If you didn't already know the New York Stock Exchange was waist-deep in turmoil, Dan Webb's presence there would be a good indication of something amiss.
Like many a troubled institution before it, NYSE has hired Webb, one of the nation's most esteemed defense attorneys, to help sort out a big mess — in this case, tumult over the $186.5 million pay package that led to the ouster of NYSE chairman Richard Grasso.
More specifically, Webb is charged with examining NYSE compensation and corporate governance practices related to that pay package. In addition to figuring out whether the board followed established corporate governance policies in awarding Grasso that eyebrow-raising sum, there's also the question of what litigation may be necessary to remediate the muddle. Webb's report is due in early December.
His work in other high-profile quarters ought to serve him well. Almost twenty years ago, as prosecutor of Adm. John M. Poindexter in the Iran-Contra affair, Webb interrogated then-President Ronald Reagan. “Reportedly the President was pleasant, but not terribly helpful,” says Tyrone Fahner, chairman of Mayer Brown Rowe & Maw, Chicago's largest law firm. Like Webb, Fahner is a former U.S. Attorney there. “I've heard that although Dan treated Reagan with dignity, he pressed him very, very hard. That's the Dan I know.”
When asked what the NYSE board members, Grasso and others involved in controversy surrounding the exchange can expect from Webb, Fahner answers succinctly: “They can expect the same thing.” He adds, “Dan is a very public example of what we were all taught as assistant U.S. Attorneys in Chicago in the 1970s. Do your job professionally, strike hard blows, but fair blows.”
Fahner is not alone in his high regard for Webb. In the wake of Webb's successful defense of Microsoft in the government's anti-trust case, 62 white-collar criminal defense attorneys at 100 leading firms nationwide voted Webb, 58, foremost in their profession. In short, he's the attorney they'd call if targeted by a federal criminal investigation.
But while Webb's name was on their list — and on that of John Reed, the former Citicorp chairman now serving as NYSE's interim chief — his name is probably unfamiliar to the average securities industry executive. “He and his firm are pretty much strangers to the industry,” says Anthony Paduano, partner at New York City-based Paduano & Weintraub.
Perhaps, that's one reason he was hired, replies former SEC Chairman David S. Ruder. (He now teaches at Northwestern University Law School in Chicago.) “One could speculate Dan was selected because he wasn't associated with a firm active in representing any of the brokerage firms,” Ruder says. “But, one could also argue he was selected because he's very experienced at reviewing facts and interviewing witnesses. The NYSE will get an incredibly thorough examination of what happened before deciding what to do in the future.”
Webb's legendary fairness, work ethic and “altar boy face” conceal a detail-oriented mind, say Webb colleagues.
While Webb was U.S. Attorney, the office launched a high-profile investigation of a client of Anton Valukas, a subsequent U.S. Attorney in Chicago. “Based on ambiguous, but sinister tape recordings, it was clear the government wanted to indict him,” Valukas says. He offered to bring his client in, lay out everything, letting Webb and his assistant examine our case with the understanding that if he convinced Webb of the client's innocence, he wouldn't indict.
“There aren't a lot of prosecutors with whom I'd entrust that responsibility,” says Valukas, who chairs Chicago-based Jenner & Block's white collar crime defense practice. “Dan's got a reputation for being tough, but also fair and unbiased. My client wasn't indicted.”
In another “very controversial, undercover” investigation involving possible impropriety by local judges, Valukas says. “Dan had carefully researched all of the investigation's aspects. When the cases were heard, the courts uniformly found that all procedures employed were appropriate. In fact, the case is studied at the Department of Justice today as a model for undercover investigations.”
Nowadays Webb, described as a tireless worker with two secretaries, starts work at 8 a.m., and can usually be found at his desk twelve hours later.
“I bet he works 3,000 hours annually, an extraordinarily high number,” says Brian Crowe, commercial litigator with Chicago-based Shefsky & Froelich. Crowe has litigated with and against Webb several times. “Dan reads everything in the file, absolutely everything. He can take a complex fact or situation, ask some questions and have a total grasp of it quickly.”
“If I were Dick Grasso, I'd feel good about Dan being hired,” continues Crowe. “Whatever Dan does will be fair and for the benefit of the NYSE organization.”
Cards on the Table
Not all of Webb's energy is confined to investigations and litigation. Some of it gets exhausted on daily runs wherever his litigation schedule takes him or on occasional fishing trips to northern Wisconsin, the Arctic or Caribbean.
He is the “first one to the card table” and “a fantastic hearts player,” reports Valukas. “You think he isn't paying attention, but actually he's counting the cards, thinking ahead. He's focused on the game. This trait also makes him a great investigator.”
Son of a rural mail carrier, Webb was born and raised in downstate Illinois. Hoping to become an agriculture attorney, he enrolled at Western Illinois University in a combination program with University of Illinois Law School. Graduates received pre-law and law degrees in six years.
Because the program was terminated after his junior year, Webb almost missed becoming an attorney completely. Every Illinois law school to which he applied, except one, responded that an undergraduate degree was pre-requisite. Only Loyola University of Chicago's dean agreed to meet him, Webb recounted in a 1985 Chicago Tribune profile.
After reviewing his transcript, the dean realized Webb didn't have an undergraduate degree, but said, “‘I dragged you up here on my mistake. I'm going to take a chance. We'll let you in,’” Webb recounted.
After graduation, he joined the U.S. Attorney's office in Chicago, headed by future Illinois Gov. James Thompson. Thompson is current chairman of Winston & Strawn, the Chicago mega-firm Webb joined in 1985 after leaving the U.S. Attorney's post. Webb is now chief litigator there.
“I've watched Dan almost from the beginning of his practice,” says veteran Chicago criminal defense attorney and sometime courtroom adversary George Cotsirilos. “He looks much younger than he is. He's a very plain, choirboy type with a trace of a southern Illinois accent. He's very engaging. Not at all arrogant. That appeals to juries. But, he's also a superb, technical lawyer and meticulous fact-finder.”
“No one in New York has to fear there are going to be endless press conferences,” concludes Valukas. “This isn't a stepping stone for Dan. Whatever he finds is going to be a fair conclusion predicated on the facts. The cards will be face up on the table.”