President Obama and Robert Wolf
Posted by Larry Doyle on February 2, 2010 3:02 PM |
I have debated writing about Robert Wolf.
Who is Robert Wolf? The CEO of UBS Group Americas and one of if not the closest adviser President Obama has on Wall Street. Wolf was profiled in The Wall Street Journal on January 23rd, Obama’s Lead Blocker on Wall Street:
Mr. Obama has at least one buddy in the banking business: a former University of Pennsylvania fullback and ex-Salomon Brothers bond trader who now serves as an outside White House adviser.
Robert Wolf, chief executive of UBS Group Americas, first met then-Sen. Obama at the office of George Soros.
Mr. Wolf has visited the White House nearly 20 times since Mr. Obama moved in last January. Mr. Wolf lunched alone with the president in June. He joined him July 4th to watch the national fireworks from the White House lawn. They golfed together on Martha’s Vineyard in August.
Making the relationship all the more unusual is that Mr. Wolf works for a foreign bank that agreed last year to pay the U.S. government $780 million to settle accusations that it had helped defraud the Internal Revenue Service. The Justice Department alleged that UBS helped 52,000 wealthy Americans hide billions of dollars in assets to avoid U.S. income taxes. Obama aides say they determined early on that the U.S. arm of UBS wasn’t involved in the alleged tax fraud.
Mr. Wolf says that the fisticuffs between Mr. Obama and Wall Street haven’t strained their friendship. The rapport between the White House and the banks, he says, “is dynamic, kind of like our industry: Some days the markets are volatile and others times they work smoothly.”
The two men first met in December 2006 in the New York office of billionaire investor George Soros. Mr. Wolf was a newcomer to elite Democratic donor circles. Then-Sen. Obama, still months from launching his bid for the White House, was desperate to raise campaign cash on Wall Street.
Mr. Wolf slipped the senator his business card. He got a call from Mr. Obama the next morning. “I picked up the phone and said, ‘Yeah, sure, this is really Obama.’ And it was.” The two men dined twice in Washington over the next month. A few weeks later, Mr. Wolf hosted New York’s first Obama fund-raiser. The event, at UBS’s Manhattan offices, drew nearly 200 people and raised $350,000 in three hours, Mr. Wolf says.
Mr. Wolf’s fund-raising clout helped seal a bond, despite their divergent personalities—a onetime bond trader and obsessive Little League coach hitting it off with a bookish former community organizer.
“Many of us were jealous,” says hedge-fund chief Jim Torrey of the Torrey Funds, an initial Obama fund-raiser. “He had Obama’s personal cellphone number, and the two of them talked all the time. They just sort of adopted each other.”
At a debate in July 2007, former Alaska Sen. Mike Gravel took a dig at Mr. Obama for saying he spurned all lobbyists while accepting cash “from a Robert Wolf at USB [sic] Bank.” By then, U.S. employees of UBS had contributed more than $200,000 to the Obama campaign.
Two weeks later, Mr. Wolf took a call from Mr. Obama that he says changed their relationship. The two talked in depth about the country’s rising economic woes. Bear Stearns was wobbly. Foreclosures were skyrocketing. And some units within UBS itself were racking up losses. The bank later had to write down more than $50 billion in illiquid securities as part of the subprime-mortgage crisis. The losses came from a portion of the bank not directly under Mr. Wolf’s purview.
At this point, I nearly spilled my coffee. Why?
The fact that the President was reaching out to Robert Wolf for color on developments surrounding the mortgage business. Why might that be funny? As an institution, UBS could not spell mortgage in the early to mid-90s let alone think about properly underwriting and distributing the product.
I was hired in late ’96 by a former Bear Stearns colleague who had recently joined UBS to help develop this business. My tenure and that of my colleagues within our fledgling mortgage effort was short-lived as a result of Swiss Bank’s takeover of UBS. Swiss Bank’s management had no desire to be in the mortgage business. UBS’s management, including Wolf, was not about to spend any political capital to truly defend our business.
Not a big deal truly. I took my francs and moved on.
I write now simply because I find it amazing that our President is getting insights on the mortgage market from an individual at an institution that had no meaningful understanding of the intricacies of the mortgage market.
Great country America.
You can’t make this stuff up.