McGuire: Take Thain’s name off café

This article has been corrected. You may view this article’s correction here.

Last week the Yale Political Union voted 49-25 that the Thain Family Café should be renamed. Usually a resolution like this would go unnoticed by the rest of campus, but I firmly believe this is a cause around which all Yale students should rally.

John Thain was the CEO of Merrill Lynch when it was acquired by Bank of America. He was terminated shortly afterward, but not before making off with a $40 million severance package and a $1.2 million office renovation. Ordinarily I would not have a problem with corporations paying their executives whatever they want, except for one little detail: Bank of America just received $45 billion from the federal government through the financial bailout passed last fall.

Thain generously gave money to create the Thain Family Café prior to the financial crisis or the bailout. Chronologically, the donated money was from Thain’s pre-bailout personal wealth. That must be acknowledged and is not disputed.

But Mr. Thain drove his company into the ground, sold a lemon to Bank of America and parachuted out with $40 million courtesy of the American taxpayers who bailed him out. Yet Yale University continues to honor Thain by keeping his name on the café despite all that.

I am about to draw a parallel that is admittedly hyperbolic, but I hope it illustrates the principle behind this issue. Suppose Pol Pot had given money to Yale in the early 1970s to endow the Pol Pot Café. Prior to the Khmer Rouge, Yale would have had no reason not to accept a gracious donation that improved the life of its students. But afterwards, even if Yale had good reasons to start with, it would be unconscionable to honor such a despicable person by naming a Yale facility in his honor.

John Thain, while certainly no Pol Pot, has done despicable things. He stole $40 million from the taxpayers of this country at a time when they face great hardship. I am a free-market, limited-government conservative — my issue is not with extravagance by private businesses. The problem is that Bank of America took $45 billion of our money, with our complete trust, and frittered it away on a $40 million bonus for a failure of a CEO. It is an offense against not just the businesses involved, but against the entire American people.

The president and secretary of the Treasury have already decried Thain’s abuse of this country’s trust with his decadent bonus. The vice president went so far as to say about Wall Street executives like Thain that he’d love to “throw these guys in the brig.” All I want is for Yale to stop honoring this hack with a café named after him.

This is an issue that has not just united the left and right in the Yale Political Union, but an issue that ought to transcend our personal political beliefs. Whether you are for or against the bailout, for free markets or more regulation, Thain’s abuse of the American people’s trust is a disgusting deceit. President Levin and the Yale administration should use whatever power is at their disposal to erase a scoundrel’s name from our college.

Jake McGuire is a junior in Pierson College.

Comments

  • Whoah boy, whoa!

    I appreciate the attempt to hyperbolize, but Pol Pot led to over one million DEATHS, not losses in dollars. While I get your point, you cannot and should not compare the value of lives lost with money. Please.

    He could have made off with $50b Madoff-style, or $125b like the US officials have fleeced from Iraq, and you still shouldn't translate that into Khmer.

  • josh '10

    if we change the name of the cafe, doesn't that mean we have to give the money back to him?

  • Anonymous

    So when are we renaming Calhoun? He also did "despicable things" serving as the spokesman for the cause of slavery pre-Civil War. Is the YPU in agreement about renaming the college?

  • yale ’10

    if we don't change the name of the cafe, does that mean he has to give the bailout money back to us?

  • Jon

    "Of all the Cafe joints in all the world, Thain has to walk in to ours." (Maybe Yale should name Thain as the new Dean of the School of Management.) It is in the highest traditions of Yale for the students to conceive of confronting this issue; for the Union to vote on this issue, and for an article about all this to be written. Had the writer mentioned the amount of money Mr. Thain donated and that possibly might be returned to him, with interest earned, I would have given the author an A Plus for his excellent analysis. A straight A is still a tribute. GIVE THE MONEY BACK. A University that is so adept at securing donations should be ethical and honorable enough to respectfully return Mr. Thain's donation. Can Mr. Thain even hope to claim to understand what Yale represents? Perhaps the gentleman is constrained in his scope of understanding.

  • Alum

    Actually, John Thain didn't drive Merrill "into the ground." He joined Merrill in 2007 after Merrill's problems began to be known and it had fired Stan O'Neill, its long-time CEO. He reached a deal to sell the company to Bank of America the same weekend that Lehman went under. If he hadn't done that, Merrill likely would have followed Lehman down the drain, absent government action. As it turned out (or at least as it looks today), it wasn't such a good deal for Bank of America but it looks like it was a brilliant deal for Merrill's stockholders, who otherwise would have lost everything. And by the way, Mr. Thain's job was to serve the interests of Merrill's stockholders and other stakeholders, something he appears to have done reasonably well. I don't know the details of his severance package, but I believe any severance he received was mandated by the contract he signed with Merrill in 2007 (i.e. long before the government bail out). The Constitution contains a clause preventing the government from abrogating contracts, bellicose statements from congressmen and senators left and right (not to mention the left and right of the Yale Political Union) notwithstanding.

    Even putting aside the over-the-top Pol Pot analogy, the columnist (and perhaps the Political Union, although I don't know what its resolution said) is caught up in the political hoohah of the moment rather than considering the merits of the matter. Thain appears to me to be a businessman who tried to do the best job he could in disastrous circumstances. I don't know if he could have done a better job or not but I don't see why he deserves the opprobrium served up in this column. I'm not nominating him for an honorary degree from Yale or such, but I don't see the case for Yale reneging on its prior act of appreciation for his gift.

  • Anonymous

    let's start with Calhoun college first if we are going to rename things that are associated with odious people

    and how do we differentiate someone driving his company into the ground versus someone who was running a company in a sector that got destroyed this year?

  • Y'09

    Brilliantly-stated, #6. In hindsight it is so easy to say that John Thain acted immorally. Yes, he probably "exploited" the powers afforded to him by his position, but that shouldn't stop us from being grateful for his contribution to Yale.

  • Hiero II

    Dear Jake,

    Try Harder.

    Love,
    Hiero II

  • Alum

    If your facts were correct, you might have a story. John Thain did not receive a severance package. So, how did you come up with a $40 million number? Do your research before you defame someone's character.

  • Yale 08

    Did he commit a crime? No

    Was he paid legally according to his employment contract? Yes

    Grow up

  • Jon

    In the bowels of Yale's storage vault is a magnificent stained glass window taken down from a prominent position in Sterling. What did it depict? A Black man sitting down and eating watermelon. Yes, Calhoun should most emphatically be re-named. The proper name should be "Amistad College." That trial took place in New Haven.

  • Jerry Brush

    Your old BHS Spanish teacher says: Great reasoning and logical conclusion! Continue to speak out against injustice wherever it is found.

  • Anonymous

    You can take the name off the cafe, but give him his money back. That's blatant violation of a contract.