You know the Donald (Trump) and the Don (Tony Soprano). What about IR’s own Don Carter? Some 20 years ago the eighth floor of 237 Park Avenue served as the nerve center for a takeover wave led by iconic figures such as Saul Steinberg, Irwin Jacobs, T Boone Pickens, James Goldsmith, Robert Maxwell, Carl Icahn and Rupert Murdoch.
At number 237 another iconic figure set up shop, transforming in just a few years the business of proxy solicitation dominated until then by DF King and Georgeson. Collecting corporate ballots had been a merely mechanical job until the Carter Organization (TCO) blew onto the scene in the mid- 1970s, turning it into a powerful weapon. By 1987 Carter had more than 100 employees and revenues of $35 mn a year.
TCO’s offices were the stuff of 1980s legend. On entering the building, visitors passed by a floral arrangement that probably cost more than the weekly salary of the receptionist. Smoked glass doors parted silently, leading into a complex that included the ‘war room’, an aquarium stocked with piranhas and a cat named Stretch that roamed the office. Carter’s executive lair was featured in several scenes in Oliver Stone’s Wall Street, the 1987 film in which Michael Douglas, as financier Gordon Gekko, declared: ‘Greed is good!’
TCO itself was bought by UK advertising agency Valin Pollen in 1987. The $50 mn price tag was jawdropping back then, and a tidy return on $3,000 in start-up investment. TCO became Carter Valin Pollen and business thundered ahead, motivated perhaps by the additional $60-plus mn promised should Carter reach profit targets.
Learning from the master
Flash forward to 1990. The kingdom of Carter was being dismantled, Valin Pollen was preparing to sue to recover its money, and Carter was packing for a 16 months to four-year sentence in New York state prison, having pleaded guilty to larceny and fraud. In the annals of white-collar crime, it was a classic: Wall Street mover-and-shaker fashions wings of wax, flies too close to the sun, crashes and burns.
But Carter’s lieutenants did not go down in flames with him. Indeed, many stayed in the business and now hold senior positions in other proxy firms. For example, two former Carter deal brokers, Edward McCarthy and Rick Grubaugh, are today senior vice presidents in the extraordinary events unit at DF King, where they landed after forming Beacon Hill.
‘Those were long days we put in,’ recalls McCarthy affectionately. He started at TCO in 1986 fresh out of college. ‘Both Rick and I worked our way through the ranks. We worked side-by-side with Don on all the big fights. It was like learning from…’ – he pauses, giving emphasis to his words – ‘…the Master.’ McCarthy refers to TCO as the ‘Harvard Business School of proxy contests’.
‘One of the nicest offices I ever worked in,’ claims one former staffer. ‘A phenomenal learning experience,’ says another. ‘They paid us peanuts, but we didn’t care,’ recalls a third. ‘It was all about the thrill of winning the fight.’
Tracking down the principals and worker bees from the Carter Organization is not difficult, thanks to the ties that bind the close-knit investor relations community. Dennis Mensch, described by his former colleagues as ‘the one who did all the work’, can be found at Morrow & Co. Also at Morrow are Fred Marquardt and Ron Knox. Two decades ago, Knox was in Carter’s special situations group and Marquardt was running the shareholder ID and broker nominees side. Now sitting at desks at Innisfree M&A are Michael Brinn and Alan Miller, both former high-level Carter executives.
Paul Schulman went first to Georgeson and is now an executive managing director at the Altman Group, working with Jim Gaffney, senior managing director. Gaffney also made a pit stop at Georgeson. And John Siemann is at Georgeson as a managing director. He recalls: ‘It was crazy, it was fun, and not for nothing we were the best on the Street.’
Also at the top of their game are Scott Ganeles, CEO of market intelligence firm Ipreo, having previously served as president of the Carson Group, a stock surveillance firm started by a Carter colleague, David Geliebter.
Geliebter had come late into the game and served as Carter’s marketing director. Today he’s heading up Carrot Capital, which he founded after Carson was sold to Thomson Financial in 2000. (To set the record straight, Carson was not named in homage to Carter – ‘son of Carter’ – but after one of Geliebter’s children.)
Further afield is David Kahn, who is living in California and working as a portfolio manager at Wilmington Trust. Kahn was the boy wonder who ran TCO’s stock-surveillance group. He is married to Joan, née Ferguson, who was the assistant to Robert Hubbell, an executive brought in after the Valin Pollen deal with a mandate to grow an IR consulting practice. Hubbell went from Carter to Edelman Public Relations to Andersen Worldwide. Today he’s managing director of communications and marketing at Cantor Fitzgerald.
Another who wandered over to the corporate side is Jack Carsky. After TCO collapsed, he spent time with CIC and Thomson, eventually landing a job at the American Stock Exchange. This helped him snag an IRO position at Providian Bank in 1998, where he remained until it was taken over by Washington Mutual. That’s where he was serving as vice president of fixed income IR until this summer when he decided to take some break time. He too found romance in the office, meeting his wife at TCO.
Life after prison
And what about Don Carter himself? Since leaving prison in 1991 and failing to have his guilty plea overturned (he successfully had it voided in the fall of 1998, but this was overturned on appeal the following February), he’s moved to Palm Beach. ‘I love Florida,’ he proclaims, ‘I don’t miss New York. I’m just sorry it took me so long to get here.’
In true Gatsby-like fashion, Carter has reinvented himself as a private investor with interests in energy development and private equity, and runs a multifamily office. He still socializes professionally with former TCO clients such as T Boone Pickens and Michael Boswell of Sunshine Mining. ‘I invest in [Boone Pickens’] hedge funds and provide private financing for REITs,’ he discloses. The once avid Fantasy Baseball Camp participant confides, ‘My fantasy these days is to get through yoga four times a week.’ Golf is now his passion. Carter flew up to make an appearance last winter at a small reunion of TCO alumni in New York, professing surprise afterwards at learning for the first time of the numerous romantic mergers that once went on under his nose.
Meanwhile, from Hollywood comes the news that 20th Century Fox is working on a sequel to Wall Street. Perhaps the screenwriters will take a clue from Carter’s new lifestyle and put Gordon Gekko on Trump’s Palm Beach golf course instead of confining him to the canyons of Manhattan.
As for Stretch, the cat was adopted by the foreman of the crew renovating Carter’s Long Island estate. She was last seen wandering the grounds looking for some action.
