Cantor Fitzgerald CEO recalls 9/11, genesis of $270 million fund
ONE WORLD TRADE CENTER is constructed beside the north pool of The National September 11 Memorial and Museum in New York, U.S., on Aug. 25, 2011.
BLOOMBERG FILE PHOTO/PAUL GOGUEN
By Patrick Cole Bloomberg News
NEW YORK - On Sept. 11, 2001, Howard Lutnick, the CEO of Cantor Fitzgerald LP, lost 658 employees, including his brother, at the World Trade Center.
Three days later, he began rebuilding Cantor so that it could take care of the victims’ surviving families by giving them 25 percent of the company’s profits for five years.
He established the Cantor Fitzgerald Relief Fund, using the 25 percent and other contributions. It now totals more than $270 million and has also supported those affected by Hurricane Katrina, the 2004 Indian Ocean tsunami and last year’s superstorm Sandy.
Cantor also began an annual Charity Day, which is today -- brokers donate their Sept. 11 pay to the fund and have raised $89 million.
Lutnick, who recounts the horror of Sept. 11 in a documentary released this week, “Out of the Clear Blue Sky,” talked about how the attack affected him and Cantor over lunch at Bloomberg News headquarters in New York. (His sister, Edie Lutnick, a lawyer and the fund’s co-founder, answered questions by phone.)
Cole: How did Sept. 11 change your outlook on life and business?
Lutnick: My mom died of cancer when I was 16, and 18 months later my father also had cancer and went in for his first chemotherapy shot. The nurse gave him 100 times the dose and killed him.
My extended family pulled out. I think they were afraid we’d be sticky, we’d come over and never leave. I never spoke to my father’s brother after my father’s funeral. If you look at Sept. 11, I was not going to let what happened to me ever repeat itself. I had seen what hell looked like, and I had been there.
Cole: You must have been haunted by the attack.
Lutnick: The first night, it was 3:30 a.m. and I had the worst dream ever. I watched a spider make a web and it came down on my face and suffocated me, and I woke up screaming.
The other dream I had was putting my feet on the transom in my office looking out the window, and I would see the plane coming. I know what’s going to happen. I have enough time to get out. But I never get out because I’m grabbing other people. I had that dream for two or three years.
Cole: How did your priorities change?
Lutnick: We rebuilt the company in order to have short-term earnings to take care of the families. That’s the only thing that mattered to me. Every decision I made was a short-term decision so that we could give 25 percent of the profits to the families. Edie’s job was to figure out how to distribute the money and take care of them in every way humanly possible.
Cole: Who did you turn to for advice on creating the Cantor Fitzgerald Relief Fund?
Lutnick: It was definitely a creation from scratch. I knew that I needed to touch the families, and I knew that it had to be me or the equivalent of me. My sister is the equivalent of me. Edie didn’t want to do it because she was crying all day, sick to her stomach all night, but she had to do it.
Cole: The fund’s scope over the years has been expanded to disasters such as Hurricane Sandy victims to whom you gave $10 million in $1,000 debit cards. Why did you decide to give cash grants?
Edie Lutnick: We learned from Sept. 11 that if we can give families direct financial aid, they would do the right thing for their family. That was a core model for us.
When Sandy hit, we still had funds from Charity Day left over, and Howard and I talked about what the fund could do. We said we wanted to help Sandy victims in a big way.
Cole: Let’s talk about taxes, Howard. Warren Buffett says that the rich should pay more taxes. Do you agree?
Lutnick: I disagree. I don’t think that sending more money to the U.S. government is going to make a darn bit of difference. I like the concept of incentives because I’m a businessman. If Warren Buffett has got an extra $100 million, and he’s doing nothing with it, then you should send it to government.
But if you invest it in creating jobs, then you should get a credit and not pay. And Warren Buffett is smart enough that I bet you that if he invests that $100 million he will employ people and make money.
Cole: What about giving to national parks?
Lutnick: Love the idea of parks. The key is that I want to give my money in ways I think are worthwhile. I believe in charity because I make the choice. We give money through schools because I want to do it with the principal of the elementary school standing next to me, so that when I leave, these parents think, “How great was the principal for arranging that!”
Cole: What philanthropic issues aren’t getting enough attention?
Lutnick: Articulating the percentage of money raised that goes to the purpose at hand is gigantically important. It disgusts me, these organizations that take 35 cents of a dollar off the top and have big real-estate holdings and salaries, because that’s not the purpose.