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Monday, February 28, 2011
2008: a year in review | Netvibes Developers blog
http://dev.netvibes.com/blog/2008/12/30/2008-a-year-in-review/
James Fotopoulos
James Fotopoulos Home
The film and video work of James Fotopoulos has been shown internationally at many festivals and sites including the International Film Festival Rotterdam, the New York Underground Film Festival, the Sundance Film Festival, the Walker Art Center and the Andy Warhol Museum, among others. In 1998 Fotopoulos founded Fantasma, Inc. for the production of his second feature film Migrating Forms (1999). In 2002 he had a retrospective at Anthology Film Archives and was exhibited in the 2004 Whitney Biennial. In 2005 he received a Creative Capital Grant for his in-progress interdisciplinary epic on the life of Richard Nixon, published the first of many books of drawings The Lime Book, and completed an installation for the 2005 Contour Biennial for Video Art. In 2006 with Grove Press founder Barney Rosset he created an experimental video biography on Rosset and an adaptation of an unpublished screenplay by Eugène Ionesco, of which the latter premiered at the New York Museum of Modern Art. In 2008 he directed two videos based on screenplays by artist Raymond Pettibon. He currently resides in Philadelphia, Pennsylvania. His most recent piece is a feature length video and 245 drawing adaptation of the 1886 Henry Saville Clark and Walter Slaughter musical Alice in Wonderland (2010). | ||||||||||
Five traits to creating innovative change for business value
Five traits to creating innovative change for business value
Do you have what it takes to innovate?
Collaborating with the crowd is more important than ever. HP Fellow Ed Kettler outlines five traits essential to creating change that generates business value.
Are You Ready to become an innovative, Instant-On Enterprise? Let us help you find the right mix of solutions.
Innovation is essential to surviving rapid change. It breeds new ideas, processes and methods focused on generating value and gaining a competitive edge. And unleashing it may be less complicated than you realize.
For example, consider this common problem. An insurance company, with a workforce that exceeds 36,000, wanted to tap into the knowledge of employees, customers and partners. After deploying a Web-based innovation management platform, the company was able to quickly sift “high impact ideas.” The ideas generated account for $3.5 billion in potential revenue.
Someone in the crowd knows the answer
“Innovation is a community sport,” advises HP Fellow Ed Kettler. “The answer to a specific problem is almost always known by someone in the organization.” However, “the person closest to the problem usually has an answer but may not have the voice to catch the ear of leadership.”
In The Wisdom of Crowds, James Surowiecki dispels the belief that knowledge rests exclusively in the hands of skilled experts. Chasing the expert, he argues, is a costly mistake. “We should stop hunting and ask the crowd instead,” Surowiecki writes. “Chances are, it knows.”
How can leaders cultivate a culture of innovation to gain a competitive advantage in an environment of accelerating disruptive change? Kettler shares five features of successful innovation strategies:
- Know what innovation is. Innovation equals value. An idea that fails to solve a business problem or deliver value will not be perceived as innovation.
- Understand the ecosystem. Leaders must possess a thorough understanding of an organization’s operations, industry and competitive environment.
- Engage employees. Develop talent and inspire enthusiasm by continuously expressing the necessity for innovation. Reinforce the process with recognition.
- Cultivate innovator language. Develop the necessary communication skills to effectively express the business value of specific ideas at every level.
- Foster divergent thinking. Encourage intersections with non-adjacent worlds such as Olympic competition, film and astronomy to drive strategic imagination.
Hands-on participation stimulates innovation
About Ed Kettler
Ed Kettler, an HP Fellow, is the Chief Technologist for Sustainability for HP Enterprise Services’ US Public Sector organization. He is responsible for strategy development and delivery for energy and sustainability management solutions. Continue the conversation with Ed on The Next Big Thing Blog.
Ed Kettler, an HP Fellow, is the Chief Technologist for Sustainability for HP Enterprise Services’ US Public Sector organization. He is responsible for strategy development and delivery for energy and sustainability management solutions. Continue the conversation with Ed on The Next Big Thing Blog.
Sustain your innovative culture by continuously circulating stories and shared experiences of success, advises the consulting firm InnovationPoint, LLC. Instead of classroom study, allow employees to directly participate in the process by exploring solutions to real-world challenges. This stimulates experiential learning, which provides innovation narratives to be captured and implemented.
Such out-of-the box thinking is going to be a necessary transition for enterprises to manage information going forward. “The demand for speed, efficient analytics and network capacity will be vast. Some experts project within two decades we will need upward of a thousand Internets worth of capacity to cope,” Kettler says. “Only the innovative will survive such data deluge.”
Learn how HP is helping clients flip the ratio from operations to innovation as an Instant-On Enterprise.
Long live the American dream - WWW.THEDAILY.COM
Long live the American dream - WWW.THEDAILY.COM
America doesn’t have a culture of hype
An important reason U.S. gloom-and-doom is unjustified is that there is so much gloom-and-doom. Indians and Chinese, by contrast, have drunk their own Kool-Aid. Their moribund economies have barely kicked into action and they are entertaining dreams of being the next economic superpowers. That bespeaks a profound megalomania. There is not a culture of hope in these countries, as Giridhardas told Stewart, but a culture of hype.
An important reason U.S. gloom-and-doom is unjustified is that there is so much gloom-and-doom. Indians and Chinese, by contrast, have drunk their own Kool-Aid. Their moribund economies have barely kicked into action and they are entertaining dreams of being the next economic superpowers. That bespeaks a profound megalomania. There is not a culture of hope in these countries, as Giridhardas told Stewart, but a culture of hype.
Sunday, February 27, 2011
Alice Neel
Alice Neel
My intro to Alice Neel:
Alice Neel: Paintings 1933-1982
29th March 1983 - 7th May 1983
Los Angeles, Art Gallery
Loyola Marymount University Catalogue by Ann Sutherland Harris, with text of a lecture by Alice Neel
Saturday, February 26, 2011
TRAVEL INSIGHTS from American Express Centurion
FRENCH RIVIERA TRAVEL INSIGHTS from American Express Centurion
EVENTFUL VISITS
Villa Noailles, Hyeres
+ 33 (0)4 98 08 01 98
Festival International du Cirque de Monte Carlo
5, Avenue des Ligures, Monte Carlo
+ 377 (0)4 92 05 2345
Le Carnaval de Nice
Place Massena, Nice
+33 (0)4 92 14 46 46
Le Jumping International de Monte-Carlo
Fédération Equestre de la Principauté de Monaco
3, avenue Saint-Michel, Monaco
+ 377 93 50 80 54
Les Nuits du Château
Place Château of La Napoule
Mandelieu-La Napoule
+ 33 (0)4 93 49 95 31
EVENTFUL VISITS
Jet-set travellers seeking the hottest clubs and trendiest shops may not have Hyères on their Riviera itineraries, but for shutterbugs and those who appreciate fine photography, this quiet little town becomes a Mecca every spring.
Influential buyers, distributors, and museum professionals swarm the three-day Festival International de Mode et de Photographie, a twin competition for young photographers and fashion designers. The Hyères festival has exhibited more than 80 international photographers and 300-plus fashion designers vying for jury prizes and an audience award voted on by the public. Grand Prizes at last year’s festival went to the Swedish “avant knitter” Sandra Backlund in the Fashion category and co-winners Jessica Roberts (United States) and Popel Coumou (Netherlands) in Photography. Access to the exhibitions, which run from April through early June, is free of charge. The festival venue itself—the eye-popping Villa Noailles, created by Robert Mallet-Stevens in the 1920s as a monument to cubism—may alone be worth the trip.
If your visit to the Côte d'Azur doesn’t coincide with the festival in Hyères, the Riviera offers a whole menu of special events at other times of the year. Don’t miss the Festival International du Cirque de Monte Carlo, for example, where the world’s elite circus performers square off in competition for the Clown d’Or prize. This 11-day event, which was founded by Prince Rainier in 1974, runs from mid- to late January.
The following month offers an opportunity to experience the tradition of Carnival in a region where its roots go back as far back as the 13th century. Of special note is Le Carnaval de Nice, which is the time for two weeks of raucous music, dance, and colourful, flower-filled floats in February.
Springtime, of course, brings the famous Monaco Grand Prix in May. If you prefer competition of a more traditional sort, spring also brings the three-day Monaco Horse Show in late June. Le Jumping International de Monte-Carlo, which became an outdoor event in 2007, offers VIP tents and a new arena for optimal viewing over what is also the Formula 1 racecar paddock. Contact Centurion Concierge for ticket inquiries.
Visitors in high season may enjoy the Côte d’Azur by night at Les Nuits du Château, a cultural festival that has been attracting attention since its founding in 1997. An eclectic, international menu of modern and classical music and dance provides the main attraction at the festival, which runs from late July to mid-August. The venue for the festival is the charmingly spooky Château de La Napoule, known for the quixotic art collection of American artist and former owner Henry Clews. Contact Centurion Concierge for ticket inquiries.
And if you’re a yachting enthusiast, then you probably already know that autumn is regatta season on the Riviera, a topic you may wish to read more about in our feature Yachting par Excellence.
Festival International de Mode et de Photographie
Villa Noailles, Hyeres
+ 33 (0)4 98 08 01 98
Festival International du Cirque de Monte Carlo
5, Avenue des Ligures, Monte Carlo
+ 377 (0)4 92 05 2345
Le Carnaval de Nice
Place Massena, Nice
+33 (0)4 92 14 46 46
Le Jumping International de Monte-Carlo
Fédération Equestre de la Principauté de Monaco
3, avenue Saint-Michel, Monaco
+ 377 93 50 80 54
Les Nuits du Château
Place Château of La Napoule
Mandelieu-La Napoule
+ 33 (0)4 93 49 95 31
MADRID TRAVEL INSIGHTS from American Express Centurion
TRAVEL INSIGHTS from American Express Centurion
DISCOVERING LA LATINA
[MADRID]
Plaza de San Francisco
+34 91 3653800
La Corrala
Corner of Calles Mesón de Paredes and Tribulete
Museo San Isidro
Plaza San Andrés, 2
+34 91 3667415
El Almendro
Calle Almendro, 13
+34 91 3654253
La Burbuja Que Ríe
Calle del ángel, 16
+34 91 3665167
DISCOVERING LA LATINA
[MADRID]
La Latina is an old and beautiful section of central Madrid that is often overlooked by foreign visitors. It is here, however, in the narrow, winding streets between the Plaza Mayor and the Puerta de Toledo, where one may have the best opportunity to experience the authentic feel of old Madrid. Now home to thriving immigrant communities from Africa, Asia, Central and South America, the Middle East, and beyond, the neighbourhood has restaurants and cafes offering a range of authentic world cuisines. But it is traditional Spanish tapas that make perhaps the perfect complement to a day of wandering through historic La Latina, taking in the lovely plazas, churches, and other local sights that date back to the 18th century and beyond.
Among the attractions in La Latina is the Basílica de San Francisco el Grande, one of Madrid’s largest basilicas and a wonderful example of 18th-century classical design. (Its 33-meter dome, adorned with intricate frescoes, is in fact one of the largest in the world.) Beyond its initial aesthetics and historical appeal, however, the church houses a large collection of paintings—and some sculpture, as well—in its multiple chapels. Look for works by Francisco de Goya, Alonso Cano and Francisco de Zurbarán, among others.
La Latina and neighbouring Lavapíes were once home to the working classes of Madrid—citizens who earned their keep in factories long since demolished. La Corrala is a lone survivor from the era of tenements, dating to 1790. Its long balconies overlook a courtyard where tenants gathered for socializing and to get water from a shared well. It remains a residence to this day, and come summertime, outdoor performances are often hosted in its plaza.
The Museo San Isidro is a tribute to Madrid’s patron saint, located in a former palace that is said to be the house of Saint Isidro’s masters. The museum focuses on the history of Madrid, though a portion is dedicated exclusively to the life of Saint Isidro, of his wife, Santa María, and to the many legends and miracles that make up their story. The museum has a charming garden and courtyard and books excellent visiting exhibits, as well.
Yet even after a full day of sightseeing and wandering in this charming neighbourhood, your visit to La Latina is not complete. To experience La Latina as the locals do, you must join them in one of the many excellent bars on Cava Baja and the streets that feed onto it to take part in the Madrileño ritual of evening drinks and tapas. One favourite such bar is El Almendro, a small tavern steeped in local flavor, where traditional Andalusian fare is served on tables made from barrels and a bell is rung at the bar to signal when an order is ready. La Burbuja Que Ríe makes another excellent stop on your tapas tour of La Latina. Here you may join a boisterous crowd sampling the cuisine of the northern region of Asturias—steamed mussels, spicy chorizos, and hearty stews.
Basílica de San Francisco el Grande
Plaza de San Francisco
+34 91 3653800
La Corrala
Corner of Calles Mesón de Paredes and Tribulete
Museo San Isidro
Plaza San Andrés, 2
+34 91 3667415
El Almendro
Calle Almendro, 13
+34 91 3654253
La Burbuja Que Ríe
Calle del ángel, 16
+34 91 3665167
BANGKOK ARTISTIC TRAVEL INSIGHTS from American Express Centurion
TRAVEL INSIGHTS from American Express Centurion
BANGKOK ARTISTIC
307 Ozono Complex, 2F
Sukhumvit Road 39
Soi Prompong
Wattana
+66 2 259 6117
Gallery Soulflower
309, The Silom Galleria
Soi Silom
19 Silom Road
+66 2 630 0032
Tang Contemporary
Unit B-28
Silom Galleria
919/1 Silom Road (Soi 19)
+66 2 630 1114
BANGKOK ARTISTIC
Art lovers and collectors will find no shortage of inspiration in this culture-rich city, a place where ancient customs clash and blend with soaring modern architecture and ideals, creating fertile ground for new artists to take root and grow.
Brad Gordon, publisher of the Thailand Art & Design Guide, says “The art scene in Thailand is a vibrant one. Almost every month this year we’ve seen a new gallery appear in Bangkok, and new shows are opening almost every night of the week.”
Gordon, an American who opened the Teo + Namfah Gallery with his wife Rattana, a Thai national, says that Bangkok galleries have shown a real commitment both to emerging and established artists, and to clients seeking to grow their collections. Teo + Namfah focuses primarily on two groups of artists, according to Gordon: emerging artists and artists who have established themselves within Asia but haven’t yet “arrived” on the international scene. Monkor Erdenbayar (also known simply as “Bayar”), is one such artist who is gathering acclaim for his semi-abstract paintings of horses. Gordon encourages Centurion cardmembers to call ahead to arrange a personal tour, including transportation to the gallery and an opportunity to meet with the artists Teo + Namfah represents. Contact Centurion Concierge for appointment inquiries.
Gallery Soulflower, according to owner Natasha Tuli, is the first in Thailand to specialise in contemporary art from India. Housed within the Silom Galleria, a well-known art centre, Soulflower places no boundaries on medium, showcasing everything from paintings, sculpture, photography and installations to new media and conceptual art. Collectors with an interest in Gallery Soulflower’s collections are invited to browse the gallery’s Web site and contact Tuli to arrange for works of interest to be on display at the time of their visit. Centurion cardmembers will be personally attended to by Tuli or her gallery manager. Contact Centurion Concierge for appointment inquiries.
At Tang Contemporary, exhibitions are put together thoughtfully by curator/consultant Josef Ng, who organises up to ten different shows annually and is happy to articulate to interested visitors the details of each artist’s background and techniques as well as the criteria he applies in selecting works for each exhibit. “There is a personal touch in handling our clients,” says Ng, “many of whom are high-end buyers, which is why we enjoy regular and loyal customers who keep coming back.”
Teo + Namfah Gallery
307 Ozono Complex, 2F
Sukhumvit Road 39
Soi Prompong
Wattana
+66 2 259 6117
Gallery Soulflower
309, The Silom Galleria
Soi Silom
19 Silom Road
+66 2 630 0032
Tang Contemporary
Unit B-28
Silom Galleria
919/1 Silom Road (Soi 19)
+66 2 630 1114
TRAVEL INSIGHTS from American Express Centurion
TRAVEL INSIGHTS from American Express Centurion
TEA TIME
Ground Floor
K.S. Lo Gallery
Hong Kong Park
Admiralty
+852 28017177
Fook Ming Tong (IFC Mall location)
IFC Mall
8 Finance St.
Central
+852 22950368
Green T. House
Shop 208, The Arcade
100 Cyberport Road
Central
+852 29896040
Clipper Lounge
Mandarin Oriental Hong Kong
5 Connaught Road
Central
+852 2522 0111
Portal Bar
Langham Place Hotel
555 Shanghai Street
Mongkok, Kowloon
+852 3552 3388
Flagstaff House Museum of Tea Ware
10 Cotton Tree Drive
Central
+1 852 28690690
TEA TIME
China has a legend that speaks of the discovery of tea some 4,700 years ago by the Emperor Shen Nung. As he boiled water one morning, the legend goes, a breeze carried leaves into his kettle, creating an irresistible aroma. He not only found the taste of the resulting brew enchanting, but he felt invigorated and energised as well. And so began tea’s journey to becoming the nation’s chief beverage.
Several noteworthy retailers and teashops carry on the ancient traditions of Chinese tea. Lock Cha Tea deals in high-quality Chinese blends—more than 100 varieties—in its two locations. A selection of vegetarian dim sum is made fresh daily at the Admiralty shop, which hosts a Sunday programme featuring Chinese woodwind and string performances, along with a tea discussion led by the proprietor.
At Fook Ming Tong, don’t let the modern facade fool you. Staffers here are skilled in the traditional methods of making tea and offer a lovely selection of teapots, cups, and related accessories for purchase. They have five locations throughout the city.
Placing emphasis on the teahouse as a gathering place, the Green T. House modernizes the tradition by combining contemporary artistic, culinary, and musical elements to create an energetic and evolutionary experience for its patrons.
Another side of Hong Kong’s tea culture is closely associated with the British presence, and celebrates the delicate chinaware in which a proper high tea is served. The high tea tradition lives on in places like the locally-lauded Clipper Lounge at the Mandarin Oriental Hong Kong, where guests sip and socialize in the late afternoon six days a week, and the fashionable Portal Bar at the Langham Place Hotel, where afternoon tea comes in two varieties: traditional (meaning British) or Oriental.
But if you ask Hong Kong locals which tea a visitor should sample, many will suggest not traditional Chinese or English tea, but Hong Kong’s own milk tea. Creamy and sweet, served hot or cold at many bistros and at the ubiquitous dai pai dong (authentic street stalls), milk tea melds a carefully selected variety of black teas with evaporated milk and sugar. It is nearly as staple a beverage here as coffee in the West, with locals often debating the proper way to brew the perfect cup.
And if you are a fan of tea’s accoutrements, consider a visit to the Flagstaff Museum of Tea Ware, a branch museum of the Hong Kong Museum of Art. Housed in the former office and residence of the commander of the British forces in Hong Kong, the museum holds regular demonstrations and lectures in addition to housing a collection of tea artifacts.
Lock Cha Tea Shop (Admiralty)
Ground Floor
K.S. Lo Gallery
Hong Kong Park
Admiralty
+852 28017177
Fook Ming Tong (IFC Mall location)
IFC Mall
8 Finance St.
Central
+852 22950368
Green T. House
Shop 208, The Arcade
100 Cyberport Road
Central
+852 29896040
Clipper Lounge
Mandarin Oriental Hong Kong
5 Connaught Road
Central
+852 2522 0111
Portal Bar
Langham Place Hotel
555 Shanghai Street
Mongkok, Kowloon
+852 3552 3388
Flagstaff House Museum of Tea Ware
10 Cotton Tree Drive
Central
+1 852 28690690
Friday, February 25, 2011
Wednesday, February 23, 2011
Tuesday, February 22, 2011
Monday, February 21, 2011
Zinio Reader: The Fury and the Power of the Clash
THE FURY AND THE POWER OF THE CLASH
HOW THE ANGER THAT FUELED THE ONLY BAND THAT MATTERED ALSO TORE IT APART
BY MIKAL GILMORE
THE CLASH
The moment that best exemplified the clash didn't come in England, where they helped tear rock & roll history in half. Nor in America, where they fought for a recognition that, once won, helped pull them apart. Instead, it took place in August 1977, at a music festival in Liège, Belgium. The band was playing before 20,000 people and had been under fire from a crowd that was throwing bottles at the stage. But that wasn't what bothered lead singer Joe Strummer. What enraged him was a 10-foothigh barbed-wire fence strung between concrete posts and forming a barrier between the group and the audience – dividing, as one reporter put it, the privileged from the less privileged. * "Why is this space here?" the singer demanded to know. Strummer jumped from the stage and attacked the fence, trying to pull it down, while guitarist Mick Jones, bassist Paul Simonon and drummer Topper Headon complayed on warily. Festival stage guards dragged Strummer back, while the Clash's crew struggled to pull security off Strummer. Later, Simonon told writer Chris Salewicz, "It didn't seem like a gig. It was more like a war."
The Clash were the only performers at the show who tried to do anything about the obstacle. They were more willing to run the risk of the crowd than to tolerate barbed wire that was meant to fend off that crowd. This is more or less what the Clash were about: fighting the good fight that few others would fight. They first made their mark in British music in early 1977 with "White Riot," a provocative song about frustration with brutal authority. It was the time of the Sex Pistols, the band that spearheaded punk as a musical and cultural uprising that blazoned discontent with British society. The Clash would outlast the Sex Pistols and come to epitomize punk, then outdistance the movement with sounds and ambitions all their own, until the band's effective end in 1983. Along the way, they asserted the boldest political worldview of any artists in popular music's history, moving from the narrow obsessions of U.K. punk sedition to the fiery reality of the world outside. The first time I met the band – in London, Christmas week, 1978 – Strummer told me, "We're trying to do something new; we're trying to be the greatest group in the world, and that also means the biggest. At the same time, we're trying to be radical – I mean, we never want to be really respectable – and maybe the two can't coexist, but we'll try."
But the Clash's story isn't just about ideals. It is also about power, who has it and who doesn't – in the real world, and in the band. By the time the Clash's mission was done, they had suffered derision, heartbreak and betrayal, at their own hands. "[As] it got bigger and bigger," Strummer said years later, "I felt worse and worse. It had something to do with what those songs are saying."
MICK JONES, JOE STRUMMER and Paul Simonon – the three enduring members of the band – each came from disrupted family lives, the sort of privation that would cause them to form a new union, but also never to fully trust that union. Jones, who wrote and arranged much of the band's music, was born in June 1955 to parents who quarreled intensely. "They had a bomb shelter in the basement of the flats," Jones recalled in Don Letts' documentary Westway to the World. His grandmother would take Mick down to the shelter when they argued, "and we'd wait for the raid to pass." When he was eight, Mick's parents divorced and his mother moved to the United States, leaving Mick in the care of his grandmother. "Psychologically," he said, "it really did me in." In 1968, Jones found recompense in the guitar power that he heard in Cream's Disraeli Gears, though in the years that followed he favored the more unkempt sounds of the Rolling Stones and Mott the Hoople, and American bands like the MC5, the Stooges and the New York Dolls. He took up guitar seriously in 1972, with the aim of forming a raunchy band. In early 1975, he founded the group London SS – a workshop unit more than anything else.
"WE'RE TRYING TO BE THE BIGGEST GROUP IN THE WORLD AND RADICAL AT THE SAME TIME, "SAID STRUMMER "MAYBE THE TWO CAN'T COEXIST."
That same year, Mick Jones met Bernard Rhodes during a rock & roll show at a dingy pub. Rhodes – in some ways the most crucial and troubling figure in the Clash's story – was the son of a Jewish woman who fled Germany in 1945 while pregnant with Bernard, who was born in London's East End (according to Clash biographer Pat Gilbert, Rhodes' mother bought a birth certificate on London's black market to establish his citizenship). Rhodes never knew his father, and perhaps that lack played a part in the curious dynamic that later developed between him and Joe Strummer. When Mick Jones met him, Rhodes was printing T-shirts for conceptualist entrepreneur Malcolm McLaren at the controversial rock & roll boutique Sex, on London's King's Road. Both McLaren and Rhodes had been enamored of the Situationists, a Marxist movement that promoted provocative art ideas as the means to political change and that played a part in the May 1968 Paris revolts. McLaren wanted to apply Situationist principles to London's rock & roll scene, which had grown out of touch with Britain's social realities. He'd been looking to the New York scene that produced Patti Smith, Television, Richard Hell, Talking Heads and, perhaps most important, the Ramones, who created the breakneck template for punk. McLaren was determined to relocate that new sound and attitude to London, yet recast it for a disruptive cultural impact aimed at British social mores and the rock status quo. He found his means in the Sex Pistols, a band assembled by a Sex shop regular, guitarist Steve Jones. Once Rhodes introduced McLaren to John Lydon, an other worldly singer with a strange charisma – soon to be known as Johnny Rotten – the Sex Pistols were ready to move into notoriety and legend. However, McLaren pushed Rhodes away from any oversight of the band. There was a competitive edge between the two men, and Mc Laren – who envisioned orchestrating the new scene that would outrage popular music – wasn't eager to share the moment.
Rhodes, though, didn't intend to take a minor role in this cultural event; he wanted a band of his own to mastermind. In Mick Jones, he saw a quick learner with a necessary core belief that rock & roll should work as an agitation. Some of the musicians who moved in and out of Jones' London SS were also part of the scene around the Sex Pistols, including Keith Levene, an early guitarist in the Clash. Rhodes was looking for an equivalent to Johnny Rotten, and Jones hoped he'd found that person in Paul Simonon, a lanky young man with craggy good looks. Like Jones, Simonon came from a broken family. His parents separated when he was seven, and in his teens, he lived with his father, an art teacher and devoted communist. Though Paul once proclaimed, "Art is dead – it's not the way to reach the kids; rock & roll is," he would also become an art expert, and eventually oversaw much of the Clash's graphic design. When Jones met Simonon in late 1975, he liked the soft-spoken young man's look – cowboy boots; short, swept-up hair; oblivious gait – but Simonon could only chant off-key. Still, Rhodes persuaded Jones to teach him bass guitar: Simonon possessed an insouciant cool that surpassed immediate musical talent.
Others came and went – in 1976, drummer Terry Chimes joined, and in that same year, guitarist Keith Levene would leave. Mick Jones was shaping up as a prolific songwriter, but he didn't have a feral voice, which was what Rhodes wanted: a frontman who could tell hard truths unflinchingly.
IF YOU LOOK AT FILMS OF Strummer from his childhood (bits can be glimpsed in Julien Temple's 2007 film Joe Strummer: The Future Is Unwritten), you see a playful, frenetic boy mugging before a camera. Even in still images – posing with his father, Ronald Mellor, his mother, Anna, and brother, David, 18 months Joe's senior – there's an irrepressible rascal in the young Strummer's face. The mischief stayed with Strummer, but along the way, a wary and haunted quality overshadowed him. His eyes were always flitting, maybe looking for something to trust, or looking for an escape route.
Strummer's father was an English diplomatic officer, his mother a diplomat's wife. It was not a wealthy family, though Ronald's work took the family to faraway places – Cairo, Mexico City, Bonn and Ankara, Turkey, where Strummer was born on August 21st, 1952, as John Mellor. In 1961, concerned that all the travel might prove a detriment to their sons' educations, the Mellors left Joe and David at a London boarding school. Joe felt that his parents had abandoned him and David in an environment that brought out a hardened side in him, and a painful remoteness in his brother. Years later, Strummer talked about how the experience had shaped his worldview: "Authority is supposedly grounded in wisdom," he said. "But I could see from a very early age that authority was only a system of control, and it didn't have any inherent wisdom."
When he was a teenager, Strummer found morale in the same sort of sources that had heartened Mick Jones. In particular, he said, the Rolling Stones' 1964 single "Not Fade Away" transformed him. "That's the moment I thought, 'This is completely opposite of all the other stuff we're having to suffer here. . . .' I decided, 'Here is at least a gap in the clouds.' " Strummer would need the uplift. In the summer of 1970, his brother, David – who, to Joe's dismay, had an attraction to England's neo-fascist movement, the National Front – went missing. A few days later, David's body was found under a bush in London's Regent's Park; he had taken a massive overdose of aspirin. The news of his elder brother's suicide, and the impact of making the formal identification of the body, left Strummer unsettled in ways he could never discuss fully. When punk later became Strummer's means and purpose, he never subscribed to the nihilism some found so romantic. Joe's own anger and grief cut too deep for him to surrender to the romance of oblivion, because of the day he'd had to identify the cold reality of it lying in a London morgue.
After school, Strummer made a career out of an itinerant life. In 1972, he began playing an acoustic guitar and singing folk songs in London subway stations for spare change, and in 1974, he joined the city's radical squatters' movement, taking over an abandoned residence at 101 Walterton Road and making it livable, rent-free. The collective became the foundation for the 101ers, a band that began by playing early rock & roll and R&B songs. At that time, several back-to-basics rock & roll groups were cropping up at London's small bars and taverns, in a pub-rock scene that included Dr. Feelgood, Eddie and the Hot Rods, and the loose and slapdash 101ers. Joe – who now took on the name Strummer, in deference to his limitations as a guitarist – proved a rough-hewn singer; his several misshapen teeth had given him a guttural embouchure. But he had a galvanic sense of rhythm and an impassioned R&B-informed delivery that made the 101ers a prime draw. In March 1976, Strummer wrote and sang lead vocals on the 101ers' single, "Keys to Your Heart," for Chiswick Records. But in April, Strummer began questioning the band's future, after seeing the Sex Pistols open a show for the 101ers. "As soon as Johnny Rotten hit the stand . . . the writing was on the wall," Strummer recalled in Chris Salewicz's 2006 biography, Redemption Song: The Ballad of Joe Strummer. "I realized immediately that we were going nowhere, and the rest of my group hated them. They didn't want to watch it or hear anything about it."
By May 1976, Mick Jones, Paul Simonon and Keith Levene had taken note of the 101ers – in particular, the dynamic lead singer. During a chance meeting on a London street, Jones told Strummer he'd seen him perform with the 101ers; Jones didn't care much for the band, but he thought Strummer was "great." Around this time, Levene took Rhodes to see the 101ers at a pub show, and afterward, backstage, the manager asked Strummer if he wanted to become lead singer for a new punk band that would rival the Sex Pistols. Rhodes gave Joe 48 hours to decide. Within 24, Joe Strummer joined the Clash.
IN 1976, BRITISH PUNK – WHICH HAD burgeoned as a result of the Sex Pistols – was an argument for new intense possibilities, and one of its tenets was to dismiss the past. Joe Strummer was ready for it. "The day that I joined the Clash," he later said, "was very much back to square one, Year Zero. We were almost Stalinist in the way that you had to shed all your friends, or everything that you'd known, or every way that you'd played before."
Bernard Rhodes gave the band an urgent decree: "Write about what's important," he said. "The thing was to be relevant," Strummer said later, "to have some kind of root in human existence." Paul Simonon made another invaluable contribution: He gave the band its name, after noting how often the word cropped up in daily news to describe increasing social and political conflicts in England. "I didn't just stumble upon it," he told Chris Salewicz. "We were so highly attuned to what we needed by then that the word leapt out at me from the pages of the paper." The Clash played their first show on July 4th, 1976, opening for the Sex Pistols. They were kinetic from the start, lurching and crashing about the stage in unruly movements, Strummer pumping his right arm and leg in unison at impossibly high-speed rhythms, working himself into an exhausted frenzy, clinging to his microphone stand so he could stay on his feet.
This was probably punk's most daring and exciting season, but there were occasional impulses that allowed ugly risks, including sporadic melees at shows. A greater concern was that a few regulars in London's punk scene began wearing Nazi fashion as a means to offending British sensibility. When Siouxsie Sioux of Siouxsie and the Banshees, on the same bill with the Clash at London's 1976 Punk Festival, showed up wearing a swastika armband, Rhodes refused to let her play with the Clash's equipment unless she removed the armband. Siouxsie's display had been a foolish and inexcusable gesture, especially given England's socio political atmosphere at the time. The right-wing, often openly racist National Front was on the rise in the mid-1970s and had fought violently with leftist groups in London's streets. Many punks hadn't yet thought through the political implications of their movement, but the Clash already knew which side they stood on. In August 1976, after witnessing London police provoke a confrontation in a largely black community – resulting in Britain's worst riot in almost two decades – Joe Strummer found his voice. In the song "White Riot," he pursued the truths underneath the incident: "All the power's in the hands/Of the people rich enough to buy it. . . ./Are you taking over/Or are you taking orders?"
With "White Riot" – the band's first single, in March 1977 – the Clash seized ground as punk's moral center. Whereas the Sex Pistols addressed a darkness at the heart of all things – a rock & roll equivalent of Beyond Good and Evil – the Clash still envisioned a good despite evil. Johnny Rotten sang magnificently of an angry negativism, but it could be taken as a permission to something dead-ended. By contrast, Joe Strummer depicted cut-off lives trapped in tower tenements, minorities and young people subject to authoritarian power systems, bristling to make a hope of their own, even if it meant pushing back. On the back of the "White Riot" single sleeve, the Clash ran a quote from a flier for a controversial art exhibition of a few months before: "A clash of generations is not so fundamentally dangerous to the art of government as would be a clash between rulers and ruled." This is how the Clash announced themselves to the world.
THE CLASH'S INCREASING Prominence would also challenge their credibility in unanticipated ways. In January 1977, Rhodes signed the band to CBS Records for £100,000. CBS was one of the biggest labels in the world, and the idea of endorsing a renegade act like the Clash bothered many at the company. Maurice Oberstein, managing director of CBS's U.K. division, dismissed those misgivings. "There was a level of hysteria in the music industry that this is a music that we shouldn't be involved in," he told Jon Savage in England's Dreaming, a history of early punk in the U.K. "There is an inherent fear of the unknown. . . . It seemed perfectly natural: I'd seen Elvis and the Beatles on Ed Sullivan: Suddenly, there was another bunch of screamers. The record companies are in business to make money, and I saw the potential that these artists had to be on our label rather than some other label. . . . I wasn't looking at the Clash as a social phenomenon: We were just making records." It was Oberstein's last point, however, that disturbed somebody like Mark Perry, whose punk fanzine Sniffin' Glue had championed the band. "If you talk about what the Clash talked about in their songs," he told Marcus Gray, "then they completely sold out. . . . It disappointed me immensely, and I said so. My big quote was, 'Punk died the day the Clash signed to CBS.' "
The criticism stung the Clash, but it also incited them to produce punk's first monumental album. The Clash, released in April 1977, displayed a band with both a raging attack and a tuneful pop sensibility, plus – in a haunting cover of Junior Murvin's "Police and Thieves" – an affinity for reggae music that would emerge as a fertile stylistic stream for the group. The album sold well in the U.K., rising to Number 12 on the U.K. album charts, to the bewilderment of many at CBS.
"THE DAY THAT I JOINED THE CLASH," STRUMMER SAID, "I WAS BACK TO YEAR ZERO. YOU HAD TO SHED ALL YOUR FRIENDS, EVERYTHING THAT YOU'D KNOWN."
But in the U.S., CBS's Epic Records refused the album and insisted on a more polished effort before presenting the band to American tastes. (The Clash ostensibly had been assured of creative control with CBS, but the label could still decline to release their recordings.) The band accepted the company's suggestion for a new producer, Sandy Pearlman, known for getting a forceful but clean sound with Blue Öyster Cult. By this time, drummer Topper Headon had replaced Terry Chimes in the band. Pearlman marveled at his abilities – especially when Headon played a complicated pattern backward with ease. During sessions that stretched through much of 1978, Pearlman and the Clash layered a sound that was less frantic than the first album's, but was anything but clean; rather, it was a dense blare. Mick Jones – already feeling hemmed in by the punk dogma of rigid harmonic and rhythmic constructions – worked overtime with Pearlman to build the new album's titanic roar. "There are more guitars per square inch on this rec ord," Pearlman told critic Greil Marcus, "than in anything in the history of Western civilization."
The finished work, Give 'Em Enough Rope, was released in November 1978. It soared to Number Two on the U.K. album charts, but despite Epic's insistence on more professional production, it didn't penetrate the Top 100 in America. (The Clash's first album, which Epic had initially refused to release, eventually fared much better in the U.S.) The slow-to-warm American reaction had something to do with how punk was still regarded by many as an anomalous insurrection, though it may have owed as well to the album's cover image depicting a Chinese communist soldier advancing on horseback toward the body of a dead American cowboy. The illustration wasn't simply a taunting poke at what the Clash saw as America's imperial hubris. It also proclaimed that Strummer and Jones were expanding their gaze beyond the confines of British society and politics and were now considering a world full of fearfulness and deathly struggle. The problems were complex, maybe even lethal. In "Guns on the Roof," Strummer sang, "A system built by the sweat of the many/Creates assassins to kill off the few/Take any place and call it a courthouse/This is a place where no judge can stand." Some British critics took issue with these views. Didn't Strummer worry, one interviewer asked in 1978, that he might seem to advocate violent terrorist acts? "I'm impressed by what they're doing," Strummer replied, "and at the same time I'm really frightened by what they're doing. It's not an easy subject." But Strummer knew the odds. In "(White Man) In Hammersmith Palais," he sang, "It won't get you anywhere/Fooling with your guns/The British army is waiting out there/An' it weighs fifteen-hundred tons."
In truth, the Clash's political stance not only helped secure their place in rock & roll history, but it also proved prescient. A few months after Give 'Em Enough Rope, Conservative Party leader Margaret Thatcher came to power as Britain's prime minister, capitalizing on the nationalist sentiment advanced by the National Front. Thatcher's time came and went, and though one could say the same for the Clash, their truths still resonate. In the mournful "English Civil War," Strummer asked, "Who got caught out on their unawares/When the New Party Army came marching right up the stairs." More than 30 years later, the song's apprehension still seems to have a place in describing a present moment.
BY THE TIME "GIVE 'EM ENOUGH Rope" came out, punk no longer existed as the same sort of insurgent experiment. In January 1978, the Sex Pistols toured America and then fell apart. In the aftermath, a new wave of bands began to favor the sort of abstruse post-punk music that Johnny Rotten (who resumed his given name, John Lydon) would make with former Clash member Keith Levene in Public Image Ltd.
The Clash, though, weren't anxious to heed anybody else's directions, and this included the supervision of Bernard Rhodes. For some time, Mick Jones had been growing wary of Rhodes' demands – especially in light of the manager's insistence that he be granted "complete control." Jones also worried that Rhodes might replace him with Sex Pistols guitarist Steve Jones, and made a pre-emptive move: In October 1978, the Clash fired the manager who had helped form the band and its purposes. Rhodes shot back with graceless comments. "I took them off the streets," he said, "and made them what they are!" He later told writer Pat Gilbert, "I didn't realize that Joe was such a coward." However, Strummer – who seemed to need fatherly guidance even as he deprecated authority – had misgivings about Rhodes' dismissal. "Bernie imagined the Clash," Strummer said in 1991, "and he built it to fit the specifications of his vision. The Clash wouldn't exist without Bernie's vision."
Rhodes won a court order that tied up the Clash's earnings, and the band turned to Epic Records to finance its first U.S. tour; the label grudgingly put forth a modest budget. Though they opened American shows with "I'm So Bored With the U.S.A.," the Clash were nonetheless fascinated with the myths and music of America. This was, after all, a country with remarkable music legacies – folk, blues, R&B, New Orleans jazz, country-western – plus it was the land that had delivered rock & roll in the 1950s. Punk may have claimed to spring self-willed in Year Zero, but the Clash understood that they weren't without essential precursors. "When you've been into American music as long as I have," Strummer said, "to go there is a trip. To ride across the country – even better, on a bus – is another trip. It was fantastic. I got endless amounts of inspiration from it."
The Clash were nearing a pivotal moment. On one hand, Bernard Rhodes was gone; on the other, CBS Records still didn't have much faith in the band's appeal outside England. The Clash also knew they could not hold to punk's narrow aesthetic without running the risk of becoming static, or a dated curio. With Give 'Em Enough Rope, the band had sung about mortality, politics, freedoms and fates being up for grabs. Now, after touring America, the Clash were finding ways to infuse their themes and their sound with music that was at once historic – in some cases ageless – yet forward-leaning. The band would bring all these influences to bear on a groundbreaking collection of songs. This time out, the Clash worked with producer Guy Stevens, who was respected for his recordings with Mott the Hoople but also known for drunken and unpredictable behavior. There were accounts of Stevens swinging a ladder over the heads of the musicians and pouring red wine across the keyboard of an expensive piano that Strummer was playing to realize the sound the producer wanted. (Stevens would die in August 1981, from an overdose of a drug he was taking to control his alcoholism.)
What resulted was one of rock & roll's most prodigious works. London Calling (released in the U.S. in January 1980) opened with the doomful undertow of its apocalyptic title track and closed with the surprising ache – and unabashed pop savvy – of Mick Jones' "Train in Vain." In between were 17 other songs, about defiance, revolution, war, apocalypse and death, but also about the freedom to display delight, vulnerability, doubt and courage in the same breath. "I have lived that kind of day," Jones sang in the album's most affecting verse, from "I'm Not Down," "when none of your sorrows will go away. . . ./But I know there'll be some way/When I can swing everything back my way." Which is what the Clash had done: They made a masterpiece on their own terms – a work that has been cited as the best album of the 1980s. The Clash had seized an ambitious creative momentum that nobody since the Beatles had accomplished. By 1980, they were already being called "the only band that matters," and nobody has said that about any other band since and made it stick.
JONES ONCE REFUSED TO PLAY "WHITE RIOT"; STRUMMER PUNCHED HIM. "YOU'RE LIKE A TEAM GOING ONSTAGE," HE SAID. "NO ONE LETS ANYONE DOWN."
SO FAR, THIS MAY SEEM LIKE A story of hard-fought idealism. The Clash genuinely shared the political values they expressed, and they never relinquished those beliefs. But the Clash were not an integral partnership like the Beatles, who had grown up together with a mutual history. There had been unease among the Clash since their earliest days – due partly to the unavoidable stress from working and traveling so intensively in such a short period of time. In particular, the relationship between Strummer and Jones was often embattled. "We have rows almost every day," Strummer said in early 1978, "and we break up almost every day."
Sometimes those tensions flared in nasty ways. Backstage at a Sheffield, England, show in January 1980, Jones told Strummer he wouldn't play "White Riot" for an encore; he was tired of the song. The refusal turned into a shouting match, with Jones throwing a drink into Strummer's face. Joe punched Mick, "hard in the middle of the head," Strummer admitted later. "There was real savagery in the attack," one witness said. "Mick was crying his eyes out." The band went back on and played "White Riot," but midway through, Jones set down his guitar and left the stage. Even so, there was a lot of affection between these men, and respect for each other's talents. "Mick was my best friend at one time," Strummer later told music journalist Robert Hilburn.
With Bernard Rhodes gone, things improved for a time. The Clash had London Calling under their belts – it sold well in both England and the U.S. – and when the band assembled to record again in 1980, it had gained an openness to making music in styles outside punk's sonic regimen. Mick Jones had developed an interest in New York's nascent hip-hop scene, Joe Strummer and Paul Simonon delved into reggae dub abstractions more deeply, Topper Headon experimented with jazz-informed rhythmic patterns – and collectively, they kept exploring rock & roll forms, though with uncommon textural elements. At the project's end, the Clash emerged with 36 tracks encompassing a staggering stylistic diversity that ranged from mellifluous pop and soulful gospel to experimental tape collages, cutting-edge funk and a poignant children's choral group, much of the music arranged in uncommon structures. It was enough material, Jones insisted, to justify the release of three long-playing vinyl albums in a single package, as Sandinista! (The title – also Jones' idea – came from the song "Washington Bullets" and was a tribute to the Nicaraguan revolutionary movement that had overthrown corrupt and brutal dictator Anastasio Somoza Debayle in 1979. The Reagan administration was working at the time to unseat the Sandinistas.)
CBS Records was furious with the Clash – not because of the album's implicit Marxist sympathies, but because the band was releasing so much music at the price of a single album. Mick Jones declined any suggestions to cut back on the material, which led to a dividing point in the band's history. Over the years, Sandinista! has been viewed as both a magnificence of riches and as a bounty of disorder and indulgence, though it's a bulwark of originality that still plays beautifully. In response to the Clash's obstinacy, CBS refused to tour the band, and Sandinista! did poorly in sales. Wounded by the lack of acceptance, Joe Strummer began to suspect that Mick Jones' freewheeling production style had been a fatal flaw. In the years that followed, Strummer would renounce the album as a mistake, though later in his life he again defended Sandinista!
Strummer decided to use the album's failure to correct what he saw as wrong in the first place. In early 1981, he gave the others an ultimatum: If the Clash wanted him to remain, they would have to rehire Bernard Rhodes. ("I made Joe great," Rhodes told Chris Salewicz. "I knew how it worked.") Mick Jones was stunned. He despised Rhodes, and he felt the band had flourished creatively without him, but Strummer had left him with no options. "I could quite easily have walked out then," Jones later said. "But it's like a marriage or the people you love: You cling on, hoping it's going to work." It was during this period that Jones began growing distant within the band, keeping his own hours, enjoying live performances less. It was also a time in which drummer Topper Headon was running into serious difficulties. His extraordinary talents had been essential to the band's musical growth. But early on, he had taken to reckless drunken behavior, and then along the way developed a heroin habit. In 1979, while in Lubbock, Texas, for a show, the drummer nearly overdosed, and in late 1981, he was arrested at Heathrow Airport for narcotics possession. Joe Strummer was growing disheartened over Headon's intractability and over his fluctuating beats onstage.
Meantime, Rhodes returned with big ideas – and big assertions. When a British reporter asked him how his role with the band had changed, Rhodes snapped back, "I own this group!" To offset CBS's unwillingness to fund a tour, Rhodes booked the band for a series of dates in Times Square in New York, at Bond's Casino, beginning in late May 1981. Things seemed to misfire almost every inch of the way – fire marshals forced last-minute closures of the club, fans rioted, a disrespectful audience heaped abuse on the shows' openers – rap groups the Treacherous Three, and Grandmaster Flash and the Furious Five – and the Clash themselves delivered off-center performances (owing in part to Headon's drug use). "Doing that 15 nights in a row, it nearly killed us," Strummer said. Yet overall, the event had a tremendous effect: It hoisted the Clash to headline news repeatedly, in one of the most important cities in the world.
Back in London, Strummer wanted the band to make a more accessible album, with a sound closer to its first effort. Jones, though, wanted the Clash to return to New York, to pursue a more technological and funk-infused direction. Communications became so uncomfortable that the songwriting partners took to collaborating through the mail, and at one session, Strummer drew a chalk line on the floor, dividing himself from Jones. After Mick Jones thought he had a final version of the album, Strummer rejected the effort. "Mick, I don't think you can produce," he said. "You bastard," Jones replied. "I thought you were my friend." Rhodes brought in Glyn Johns – who had worked in the war zone of the Beatles around the Let It Be sessions – to edit and mix tapes. When the Clash's fifth album was released, in May 1982, as Combat Rock, Strummer's vision pretty much prevailed. Surprisingly, it proved fairly commercial and had the effect of finally delivering the Clash to the masses. Two singles, "Should I Stay or Should I Go" and "Rock the Casbah," made it onto U.S. singles pop charts, and the album itself became the Clash's bestselling. CBS was, for once, eager to put the band on the road.
But after some Scottish dates failed to sell out in advance, Rhodes panicked and approached Strummer. "You've got to disappear," he said, figuring that a missing Joe Strummer would make headlines and stir interest. When Strummer truly vanished, without telling Rhodes where he had gone, the manager panicked again. He hadn't told the other band members about the stunt, and after Strummer missed the tour's first date in Aberdeen, Scotland, a Clash spokesman appealed to him via the press to come back. When the singer returned nearly a month later (he had been in Paris), he used the occasion for a big move: He had grown exhausted with Headon's promises to overcome his drug problem. Strummer called a meeting of band and told the drummer, "You're sacked." Hea don later said, "I admit I lost track of what was going on, but I think we all did. Everyone was fucked up, whether it was drugs or drink." Headon's problems grew worse for years – he was massively in debt to drug dealers; he broke a leg and claimed amnesia after falling through a motorcycle-garage skylight (during what police suspected was a robbery attempt); and in the late 1980s, he served a 15-month sentence for supplying heroin to a man who overdosed and died. In 1998, Headon was so severely injured in a car accident that he was declared dead on arrival at the hospital; he recovered, to learn he had hepatitis C. Strummer would later admit that losing Headon had been a severe blow to the Clash. "I don't think we played a good gig after that," he told Salewicz. Jones had never liked Strummer's decision. "I wouldn't have sacked anybody," he said.
The Clash persuaded Terry Chimes to rejoin them for their 1982 tour, which culminated in the band opening for the Who at several autumn stadium dates. As Live at Shea Stadium attests, the Clash – even without Headon – were still a superb performing band. But conflicts between the group's ideals and the reality of its mass success, plus rancor, were taking a steady toll. In May 1983, the band (now with Pete Howard on drums) appeared before its largest audience – an estimated 200,000 people – at the Us Festival, a four-day event outside Los Angeles organized by Apple Computers co-founder Steve Wozniak. Before Rhodes would allow the Clash to play, though, he goaded them into unnecessarily admonishing Wozniak for greed (the Clash received $500,000 for performing under a banner that read THE CLASH NOT FOR sale). As the Clash left the stage, the day's ill will reached its peak in a fistfight between band members and the festival's stage crew. It was the last show the original members of the Clash – Mick Jones, Paul Simonon and Joe Strummer – played together.
Strummer had continued to feel that Jones was somehow failing the band. "Mick was intolerable to work with by this time," he said in Westway to the World. "When he did show up, it was like Elizabeth Taylor in a filthy mood." In August 1983, Strummer called a band meeting. "How have you enjoyed the last seven years?" he asked Jones. "I think it's time for a parting of the ways." Mick was sure this was Rhodes' doing. "I asked the band who they wanted, Bernie or me," Jones later said. "The group said they wanted Bernie, and then just looked at the floor. I couldn't believe my ears. I stood there for about 10 seconds, stunned. Then I just picked up my guitar and walked out." Perhaps even Bernard Rhodes had been unprepared for the finality and brutality of the moment. He rushed after Jones and offered him a check. "Like a gold watch – which added insult to injury," Jones recalled. "But I took it anyway."
THE CLASH TRIED TO LUMBER on. Rhodes and Strummer recruited new members (Pete Howard stayed on drums; Vince White and Nick Sheppard joined on guitars and vocals), but there was no equanimity in the resulting lineup. Rhodes berated the new members regularly, in what Sheppard described as "dehumanizing sessions." When Strummer was around, he failed to intervene. Observers thought he seemed intimidated by Rhodes. "I went into the situation thinking the Clash is a humanitarian band," Vince White later said. "But the reality is the complete opposite."
Strummer's commitment to the Clash now seemed sporadic; he was dealing with more preoccupying matters. His father, Ronald Mellor, died of a heart attack in early 1984, and then his mother fell ill. When Strummer appeared for rehearsals or performances, he said nothing about this to others. "There was a point," Mick Jones told Chris Salewicz, "when you got right down to it and you couldn't quite go past. . . . Years later, I casually asked one day, 'How's your mum?' We're in a loo somewhere, having a piss, and he says, 'She's got cancer.' There was stuff like that all inside. Really shocking even to look at." As Anna Mellor was dying, Strummer sat at her bedside, but he also took her to task for the time she and his father had left him and his brother, David, at boarding school. Later, Strummer would say that he'd regretted not having come to better terms with his father before Ronald Mellor's death. He now understood that, like his father, he gave himself to work, to paying attention to the world, more readily than to familial bonds. In reproaching his mother, Strummer was trying to wrest some sort of hard-won reconciliation before it was too late. He nonetheless visited regularly in her last months, sometimes bringing with him his two daughters, Jazz and the newborn, Lola, to cheer her. Anna Mellor died in December 1986.
On the Clash's final work, Cut the Crap, Strummer shared writing credit with a new partner, Bernard Rhodes. Arriving in late 1985, the album proved a tough listen. Many of its songs had a false bravado about them, and the work's best moment, "This Is England," perhaps implied meanings that Strummer had never hoped for: "This is England/What we're supposed to die for/This is England/And we're never gonna cry no more." Strummer considered taking out ads denouncing the album, but instead he convened the band members at Paul Simonon's house and told them it was over. Rhodes wanted to keep the group going with Simonon as the frontman – "I've got a bunch of assholes," Rhodes confessed, "and I'm going to see it as a bunch of assholes" – but it didn't happen.
Strummer finally knew what he had lost in his firing of Mick Jones. He later blamed the decision on Rhodes, but in 2003, after Strummer's death, Simonon confided to Jones that the firing hadn't been Rhodes' doing; it was Strummer's incentive. At the end of 1985, Strummer hunted down Mick Jones in the Bahamas, where his former partner was recording. Joe apologized for what he had done, for the unkind things he'd said in the press and asked Jones if they could reconstruct the Clash. Mick was grateful for the apology, but he did not want to renew the band. Jones played Strummer tapes of music with his new band, Big Audio Dynamite. "It's the worst load of shit I've ever heard in my life," Strummer told Jones. "Don't put it out, man. Do yourself a favor."
Strummer spent years in a malaise, regretting how he had ruined the Clash. "I learned that fame is an illusion and everything about it is a joke," he told Chris Salewicz. He moved to various cities, drank a lot, turned volatile in a flash. He also provided good music for various films – including Alex Cox's Sid and Nancy and Walker – and played starring roles in Cox's Straight to Hell (1987) and Jim Jarmusch's Mystery Train (1989). However, his 1989 solo album, Earthquake Weather, felt unfinished and sold only a few thousand copies. "I had to disassemble myself and put the pieces back together," Strummer said in 1988. "I'd lost my parents, my group. You want to think about things. You become a different person."
Gradually, Strummer worked his way back from what he called his "wilderness years." He'd had two daughters and a long relationship with one woman, Gaby Salter, and when that ended, he entered a happy marriage, in 1995, with Lucinda Henderson. Beginning in 1999, Strummer made great work again with a new band, the Mescaleros – rhapsodic and forlorn music that searched the world for new sounds, and that was Strummer's way of keeping faith with his earlier values. "I believe that mankind is inherently good," he told Lucinda, "and that good will always triumph."
Strummer kept hope that he could bring the Clash back together. After learning that the band had been elected to the Rock and Roll Hall of Fame, Strummer hoped to persuade Mick Jones and Paul Simonon to regroup for the occasion. In the early afternoon of December 22nd, 2002, Strummer tried to fax Simonon a letter making his case. He put on a jacket, took the family dogs for a walk in the cold English air, then returned home about 3 p.m. and collapsed on a sofa. When Lucinda found him, his body was already turning cold. He died of a heart defect he had carried throughout his life, without knowing.
IF THERE IS A TRAGEDY IN THE Clash's story, it is not that the band members lost faith in one another, nor that Joe Strummer suffered as a result of sundering that faith. The Clash had always run risks. By doing so, they didn't so much change what rock & roll could be, but instead renewed a promise that had always been in the music: That it was a disruption about liberation, about giving voice and courage to people who were too often denied voice. The Clash went further with this vision than anybody – than the Beatles or the Rolling Stones or Bob Dylan or Public Enemy – because they revisited that ideal, in one form or another, over and over, without settlement. Joe Strummer told filmmaker Don Letts, "We were trying to grope in a socialist way toward some future where the world might be less of a miserable place than it is."
That sort of vision feels like something from a long time ago, another story of death and glory. Popular culture rebellions have grown smaller; popular fears loom bigger. The tragedy of the Clash isn't about the Clash itself – that they fought for something honorable yet defeated one another. The tragedy of the Clash is that we no longer allow the room for their sort of voice.
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Zinio Reader: Why Isn’t Wall Street in Jail?
WHY ISN'T WALL STREET IN JAIL?
Financial crooks brought down the world's economy – but the feds are doing more to protect them than to prosecute them
By MATT TAIBBI
Over drinks at a bar on a dreary, snowy night in Washington this past month, a former Senate investigator laughed as he polished off his beer.
"Everything's fucked up, and nobody goes to jail," he said. "That's your whole story right there. Hell, you don't even have to write the rest of it. Just write that."
I put down my notebook. "Just that?"
"That's right," he said, signaling to the waitress for the check. "Everything's fucked up, and nobody goes to jail. You can end the piece right there."
Nobody goes to jail. This is the mantra of the financial-crisis era, one that saw virtually every major bank and financial company on Wall Street embroiled in obscene criminal scandals that impoverished millions and collectively destroyed hundreds of billions, in fact, trillions of dollars of the world's wealth – and nobody went to jail. Nobody, that is, except Bernie Madoff, a flamboyant and pathological celebrity con artist, whose victims happened to be other rich and famous people.
The rest of them, all of them, got off. Not a single executive who ran the companies that cooked up and cashed in on the phony financial boom – an industrywide scam that involved the mass sale of mismarked, fraudulent mortgage-backed securities – has ever been convicted. Their names by now are familiar to even the most casual Middle American news consumer: companies like AIG, Goldman Sachs, Lehman Brothers, JP Morgan Chase, Bank of America and Morgan Stanley. Most of these firms were directly involved in elaborate fraud and theft. Lehman Brothers hid billions in loans from its investors. Bank of America lied about billions in bonuses. Goldman Sachs failed to tell clients how it put together the born-to-lose toxic mortgage deals it was selling. What's more, many of these companies had corporate chieftains whose actions cost investors billions – from AIG derivatives chief Joe Cassano, who assured investors they would not lose even "one dollar" just months before his unit imploded, to the $263 million in compensation that former Lehman chief Dick "The Gorilla" Fuld conveniently failed to disclose. Yet not one of them has faced time behind bars.
Instead, federal regulators and prosecutors have let the banks and finance companies that tried to burn the world economy to the ground get off with carefully orchestrated settlements – whitewash jobs that involve the firms paying pathetically small f ines without even being required to admit wrongdoing. To add insult to injury, the people who actually committed the crimes almost never pay the fines themselves; banks caught defrauding their shareholders often use shareholder money to foot the tab of justice. "If the allegations in these settlements are true," says Jed Rakoff, a federal judge in the Southern District of New York, "it's management buying its way off cheap, from the pockets of their victims."
To understand the significance of this, one has to think carefully about the efficacy of fines as a punishment for a defendant pool that includes the richest people on earth – people who simply get their companies to pay their fines for them. Conversely, one has to consider the powerful deterrent to further wrongdoing that the state is missing by not introducing this particular class of people to the experience of incarceration. "You put Lloyd Blankfein in pound-me-in-the-ass prison for one six-month term, and all this bullshit would stop, all over Wall Street," says a former congressional aide. "That's all it would take. Just once."
But that hasn't happened. Because the entire system set up to monitor and regulate Wall Street is fucked up.
Just ask the people who tried to do the right thing.
HERE'S HOW REGULATION of Wall Street is supposed to work. To begin with, there's a semigigantic list of public and quasi-public agencies ostensibly keeping their eyes on the economy, a dense alphabet soup of banking, insurance, S&L, securities and commodities regulators like the Federal Reserve, the Federal Deposit Insurance Corp. (FDIC), the Office of the Comptroller of the Currency (OCC) and the Commodity Futures Trading Commission (CFTC), as well as supposedly "self-regulating organizations" like the New York Stock Exchange. All of these outfits, by law, can at least begin the process of catching and investigating financial criminals, though none of them has prosecutorial power.
The major federal agency on the Wall Street beat is the Securities and Exchange Commission. The SEC watches for violations like insider trading, and also deals with so-called "disclosure violations" – i.e., making sure that all the financial information that publicly traded companies are required to make public actually jibes with reality. But the SEC doesn't have prosecutorial power either, so in practice, when it looks like someone needs to go to jail, they refer the case to the Justice Department. And since the vast majority of crimes in the financial services industry take place in Lower Manhattan, cases referred by the SEC often end up in the U.S. Attorney's Office for the Southern District of New York. Thus, the two top cops on Wall Street are generally considered to be that U.S. attorney – a job that has been held by thunderous prosecutorial personae like Robert Morgenthau and Rudy Giuliani – and the SEC's director of enforcement.
The relationship between the SEC and the DOJ is necessarily close, even symbiotic. Since financial crime-fighting requires a high degree of financial expertise – and since the typical drug-and-terrorism-obsessed FBI agent can't balance his own checkbook, let alone tell a synthetic CDO from a credit default swap – the Justice Department ends up leaning heavily on the SEC's army of 1,100 number-crunching investigators to make their cases. In theory, it's a well-oiled, tag-team affair: Billionaire Wall Street Asshole commits fraud, the NYSE catches on and tips off the SEC, the SEC works the case and delivers it to Justice, and Justice perp-walks the Ass hole out of Nobu, into a Crown Victoria and off to 36 months of push-ups, license-plate making and Salisbury steak.
That's the way it's supposed to work. But a veritable mountain of evidence indicates that when it comes to Wall Street, the justice system not only sucks at punishing financial criminals, it has actually evolved into a highly effective mechanism for protecting financial criminals. This institutional reality has absolutely nothing to do with politics or ideology – it takes place no matter who's in office or which party's in power. To understand how the machinery functions, you have to start back at least a decade ago, as case after case of financial malfeasance was pursued too slowly or not at all, fumbled by a government bureaucracy that too often is on a first-name basis with its targets. Indeed, the shocking pattern of nonenforcement with regard to Wall Street is so deeply ingrained in Washington that it raises a profound and difficult question about the very nature of our society: whether we have created a class of people whose misdeeds are no longer perceived as crimes, almost no matter what those misdeeds are. The SEC and the Justice Department have evolved into a bizarre species of social surgeon serving this nonjailable class, expert not at administering punishment and justice, but at finding and removing criminal responsibility from the bodies of the accused.
The systematic lack of regulation has left even the country's top regulators frustrated. Lynn Turner, a former chief accountant for the SEC, laughs darkly at the idea that the criminal justice system is broken when it comes to Wall Street. "I think you've got a wrong assumption – that we even have a law-enforcement agency when it comes to Wall Street," he says.
In the hierarchy of the SEC, the chief accountant plays a major role in working to pursue misleading and phony financial disclosures. Turner held the post a decade ago, when one of the most significant cases was swallowed up by the SEC bureaucracy. In the late 1990s, the agency had an open-and-shut case against the Rite Aid drugstore chain, which was using diabolical accounting tricks to cook their books. But instead of moving swiftly to crack down on such scams, the SEC shoved the case into the "deal with it later" file. "The Philadelphia office literally did nothing with the case for a year," Turner recalls. "Very much like the New York office with Madoff." The Rite Aid case dragged on for years – and by the time it was finished, similar accounting fiascoes at Enron and WorldCom had exploded into a full-blown financial crisis.
The same was true for another SEC case that presaged the Enron disaster. The agency knew that appliance-maker Sunbeam was using the same kind of accounting scams to systematically hide losses from its investors. But in the end, the SEC's punishment for Sunbeam's CEO, Al "Chainsaw" Dunlap – widely regarded as one of the biggest assholes in the history of American finance – was a fine of $500,000. Dunlap's net worth at the time was an estimated $100 million. The SEC also barred Dunlap from ever running a public company again – forcing him to retire with a mere $99.5 million. Dunlap passed the time collecting royalties from his self-congratulatory memoir. Its title: Mean Business.
THE PATTERN OF INACTION toward shady deals on Wall Street grew worse and worse after Turner left, with one slam-dunk case after another either languishing for years or disappearing altogether. Perhaps the most notorious example involved Gary Aguirre, an SEC investigator who was literally fired after he questioned the agency's failure to pursue an insider-trading case against John Mack, now the chairman of Morgan Stanley and one of America's most powerful bankers.
Aguirre joined the SEC in September 2004. Two days into his career as a financial investigator, he was asked to look into an insider-trading complaint against a hedge-fund megastar named Art Samberg. One day, with no advance research or discussion, Samberg had suddenly started buying up huge quantities of shares in a firm called Heller Financial. "It was as if Art Samberg woke up one morning and a voice from the heavens told him to start buying Heller," Aguirre recalls. "And he wasn't just buying shares – there were some days when he was trying to buy three times as many shares as were being traded that day." A few weeks later, Heller was bought by General Electric – and Samberg pocketed $18 million.
After some digging, Aguirre found himself focusing on one suspect as the likely source who had tipped Samberg off: John Mack, a close friend of Samberg's who had just stepped down as president of Morgan Stanley. At the time, Mack had been on Samberg's case to cut him into a deal involving a spinoff of the tech company Lucent – an investment that stood to make Mack a lot of money. "Mack is busting my chops" to give him a piece of the action, Samberg told an employee in an e-mail.
A week later, Mack flew to Switzerland to interview for a top job at Credit Suisse First Boston. Among the investment bank's clients, as it happened, was a firm called Heller Financial. We don't know for sure what Mack learned on his Swiss trip; years later, Mack would claim that he had thrown away his notes about the meetings. But we do know that as soon as Mack returned from the trip, on a Friday, he called up his buddy Samberg. The very next morning, Mack was cut into the Lucent deal – a favor that netted him more than $10 million. And as soon as the market reopened after the weekend, Samberg started buying every Heller share in sight, right before it was snapped up by GE – a suspiciously timed move that earned him the equivalent of Derek Jeter's annual salary for just a few minutes of work.
The deal looked like a classic case of insider trading. But in the summer of 2005, when Aguirre told his boss he planned to interview Mack, things started getting weird. His boss told him the case wasn't likely to fly, explaining that Mack had "powerful political connections." (The investment banker had been a fundraising "Ranger" for George Bush in 2004, and would go on to be a key backer of Hillary Clinton in 2008.)
Aguirre also started to feel pressure from Morgan Stanley, which was in the process of trying to rehire Mack as CEO. At first, Aguirre was contacted by the bank's regulatory liaison, Eric Dinallo, a former top aide to Eliot Spitzer. But it didn't take long for Morgan Stanley to work its way up the SEC chain of command. Within three days, another of the firm's lawyers, Mary Jo White, was on the phone with the SEC's director of enforcement. In a shocking move that was later singled out by Senate investigators, the director actually appeared to reassure White, dismissing the case against Mack as "smoke" rather than "fire." White, incidentally, was herself the former U.S. attorney of the Southern District of New York – one of the top cops on Wall Street.
Financial regulators have evolved into a bizarre species of social surgeon, expert at finding and removing criminal responsibility from the bodies of the accused.
Pause for a minute to take this in. Aguirre, an SEC foot soldier, is trying to interview a major Wall Street executive – not handcuff the guy or impound his yacht, mind you, just talk to him. In the course of doing so, he finds out that his target's firm is being represented not only by Eliot Spitzer's former top aide, but by the former U.S. attorney overseeing Wall Street, who is going four levels over his head to speak directly to the chief of the SEC's enforcement division – not Aguirre's boss, but his boss's boss's boss's boss. Mack himself, meanwhile, was being represented by Gary Lynch, a former SEC director of enforcement.
Aguirre didn't stand a chance. A month after he complained to his supervisors that he was being blocked from interviewing Mack, he was summarily fired, without notice. The case against Mack was immediately dropped: all depositions canceled, no further subpoenas issued. "It all happened so fast, I needed a seat belt," recalls Aguirre, who had just received a stellar performance review from his bosses. The SEC eventually paid Aguirre a settlement of $755,000 for wrongful dismissal.
Rather than going after Mack, the SEC started looking for someone else to blame for tipping off Samberg. (It was, Aguirre quips, "O.J.'s search for the real killers.") It wasn't until a year later that the agency finally got around to interviewing Mack, who denied any wrongdoing. The four-hour deposition took place on August 1st, 2006 – just days after the five-year statute of limitations on insider trading had expired in the case. "At best, the picture shows extraordinarily lax enforcement by the SEC," Senate investigators would later conclude. "At worse, the picture is colored with overtones of a possible cover-up."
EPISODES LIKE THIS help explain why so many Wall Street executives felt emboldened to push the regulatory envelope during the mid-2000s.
Over and over, even the most obvious cases of fraud and insider dealing got gummed up in the works, and high-ranking executives were almost never prosecuted for their crimes. In 2003, Freddie Mac coughed up $125 million after it was caught misreporting its earnings by $5 billion; nobody went to jail. In 2006, Fannie Mae was fined $400 million, but executives who had overseen phony accounting techniques to jack up their bonuses faced no criminal charges. That same year, AIG paid $1.6 billion after it was caught in a major accounting scandal that would indirectly lead to its collapse two years later, but no executives at the insurance giant were prosecuted.
All of this behavior set the stage for the crash of 2008, when Wall Street exploded in a raging Dresden of fraud and criminality. Yet the SEC and the Justice Department have shown almost no inclination to prosecute those most responsible for the catastrophe – even though they had insiders from the two firms whose implosions triggered the crisis, Lehman Brothers and AIG, who were more than willing to supply evidence against top executives.
In the case of Lehman Brothers, the SEC had a chance six months before the crash to move against Dick Fuld, a man recently named the worst CEO of all time by Portfolio magazine. A decade before the crash, a Lehman lawyer named Oliver Budde was going through the bank's proxy statements and noticed that it was using a loophole involving Restricted Stock Units to hide tens of millions of dollars of Fuld's compensation. Budde told his bosses that Lehman's use of RSUs was dicey at best, but they blew him off. "We're sorry about your concerns," they told him, "but we're doing it." Disturbed by such shady practices, the lawyer quit the firm in 2006.
Then, only a few months after Budde left Lehman, the SEC changed its rules to force companies to disclose exactly how much compensation in RSUs executives had coming to them. "The SEC was basically like, 'We're sick and tired of you people fucking around – we want a picture of what you're holding,' " Budde says. But instead of coming clean about eight separate RSUs that Fuld had hidden from investors, Lehman filed a proxy statement that was a masterpiece of cynical lawyering. On one page, a chart indicated that Fuld had been awarded $146 million in RSUs. But two pages later, a note in the fine print essentially stated that the chart did not contain the real number – which, it failed to mention, was actually $263 million more than the chart indicated. "They fucked around even more than they did before," Budde says. (The law firm that helped craft the fine print, Simpson Thacher & Bartlett, would later receive a lucrative federal contract to serve as legal adviser to the TARP bailout.)
Budde decided to come forward. In April 2008, he wrote a detailed memo to the SEC about Lehman's history of hidden stocks. Shortly thereafter, he got a letter back that began, "Dear Sir or Madam." It was an automated e-response.
"They blew me off," Budde says.
Over the course of that summer, Budde tried to contact the SEC several more times, and was ignored each time. Finally, in the fateful week of September 15th, 2008, when Lehman Brothers cracked under the weight of its reckless bets on the subprime market and went into its final death spiral, Budde became seriously concerned. If the government tried to arrange for Lehman to be pawned off on another Wall Street firm, as it had done with Bear Stearns, the U.S. taxpayer might wind up footing the bill for a company with hundreds of millions of dollars in concealed compensation. So Budde again called the SEC, right in the middle of the crisis. "Look," he told regulators. "I gave you huge stuff. You really want to take a look at this."
But the feds once again blew him off. A young staff attorney contacted Budde, who once more provided the SEC with copies of all his memos. He never heard from the agency again.
"This was like a mini-Madoff," Budde says. "They had six solid months of warnings. They could have done something."
Three weeks later, Budde was shocked to see Fuld testifying before the House Government Oversight Committee and whining about how poor he was. "I got no severance, no golden parachute," Fuld moaned. When Rep. Henry Waxman, the committee's chairman, mentioned that he thought Fuld had earned more than $480 million, Fuld corrected him and said he believed it was only $310 million.
The true number, Budde calculated, was $529 million. He contacted a Senate investigator to talk about how Fuld had misled Congress, but he never got any response. Meanwhile, in a demonstration of the government's priorities, the Justice Department is proceeding full force with a prosecution of retired baseball player Roger Clemens for lying to Congress about getting a shot of steroids in his ass. "At least Roger didn't screw over the world," Budde says, shaking his head.
Fuld has denied any wrongdoing, but his hidden compensation was only a ripple in Lehman's raging tsunami of misdeeds. The investment bank used an absurd accounting trick called "Repo 105" transactions to conceal $50 billion in loans on the firm's balance sheet. (That's $50 billion, not million.) But more than a year after the use of the Repo 105s came to light, there have still been no indictments in the affair. While it's possible that charges may yet be filed, there are now rumors that the SEC and the Justice Department may take no action against Lehman. If that's true, and there's no prosecution in a case where there's such overwhelming evidence – and where the company is already dead, meaning it can't dump further losses on investors or taxpayers – then it might be time to assume the game is up. Failing to prosecute Fuld and Lehman would be tantamount to the state marching into Wall Street and waving the green flag on a new stealing season.
THE MOST AMAZING NON-case in the entire crash – the one that truly defies the most basic notion of justice when it comes to Wall Street supervillains – is the one involving AIG and Joe Cassano, the nebbishy Patient Zero of the financial crisis. As chief of AIGFP, the firm's financial products subsidiary, Cassano repeatedly made public statements in 2007 claiming that his portfolio of mortgage derivatives would suffer "no dollar of loss" – an almost comically obvious misrepresentation. "God couldn't manage a $60 billion real estate portfolio without a single dollar of loss," says Turner, the agency's former chief accountant. "If the SEC can't make a disclosure case against AIG, then they might as well close up shop."
As in the Lehman case, federal prosecutors not only had plenty of evidence against AIG – they also had an eyewitness to Cassano's actions who was prepared to tell all. As an accountant at AIGFP, Joseph St. Denis had a number of run-ins with Cassano during the summer of 2007. At the time, Cassano had already made nearly $500 billion worth of derivative bets that would ultimately blow up, destroy the world's largest insurance company, and trigger the largest government bailout of a single company in U.S. history. He made many fatal mistakes, but chief among them was engaging in contracts that required AIG to post billions of dollars in collateral if there was any downgrade to its credit rating.
St. Denis didn't know about those clauses in Cassano's contracts, since they had been written before he joined the firm. What he did know was that Cassano freaked out when St. Denis spoke with an accountant at the parent company, which was only just finding out about the time bomb Cassano had set. After St. Denis finished a conference call with the executive, Cassano suddenly burst into the room and began screaming at him for talking to the New York office. He then announced that St. Denis had been "deliberately excluded" from any valuations of the most toxic elements of the derivatives portfolio – thus preventing the accountant from doing his job. What St. Denis represented was transparency – and the last thing Cassano needed was transparency.
Another clue that something was amiss with AIGFP's portfolio came when Goldman Sachs demanded that the firm pay billions in collateral, per the terms of Cassano's deadly contracts. Such "collateral calls" happen all the time on Wall Street, but seldom against a seemingly solvent and friendly business partner like AIG. And when they do happen, they are rarely paid without a fight. So St. Denis was shocked when AIGFP agreed to fork over gobs of money to Goldman Sachs, even while it was still contesting the payments – an indication that something was seriously wrong at AIG. "When I found out about the collateral call, I literally had to sit down," St. Denis recalls. "I had to go home for the day."
After Cassano barred him from valuating the derivative deals, St. Denis had no choice but to resign. He got another job, and thought he was done with AIG. But a few months later, he learned that Cassano had held a conference call with investors in December 2007. During the call, AIGFP failed to disclose that it had posted $2 billion to Goldman Sachs following the collateral calls. "Investors therefore did not know," the Financial Crisis Inquiry Commission would later conclude, "that AIG's earnings were overstated by $3.6 billion."
"I remember thinking, 'Wow, they're just not telling people,' " St. Denis says. "I knew. I had been there. I knew they'd posted collateral."
A year later, after the crash, St. Denis wrote a letter about his experiences to the House Government Oversight Committee, which was looking into the AIG collapse. He also met with investigators for the government, which was preparing a criminal case against Cassano. But the case never went to court. Last May, the Justice Department confirmed that it would not file charges against executives at AIGFP. Cassano, who has denied any wrongdoing, was reportedly told he was no longer a target.
Shortly after that, Cassano strolled into Washington to testify before the Financial Crisis Inquiry Commission. It was his first public appearance since the crash. He has not had to pay back a single cent out of the hundreds of millions of dollars he earned selling his insane pseudo-insurance policies on subprime mortgage deals. Now, out from under prosecution, he appeared before the FCIC and had the enormous balls to compliment his own business acumen, saying his atom-bomb swaps portfolio was, in retrospect, not that badly constructed. "I think the portfolios are withstanding the test of time," he said.
"They offered him an excellent opportunity to redeem himself," St. Denis jokes.
IN THE END, OF COURSE, IT WASN'T just the executives of Lehman and AIGFP who got passes. Virtually every one of the major players on Wall Street was similarly embroiled in scandal, yet their executives skated off into the sunset, uncharged and unfined. Goldman Sachs paid $550 million last year when it was caught defrauding investors with crappy mortgages, but no executive has been fined or jailed – not even Fabrice "Fabulous Fab" Tourre, Goldman's outrageous Euro-douche who gleefully e-mailed a pal about the "surreal" transactions in the middle of a meeting with the firm's victims. In a similar case, a sales executive at the German powerhouse Deutsche Bank got off on charges of insider trading; its general counsel at the time of the questionable deals, Robert Khuzami, now serves as director of enforcement for the SEC.
Another major firm, Bank of America, was caught hiding $5.8 billion in bonuses from shareholders as part of its takeover of Merrill Lynch. The SEC tried to let the bank off with a settlement of only $33 million, but Judge Jed Rakoff rejected the action as a "facade of enforcement." So the SEC quintupled the settlement – but it didn't require either Merrill or Bank of America to admit to wrong doing. Unlike criminal trials, in which the facts of the crime are put on record for all to see, these Wall Street settlements almost never require the banks to make any factual disclosures, effectively burying the stories forever. "All this is done at the expense not only of the shareholders, but also of the truth," says Rakoff.
Goldman, Deutsche, Merrill, Lehman, Bank of America . . . who did we leave out? Oh, there's Citigroup, nailed for hiding some $40 billion in liabilities from investors. Last July, the SEC settled with Citi for $75 million. In a rare move, it also fined two Citi executives, former CFO Gary Crittenden and investor-relations chief Arthur Tildesley Jr. Their penalties, combined, came to a whopping $180,000.
Throughout the entire crisis, in fact, the government has taken exactly one serious swing of the bat against executives from a major bank, charging two guys from Bear Stearns with criminal fraud over a pair of toxic subprime hedge funds that blew up in 2007, destroying the company and robbing investors of $1.6 billion. Jurors had an e-mail between the defendants admitting that "there is simply no way for us to make money – ever" just three days before assuring investors that "there's no basis for thinking this is one big disaster." Yet the case still somehow ended in acquittal – and the Justice Department hasn't taken any of the big banks to court since.
All of which raises an obvious question: Why the hell not?
Gary Aguirre, the SEC investigator who lost his job when he drew the ire of Morgan Stanley, thinks he knows the answer.
Last year, Aguirre noticed that a conference on financial law enforcement was scheduled to be held at the Hilton in New York on November 12th. The list of attendees included 1,500 or so of the country's leading lawyers who represent Wall Street, as well as some of the government's top cops from both the SEC and the Justice Department.
Criminal justice, as it pertains to the Goldmans and Morgan Stanleys of the world, is not adversarial combat, with cops and crooks duking it out in interrogation rooms and courthouses. Instead, it's a cocktail party between friends and colleagues who from month to month and year to year are constantly switching sides and trading hats. At the Hilton conference, regulators and banker-lawyers rubbed elbows during a series of speeches and panel discussions, away from the rabble. "They were chummier in that environment," says Aguirre, who plunked down $2,200 to attend the conference.
Aguirre saw a lot of familiar faces at the conference, for a simple reason: Many of the SEC regulators he had worked with during his failed attempt to investigate John Mack had made a million-dollar pass through the Revolving Door, going to work for the very same firms they used to police. Aguirre didn't see Paul Berger, an associate director of enforcement who had rebuffed his attempts to interview Mack – maybe because Berger was tied up at his lucrative new job at Debevoise & Plimpton, the same law firm that Morgan Stanley employed to intervene in the Mack case. But he did see Mary Jo White, the former U.S. attorney, who was still at Debevoise & Plimpton. He also saw Linda Thomsen, the former SEC director of enforcement who had been so helpful to White. Thomsen had gone on to represent Wall Street as a partner at the prestigious firm of Davis Polk & Wardwell.
Two of the government's top cops were there as well: Preet Bharara, the U.S. attorney for the Southern District of New York, and Robert Khuzami, the SEC's current director of enforcement. Bharara had been recommended for his post by Chuck Schumer, Wall Street's favorite senator. And both he and Khuzami had served with Mary Jo White at the U.S. attorney's office, before Mary Jo went on to become a partner at Debevoise. What's more, when Khuzami had served as general counsel for Deutsche Bank, he had been hired by none other than Dick Walker, who had been enforcement director at the SEC when it slow-rolled the pivotal fraud case against Rite Aid.
"It wasn't just one rotation of the revolving door," says Aguirre. "It just kept spinning. Every single person had rotated in and out of government and private service."
The Revolving Door isn't just a footnote in financial law enforcement; over the past decade, more than a dozen high-ranking SEC officials have gone on to lucrative jobs at Wall Street banks or white-shoe law firms, where partnerships are worth millions. That makes SEC officials like Paul Berger and Linda Thomsen the equivalent of college basketball stars waiting for their first NBA contract. Are you really going to give up a shot at the Knicks or the Lakers just to find out whether a Wall Street big shot like John Mack was guilty of insider trading?
"You take one of these jobs," says Turner, the former chief accountant for the SEC, "and you're fit for life."
Fit – and happy. The banter between the speakers at the New York conference says everything you need to know about the level of chumminess and mutual admiration that exists between these supposed adversaries of the justice system. At one point in the conference, Mary Jo White introduced Bharara, her old pal from the U.S. attorney's office.
"I want to f irst say how pleased I am to be here," Bharara responded. Then, addressing White, he added, "You've spawned all of us. It's almost 11 years ago to the day that Mary Jo White called me and asked me if I would become an assistant U.S. attorney. So thank you, Dr. Frankenstein."
Next, addressing the crowd of high-priced lawyers from Wall Street, Bharara made an interesting joke. "I also want to take a moment to applaud the entire staff of the SEC for the really amazing things they have done over the past year," he said. "They've done a real service to the country, to the financial community, and not to mention a lot of your law practices."
Haw! The line drew snickers from the conference of millionaire lawyers. But the real fireworks came when Khuzami, the SEC's director of enforcement, talked about a new "cooperation initiative" the agency had recently unveiled, in which executives are being offered incentives to report fraud they have witnessed or committed. From now on, Khuzami said, when corporate lawyers like the ones he was addressing want to know if their Wall Street clients are going to be charged by the Justice Department before deciding whether to come forward, all they have to do is ask the SEC.
"We are going to try to get those individuals answers," Khuzami announced, as to "whether or not there is criminal interest in the case – so that defense counsel can have as much information as possible in deciding whether or not to choose to sign up their client."
Aguirre, listening in the crowd, couldn't believe Khuzami's brazenness. The SEC's enforcement director was saying, in essence, that firms like Goldman Sachs and AIG and Lehman Brothers will henceforth be able to get the SEC to act as a middleman between them and the Justice Department, negotiating fines as a way out of jail time. Khuzami was basically outlining a four-step system for banks and their executives to buy their way out of prison. "First, the SEC and Wall Street player make an agreement on a fine that the player will pay to the SEC," Aguirre says. "Then the Justice Department commits itself to pass, so that the player knows he's 'safe.' Third, the player pays the SEC – and fourth, the player gets a pass from the Justice Department."
When I ask a former federal prosecutor about the propriety of a sitting SEC director of enforcement talking out loud about helping corporate defendants "get answers" regarding the status of their criminal cases, he initially doesn't believe it. Then I send him a transcript of the comment. "I am very, very surprised by Khuzami's statement, which does seem to me to be contrary to past practice – and not a good thing," the former prosecutor says.
Earlier this month, when Sen. Chuck Grassley found out about Khuzami's comments, he sent the SEC a letter noting that the agency's own enforcement manual not only prohibits such "answer getting," it even bars the SEC from giving defendants the Justice Department's phone number. "Should counsel or the individual ask which criminal authorities they should contact," the manual reads, "staff should decline to answer, unless authorized by the relevant criminal authorities." Both the SEC and the Justice Department deny there is anything improper in their new policy of cooperation. "We collaborate with the SEC, but they do not consult with us when they resolve their cases," Assistant Attorney General Lanny Breuer assured Congress in January. "They do that independently."
Around the same time that Breuer was testifying, however, a story broke that prior to the pathetically small settlement of $75 million that the SEC had arranged with Citigroup, Khuzami had ordered his staff to pursue lighter charges against the megabank's executives. According to a letter that was sent to Sen. Grassley's office, Khuzami had a "secret conversation, without telling the staff, with a prominent defense lawyer who is a good friend" of his and "who was counsel for the company." The unsigned letter, which appears to have come from an SEC investigator on the case, prompted the inspector general to launch an investigation into the charge.
When Citigroup was nailed for hiding $40 billion in liabilities from investors, the SEC fined two Citi executives. Their combined penalty: a whopping $180,000.
ALL OF THIS PAINTS A Disturbing picture of a closed and corrupt system, a timeless circle of friends that virtually guarantees a collegial approach to the policing of high finance. Even before the corruption starts, the state is crippled by economic reality: Since law enforcement on Wall Street requires serious intellectual firepower, the banks seize a huge advantage from the start by hiring away the top talent. Budde, the former Leh man lawyer, says it's well known that all the best legal minds go to the big corporate law firms, while the "bottom 20 percent go to the SEC." Which makes it tough for the agency to track devious legal machinations, like the scheme to hide $263 million of Dick Fuld's compensation.
"It's such a mismatch, it's not even funny," Budde says.
But even beyond that, the system is skewed by the irrepressible pull of riches and power. If talent rises in the SEC or the Justice Department, it sooner or later jumps ship for those fat NBA contracts. Or, conversely, graduates of the big corporate firms take sabbaticals from their rich lifestyles to slum it in government service for a year or two. Many of those appointments are inevitably hand-picked by lifelong stooges for Wall Street like Chuck Schumer, who has accepted $14.6 million in campaign contributions from Goldman Sachs, Morgan Stanley and other major players in the finance industry, along with their corporate lawyers.
As for President Obama, what is there to be said? Goldman Sachs was his number-one private campaign contributor. He put a Citigroup executive in charge of his economic transition team, and he just named an executive of JP Morgan Chase, the proud owner of $7.7 million in Chase stock, his new chief of staff. "The betrayal that this represents by Obama to everybody is just – we're not ready to believe it," says Budde, a classmate of the president from their Columbia days. "He's really fucking us over like that? Really? That's really a JP Morgan guy, really?"
Which is not to say that the Obama era has meant an end to law enforcement. On the contrary: In the past few years, the administration has allocated massive amounts of federal resources to catching wrongdoers – of a certain type. Last year, the government deported 393,000 people, at a cost of $5 billion. Since 2007, felony immigration prosecutions along the Mexican border have surged 77 percent; nonfelony prosecutions by 259 percent. In Ohio last month, a single mother was caught lying about where she lived to put her kids into a better school district; the judge in the case tried to sentence her to 10 days in jail for fraud, declaring that letting her go free would "demean the seriousness" of the offenses.
So there you have it. Illegal immigrants: 393,000. Lying moms: one. Bankers: zero. The math makes sense only because the politics are so obvious. You want to win elections, you bang on the jailable class. You build prisons and fill them with people for selling dime bags and stealing CD players. But for stealing a billion dollars? For fraud that puts a million people into foreclosure? Pass. It's not a crime. Prison is too harsh. Get them to say they're sorry, and move on. Oh, wait – let's not even make them say they're sorry. That's too mean; let's just give them a piece of paper with a government stamp on it, officially clearing them of the need to apologize, and make them pay a fine instead. But don't make them pay it out of their own pockets, and don't ask them to give back the money they stole. In fact, let them profit from their collective crimes, to the tune of a record $135 billion in pay and benefits last year. What's next? Taxpayer-funded massages for every Wall Street executive guilty of fraud?
The mental stumbling block, for most Americans, is that financial crimes don't feel real; you don't see the culprits waving guns in liquor stores or dragging coeds into bushes. But these frauds are worse than common robberies. They're crimes of intellectual choice, made by people who are already rich and who have every conceivable social advantage, acting on a simple, cynical calculation: Let's steal whatever we can, then dare the victims to find the juice to reclaim their money through a captive bureaucracy. They're attacking the very definition of property – which, after all, depends in part on a legal system that defends everyone's claims of ownership equally. When that definition becomes tenuous or conditional – when the state simply gives up on the notion of justice – this whole American Dream thing recedes even further from reality.
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