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A Day at the Office
A DAY AT THE OFFICE....When I read that Merrill Lynch CEO John Thain had spent $1.2 million redecorating his office, my first thought wasn't, "What a moron." (That was second.) It was, "How can you spend that much on one room? Solid gold wall sconces? Ashtrays carved out of moon rocks? What?" Luckily for me, Charlie Gasparino has the answer:
The biggest piece of the spending spree: $800,000 to hire famed celebrity designer Michael Smith, who is currently redesigning the White House for the Obama family for just $100,000.
The other big ticket items Thain purchased include: $87,000 for an area rug in Thain's conference room and another area rug for $44,000; a "mahogany pedestal table" for $25,000; a "19th Century Credenza" in Thain's office for $68,000; a sofa for $15,000; four pairs of curtains for $28,000; a pair of guest chairs for $87,000;
a "George IV Desk" for $18,000; six wall sconces for $2,700; six chairs in his private dining room for $37,000; a mirror in his private dining room for $5,000; a chandelier in the private dining room for $13,000; fabric for a "Roman Shade" for $11,000; a "custom coffee table" for $16,000; something called a "commode on legs" for $35,000; a "Regency Chairs" for $24,000; "40 yards of fabric for wall panels," for $5,000 and a "parchment waste can" for $1,400.
Impressive! But it doesn't add up to $1.2 million. It adds up to $1.3 million just for these 19 items alone, and there were probably plenty of smaller ticket nicknacks too. Plus labor — unless that's included in Smith's fee. Probably not, I suppose, which means this monument to American capitalism must have run at least a couple million bucks. The Sun King would have been proud.
And my third question? That's easy: "Who leaked this?" Most probable answer: BofA chief Ken Lewis, the guy who fired Thain, in an effort to keep attention focused on his scapegoat of the hour. Good luck with that, Ken.
"Knickknacks." And a "commode" is basically a sink, which in this case sounds like a basin -- likely stone or maybe metal -- mounted on legs (vs. a pedestal, like many modern bathroom sinks), possibly with attached plumbing (which may or may not be original).
Sadly, these prices are not qualitatively out-of-line. They are merely high-end in degree.
But y'might wanna ask about "load" the next time you hand over your savings to a mutual fund...
That is all bad, but Gasparino plays the role of the village idiot on CNBC.
Bleh: My dictionary lists both spellings. I use "nicknack" because the double k in the other spelling has always bugged me.
Next question after who leaked it, did the board of directors approve it? Seriously, was there a $1.3 million dollar line item for office decoration? Is just crony capitalism quid pro quo (I'll approve your wretched excess if you approve mine)?
I'm sure Ken's office is just a spartan little nook (or is that knook?)
Huh, never seen it. But hey, yer blog, yer sources; I'm just a silly lurker.
BTW, how do you feel about bookkeeping?
Kevin -- FYI -- many decorators do not take a fee for services, instead they get paid via the markup on the items they sell to their clients.
Speaking of banker b.s., has anyone else noticed that the little email reminders that your credit card company agreed to send to alert you that a payment is coming due don't always arrive these days, but that the late payment fee is tacked on immediately, without fail?
No cop on the beat? Not one cop?
fabric for a "Roman Shade" for $11,000;
I think I might get too close to this with a lit cigarette. Oops!
Don't tell me that photo is of his office. That's Versailles, right? I mean, where's the computer?
$35k for the commode? How much was the TP? (and what brand...)
If I'm going to spend $800k on a decorator, I wouldn't expect to end up with Ikea.
Just sayin...
Yes, according to the Windows "Properties" box for the picture, the picture is a shot of the Hall (of) Mirrors at Versailles.
William,
I had the same response... I've only been to Versailles once, and the room was considerably more crowded (filled with tourists like me), but that looks like Versailles to me.
Looks as if nobody learned from Tyco. Ah, human nature.
6 sconces for $2600 sounds pretty fair; that's only a little over $400 each. Home Depot sells bottom-end ones for $50-$120. As far as extravagance goes, that's not horrible.
But $800K for designer services while Obama's White House is getting the same for $100K? Now THAT'S getting your federal dollar's worth!
$1.2 million for redecorating the CEO's office? He just wasn't thinking big enough...If Merrill Lynch had put all its money in antiques instead of CDO's they'd still be in business!
So how much for the hookers ?
Really, I want to know.
"Every normal man must be tempted at times to spit on his hands, hoist the black flag, and begin to slit throats." - H. L. Mencken
But, now that he's been fired --who gets the office?
Damn! I've spent years hunting eBay for a mahogany pedestal table that I could afford.
Okay, okay this looks bad, and dumb. But Thain did nothing illegal, and one way to look at it is the CEO of Merrill is like the sales-man-in-chief. A big part of his job is to convince other companies, institutions, governments,etc. to invest with his firm. Obviously most people in this position would feel that is important to impress prospective clients and investors with an aura of success and power. Also,strong optimism is often a component of a successful CEO's character. I'm sure it took a lot of bad news for Thain to give up on the idea that he could ultimately restore Merrill's lost financial glory. From this perspective it was money well spent at the time. Thain probably thought the bad news was only temporary.
Another thing, if the items listed were genuine period antiques, the prices were relatively reasonable for the antiques market at the time. If the furnishings were all reproduction, someone was getting a very nice commission on the markup.
The Sun King would not have been proud. The Hall of Mirrors, and Versailles generally, were an admittedly hugely costly piece of political theatre serving a public purpose, like it or not: to cement the King's authority and keep the nobility in the busywork of court life rather than plotting in the provinces. If you want to know what Louis XIV thought of private conspicuous consumption, look up "Nicolas Fouquet". (I don't include a link because the post will be held up.)
My guess is that the designer passed on a 20% discount on the list prices, which brings us back down to $1.2 million.
I had friends who worked in Shearson American Express back in the 1980s - the executive suites were filled with a very extensive art collection - it was considered part of Shearson's investment portfolio. So I wouldn't be surprised, actually, if this stuff was high quality with artistic value that that sort of spending wouldn't have been justified in that way
I lived in Louisiana in the 1950s and a commode was a toilet.
OK for Obama though? Mr. "Serve and Sacrifice"? Probably costs a lot more to replace furniture and fixtures in the Whitehouse than just doing an office.
To the point of Anonymous' post: Bear in mind that our federal dollar is paying for both the White House commission AND Thain's folly.
"Louis VX (or one of them)Commode" came up in the Duke Cunningham scandal, and it was basically a small credenza. Got to have some place to put those $4000 bottles of 50-year-old Scotch.
A way needs to be found to seize the $2B in bonuses paid right before the merger of Merril and BoA for the Treasury.
Whether it is obtained through fines, fees or taxes, the bonuses paid to bankers, Wall St. schemers and oil company executives the past eight to fifteen years should be used to finance a government stimulus during economic crises caused by over consumption.
Gee Luther - where did you see anything about Obama doing any renovations on the WH? Or did you get confused over the new dinnerware Laura ordered?
I'm trying to think of the name of that bad guy in Baghdad who did this kind of spending on his palaces. What was his name again?
Seriously, you guys are very funny and I appreciate the humor very much.
But, now that he's been fired --who gets the office?
And it will probably have to be redecorated to the tastes of the new tenant--again.
Misappropriation of stockholders equity - not a lawyer, but I believe it is a crime.
the redecorating story is just to distract us from the 4 billion in bonuses
That's a great picture of Versailles there, but the actual $35K commode, for instance, that we-all bought Thain is considerably less impressive. I think I have a picture of it on www.RealityChex.com -- it's that little chest between the sinks.