Citigroup's new chairman an old hand at UH
By Rick Daysog
Advertiser Staff Writer
By Rick Daysog
From his office in Citigroup's 41-story Manhattan headquarters, Richard Parsons has a sweeping view of what many are calling the worst economic slump since the Great Depression.
The 61-year-old Parsons was named chairman of Citi in January after the struggling banking giant received more than $45 billion in federal bailout money.
He also served on President Obama's transition team and is often described as an economic adviser to the nation's first Hawai'i-raised commander-in-chief.
"He's just a smart and experienced executive who has found himself in situations that are difficult and has managed to navigate through those shoals," said former Bank of Hawaii Corp. CEO Mike O'Neill, who was nominated to Citi's board earlier this year.
Parsons, who attended the University of Hawai'i-Manoa in the mid-1960s, is in town this week as the 2009 Dan and Maggie Inouye Distinguished Chair in Democratic Ideals at UH.
He's giving a series of seminars and lectures on the Manoa campus, including a Tuesday night keynote address titled "The Global Financial Crisis: Origins and Solutions."
In a telephone interview last month, Parsons provided a preview of his talk, in which he compares the turmoil in the financial markets to a "global pandemic."
He also spoke fondly of his years as a student at the university.
Dubbed the "anti-mogul" by Businessweek magazine, Parsons is well known for taking on tough jobs.
Even before he became Citi's chairman, he ran Time Warner Inc. His predecessor, former Isle resident and AOL founder Steve Case, left in 2003 amid questions about the company's accounting practices.
During the early 1990s, he headed Dime Saving Bank of New York, which was hard hit by the savings and loan crisis.
"The calmness was always there," said local attorney Wilma Sur, a close friend of Parsons since their days at UH.
"I think his strength is the same kind of what I see in President Obama: It's this ability to take your ego out of the equation and simply solve the problem."
In many ways, Parsons' visit to UH completes a full circle for the business executive. He arrived on the Manoa campus in 1964 as a fun-loving, 16-year-old freshman from Queens, N.Y.
He played basketball at UH and met his wife, Laura, during his student years here.
Parsons said he wanted to study astrophysics but found that discipline to be "incompatible with playing basketball, drinking beer and partying."
"If I think back, I don't think any of us would have predicted the success Richard would have had," said local psychologist Craig Robinson, a former classmate.
"He was very outgoing and friendly. I never found anybody who didn't like Richard."
To be sure, Parsons' gregarious and down-to-earth nature will be put to the test at Citi.
Before he became chairman, the company had posted five consecutive quarterly losses, including $8.3 billion in the 2008 fourth quarter.
Although Citi has been able to fend off calls for a government takeover, the company took a lot of heat from Obama for ordering a $45 million corporate jet, which has since been canceled.
More recently, the company has come under fire for a $3 million plan to renovate its corporate headquarters amid its financial troubles.
Parsons said it's easy for the public to single out so-called "greedy banks" for problems in the economy. But he said the downturn is a product of a much broader factors.
Developers overbuilt, lenders issued mortgages to risky borrowers, buyers overextended themselves, insurers invested in derivative products, and agencies such as Fannie Mae and Freddie Mac encouraged the risk-taking,
"If you want to point a finger at somebody, you can point a finger at a host of folks," Parsons said.
Parsons believes the economy will rebound once the housing market hits bottom and the banking industry is stabilized.
He's a big supporter of the Obama administration's plan to help the nation's banks sell their troubled loans through a so-called toxic fund.
Like the Resolution Trust Corp., which was created in the wake of the savings and loans crisis of the 1980s, the toxic-asset plan would provide incentives for investors such as hedge funds to purchase distressed assets, freeing up the banks to issue new loans.
"It's easy to blame somebody, find fault and vilify," he said.
"But if you put the banks in the penalty box, then you don't have any institutions to get credit pumping again and you have no way to restart the economy."
Reach Rick Daysog at firstname.lastname@example.org.