Overhaul (17 page)

"B
ANKRUPTCY IS
NOT
our goal." The words seemed to just pop out of my mouth.

At the behest of the White House, I'd found myself on the phone with some reporters from Detroit while on my way in from the airport on a Monday morning in March. All went fine until one asked about bankruptcy for Chrysler and GM. I should have been prepared for this obvious question, but wasn't.

I hesitated, trying to reconcile my preference for directness with the indisputable need to avoid further destabilizing two already fragile companies. And the last thing I wanted was to be dragged into some kind of horrible media free-for-all.

Dealing with reporters, I had to get used to how the rhythm of journalism in Washington had changed. During my years as a
Times
reporter, the Washington crew typically faced a 6
P.M.
deadline for all but the most important stories. So unless late news broke, we had evenings free for the carousing that journalists back then enjoyed. But reporting these days goes on 24/7, with questions often posed and answered by e-mail. Throughout the day, our press people replied to questions themselves or asked for our help. There was no more stopping at the cocktail hour. By mid-evening, the next day's newspaper stories would appear on the Internet, triggering rounds of pushing and pulling between our communications team and the reporters to try to move errors, misunderstandings, or excessive harshness to a happier place. We would awaken in the morning and open the print editions to see whether our labors had borne fruit.

The tone of the relationship between the media and the government had changed too—it had grown more mistrustful and cynical even than after Watergate. No matter what we did, our competence, our motives, and, at times, our integrity were questioned.

The game was rough, but the White House press office had decided it was time for us to play it. We needed to make the case to the public that the task force was getting things done. That was why I had found myself in that airport car on the phone with the
Detroit News
and the
Detroit Free Press,
being questioned about one or more of the automakers having to declare bankruptcy.

I went ahead and said what had come to mind: "Bankruptcy is not our goal. I've been in and around bankruptcy for twenty-six years as part of my private-sector work. It is never a good outcome for any company, and it's never a first choice." I knew that I was on the edge of being disingenuous, but no formal decision had been made about bankruptcy and the decision would be the President's, not mine. So great was our concern about scaring off car buyers that we did not want to take any chances by throwing around the B word.

Sharpened to a sound bite—"Bankruptcy is not our focus; bankruptcy is not our goal"—my ad lib became our mantra.

Yet all the while we were preparing for it.

The day after our return from Detroit I'd met Matt Feldman, a bankruptcy lawyer whom we'd recruited because
TARP'S
nine-attorney legal department had no one available with cutting-edge experience in restructuring. I didn't know Matt but Harry and Ron did, and he had also been recommended by a mutual friend on Wall Street. Nonetheless, hiring a lawyer at Treasury presented its own complications;
TARP
or no
TARP,
I was told, only the general counsel was permitted to hire attorneys. We eventually ground through the bureaucracy, trying to take advantage of Matt's expertise as best we could along the way.

So skittish was the White House about any talk of bankruptcy that when Matt's firm put out a press release proudly announcing his joining the task force, I was ordered to reprimand him for breaching protocol. I knew that Matt had nothing to do with the release—it was an innocent effort by his firm to brag a little—so I chose to ignore that particular instruction, the only time in my government career when I did so.

Matt Feldman was our last senior hire. Balding and cherubic, he had the maturity, steady nerves, and persistence that we'd require in dealing with the strong and stubborn personalities of a dominant industry. Matt also had terrific judgment on business issues well beyond questions of law. And he would prove to be as fine a restructuring lawyer as I have ever met.

We now had plenty of chiefs but no Indians. Harry proposed that we launch an investment-banking-style recruiting drive. It didn't faze him that we had only a couple of weeks to hire people, instead of the usual six months. On March 13, he blasted out an e-mail to his entire network of Wall Street contacts. "The work is incredibly intense," Harry wrote. "The amount of work is massive, the timelines are tight and the level of focus is also very high." And he added "compensation = government wages." When Matt read it, he thought it was so tough that no one would respond; Harry's view was that we wanted only highly talented people with an extraordinary sense of commitment. His e-mail was a way to select for them. We were soon deluged with hundreds of applicants, the vast majority from people we hadn't solicited directly as Harry's e-mail ricocheted around cyberspace.

We spent part of a morning reviewing piles of résumés and settled on a small group of candidates to invite to Washington for interviews. They had to pay their own way; unlike an investment bank, Treasury had no budget for reimbursing candidates' travel expenses. Nor was there anything like relocation or temporary-housing allowances for those we hired. Five of our new colleagues (including Ron and Harry) settled at the Woodward, a former office building a block from the Treasury that had been renovated to accommodate just the sort of short-term residents we expected to be.

In hiring, as in many other matters, we would have preferred a more conventional schedule, to make sure we picked the very best. But I'm a believer in the principle of Malcolm Gladwell's book
Blink:
you can often make equally good decisions in a fraction of the customary time. (Warren Buffett has shown that superb investing need not entail the months of due diligence and deliberation that private equity firms typically apply to a deal. Buffett has been known to make successful multi-billion-dollar bets on the basis of a few meetings or phone calls.)

As we filled out the team, I thought of it as a firm rather than as a governmental hierarchy with gradations of seniority and titles bordering on the ridiculous—we wanted no "principal deputy undersecretaries" or the like. There were five partners (Ron, Harry, Brian, Matt, and I) who each had clear responsibilities but who functioned as a team. Matt ran our mini-law firm, with the assistance of Paul Nathanson, a superstar who had worked for me at both Lazard and Quadrangle before going on to Harvard Law School and a Supreme Court clerkship for Chief Justice John Roberts. We had diligence/restructuring teams for GM (headed by Harry) and Chrysler (headed by Ron with help from Brian Osias). Wall Street and the auto finance companies became my bailiwick, and to guide us with the latter, we recruited yet another Brian, Brian Stern, a youthful but experienced pro in financial institutions.

The White House belonged to Brian Deese, whose physical proximity to Summers and precocious understanding of policymaking were invaluable assets for navigating the byzantine decisionmaking process. Among many other things, I would learn an entirely new language from him, the lingo of the West Wing. "Litigate" meant to debate a decision or the wording of some document or speech. "Lean into" referred to encouraging the media about a particular line of speculation. "Wave off" was the opposite. To get "caught trying" meant receiving credit for having attempted something (like saving Chrysler) but failing.

Our recruiting effort succeeded in part because it coincided with a slow time on Wall Street. But far more significant, I found, was the desire of people to serve. With one exception, none of our new arrivals had any government experience or had ever thought much about coming to Washington. All shared the urgency that had finally prompted me to close my eyes and jump: the nation was going through a financial crisis, and for those of us with relevant qualifications, this was our chance to help. As Harry wrote in his e-mail, "I believe the opportunity is both unique and tremendous."

Washington veterans marveled at our hiring. I made a point of bringing as many of our new colleagues as I could to meetings in the West Wing. Even Larry was impressed. "Where did these people come from?" he asked on more than one occasion. "Every time you come here I see different faces, but they all seem to know what they are talking about." Our growing team attracted a different kind of attention in the halls of the Treasury. Never mind that we were part of
TARP
and our hiring didn't impinge on Treasury's tight budget; eventually Mark Patterson, Geithner's no-nonsense chief of staff, suggested that a task force of fourteen was, as Larry had cautioned weeks before, large by government standards.

By early March, I had settled into a routine that would continue until the end of my government service. I had sublet a cozy furnished condo on 23rd Street that had the advantage of access to room service from the Ritz-Carlton Hotel (to which it was attached) and to a Reebok Sports Club. I would get up at 5:30, take a quick look at the e-mails that had arrived overnight (inevitably, a pile from Harry), and be on a treadmill at the gym in time to catch the opening of
Morning Joe
on MSNBC at 6
A.M.
The reports were filled with gloom, with the stock market below 7,000 and people debating whether we were in a recession or a depression. By seven, I would be back to shower, dress, scan the newspapers, and wolf down a bowl of Cheerios or an English muffin, all in order to get to the office in time to prepare for our daily 8
A.M.
Team Auto call. Lunch was a tuna fish sandwich or a chicken caesar salad at my desk, a big change from the Four Seasons restaurant in New York, on the ground floor of the Seagram building, where Quadrangle had its offices. I'd get back to my condo between 8 and 9
P.M.,
eat some take-out food or order room service, and respond to the e-mails and other tasks that had piled up during the day. Answering government e-mails from home took some doing. The Treasury's e-mail system had layers of security that made it difficult to navigate remotely. (I'd been given a top-secret clearance—complete with a security briefing—but I never needed it for my job.)

I had anticipated this ascetic life and soon came to enjoy it, though it was a long way from the glamour of Washington that many envision. An unexpected benefit was that my caloric intake was so reduced that I lost five pounds during my time in government. Another happy surprise was that Team Auto was sufficiently autonomous for many of us to be able to commute home on weekends. I didn't mind spending most of Saturday and Sunday on conference calls or answering e-mails or commenting on drafts as long as I could be with my family for meals.

My teenage children didn't have much interest in cars or car companies—these were city kids. But having grown up in a politically active household, they were curious about government life. They particularly wanted to find out how it compared with the TV show
The West Wing,
reruns of which they watched endlessly. (I've never seen a single episode.) One weekend when I was stuck in Washington, my twin boys, who were seniors in high school, came to visit. They'd been to the White House (and the Oval Office) during the Clinton years and now wanted to see the Treasury building where I worked. Built in the mid-nineteenth century, the Treasury has all the feel of the important monument that it is. The department has an in-house curator, and the building's long and eventful history is displayed on its walls. As my boys and I walked the cavernous halls on Saturday morning, I enjoyed as much as they did looking at the vintage photographs, some of significant events, some of the building and its neighbors over the years. We also toured the portraits of former Treasury secretaries on the third floor, each with a surprisingly frank caption explaining the individual's successes and shortcomings. And we visited the ornate marble Cash Room, a banking hall where in the past money could be redeemed for gold and silver, and which was also the scene of President Grant's inaugural ball. (Since arriving at Treasury, I had been to the Cash Room for two ceremonial events: Tim Geithner's swearing-in and his disastrous first bank speech.)

The toll on my colleagues, who had more limited financial means and many of whom had young children, was far greater than it was on me. Every evening around six, Ron, Matt, and Harry would don headsets and call home to talk to their school-age kids. Ron would make the five-hour drive each week from his home near Pittsburgh in his 2003 Mustang (making him one of only a couple of task force members who drove an American car). When Matt Feldman told his wife he was joining the task force, she replied, "Let me understand this. You're moving away, you're leaving me with four kids, you're resigning your partnership, you're giving up 98 percent of your income, and you're asking me to be excited about that? I'll support you, but don't expect me to be excited about it." My young colleague Sadiq Malik spent his first month on a friend's couch in the Virginia suburb of Rosslyn. I tried to ameliorate the sacrifices as best I could, such as by paying for a stocked refrigerator and cabinet of cookies, granola bars, and the like to sustain the team during the late nights.

Even Harry Wilson, tough as nails, experienced low points. He had given up a treasured early retirement to go back to a life of hundred-hour weeks, and he and his family were feeling the strain. Two weeks after joining Team Auto, having been told he couldn't go on the Detroit trip because of lack of space, he mistakenly took a worried comment that I made during a Sunday conference call as personal criticism. That night, as he said goodbye for the week to his wife and four daughters, most of them broke down in tears. Bombarded on all sides, he lay down on his bed and cried. The next morning, after a mostly sleepless night, he took the first flight to Washington, miserable as he contemplated another week of back-to-back meetings.