From "A Sprocket in Satan's Bulldozer: Confessions of an Investment Banker," by Ted Rall, in issue number 6 of Might, a bimonthly published in San Francisco. Rall worked at the New York City branch of the Industrial Bank of Japan from 1986 to 1990. He is now a cartoonist.
In early 1986, one of our clients, Mitsui Real Estate Ltd., expressed interest in purchasing the Exxon Building in Manhattan. Mitsui asked us to contact Exxon and find out how much they wanted. Exxon's asking price of $375 million for the 1970s-style building seemed high to us, and we knew that Exxon was hot to sell. We relayed the price to Mitsui and told them that Exxon would probably accept a lower offer.
A few weeks later Mitsui called to say that they wanted to offer Exxon $610 million.
Neither my boss nor I could believe it. We prodded our rep at Mitsui for information, and he finally admitted their reason for deliberately overpaying by $235 million: "Our president read that the current record price paid for a single building, as listed in the Guinness Book of World Records, is $600 million. He wants to beat the record."
Exxon's lawyers were perplexed. "Look, just pay us the asking price of $375 million, and everything'll be fine. We can't accept more than the asking price -- the regulators will think you're bribing us."
Mitsui insisted: they would pay $610 million or nothing at all. Why not $600,000,001? Because the record breaker had to look good. That extra ten million would be for appearance -- as was, in fact the whole deal. How about a more expensive building? No, this one had the right location.
Exxon almost turned down the money, but then their lawyers came through: "If Mitsui can get us an opinion stating that it is legal to overpay to this extreme extent, we will consent to accepting the offer."
A half hour before Mitsui's president was supposed to sign the contracts, my boss and I sat down with him to argue. We presented our research.
"It isn't necessary to go through with this. If it's publicity you're looking for, there are better ways. We could put Mitsui's name on every billboard in America for a year. The ad agencies would be thrilled. We called the New York City Board of Education: that money would bring the facilities at every public school in all five boroughs up to current standards. The press would be huge! Isn't that better than some listing in the Guinness Book?"
This clearly wasn't registering.
"The City says they can build apartment units for homeless people at $10,000 a pop. That's twenty-five thousand people off the streets--the Coalition for the Homeless says there's only forty thousand in the whole city? Think about it -- 'Mitsui virtually eliminates poverty in New York City!'"
He listened politely as we pleaded for his quarter-billion. Then he left to sign the papers. We went back to our offices. I've never felt so dirty.
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[Note: This piece was published in the August 1995 issue of Harper's Magazine, in their "[Anecdote]" column. I happened to be working in this building at the time, for the Anderson Kill & Olick law firm. Thanks to Gene Anderson for copying and distributing it (with his handwritten "A Little Building History" on top) to his employees. By the way, the building was a beautiful and well-maintained place to work. - WT]