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 The New York Times' DealBook offered
on Tuesday a look at the possible candidates for the top job at
troubled Freddie Mac. We don't know if DealBook, which cited unnamed
sources for the suspiciously short list, has a clue. But we do know
that candidate lists for big, troubled government sponsored enterprises
aren't exactly common, so we'll give it a spin.
The first thought: While conventional wisdom suggests
that leading contenders will be faithful Republicans -- the Bush
administration is still in business -- a quick look at the Federal
Election Commission database suggests a more complicated situation.
While the administration may have influence on the decision thanks to
Freddie's status as a GSE, and Treasury has assumed an increasingly
central role, it's ultimately up to Feddie's board of directors to make
the choice. The four rumored "candidates" are former Bear Stearns Cos. CEO Alan Schwartz, former Goldman, Sachs & Co. director Ken Wilson (also a veteran of Lazard and Salomon Brothers), Lehman Brothers Inc.'s global head of mortgage capital Theodore Janulis and Deutsche Bank America's CEO Seth Waugh. The last two are big Democrats. For example, of the $11,732 Waugh donated to political causes over the last eight years, only $3,300 went to Republicans. Meanwhile, Lehman's Janulis is even bigger. Of the $72,600 he donated over the last eight years, only $2,000 of it went to a Republican, in this case to President George W. Bush's re-election campaign. While Schwartz may seem like a longshot -- he's an
investment banker without a lot of experience with the kind of mortgage
arcana Freddie Mac traffics in -- based on FEC data he is the most
Republican-leaning of the bunch, even more so then Wilson, a longtime
financial services investment banker who recently joined old colleague
Hank Paulson at Treasury. But politics
aside, Schwartz would seem to be the least likely contender not only
based on his resume, but because of his unavoidably close association
with Bears' collapse and its renegade rep -- even if he wasn't really
responsible for most of it. Already the mere inclusion of his name in
the DealBook story has prompted a number of bloggers to howl over the
absurdity of it. Schwartz may be toxic. Janulis,
a fixed-income specialist, could face a similar problem from Lehman's
mortgage-related woes. Besides, why would Janulis want to jump from one
mess to another? And if he's the guy who helped stave off a Bear-like
collapse at Lehman, would Lehman CEO Dick Fuld really want to lose him
right now? The larger question here is whether mortgage-related
expertise would now prove to be a disqualifier for a job running a
large mortgage GSE. Strange. Ironically, politics and perception combine to boost
Wilson, though he's short on management experience. He's certainly
experienced in helping troubled banks. Like Schwartz, Wilson is a
big-time banker though he's not actually run a large firm. Nonetheless,
he's well connected to the administration, and it may help that he's
donated to the political campaigns of Sens. Hillary Clinton, Chris
Dodd, and Charles Schumer, three Democratic heavyweights who certainly
will have a thing or two to say about Freddie Mac's next boss in a new
administration. The dark horse of the group is Waugh. He's not as well known as the others -- if you Google him, you get a lot of stories about him ringing the NYSE bell with Tiger Woods. But like Janulis, his background is in fixed income and not banking. Maybe that's the magic recipe: expertise in fixed income without being part of the mortgage mess. And, of course there's always the possibility that DealBook missed a name or two or more. - Matthew Wurtzel Categories Deal Video
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