

not be used.

As a newcomer, the Harvard man worked in “the cage”-a bank

vault without air conditioning, where he counted securities by hand in his

underwear, grabbing an occasional beer to cool off. About a year later, he was

sent to the equities desk, where he and his supervisor, Jay Perry, raised block trading-enabling big institutions to acquire or

unload stocks in bulk-to an art form. In his book, Mr. Bloomberg described

himself as “Jay’s right-hand man-or he as my left-hand man.” Mr. Perry was

tall, Mr. Bloomberg average in height. One former co-worker described them as

looking “like Mutt and Jeff.”

“Block traders tend to have large personalities,” recalled

former Salomon partner George Hutchinson. “They are committing large amounts of

the firm’s capital on deals that are decidedly risky, so they need to be able

to have those skills.”

The atmosphere at Salomon matched the mood. “It was all one room,

the 41st and 42nd floors, a sea of desks and all these people. We had what was

called a ‘hoot-and-holler’ system where Jay or Mike could speak into a

microphone and Jay’s voice or Michael’s voice would be carried to all the

branch offices. They were great users of that system-there was a lot of

shouting and cajoling.”

Even today, the offices of Bloomberg L.P. resemble a trading

floor, though hushed, with no offices or doors. “It gives people an opportunity

to meld in,” said Morris Offit, a former Salomon partner who now heads

Offitbank. “It creates social dynamism. You bring people together and it

creates a whole sense of spirit. You realize you’re part of a greater concept

called a firm.”

At Saloman, above all, the equity trading desk was loud.

“There were 210 people working and yelling at the same time; it was very

high-energy,” said former Salomon municipal-bond man Robert Quinn.

And Mr. Bloomberg was always “going off the handle, yelling

and screaming,” said Mr. Levy, Mr. Bloomberg’s subordinate on the trading desk.

“Oh, God, did I get yelled at,” seconded Mr. Hutchinson.

“You have to understand, that was the way it was-there wasn’t a lot of time to

do it politely.”

“That was part of Wall Street; it was never personal,” said

Mr. Levy. “He would-everyone would-say things that by today’s standards would

be considered not politically correct. If you were overweight, they’d call you

names; if you were Irish, they’d call you names; if you were Jewish, they’d

call you names; if you were female and built differently, they’d take note.

You’d see some of the girls ready to go into tears.”

“We all had salty language in those days,” confirmed Mr.

Quinn.

“People who were in locker rooms at first-class universities

or sports teams or barracks in officer-training groups would recognize a lot of

it …. The more we liked each other, the more vicious we got,” said former

Salomon corporate financier Richard Grand-Jean.

The hard-driving attitude would bleed into off-hours, too.

Mr. Quinn-who, like Mr. Bloomberg, had a home in the Hamptons-would

drive his used fire engine by Mr. Bloomberg’s on weekends. Mr. Hutchinson-like

Mr. Bloomberg, a skier-said he remembers Mr. Bloomberg flying to Salt

Lake City on a Friday and returning Sunday by midnight. “Michael skied hard and fast and

always had to be first down the mountain.”

But, said Mr. Grand-Jean, there was another side to Mr.

Bloomberg. Years later, when Mr. Bloomberg was already at his own company, a

former Salomon employee died. Only two former partners went to the funeral: Mr.

Grand-Jean, who lived across the street from it, and Mr. Bloomberg. “I always

thought of [Bloomberg] as a good guy,” Mr. Grand-Jean said.

Besides Mr. Bloomberg’s support of numerous charities, Mr.

Levy said, loyal employees were liberally rewarded. “If you were out there

every day and put up with his nonsense, he would really take care of you.”

And indeed, in his book, Mr. Bloomberg wrote: “Loyalty is

everything.” He means it. Those who leave his company for anything other than

family reasons can never be re-hired. Those who stay are well looked after.

Power Struggle

In the early 1970′s at Salomon, Mr. Bloomberg described

himself as the “fair-haired boy.” He arrived at 6:30

a.m. and left later than anyone except Billy Salomon and the No. 2

man, John Gutfreund. “I’ve never understood why everybody else doesn’t do the

same thing-make himself indispensable on the job,” Mr.

Bloomberg wrote in his book.

And then Mr. Bloomberg was caught in a power struggle

between Mr. Perry and Richard Rosenthal, who culminated their dispute in a

fistfight that had Mr. Perry exiled to Dallas.

Mr. Rosenthal joined the firm’s executive committee; his portfolio included the

equity desk. In his book, Mr. Bloomberg writes that he was Mr. Perry’s man, and

so Mr. Rosenthal poisoned the executive committee against him. Mr. Bloomberg,

however, helped to provide the toxic material.

“Michael is a genius,” Mr. Hutchinson said. “He is

extraordinarily smart. And he was abrasive. For some people, that was a

problem.”

“Michael started banging heads with other partners,”

recalled Mr. Levy. “He was an irritant and our desk was very visible, and also

we would risk a lot of capital. This was an old-time bond house, and they were

very conservative and we were not. We were aggressive; we were always in

competition.”

Even Mr. Gutfreund, who has almost nothing but positive

words for Mr. Bloomberg, allowed, “Does everyone want their cage rattled? Obviously, no.”

So Mr. Bloomberg was sent to the operations division, to run

information systems.

“He was a trader and this was an office job, a real

comedown,” said a partner. But even there, he couldn’t tone it down.

“There were a lot of things wrong in the operations

department-we wasted a lot of money,” Mr. Hutchinson said. “We were horribly

inefficient, and because he was smart and didn’t suffer fools gladly, he

alienated some of the senior people in the operations department.”

Mr. Bloomberg’s own account verifies this: “It didn’t help

my situation when I argued vociferously the firm was going down the wrong path

…. Maybe I shouldn’t have criticized the changing of our employment strategy ….

It might have been smarter politically not to have focused computer development

toward the newly fashionable microcomputers …. Mythology also says I shouldn’t

have claimed I could run the firm better than the Executive Committee, although

I don’t remember ever saying that.”

Morris Offit does. He was quoted in 1991 as saying Mr.

Bloomberg “thought he knew more than the people he was working for.” Today, he

stands by the quote. “But he did,” Mr. Offit protested, “he did know more than

people.”

“He was a market professional on the right hand, and a

computer person on the left hand. That was very unusual,” Mr. Offit said.

And so when he was exiled to operations, he developed what

became the Bloomberg terminal. In those days, most market information was kept

on extremely primitive computers with limited data-analysis capacity, or even

in phone-book-like tomes. “The dark ages” is how several Salomon partners

described it. But Mr. Bloomberg developed a computer-known as the Salomon

B-pages-that could give Salomon traders real-time market information. That gave

Salomon a huge competitive advantage. Unfortunately for them, they didn’t

recognize it at the time.

Mr. Bloomberg wasn’t asked to stay when Salomon was taken

over by the Philbro Corporation in 1981. But he was one of 62 partners to

receive a share, tax-free, of Salomon’s $233 million value, plus stock options.

“It was a huge mistake and a great tragedy for Salomon,” Mr. Hutchinson said.

“He was permitted to walk out the door with his severance

and all that intellectual property and form Bloomberg,” Mr. Grand-Jean said.

“And then he created for the world and built for the world something he founded

at Salomon. Very arguably, if it happened today, they would never have let him

take the technology.”

“He became partners with Merrill Lynch and proceeded to sell

back as a service what he had produced for us as an employee,” said Mr.

Gutfreund. “He was a smarter business man than we.”

With, as he described it, “$10 million in my pocket,” Mr.

Bloomberg decided never to be part of a corporate culture again-unless it was

his own. As head of his own company, he would not have to butt heads, or

irritate management, or play political games. And at Bloomberg L.P., he has

certainly set the rules on his own terms.

In 1981 he left Salomon, and with the technology he

developed there and $30 million from Merrill Lynch, he started his company. He

is now worth more than $4 billion.