Foundations

You learn things along the way

People over process and when doing nothing is not an option

In 1973, I learned that while you can drive from Cairo to Venice in 635 miles, floating it takes 954 river miles. That discrepancy was my opening introduction to the complexities of the Mississippi River. Tasked with the socio-economic impacts of raising the levees by a foot, laying down revetments (mats that protect the cut bank from erosion) and adding dikes to further direct, I found myself navigating a Corps of Engineers bureaucracy that described the project like blind men describing an elephant.

The environmental impact statement was on a fast track. The geographic scope was vast, but where to begin? What, exactly, is required materially? How much fill does it take? Where does it come from? How is it placed? My colleague Don McQueen and I visited Memphis, Louisville and New Orleans to find out. At each of the District Engineer offices we were shuttled down the chain of command down to the working level of each speciality. When we finally got down to explaining what we were looking to find out, there was a detour.

What seemed like small talk slowly came into focus as a question of establishing trust: Who are your people? The revetment specialist in New Orleans wasn’t really interested that I knew Al Boudreaux in St. Louis. The real question was are you a Yankee? In 1973, the term The War of Northern Aggression was not ironic, it was tribal. I established my bona fides by recounting that my grandparents arrived from Mexico and Ireland after the late unpleasantness.

Success didn’t come from the data alone. Navigating that cultural landscape proved as vital as the engineering. And when the 1973 flood nearly claimed the Old River Control Structure, the “no action” alternative wasn’t just a checkbox in an EIS—it was a glimpse into an economic catastrophe. It taught me that while doing nothing is always an option, it is the one that requires the most scrutiny.

The Butterfly and the Concrete Bathtub

In 1978, while surveying a 178-acre site in Albany, NY, I stumbled upon a clearing of blue lupine—and a butterfly that looked like it flew straight out of a Disney movie. It was the Karner Blue, an endangered species famously described by novelist Vladimir Nabokov. When my census revealed the largest known colony of the species on the exact spot where a major anchor store was planned, I had to deliver the news: the hill stayed, or the permit died. Even a sit-down with the legendary Mayor Erastus Corning couldn’t move that hill. I developed a preservation plan to protect the habitat, and the butterfly colony has thrived since. My deep dive into the site’s ecology eventually saved the project in a different way, as well. While reviewing the revised site plans, I realized the civil engineer had set the grade eight feet below the static water table. By “connecting the dots” between geology and engineering, I saved the developer from building a 178-acre “concrete bathtub.” The Takeaway: Expertise is only useful if you’re willing to step outside your silo to ensure the whole project holds water.

Unexpected Detour on the Way to What I Was Hired to Do

In the late 70s, the State of Alaska was awash in oil revenues and was looking to invest in local infrastructure improvements. However, only the few large urban areas had the institutional capacity to mount capital improvement programs. The state determined to fund staff additions to the smaller municipalities to remedy that shortcoming. I was hired as the first planning director of the City of Unalaska, the westernmost incorporated place in the United States, in the Aleutian Island Chain.

When I arrived in 1980, the town had grown from a population of 270 a decade before to 2,000 year-round residents with seasonal peaks of 4,000. By dollar volume landed it was the leading fishing port in the country, based on King Crab. The community lacked adequate infrastructure across the board. There was no sewer system. The municipal water system was a wood stave relic of the military installations of World War II. There was no central electrical power generation, no public dock, solid waste disposal was an open dump, and there was no pavement, even for the 4,000 foot runway served by a quonset hut for a terminal. And there was not even any basemap on which to display existing and needed facilities.

These were exactly the shortcomings that I was hired to help address.

There were, however, obstacles that money alone could not fix. These were institutional. The governance was of the council-manager form; however, the effective model was that anything said without contradiction by a council member had the force of law. Such official records as existed were largely chronicles of what was said, not enacted, at meeting. It was no wonder that the circuit magistrate was unwilling to enforce municipal law that was based on oral tradition.

More serious, however, was the state of municipal finance operations. The city treasurer made sure to keep the city’s cash in non-interest bearing deposits of at least $1 million because of reliance on outside auditors to balance the checking accounts during the annual audit. The municipal budget was in disarray. Car batteries for the police department were charged to electric utility operations. Because batteries produce electricity. The bi-monthly payroll for the city’s 150 employees was processed by hand and required the city treasurer and city clerk plus two clerks a full week to complete each cycle. It quickly became clear that no grant funding would be forthcoming while the city was unable to account for it.

To overcome this, I went to the city manager with a proposal to convert city operations to electronic data processing and, with his support, obtained an appropriate of $100,000 (about $325,000 adjusted for inflation). With that I purchased an IBM System 34 mini-mainframe, line printer, four terminals and payroll, general ledger, budgeting and text editing software. Within six months of my arrival, a junior clerk required only a half-day twice a month to put out payroll. Within a year, a model code of ordinances was tailored to local conditions and adopted, the Council was adopting formal resolutions to make clear its actions. And I created a detailed municipal chart of accounts for budget and general ledger purposes. I then recruited a finance director to take over ongoing operations.

I was now freed to pursue the primary purpose for which I was hired. Even if I had to learn to be an IT department and a treasurer to do it.

The $100,000 Placemat

In the 1980s, I was tasked with the preliminary site plan for a Coast Guard Air Search and Rescue facility at Cold Bay, Alaska—home to caribou, bears, and a vital 10,000-foot runway.

Despite the six-figure budget, the core of the project was solved in a single evening. Over dinner in the mess hall, we sketched the runway layout on the back of a placemat. By applying basic logic—eliminating quadrants that required runway crossings and calculating setbacks for the tail height of a C-130 Hercules—we delivered 95% of the project’s value using only 5% of the budget.

The Takeaway: True expertise isn’t measured by the hours billed, but by the ability to cut through noise and deliver the essential solution. It’s not the effort, it’s the output.

Right the First Time

In 1991, as a 44-year-old second-year associate at a major San Francisco firm, I was tasked with “marrying” two complex financial structures into a new mortgage-backed security. It was a baptism by fire that required a double-all-nighter and the help of a brilliant former Stanford PhD in math for the tax structure. That document didn’t just close the deal; it became an industry model, and it was still in use by a successor major institutions years later for dozens of deals. But the real lesson wasn’t in the “pyrotechnics” of the closing. It was in the realization that long-term success in multi-party transactions requires “even-sidedness.” The Takeaway: The best deals aren’t won; they are built. I learned the virtues of drafting agreements that would be durable and fair enough that I would be comfortable sitting on either side of the table.

Technocrat Leaves the Show to Become a Minor League Player

In my late 40s, I transitioned from the high-octane world of San Francisco law firms to serve as an Administrative Law Judge for the California Public Utilities Commission. I traded 320-billable-hour Februaries for a role as a “utility infielder” in the public sector—tackling complex cases that required both speed and technical precision. When the 1996 Telecommunications Act threw the industry into a whirlwind, I brokered the interconnection agreements between giants like AT&T, Verizon, and Sprint—an award that was eventually upheld by the Supreme Court. Later, I leveraged my securitization background to save California’s electrical utilities from bankruptcy, pushing through “stranded cost recovery bonds” within a strict 120-day statutory window—a feat previously unheard of in the commission’s culture. The Takeaway: Leadership often requires pushing beyond institutional inertia to meet the demands of the day. I learned that while efficiency can breed resentment in a slow-moving system, the results are what preserve the system itself.

Return to Securitization

An unexpected call from my former securitization client led me to go in-house with PNC Mortgage in Chicago. The business needed a smoother deal flow that was more efficient and cost effective. I took care of that through master agreements to purchase loan pools to securitize that could be incorporated into term sheets. What had formerly taken outside counsel and $5,000 to do in a week now took a clerk an hour to document.

Then Washington Mutual bought PNC Mortgage and it was off to Seattle with a titular upgrade from Second Vice President to Vice President, becoming Senior Vice President/Associate General Counsel five years later. It also involved an expansion beyond securitization work to treasury operations, corporate finance, SEC reporting and most other transactional work that came along aside from procurement. When the lawyer with the securitization program when over to the business side, I handed off treasury to a new hire and trained another new hire to keep the securitization program ticking under my supervision. I took over the broker dealer business but continued to be involved in matters such as implementation of Sarbanes Oxley. In April 2005, the Securities and Exchange Commission announced two proposed rulemakings. One would codify the many informal arrangements that had developed over the course of 15 years for asset backed securities, which had never fit well into the traditional framework for IPOs. The other liberalized pre-sale offering rules in ways that also impacted securitization. For the remainder of the year, that is how I spent most of the time. I became deputy chair of the American Securitization Forum’s committee on the effects on underwriters and retained outside counsel to redraft our disclosure documents under a pilot program of the SEC to comment on the form of new disclosures. There was also a major business process redesign to advise. On January 3, 2006, Washington Mutual’s $100 billion securitization registration statement was declared effective, the first issuer out of the gate. This was followed by another $400 billion the following year, and for both of those it was my name on the cover. We issued 90 deals under those offering documents.

In January 2007, I became involved in a root cause analysis of disappointing loan performance in the previous year’s subprime deals. That led me to get immediately involved with the loan-level tapes of the deal. I created a database of 125,000 records with 50 fields and began a forensic analysis. In the end, I could find no useful predictive indicators aside from the margin over index on these adjustable-rate loans. This ran counter to the received wisdom that the loans were, as a whole, poorly underwritten.

Instead, the real estate bubble was defalting. Borrowers who experienced life events such as loss of employment or divorce were no longer able to sell or refinance their way out of foreclosure because loans were underwater.

By July, the securitization business imploded also, and I turned attention to how borrowers whose adjustable-rate loans were resetting from the teaser rate to the fully index rate would be affected. My database paid immediate dividends because it made me the only person who had the count and balance of loans coming up each month at this fingertips. I also got involved with industry initiatives to help borrowers restructure loans.

By December 2007, Washington Mutual had settled into the decline from which it never recovered, and when the FDIC seized the bank in August 2008 the reaction in the building was mainly one of relief. JPMorgan Chase acquired the assets, and I helped in transition matters for the next six months. JPM decided that a senior attorney wasn’t really needed for a business segment in wind-down mode and let me go. Frankly, I would have done the same.

This phase of my career was my experience with public company high-pressure, high-stakes work of a range and diversity (from consumer loan disclosures to commercial paper) that only my previous experience could have prepared me for. Despite the sudden end, I felt that I had reached a career peak, and proud of my part.