Dan Rattiner's Stories

Who’s Here: Ken Lipper, Renaissance

Ken Lipper has won an Academy Award for producing The Last Days, written bestsellers, been a Deputy Mayor of New York City and is currently a Commissioner of the Port Authority of New York and New Jersey, has appeared in several films, has produced three movies, taught at the Columbia School of International and Public Affairs, served as director of several major corporations, is Chairman of Lipper & Co., an investment banking firm, has gone on safari in Africa several times—living with a tribe of bushmen in the Kalahari desert for three weeks on one trip—and had his own imprint at Penguin books for a series of 24 biographies of famous people written by celebrated authors. He also was Phi Beta Kappa at Columbia, has a law degree from Harvard, an LLM (Master of Laws) in the European Civil Law System from NYU and did postgraduate work in law and economics at the University of Paris. If there is still such a thing as a Renaissance man, Ken Lipper is one.

I didn’t learn all this directly from him, by the way; I learned it all from reading about him in preparing for an interview with him. I also learned he is a philanthropist, and for years was one of the most highly paid Wall Street executives in America.

As a result, as I walked up the winding brick path to his home on Hook Pond, I wondered how I could get all of this into a brief interview for Dan’s Papers. So, as is my custom, I decided to begin at the beginning.

Ken Lipper was born in the Bronx in 1941 at a time when that borough was largely a family neighborhood. He grew up in a five-story walkup, where his grandmother had an apartment on the fifth floor and his mother and father and older brother occupied a one-bedroom apartment on the second. He and his brother slept in the bedroom. His parents slept in the living room on a pullout couch at night, and during the day it was a living room and the focus of family life. His father was a shoe salesman, his mother a school crossing guard, and he’d pass her every day when he walked to PS 50. It was an extended family, his neighborhood, with uncles, aunts, cousins and close friends living on other blocks nearby.

“If my mother called me to come home from playing with my friends and I was five blocks away playing ball, the uncles and aunts and family friends would hear her shouting ‘Kenny, Kenny!,’ it would be passed along until finally I would get told to go home,” he says

Main Street for him was Southern Boulevard and 174th Street. A special treat, a family outing, would be to go to lunch on Arthur Avenue, followed by a trip to Yankee Stadium, the Bronx Zoo, Alexander’s on Fordham Road or to Loehmann’s. He went to Herman Ridder Junior High and then James Monroe High School, both nearby. He was a normal kid, he said, though smart. He was a “special progress” student who skipped seventh grade.

I asked if he’d ever got in trouble. Most kids get in trouble one way or another. I know I did. I was astonished by his answer.

“In our neighborhood, all the kids joined different street gangs. There were maybe seven of them.”

“Did they have names?”

“One was the Elsmere Alley Boys. My gang was the Redwings. I wore a black jacket with the name Redwings on the back in red with white piping around it. We’d go out late at night and sometimes get in fights in a schoolyard with the other gangs.”

“Every night?”

“Oh no. Maybe once in two months. It was generally about respect or girls. Somebody would dis somebody. There would need to be an apology. If it was not accepted, a gang fight would be scheduled and we’d all come.”

“You had weapons?”

“When I was a young teenager, we threw stones or bricks or swung clubs. The gang was everything. A few bigger kids had zip guns.”

“People hurt?”

“Sometimes. I have a scar on the top of my head where I was banged with a brick and I had to have stitches. Another scar, now gone, was on my forehead. It was a badge of honor to have to go to the hospital. My friend and neighbor Al Pacino was a Redwing.

“In any case, the cops came to the schoolyard one night and lined all of us up against the wall and our parents and extended families poured into the street. We were facing the wall. My dad came over to me, grabbed me by the shoulder and turned me around and then hit me right in the jaw. I went down. My mother was there yelling stop, stop, and he did, but he pushed me up and all the way home, he cursed at me and kicked me. By separating me from the lineup he spared me a ride to the station house. The next morning, my mother called me over. She had my Redwings jacket, my most valuable possession, custom made in the Army-Navy Store, and with a pair of scissors, she made me watch as she cut it all up to ribbons.”

Lipper received a scholarship to Columbia and fell in love with the intellectual life. He lived at home the first year and went by subway to school, a trip that took an hour and a half with four transfers. He read books on the commute. He felt at Columbia he had come in at a great disadvantage. Everyone in his class seemed to have already studied the classics. Many came from afar, from other states and countries. He’d taken trips out of the Bronx just a few times before he went to college, mostly class trips.

“I think growing up in the Bronx I learned you had to get along with everybody, even those you didn’t like or disagreed with. It was one big family and everybody was going to always be in it, no expectations they’d be moving on. Columbia was something else, an awakening. There were kings and emperors and big tragic figures to learn about. I fell in love with it all. And I admired the lives my professors lived.”

He went to see one of them, Henry Graff, a famous historian who was his advisor. “I feel behind everybody,” he told Graff. “Don’t worry,” Graff replied. “Our Bronx boys always do better than our Park Avenue boys in the long run.”

Ken told his mother he wanted to be a professor.

“She said, ‘First make a living, then teach.’”

Lipper majored in History with a minor in Oriental Studies. He also joined the debate team. One day, he was invited to join one of four American debaters, one from a university in each geographic region, going to Japan. One side represented America. The other side represented the anti-establishment Japanese Zengakuren leftist student movement, the kids determined to occupy college buildings and block a U.S. Presidential visit, which they got.

Lipper and his teammates had an audience with the Crown Prince and Princess, now the Emperor and Empress of Japan. They debated in universities all around Japan, in Tokyo, Osaka, Kyoto, Wakayama and Hiroshima, staying in dormitories. The burning question in the dormitory from the militant Japanese students was not political, but, “Do you really kiss girls in the U.S.?”

For a summer job, college dean Dean Harry Carman got Ken a job interview with John D. Rockefeller. Rockefeller asked Ken why he wanted to work for him. “I want to watch you,” Ken said. Rockefeller turned to an aide and with a chuckle said, “He wants me to pay him to learn from me.” Rockefeller suggested Ken would learn more working for the Japan External Trade Organization, and arranged an interview.

“I got to see firsthand how American consulting engineers working with Japanese industrial designers applying advanced American technology and Japanese miniaturization skills to create cutting-edge TVs. That’s how the US/Japan alliance rebuilt war-torn Japanese industry. I’d see RCA and Zenith TVs on a table, all their parts spread out and then re-envisioned.” The next summer he worked for Ruder & Finn, a New York PR agency that lobbied for Japan, serving as assistant to its president, Norman Weissman.

It was in his first year at Harvard that a classmate of his introduced him to the woman who would become his wife. Evelyn was a freshman at Simmons College. He married her in June, days after graduation, and they went off to Paris to an apartment near the Bois de Boulogne. She would study biochemistry at the Pasteur Institute and cooking at a cooking school. He would study international law and economics at the University of Paris.

After a year there, they returned home and settled into a one-bedroom apartment on East 55th Street in Manhattan. Evelyn went to medical school and Ken got a job with a law firm. Then he worked in Washington for the Federal Government. A few years later, he went to Wall Street to become an investment banker, starting at Lehman Brothers and working his way up to partner in just two years. Subsequently he became partner at Salomon Brothers. Evelyn became a professor at Cornell Medical School.

In 1982, the City of New York was in terrible financial trouble, skipping very close to bankruptcy, with bond investors either lending the City money at 14–18% interest or not at all. The City had lost its credit ratings. Mayor Ed Koch, elected to fix this mess, called Lipper, then 41, invited him to breakfast and asked him to advise him on what to do.

The city would have to cut services, fire people and increase tax collections. Koch had grown up in the Bronx. Lipper recalls Koch saying, “‘I don’t feel comfortable with the richies, I need you.’ I told him, ‘look if I come to work in City Hall, in a few years you’ll kick me out, we both know that.’ And he said ‘that’s why you have to take this job.’” I agreed at first just to consult with the city on the side, but then he slipped a note under my townhouse door: ‘I need your body as well as your mind. I want you to be Deputy Mayor.’ So I went and took the job.

“Koch had these incredible press conferences. The police had been cut back. The fire departments had been cut back. Garbage pick up had been cut back. He’d meet the press and say ‘I think this approach is idiocy, but if you hire experts you have to go with it.’ Sometimes I’d doubt myself about what we had to do and I’d whisper that to him. ‘Don’t get soft on me now,’ he’d say. The press would say it’s so Draconian, there must be another approach. He’d say ‘It’s simple! If you don’t start paying the banks back, the banks won’t lend you any more money!”

After 3 years, much of the work done, Lipper left his deputy mayor job by mutual agreement and went on an archeological dig in Israel, then met his family for a safari in Kenya. When he got back, there was another remarkable call. “It came from Alex Ho, a Hollywood producer to Oliver Stone. He said Oliver Stone wanted to make a movie about Wall Street and government and you’re the best guy to be the advisor for this. He wants to meet you.

“My wife and I and our four girls got all dressed up to meet him at our townhouse on 70th Street, and there’s a knock on the door. It’s Oliver Stone. He’s wearing a short-sleeved Mobil Oil shirt and baggy black pants. We invited him up. He told me the story and described the characters. I told him it was too black-and-white, not realistic. It emphasized the retail brokerage business too much, and moviegoers wouldn’t be interested in that. I told him what they’d be interested in was why Ivan Boesky would steal a hundred million after already making a hundred million.”

Stone stood up. “Well,” he said, “I don’t think this is going to work out.” And, without another word, he walked down the stairs and slammed the front door as he left.

“That night, his producer calls me and says, ‘Oliver really liked you. He wants you to do this. Write down your ideas, and I’ll set up a dinner and you can go over them with him.’ I wrote 13 pages. After a lengthy discussion over dinner he decided we would make a great team. He offered me the job. I gave it some thought. I had a New York lifestyle. I had sold my shares in Salomon Brothers for a big capital gain. And though I’d lose lots of Wall Street banker income doing a movie, I’m grounded in my skills and I can always go back to that. But it would be an adventure. I want life to be an adventure. So I took it. And boy was it a fabulous experience. I stood next to Oliver for the next 18 months; wherever he went, I went, to help select actors, write scenes, work with set designers to create realistic sets, help Oliver set up the shots…for example, I would tell him that a Wall Street trading floor should have clocks. There’s a time driven rhythm to how a Wall Street trading floor works. Start with a clock in the huge and crowded room, and pan down and work the scene from there.”

Lipper is in four different scenes in the movie Wall Street. He has a line in one scene. It’s “Buy! Eighths and quarters won’t matter.” So he holds a SAG card. Wall Street is considered the best film ever made about the financial world. While working on the screenplay, Stone asked Lipper to write a book based on the story underlying the evolving screenplay. The book Wall Street was a big seller.

In the years that followed, Lipper founded his own investment banking firm Lipper and Co., which was investing about $5 billion on behalf of institutions, high net worth individuals and its mutual funds. But he also continued his work in the arts. He wrote a novel called City Hall, then wrote a screenplay of it and produced the movie by that name starring his old high school buddy Al Pacino. It was a fictionalized portrayal based on his personal experiences and observations as deputy mayor. A few years later he read an excellent play and from it produced the movie The Winter Guest, about a mother and daughter who have a fractured relationship until both their husbands die and they have to cope with the grief and loneliness that followed.

Then, in 1997, with Steven Spielberg as executive producer, he initiated and produced the documentary The Last Days, about the Hungarian government’s attempts to keep Hitler from killing that country’s Jews during WWII and Hitler’s evil determination to carry out the final solution. It won him an Academy Award.

For six years, Lipper taught an international economics course as an adjunct professor at Columbia’s School of International and Public Affairs, endowed college student scholarships to Harvard, Princeton and Columbia in the name of his mother, endowed a blood cancer research center at Dana Farber Cancer Institute, at Harvard University in honor of his older brother who died young, and re-established his investment banking firm after a huge setback. A portfolio manager of one of the funds at the firm had committed fraud and as a result went to jail. This caused Lipper to have to sell his firm and start over. (Lipper was sued in a civil action by some investors for their losses; he was found not to have been negligent in his supervision of the fraudulent employee or to have violated any laws and received $14 million in court-ordered restitution to cover his legal fees.)

In 2013, at Governor Cuomo’s recommendation, Lipper was appointed to the Board of Commissioners of the Port Authority of New York and New Jersey. This Commission oversees all tunnels and bridges that cross the Hudson River, the three major airports, the New York/New Jersey docks, the PATH train, bus terminals and the World Trade Center. He has a major role developing the plan for the new LaGuardia Airport and Midtown Bus Terminal and recently, alone on the board at first, opposed giving $1.2 billion in Port Authority taxpayer’s money to private developer Larry Silverstein so he could build Tower Three at the World Trade Center site. The Port Authority had already spent $7 billion on the rebuilding of the World Trade Center, quite enough of public money, he said—Silverstein’s claim that the banks wouldn’t lend him the money to build was not an accurate reflection of the lending markets. He prevailed, the public money was never shelled out and, as Lipper predicted, Silverstein wound up getting the banks and bond market to lend him the money. Today, the building is under construction with private money. As Chairman of the Governance and Ethics Committee, he has drafted a new Ethics Code for the Port Authority.

Lipper has been coming to East Hampton for over 40 years. He has built a quiet and peaceful retreat adjacent to Hook Pond, and the house sits behind a front-yard flower garden that sits adjacent to the brick path that leads to his front door. These gardens are modeled after renowned artist Claude Monet’s gardens at Giverny, outside of Paris. “I told Bayberry Landscapers to follow my photos of Monet’s Giverny gardens, with respect to the colors, density and relative heights of plants, while using deer-resistant plantings,” he says.

His wife, now ex-wife, is a successful physician. His four daughters have established themselves in careers. Joanna teaches at Harvard and is up for an African Academy Award for her documentary about the Nigerian democracy movement, The Supreme Price. Julie founded the Julie Wilcox Method for wellness. Tamara was the White House Correspondent for Newsweek and is now a VP at Charter Communications. And Daniella was a managing director at Lehman Brothers and currently runs a charitable foundation.

I spent two hours with Ken Lipper. He is funny, smart, hardworking and well meaning, and I’m very pleased to know him.

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