Felix Rohatyn

Ambassador Felix George Rohatyn
Born	(1928-05-29) May 29, 1928 Vienna, Austria
Residence	Upper East Side New York, New York Southampton, New York
Nationality	American
Ethnicity	Jewish
Education	B.S. in physics Middlebury College, 1949
Occupation	investment banker
Employer	Lazard Frères
Known for	Oversaw New York City's 1975 financial restructuring as head of Municipal Assistance Corporation
Political party	Democrat
Board member of	-LVMH Moet Hennessy Louis Vuitton -Publicis Group -Groupe Lardere -Rothschild Continuation Holdings -Carnegie Hall in New York -trustees, Center for Strategic and International Studies -New York Stock Exchange 1968 1972 -Suez Group -ITT
Spouse(s)	Jeannette Streit (div. 1979) Elizabeth Fly Vagliano Rohatyn
Children	Nicolas Streit Rohatyn (born ca. 1960) Pierre Streit Rohatyn Michael Streit Rohatyn
Parent(s)	Edith Knoll Rohatyn Alexander Rohatyn
Awards	-United States Ambassador to France until 2000 -commander of the French Legion of Honor.
Notes

Felix George Rohatyn (born May 29, 1928) is an American investment banker. He is known for his role in preventing the bankruptcy of New York City in the 1970s, and he also served as United States Ambassador to France. He was a long-term advisor to the U.S. Democratic Party.

Early life

He was born in Vienna in 1928, the only son of Alexander Rohatyn, a Polish Jew, and Edith (Knoll) Rohatyn, a native of Austria. His great grandfather was grand rabbi of Poland. His father managed breweries controlled by the family in Vienna, Rumania, and Yugoslavia. The family left Austria in 1935 for France. They fled the Nazis in 1940, going to Casablanca, Lisbon, and in 1941, Rio de Janeiro, before arriving in the United States in 1942. Luiz Martins de Souza Dantas, the Brazilian ambassador to France, provided visas that enabled them to escape France and the Holocaust by sailing from Marseille to Casablanca.

Rohatyn graduated from McBurney School, New York City. He received his Bachelor of Science degree in physics from Middlebury College in Vermont (where he joined Alpha Sigma Phi) in 1949.

He ended service in the U.S. Army in Germany during the Korean War as a sergeant.

Career in finance

Rohatyn joined the New York office of the investment bank Lazard Frères under André Meyer. He was made partner in the firm in 1961 and later became managing director. While at Lazard he brokered numerous, major mergers and acquisitions, notably on behalf of International Telephone and Telegraph (ITT), where he became a director in 1966. He also served on the boards of the Englehard Mineral and Chemical Corporation, Howmet Turbine Component Corporation, Owens-Illinois Inc., and Pfizer Inc. He served on the Board of the New York Stock Exchange from 1968 to 1972.

New York City fiscal crisis

In spring 1975, New York City faced a serious fiscal crisis. The city had run out of money to pay for normal operating expenses, was unable to borrow more, and faced the prospect of defaulting on its obligations and declaring bankruptcy. The city admitted an operating deficit of at least $600 million, though the actual total city debt was actually more than $11 billion. and the city was unable to borrow money from the credit markets.

There were numerous reasons for the crisis, including overly optimistic forecasts of revenues, underfunding of pensions, use of capital expenditures for operating costs, and poor budgetary and accounting practices. The city government was reluctant to confront municipal labor unions; an announced "hiring freeze" was followed by an increase in city payrolls of 13,000 people in one quarter, and an announced layoff of eight thousand workers resulted in only 436 employees leaving the city government.

When the City of New York ran out of money in mid-April 1975, New York Governor Hugh Carey advanced state funds to the city to allow it to pay its bills, on the condition that the city turn over the management of its finances to the State of New York. Carey appointed Rohatyn to head a blue-ribbon advisory committee to look for a long-term solution to the city's fiscal problems. The Advisory Commission recommended the creation of the Municipal Assistance Corporation (MAC), an independent corporation which was authorized to sell bonds to meet the borrowing needs of the city. The MAC was established on June 10, 1975. with Rohatyn as chairman, and a board of nine prominent citizens. In the meanwhile, the crisis continued to worsen, with the admitted city deficit reaching 750 million dollars; municipal bonds could be sold only at a significant loss to the underwriters.

The MAC, led by Rohatyn, insisted that the city make major reforms, including a wage freeze, a major layoff, a subway fare hike, and charging tuition at the City University. The New York State Legislature supported the MAC by passing a law converting the city sales tax and stock transfer tax into state taxes, which when collected were then used as security for the MAC bonds. The State of New York also passed a state law that created an Emergency Financial Control Board to monitor the city's finances, required the city to balance its budget within three years, and required the city to follow accepted accounting practices. But even with all of these measures, the value of the MAC bonds dropped in price, and the city struggled to find the money to pay its employees and stay in operation. In November 1975 the federal government stepped in, with Congress extending $2.3 billion in short-term loans. In return Congress ordered the city to increase charges for city services, to cancel a wage increase for city employees and to drastically reduce the number of people in its workforce. Rohatyn and the MAC directors persuaded the banks to defer the maturity of the bonds they held and to accept less interest. They also persuaded the city and state employee pension funds to buy MAC bonds to pay off the city's debts. The city government cut its number of employees by 40,000, deferred wage increases already agreed in contracts and kept them below the level of inflation. Thanks to these measures, the confidence of the banks and bond market in MAC bonds was restored.

Under Rohatyn's chairmanship, the MAC successfully sold $10 billion in bonds. By 1977–78, New York City had eliminated its short-term debt. By 1985, the City no longer needed the support of the Municipal Assistance Corporation, and it voted itself out of existence.

Rohatyn, as the chairman of the MAC and the chief negotiator between the city, the unions, and the banks, was widely given credit for the success of MAC and the rescue of New York City from bankruptcy. The social cost to the City was high: taxes were raised, some forty thousand city workers were laid off, there were cutbacks in hospitals and other municipal services, tuition was imposed at the City College, and dozens of daycare centers closed. He also drew the fire of some critics, who accused him of bailing out the banks, while slashing workers wages and benefits and reducing the power of municipal unions. But as Rohatyn wrote in the MAC annual report, "The alternative to such cutbacks would have been bankruptcy for the city, which would have generated infinitely greater social costs".

In a letter to the New York Times on March 4, 2012, Rohatyn attributed New York City's fiscal turnaround from possible bankruptcy in the late 1970s to the leadership of former New York Governor Hugh Carey and to the cooperative efforts of the City’s banks and unions, though not to President Gerald Ford’s belated agreement to federally guarantee the newly issued city bonds.

Career after the New York City fiscal crisis

After the crisis, Rohatyn continued his deal making at Lazard. Although he capped his take at the firm at 6%, Rohatyn continued to be the preeminent rainmaker at Lazard well into the 1990s, completing such deals as Sony's acquisition of Columbia. By the time Bill Clinton was elected, Rohatyn had aspired to be U.S. Secretary of the Treasury since the 1970s. But he had supported longtime client Ross Perot's candidacy, and Clinton appointed Lloyd Bentsen instead. In 1996, the Clinton administration put forward his candidacy for the post of Vice Chairman of the Federal Reserve, but a formal nomination was not made because of ideological opposition from Republicans.

In 1990, he received The Hundred Year Association of New York's Gold Medal Award “in recognition of outstanding contributions to the City of New York”. Rohatyn is also the recipient of The International Center in New York's Award of Excellence.

According to The New York Times, in the 1990s, Felix Rohatyn described derivatives as “financial hydrogen bombs, built on personal computers by 26-year-olds with M.B.A.s".

On August 22, 2006, he was appointed by Lehman Brothers as chairman of its international advisory committee and as a senior adviser to its chairman, Richard S. Fuld, Jr.

On January 27, 2010, Rohatyn announced his return to Lazard as Special Advisor to the Chairman and CEO, after a short role at Rothschild.

Diplomacy and foreign policy

Rohatyn was United States Ambassador to France 1997–2000 during the second Clinton Administration and is a Commander in the French Legion of Honor. He is a member of the Council on Foreign Relations, American Academy of Arts and Sciences, and a Trustee for the Center for Strategic and International Studies.

While serving as Ambassador to France, Rohatyn opened a series of small diplomatic missions, called American Presence Posts, in Lyon, Rennes, Toulouse, Bordeaux and Lille which brought American diplomats into contact with the people and leaders of those cities at lower cost than traditional Consulates.

He also delivered a memorable speech to D-Day veterans at Omaha Beach in 1999, on the 55th anniversary of the Normandy Invasion. He told them that a "democratic, prosperous Europe is the finest monument" to the veterans' exploits. He said, "I ask the children here today to look around—you are in the company of real heroes".

As ambassador, he also organized the French-American Business Council (FABC), a 40-member council of U.S. and French corporate chief executives that met annually, with meetings held alternately in the United States and France. FABC meetings included President Clinton, President Chirac and Prime Minister Jospin, as well as U.S. cabinet secretaries and French government ministers and meetings continued during the presidencies of George W. Bush and Nicolas Sarkozy. While ambassador, Rohatyn also worked with the U.S. Conference of Mayors to establish a TransAtlantic Conference of Mayors that gathered U.S. and European mayors to discuss urban and economic issues and build ties among their cities. In addition, Mrs. Elizabeth Rohatyn founded the French Regional and American Museum Exchange (FRAME), a consortium of 26 French and North American art museums that works together to sponsor major, bilateral exhibitions and education programs. After the Rohatyns left the ambassador’s post in Paris, FRAME became an independent, non-profit organization, which Mrs. Rohatyn continued to co-chair. FRAME remains vibrant and active today.

Infrastructure

The late New York Times columnist, William Safire, once wrote about “the infrastructuralist Felix Rohatyn”, due to Rohatyn’s long-time advocacy of rebuilding America’s public infrastructure to strengthen the country’s economy and global competitiveness. In 2007, Rohatyn and the late Senator Warren Rudman co-chaired the Commission on Public Infrastructure, a bipartisan council of governors, members of the U.S. Congress and U.S. business leaders sponsored by the Center for Strategic and International Studies (CSIS). It drew up guiding principles for strengthening U.S. infrastructure. Its members included then U.S. Senators Christopher Dodd and Chuck Hagel; based on the Commission’s work and findings, Dodd and Hagel introduced Senate legislation to create a National Infrastructure Reinvestment Bank. When they left the Senate, sponsorship of the Bill was assumed by then Senators John Kerry and Kay Bailey Hutchison. Rohatyn also worked with Congresswoman Rosa DeLauro, who has authored a House bill to create an infrastructure bank. Rohatyn testified in both the House and Senate in support of the law.

His book, Bold Endeavors: How our Government Built America, and Why It Must Rebuild Now, argues that a national infrastructure investment program would have transformational impact and lift the U.S. economy, as did historic federal projects such as the Transcontinental Railroad, the GI Bill, Land Grant Colleges and the Interstate Highway System. After Superstorm Sandy, New York Governor Andrew Cuomo appointed Rohatyn co-chair of the New York State 2100 Commission, which developed strategies for rebuilding after the hurricane. Rohatyn also serves as co-chair of the New York Works Task Force on Infrastructure.

Personal

Rohatyn has been married twice:

• In 1956, he married Jeanette Streit (1924-2012), the daughter of journalist and Atlanticist, Clarence Streit. They divorced in 1979. They had three children:
  • Pierre of St. Alexandre, France
  • Nicolas is CEO and Chief Investment Officer at The Rohatyn Group, an investment firm specializing in emerging markets, following a 19-year career at J.P. Morgan. In 1997, he married Jeanne Beth Greenberg in a Jewish ceremony in St. Louis.
  • Michael of New York City

• In 1979, he married Elizabeth Fly Vagliano. She had a daughter, Nina Griscom from a previous marriage. She worked as chairwoman of the New York Public Library.

Selected bibliography

• 1983: The Twenty-year Century: Essays on Economics and Public Finance. New York: Random House. ISBN 978-0-394-53450-3.
• 2002: "Capitalism Betrayed". The New York Review of Books. February 28, 2002.
• 2002: "From New York to Baghdad". The New York Review of Books. November 21, 2002.
• 2003: With Béchat, Jean-Paul. The Future of the Transatlantic Defense Community: Final Report of the CSIS Commission on Transatlantic Security and Industrial Cooperation in the Twenty-first Century. Washington, D.C.: CSIS Press. ISBN 978-0-89206-425-0.
• 2003: "Free, Wealthy and Fair". The Wall Street Journal. November 11, 2003.
• 2005: "Where Now for the U.S. Economy? Domestic Public Investment and America's Position in the World".Center for American Progress. Washington. September 22, 2005.
• 2005: With Warren Rudman. "It's Time to Rebuild America". The Washington Post. December 13, 2005.
• 2006: "When the Free Market and Politics Collide". The International Herald Tribune. April 3, 2006.
• 2007: With George L. Argyros and Marc Grossman. The Embassy of the Future. Washington, D.C.: The CSIS Press. ISBN 978-0-89206-508-0.
• 2007: With Warren Rudman. "Guiding Principles for Strengthening America’s Future". Commission on Public Infrastructure, Center for Strategic and International Studies.
• 2007: "A Small Price to Get New York Moving Again". The Financial Times. April 26, 2007.
• 2008: With Ehrlich, Everett. "A New Bank to Save Our Infastracture".The New York Review of Books. October 9, 2008.
• 2009: Bold Endeavors: How Our Government Built America, and Why It Must Rebuild Now. New York: Simon & Schuster. ISBN 978-1-4165-3312-2.
• 2009: "Rebuilding the Economy by Rebuilding America". Economic Club of Chicago. March 24, 2009.
• 2010: Dealings: A Political and Financial Life New York: Simon & Schuster. ISBN 978-1-4391-8196-6.

External links

• Charlie Rose Show, 12/21/2000 The Life of Felix Rohatyn, 53 minutes, with Felix and Elizabeth Rohatyn and Hugh Carey.
• Appearances on C-SPAN
• Rohatyn talk on New York City fiscal issues at Columbia University
• Namebase Entry (Archive)
• Rohatyn author page and archive from The New York Review of Books
• Rohatyn biography from Center for Strategic and International Studies

Diplomatic posts
Preceded by Pamela Harriman	U.S. Ambassador to France 1997–2000	Succeeded by Howard H. Leach