Audit Notes: FT’s Fairhead is out; BofA CEO stonewalls; Rent a Quote

But Pearson says the paper is not for sale.

FT Group CEO Rona Fairhead got denied the top job at Pearson and so is stepping down as chairman and CEO of its unit the FT Group, with a $1.8 million exit package. The Guardian’s Nils Pratley asks a good question: “Why is Pearson paying Rona Fairhead to go?”

The New York Times reports that the new Pearson CEO visited the FT newsroom to tell journalists the paper is not for sale, as many had speculated.

Nobody mentions an uncomfortable item on Fairhead’s résumé: Her chairmanship of HSBC’s audit committee while the bank was laundering billions of dollars in Mexican druglord money. I wrote about that a couple of months ago:

So, the FT has to cover the HSBC scandal, while the CEO of its parent is on the board responsible for the bank’s oversight.

Not helping matters, Fairhead chaired the board’s Audit Committee, which at the time, was broadly responsible for making sure management’s internal controls were adequate. Those systems failed, and amidst several law-enforcement investigations into its anti-money laundering controls, the bank created a Risk Committee, which Fairhead heads.

— It’s little remarked, but Rolling Stone’s Matt Taibbi isn’t just a withering polemicist; he’s a damn good reporter too. Here he digs up testimony from Bank of America CEO Brian Moynihan from a fraud lawsuit brought against it by monoline insurer MBIA. Moynihan’s memory is worse than Reagan’s in Iran Contra.

Here’s some of the transcript:

Q: By January 1st, 2010, when you became the CEO of Bank Of America, CFC - and I’m using the initials CFC, Countrywide Financial Corporation - itself was no longer engaged in any revenue-producing activities; is that right?

Moynihan: I wouldn’t be the best person to ask about that because I don’t know.


There are no sound effects in the transcript, but you can almost hear an audible gasp at this response. Calamari presses Moynihan on his answer.

“Sir,” he says, “you were CEO of Bank Of America in January, 2010, but you don’t know what Countrywide Financial Corporation was doing at that time?”

In an impressive display of balls, Moynihan essentially replies that Bank of America is a big company, and it’s unrealistic to ask the CEO to know about all of its parts, even the ones that are multi-billion-dollar suckholes about which the firm has been engaged in nearly constant litigation from the moment it acquired the company.

“We have several thousand legal entities,” is how Moynihan puts it. “Exactly what subsidiary took place [sic] is not what you do as the CEO. That is [sic] other people’s jobs to make sure.”

Inc. writes a puff piece on how one small businessman can get a lot of press coverage.

Drew Greenblatt is almost as much in demand as his products. His Marlin Steel Wire Products, a Baltimore-based manufacturer of precision engineered wire-baskets and sheet-metal fabrications, hit the Inc. 5000 list for the sixth time in 2012, with a three-year-growth rate of 33%. At the same time Marlin has been racking up sales, it’s also been racking up attention. This year alone the company has been covered by dozens of media outlets, ranging from local and technical publications to The New York Times, NPR, Fox Business, PBS NewsHour, The Huffington Post, NBC Nightly News, The BBC News Channel, Reuters and (of course) Inc.

We had quite a different take on Greenblatt’s media coverage here at The Audit this summer, noting how he’s on the executive committee of the board of the National Association of Manufacturers, a major right-wing business lobby, a fact that is almost never mentioned in his press hits, which include two Fox Business TV appearances and yet another Inc. story just this month.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum. Tags: , , , ,