chapter 17 Climbing the Corporate Ladder
Page 211 →The SEC proved to be a rich experience. I was assigned to the Office of the General Counsel, which managed the appellate litigation practice for the commission. The Enforcement Division would try securities law cases in the federal district courts and the General Counsel Office would handle the appeal of those cases in the federal circuit courts. Often the General Counsel Office would appear before the US Supreme Court if permitted by the US Solicitor General. The solicitor general defers to the expertise of the SEC in most securities law cases.
It was an exciting time to be at the SEC. The commission was pushing into new areas of the law. The SEC’s primary weapon for policing the capital markets was the antifraud sections of the Securities Act of 1933 and the Securities Exchange Act of 1934. Both statutes were enacted during the Great Depression to control the unbridled speculation and misinformation that caused the collapse of the US stock market.
A new federal statute, the Foreign Corrupt Practices Act (FCPA), was enacted shortly before I arrived at the commission. That law essentially prevents US companies from bribing foreign officials to obtain or retain business with those foreign countries. The SEC had a dynamic Enforcement Division director, Stanley Sporkin, who vigilantly pursued companies that violated the FCPA. Before a securities law case is brought in federal court, a majority of the five SEC commissioners must agree with the merits of the charge against a company or individual. Stan Sporkin often presented a Page 212 →summary of the case to the commissioners. Commission lawyers would often joke about Sporkin’s common refrain before the commissioners: “This is the worst goddam fraud I’ve ever seen.” Sporkin was a colorful figure who later became a federal district court judge in Washington, DC.
The general counsel, Harvey Pitt, was a hard-charging, exceptionally able workaholic. He was a wunderkind who was appointed General Counsel at age thirty, the youngest ever to achieve that rank. Harvey expected others in the office to give as much as he did. Once I ran into Harvey at the elevator around 7 pm, after a long day, and his only comment as I entered the elevator was: “Nice you could come in today.” I often joked with my fellow lawyers that, before leaving the office in the evening, we should leave the lights on and a coat on the chair in case Harvey did a bed check at night.
In truth, we enjoyed the high expectations that Harvey had for us. Once you penetrate the gruff veneer of Harvey’s persona, his warm and joyful soul becomes apparent. Harvey meant a great deal to me. He gave me interesting assignments overall and selected me to work on a team that was preparing a brief and argument before the US Supreme Court. The case was a very complicated antifraud matter that involved the novel question of whether a “pledge” of stock constituted a “sale,” an essential element in determining whether a federal court has jurisdiction to hear the case. The matter was so complicated that the Supreme Court ducked the issue by dismissing the case, deciding that “certiorari was improvidently granted.”1 Certiorari is the discretionary authority the Supreme Court has for accepting a case for argument and decision.
Working in the General Counsel Office was the quintessential assignment at the commission. I learned the appellate practice from two legendary litigators. David Ferber was the SEC’s Solicitor, the second in command in the office. He had a gentle demeanor and commanded attention and respect because of his brilliance. His Page 213 →comments on my legal briefs were concise and pointed, grounded in knowledge, gained over years of practice, of what the circuit court judges wanted to see. Jacob Stillman, Principal Assistant General Counsel and third in command, was a Harvard Law–educated dynamo with a towering intellect. Jake’s mind would work a mile a minute. He peppered me with so many questions about my legal arguments that I felt I was back in law school. Jake did not suffer second-rate preparation, and I would always try to be at the top of my game in discussing legal matters with him. He was later appointed Solicitor and argued cases before the Supreme Court.
I had a two-year appointment at the commission. At the six-month point, I got married and Harvey was a guest at the wedding. After marriage, I started to think more about the future. Should I stay at the commission or reenter private practice with a law firm? During my second year at the SEC, Harvey left for private practice at Fried Frank Harris, a leading New York law firm.
Ralph Ferrara took over as General Counsel. Ralph had been chief of staff or special counsel to three SEC chairmen and his appointment seemed natural. I got along well with Ralph. He recommended me for the General Counsel position at the Council of Economic Advisers. I interviewed for the job but didn’t get it. Later I interviewed at a few leading Washington, DC, law firms. I realized quickly that a law firm position would be hard to get because I had been out of law school for nine years. Lateral hires by the leading law firms at the time were highly unusual, and my profile didn’t fit neatly with the standard associate-partner paradigm. When I realized that, I began looking at legal positions with corporations.
Settling in at Aetna Life & Casualty
I spent most of my professional life as a lawyer at the Aetna Life & Casualty Company. I was hired from the SEC to fill a securities lawyer position in the Aetna Law Department. However, no sooner Page 214 →than I began that role, the General Counsel, Stephen Middlebrook, asked me to take on two additional roles. He wanted me to assist the senior antitrust counsel and the senior employment law counsel.
Part of my securities law role was providing legal advice to the Aetna Board of Directors Compensation and Organization Committee. That role provided insight into the corporate governance of a publicly traded company. That committee included the quintessential heavy-hitters on the board: CEO of Aetna (James Lynn, former Secretary of Housing and Urban Development and Director of the Office of Management and Budget in the Gerald Ford Administration); the CEOs of United Technologies (Harry Gray), Union Carbide (Warren Anderson), US Steel (David Roderick), and Barnes Group (Wallace Barnes); and Barbara Franklin (“Secretary and Commerce”).
The role of legal adviser to the Compensation and Organization Committee provided great opportunity and entailed great risk. I played it straight down the middle with the committee, calling the issues as I saw them and not pulling any punches. I encountered one career-ending situation relating to providing legal advice on a stock option agreement that was proposed by the Human Resource’s Executive Compensation Office. The office had designed a provision of the agreement that did not pass the legal smell test. I was not aware of the provision until it was proposed for a vote before the Committee. I advised the committee not to vote on the agreement because there was a legal defect. Well, you can imagine the looks I got from Aetna’s CEO and the head of the human resource department. However, I did not receive any negative feedback from the committee members, who were probably grateful that I did not allow a legally deficient document to be acted upon. Word spread throughout Aetna’s senior management about what had happened; after all, I had prevented a stock option grant to senior management during the meeting. Some thought I would be fired for my action. At the end of the day, Aetna’s General Counsel called me into his Page 215 →office, and I just knew I would receive my pink slip. However, to my surprise, he thanked me for delivering the correct legal advice and standing up in the face of an untenable situation created by others.
Although the work of the committee was treated with the utmost seriousness, there were moments of levity. In a discussion about whether senior executives should be treated the same with respect to compensation, David Roderick, of US Steel, quipped: “You know, the sun doesn’t shine on the same dog’s ass every day.” His point was well-taken from the vivid metaphor.
My board exposure also made possible the development of a close friendship with the board’s sole African American director, Earl G. Graves Sr. Earl clawed his way to the top of the publishing industry with his successful launch of Black Enterprise magazine. Created in the 1970s, the magazine covered African American businesses and had a readership of 3.7 million. Earl provided me with valuable coaching on how to navigate corporate America.
When the senior antitrust lawyer took early retirement, I was appointed senior antitrust counsel. This was a full-time engagement. I had to provide day-to-day antitrust counseling as well as manage the antitrust compliance program. That latter role became especially significant when the company was sued in an industry price-fixing case that went to the US Supreme Court. I traveled around the company teaching managers and key individuals the fundamentals of antitrust law compliance. At the same time, I became very active in the American Bar Association Antitrust Law Section. This volunteer activity provided large professional exposure. After I had spoken on the topic of healthcare antitrust law at several major law forums, my name became widely known among leading antitrust lawyers around the country. Those forums included the ABA Annual Antitrust Law Section Business meeting in Washington, DC, and the Practicing Law Institute in New York City, the leading educational institution for legal training.
Page 216 →Because of my success in managing Aetna’s antitrust practice, General Counsel Zoe Baird selected me to head a new compliance law unit. I managed several lawyers practicing in the areas of antitrust compliance, information technology/intellectual property, corporate services, and communications/public relations. I was in that role a short time when Aetna’s CEO, Ronald Compton, appointed me to become Aetna’s chief compliance officer. In that position, I provided oversight and leadership to a network of senior compliance officers located in five insurance business areas: health, property and casualty, life and disability, financial services, and international.
Aetna provided me a wonderful professional experience for twenty-five years. I worked on an interesting public relations project in 1998 involving the disclosure that Aetna had sold life insurance policies on the lives of slaves in 1853. The policies protected slave owners from financial loss of their human “property” upon the death of an enslaved person resulting from hazardous work. Benefits under the policies generally would not be paid for death resulting from mistreatment. After a diligent search of Aetna’s archives, only a handful of slave policies were found. While more policies were likely written, subsequent records suggested that Aetna wrote a limited number of slave policies. In one policy sale, Mary Raby purchased from Aetna’s New Orleans office a one-year policy on the lives of slaves for a premium of $17.25. The policy would pay $600 if one or more slaves died. When the sales were publicized in 2000, Aetna apologized and expressed “deep regret” for the few years that it sold a small number of slave policies.
There was a demand for reparations to the extent Aetna profited from the sale of slave policies. Although Aetna had no intention of paying reparations, since the sale of such policies was legal before slavery was abolished, the company did seek out ways to support the critical needs of the Black community. Aetna’s General Counsel, Edward Shaw, and I visited Harvard Law Professor Charles Ogletree, Page 217 →a leading Black scholar with a reputation for finding creative solutions to seemingly intractable issues affecting the Black community. We started a dialog on productive ways that Aetna might support the Black community. An area that found a receptive ear was supporting an initiative that Aetna had already begun examining racial disparities in the delivery of healthcare services. Since 2001, the Aetna Foundation awarded more than $30 million to support initiatives to reduce racial and ethnic health disparities.
All of Aetna’s voluntary efforts were not enough to stave off a 2002 lawsuit against the company, FleetBoston Financial and CXS (a railroad company) filed in a Brooklyn, New York federal court for allegedly profiting from the slave trade. The lawsuit was dismissed in 2004 because there was no alleged connection between plaintiffs and the companies they targeted.2
For many years, Aetna promoted the interest of its employees and public welfare. The company was affectionately known as “Mother Aetna.” Aetna gave millions to charities through the Aetna Foundation and encouraged its employees to get involved in public service in the community. The company afforded me the opportunity to pursue my love for teaching by allowing me to teach law courses at the University of Connecticut and Yale University. The Yale experience was especially exciting because I was able to team-teach a corporate practice seminar with Jan Deutsch, a brilliant Yale law professor.
Aetna encouraged me to join the board of directors of Greater Hartford Legal Assistance, a legal services program for the poor. I spent a decade on the board, ultimately becoming president of the organization. My most significant achievement as president was working with University of Connecticut Law Dean Hugh Macgill, president of the companion Neighborhood Legal Assistance, to merge the two programs to achieve greater organizational efficiency at a time of limited funding for legal services.
Page 218 →Pursuing my love of education, Aetna encouraged me to join the boards of trustees at Renbrook School, a private elementary school that my children attended, and Saint Joseph College, then a Catholic college for women. At Renbrook, my service led to the headmistress, Jane Shipp, appointing me board chair, the first African American to hold that position. At Saint Joseph, I chaired the faculty appointments committee, which evaluated teachers for tenure. Both of those experiences taught me a great deal about the administration of educational institutions. The Renbrook head encourage me to seek a position as headmaster of a prep school, which was a nice compliment.
Over the years, I have served on other boards of trustees that have had critical missions. Serving on the Hartford Hospital Board of Directors and Board of Governors has been especially rewarding. For over twenty-two years, I have served on the hospital’s Research Committee, where I have been exposed to cutting-edge research protocols designed to improve the hospital’s clinical program. I believe that medical research is the key to solving some of the most serious diseases that have plagued mankind. Recently, Becky and I established a research fund at Hartford Hospital to promote medical research.
I have been actively involved in the Harvard Law School Association (HLSA), the alumni organization, for over forty years. My primary contribution has been as chair of the Awards Committee. The HLSA Award is the highest alumni award granted to individuals for extraordinary service to the legal profession, society, and/or Harvard Law School. Under my leadership, the Awards Committee conferred awards on Deval Patrick, former governor of Massachusetts; Loretta Lynch, former US Attorney General; David Gergen, Harvard professor, CNN contributor and former assistant to three US presidents; and Kenneth Frazier, CEO at Merck.
For my many contributions to HLSA, I was honored with the James Coolidge Carter Award for Distinguished Service and the Page 219 →Harvard Alumni Association (HAA) Award, the university’s second highest alumni award.
Returning to Law Firm Practice at Day Pitney
My last fifteen years of law practice were spent at the Hartford law firm of Day Pitney. After taking early retirement from Aetna at the end of 2003, I wanted to end my law career at a law firm. In a sense, I had come full circle from where I began my law career at a Boston law firm. Day Pitney was the leading firm in Connecticut, and I had known several of its key partners through my work at Aetna. Since I had become a quintessential practitioner of compliance law, a nationally emerging law practice area, at Aetna, Day Pitney was interested in me developing a new compliance law practice at the firm. I had never engaged in the entrepreneurial practice of law, always practicing at a corporate institution, and this was an opportunity to see whether I could build a business. While it was difficult, after months of planting seeds in preparation, I hit a stride and brought in many new and lucrative clients to the firm from multiple industries, including transportation, insurance, energy, and publishing. After I reached my seventies, I began to think about retirement from the active practice of law. I wanted time to pursue other endeavors that were not necessarily law related.