Days after September 11, Cantor Fitzgerald's notoriously hard-edged CEO wept and promised a new mission: to take care of the families of his 657 dead employees. Then he stopped their payroll. It was weeks before he was prepared to make good on his promise. Was it a mistake? He still says no.
December 10, 2011
By Meryl Gordon
Photographed by Mary Ellen Mark
Howard Lutnick at home, with a photo of him and his brother, Gary, who died September 11.
It was the last really good time, a carefree and absurdly lavish celebration. On the occasion of his 40th birthday, on Bastille Day, July 14, Howard Lutnick and his wife, Allison, chartered a 160-foot-boat, La Naturelle Dee. For a week, the Lutnicks and four other couples cruised the Mediterranean, starting in Cannes and making leisurely stops in Nice and Monte Carlo.
"We lived on Howard time," says Michael Kaminer, Lutnick's Haverford College roommate and now a dermatologist, as he describes lazily goofing around the boat during the day, playing charades and dancing at night.
"I'm so glad we had that trip, it was so special," says Jennifer Gardner, who reveled with her husband, Doug, another Haverford classmate and a partner at Lutnick's firm, Cantor Fitzgerald, in this rare uninterrupted vacation. Howard Lutnick is a famously wired and demanding man, but as the cruise ended, he announced jubilantly, "It is not possible for a human being to have a better week."
And there was more: Lutnick and friends then headed to a magnificent estate in Cliveden, just outside London, where he threw a Georgian costume ball for 45 couples, many of them buddies from work, flown in from New York at his own expense. There were toasts by Lutnick's older sister, Edie, and younger brother, Gary, about how Howard had become the rock of the family after their parents died two decades ago. "The only reason to have money," Lutnick sentimentally told the crowd, "is to share it with your friends and have fun." Allison Lutnick, a former Legal Aid lawyer and mother of three who had orchestrated this extravaganza, looked dazzling. Photos from the event show the men grinning in white frilly shirts and brocade waistcoats, the women done up in elaborate gowns with plunging décolletage, living for one candlelit night in an eighteenth-century fantasy -- a world before electricity and Internet brokerage firms. A world before terrorists flew airplanes into office buildings, killing 657 Cantor Fitzgerald employees, including Gary Lutnick, Doug Gardner, and thirteen others who were at Cliveden to applaud Howard Lutnick's happy midlife.
On a chilly night in early November, Lutnick travels to the Ramada Inn in Rochelle Park, New Jersey, to give a pep talk to 75 Cantor Fitzgerald technical-support-staff members. These people are alive only by luck; their workday at 1 World Trade Center started at 9 a.m., and most of them were getting coffee in the concourse or stepping out of the subway when the first cataclysm occurred. No one who was in the company's offices, on floors 101 through 105, made it out. Since September 11, those who survived have been working round the clock in scattered temporary offices to keep Cantor Fitzgerald's bond-and-equity-trading operations in business. They are furiously fighting off competitors who would feed on the firm's misfortune.
Lutnick, an athletic tennis player in a casual shirt and slacks, his slicked-back hair rebelling in unruly curls, gives a riveting, hoarse-voiced speech that is part grief counselor -- "Everyone in this room knows how much we cared about the people we've lost" -- and part corporate coach. "For us to be successful, we have to kick our competitors' butt," he growls. "If you let your grief and sadness overrun your commitment to the company, then you're going to bring down the people to your left and to your right." Vigorously conducting with his hands, he throws in self-deprecating and knowing asides designed to evoke smiles.
Asked afterward when the firm would relocate, he replies, "How much do you hate your offices?" People nod appreciatively. "I hate my office," Lutnick says, ramping it up. "We're looking for space in midtown Manhattan. Is that okay with you guys?"
"Low floor," a voice calls out from the back of the room.
In this hotel room of people who have witnessed terrible things erupts a truly shocking noise: laughter.
Riding back to Manhattan in the 8 p.m. darkness, his driver Jim Maio at the wheel of his black Chevy Suburban, Lutnick slumps in his seat. "Two things allow me to communicate with my employees," he says. "I was there, and I lost my brother." His guard is down; he is worn out from his performance. "Doubles, I have real trouble with doubles," he murmurs. Innocently, stupidly, I ask, "What's a double?"
It's a double memorial service, he explains. "I think there are twenty sets of two of them, father and son, two brothers. I had two women who I talked to yesterday who had both lost their brother and their husband." He lets out a sigh -- whooh -- fighting to hold back tears. "You got to live. But it's so sad. If you didn't have a greater purpose, you couldn't go on. There would be no point."
Who is Howard Lutnick and what is his greater purpose? These questions are part of our public need, both empathetic and voyeuristic, to plumb the depths of his company's tragedy. For Lutnick embodies much about New Yorkers on September 11. He started that day a Wall Street buccaneer, a hugely successful, legendarily aggressive striver who was personally worth as much as a half-billion dollars. By the 13th, he'd become the accidental survivor who was crying on Connie Chung about how it felt to lose so many people and to run for his life. By the 15th, he was the Dickensian villain who'd cut off the widow's mite, the paychecks of the dead, to assure the bankers of his sangfroid. By October 10, he had announced a munificent and detailed financial plan for the families. By then, not many people knew what to believe about Howard Lutnick.
The usually shrewd CEO seems unable to fathom the public-relations disaster of the discontinued paychecks. He still insists that he had no choice but to stanch a payroll of more than $500,000 a day, even if it was cruel to families still hoping beyond hope that their loved ones were alive. "I needed my bankers to know that I was in control," Lutnick says. "That I wasn't sentimental and that I was no less motivated or driven to make my business survive."
He turns out to have been at least as generous as and sometimes more generous than the other hard-hit World Trade Center firms. But that September 15 misstep has cost him; it will always be part of his story.
"The concerns of those families at the end of the day that he'd do the right thing are well-founded," says one finance mogul who has had business dealings with Lutnick. "He's a very tough guy, sharp elbows, takes no prisoners." A bitter former Cantor Fitzgerald broker ("You can't use my name, because I'm afraid he'll go after me -- that's how much I trust Howard") recalls that Lutnick, while developing the company's Internet trading system, reassured bond brokers that their jobs were secure, but in the end fired almost 300 of them. The luckiest people in New York? The twenty Cantor Fitzgerald staff members let go on Monday, September 10, most of whom have loyally returned to the firm. The saddest tale of all? The man who came back the morning of September 11 to pick up his things and perished.
Lutnick, a legendary proponent of no quarter, offers his version: "I alerted brokers that they'd have to expand and adapt their skills," Lutnick says by way of an explanation. "We could either get run over by the future or be part of it."
And he has his defenders. One of the most vocal is Richard Breeden, the former Securities and Exchange Commission chairman who serves on the board of eSpeed, Cantor's electronic bond-trading operation, who describes Lutnick as a man of "prodigious talent who is tremendously farsighted about the financial markets" and has been a Wall Street innovator. What to make of Lutnick's hard-hitting style? "The business of bond traders is people fighting for one hundredth of a penny," Breeden says. "It's hard to be Mr. Magnanimous when you're the little guy going up against big competitors."
Lutnick is confident that if he can just explain, if he can just demonstrate what it's like to be him right now, people will understand and forgive and see him as a corporate hero once again. This Long Island native, named "best flirt" in high school, is a champion talker, but he's under too much pressure now to follow a script. All the elements of his personality are out there: He's likable, he's irritating, he's furious that his motives are being challenged, he pushes people hard but then teases them, he's smart and self-aware yet also in denial. "It's not sad here. It's not sad here. It's not sad here," he insists of his current workplace, a remark that makes his co-workers affectionately roll their eyes. But in the next moment, he's overcome by sadness. He's a man who keeps going forward because forward is the only direction open to him.
Cantor Fitzgerald's chaotic, box-filled temporary headquarters now occupies the drab twenty-ninth floor of the UBS Warburg Building on Park Avenue, next to the Waldorf-Astoria, a far cry from the elegantly appointed Trade Center offices, designed to show off the superb Rodin sculptures collected by deceased founder Bernie Cantor. Practically twice a day for weeks, the building has been evacuated because of bomb scares phoned in by some apparent wacko targeting Warburg. It's not helping Cantor's traumatized employees, though it has produced some darkly funny moments. During one recent evacuation, Dave Kravette, a Lutnick friend since the seventh grade who descended 105 flights during the 1993 Trade Center bombing, was slowly making his way down the stairwell when two panicked young women from another firm ran by him. "I turned to the guy next to me," Kravette recalls, "and I said, 'Rookies.' "
On Park Avenue now, Lutnick shares his glassed-in corner office with Stuart Fraser, the easygoing vice-chairman of the firm. The two started together as trainees at Cantor in 1983 and became very close; Lutnick even played matchmaker years ago, fixing up Fraser, a Missouri-bred wilderness-camp enthusiast, with Elise Sand, the woman who became his wife and the mother of his three children. Fraser, who has stayed at his desk during the recent bomb scares to, as he says, "lead by example," nonetheless cannot bring himself to muster his old macho Wall Street front these days. Mourning his brother-in-law, Fraser tells employees who seem shaky that he's logging hours with a therapist and urges them to do so, too. "I feel novocained," he admits. "There are days when I'm just numb. It took me three weeks to realize this was not a dream, a bad Dallas episode."
He tells a story about going to dinner with his wife, Howard, and Allison recently. For weeks after September 11, Fraser says, Elise, who lost her brother in the attack, couldn't bear to turn on the TV news; all she could handle was the Food Network, for hours on end. She was still grieving when she had dinner with the Lutnicks, and Howard gave her a speech: "Elise, you have to stop acting like you died," he said. "You didn't die. You have to live."
When I ask Lutnick whether in all of this he has ever seen a shrink or taken Prozac, he looks at me like I've lost my mind. "I know how to do this," he says.