Eyes Wide Shut: New York Reporter Crashed a Wall Street Secret Society

What did Tom Sawyer see after he entered the College of Cardinals? Perhaps the imagery might be a bit of a stretch because the secretive Wall Street clique called Kappa Beta Phi certainly doesn’t worship any celestial being, but the organization does have an object of pious affection for dollars, piles of the stuff stacked in the billions. Former New York Times reporter, Kevin Roose, crashed a secretive meeting of the nation’s biggest financial chiefs in January of 2012 to show us what these worshippers of paper look like when ridiculously adorned and at play. He wrote a book about it titled “Young Money.” For Roose, the adventurous name Tom Sawyer probably fits.

The book parts the curtain of Kappa Beta Phi and gives readers a furtive look at grown men dressed in tights, inopportune insults toward Main Street, a nasty but wealthy wrestler grappling toward a heart attack and desperate, wealthy men begging for the curtain to remain closed. The Kappa Beta Phi dinner that cold January day at the St. Regis in New York City involved inducting young accolades at the bottom of the financial food chain into the society. Those picked were considered the best and brightest who would be pulling the country’s financial levers a couple of decades down the road.

The ceremony opened with a resplendent billionaire, Wilbur Ross, decked out in a pricey tuxedo and wearing Indian moccasins, sporting embroidered Greek letters of the financial fraternity. He greeted the attendees with a hearty “Good Evening,” acknowledging those in attendance as Grand Swipes, Swipes-in-Waiting, Kappas from Spring Street, Montgomery Street and Wall Street and worthless neophytes.

Roose wrote how easy it was to sweep past grim-faced security at the welcome desk. Nobody seemed to notice his ill-fitting, rented tuxedo or his obvious plebeian face. He found this remarkable because these titans of Wall Street were all mostly 20 years or more his senior. These financial wizards probably all thought him a waiter or a polisher of Tiffany flatware. Obviously, their legendary defenses were down.  As a disguise, he picked up an event program.

Highlighted in bold were names like Jimmy Lee, vice chairman at JP Morgan Chase, Ken Langone, founder of Home Depot, CEO Larry Fink from BlackRock and the former CEO of Citigroup, Vikram Pandit. Roose found a table in back to escape unwanted attention, pulled out his iPhone and pretended to tap out emails.

After cocktail hour commenced, politically incorrect jokes made their appearance, a deeply offended Roose wrote. They included jabs at Hillary Clinton, asking what was the difference between Hillary and a catfish? One is a fish and the other stinks and has whiskers. Jokes comparing Barney Franks and Fenway franks also made the rounds.  Then came the appearance of new inductees. They dressed in tights, gold skirts and funky wigs, performing various skits and dance routines on stage.

Emil Henry, a former U.S. treasury assistant secretary, and Bill Mulrow, a Blackstone Group executive, performed a skit about a rich tycoon berating a dirty hippy in tie-dye clothes, shouting cliches about needing a bath and creating jobs. As the Grand Swipes and Swipes-in-Waiting gorged themselves on racks of lamb, foie gras and copious amounts of liquor, enjoying Confederate skits and neophytes performing in Mormon costumes, Roose made a fatal error that exposed himself: he started recording events on his smartphone.

That’s when former Army helicopter pilot and founder of Fortress Investment Group, Michael Novogratz, demanded to know what Roose was doing. Roose admitted his chicanery and identified himself as a New York Times reporter. Several Kappas surrounded the table and escorted Roose to the lobby where a couple of hedge fund founders were hyperventilating.  Ross, the current Grand Swipe, offered Roose access to any person in the financial world in exchange for silence. Ross also insisted that what Roose witnessed was simply rich boys at play.

Roose shrugged off the access bribes and stood his ground, making his way home because he had a book to write. Wall Street’s Kappa Beta Phi chapter is the last standing vestige of this fraternity that started in 1929. The stated goal of this fraternity is to keep alive the joyous spirit of Wall Street before the 1929 stock market crash.

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