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I think it's more for the benefit of the parents than the children, n'est-ce pas? [EMAIL PROTECTED] Private Preschool Admissions: Grease and the City November 16, 2002 By STEPHANIE STROM It came as no shock to a certain slice of New York society that Jack B. Grubman, the former star telecommunications analyst at Salomon Smith Barney, had pulled out all the stops to get his twins into preschool. Nor was it any surprise that he had asked his boss, Sanford I. Weill, chief of Salomon's parent, Citigroup, to make a few calls on behalf of his children, or that Mr. Weill complied. What did raise eyebrows was the possibility that the plea involved not only a well-placed call or two from Mr. Weill to board members of the school but also the philanthropic largess of Citigroup itself. Citigroup pledged to give $1 million over five years to the 92nd Street Y, which runs the nursery school Mr. Grubman's twins ultimately attended. The gift, which is to underwrite lectures and other events at the Y, was announced in the summer of 2000, and the Grubman twins started school a few months later. "It is odd that the money came from the bank," one major fund-raiser said. "If it had come from the bank's foundation, well, then you might be able to make a case that this was good citizenship. But from the company itself? That's funny." Members of prestigious nonprofit boards around the city are following the story with great interest but have no desire to discuss it publicly. "The fact that Sandy has been so incredibly generous himself makes it difficult to talk about it," one said. "The one thing that just doesn't feel right, whether it violates any rules or principles, is that this was shareholders' money." Mr. Weill acknowledged this week that he helped Mr. Grubman with the Y school, and Citigroup has not denied that the $1 million contribution was part of that effort, as people close to the regulatory investigations of Mr. Grubman have said. Mr. Grubman has dismissed some other allegations, including some involving parts of an e-mail message. He now says that he was boasting when he wrote in the message to a friend that he upgraded his rating on AT&T's stock to help Mr. Weill win the support of C. Michael Armstrong, AT&T's top officer and a member of the Citigroup board, in a boardroom battle. Mr. Weill has called that e-mail message nonsense. Mr. Grubman's seeking help with the school admissions was mentioned not only in the e-mail message to his friend but also in a memo he wrote to Mr. Weill, obtained by investigators looking into Mr. Grubman's stock ratings. The details of Mr. Grubman's effort have put what has long been regarded as a normal if somewhat distasteful part of life in New York under the microscope. Helping out with school applications greases the wheels of business and philanthropy in New York and any other city where getting into private schools is difficult. "There's always a quid pro quo of some sort," said Peter J. Solomon, a Wall Street fixture who sits on boards of numerous institutions and is an alumnus of the 92nd Street Y nursery school. "Usually, it's just friendship or a favor for a good employee, but sometimes you make the call for a client. There's nothing nefarious about it. It's part of the social fabric of New York." Gifts the size of Citigroup's to any institution typically involve a series of negotiations between the recipient and the donor, but neither Citigroup nor the Y will say who initiated the gift or when. A spokeswoman for Citigroup said that the company regarded all of its philanthropy, which amounted to almost $69 million last year, as a whole, and that whether the money came from its foundation or the company itself depended on the terms of each gift. "This is yet another example of why we need a significant investment in corporate oversight," said Rick Cohen, president of the National Committee for Responsive Philanthropy, a watchdog group that is doing research on how corporations use philanthropy. "Who is going to call Citigroup on the carpet about this? Who is going to check to make sure it reflects its responsibility to Citigroup's shareholders? Nobody, that's who, and that's why they can get away with it." In fact, a call from Mr. Weill might have been sufficient to get Mr. Grubman's children into the school. Mr. Grubman, who once made $20 million a year on Wall Street, not to mention what he probably made on his own investments, was capable of making significant contributions to the institution on his own. "Look, it's a well-known fact that when you send your child to an independent school in the city, if you have the money, you're expected to pay a lot more than the $20,000 tuition," said a board member at one school. "In many cases, parents are paying $50,000 to $100,000 a year." Mr. Grubman did not bank on Mr. Weill's influence alone. In the memo to Mr. Weill dated Nov. 5, 1999, regarding "AT&T and the 92nd Street Y," Mr. Grubman said that Frederic V. Salerno, the vice chairman of Verizon Communications, was reaching out to Patricia Cayne, a board member of the 92nd Street Y and the wife of James E. Cayne, chairman and chief executive of Bear Stearns. "However, if you feel comfortable and know some of the board members well enough, I would greatly appreciate it if you could ask them to use any influence they feel comfortable in using to help us as well," Mr. Grubman wrote. "I noticed Bill Heyman is on the board and I think he works somewhere in the Citigroup corporate structure but I don't really know Bill." William H. Heyman is chairman of Citigroup Investments Inc. In his memo, Mr. Grubman expressed the incredulity at the preschool application process in the city that is echoed by most other parents. "On another matter, as I alluded to you the other day, we are going through the ridiculous but necessary process of preschool applications in Manhattan," he wrote, after discussing his efforts to review his opinion of AT&T. "For someone who grew up in a household with a father making $8,000 a year and for someone who attended public schools, I do find this process a bit strange, but there are no bounds for what you do for your children." Mr. Grubman's father, Isadore, worked as a city construction worker and engineer in Philadelphia. "Given that it's statistically easier to get into the Harvard freshman class than it is to get into preschool at the 92nd Street Y (by the way, this is a correct statement), it comes down to `who you know,' " Mr. Grubman wrote. He did not notice, apparently, that Judith O. Rubin, the wife of Robert E. Rubin, the former Treasury secretary who is now chairman of the executive committee of the Citigroup board, was an honorary board member at the Y. Reached at home on Thursday, Mrs. Rubin said she had not been involved. "I don't know why you're calling me about this," she said. "I've moved on from there." A spokeswoman for Citigroup said that the Rubins did not do anything to help Mr. Grubman get his children into the preschool. The activities described in Mr. Grubman's memo are so widespread that some schools actually discourage them. The application packet from the Spence School, which has a kindergarten but no preschool, tells parents not to send letters of reference or ask friends to call. Arlene Gibson, the Spence headmistress, tells her counterparts at preschools in the city to warn applying parents that if they ignore that request, the school will use the references for fund-raising purposes and nothing else - "and she says she'll remind whoever sent the letter which parent asked them to send it," said the head of one preschool. The policy has not hurt Spence. It has one of the largest endowments among the independent schools in New York, thanks to multimillion-dollar gifts from such notables as Mayor Michael R. Bloomberg and Fiona Biggs Druckenmiller, the philanthropist who attended the school. One person who has appealed on several occasions to Matthew Bronfman, the president of the Y's board, on behalf of luminaries wanting to get into the preschool said Mr. Bronfman had been discouraging. "He always says it doesn't help," the person said. "He says he couldn't even get his brother's kids in." Mr. Bronfman did not return a call seeking comment. http://www.nytimes.com/2002/11/16/business/16WALL.html?ex=1038459637&ei=1&en=e55f5dc9af4662d2 HOW TO ADVERTISE --------------------------------- For information on advertising in e-mail newsletters or other creative advertising opportunities with The New York Times on the Web, please contact [EMAIL PROTECTED] or visit our online media kit at http://www.nytimes.com/adinfo For general information about NYTimes.com, write to [EMAIL PROTECTED] Copyright 2002 The New York Times Company <A HREF="http://www.ctrl.org/";>www.ctrl.org</A> DECLARATION & DISCLAIMER ========== CTRL is a discussion & informational exchange list. Proselytizing propagandic screeds are unwelcomed. Substance�not soap-boxing�please! These are sordid matters and 'conspiracy theory'�with its many half-truths, mis- directions and outright frauds�is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. 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