A Raucous Hazing at a Wall St. Fraternity
BY KEVIN ROOSE http://dealbook.nytimes.com/2012/01/20/raucous-hazing-at-a-wall-st-fraternity/
John Marshall Mantel for The New York TimesThe St. Regis Hotel in Manhattan was the site of a black-tie dinner for Kappa Beta Phi, whose members were told “what happens at the St. Regis stays at the St. Regis.”
The chandelier-filled ballroom was teeming with 200 men in tuxedos — and a smattering of women — whose daily decisions can collectively make or break the global financial markets. Most were picking over a lavish dinner that included rack of lamb and crème brûlée. Others were preparing to sing bawdy show tunes.
Kappa Beta Phi, an exclusive Wall Street fraternity whose members include big-name bankers, hedge fund billionaires and private equity titans, met at the St. Regis Hotel in Manhattan on Thursday night for its 80th annual black-tie dinner and induction ceremony.
As always, the event was held in strict secrecy, with members being told that “what happens at the St. Regis stays at the St. Regis.”
A reporter, however, was able to walk in unquestioned and observe the proceedings.
Neither a rough year in the financial markets nor the animus of the Occupy Wall Streetmovement was enough to dampen spirits at this year’s dinner, which was attended by members like Alan C. Greenberg, known as Ace, the former chairman of Bear Stearns; Robert H. Benmosche, the chairman of the American International Group; Meredith Whitney of the Whitney Advisory Group; and Martin Lipton, founding partner of the law firm Wachtell, Lipton, Rosen & Katz.
The Occupy movement was fodder for several after-dinner skits. In one, a documentary filmed during the protests, James Lebenthal, a bond specialist, joked with a protester whose face was appeared to be tattooed.
“Go home, wash that off your face, and get back to work,” Mr. Lebenthal told the protester.
Reached through his daughter on Friday, Mr. Lebenthal declined to comment.
In another skit, William Mulrow , a senior managing director at the Blackstone Group, put on raggedy clothes to play the part of an Occupy protester. Emil W. Henry Jr., a managing partner at Tiger Infrastructure Partners and a fellow new Kappa, joined him dressed as a wealthy baron.
“Bill, look at you! You’re pathetic, you liberal! You need a bath!” Mr. Henry said, voice full of mock indignation.
“You callow, insensitive Republican!” Mr. Mulrow said. “Don’t you know we need to create jobs?”
A Blackstone spokesman declined to comment on Mr. Mulrow’s behalf. Mr. Henry was not immediately available for comment.
The night’s agenda was twofold: install officers for the coming year and haze incoming members by having them don wigs, gold-sequined skirts and skin-tight tops and put on a comedic variety show for the enjoyment of other members.
Among the 21 inductees featured in the variety show were Marc Lasry, the billionaire founder of the Avenue Capital Group, Warren Stephens, the chief of Stephens Inc. and Ted Virtue, the chief executive of MidOcean Partners.
Kappa Beta Phi, which started in 1929 as a group of Wall Street bigwigs whose social club was named as a send-up of Phi Beta Kappa, the honor society, has become a sort of upper-crust Friar’s Club roast.
The group’s leadership consists of a “Grand Swipe,” “Grand Smudge,” “Grand Loaf,” and a “Master-at-Arms.”
Some members wear the group’s insignia, which consists of a beer stein, a Champagne glass, a pointing hand and five stars. The group’s Latin motto, “Dum vivamus edimus et biberimus,” roughly translates as “While we live, we eat and drink.“
Members pay $475 a year in dues for the invitation-only group, according to a person who spoke on the condition of anonymity.
Absent from this year’s gathering were Wall Street exiles like Richard S. Fuld Jr., the former chief executive of Lehman Brothers; James E. Cayne, the former chief of Bear Stearns; and Jon S. Corzine, the former Goldman Sachs head who presided over the failed brokerage firm MF Global. All are still listed in the group’s member directory, though the men are said not to have attended in a few years.
Wilbur L. Ross Jr., the billionaire investor who served as this year’s Grand Swipe, acknowledged the foibles of those prominent Kappas.
“We have members from every firm that has failed, as well as members from those that will fail in the future,” he said to loud laughter.
After Mr. Ross’s opening remarks and a presentation by representatives from the group’s Los Angeles chapter, the inductees broke into their variety acts.
Some jokes took aim at industry outsiders like Representative Barney Frank, the Democrat of Massachusetts who has been an advocate of financial regulation. But most Kappas roasted fellow financiers.
Mr. Corzine, the latest of the prominent Kappas to fall from grace, proved an inviting target. Two initiates did a comedy act lampooning Mr. Corzine and Steven A. Cohen, a prominent hedge fund manager whose firm, SAC Capital Advisors, has had some former employees who have been ensnared in recent insider-trading investigations. (Neither Mr. Cohen, who is not a Kappa, nor Mr. Corzine has been accused of any wrongdoing.)
“What do Steve Cohen and Jon Corzine have in common?” the joke went. “They’re future cellmates!”
The bulk of the entertainment came in the form of musical spoofs.
Inductees sang Wall Street-themed versions of “Mama, Don’t Let Your Babies Grow Up to Be Cowboys,” (replacing “cowboys” with “traders”) and Abba’s “Dancing Queen” (which was retitled “Bailout King”). Mr. Lasry, along with two other inductees, dressed as a member of the Village People for a financial rendition of “Y.M.C.A.” Mr. Lasry declined to comment.
As is customary during Kappa events, some audience members threw objects at performers on stage, including petit fours and napkins dipped in wine.
Kappa Beta Phi’s gatherings have become divisive among members in recent years. Some Wall Street executives, wary of taking part in an event that could be construed as tone-deaf to the economic woes facing the country, are choosing not to attend.
“The skits can be offensive and I don’t want to sit through it,” said one fraternity member who spoke on the condition of anonymity.
Mr. Ross defended Kappa Beta Phi on the grounds that the same freedom of speech rights afforded to Occupy Wall Street should be extended to the group’s members.
“This is not a political convention,” he said by telephone on Friday. “It’s a group of people that are friendly with each other trying to have an enjoyable evening, mostly at each others’ expense.”
While they may not want to attract attention publicly, the members of Kappa Beta Phi are privately finding humor in their vilification. As the night’s musical finale, the entire group of inductees changed into white dress shirts and dark ties to sing a parody of “I Believe,” a song from the hit Broadway show “The Book of Mormon.”
In the original version of the song, a down-and-out Mormon missionary offers a passionate defense of his faith. On this night, though, the financiers turned it into a playful paean to their industry. (“I believe that the Lord God created Wall Street. I believe he got his only son a job at Goldman Sachs.”)
Off-key and raucous, the financiers raised their voices once more.
“I work on Wall Street. And Wall Street just believes.”
Susanne Craig contributed reporting.
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