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American Morning
Minding Your Business: SEC Nominee Bill Donaldson
Aired January 31, 2003 - 07:45 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
PAULA ZAHN, CNN ANCHOR: Next week the man who is nominated to lead the Securities and Exchange Commission will go before the Senate. And to talk about his plans to clean up corporate America, more on that in a minute, first, let's check out the markets with Andy -- good morning.
ANDY SERWER, "FORTUNE" MAGAZINE: Good morning to you, Paula.
Another dismal day on Wall Street for investors, stocks down across the board. The Dow is down 165 points. Not a very good month at all, January, so let's hope it's better in February.
ZAHN: Let's talk about the new proposed head of the SEC, who is he?
SERWER: Yes.
ZAHN: You've been working very hard on the story for...
SERWER: We have.
ZAHN: ... "Fortune" magazine. What did you find?
SERWER: Well this is a gentlemen named Bill Donaldson, an old family friend of the Bush's. He has a golden resume, but the question is if you dig beneath it, is he really all that he's cracked up to be? Yes, he did found the important Wall Street firm Donaldson, Lufkin & Jenrette, but after that his career seems to tail off a bit. He worked for Henry Kissinger in the Nixon White House but washed out after a few months. Went to Yale and founded the Business School there. That never really lived up to its promise. Was an unremarkable head of the New York Stock Exchange and the CEO of Aetna for 14 months and took a million dollar -- multimillion dollar pay package.
Couple of interesting points.
ZAHN: Well you shouldn't hold that against him.
SERWER: Well not in this environment I guess.
ZAHN: Going to pay him, you take it.
SERWER: He did stabilize the firm, I should point that out.
Two very important points though, Paula. No. 1, while on Wall Street he led a company called Donaldson Enterprises, and that company ran an offshore fund based in the Cayman Islands. Now the point here is the two things that an offshore fund does is minimize regulatory oversight by U.S. agencies and also minimize taxation. Ironic, some would say, for an SEC chairman to be head of such a fund.
ZAHN: Legal, illegal?
SERWER: Very legal, but again, not the kind of thing I would think that an SEC chairman would run.
Also, there are questions about his personal life, and this is very interesting. Donaldson and his wife have lived in Manhattan for many years. They were married in 1962, adopted children. Sometime in the 1980s though, Donaldson began an affair with a woman named Jane (ph) Morrison who was married to a Democratic congressman from Connecticut, Bruce Morrison. Twelve years ago, Jane Morrison had a child by Bill Donaldson. This is while Donaldson was still married to Evan (ph) Donaldson, his wife. Around the same time, the congressman and Jane Morrison divorced. So this is a very uncomfortable situation, Donaldson is married to his wife and has a young child by another woman. Four years later in 1994, however, his first wife passed away suddenly. A year later, Donaldson marries Jane Morrison and they live happily ever after.
Now why does this have anything to do with him being head of the SEC?
ZAHN: Yes, that was my question.
SERWER: Well, it calls into question his character. Some say that very important that the head of the SEC has character. Also ironic, some would also say, that for an administration that pledged to bring back family values and restore dignity to the White House and Washington they would pick such a nominee.
The other thing that's interesting is he's had such trouble, the president, with picks in the financial arena. Pitt, O'Neill, Webster, you compare those people to Condoleezza Rice, Colin Powell and Donald Rumsfeld and they don't stack up. I would have to say that the nomination for the head of the SEC, Bill Donaldson, leaves me a bit chilly -- Paula.
ZAHN: And how tempestuous do you think those hearings will get, pretty nasty?
SERWER: Well it depends how important people think these questions are.
ZAHN: Andy Serwer, thanks for sharing the questions with us this morning.
SERWER: OK.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired January 31, 2003 - 07:45 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
PAULA ZAHN, CNN ANCHOR: Next week the man who is nominated to lead the Securities and Exchange Commission will go before the Senate. And to talk about his plans to clean up corporate America, more on that in a minute, first, let's check out the markets with Andy -- good morning.
ANDY SERWER, "FORTUNE" MAGAZINE: Good morning to you, Paula.
Another dismal day on Wall Street for investors, stocks down across the board. The Dow is down 165 points. Not a very good month at all, January, so let's hope it's better in February.
ZAHN: Let's talk about the new proposed head of the SEC, who is he?
SERWER: Yes.
ZAHN: You've been working very hard on the story for...
SERWER: We have.
ZAHN: ... "Fortune" magazine. What did you find?
SERWER: Well this is a gentlemen named Bill Donaldson, an old family friend of the Bush's. He has a golden resume, but the question is if you dig beneath it, is he really all that he's cracked up to be? Yes, he did found the important Wall Street firm Donaldson, Lufkin & Jenrette, but after that his career seems to tail off a bit. He worked for Henry Kissinger in the Nixon White House but washed out after a few months. Went to Yale and founded the Business School there. That never really lived up to its promise. Was an unremarkable head of the New York Stock Exchange and the CEO of Aetna for 14 months and took a million dollar -- multimillion dollar pay package.
Couple of interesting points.
ZAHN: Well you shouldn't hold that against him.
SERWER: Well not in this environment I guess.
ZAHN: Going to pay him, you take it.
SERWER: He did stabilize the firm, I should point that out.
Two very important points though, Paula. No. 1, while on Wall Street he led a company called Donaldson Enterprises, and that company ran an offshore fund based in the Cayman Islands. Now the point here is the two things that an offshore fund does is minimize regulatory oversight by U.S. agencies and also minimize taxation. Ironic, some would say, for an SEC chairman to be head of such a fund.
ZAHN: Legal, illegal?
SERWER: Very legal, but again, not the kind of thing I would think that an SEC chairman would run.
Also, there are questions about his personal life, and this is very interesting. Donaldson and his wife have lived in Manhattan for many years. They were married in 1962, adopted children. Sometime in the 1980s though, Donaldson began an affair with a woman named Jane (ph) Morrison who was married to a Democratic congressman from Connecticut, Bruce Morrison. Twelve years ago, Jane Morrison had a child by Bill Donaldson. This is while Donaldson was still married to Evan (ph) Donaldson, his wife. Around the same time, the congressman and Jane Morrison divorced. So this is a very uncomfortable situation, Donaldson is married to his wife and has a young child by another woman. Four years later in 1994, however, his first wife passed away suddenly. A year later, Donaldson marries Jane Morrison and they live happily ever after.
Now why does this have anything to do with him being head of the SEC?
ZAHN: Yes, that was my question.
SERWER: Well, it calls into question his character. Some say that very important that the head of the SEC has character. Also ironic, some would also say, that for an administration that pledged to bring back family values and restore dignity to the White House and Washington they would pick such a nominee.
The other thing that's interesting is he's had such trouble, the president, with picks in the financial arena. Pitt, O'Neill, Webster, you compare those people to Condoleezza Rice, Colin Powell and Donald Rumsfeld and they don't stack up. I would have to say that the nomination for the head of the SEC, Bill Donaldson, leaves me a bit chilly -- Paula.
ZAHN: And how tempestuous do you think those hearings will get, pretty nasty?
SERWER: Well it depends how important people think these questions are.
ZAHN: Andy Serwer, thanks for sharing the questions with us this morning.
SERWER: OK.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
