Obama's Lead Blocker on Wall Street
UBS Executive Advises President on Economic Issues Even as Feud Between White House, Finance Industry Heats Up
President Barack Obama's long feud with Wall Street is getting only hotter. He is pushing a regulatory revamp that would rein in the size and power of the big banks, after jabbing at "fat cat bankers" and denouncing Wall Street greed.
But Mr. Obama has at least one buddy in the banking business: a former University of Pennsylvania fullback and ex-Salomon Brothers bond trader who now serves as an outside White House adviser.
"People joke that 50% of those who like Obama don't like Wall Street, and vice versa, so it's a good thing I have family and friends," says Robert Wolf, chief executive of UBS Group Americas, the U.S. arm of one of Switzerland's largest banks, UBS AG. Mr. Wolf oversees the bank's U.S. operations, working with clients and dealing with regulators.
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Robert Wolf, chief executive of UBS Group Americas, first met then-Sen. Obama at the office of George Soros.
Mr. Wolf has visited the White House nearly 20 times since Mr. Obama moved in last January. Mr. Wolf lunched alone with the president in June. He joined him July 4th to watch the national fireworks from the White House lawn. They golfed together on Martha's Vineyard in August.
Making the relationship all the more unusual is that Mr. Wolf works for a foreign bank that agreed last year to pay the U.S. government $780 million to settle accusations that it had helped defraud the Internal Revenue Service. The Justice Department alleged that UBS helped 52,000 wealthy Americans hide billions of dollars in assets to avoid U.S. income taxes. Obama aides say they determined early on that the U.S. arm of UBS wasn't involved in the alleged tax fraud.
Mr. Wolf says that the fisticuffs between Mr. Obama and Wall Street haven't strained their friendship. The rapport between the White House and the banks, he says, "is dynamic, kind of like our industry: Some days the markets are volatile and others times they work smoothly."
The two men first met in December 2006 in the New York office of billionaire investor George Soros. Mr. Wolf was a newcomer to elite Democratic donor circles. Then-Sen. Obama, still months from launching his bid for the White House, was desperate to raise campaign cash on Wall Street.
Mr. Wolf slipped the senator his business card. He got a call from Mr. Obama the next morning. "I picked up the phone and said, 'Yeah, sure, this is really Obama.' And it was." The two men dined twice in Washington over the next month. A few weeks later, Mr. Wolf hosted New York's first Obama fund-raiser. The event, at UBS's Manhattan offices, drew nearly 200 people and raised $350,000 in three hours, Mr. Wolf says.
Mr. Wolf's fund-raising clout helped seal a bond, despite their divergent personalities—a onetime bond trader and obsessive Little League coach hitting it off with a bookish former community organizer.
"Many of us were jealous," says hedge-fund chief Jim Torrey of the Torrey Funds, an initial Obama fund-raiser. "He had Obama's personal cellphone number, and the two of them talked all the time. They just sort of adopted each other."
At a debate in July 2007, former Alaska Sen. Mike Gravel took a dig at Mr. Obama for saying he spurned all lobbyists while accepting cash "from a Robert Wolf at USB [sic] Bank." By then, U.S. employees of UBS had contributed more than $200,000 to the Obama campaign.
Two weeks later, Mr. Wolf took a call from Mr. Obama that he says changed their relationship. The two talked in depth about the country's rising economic woes. Bear Stearns was wobbly. Foreclosures were skyrocketing. And some units within UBS itself were racking up losses. The bank later had to write down more than $50 billion in illiquid securities as part of the subprime-mortgage crisis. The losses came from a portion of the bank not directly under Mr. Wolf's purview.
Of the call, he says, "Right then, it just flipped. My role went from fund-raising to economic advising." Mr. Wolf started talking almost daily to Austan Goolsbee, a former University of Chicago economist who was then Mr. Obama's top economic adviser and is now a White House adviser.
Mr. Wolf's office at UBS's U.S. headquarters in Stamford, Conn., overlooks the world's largest trading floor: 1,700 traders arrayed across the equivalent of two football fields. "We turned to him for information from the front lines, for market reaction," says Mr. Goolsbee. "It was often, 'Robert, what are you hearing about this, or that?' "
"I did the financial color stuff," Mr. Wolf says. He showered the campaign with his own research, including a study on how Congress rewrote the tax code after every major military conflict. Two weeks after taking office, Mr. Obama picked Mr. Wolf to sit on his economic-recovery advisory board, chaired by Paul Volcker, the former Federal Reserve chairman.
Mr. Wolf's chief obsession, White House officials say, is pushing a national infrastructure bank that local governments and the private sector could use to fund big projects like bridges and water-treatment plants—an idea first championed by the Clinton campaign. He has had less to say on the issue closest to his industry: the drive to tighten regulations on the financial sector.
Mr. Wolf was gentler than other bank CEOs in reacting to the proposed bank tax, which Mr. Obama announced Dec. 14. "We need to be responsive and make sure that the taxpayers get all their money back," he said.
He has played a big role trying to ease tensions between the White House and the business world, largely through a series of private dinners in Washington and New York. These meals have brought CEOs together with top Obama aides, including White House Chief of Staff Rahm Emanuel and Lawrence Summers, the president's top economic adviser.
While UBS has big asset- and wealth-management businesses in the U.S., its foreign ownership has insulated Mr. Wolf from some of the most contentious issues involving bank regulations. Personally, though, he would be vulnerable to higher taxes on the rich. Based on the average pay of executive-board members at UBS, Mr. Wolf would have made around $4 million in 2007 and roughly $700,000 in 2008, when UBS suffered big losses from bets on subprime mortgages. Mr. Wolf said he took no bonus in 2008.
Mr. Wolf's closeness to the president burst into the news in late August, after a five-hour golf outing with the president stoked criticism that Mr. Obama was getting too cozy with rich donors. After Mr. Obama jabbed at "fat cat bankers" in December, Fox News' Glenn Beck made his own list of Obama fat cats, and featured Mr. Wolf under the title: "Banking Scum." Mr. Wolf says the golf outing was a harmless coincidence: They were both on the Vineyard at the same time.
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