For a few seconds, the question hangs in the air.
“Would you just raise your hand?”
The congresswoman from California peers down through her spectacles at the eight men in front of her, their faces as dour as war criminals at a tribunal. It’s the congressional Finance Committee hearing in February, and Maxine Waters has demanded to know who among America’s investment-bank CEOs had the gall to take billions in federal bailout money and then raise credit-card rates on the very taxpayers who’d helped prop up their sorry companies.
Heads crane to look. Then the long, thin arm of Vikram Pandit, the chief executive of global banking conglomerate Citigroup, goes up in the air like a flag of surrender. When it drops back down again, Pandit’s shoulders slump, a weak smile of acquiescence on his face. Behind him, the Reverend Jesse Jackson glowers with righteous anger.
“Thank you,” Waters says curtly.
It’s a moment of withering humiliation for Pandit, but it’s only the latest disgrace: In the preceding months, he has barely clung to his job, as Citigroup’s board considered replacing him with a former media CEO and offered the government his head in exchange for the billions in bailout money. President Obama himself publicly rebuked him for ordering a new $50 million jet. Forced to break up Citigroup against his own strategic aims, he’s taken so much government aid that one i-banker jokes that Citi has become “the Wall Street version of the DMV.” The rank and file at Citi, their net worth destroyed, accuse him of cronyism and absentee leadership. He’s become a virtual corporate eunuch, his options narrowed to nil, making a $1 salary as a public display of humility.
Pandit is trying to keep his chin up. “Look, I don’t want to leave until the job is done,” he tells me late last week. “I don’t want to lose the opportunity to put this company in the right place, because I believe I can do it.” Not everyone agrees, of course, and the consensus is that he might already have been replaced at Citi if the government could find anyone willing to take the thankless job. (“The funniest blog was e-mailed to me by a friend,” he jokes wanly. “ ‘Pandit Gets to Keep His Crappy Job.’ ”)
It wasn’t supposed to be this way. When he arrived at Citi in late 2007, Vikram Pandit was the definition of the fabled “smartest guy in the room,” the kind of brainy financial engineer Wall Street invented—and rewarded richly—over the past twenty years, as complex instruments like derivatives fueled wealth creation. He saw hidden folds in complicated problems that others didn’t see, and when he spoke, which was not often and always quietly, people listened. But for all his brains, he never quite seemed to be in control of his own destiny. Fourteen months later, Pandit is the latest to be blamed for everything that is wrong with Wall Street, the smartest guy in a room full of idiots.
In the 1976 Columbia University yearbook, Vikram Pandit appears with the Institute of Electrical and Electronics Engineers: He’s a slight young man with huge black-framed glasses perched over a thin, aquiline nose and a sparse mustache, his thin neck poking out of a too-big plaid lumberjack shirt. He looks cheerful among the academic elite. Pandit had moved to Queens from a town in central India when he was 16, the son of a middle-class pharmaceutical executive. His family was of the Maharashtrian Brahmin caste, traditionally known as priests and scholars (Pandit, in fact, means “priest” or “learned person”), who frequently enter the business class in Indian society. When Pandit was born, an astrologer told his family that “whatever this boy touches will turn to gold.”
A spectacular student, Pandit studied summers and earned an undergraduate degree in electrical engineering in only three years. He then turned to finance and earned a doctorate after publishing a dissertation involving a crushingly complex financial puzzle. After teaching economics at Columbia, he moved to Bloomington to take a job as a professor of finance at Indiana University. This was a time when lowly professors at midwestern schools were suddenly being offered entry into the world of high finance. Wall Street needed so-called quants who could understand sophisticated investment structures like derivatives. Pandit saw an opportunity. He started as an associate at Morgan Stanley in 1983, among the first Indians to be employed at the firm.
Almost immediately, his colleagues recognized his sharp mind. “Whenever we had a tough problem, whatever the complex structuring was, we’d send Vikram to do that job,” recalls Anson Beard, an advisory director at Morgan Stanley and a veteran of the company’s seventies vanguard.