Skip to content, or skip to search.

Skip to content, or skip to search.

The King of All Synergy

How Bloomberg has used charm (and money) to finesse conflict -- and conflict of interest.

ShareThis

Kevin Sheekey had been around the block a couple of times in Washington -- five years with Queens congressman Jim Scheuer, followed by another five with Senator Pat Moynihan -- and was starting to get antsy. And so, in 1996, he marched into Mike Bloomberg's office and suggested that the mogul should hire Sheekey to be his Virgil in the social and political circles of Washington. And Mike did.

As job interviews go, this one was unorthodox. "Mike saw me as someone from Washington," Sheekey remembers, "so we argued about politics for an hour." What followed was a six-year charm offensive in which the billionaire, often squired by Sheekey, wined and dined politicians while championing three arcane but crucial issues in Congress: fair-disclosure rules for public companies, open use of public-domain financial databases, and (perhaps most important) the ability of Bloomberg's Trojan horse of a number-crunching terminal to morph into a trading unit that actually competes with the New York Stock Exchange. It so happened that these issues, Sheekey takes pains to note, were also on the side of free expression and the protection of small investors. Bloomberg, the man in the white hat, won on all three -- plus a highly coveted spot in the White House reporting pool.

This is a batting average that the D.C.-challenged Bill Gates would certainly envy. But then, no one has ever called Bill Gates a party animal. "Bloomberg was dining at a party with Katherine Graham shortly before she died," marvels Tammy Haddad, a Washington social butterfly and veteran network TV producer who helped to create Larry King Live. "She wanted him next to her. I thought, This is how good this guy is. When I heard he might run for mayor, I actually wrote him a letter saying, 'Please don't run for office. You have all the great parties!' "

Long before Mike Bloomberg told anyone he wanted to be mayor, his business and personal lives were becoming more political. It would have been easy for Washington to be threatened by Bloomberg LP, a sprawling company that has moved aggressively into a lot of politically charged -- and, not incidentally, highly regulated -- areas, from telecommunications to broadcasting to stock trading. But in short order, Bloomberg won the town over. And he did it in such an open-faced, seemingly effortless way that few people have questioned him on it. Sheekey, now a trusted adviser to the mayor, says Mike now is expanding his "Colonel Sanders" role: Just as he was the public face of his business, now he's the public face of the city's business.

His charm helps, but then, so does his money. "To a politician," one lobbyist says, "a billionaire is like the beautiful girl at the bar. You have absolutely no chance, but you're gonna talk to her anyway."

Now that Mike is mayor, conflicts of interest don't register on his radar so much as synergy and credibility and functionality -- how good a manager would he be, his people argue, if he was doing something crooked? Consider that for three months we've had a financial-media czar running the city -- pushing for better city bond ratings while owning a news service that covers the bond raters. There are the bonuses given to campaign-staff members shortly before many of them took jobs in his administration, and the Bloomberg terminals delivered gratis to City Hall. The city's Conflicts of Interest Board is said to be deliberating on the ins and outs of a mogul mayoralty, but neither the mayor nor the public seems terribly concerned about it.

On the mayor's part, that could be because he's been blurring boundaries on Wall Street for years. Take Tradebook -- the electronic-communications network, or ECN, that subscribers to the Bloomberg terminal can use to trade stocks. Depending on whom you talk to, Tradebook is either yet another feature that adds functionality to the Bloomberg terminal, or the hottest ECN out there, competing directly with larger exchanges for the heart and soul of the average trader. "They are not only an influence on the market, but they are in the market," says Frank Kelly, the chief lobbyist for Charles Schwab & Company.

And they've fought hard for that distinction. Two years ago, when Morgan Stanley, Goldman Sachs, and Merrill Lynch teamed up to try to create a central location through which all stock orders would flow, Bloomberg was a major force lobbying against it. The idea never made it out of the Senate Banking Committee. "They weighed in behind the scenes," says Kelly. "On similar kinds of issues, they're still a factor."

It's easy to see why: Tradebook's business grew by 60 percent last year alone. The structure of the stock market is still in flux -- nasdaq is making moves to go public -- and so the company continues to lobby hard to protect ECNs. "The problem is, the last big industry to be deregulated in this country is securities," says Kevin Sheekey. Now the company has the country's preeminent market-structure expert in its corner. Arthur Levitt, the former Securities and Exchange Commission chief (and personal friend and golfing buddy of Mike's), joined the board last year. Levitt downplays Tradebook's competitive threat to the Stock Exchange, saying, "Other ECNs are doing the same thing." But he's well aware of the company's influence: When Levitt headed the SEC, he says, Mike -- along with Bloomberg News editor-in-chief Matt Winkler -- was instrumental in persuading him to create new fair-disclosure rules for public companies.

"He's probably the most interesting individual I've ever known in my life," Levitt says. "He leaves me, at least, with the feeling that I'd like to know him a lot better than I do."

Consider the Bloomberg black box as a metaphor for Mike himself. Just as Bloomberg News adds functionality and journalistic credibility to that box, so does the Bloomberg mayoralty add functionality and credibility to Mike Bloomberg the crossover artist. Once the business started to run itself, friends say, being mayor simply bubbled up as an option for him.

"I think Mike's whole persona is based around influencing people and events," Arthur Levitt says. "There are only a few platforms beyond his company where he can do that, and the mayoralty is one of them." The charm offensive continues.

Read More: Bloomberg, the First Hundred Days


Related:

Advertising
Current Issue
Subscribe to New York
Subscribe

Give a Gift

Advertising