A Day at the Office
| Thu Jan. 22, 2009 6:44 PM PST
A DAY AT THE OFFICE....When I read that Merrill Lynch CEO John Thain had spent $1.2 million redecorating his office, my first thought wasn't, "What a moron." (That was second.) It was, "How can you spend that much on one room? Solid gold wall sconces? Ashtrays carved out of moon rocks? What?" Luckily for me, Charlie Gasparino has the answer:
The biggest piece of the spending spree: $800,000 to hire famed celebrity designer Michael Smith, who is currently redesigning the White House for the Obama family for just $100,000.
The other big ticket items Thain purchased include: $87,000 for an area rug in Thain's conference room and another area rug for $44,000; a "mahogany pedestal table" for $25,000; a "19th Century Credenza" in Thain's office for $68,000; a sofa for $15,000; four pairs of curtains for $28,000; a pair of guest chairs for $87,000;
a "George IV Desk" for $18,000; six wall sconces for $2,700; six chairs in his private dining room for $37,000; a mirror in his private dining room for $5,000; a chandelier in the private dining room for $13,000; fabric for a "Roman Shade" for $11,000; a "custom coffee table" for $16,000; something called a "commode on legs" for $35,000; a "Regency Chairs" for $24,000; "40 yards of fabric for wall panels," for $5,000 and a "parchment waste can" for $1,400.
Impressive! But it doesn't add up to $1.2 million. It adds up to $1.3 million just for these 19 items alone, and there were probably plenty of smaller ticket nicknacks too. Plus labor — unless that's included in Smith's fee. Probably not, I suppose, which means this monument to American capitalism must have run at least a couple million bucks. The Sun King would have been proud.
And my third question? That's easy: "Who leaked this?" Most probable answer: BofA chief Ken Lewis, the guy who fired Thain, in an effort to keep attention focused on his scapegoat of the hour. Good luck with that, Ken.
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Comments
"Knickknacks." And a "commode" is basically a sink, which in this case sounds like a basin -- likely stone or maybe metal -- mounted on legs (vs. a pedestal, like many modern bathroom sinks), possibly with attached plumbing (which may or may not be original).
Sadly, these prices are not qualitatively out-of-line. They are merely high-end in degree.
But y'might wanna ask about "load" the next time you hand over your savings to a mutual fund...
Submitted by Kevin Drum on Thu Jan. 22, 2009 7:17 PM PST.
Bleh: My dictionary lists both spellings. I use "nicknack" because the double k in the other spelling has always bugged me.
Next question after who leaked it, did the board of directors approve it? Seriously, was there a $1.3 million dollar line item for office decoration? Is just crony capitalism quid pro quo (I'll approve your wretched excess if you approve mine)?
Speaking of banker b.s., has anyone else noticed that the little email reminders that your credit card company agreed to send to alert you that a payment is coming due don't always arrive these days, but that the late payment fee is tacked on immediately, without fail?
No cop on the beat? Not one cop?
Submitted by Alan in Elk Grove (not verified) on Thu Jan. 22, 2009 8:30 PM PST.
$35k for the commode? How much was the TP? (and what brand...)
Submitted by Brad Warbiany (not verified) on Thu Jan. 22, 2009 8:49 PM PST.
William,
I had the same response... I've only been to Versailles once, and the room was considerably more crowded (filled with tourists like me), but that looks like Versailles to me.
6 sconces for $2600 sounds pretty fair; that's only a little over $400 each. Home Depot sells bottom-end ones for $50-$120. As far as extravagance goes, that's not horrible.
But $800K for designer services while Obama's White House is getting the same for $100K? Now THAT'S getting your federal dollar's worth!
Okay, okay this looks bad, and dumb. But Thain did nothing illegal, and one way to look at it is the CEO of Merrill is like the sales-man-in-chief. A big part of his job is to convince other companies, institutions, governments,etc. to invest with his firm. Obviously most people in this position would feel that is important to impress prospective clients and investors with an aura of success and power. Also,strong optimism is often a component of a successful CEO's character. I'm sure it took a lot of bad news for Thain to give up on the idea that he could ultimately restore Merrill's lost financial glory. From this perspective it was money well spent at the time. Thain probably thought the bad news was only temporary.
Another thing, if the items listed were genuine period antiques, the prices were relatively reasonable for the antiques market at the time. If the furnishings were all reproduction, someone was getting a very nice commission on the markup.
Submitted by James Wimberley (not verified) on Fri Jan. 23, 2009 5:25 AM PST.
The Sun King would not have been proud. The Hall of Mirrors, and Versailles generally, were an admittedly hugely costly piece of political theatre serving a public purpose, like it or not: to cement the King's authority and keep the nobility in the busywork of court life rather than plotting in the provinces. If you want to know what Louis XIV thought of private conspicuous consumption, look up "Nicolas Fouquet". (I don't include a link because the post will be held up.)
Submitted by Felix Salmon (not verified) on Fri Jan. 23, 2009 5:34 AM PST.
My guess is that the designer passed on a 20% discount on the list prices, which brings us back down to $1.2 million.
I had friends who worked in Shearson American Express back in the 1980s - the executive suites were filled with a very extensive art collection - it was considered part of Shearson's investment portfolio. So I wouldn't be surprised, actually, if this stuff was high quality with artistic value that that sort of spending wouldn't have been justified in that way
A way needs to be found to seize the $2B in bonuses paid right before the merger of Merril and BoA for the Treasury.
Whether it is obtained through fines, fees or taxes, the bonuses paid to bankers, Wall St. schemers and oil company executives the past eight to fifteen years should be used to finance a government stimulus during economic crises caused by over consumption.
Submitted by Marie Burns (not verified) on Sun Jan. 25, 2009 10:26 AM PST.
That's a great picture of Versailles there, but the actual $35K commode, for instance, that we-all bought Thain is considerably less impressive. I think I have a picture of it on www.RealityChex.com -- it's that little chest between the sinks.
