title: “Power Play” ShowToc: true date: “2022-12-22” author: “Christopher Smith”
title: “Power Play” ShowToc: true date: “2023-01-07” author: “Dionna Muraski”
title: “Power Play” ShowToc: true date: “2022-12-31” author: “Wilma Suarez”
But the capital is also filled with disillusionment and anger. Nearly 130 sitting parliamentarians resigned last week to protest the barring of more than 3,500 candidates from elections scheduled for Feb. 20. The leading reformist party is promising to boycott the elections. Khamenei is insisting that they be held as planned, and conservative candidates are expected to edge aside the reformists who have run the government since 1997. “Other countries in the region are moving toward democracy, but we’re moving in the opposite direction–toward a religious monarchy,” says Issa Saharkhiz, editor of the reformist magazine Aftab.
Iran’s conservatives are not relying only upon electoral shenanigans to cement their hold on power. Until now the world has been mostly familiar with the more extreme face of the conservative camp, epitomized by the Guardian Council, responsible for scratching more-liberal candidates from the ballot, and by the likes of Ayatollah Ahmad Jannati, who regularly blasts protesting students as traitors and refuses any dialogue with the United States. Now, analysts say, a new movement of “can do” conservatives is rising to the fore. These men, who include former president Ali Akbar Hashemi Rafsanjani, hope to win over cynical Iranians by breaking the longstanding political deadlock, strengthening the country’s ties to the rest of the world and, importantly, projecting concern about people’s pocketbooks. “Many conservatives have openly adopted the China model. It has been mentioned in official speeches,” says economist Sayeed Leylaz. “This model would allow for economic reform without budging on political issues.”
The rising star of this conservative movement is Hassan Rowhani, a cleric who heads the Supreme National Security Council. Many believe he’s being groomed as the next president. Rowhani, 55, led Iran’s nuclear negotiations with European Union ministers last fall. He followed up that high-profile deal with a visit to Paris last month to discuss Iran’s nuclear program with French President Jacques Chirac. Unlike reformist politicians, Rowhani, who holds a Ph.D. in law from Glasgow University, is trusted by Supreme Leader Khamenei, which allows him to negotiate with authority. “He’s not a charmer–he’s a dealer,” says one Western diplomat in Tehran. “Rowhani and people like him prefer survival to ideology. They would be willing to deal or sacrifice some of the sacred cows of the revolution if they got the right price.”
One possible result: a rapprochement with the United States. There have been some positive signs. Two weeks ago Mohammed Javad Zarif, Iran’s ambassador to the United Nations, met with a half-dozen members of Congress to discuss regional issues. It was only the second time an Iranian diplomat had visited Washington since 1979. And last month Foreign Minister Kamal Kharrazi met with Sen. Joseph R. Biden in Davos, Switzerland. Neither of these meetings could have happened without a green light from conservatives at the top. “By negotiating with America we can decrease international pressure on ourselves,” says Amir Mohebian, political editor for the conservative daily Resalat. “Chanting ‘Death to America’ is not a goal in itself.”
Closer relations could have a wide- ranging impact. Iran has the fourth largest oil reserves, and second largest natural-gas reserves, in the world. But production is limited by old technology, lack of capital investment and few partnerships with Western oil majors. If Washington were to drop sanctions, say analysts, Iran’s oil production could jump by 20 percent, boosting state revenues by billions of dollars.
Indeed, improving Iran’s economic fortunes could buy the conservatives the kind of widespread legitimacy they currently lack. The biggest issues are unemployment (roughly 20 percent), privatization and the need to attract foreign investment. Iran receives roughly $20 billion in foreign investment, mostly in the oil and gas sector, but nearly 80 percent of the economy is bogged down by inefficient, corrupt state-run institutions. Reformists’ efforts to liberalize this sector and open the economy to foreign money, and ideas, have thus far been stymied. Two weeks ago Finance Minister Tahmasb Mazaheri announced the drafting of legislation aimed at selling off more than 400 state-owned companies. It remains to be seen whether the government can follow through with this type of sweeping initiative, but overhauling the public sector is one element of the reformist agenda that conservatives could well adopt.
Either way, the key to the success of this new conservative group is growing public cynicism. During municipal elections last year, turnout was extremely low, which gave conservatives their first victory at the ballot box since reformist President Mohammed Khatami was elected in 1997. Many ordinary Iranians have lost hope of drastic political reform, and have tired of Khatami’s multiple, never-fulfilled threats to resign. (Last week he caved in again and agreed to stage the elections as scheduled.) “The public has lost faith in the situation,” says the Western diplomat. “They think the parliamentarians are fighting for themselves. Everyone seems to hate the regime, and has lost respect for the reformists.”
Even students, typically the most outspoken force in Iranian society, have barely stirred themselves over the current electoral controversy. Conservatives are counting on most voters to stay home on Feb. 20, and on those who do show up to vote for the camp that already seems to have all the power anyway. “In the next round of reform, the flag will switch to the other side,” says Mohebian. “The reformists haven’t been able to fulfill their promises. The people want to see results.”
Still, that support will be fragile. Even old-school revolutionaries are troubled by where the country seems to be heading. Mohsen Rahami, a respected cleric and a law professor at Tehran University, identifies more with the parliamentarians who resigned than with their rivals. He accuses hard-liners of playing dirty by sending representatives to the lawmakers’ neighborhoods to gather information about their daily life, particularly their devotion to Islam. He speaks from experience. Two years ago Rahami was disqualified from running for Parliament after government representatives canvassed his neighborhood to collect information on him. “They came and asked my neighbors, ‘Does he pray?’ " Rahami says, flinging his hands up in exasperation. “The ground floor of my house is a Husseiniya [Shiite mosque]! I taught people in my neighborhood how to pray! It can really make a person bitter.”
That kind of bitterness will not be easily salved. The regime in Beijing has been able to buy some breathing room with stellar economic growth. The regime in Tehran has less credibility to start with, and can hardly expect the same kind of boom. For now conservatives will have to focus on the elections and the dozens of irate reformists who are hellbent on preventing them. If they do find themselves holding all the reins of power, though, Iran’s can-do conservatives may find they have more to do than they think.
title: “Power Play” ShowToc: true date: “2022-12-25” author: “Charles Austin”
Among them: Hank Paulson, chairman of the blue-chip investment bank Goldman Sachs and an NYSE director. But Grasso wanted only police, firemen and officials like Mayor Rudy Giuliani. Paulson would have to watch from the floor. After Grasso’s ruling, he left to work on a client matter.
That incident was, in many ways, a prelude to the battle now consuming Wall Street over Grasso and the $139.5 million pay package that got him fired last fall. L’affaire Grasso, as many on Wall Street call it, is now widely viewed as a showdown between Grasso and Eliot Spitzer, the New York state attorney general who last week sued Grasso, charging that he misled the board about his contract. But the controversy is in fact the fallout of a much longer power struggle between Paulson and Grasso over who rules the Street. For now, it appears the Harvard M.B.A. man, Paulson, has bested Grasso, who was raised in working-class Queens, and didn’t graduate from college. It was Paulson, after all, who worked behind the scenes to have Grasso fired. This battle has just started, and Grasso is digging in for a long fight, threatening to drag a parade of Wall Street executives into court as part of a countersuit he’s said he will file shortly. Grasso says his reputation has been damaged, and he appears intent on doing the same to former colleagues on the NYSE board. Many on the Street say the PR fallout, which may worsen yet, resulted from miscalculations by Paulson that may cost him dearly in support from his peers and within his firm.
Paulson is trying to shore up his position. Lately he’s been speaking frequently to officials at other firms–an unusual move for him, since he rarely socializes with rivals. “Tell me why Hank Paulson wants to talk to me?” asks one executive. (Paulson, through a spokesman, says he’s simply trying to “limit the damage to the U.S. financial markets, not to cover his own backside.”) Paulson is also trying to downplay his rivalry with Grasso, telling acquaintances that he in fact was “the best friend that Grasso never realized he had” because he told Grasso that it would be suicidal to take his $139.5 million payday in one lump sum. Paulson, in his only public comments about Grasso since the controversy erupted, told NEWSWEEK that he thinks the whole episode has been “a real tragedy.” He acknowledges he led the ditch-Grasso effort, but says he had no other choice. “The only thing I thought about was protecting the institution and the credibility of the institution.” He adds that a plaque at the exchange that lauds Grasso’s 9/11 efforts should remain up, even though some Grasso opponents have fought to remove it. “I don’t feel any animosity toward Dick,” Paulson says.
But animosity is all that Grasso feels toward Paulson, and he routinely refers to Paulson as a “snake.” NEWSWEEK has learned that Grasso will name Paulson in a countersuit. He will claim that Paulson never objected to the size of his pay when he was on the comp committee. Grasso also says Paulson helped him handle the controversy, suggesting he release details of his pay package close to Labor Day because “the press won’t be around.” Paulson doesn’t dispute his account. After Labor Day, when Grasso was fighting for his job, he decided to give up a $48 million payment he was owed. Grasso says that during a conference call with the NYSE board, Paulson applauded the decision. “Dick, this is tremendous,” Paulson said, according to two people who heard the conversation. “We support you and the great job you’ve done.” Soon after, Paulson started campaigning to convince other NYSE directors that Grasso had to go. Grasso has said he can’t wait to see Paulson “squirm” during cross-examination. Such a spectacle would not play well with Goldman directors, who prefer the company keep a low profile. “Goldman hates bad publicity,” says a former executive. “The Grasso thing could produce a lot of bad publicity.” Paulson’s second in command, a savvy trader named Lloyd Blankfein, is said to be itching for Paulson’s job. His chances improve if Paulson becomes too much of a lightning rod. The storm could still die down, however. Grasso is considering approaching Spitzer with a settlement offer: if the exchange donates to a charity the $48 million he says he’s still owed, he will also donate about $10 million.
Paulson, by all accounts, made two critical errors. He played a key role in persuading former Citigroup co-CEO John Reed to take on the role as NYSE chairman. He had assumed the cerebral Reed would focus mainly on governance issues. But Reed hired lawyer Dan Webb to investigate how Grasso cut his deal. Reed then took Webb’s report to Spitzer, who saw it as another high-profile case to burnish his rep. Paulson’s second mistake was assuming that Grasso would not make the fight so personal. Grasso feels he has nothing to lose, and has no intention of settling. Despite the damage, Paulson says he has no regrets. “If I had to do it again, I would.”
Why did Paulson misread the situation? According to laws of the Wall Street jungle, somebody wins, somebody loses and you move on (an avid bird watcher, Paulson’s particularly fascinated by birds of prey). He’s said he learned during a stint as a White House staff assistant in the 1970s that there should be no limits to aggressiveness. It’s a lesson he’s repeated to his bankers, and he’s followed it religiously. He distinguished himself early at Goldman as a tireless worker. A CEO once confided to another Goldman banker: “If I don’t give the business to Goldman, Paulson will call all my board members.” He also capitalizes on other’s weaknesses. In 1998 he was appointed co-CEO to run the firm with Jon Corzine. A year later he seized on Corzine’s decision to help bail out the troubled hedge fund, Long Term Capital Management, and gained full control.
Paulson’s relationship with Grasso through the years has been far more complicated. They have helped each other. When Grasso tried to persuade Bill Gates to list Microsoft on the NYSE instead of NASDAQ in 2003, he asked Paulson to make the call (he couldn’t close that deal). Paulson also tried to warn Grasso about his decision last year to appoint former Citigroup CEO Sandy Weill to the NYSE board at a time when Weill was under scrutiny by regulators for any role in fraudulent stock research practices (he was never charged). “Let’s wait until the fall when the controversy passes,” he told Grasso, who ignored the advice, only to pull the nomination later. Paulson and Grasso have battled over the exchange’s future, too, with Paulson arguing for electronic trading that could make floor specialists obsolete.
For all their ups and downs, though, it was Grasso who invited Paulson onto the NYSE board in 1999, and was a director when Grasso landed a single-year haul two years later of $30 million. One of Grasso’s favorite lines is the old saying: “Keep your friends close, and your enemies closer.” For Paulson, his ties to Grasso no doubt feel too close for comfort these days.
