[Congressional Record Volume 140, Number 7 (Wednesday, February 2, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: February 2, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                    TONY COELHO, SOLDIER OF FORTUNE

                                 ______


                        HON. ANDREW JACOBS, JR.

                               of indiana

                    in the house of representatives

                      Wednesday, February 2, 1994

  Mr. JACOBS. Mr. Speaker, I place in the Record the following 
Washington Post article about our former colleague, Tony Coelho.
  At the time Tony chose to leave Congress, there was a lot of 
speculation about his financial matters. The most significant element 
of the Washington Post article is the letter of exoneration from the 
Justice Department concerning Tony's conduct.
  One might wonder, then, why Tony resigned. But those who know him 
understand perfectly well why he did so. He chose to spare his family 
and his party the inevitable, scurrilous attacks of far fetched 
innuendo which would have emanated from unprincipled partisanship in 
those soapbox tribunals where, in the words of Samuel Shellabarger, 
``No one is too innocent to be proved guilty.''
  It is said that the best revenge is living well. And despite the fact 
that Tony is anything but a vengeful person, it is nice to know that he 
is living, well, happily.

                [From the Washington Post, Jan. 9, 1994]

                    Tony Coelho, Soldier of Fortune

                           (By David A. Vise)

       New York.--Tony Coelho sat at his desk, tears streaming 
     down his cheeks and doubts racing through his mind as he 
     gazed out the window into the back yard of his Alexandria 
     home.
       It was the summer of 1989, two weeks after he had resigned 
     from Congress under a cloud, and Coelho was home alone. His 
     wife was out shopping, the colleagues who had offered him 
     support were busy with other problems and the reporters who 
     had chronicled his abrupt demise has stopped calling. For the 
     first time since the whole nasty episode began, Coelho was 
     second-guessing his decision to move on rather than fight 
     allegations of financial misconduct.
       ``It was like somebody just hit me in the belly and knocked 
     all my air out,'' Coelho recalled. ``I was feeling blue, 
     lonely, and questioning my judgment. I broke down,''
       As he wept, Coelho thought about all the people he had let 
     down--the staffers, the voters, the family and friends, 
     himself. Had he quit too hastily? Should he instead have 
     girded for battle as he had so often done before? He prided 
     himself on being a fighter and a survivor, yet his own 
     daughter was saying that he had ``run away.''
       The sound of his wife returning home snapped Coelho out of 
     his funk.
       ``It lasted only 20 minutes,'' Coelho said. ``I got a hold 
     of myself basically and said, `You did the right thing, and 
     you can't look back.' That was the only time in that whole 
     four-year period that I thought maybe I made a mistake. I 
     felt great afterward.''
       As the big bucks have rolled in, Coelho (pronounced KWEL-
     oh) has felt even better about life after Congress.
       In the four years since he resigned from his lofty post as 
     House majority whip, Tony Coelho has turned a political 
     disaster into a personal fortune. He has made millions of 
     dollars on Wall Street, built an expensive beach house in 
     Delaware and become a behind-the-scenes adviser to the 
     Clinton White House--even being suggested as a possible chief 
     of staff. He's also been able to spend time with his family 
     and has endowed a university professorship for medical 
     research into epilepsy, the disorder that nearly caused him 
     to kill himself as a young man.
       Interviews with Coelho and dozens of people who know him 
     provide a portrait of a man who had one of the fastest balls 
     and most remunerative rebounds of any Washington figure in 
     recent memory. After a remarkably successful decade on 
     Capitol Hill, the California legislator departed on his 47th 
     birthday with a vow that there must be life after Congress. 
     By trading on political connections and his considerable 
     networking and money-raising skills, Coelho has found it.
       Only to his friends has the revival been unsurprising. They 
     know that Tony Coelho has been through worse.
       When he was a teenager growing up on a dairy farm in 
     California, the grandson of Portuguese immigrants, his 
     parents took him to witch doctors and faith healers who 
     burned candles on him in dark rooms and poured hot oil on his 
     head to try to cure him of seizures. His parents never 
     explained, but Coelho found out during his college years. 
     Wanting to become a Roman Catholic priest, he went to a 
     doctor for the required physical--and was informed that not 
     only was he an epileptic, but he could not become a priest. 
     The church, the doctor said, held to an ancient belief that 
     people with the disorder were possessed by evil spirits, if 
     not the devil himself.
       Coelho said that when he called his parents to tell them, 
     they refused to acknowledge the problem, because they agreed 
     with the church. ``We always believed that,'' his mother, 
     Alice, said. For Coelho, it was the first in a devastating 
     series of rejections. He lost his driver's license because 
     epileptics were required to be seizure-free for one year 
     before driving in Los Angeles. Businesses that had sought to 
     hire him backed off after they learned of his condition; the 
     only job he could find was working as a cashier in a liquor 
     store. And he was lonely, having broken up with his 
     girlfriend after deciding to become a priest.
       ``I was suicidal and drank a lot,'' Coelho said. ``I felt 
     rejected by the church. I felt rejected by my parents. I 
     thought God had rejected me.'' Even the government had 
     rejected him by taking away his license.
       Epilepsy is a group of neurological disorders characterized 
     by the tendency to have recurrent seizures. For most 
     epileptics, a seizure is not a medical emergency, even 
     thought it appears like one. The condition can be controlled 
     with medication, and after going on a daily dose of 
     phenobarbital, Coelho says, he hasn't had a seizure in years.
       Coelho credits comedian Bob Hope with saving his life. A 
     priest arranged for him to do chores for Hope and they became 
     friends. His long talks with the star helped him regain his 
     self confidence and eventually he came to Washington to work 
     for a congressman from California.
       Two decades later, he knew that leaving the power and 
     prestige of Capitol Hill was easier than what it took to get 
     there. ``I have tremendous confidence in myself,'' Coelho 
     says. ``I can never be rejected as much as when I found out I 
     had epilepsy. Nobody will ever put me down there again.''
       And, finally, that includes his parents. Ironically, for a 
     man with such honed communications skills, he avoided 
     dialogue with his mother and father about the pain of his 
     epilepsy for 29 years. Only when a reporter asked his mother 
     about the subject recently did Coelho learn that she no 
     longer considered the condition a stigma. He flew to 
     California and talked it through for the first time in his 
     life. ``Unless you have been through it, I don't think you 
     can appreciate the emotional burden that took off my 
     shoulders,'' he says.
       Today he regularly travels around the country making 
     speeches about the disorder and even putting on puppet shows 
     to teach children about it. Coelho has endowed a chair at 
     UCLA Medical School for epilepsy research and has raised 
     about $5 million overall to fund programs ranging from job 
     training centers to family counseling.
       ``Tony is the first and only prominent public person to 
     speak up and say, `I have epilepsy,' '' said Jerome Engel 
     Jr., chief of epilepsy research at UCLA School of Medicine. 
     ``He is a role model for kids, in particular. Until he came 
     along there were not any.''
       Still, for a man who likes to be in control at all times, 
     Coelho knows that in some ways--many of them positive ways-- 
     his epilepsy controls them. It isn't the physical symptoms; 
     the medicine takes care of those. It is simply the looming 
     reality of his condition that, each and every day, shapes 
     Coelho's self-disciplined approach to living.


                           the disciplinarian

       Five mornings a week, Tony Coelno begins his day around 
     5:30 working out with a personal trainer or a friend. His 
     mother said that had it not been for his epilepsy, he might 
     have become one of those priests who lacked the requisite 
     discipline and decorum. But in the lifestyle he has chosen, 
     Coelho relishes rigor and routine.
       Before the doctors told him what was wrong, Coelho thought 
     the seizures were a reaction to stress. He still believes 
     that one way to keep his epilepsy under control is by 
     managing stress--which involves everything from precisely 
     organizing his life to strenuous daily workouts.
       Says stockbroker Michael Shor, who often lifts weights with 
     the 165-pound, 5-foot-10 Coelho: ``I've spotted him when he 
     was bench-pressing 195 pounds.''
       At Wertheim, Schroder & Co., the Wall Street investment 
     firm he joined after leaving Congress, colleagues say they've 
     never seen anyone so focused and methodical--in small ways 
     and large. Over the course of the day, he writes tasks he 
     wants to accomplish on 3-by-5 index cards that he carries in 
     his coat pocket. One task per card, of course, relieving the 
     burden of remembering what needs to get done. He's upgraded 
     the computer systems to track clients and investments and 
     established a more formal planning and budgeting process.
       The efficiency extracts a price from those around him, 
     however. As a boss, he is extremely demanding and regarded by 
     some as abrupt and a bully. In contrast with the peaceful 
     poems and framed lithographs of waterfalls and snowy scenes 
     in his office, he replaces people he doesn't regard as 
     talented and dedicated much faster than the voters could have 
     thrown him out.
       ``In politics, they measured you every two years,'' Coelho 
     said. ``Here, it is every day.''
       As with other aspects of his life, Coelho's decision about 
     where to work was influenced by epilepsy. After he resigned 
     from Congress, the job offers came pouring in to the man who 
     had once been the nation's leading Democratic fund-raiser. He 
     had been in line to become House majority leader and had ties 
     to many business and labor leaders. Ultimately, he had 83 
     choices.
       Coelho quickly narrowed the alternatives by ruling out 
     lobbying, the career path of choice for many former members. 
     He also ruled out any job far from Washington because his 
     daughters were in school. He wanted a job that offered him 
     the potential to earn a lot of money and learn. Within 
     several months, he settled on Wertheim. Coelho had visited 
     the firm several years before and had liked the people there. 
     The purpose of his earlier visit: raising money for epilepsy.


                            the businessman

       Coelho's new job matched one of the nation's premier fund-
     raisers with a giant honey pot.
       He became a top executive of the Wertheim division that 
     invests in stocks and bonds for pension funds and other major 
     investors. The $4 trillion in pension funds is the nation's 
     biggest pool of money, and much of it is in city, sate and 
     union pension funds, where Coelho already had contacts or 
     could develop them.
       When he arrived, the troubled division had about $700 
     million under management and was shrinking; in four years 
     under Coelho that figure has quintupled to abut $3.6 billion 
     and is heading toward his goal of $5 billion. His initial 
     major recruits were union pension funds.
       ``He has done for them what he did for the Democratic 
     Party. He has raised a lot of money,'' said Jay Mazur, 
     president of the International Ladies Garment Workers Union.
       ``He has a magic Rolodex,'' said Wertheim Managing Director 
     Kenneth Melamed.
       Some Wertheim executives initially were opposed to hiring 
     Coelho due to his lack of business experience and the 
     questions surrounding his resignation. A spate of articles in 
     1989 said he had profited from his political connections by 
     purchasing $100,000 of a new issue of junk bonds from Michael 
     Milken and Drexel Burnham Lambert. He borrowed money to buy 
     the bonds from Los Angeles-based Columbia Saving and Loan, 
     which was run by Democratic contributor Tom Spiegel.
       Coelho failed to disclose the loan, making it appear he was 
     trying to hide a profitable deal not available to others. The 
     damaging details emerged amid an unrelated ethics 
     investigation of former House speaker Jim Wright and as 
     federal prosecutors were prying into Drexel and Columbia in 
     the biggest criminal fraud probe in Wall Street history.
       Coelho resigned quickly to avoid putting himself, his 
     family and the party through many months of adverse 
     publicity. He had played political hardball and knew he would 
     make a juicy target. ``I want to give my party a chance to 
     move on,'' he said upon resigning.
       While blaming the error on his failure to pay attention to 
     matters handled by his accountant, Coelho predicted a federal 
     investigation would clear him. Last year, the Justice 
     Department sent him a letter saying it had closed its probe 
     of his junk bond purchase--as far as it will go in saying 
     that the target of an investigation is cleared.
       Wertheim's William Smethurst said some people believe 
     Coelho while others remain skeptical. ``He said he had a 
     problem and recognized it and felt under those circumstances 
     that he did the honorable thing'' by resigning, Smethurst 
     said. ``Other people to this day say no guy would have 
     resigned from that important an office for something that was 
     a peccadillo, and that there must have been something more 
     serious behind. He said there was nothing more and he got a 
     clean bill of health.''
       Though he was an untraditional hire, Wertheim's top 
     officials sensed that Coelho could be a great rainmaker.
       ``If I could sell the Democratic Party in 1981, I could 
     sell Wertheim Schroder,'' Coelho said.
       Bud Morten, a Wertheim managing director, said there is a 
     link between the close relationships Coelho develops and his 
     ability to bring in business. ``Everybody is struck by his 
     quality of concern and his interest in you as a human 
     being,'' Morten said. ``That is a quality some of the best 
     salesmen in the world share.''
       And some of the best politicians. Coelho's skills are never 
     more apparent than in a one-on-one encounter. He locks on to 
     you with a remarkable pair of deep brown eyes. Their 
     concentration is total and so is his, exuding empathy and 
     making clear there is no other conversation in the world than 
     yours at this moment. The focus, the discipline, the energy 
     are at your disposal. Your words are the most important he 
     has ever heard. He stands close, than speaks in a hushed tone 
     that draws you closer. In the end, his eyes do not 
     permanently release you; they merely allow a comfortable 
     leave of absence until your next meeting.
       Coelho has converted new acquaintances and old political 
     allies into clients. He added one wealthy client after a 
     conversation on a flight from London to Washington. Barbara 
     Easterling, secretary-treasurer of the Communications Workers 
     of America, said she gave Wertheim tens of millions of 
     dollars to manage because of her prior political relationship 
     with Coelho. The firm has kept the funds because of superior 
     investment performance, she said.
       Some people find what Coelho is doing repugnant. Charles 
     Lewis, executive director of the Washington-based Center for 
     Public Integrity, said Coelho hurt the Democratic Party by 
     making it too dependent on special interest fund-raising. 
     Then he resigned to avoid a House ethics investigation and 
     began soliciting pension business from people who had given 
     him political contributions.
       ``He basically used his old connections to raise all this 
     money in a different context on Wall Street,'' Lewis said. 
     ``In the context of Wall Street, that is wonderful. From my 
     perspective, he used his position as a Democratic Party 
     official and made tons of money for himself and his firm. 
     This is not a person who became a priest after he resigned.''


                             the networker

       Wall Street provided as good a home for Tony Coelho as 
     Capitol Hill because relationships matter in both places. 
     Coelho approaches networking with all the passion and self-
     discipline be brings to the rest of his life.
       ``I commit to relationships,'' Coelho said. ``I never walk 
     away from people.''
       Coelho typically spends Monday through Thursday in 
     Manhattan and Friday in Washington, where he meets with 
     clients and goes to the White House. He also counsels members 
     of Congress and sits on numerous corporate boards.
       Coelho has maintained close ties with his former staff 
     members in Washington. Many of them came to work for Clinton 
     and they look to the 51-year-old Coelho, whom they describe 
     as their mentor, for advice.
       ``I have learned more from him than anybody in politics and 
     stay in regular weekly contact,'' said presidential assistant 
     Rahm Emanuel. ``He always has a take on things that gives you 
     another way of looking at how to move something and spin 
     something.''
       ``I probably talk to him every other day,'' said Tom Nides, 
     chief of staff for U.S. Trade Representative Mickey Kantor.
       ``He continues to have the best political instincts of 
     anybody I know,'' said David Dreyer, deputy White House 
     communications director.
       On NAFTA, Coelho helped devise a national security focus, 
     which gave Democratics a way to deflect the pressure they 
     were getting for voting against organized labor. He also 
     provided the White House with intelligence on where key 
     members were leaning and how to move them. He even made calls 
     to persuade members, as he has on other issues.
       Emanuel and other former Coelho staffers gathered at 
     Coelho's home in Northern Virginia last summer for their 
     third reunion. For hours, Coelho stood in the center of the 
     lawn receiving visitors and dispensing advice. He distributed 
     a directory of addresses with a cover-memo addressed to ``Our 
     Extended Family.'' It included a request for information so 
     he could publish a newsletter.
       Coelho said his parents' refusal to accept his epilepsy 
     explains his affinity for creating an extended family.
       He also counsels friends on jobs, marital problems, and 
     other issues. ``It is the priest in me,'' he said.
       Every day, Coelho spends hours on the phone expanding his 
     network. Sometimes, it leads to new business. ``I'll pick up 
     the phone and call a former staffer and say,, `How are you 
     doing?' or just call an old acquaintance. I called a guy the 
     other day I hadn't heard from in seven or eight months. He 
     said to me, `It is fortuitous you called. Our company is in 
     the middle of doing something, and I want to bring you in.' I 
     called because I hadn't heard from him and we had a great 
     relationship. I don't know if we would have had the business 
     if I hadn't called. That is what relationships and commitment 
     are all about.''


                          life after congress

       Although people at Wertheim describe Coelho as a hard 
     worker, his schedule is easier than it was when he was in 
     Congress. There he'd work all week and then spend weekends on 
     the fund-raising circuit. ``You didn't get a place for him,'' 
     said Phyllis Coelho. ``He was never there.''
       This summer, Coelho spent weekends with his family at his 
     new million-dollar beach house in Bethany. ``He and Phyllis 
     are as happy as I've seen them in 20 years,'' said CBS vice 
     president Martin Franks, who used to work with Coelho. ``He 
     has discovered he doesn't have to be running 24 hours a day, 
     seven days a week to enjoy himself.''
       ``Life is better now,'' said Phyllis Coelho. ``Definitely, 
     definitely, definitely.''
       Coelho would like to stay at Wertheim a few more years to 
     add to his net worth. Yet the pull of politics remains 
     strong.
       The most enticing job for Coelho would be White House chief 
     of staff, where his executive skills and political instincts 
     would be utilized. But would the White House be willing to 
     absorb the heat from his damaged reputation? The clearance 
     letter Coelho received from Justice helps, but it likely 
     wouldn't prevent criticism, at least not yet. His name 
     recently was floated for White House deputy chief of staff, a 
     job Coelho wouldn't leave Wall Street to take. Someday, as an 
     elder statesman, he says he'd like to be U.S. ambassador to 
     Portugal.
       Former Ohio congressman Dennis Eckart, who sought Coelho's 
     advice before resigning, predicted his friend won't last at 
     the firm. ``Tony is a hurdler in life,'' he said. ``He 
     hurdled epilepsy, he hurdled the House and he will hurdle 
     Wertheim Schroder at some point.''
       As a politician on Wall Street, Coelho has his own way of 
     explaining things. ``I said there is life after Congress,'' 
     he said. ``I say there is life after Wertheim.''

                          ____________________