Rosie (New York, NY)
Page 62, January 2002
By Judy Bachrach
Features - Behind the HeadlinesWhat took Cantor Fitzgerald CEO Howard Lutnick so long to compensate 657 mourning families? He wept on national television and promised that he would care for the families of his 657 employees who died at the World Trade Center on September 11th. Then Howard Lutnick cut off their paychecks. After public criticism the head of Cantor Fitzgerald finally settled up, but was it too late?
For a whole month an MCI operator had tried to track down Jean Braca, a 53-year-old New Jersey homemaker and the mother of four, the youngest a 16-year-old boy. Jean was also, as it happened, one of our nation's newest widows: Alfred J. Braca, her husband of almost 33 years and a vice president of Cantor Fitzgerald, had been among the 657 employees of that securities firm to die in the World Trade Center on September 11th. His wife was devastated and puzzled about her future. "We had just moved into our new house in August. I had a heart attack a year ago and most of my heart is damaged," she tells me.
I am calling her at a particularly terrible time. The night before Jean's family received a phone call from the MCI operator, one of the last people who spoke to her husband. The woman wanted to relay Alfred Braca's final words to his loved ones. "I'm not going to make it," he said. "Tell my family I love them." He could scarcely breathe, the operator reported, but he did manage to tell her about the circumstances of his last moments. "My husband had been praying with 50 other men, all holding hands, when he died," says Jean. "He described the atmosphere as very hot - the floor felt like it was burning. Then the line went dead."
The gracious act of a complete stranger, an operator Jean had never met, was in stark contrast to the initial silence of Howard Lutnick, the CEO of Cantor Fitzgerald, which had employed her husband for 16 years. In the days just after the catastrophe Lutnick had appeared on national television, tears for his lost employees spilling down his cheeks. "We have a lot of people to take care of," he said. "And that's what we're going to do."
And at crisis meetings organized by Cantor Fitzgerald that first week families had been told to call Lutnick "if we had any questions," says Margie Meyer, a New Jersey grandmother who lost her husband David, a bond trader at Cantor Fitzgerald.
But Jean claims that calls to Lutnick were never returned, though someone at the Lutnick residence answered the phone. "All they would tell you was 'Look on the Internet'," says Jean. The response stunned her. "I got a letter from President Bush and who's busier, than he is?" she says.
Jean and others mourning the victims found the lack of contact strange, considering the depths of Lutnick's public emotions. Speaking to ABC's Connie Chung on the Thursday after the tragedy, the famously tough-minded Lutnick had been very specific about his obligations to the spouses of those who had worked for his devastated company. As he told Chung, "We've got to make our company be able to take care of my 700 families - 700 families... I can't say it without crying. So many people and so many names, and so many people I loved." The same day he told NBC "We are going to take care and do everything we can to take care of the people - the family - that we lost."
Tender words repeated over and over again on television. Lutnick's own brother Gary had also died that terrible morning, trapped on the 103rd floor. The 40-year-old magnate himself had been saved from death only, because at the precise moment, when the first hijacked plane attacked the building, he had been taking his son to school. "It was his first day of kindergarten," Lutnick explained through his tears. "I get to kiss my kids tonight, but other people don't get to kiss their kids. And I just have to help them."
At the crisis meetings held in New York City hotels on September 12, 13 and 14 hundreds of the bereaved were told about Social Security benefits, life insurance benefits and Lutnick's promise to put $1 million of his own money into the Cantor Fitzgerald Relief Fund, which was going to solicit donations from the public for all victims of the tragedy.
Finally they listened to Carole King in person sing "You've Got a Friend", then went home and found in the mail envelopes marked "final paycheck". This was when most families were still holding out hope that their loved ones might have made it - as were the rescue workers who were still looking for survivors.
News of Lutnick's decision to cut off paychecks hit the media that weekend and on September 19th Lutnick appeared on Larry King Live and talked about getting aggrieved messages from spouses suddenly without husbands or funds. Weeping again he said "They think we're doing something wrong. I can't pay their salaries. I don't have any money to pay their salaries." Larry King then asked how America could help and Lutnick said "They're going to get 25 percent of whatever we do... So if every money manager and pension fund just gives us a little bit of business, then maybe we'll survive."
However, Lutnick's claim that there wasn't any money to pay the salaries came as a surprise to people who'd heard him tell Lesley Stahl on CBS's The Early Show on September 14 "Last year we did $50 trillion in business".
Commentators also began to get testy. On October 10th on 20/20 Connie Chung said "Paying at least two weeks' base salary for the missing employees would hardly bankrupt the company".
What hurt the most was the timing. "Cantor Fitzgerald cut off the paychecks when they had no idea, whether our men were alive or dead," Kelly Grady, the 35-year-old widow of Chris Grady, a money-market broker with Cantor Fitzgerald told USA Today on October 19th. "It's appalling," she said. The next day Kelly got a call from Lutnick. A week later she received $5000 from Cantor Fitzgerald - a welcome sum for the mother of a two-year-old girl and a four-year-old boy. That same week Lynda Fiori, 30, whose husband Paul was a Cantor Fitzgerald broker, also received a check for $5000 from the Cantor Fitzgerald Relief Fund, the sum given to all widowed spouses with children 18 and under. And she got $81,000 in life insurance benefits. That was two and a half weeks after she had appeared on Fox News's The O'Reilly Factor and complained that she hadn't heard from the firm or gotten any money. "No one from Cantor Fitzgerald contacted me personally," says Lynda, the mother of two, the youngest just four months old. Despairing she had called Lutnick at his home. "I just wanted to talk - not even about money matters," she recalls. "I just wanted to touch base with someone."
There is a difference between corporate and personal responsibility, of course and Lutnick was under no legal obligation to take care of his deceased employees' families out of personal funds. But his tearful appearances had raised expectations that he would. Furthermore, cutting off his employees' paychecks seemed an especially harsh action coming from a man who was known for an impressive style of living. Just three years before, he'd bought a $7.6-million house in Manhattan.
From his earliest days Lutnick had been known as a hard-charging executive short on sentiment. Ten years after joining Cantor Fitzgerald, where he was the special protégé of its founder Bernie Cantor, Lutnick tried, at first without success, to buy out his much older mentor, who was on dialysis. A year later, when the failing Cantor was on life support, Lutnick sought to have him declared incapacitated. Cantor's wife sued to prevent having her husband declared incompetent and when Cantor died, the widow barred Lutnick from the cemetary. The weekend after Cantor's death Lutnick celebrated his 35th birthday with a gambling party. Within short order he would have plenty more to celebrate. By the end of that year his firm's revenues soared to nearly $600 million.
Despite such earnings some remained displeased with the atmosphere at Cantor Fitzgerald: among them former employees who complained occasionally in lawsuits that the firm's macho culture fostered gay-bashing and racist remarks. Lutnick's firm denied all such charges, but there is no doubt that a number of Lutnick's subordinates found the environment less, than congenial.
By the third week of October, after an impressive number of his employees' widows had appeared on television or in newspapers talking about their financial concerns, Lutnick began to address their problems. By late October he was calling back "as many people as physically possible," he told The Wall Street Journal. The firm had begun distributing more, than $45 million in bonuses to the families of those who had died and 85 percent of the insurance claims had been processed. Moreover, Lutnick vowed, for the next five years the company would set aside 25 percent of its profits for the bereaved. Part of that sum - a whopping $75 million - would cover the families' health care costs for ten years. Whatever cash was left over, would be divided among the victims' families with each family assured a minimum of $100,000. The once-elusive CEO discussed all these matters at a series of meetings in New York, New Jersey and Connecticut. (However, he refused two requests to be interviewed for this piece.) A Cantor Fitzgerald spokesperson, Amy Nauiokas says cutting off paychecks on September 14th was by far the hardest business decision. "We needed to make sure that the company would be around, in order to take care of the families for the long term," she says. Later, when an interim staff was in place, "we knew we could pay bonuses sooner."
There are those relieved and grateful for Lutnick's turnaround. "Ten years of free medical insurance is incredible," says 46-year-old Irene Boehm of Long Island, whose husband Bruce was a broker at Cantor Fitzgerald for four years. She thinks that Lutnick's behavior shouldn't be too closely examined. "I don't care what his reason is. He has done more, than he needs to do," she insists.
To call these families is an exercise in humility. In many instances you can still hear the voices of dead spouses on their answering machines, which the survivors cannot bear erasing. "My husband had a beautiful voice," says one widow. "I find it comforting." You can see why. They are left not simply with debts, ghostly voices, children, memories, but also with the pain of sudden, irreversible loss.
But these women left behind aren't bitter. Far from it. In these last months, after all, they have experienced so much, not all of it terrible. They have witnessed the generosity of strangers, people who owed them nothing. They have learned that people give not in relation to what they can afford, but according to the dictates of their hearts.
"Let me tell you, a lot of people are out giving," says Lynda Fiori, whose family started a trust fund in her husband's name (she has no other income). Much to her astonishment she received $1000 from a Buddhist temple and "they don't know me from anyone". Then at her husband's memorial service a group of gas station attendants showed up with what they had to offer. They had shared cups of coffee with her husband, they told her, whenever he got gas. After the service they inquired solicitously about her two little girls. "Six of them came to the memorial service," she recalls, touched beyond measure. "You don't expect people from the gas station to come. They speak little English and they make - what? - minimum wage."
But the gas station attendants did not come empty-handed. And they came right away.