A Modern Great Gatsby: Rajat Gupta vs. Raj Rajaratnam and the Great Wall Street Scandal

Leo DiCaprio will never portray him on the screen, but the disgraced Sri Lankan American moneyman Raj Rajaratnam could well be the Jay Gatsby of our times.
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Leo DiCaprio will never portray him on the screen, but the disgraced Sri Lankan American moneyman Raj Rajaratnam could well be the Jay Gatsby of our times.

The story of Raj Rajaratnam versus Rajat Gupta is playing out in the media like F. Scott Fitzgerald's famous novel -- about old money East Egg, new money West Egg and rotten eggs all around.

In our real-life 21st century version, on one side we have Rajat Gupta, patrician, mover and shaker, philanthropist with all the correct credentials for today's blue blood -- IIT, Harvard Business School, McKinsey -- and a Rolodex that includes the likes of Bill Clinton. He might not be exactly old money like the Rockefellers or India's Birlas but it's close enough.

On the other side you have the grubbier Raj Rajaratnam, despite his English public school education -- the player with a gap-toothed smile and "gorilla moods" who threw blowout bashes headlined by the disco queen Donna Summer.

"How could (Gupta) get into business with a trader who was known for giving Super Bowl parties filled with scantily clad women?" wonders Anita Raghavan in an upcoming book, The Billionaire's Apprentice, excerpted recently by the New York Times.

The tone, aghast and incredulous, sounds just one sneer away from Fitzgerald's Tom Buchanan telling the nouveaux riche Jay Gatsby he doesn't stand a chance with Daisy.

"She's not leaving me! Certainly not for a common swindler who'd have to steal the ring he put on her finger."

In Baz Luhrmann's cinematic version The Great Gatsby becomes all about orgiastic parties filmed in eye-popping 3D. But the book itself was a scathing observation about the false differentiation between class and money or the lack thereof. Gatsby, a man of great charm but mysterious wealth, throws his money around like there's no tomorrow, while Tom Buchanan, polo-playing Mr. Old Money and garden-variety adulterer rues, "Civilization's going to pieces." Rajat Gupta also viewed the Johnny-come-latelies striking it mega rich during the heady boom years on Wall Street with lofty disdain.

As Raghavan writes:

Offers were flowing into Gupta's office too, but his wife, Anita, told a colleague he enjoyed the stature that came with his job. He could trade places with these young Wall Street guys and 20-something tech millionaires any day, but they could never trade places with him.

Just as Tom Buchanan scoffed that, for all his ill-gotten fortunes, Gatsby, "Mr. Nobody from Nowhere," could never hope to be one of them. What stings most is both Gatsby and Rajaratnam are fabulously, vulgarly wealthy. Rajaratnam is the one who loaned Rajat Gupta $5 million at one point.

But while Fitzgerald didn't sugarcoat Gatsby's corruption, he was withering about the Buchanans. "They were careless people, Tom and Daisy, they smashed up things and retreated back into their money of their vast carelessness, or whatever it was that kept them together, and let other people clean up the mess they had made."

Unlike Fitzgerald, we cannot let go of our giddy enchantment with the likes of Rajat Gupta. Before Gupta's conviction, R. K. Raghavan, a former CBI director gushed about his "unsullied record":

The fact that he was elected thrice to lead McKinsey, one of world's leading consulting firms, by its partners and the first non-American to be so chosen is proof enough that he is a professional to the core who will not commit the indiscretions of the kind attributed to him.

In Anita Raghavan's telling of the story, at least as evident from the excerpt, Gupta comes across as more sinned against than sinning. "What if Gupta, the adviser to presidents and executives, simply got played?" she wonders. Even if his conviction is overturned, he will be remembered as "the dignified McKinsey managing director who fell down the money trap, and under the spell of a boorish hedge fund trader, a reality which in his world is almost as damning as the crime he stands accused of committing."

Raghavan is not calling Gupta innocent or dismissing the evidence against him as circumstantial the way his lawyers are. But she points out that after his stellar run on Wall Street he wanted to "burnish his legacy as a philanthropist." If he had a "lust for zeros" as the story is headlined, it was for a higher cause.

If Gupta wanted to compete on the same level as Stephen A. Schwarzman, who would go on to give $100 million to the New York Public Library, or Sandy Weill, whom he knew from the Weill Cornell Medical College board, he had to be a billionaire.

Gupta's greed is thus ennobled in a way Rajaratnam's will never be. Rajaratnam is the man who treats 70 of his closest friends and family to a lavish Kenyan safari for his 50th birthday. Gupta, pointedly, is not on that guest list. One is class. The other is crass.

But Fitzgerald knew that while the two worlds did not want to be seen socializing together the borders between them were infinitely permeable. "He and this Wolfsheim bought up a lot of side-street drug-stores here and in Chicago and sold grain alcohol over the counter. That's one of his little stunts. I picked him for a bootlegger the first time I saw him, and I wasn't far wrong," says Tom about Gatsby.

"What about it?" replies Gatsby. "I guess your friend (Wall Street tycoon) Walter Chase wasn't too proud to come in on it." In fact, even Tom shows up at his secret speakeasy as do senators.

The Rajaratnam-Gupta affair unfolds on exactly the same lines. While his associates and friends now try to underscore the social gulf between the two, the fact is, it didn't stop Gupta from picking up the phone and calling Rajaratnam after a Goldman board meeting.

It's just the ending that is a little different, but only a little. The "careless" Buchanans just shrug and walk away, letting all the blame and opprobrium fall on Gatsby, leaving him to be the fall guy for their crimes. Rajat Gupta, on the other hand, has been convicted by a jury. But as he sits in his Westport, Conn. estate working on his appeal, he hopes he will at least walk free, if not unscathed.

The abandoned Rajaratnam meanwhile complains bitterly, "Every bloody Indian cooperated (to nail me)." And then says piously, "They wanted me to plea bargain. They wanted to get Rajat. I am not going to do what people did to me. Rajat has four daughters." This is not to say our modern Gatsby is the "man of sensitivity" that Jay was. Or a modern day chronicler should say to him, "They're a rotten crowd. You're worth the whole damn bunch put together."

But our belief in the intrinsic nobility of the Rajat Guptas remains our blind spot. The Raj Rajaratnams and Rajat Guptas are more connected that we'd care to admit. Both believed in the green light at the end of the dock (though theirs was of the dollar kind) and "the orgiastic future" that has now eluded them both. But that's no matter, for as Fitzgerald observed, tomorrow the rest of us will continue to "run faster, stretch out our arms farther -- so we beat on, boats against the current, borne back ceaselessly into the past."

The Great Gatsby reminds us the more things change, the faultline of class remains unalterably the same.

Another version of this blog first appeared on Firstpost.com.

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