Confidence Men Are Everywhere

The test comes when organizations realize they've hired one

Very early in my finance career, when I was still in an entry-level position, the group I was in hired another entry level person who everyone was incredibly excited by. She was right out of college, but her CV was incredible. She had worked with researchers at Cornell as an undergraduate and discovered the cure for potato blight. There was an article in Newsweek about a group of students with perfect MCAT scores that included her. I didn’t interview her myself, but I heard that she presented incredibly well, poised and polished and smart and funny. There was a bit of a controversy about hiring her because she demanded a higher base salary than any other entry level hire was offered, but the head of our group lobbied heavily to get her, and he got his way.

At her first introduction to the company as a whole, she made as big a hit as she did in her interviews. Our company had a tradition back then of having a quarterly party at which one employee was tasked with giving a kind of toastmaster speech, something funny and clever. This new employee was given that honor at the next quarterly party, which took place only days after her hire. She told a personal story about her time in Africa—her family was spread out all over the world, with branches in Toronto, London, Bombay and Dar Es Salaam—and how she got her Tanzanian tribal name, “girl who was chased by a rhinoceros once too often.” It was a tour de force.

In the weeks and months thereafter, though, it became clear that she had no actual work skills. She supposedly had done high-level research, but she basically didn’t know how to work with a data set. Indeed, she had only the most rudimentary computer skills. She struggled to genuinely understand our business, generally trying to bluff her way through conversations. People who had always been skeptical of her hire began to dig, and discovered that there was no publication of her supposed work curing potato blight. There was no article in Newsweek either. (When confronted about the latter, she replied, “well, if it wasn’t Newsweek then it was News-something.”)

It slowly dawned on my boss that he’d hired a con artist, and not a particularly impressive one, because she had no plan beyond getting hired. Embarrassed by his mistake, he did what Japanese companies tended to do back then rather than fire people: he removed all her job responsibilities and waited for her to quit. Which eventually she did, explaining that she had to leave for family reasons. Her father, you see, had had a heart attack, and each of her brothers was already running a different part of the family business, so she had to go back to Toronto to help run the Canadian operations and also to help care for her father as he prepared for surgery to remove his brain tumor. His brain tumor? I asked when she told me the story. I thought it was a heart attack? That’s what’s so crazy, she replied, without missing a beat: it’s only because of the heart attack that they even found out about the brain tumor.

She wasn’t the only con artist I worked with during my time on Wall Street, though she was by far the most colorful. I worked with a couple of salesmen over the years who were charming and ingratiating and clearly had no book of business such as they had claimed to have, but had managed to get themselves hired and, once employed, busied themselves trying to insinuate themselves into already established business lines and claim credit for work that others had done. I worked with a trader who wound up committing a massive fraud, manipulating the marks on illiquid securities in his book so as to make it look like he was making tens of millions of dollars of profit when, in fact, he was over a hundred million dollars in the hole. All of these guys figured out how to get some level of protection from their boosters and champions—con artists by definition are good at that kind of thing—before eventually getting found out or caught, and then either quietly or noisily expelled.

I’ve been thinking about these incidents apropos of the recent Jason Arday and Graham Platner fiascos. There’s nothing weird or exceptional about an organization making a catastrophic mistake and hiring a liar and a fraud, nor is there anything surprising about such failures being in part due to poor or nonexistent vetting. These kinds of people’s particular skill is inspiring extreme credulousness, and then manipulating people to maintain that credulousness in the face of mountains of disconfirming evidence. They might make use of ideological or identity-based affinity to manipulate you—Bernie Madoff famously defrauded numerous Jewish organizations by playing on precisely those kinds of sentiments—but if that’s not an option they’ll use something else. It’s not a unique feature of politics or academia, nor of left-wing spaces. I mean, look who’s president.

The unavoidable moment of reckoning for most organizations, though, comes when it becomes clear that their own mission is being damaged. In finance, your mission is just to make money, and financial firms work hard to make sure that they know whether they are making money or losing it, and to know how to properly attribute those gains and losses. Their mechanisms are far from perfect, and they can be gamed, but nobody in a position of responsibility wants them to be gamed (unless that person is himself trying to commit fraud). In politics, your mission is to win elections, and while there are lots of structural incentives along the way to an election that can be corrupted in ways that result in bad candidates being chosen and bad campaigns being run, the election itself does pose a test that must be reckoned with in some fashion.

What makes the Arday situation distinctive, and different from the Platner situation and from my former colleague who claimed she was chased by a rhinoceros once too often, is that the organization—Cambridge University—doesn’t seem to have responded with any recognition that the organization’s mission was in any way damaged or threatened, other than in a public relations sense, if the accusations against Arday were true. That raises the reasonable suspicion that the organization doesn’t recognize that it has a mission, or, alternatively, believes that whatever Arday was doing was unrelated to that mission. That suspicion, in turn, is a far, far greater threat to the organization than Arday’s hire was.

Organizations that are governed by the profit motive have an obvious if manifestly imperfect check regularly imposed on them by reality. Organizations that profess missions beyond the bottom line have to provide that check themselves. If they abdicate that responsibility, they in effect confirm that the profit motive is the only reliable reality check, and encourage those who are in a position to strip them of their other professed missions in favor of the profit motive to do so. It’s high time that institutions like Cambridge University recognized that fact.