Whopper of the Week: 92nd Street Y

A $1 million donation is pronounced chump change.

“No child is guaranteed admission here. Every child—every child—goes through the same rigorous admissions process. The implication that a large donation—and it is by no means one of our largest—can grease the process is just not true. The only thing the 92nd Street Y takes into account is the children themselves.”

Alix Friedman, director of public relations for the 92nd Street Y, where Jack Grubman’s twins attend preschool. Grubman is a former telecom analyst for Salomon Smith Barney, a unit of Citigroup, which is currently being investigated by New York attorney general Eliot Spitzer. Friedman was quoted in the Nov. 15 New York Times.

“On another matter, as I alluded to you the other day, we are going through the ridiculous but necessary process of pre-school applications in Manhattan. … Of the schools we’ve looked at, the 92nd Street Y is, without question, the one we’d love our children to attend. … Given that it’s statistically easier to get into the Harvard Freshman Class than it is to get into pre-school at the 92nd Street Y (by the way, this is a correct statement), it comes down to ‘who you know.’

“Attached is the list of the Board of Directors from the 92nd Street Y. Fred Salerno is helping me with [board member] Patricia Cayne, who I think is Jimmy Cayne’s wife from Bear Stearns, and Fred is on the Board of Bear Stearns or at least was. However, if you feel comfortable and know some of these board members well enough, I would greatly appreciate it if you could ask them to use any influence they feel comfortable in using to help us as well. I noticed Bill Heyman is on the board and I think he works somewhere in the Citigroup corporate structure but I don’t really know Bill.

“Anyway, anything you could do Sandy would be greatly appreciated.”

Memo from Grubman to his boss, Citigroup chief executive SanfordI. Weill, Nov. 5, 1999. (If you subscribe to the Wall Street Journal’s online edition, you can click here for the complete document.)

“Although my effort to help an employee’s children is what led me to call the 92nd Street Y, the Y is a superb institution and our support is consistent with Citigroup’s philanthropic efforts. Through a $200,000 per year, five-year commitment, we now fund an outstanding program of concerts, literary readings, dances and lectures that enhances the cultural life of New York.”

Citigroup chiefWeill, in a Nov. 14 press release.

“You know everyone thinks I upgraded [AT&]T to get [an inside track on financing AT&T’s wireless unit]. Nope. I used Sandy to get my kids into 92nd St. Y pre-school (which is harder than Harvard) and Sandy needed [AT&T chairman and Citigroup director C. Michael] Armstrong’s vote on our board to nuke [Citigroup co-chairman John] Reed in showdown. Once coast was clear for both of us (ie Sandy clear victor and my kids confirmed) I went back to my normal negative self on [AT&]T. Armstrong never knew that we both (Sandy and I) played him like a fiddle.”

E-mail from Grubman to an analyst at another company, Jan. 13, 2001. Available to subscribers here.

Discussion. Chatterbox will concede it’s theoretically possible that Grubman and Weill would think that pulling strings and arranging a $1 million Citigroup donation helped get Grubman’s kids into an exclusive Manhattan preschool—when in fact it did not. But Chatterbox just doesn’t believe it.

While we’re at it: Chatterbox also doesn’t believe Weill when he denies swapping favors with Grubman. At least implicitly, the deal clearly was that Weill would help get Grubman’s twins into preschool if Grubman would upgrade AT&T, whose chairman Weill needed as an ally in Weill’s corporate showdown. Grubman’s 1999 memo comes shockingly close to spelling out a quid pro quo—the first half (not quoted here) is about AT&T, while the second half is about getting his kids into preschool.

Weill has conceded that he asked Grubman to take a “fresh look at AT&T in light of the dramatic transformation of the company,” but insists, “I never told any analyst what he or she had to write—and I never would.” Chatterbox doesn’t believe that, either. Grubman now says that the Jan. 13 e-mail was “completely baseless,” and that “[m]y research on AT&T was always done on the merits” and not “designed to influence Mike Armstrong’s vote on Citigroup board matters.” Chatterbox doesn’t believe that, either. However, Chatterbox does believe Grubman when he now says that his motive in writing the e-mail was “to inflate my professional importance and make an impression on a colleague and friend.” (Grubman’s recent statement is available to subscribers here.) We can all agree Grubman’s e-mail was spectacularly indiscreet.

Got a whopper? Send it to To be considered, an entry must be an unambiguously false statement paired with an unambiguous refutation, and both must be derived from some appropriately reliable public source. Preference will be given to newspapers and other documents that Chatterbox can link to online.

Whopper Archive:
Nov. 8, 2002: William Webster
Nov. 1, 2002: Harvey Pitt
Oct. 25, 2002: George W. Bush
Oct. 18, 2002: North Korea
Oct. 11, 2002: Michael Bloomberg
Sept. 27, 2002: Rep. Tom Tancredo
Sept. 13, 2002: Al-Muhajiroun
Sept. 6, 2002: National Republican Congressional Committee
Aug. 29, 2002: Eddie Joe Lloyd
Aug. 22, 2002: Larry Klayman
Aug. 2, 2002: Al Gore
July 26, 2002: Princeton admissions dean Stephen LeMenager
July 19, 2002: James Traficant
July 12, 2002: Maryland Lt. Gov. candidate Michael S. Steele
July 5, 2002: Hesham Mohamed Hadayet
June 28, 2002: WorldCom
June 21, 2002: Terry Lynn Barton
June 14, 2002: Tom Ridge
June 7, 2002: Former FBI Deputy Director Weldon Kennedy
May 31, 2002: Ari Fleischer
May 23, 2002: Condoleezza Rice
May 17, 2002: Robert Mueller
May 9, 2002: Karl Rove
May 3, 2002: Gen. Richard Myers
April 25, 2002: Donald Rumsfeld
April 18, 2002: George W. Bush  
April 11, 2002: The Rev. Robert J. Banks, archdiocese of Boston
April 5, 2002: George W. Bush  
March 29, 2002: Major League Baseball
March 21, 2002: Billy Graham
March 14, 2002: INS commissioner James W. Ziglar
March 8, 2002: Robert Zoellick and the U.S. steel industry
Feb. 28, 2002: Al Sharpton
Feb. 22, 2002: Olympic skating judge Marie-Reine Le Gougne
Feb. 14, 2002: Kenneth Lay
Feb. 8, 2002: Enron spokeswoman Peggy Mahoney
Jan. 31, 2002: Monsanto
Jan. 24, 2002: Linda Chavez
Jan. 17, 2002: George W. Bush
Jan. 10, 2002: Simon & Schuster
Jan. 4, 2002: The Associated Press

(Click  here  to access the Whopper Archive for 2001.)