When Maria Bartiromo asked John Thain about his notorious office, he replied:
Well, first of all, it– it is true. This was a
year ago or actually a little bit more than a
year ago in a very differ– different– ec–
economic environment and a very different outlook
for Merrill and the financial services industry.
It was my office. It was two conference rooms
and it was a reception area. But it is clear to
me in today’s world that it was a mistake. I
apologize for spending that money on those– on
those things. And I will make it right. I will
reimburse– the company for all of those costs.
This answer raised two obvious questions.
The first was why Bartiromo didn’t immediately come back pointing out that although Merrill’s $15 billion loss in the fourth quarter of 2008 was particularly gruesome, its $10 billion loss in the fourth quarter of 2007 was hardly full of happiness and sunshine. Does Thain really think that if Merrill was losing only $10 billion a quarter, that made the bank’s outlook "very different"?
The second question was who on earth advised Thain that repaying the $1.2 million was a good idea, from a PR perspective. After all, the damage had been done already. And the fact that Thain just had $1.2 million lying around to repay Merrill, despite the fact that he didn’t get his bonus for the year, just makes him seem even more disconnected from the real world.
Page Six today answers the second question, and might even answer the first as well:
MARIA Bartiromo scored the first post-axing interview with booted Merrill Lynch chief John Thain Monday – but CNBC’s "Money Honey" kept viewers in the dark about the little business arrangement that may have helped it happen. Turns out she and Thain both pay public relations guru Ken Sunshine to represent them, and he apparently helped set up the exclusive. "It’s a huge conflict of interest. It’s incredible she didn’t disclose this over the air, but she thinks she’s above it all," one broadcast insider told Page Six. "And she was really kissing Thain’s ass during the interview."
I’d love to know when Thain hired Sunshine, and how much Sunshine has cost him to date. It’s at least $1.2 million, if you include the costs of reimbursing Merrill for the office expenses. Which is a lot of money to pay for seeing your reputation implode in a matter of days.