NH Democrats Ignore Their Lamb’s Golden Fleece
The New Hampshire Union Leader originally published this column on September 28, 2012:
Ah, the political double standard. If Bob Lamb of Holderness was a Republican running for President, New Hampshire Democrats would vilify him for representing capitalism at its worst. But since he’s a Democrat running for state Senate in Grafton County, they look the other way when it comes to the details about how Lamb amassed the tidy bundle that allowed him to retire young and focus on his hobbies, one of which is politics.
Lamb grew up in Massachusetts and graduated from West Point in 1977. The mid-1970s were tough years for morale at the academy; Lamb was a cadet when American helicopters were plucking fortunate South Vietnamese from rooftops in Saigon. After fulfilling his obligation to the Army, Lamb went into the lucrative world of management consulting and big banks, where he did well for himself in a manner that normally causes liberals to howl and to occupy Wall Street.
First, he did three years with Peat Marwick, the forerunner to KPMG, one of today’s big four accounting firms. Then he moved to Fleet Financial, where he stayed 14 years and climbed the corporate ladder. And then he got rich quick.
In June 2000, Lamb left Fleet to return to KPMG as executive vice president and chief financial officer. It was the height of the tech and dotcom boom. Eight months after Lamb rejoined KPMG, the firm spun off its consulting division through an initial public offering, later rebranding itself as BearingPoint. One can presume that all the insiders, including Lamb, did OK on the deal. Having completed his work — or getting out while the getting was good, as we shall see — Lamb resigned as CFO in late 2002 after little more than two years on the job.
He rejoined his other former company, by then called FleetBoston Financial, with the same titles he’d held at BearingPoint: executive VP and CFO. According to documents filed with the Securities and Exchange Commission, Lamb’s base salary, signing bonus and performance bonus totaled $1,775,000 for two months of work at the end of 2002. His contract also included stock options, pension benefits, use of corporate jets and membership at TPC Boston, an exclusive golf club where annual dues today approach $10,000 — and that’s after the initiation fee several times that amount.
Life was good for Mr. Lamb. It was about to get much better for him — and a lot worse for thousands of others. A year after Lamb rejoined Fleet, Bank of America bought the company in a $47 billion stock transaction. Lamb received a golden parachute of more than $5 million. Between salary, bonuses, stock options and severance, Lamb pocketed nearly $10 million total compensation for a year or two of work. About 17,000 people lost their jobs in the merger. Lamb, not yet 50 years old, retired to Squam Lake in Holderness — on Golden Pond, if you will — financially set for the rest of his life. Elizabeth Warren would be appalled.
Meanwhile, trouble was mounting at BearingPoint, where Lamb had served as CFO when the firm went public. The company had to restate its earnings for several quarters. The stock price, which had reached $21 a share soon after the IPO, fell under $7 by the time Lamb took his new job with Fleet just months later. It was on its way to zero. There were lawsuits from investors alleging securities fraud, six of which named Lamb as a defendant. The new CEO blamed the former management team inherited from KPMG. BearingPoint went on to miss regulatory filings and default on bond payments. In 2009, the company, which had once employed more than 17,000 people, filed for Chapter 11 bankruptcy protection and liquidated its assets.
Substitute Boston Consulting Group for KPMG and Bain Capital for Fleet Boston, and Lamb’s corporate business career resembles that of another successful Boston businessman turned politician who lives on a lake in New Hampshire.
Democrats portray Mitt Romney as a modern-day robber baron who broke up companies, stripped them of their assets and shredded jobs for his own gain. But when they have a candidate in their own midst who engaged in all that behavior without the offsetting success stories, they ignore the past. The political double standard, alive and well.
Fergus Cullen, a freelance columnist, can be reached at email@example.com.