NEW YORK (AFX) - AP Video
Richard Grasso's entire life has been defined by a never-say-die attitude: He never knew his dad, he dropped out of college, he flunked the eye-test to become a New York cop, but he still worked his way to the top of the world's largest stock exchange.
His street savvy and salesman skills were visible as he helped lead the financial community through the Sept. 11 attacks while working tirelessly -- sleeping on a couch in his office -- to reopen the stock market only six days after Wall Street's historic shutdown.
Grasso must now summon that same mettle as he prepares a comeback from the scandal over his $187.5 million compensation package. The public furor over the package forced his resignation in 2003 as New York Stock Exchange chairman after an eight-year reign.
'For a kid like me who was booted out the door, I just have to come back,' Grasso said in a lengthy interview with The Associated Press this week. 'This fight is not about money, it's about my good name.'
'I come from the gutter in Queens,' Grasso says. 'I captured the American dream, but I did nothing wrong. I intend to fight to get the truth out. That is the American spirit.'
Grasso is embroiled in legal battle with Attorney General Eliot Spitzer, who filed a lawsuit against Grasso in 2004 seeking return of at least $100 million of the compensation. A trial is scheduled to begin Oct. 16 in state Supreme Court in Manhattan.
The 60-year-old Grasso, sporting his trademark shaved head and a navy blazer with an American flag pin in his lapel, was tanned and relaxed as he discussed his low-profile retirement and the events leading up to it.
He spends more time with his wife, Lorraine, and their four children at their home on Long Island, where financial television reports on Bloomberg and CNBC constantly run like background music. Friends from the old neighborhood, a fireman, a former FBI agent, a steam fitter -- some who go back 55 years with Grasso -- are frequent visitors. He has yet to ride his Harley-Davidson since the scandal, but dabbles in gourmet cooking and lifts weights daily.
He has done work for friends in the business world. But he won't begin his next step, either opening his own firm or accepting a corporate position until his legal problems are behind him. Grasso also says the thought of politics has crossed his mind, including a possible run for governor in 2010.
'I have been privileged to develop relationships with people from the world, but I would never ask them to do things with me until the sun comes out again,' Grasso said.
The lawsuit alleges that the pay was excessive and not commensurate with the services provided, and that Grasso and others misled board members on aspects of the pay package. Furthermore, Spitzer contends the pay was voted on by a NYSE compensation committee stacked with Grasso's cronies.
'This case will be decided on the facts and the law. We are confident of both,' said Darren Dopp, a spokesman for Spitzer.
Grasso argues that he did nothing wrong. He says he never negotiated a contract. He said he was presented with a contract approved by committee members in his absence and then was fired because he was making too much money.
'There is no doubt that it's an extraordinary amount of money,' Grasso said. 'But that was their judgment, not mine. Each of the board members were asked during depositions, how much did Grasso ask for and there is a blast of silence.'
The board members are some of the most respected and powerful corporate leaders in the nation, Grasso noted.
'I didn't have my Aunt Rose or Uncle Louie on the compensation committee,' he says. 'Oh yes, committee member Madeleine Albright was intimidated by Dick Grasso. She wasn't intimidated by Slobodan Milosevic, but that Grasso must be a powerful guy. Come on,' he says. 'I was born at night but not last night.'
Grasso has countersued for the $50 million he contends is still owed him.
If he wins the countersuit, he plans to give away the entire sum. He and his wife have chosen two cancer charities they are active in to receive some of the money. They will also set up a college trust fund to assist police, fire and construction workers to send their children to college.
Grasso grew up poor in Queens, where his mother, a homemaker, who refused to speak Italian in his presence because she wanted him to be an American. His dad left the family when Grasso was an infant. His three unmarried aunts, a seamstress and paper box makers, were the family's breadwinners.
He dropped out of Pace University and went into the Army for a two-year stint. Grasso joined the NYSE in 1968 as a clerk earning $81-a-week and rapidly worked his way up to vice president in charge of listings, then to chairman in 1995.
'He is probably the most effective leader the New York Stock Exchange has ever had,' said Ken Langone, an early backer of The Home Depot Inc., and chairman of the compensation board when it approved Grasso's contracts. 'We got value and he got what he was worth, and what he deserved.' Langone is a co-defendant in the case.
Grasso is credited with transforming what some considered an ailing out-of-step stock market into a big money machine for many Wall Street firms.
His position took him to the corners of the globe to discuss capitalism with financiers, including meeting with machine-gun toting rebels in Colombia at the request of the country's president to try to get them work within the economic system for change.
Grasso says he thinks the uproar over this pay package would have been avoided if he had taken his compensation as it was awarded instead of deferring payments into retirement funds to let the portfolio grow.
'My biggest mistake, besides deferring all that money, was I should have quit after 9/11,' Grasso said. 'I should have said, I can not do it better than this.''
Grasso became a familiar face after the 9/11 inviting only firefighters, police officers, emergency service technicians who worked at ground zero to ring the opening bell at the stock exchange following the attacks.
He scoffed at feeling sorry for his sudden departure.
'I cried at 9/11, not this,' said Grasso. 'I cry when I see 11 faces on the firehouse wall at the 24/5 on Houston Street. I cry about our kids dying today in Afghanistan or Iraq or coming home with one leg. That's when your heart cries. Not for me.'
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