Li’l Iron Ranger Philip Falcone Defends the American Dream

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"With my hair down, I am approximately <i>this much</i> more sexy."
Photo: Patrick McMullan

Harbinger Capital Management founder and Times investor Philip Falcone appeared alongside four other billionaire hedge-fund managers — George Soros, Kenneth C. Griffin, John Paulson, and James Simons — in front of the House Committee on Oversight and Government Reform this morning. The group had been called by Representative Henry Waxman to defend their use of leverage and how it may have contributed to the current financial crisis, and Falcone, who had a record year last year, wanted to prove he wasn't just a big swinging dick who spent all his time making money off other people's fears and mistakes and terrorizing the Times: He was a human being, just like anybody else. A working-class, hockey-playing kid from Minnesota who happened to have made good, and could you fault him? It was with some trepidation that he stood to give his prepared opening remarks. "I would just like to take a moment to tell you about myself," he began.

"I was born in Chisholm, Minnesota, population 5,000, on the Iron Range of Minnesota. I was the youngest of nine kids who grew up in a three-bedroom home in a working-class neighborhood. My father is a utility superintendent who never made more that $14,000 a year, while my mother worked in the local shirt factory.



I attended Chisholm Senior High, and went on to Harvard University, where I received an A.B. in Economics in 1984. After college, I went on to pursue my first love, hockey, although an injury cut short a professional hockey career abroad. I then moved to New York and began working as a high-yield bond trader at Kidder, Peabody. A few years later, at the age of 28, I teamed up with a friend to complete a leveraged buyout of a small company in Newark, New Jersey. Unfortunately, the recession in the 1990s made that venture quite difficult. As a result, by 1994, I was so 'financially challenged' that the power in my apartment was shut off because I could not afford to pay the electric bill. That experience, as painful as it was, stayed with me over the years and taught me several valuable lessons that have had a powerful impact on my success as a hedge fund manager.



I take great pride in my upbringing, and it is important for the committee and the public to know that not everyone who runs a large hedge fund was born on Fifth Avenue — that is the beauty of America."



When he finished, the court was silent. Then, from the back of the room, came a lone clap, followed by another clap, that eventually swelled into thundering applause. "All right, Philip!" shouted Coach Shock, who was there to cheer on his Little Iron Ranger. "Order! Order in the court!" shouted Representative Waxman, banging his gavel, and the court again went silent. Then he spoke. "Mr. Falcone, I would like to commend you," he said. "Your presence today has taught me a valuable lesson: forget regulation! Regulation would put a stranglehold on your beautiful spirit, and on the spirits of all of the other young mountain children whose dreams consist of paying $49 million for a porn baron's mansion and amassing the kind of wealth that could support a small nation." He gulped. "Thank you for coming in, sir. I think we all see a little more clearly now."



Hedge Fund Managers Give Opening Statements to Congress [NYT]

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