Incoming White House chief of staff Rahm Emanuel’s career as an investment banker was short but, oh, so sweet. Emanuel left the Clinton White House in 1998 as a senior adviser on a government salary. By the time he won election to the House in 2002, he had earned an astonishing $16 million.
How did he do it?
Partly, it was simple luck: Emanuel dipped quickly into the world of investment banking in time to catch the tail end of the 1990s boom economy as a Chicago-based managing director at Wasserstein Perella & Co., where he worked from 1999 to 2002. While he was there, the firm was sold to the German Dresdner Bank for $1.37 billion in stock, netting Emanuel much of his Wall Street windfall.
Returning to Chicago in 1998 after his White House stint, Emanuel soon ran Wasserstein’s small Midwestern office, developing a reputation as a deal guy who focused on mergers and acquisitions among companies that were subject to heavy government regulation. There, he deployed his skills as a born negotiator who knew the inner workings of government bureaucracies.
Frequently, Emanuel turned big Democratic donors and others he’d met during his White House years into clients for Wasserstein Perella, a firm that was led by Bruce Wasserstein, a hefty financial supporter of Clinton.
Emanuel is “tireless,” said John Canning, a managing director of Chicago-based Madison Dearborn Partners, a multibillion-dollar private equity firm.
Canning became friendly with Emanuel while he was setting himself up in Chicago business circles and has remained close to him through his congressional career. “He’s got a nose for a transaction, a sense for what each party’s looking for and where each party can concede,” Canning said.
Emanuel was unavailable for comment. But in 2003, he described his investment banking career to the Chicago Tribune.
“Fundamentally, I brought in business and worked on business that was very successful,” Emanuel said then. “I didn’t work on one deal. I didn’t work on two deals. I think it was close to six or seven, of which a couple of them were over $1 billion.”
The Democratic congressman from Illinois will be starting out as White House chief of staff for President Barack Obama during a severe global economic crisis. And as a former investment banker himself, Emanuel may be well-positioned to understand the problems and priorities of the nation’s struggling financial system.
While Emanuel lucked into the timing of the Wasserstein sale, the deals he worked on contributed in a significant way to the firm’s bottom line, generating hefty bonuses for him along the way.
One signature transaction was the $16 billion merger of Unicom Corp. and PECO Energy Co. into Exelon Corp., now one of the nation’s largest electric utilities, with nearly $19 billion in annual revenue. The company owns 17 nuclear reactors, which produce about 20 percent of the nation’s nuclear power.
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