Are the heads of large companies worse than the rest of us? Aaron Swartz said as much when, in a discussion of Ken Auletta’s Googled, he called them “sociopaths”. Nicholson Baker seemed to have had similar thoughts when he said about the same book that “what Auletta mainly does is talk shop with C.E.O.â€™s, and that is the great strength of the book.”
Lawrence Summers, now in the Obama administration, was head of Harvard University, one of the world’s most powerful companies, from 2001 to 2006. Everyone knows about Summers’ repeated tendency to do the incredibly-inappropriate thing. AÂ generous interpretation of those incidents is that Summers had lived a sheltered life. I believe they were signs of something much worse — signs of pathology — based onÂ what he did to one of Harvard’s best employees:
Back in 2002, a new employee of Harvard University’s endowment manager named Iris Mack wrote a letter to the school’s president, Lawrence Summers, that would ultimately get her fired.
In the letter, dated May 12 of that year, Mack told Summers that she was “deeply troubled and surprised” by things she had seen in her new job as a quantitative analyst at Harvard Management Co.
She would go on to say, in later e-mails and conversations, that she felt the endowment was taking on too much risk in derivatives investments, and that she suspected some of her colleagues were engaging in insider trading, according to a separate letter written by her lawyer that summarized the correspondence.
On July 2 Mack was fired. But six years later, the kinds of investments she allegedly warned about did blow up on Harvard. The endowment plunged 22 percent last summer, in part due to the collapse of the credit markets. . . .
Mack, who holds a doctorate in mathematics from Harvard, had been with Harvard Management for just four months when she approached Summers. She asked him to keep her communications confidential, or risk making her life “a living hell.”
But on July 1, Mack was called into a meeting by her boss, Jack Meyer, then the head of Harvard Management.
The next day Meyer fired her, according to the letter from her attorney, Jonathan Margolis, a copy of which was obtained by the Globe. Meyer told Mack that she was fired for making “baseless allegations against HMC to individuals outside of HMC,” according to the Margolis letter.
Mack writes to Summers, alerting him to behavior by her co-workers that she believed could (and eventually did) have a very bad effect on Harvard. Fearing loss of her job, she asks him to keep her warning confidential. Summers fails to honor her request. What distinguishes this particular horrible behavior from more conventional examples of horrible behavior by incredibly powerful people is that Summers’ action did him no good. He didn’t backstab Mack to get to the top. He was at the top. He didn’t exploit Mack. He didn’t cheat Mack. This is coming across a courageous decent far-seeing person, much less powerful than you, who is trying to help you and all the people in your careÂ . . . and giving that person a good hard kick. For no reason. There is something very wrong with Lawrence Summers.
Frontline’s recent show The Warning tells how Brooksley Born, when she was head of the Commodity Futures Trading Commission (1996-1999), did her best to protect the rest of us from exactly what Mack warned about. Summers told her, according to a third party, “you’re going to cause the worst financial crisis since the end of World War II. I have 13 bankers in my office that have informed me of this. Stop. Right away.”