March 27, 2003
Banker's "just-fix-it" approach averts Holocaust reparations blunder.
On March 11, Paul S. Nussbaum trudged down the driveway in his bathrobe, picked up the Los Angeles Times and headed back into his house -- part of his early morning routine. Moments later his wife handed him a fruit protein shake, he cracked open the paper and pulled out the business section.
Nussbaum was "astounded and dumbfounded" by what he saw. Under a headline that read, "Wells Refuses Belgium Claim," Nussbaum learned that Wells Fargo & Co. said it would not contribute $267,000 to a war reparations fund for Belgian Jews, making it the only financial institution of 22 banks named in the $59 million settlement to balk at paying. Wells Fargo argued that it had no legal obligation, because it had inherited the liability through its acquisition of a small Belgium bank.
For Nussbaum, the son of two Holocaust survivors, the bank's actions came as a double shock. For one thing, Wells Fargo had cultivated a great deal of good will in the Jewish community by contributing hundreds of thousands of dollars to the Simon Wiesenthal Center, Jewish Family Service (JFS) and other Jewish organizations. For another, Nussbaum, 46, is senior vice president for Wells Fargo in Beverly Hills.
Turning to his wife, Nussbaum said: "The bank has done something incredibly stupid that I have to deal with."
And he did.
A day later, after a barrage of calls by Nussbaum to senior executives at Wells Fargo and Jewish leaders, the bank said it would pay the reparations. In a statement, Wells Fargo Chief Executive Dick Kovacevich apologized to the Jewish community and called the Holocaust "the worst form of discrimination and violation of human rights."
The bank's quick reversal probably minimized long-term damage to its business interests and reputation. It also reflected the crisis-management skills of Nussbaum, a Jewish philanthropist who has spent much of his corporate career guiding organizations through roiled waters.
Although they sometimes cause him sleepless nights and an upset stomach, difficult times bring out Nussbaum's most analytical and creative side, he said. Like a general calmly barking orders as bullets whiz by, Nussbaum said he becomes ever more focused in a crisis, when his "just-fix-it" personality kicks in.
During his career, he has helped clean up the portfolio of a faltering savings in loan, put in 80-hour weeks to help Orange County tame its budget to emerge from bankruptcy and single-handedly revived Wells Fargo's regional commercial banking office on the Westside.
In 1984, Nussbaum joined American Savings & Loan, just as panicky investors had withdrawn $6.8 billion in one of the biggest bank runs in history. Over the next five years, Nussbaum, working in conjunction with then-American Savings CEO William J. Popejoy, helped the institution collect as much as possible on its bad loans and remove them from the company's books. Nussbaum said his efforts saved taxpayers billions.
Later, he joined Wells Fargo. In 1995, the bank gave him a paid leave so that he could serve as an adviser to his mentor Popejoy, then-CEO of bankrupt Orange County. At first viewed suspiciously as a Popejoy lackey, Nussbaum won over a lot of skeptics with his long hours and dedication toward making the county solvent, experts said.
Nussbaum was part of a group of officials who slashed the county's budget 41 percent.Â Although Nussbaum left after only five months, Popejoy said, "I don't think anyone made a bigger contribution that helped the county regain its footing. Paul was one of the unsung heroes."
Four years ago, Wells Fargo asked Nussbaum to reopen a commercial banking office in Beverly Hills that had been shuttered during an earlier consolidation. Starting from scratch, he has built a team of 16 people and increased by fourfold the number of Wells Fargo loans to Westside companies and individuals.
"I think Paul has done an exemplary job of establishing us in a market we had tried to break into in the past but had been largely unsuccessful," said Paul Watson, Wells Fargo head of commercial and corporate banking. "He's a good banker and very involved with the community. When you put that together, you have a successful formula."
Nussbaum's commitment to business is matched only by his community activism. A board member at JFS, the Wiesenthal Center and Stephen S. Wise Temple, he has encouraged Wells Fargo to donate hundreds of thousands of dollars to those and other groups, including $150,000 this year to JFS.
Mark Berns, past president of Stephen S. Wise, said Nussbaum makes contributions to the temple, both big and small. Recently, Nussbaum volunteered to cook food all afternoon "over hot flames and in the sun" at a Purim festival that raised $40,000, Berns said.
Rabbi Marvin Hier, dean of the Wiesenthal Center, has known Nussbaum for seven years. He said the banker's efforts to coax Wells Fargo to pay the reparations reflect Nussbaum's deep commitment to Jewish values.
"I think he saved the bank a lot of heartache by making such a big fuss," Hier said. "He did the right thing."