Brother Bill: A Look at William Daley

FROM OUR FEBRUARY 2005 ISSUE: The youngest of the seven children of the late mayor Richard J. and Eleanor “Sis” Daley, William Daley has moved beyond the family’s local power base to hold major positions in government, business, and the law. Supporters and critics alike credit him with remarkable savvy and consider him a go-to talent for plotting strategy (although he insists that he and his brother–the current mayor–“don’t talk about city stuff”). Now Bill Daley is back in Chicago, with a top job at J. P. Morgan Chase and big charitable dollars to dispense. But given his record for exceeding expectations, few observers expect his shrewd moves to stop there

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Daley needed all his cool on November 7, 2000, a rainy election night, when he went to the Vice President’s suite at the Loews in Nashville and told him that it was time to concede. The networks had just put Florida in the George W. Bush column. The Texas governor was ahead by 55,000 votes, with less than 1 percent of the vote uncounted.

But as the Gore motorcade pulled away for the six-minute ride to the War Memorial Plaza, where the Democratic candidate would make his concession speech, Daley’s phone rang. “Bill, did you know that [Bush’s lead over Gore] slipped to 10,000?” asked the Newsweek correspondent Howard Fineman. Daley remembers that the call left him with “a sick feeling in [his] stomach.” Others were buoyed by the hope that tragedy could morph into victory, but Bill Daley was rattled by the chaos he knew would ensue.

Suddenly barraged by updated numbers from his troops manning the “boiler room,” Daley rushed to the basement of the War Memorial, where Gore and Lieberman had stopped en route to taking the walk to concede. “Our understanding is that the official tally in Florida has dropped below 2,000,” he told Gore. “We’ve got an issue; we’ve got to check it out.” At 2:30 that morning, with the world watching, Daley walked out in the rain at the plaza to tell Gore supporters, “Our campaign continues.”

“I felt real bad because I felt I had kind of encouraged the concession,” Daley later told Roger Simon. One person near the top of the Gore campaign who was trying desperately to put the brakes on the concession train says that Daley was right to feel bad—that he was too quick “to throw in the towel.”

Although Daley made some trips to Florida during the recount fight, mostly he stayed in Washington, spending part of every day at the Vice President’s house. He calls the experience “pretty depressing.” He had to run the gauntlet of Bush-Cheney backers on his way in and out. “One of the groups was [evangelical],” he recalls. “As I’d drive in, the nastiness, the anger in these people, really it was over the top. This was the Vice President of the United States. You may not agree with his policies, but there was a meanness to it, that chant, ‘Get out of Cheney’s house!’ It was just really almost frightening.”

The scene inside, Daley says, was “kind of a Fellini movie”—meals with the Gores and their children, TVs blaring, phones ringing, trying to figure out “what was actually happening.” Ultimately, the United States Supreme Court voted five to four to stop the recount, giving Bush Florida’s 25 electoral votes and thus the White House.

When asked if he thinks he would have won the election if Daley had joined the campaign earlier, Gore says, “Yes, I do.” How much earlier? “Given the closeness of the outcome in Florida, maybe a week earlier.”

Not everyone agreed. Many have said the campaign should have used Bill Clinton more. Daley has heard the complaint so often that it strains his cool; he insists that the decisions on Clinton were “perfectly handled.” The states in which Clinton was popular were already in the Gore column, he explains, and in the red states, Clinton would have cost Gore votes. Brazile disagrees, arguing that Clinton could have helped get out the black vote in Gore’s home state of Tennessee and Clinton’s Arkansas. Either in the Gore column could have put him in the White House.

Daley will admit to only one miscalculation: his nonstrategy on Ralph Nader. “We gave him a pass,” Daley says. He did not believe that voters would “throw away” their vote. Nader’s 97,488 votes in Florida cost Gore the state.

Returning to Chicago and a troubled marriage did not seem to be the right next move. Roger Altman, the deputy Treasury Secretary during Clinton’s first term, suggested that Daley join Evercore Partners, a New York–based investment banking firm that Altman was forming. Austin Beutner, who became Evercore’s president, says that Daley was brought on because he was “likable, honest” and could help clients think through complex problems that sometimes involved regulated parts of their businesses. “I’m not sure that Bill is the first guy [I’d] ask to help me in a derivative mathematical calculation,” Beutner says.

Living alone in a rented apartment across the street from the United Nations Plaza was lonely, Daley’s friends say. “New York’s a tough place,” says one colleague. “You go there thinking that you’re a major figure in the world, and all of a sudden you’re one of however many investment bankers, and they’re all hustling for deals.”

After September 11, 2001, raising money and living in Manhattan became much more difficult. Daley stayed at Evercore until a better offer materialized that November—to become the president of SBC. By December 1st, Daley had moved from New York to San Antonio. Ed Whitacre, the chairman of the highly regulated telecommunications company, was having trouble making his case to officials. He hired Daley, fancy title and job description aside, to lobby, to “grease the skids with regulators and politicians,” in the words of one reporter who covers the industry. (SBC is regulated in 13 states and also by the Federal Communications Commission in Washington.) Daley’s Midwest clout, particularly in Illinois, a key market for SBC, magnified his value to the company. He could also schmooze Democrats. SBC gave generously to George W. Bush and his party. “They wanted him because he was a Democrat,” says Brian Moir, a telecommunications attorney in Washington. He was certainly not hired for his telecommunications experience, which was negligible.

Daley made plenty—a $1.1-million signing bonus, $612,000 in salary, 90,000 nonqualified stock options, and an $890,000 bonus that first year—a total of about $2.7 million. The pot grew richer every year.

As he had at Commerce, Daley plunged in to master the business. Whitacre calls Daley “really a quick learner.” One reporter who interviewed Daley remembers, “He knew a lot about what they needed regulation-wise, but when it came down to the nuts and bolts of the telecom business, he would say, ‘That’s not my bailiwick.’”

Neither was San Antonio. “There was no question I wasn’t the happiest person in San Antonio,” Daley says. David Lane recalls asking his former boss how he liked Texas. “[SBC] had a good airplane,” Daley replied.

He was on that plane often, sometimes with his friend Roger J. Kiley Jr.—a Mayer, Brown partner and a former chief of staff for Mayor Richard M. Daley—who, at Bill’s recommendation, had become SBC’s Midwest general counsel. They went to Wisconsin, Ohio, Michigan, Indiana, and Illinois—at each stop meeting with the governor and key legislators and with regulators, as well. Daley followed the same drill for SBC states in the West and the Southwest. Under Daley’s watch, the company won government approval to sell long-distance service in the five Midwest states in which it operated.

In May 2003, Daley seemed to have won his most audacious victory. After four days of manic lobbying, the Illinois General Assembly passed a bill hugely favorable to SBC. Negating a decision by the Illinois Commerce Commission (ICC), the legislation allowed SBC to more than double the fees charged to competitors using its local network. Within hours, Governor Rod Blagojevich signed the bill. U.S. representative John Conyers of Michigan called it “a national embarrassment. The Democratic Party is supposed to stand for consumers.”

A month later, when a federal judge ruled that the law was anticompetitive and contrary to federal statute, Daley’s victory turned into a crushing defeat. His strategy of bypassing the ICC, which regulates telecommunications companies, and appealing directly to the legislators could not pass judicial muster. For all Daley’s classy associations, he looked like a machine hack hawking Chicago-style clout politics. “He couldn’t deliver on the one thing they wanted,” says a former law partner. Whitacre says he does not count it as a failure of Bill Daley’s tenure as SBC president. “We were all in uncharted waters here,” he explains.

Less than a year later, Daley announced he was leaving. Jim Rogers, who at the time was writing a newsletter on the industry, says that SBC did not mind Daley’s departure because he had accomplished what he was hired to do, despite the defeat in Illinois. “They hired him to win the hearts and minds of regulators in the Midwest. For all intents and purposes he succeeded.”

Daley says he might have stayed at SBC if he had had a shot at being named chief executive officer. But he knew that Whitacre, 63, wasn’t going anywhere; when he did, his chief operations officer appeared to be the likely successor. Typically, Daley already had another offer in hand. “There’s not another situation like this in Chicago that would have gotten me back,” he says.

Ed Whitacre announced Daley’s departure from SBC on Friday, May 14, 2004. The following Monday, Daley announced that he was joining J. P. Morgan Chase, which was about to acquire Chicago’s Bank One. The newly merged banks, headquartered in New York, would be second in size nationally only to Citigroup.

Like Ed Whitacre, Jamie Dimon met Bill Daley while he was the Secretary of Commerce. Dimon had been the chairman of Bank One, but with the purchase, he had moved up to president and chief operations officer of J. P. Morgan Chase. Dimon says that he and William B. Harrison, the chairman of the bank, made a list of names for the new position of Midwest chairman and “one person was always at the top of it.” The frequency with which Daley’s name was suggested by business leaders “almost shocked me,” Dimon says. “We didn’t think we’d have a chance.”

Some say it is a figurehead job, with a focus on dispensing philanthropic contributions and courting big customers at expense-account restaurants—a kind of goodwill ambassadorship. After all, despite mergers and name changes, the bank was a Chicago institution, and now it was moving, along with Dimon, to New York. But Dimon insists that the Midwest is a crucial part of the bank’s market. “Anybody who thinks that [Daley is a figurehead] doesn’t know me at all. That would be a waste of money, and I don’t waste money.” Daley is the senior corporate officer in the Midwest, Dimon says, and he holds a seat on the executive committee, which will put him in touch with all parts of the company and its people in the United States and abroad. “Bill has to earn his way, more than earn his way,” insists Dimon. The Chicago lawyer Wayne Whalen guesses that Daley will be expected to help the bank compete for business. “If they want Berkshire Hathaway business,” he says, “Bill can call Warren Buffett and Charlie Munger and talk to them.”

“Clearly he decides who gets the charitable contributions in Chicago,” says a former colleague of Daley’s, “but if that’s all it is, I don’t think that’s going to satisfy him.” (Daley’s first official act was to announce the bank’s underwriting of the cost of the opening celebrations for Millennium Park, whose biggest booster was Mayor Daley.)

How big an attraction for Dimon and company was Bill’s big brother? “He’s not working on the Chicago business,” says Dimon. Jim Crown, the president of Henry Crown and Company, who describes himself as the last remaining Chicagoan on the merged bank’s board, says that Daley’s Cabinet experience made him an attractive prospect. “Mayor Daley is not going to have an impact on the governor of the Federal Reserve and the Comptroller of the Currency,” Crown says. “At the bank we care most earnestly about what’s going on in D.C.”

Sitting in his bank office before the election went Bush’s way, Bill Daley mused about possible jobs in a Kerry Administration: “Treasury would be interesting. UN ambassadorship would be interesting.” Today, his friend Jim Johnson says, Daley is “very clearly committed to his new position at J. P. Morgan and does not intend to return to government service.”

Daley certainly has deep reservations about elective office. When Joe Biden briefly considered a run for President in 2004, he talked to Daley, who recalls telling the Delaware senator, “You have to be almost sick to do this stuff at a Presidential level. I don’t know if you’re sick enough, Joe. Are you really willing to put everything aside, your personal life, your family? If you have to run to Iowa for a birthday party for somebody, you’ll do that before you go to your daughter’s birthday party.”

Bill Daley is especially close to his son, Bill, 32, who has worked in several Presidential campaigns, including Kerry’s. In 2002, Bill became a lobbyist in Washington for Fannie Mae, on whose board his father had once sat. The following year, he completed his MBA at Northwestern University. The younger Daley and his wife are expecting their first child, Bill and Loretta’s first grandchild, in March. Their daughters, Lauren and Maura, are both teachers—Lauren is currently teaching sixth grade; Maura has taught kindergarten. Their father says that neither has an interest in politics. “They like their privacy,” he says. “Billy is a lot more outgoing.”

These days, the Mayer, Brown partner Roger Kiley says he sometimes gets an early-morning call from Daley: “‘Hey, you want to go over and get some lard for breakfast?’ and so we go over and get eggs and bacon and grease and butter.” They often walk and end up in a bookstore. Asked what he was reading in late August, Daley named several books, among them former Commerce Secretary Peter G. Peterson’s Running on Empty, which warns that both political parties are “bankrupting our future,” and Ward Just’s latest novel, An Unfinished Season, set in Chicago. Bill Clinton sent an autographed copy of his memoir—as of last summer, it was well positioned on Daley’s office shelf but unopened. At night Daley is often seen at his favorite restaurant, the Rosebud steak house on Walton, sometimes with his brother John, who was the closest to him when they were growing up and remains the closest today. Bill Daley still spends weekends in Grand Beach, where he and Loretta have a house, and sometimes has dinner there with his pal Rahm Emanuel, the congressman, who has a house nearby.

His friends bristle at the notion that Daley got where he is because of his name. “You could be handed a lot of silver spoons,” says Tom Nides, his colleague from the Gore campaign. “You could be handed a great name; you could be handed a lot of money, a lot of power. It’s what you do with the money, the power, and the fame that is important. If you look at Bill’s life, he has been able to exceed every expectation.”

Bill Daley’s portrait now hangs with those of other Commerce secretaries on the wall outside the secretary’s office. Daley says that his portrait is a little different from those of his predecessors: “It’s not a totally finished portrait—it’s still a life in progress.”
 

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