Mind Without Fear

by Rajat Gupta

  Despite a few bumps in the road, the Global Fund began to do very good work and win praise as one of the most innovative health funds in the world. In 2007, the chairmanship was up for change, and, to my surprise, many wanted me to stand for election. It was quite an unusual step to invite the private sector representative to chair an organization of this nature, given that we were by far the smallest contributor compared to the various governments and foundations. I told my supporters I would stand but I would not campaign. The last thing I wanted was to feel indebted to the agenda of some particular government, so I refused to play politics. Everyone else jockeyed for position, but, in the end, I was unanimously elected chair.

  Now that I’d been given the role, I decided to make the most of it and do as much as I could during my term to create change and increase the fund’s impact. I had proven my commitment and value to the board over the past five years, attending every meeting, and now I would test the limits of my support.

  One of the first changes I made was a cultural one. The board meetings were very formal, with members addressed by the name of the group they represented: “France,” “United States,” “Uganda,” and so on. I was tired of being addressed as “Private Sector” and felt that this group of people needed to roll up their sleeves and get to know each other. We spent too much time on procedural work and not enough talking about the actual issues on the ground. The fund had a mandate to save lives, and we needed to ensure that this got the majority of our attention, not diplomatic procedure and politics. I told the board we would be shifting from process to substance, and that each board meeting henceforth would include a substantive discussion about how to defeat each of the three diseases. I also had new name cards printed with people’s actual names on them.

  Interestingly, I quickly found that my experience leading McKinsey was extremely relevant here, although the institutions were very different. I’d become skilled in the art of persuasion—pulling the noodle rather than fruitlessly attempting to push—and this would come in useful now as I took on the leadership of an unwieldy group of politicians, civil servants, philanthropists, and activists and attempted to align them behind the mission of the fund.

  Shortly after I became chairman and made my acceptance speech, I was approached by a young woman in her mid-twenties named Naina Dhingra. I had met her a couple of times, as she’d once worked at the Global Fund and later interacted with us as an AIDS advocate. “You should hire me as your staff,” she told me.

  I laughed. I’d chaired plenty of boards and had never needed a staff to help me. I listened to her pitch and was very impressed with both her credentials and her commitment to the cause, but I remained unconvinced. However, as my Global Fund chairmanship got underway, I quickly realized that this was a more demanding role than any I’d previously held. I called Naina and told her she was right, and she became an invaluable full-time staff member, tirelessly supporting my Global Fund work.

  I was a very active chairman and led by example, making field visits to our various recipient countries and going out to the villages and the slums to meet the targets of our initiatives and to see our programs in action. Between these visits, Naina would organize dinners with the most influential people in each country, and some very innovative ideas came out of those discussions, along with lasting connections. On one particularly memorable trip, Naina and I traveled to Ethiopia to meet the health minister, Tedros Adhanom Ghebreyesus, who personally drove us on field visits to the villages where his initiatives were proving to be very effective. I was so impressed by his work that I recommended him to succeed me as chairman, and he would eventually go on to become head of the WHO.

  Most importantly, during my chairmanship I changed the way the fund functioned with regard to its core mission. Up till then, we had relied on the various governments to come up with proposals, and our job had been to allocate funds in a fairly passive manner. I felt, however, that with the amount of money we were responsible for—several billion dollars a year—we needed to see ourselves as a financing institution and to view our allocations through the lens of an investment strategy. “We owe the world some clear, holistic impact in the fight against AIDS, TB, and malaria,” I told the board. “Diseases don’t respect borders, so we need to look beyond individual countries in our thinking.” I proposed that we needed to identify the macro impact we wanted to have and then work backwards, thinking creatively about which strategies worked best and where our funding dollars would have maximum impact. Rather than limiting our efforts to country-focused initiatives, we asked representatives for each disease to come up with proposals for broader solutions.

  I had a particular interest in tackling malaria. After all, malaria was easily preventable—much more so than AIDS or TB. But it did not have the lobbying power of the AIDS groups, and efforts in the field were uncoordinated and ineffective. I was connected with two very passionate and powerful advocates for malaria prevention: the celebrated economist Jeffrey Sachs and the humanitarian and UN special envoy Ray Chambers. Jeff and Ray saw an opportunity to make a huge impact in the fight against this deadly disease, at relatively low cost. The most effective weapons in this battle were simple mosquito nets, sprayed with insecticide. Indoor spraying was also effective, and there were new medications called ACTs, which were not yet widely available. If we could get all the various malaria groups to join forces and focus on getting these things to the people in the hardest hit areas, which were mostly in Africa, we could save millions of lives. The Global Fund partnered with their organization, Malaria No More, as well as the World Bank, UNICEF, and the UN, in an ambitious drive to cut malaria deaths by half. The task force, launched in 2008 and driven largely by Suprotik Basu, a young executive from the World Bank, and Melanie Renshaw, from UNICEF, was charged to come up with effective national plans. It would go on to successfully save around half a million lives a year.

  As chairman, I tried to be outwardly focused, but some internal politics were inevitable. The biggest battle I fought was to extract the Global Fund from the WHO, which had provided a lot of support over the years but was also trying to impose its personnel policies on us. The WHO was notorious for protecting its employees no matter what, making it impossible to have a true meritocracy. This approach was at odds with the business-minded outlook I was trying to foster, so I decided to get us out. This met with opposition from all sides. Most people in the fund came from the UN community of civil servants, and they had never worked outside the multilaterals. Over time, however, people came to appreciate their liberation from the WHO’s red tape.

  I also found myself embroiled in politics of a different kind, when I inadvertently challenged the Chinese government. The Global Fund had a practice of rotating our board meetings between member countries. Hosting a meeting carried some prestige, and many countries invited us to come, including China. We scheduled a meeting in China, but then discovered that there was one problem: China had terribly restrictive policies around AIDS, particularly when it came to getting visas. The AIDS activists were adamant—we could not hold a meeting in a country that would not allow our constituents, including some of our board members, to enter. I remembered how, in my early days at McKinsey, Mike Murray had pulled out of a lucrative South African assignment rather than allow me, a young associate, to face discrimination from apartheid. There was no question in my mind what the right course of action here was, even though it was politically difficult. We informed the Chinese government that we would be changing the location of our meeting unless their visa policies were amended.

  Not surprisingly, this caused some upsets. Who were we to be dictating policy to the Chinese government? We were ready to simply move the meeting, but to my great satisfaction, the government relented and changed the visa requirements, allowing us to hold a very successful meeting in China. While there, we made sure to meet with members of the gay community, who were the targets of very intense discrimination, and find ways to ensure that our AIDS funding would re
ach them.

  Every three years, the Global Fund has what’s known as a “replenishment round,” where it raises money from the donor countries. The chairman is very involved in lobbying politicians and presides over the fundraising conference. When my turn came, the conference was held in Berlin, and I convinced Kofi Annan to co-chair with Angela Merkel. The process was quite a political education, as I met with dozens of senators and congressman to make my case. In the end, we were very successful, exceeding all expectations and raising over $12 billion to fund the coming three years’ work.

  A Noble Calling

  I loved working with the Global Fund and consider it one of the most treasured aspects of my life experience. How often does one get the opportunity to shape an organization with such extensive resources and such global reach? I felt similarly about my work with the UN, as special management advisor to Kofi Annan. I was glad to be able to bring my business experience and knowledge to the nonprofit world, where such thinking is sorely needed. Indeed, this was the theme of my remarks when I was invited to address the UN General Assembly in 2005 and 2010. I was very honored and a little overwhelmed to step up to the podium where just a few hours earlier the US president had spoken, and I hoped that the assembled heads of state would take away an expanded sense of what’s possible when business, government, and civil society all combine their skill sets and perspectives.

  There is so much need in the world, at every level, from the immediate and local to the systemic, long term, and far-reaching. Personally, I’ve always felt that the way I can contribute is by tackling problems that many feel are too big and won’t be solved within a single lifetime. I knew that to do this, my colleagues and I needed to build institutions that would outlast us. My experience at McKinsey, as well as in building ISB, had given me a particular ability to manage multiple constituencies with very different objectives and bring them together for a common cause. This work wasn’t an afterthought or a side note to my career: it felt like the continuation of my life’s work. For Bengalis, social justice is a way of life, a proud tradition that we don’t see as acts of charity but as a noble calling.

  At the end of 2006, I announced my intention to retire from McKinsey at the end of the following year. Hank Paulson, who was then at the helm of Goldman Sachs, not yet having left to become treasury secretary, was encouraging me to join the Goldman board, and directors were not allowed to join corporate boards until their final year with the firm. So I decided to retire one year short of the official retirement age. At the end of 2007, aged fifty-nine, my long career with the firm came to an end.

  The directors’ conference that year was held in India, and it turned into a moving retirement party, complete with a Bollywood-themed celebration and a speech from the prime minister—the first time a sitting head of state had ever addressed the firm. He recognized the contributions I had made to India’s development and said he had come to honor me. It was an emotional moment for me. I’d been with the firm thirty-five years, my entire career and most of my adult life. I couldn’t imagine not being with the firm. In fact, I wasn’t leaving entirely—they would provide me with an office and a secretary, and I would maintain a consulting role and continue to introduce and serve clients. I would always be a McKinsey guy. As the firm’s leader, I had shaped it in ways that I could only hope would last after I had moved on. As a human being, it had shaped me indelibly.

  Part III

  Trial

  Therefore rise up, Arjuna, resolved to fight!

  Having made yourself alike in pain and pleasure,

  profit and loss, victory and defeat,

  engage in this great battle …

  —Bhagavad Gita, 2:37–38

  13

  Testimony

  He who is too busy doing good finds no time to be good.

  —Rabindranath Tagore, Stray Birds, 184

  May 2012, New York City

  Sixteen seconds.

  “It looks bad,” my lawyer told me. “You hung up from the Goldman board meeting in which you learned about the Buffett investment, and sixteen seconds later you called Rajaratnam. He immediately bought Goldman stock. The next day, he told one of his traders that he received a call right before the markets closed, telling him something good might happen to Goldman.”

  I was sitting in a small office, high above Sixth Avenue, with several members of my legal team. After a long and depressing winter, spring had finally come, but I had no time to enjoy the gentle sunshine and the new life that was bursting forth in my beloved garden at home. I was spending every day at the law offices, preparing to testify at my upcoming trial. I was worried we’d left the preparation too late—it was only when I decided to take over an empty office and show up every day that the lawyers finally responded to my requests to rehearse. One of the legal team, Robin Wilcox, would play the role of the prosecutor and grill me on the events leading up to my arrest, sometimes with an audience for added effect.

  These practice sessions were a strange and awkward affair for me. I’d given countless speeches over the course of my career—addressing students, business leaders, humanitarians, even the UN General Assembly—and I was fully confident of my ability to speak clearly and persuasively. I had been unafraid to step on to the biggest of stages, always trusting my insight and instinct. But I didn’t like having other people telling me what I should and should not say. My lawyers stopped me constantly, adjusting and fine-tuning my story based on a multitude of possible reactions from judge and jury. I appreciated their thoroughness, but all this second-guessing made me feel disconnected from the simple truth. Unlike most business leaders, I’d never used a speechwriter; instead, I simply wrote what was authentic to me. Often, I would start with a favorite poem, but I couldn’t see the judge being very receptive to me quoting stanzas from Robert Frost, Rabindranath Tagore, or the Bhagavad Gita on the witness stand. Frost would have been appropriate here though, I mused: I would indeed be taking “the road less traveled” by taking the stand in my own defense.

  One point we returned to, again and again, was the sixteen-second gap. I understood that it looked bad. Clearly the prosecution was counting on the jury thinking so too. The truth was that the government had only a meager collection of circumstantial evidence for their claims against me, but a good storyteller could make it look criminal. Predictably, Preet Bharara’s PR machine had played up the September 2008 Buffett investment in their press release following my indictment, commenting that the speed at which I ended one call and placed the next made “starkly evident” my eagerness to “lavish” inside information on my so-called good friend, “so quickly it could be termed instant messaging.”1

  How was I supposed to convincingly counter this narrative? At face value, the government’s highlighting of the sixteen-second gap seemed reasonable. Why would anyone jump off of one call and on to another with barely enough time to catch a breath unless he had something of great urgency to communicate? The thing is, it actually wasn’t that unusual for me at all, as anyone who knows me would immediately tell you. My life was so tightly scheduled that I’d gotten into the habit of using any break between meetings, however brief, to return phone calls. My family constantly upbraided me for my habit of picking up the phone the moment a conversation paused or a meal was over. No matter how disciplined I was, it was a challenge to keep up with the demands of my philanthropic work, my investment ventures, and my board roles. If there was a precious window in my schedule, the first thing I’d do was get my secretary on the phone and ask her to place the first call on my list. It’s also not surprising that the first name on my call list during the summer and fall of 2008 was often Raj Rajaratnam—after all, one of the most important things on my mind at that time was figuring out what happened to my $10 million investment in the Voyager fund.

  That was the real story behind many of the events referenced in the charges. It was the story of a ridiculously busy, overstretched man trying to manage his personal financial affairs while also
guiding numerous major companies and nonprofits, at home and abroad, during one of the most volatile periods in our economy’s history. But how was I to tell that story in such a way that it eclipsed the more dramatic and sensational spin the government was putting on it? This was the challenge facing my legal team and me as we prepared for my trial in early 2012.

  Gary was outspoken about the weakness of the government’s case: “In all my years in court, never have I seen a case with so little evidence. It’s just a bunch of vague mumbo-jumbo! Where are the financial benefits? Where are the trades? Where is the profit-sharing agreement? And where is the motive? They don’t have a case. This isn’t evidence—it’s just circumstance and hearsay.”

  “But what’s our strategy?” I kept asking. “I know I didn’t do what they’re accusing me of doing, but I don’t see how we can prove a negative. As thin as it is, the government has a story that sounds believable. And I can’t offer any concrete evidence that proves I didn’t do something.”

  The lawyers kept reminding me that the burden of proof rested on the government. Let them prove it, they’d counseled. Our job is to show the jury that they simply don’t have the evidence. To emphasize his point, Gary would tell me that I didn’t even have to put on a defense if I didn’t want to. I understood this. Their arguments made sense—in a world where I truly was innocent until proven guilty. But I felt like I’d already been judged. I couldn’t just sit back and hope we could introduce enough reasonable doubt that it would become clear the government didn’t have a case. For months now I’d said nothing while my name and reputation were destroyed. I needed to tell my story, and I needed to tell it well.