High Finance: An IDD Web Exclusive
Long hours, lots of money and loads of ambition can be a recipe for addiction.
December 21, 2007
The bottom came just as a career was reaching new highs.
The problem was that ‘John’ was reaching new highs, too. For the young Wall Street executive, times were good. He had a managing director post at a bulge-bracket bank, the respect of his peers, and more money than he had ever dreamed of.
So he did a little too much drinking. Not the first guy on Wall Street guilty of that. The coke? Well, he thought he could control it. The second divorce? Hey, things happen.
Then came the 30-day jail sentence, which served as a wake up call. A frightening, sobering, and very likely life-saving, wake up call.
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The United States makes up about 4% of the world’s population, yet we consume more than half of the world’s pain-killing and mood-altering drugs, and two-thirds of the world’s illegal drugs. While no statistics are available on the extent of substance abuse specific to Wall Street, it’s safe to say that the numbers are just as discouraging. Indeed, during the course of conducting more than a dozen interviews for this story, it wasn’t difficult to find folks on the Street who readily admit they drink in excess (often directly related to their work) and partake in the “casual” use of marijuana and cocaine.
In conversations with recovering addicts from the world of high finance, doctors, Wall Street firms and law enforcement officials, it’s clear that the combination of the Street’s lucrative salaries, the required relationship building (often done in bars), and long hours can lead to a greater chance of getting into trouble with narcotics—prescription drugs, in particular—and alcohol. Add to the mix the certain personality type that can be attracted to work in the canyons of lower Manhattan, and you’ve got a recipe for addiction.
That shouldn’t come as a great surprise. After all, there’s no reason why Wall Street, despite its highly educated and career-minded workforce, should be immune to the devastation of alcohol and drug abuse. And the US on the whole is in the midst of a discouraging return to the period when the country was at its drug-consuming worst, according to Joseph Califano, chair and president of The National Center on Addiction and Substance Abuse (CASA) at Columbia University. (JPMorgan CEO Jamie Dimon, incidentally, is a CASA board member. He declined to be interviewed for this story.)
Califano, author of High Society: How Substance Abuse Ravages America and What to Do About It, says the high point in illegal drug use came back in 1979, when there were about 26 million people using, while usage bottomed out in 1992 when the number fell to 12 million. Today, about 20 million Americans are using drugs illegally, he says.
Clearly, the pace of the Street and the pressure to entertain clients in a testosterone-filled environment are clear factors for abuse. But less obvious is the fact that, for addicts, good times can lead to increased abuse just as often as bad times.
“First use may be due to entitlement,” says Dr. Mark Gold, distinguished professor and acting chairman of the department of psychiatry at the University of Florida College of Medicine and McKnight Brain Institute. “They have the disposable income. They have lives which are often responding to the next crisis. They have access to drugs, drug-using friends, and associates, and they feel that drugs are part of the spectrum of entitlement. Wharton may have prepared them for (Wall Street), but they are not prepared by evolution or experience for cocaine, heroin, or other potent drugs of abuse.”
Good Times, Bad Times
For John, who started his career on the floor of the New York Stock Exchange, it wasn’t until the money really started rolling in that things got dicey. Having left the Big Board, he joined one of the largest and most recognizable names on the Street, initially in sales. (The recovering addicts mentioned here spoke freely with IDD, but because of the sensitive nature of this story some names have been changed or excluded.)
“One of the things that made my journey real easy is that I was essentially paid to be drunk, and paid extremely well,” he says. “Of course, all the drinking was paid for with an expense account.”
As he moved up the ranks, he was continually called on to entertain clients, and the heavy drinking never stopped, and started to be supplemented with cocaine. “I wasn’t necessarily an everyday drinker or user, I was basically a binge type,” he says. “If I was taking three clients out to Pebble Beach for five days, that was a green light to drink for a month.”
Many nights involving business meetings ended in a blur. John recalls in particular one dinner get-together in Texas where, having drank and also snorted cocaine leading up to the gathering, “by 10 o’clock, I was just gone.”
Looking back on his days on Wall Street, John says “there were signs all the way through, but I ignored them. I could stay out until 3 o’clock in the morning and get up at 5 o’clock and still put in a productive day.”
While that kind of schedule can be maintained for short periods of time, doctors we talked to agree it’s not sustainable without an artificial boost. For the investment banker working 16-hour days for several days in a row, the body has a natural desire for stimulants.
“Especially now, they’ll use any advantage they can get to stay in the chase,” says Dr. Alden Cass, president of Catalyst Strategies Group. “I see a lot of patients addicted to prescription medications aimed at improving concentration or focus or numbing some emotions.” Among the more common names are Ritalin and Adderall, both stimulants, and Vicodin and Oxycontin, which are painkillers.
Employer Response
For John, life changed when he was sentenced to a month in jail, the result of a second DWI conviction. It was a crippling blow, but one that offered a new lease on life. “When I was in jail I got this feeling that I controlled my own destiny, which led me to an incredibly strong self-will,” he says. “My jail sentence was my best rehab. People that find recovery sometimes have one particular thing that leads them there. It can be a nightmare, but when you look back on it, it’s a real blessing.”
While John’s recovery continues – he’s doing volunteer work and plans on getting back into the financial-services business – his experience with his employer left a sour taste. “When I got my first DWI, I could just go back to work and it was almost a source of humor,” he recalls. “When the second came and I had to be out of work for jail, there was a warning letter when I got back. Not one saying we’d like to help you get some help, not an employee assistance-type of letter, but instead a letter expressing their concern about the image of the firm with an MD who just got arrested.”
It’s his opinion that if the big banks took a more compassionate attitude toward employees who are suffering from substance abuse it would go a long way in preventing more serious problems. Given the resources at their disposal, he’s surprised they don’t. He also says he was turned down when he offered his personal services as someone with whom other abusers could discuss their problems.
“Look, this is my story,” he says. “It’s not like anybody made me do what I did. But there’s no doubt that Wall Street is fertile breeding ground for substance abuse, and a friendly incubator for addiction. I was an active alcoholic and then a user for 17 years, and all through the years no one at the firm once pulled me aside and said, ‘Maybe you have a problem.’ And my behavior was very clear.”
A person connected to the employee assistance program at a large Wall Street bank says these kinds of programs have become more widespread on Wall Street in recent years, through internal marketing and also word of mouth. At this particular bank, employees are encouraged to seek assistance if they are exhibiting behavior that their managers deem inappropriate or suggests a falloff in production. In egregious cases, employees are mandated to call the employee assistance hotline. Once that call is placed, however, there isn’t necessarily follow up by the employer to see what kind of progress is being made.
Although counselors work on other issues aside from substance abuse, at this bank their number has grown from one not long ago to five currently. The counselors are trained to ask specific questions, and typically conduct preliminary screening over the phone, unless they are located at the same location as the potential abuser. Depending on that analysis, the employee then may be sent to a care-giver, who would work in conjunction with the bank’s employee assistance program. Depending on the severity of the abuse, the next step could involve a leave of absence or a staggered return to the job, such as working two days a week upon return.
The source said the bank has received substantial anonymous feedback on its employee assistance program, expressing thanks for the service.
Cass says the banks aren’t necessarily doing a better job of preventing substance abuse itself, but they are more accepting of abuse as a legitimate problem to be dealt with. Cass, who works closely with senior level executives on Wall Street and founded Catalyst based on his research that stockbrokers are at higher risk of substance abuse and other mental disorders than the general population, also says there is less paranoia nowadays among his clients to take advantage of the employee assistance programs.
Smart and Wealthy … So Why Do It?
Nestled in the lush environs of southern Connecticut, Silver Hill Hospital is just a short drive from Manhattan, but light years removed from the frenetic pace of Wall Street. Handsome homes that could easily be mistaken for small hotels dot the landscape, and there’s an air not only of great wealth, but luxurious peacefulness. It seems an odd place to find a full-service psychiatric and substance-abuse facility, but Silver Hill is one of the best.
The hospital doesn’t keep statistics on the financial wherewithal of its patients, but Dr. Sigurd Ackerman, president and medical director at Silver Hill, explained that insurance will cover the inpatient program but not the hospital’s residential program, which can typically run in excess of $20,000 a month. In other words, most of the hospital’s clientele is fairly well off.
So, why does a highly educated, well-compensated, sophisticated person get hooked on drugs?
“There are lots of reasons for first exposure that don’t have anything to do with intelligence,” Ackerman says. “Kids go to college and try different things; smart ones try it and less intelligent kids try it. But then there are a number of reasons why people can’t stop despite good jobs, good families, good money, all of those things. We don’t know all the answers, but we have some ideas.”
For starters, people differ in their genetic vulnerability to addiction or abuse. There are plenty of people who can use cocaine, for instance, once every couple of months and never get hooked, and lots who can use it once and simply can’t avoid the second and third try, and that’s partly based on genetics.
Ackerman also notes the behavioral psychology concept of “reinforcement.” From a neurological point of view, if a behavior leads to a pleasurable feeling it reinforces the behavior and it occurs again. When the behavior occurs over and over again, the brain is altered, creating the sense of craving.
“The chemical changes that occur drive the person to satisfy the craving and achieve the pleasurable state again,” he says. “When the brain is exposed to drugs, the brain changes. Once you’re addicted your brain is different. Even if you manage to go through rehab and get sober, your brain isn’t sober. It still wants the exposure to the drug, and cravings can persist. And even when (those cravings) get quiet, various re-exposures can re-elicit the craving.”
Cass says there are host of reasons his patients have succumbed to addiction – a deteriorating marriage, a few months of bad performance – but there is a common thread among the Wall Street types. “These people tend to be very self-critical,” Cass says. “They’re definitely driven and ambitious, but also harshly self-critical. They can be perfectionists, and when their expectations don’t meet up with the reality it can set them up for a crash.”
Meanwhile, for those already suffering from depression or anxiety, the knowledge that drugs and alcohol can relieve those feelings can also be a lure. A downturn in the markets, for instance, can be a powerful driver of abuse.
“Most of the people we see can’t kick it the first time,” Ackerman says. “The relapse rates are 75-80% for most alcohol and drug addiction. Certainly one way to decrease the problem, I think, would be through random drug testing. Of course, there are all sorts of problems with invasion of personal freedoms and individual rights -- it’s not simple -- but I think there are probably many people who are sitting on the fence who wouldn’t risk everything if they knew they might be risking everything.”
High-End Care
The idea of random drug testing of individuals in big brokerage firms might be a tough sell, but Wall Street as a whole has often been the focus of drug investigations. One of the biggest came in the late 1980s, when the Drug Enforcement Agency broke up a drug ring on the Street that included the arrest of more than a dozen people on charges of drug trafficking.
Robert Strang, the CEO of Investigative Management Group, was a special agent working undercover with the DEA at that time, and recalls cocaine being used as barter in deal-making. “It was almost how we use nice lunches and trips now,” he says. “It was really a big part of many deals on Wall Street, an added benefit if you wanted to choose that.”
Strang noted that back in the 1980s it was “pretty easy” to buy cocaine and heroin in places like New York’s alphabet city. To help build the DEA’s case, his job was to buy narcotics at the street level and follow couriers back to where the drugs were actually processed, typically in the Bronx or Brooklyn. (He says a scene in the current hit film “American Gangster,” in which workers at a heroin processing house are forced to work naked so they’d be less likely to steal drugs, is accurate. He’s seen it.)
“Then we started to realize that a lot of people buying were at the middle and upper-middle income levels, and many had jobs on Wall Street,” Strang says. “And that’s when we really realized how rampant the problem was, and not only for people who were down and out.”
One of the biggest differences now from when he was helping to run the DEA’s investigation, Strang says, is that today’s drugs are highly pure. “You can smoke heroin now, and in our society that’s a lot more acceptable. It’s opened up doors to those who didn’t want to stick a needle in their arm, which is part of the reason we see more people doing it.” Strang also agrees with Ackerman and Cass that there has been a dramatic increase of prescription drug abuse in recent years.
Investigative Management, which Strang formed with another former DEA agent back in 2003, is a private investigation company focusing on high-end clientele. He agrees that Wall Street companies have come a long way from the early 1990s in terms of how they deal with illegal drug issues, including pre-employment testing and more aggressive employee assistance programs. “If employees come forward on their own now about drug problems, the companies will back them up,” he says.
An area in which that might not be the case, however, is in senior-level positions. “They seem to slip between the cracks, because a lot of times people don’t want to discipline them, and they also don’t want them to go across the street to a different firm,” Strang says.
Investigative Management is typically called in on more sensitive cases. He says the banks want to help their employees get better – and they want them to remain productive – but it’s been his experience that, at least when his company is hired, the person involved not only has a serious substance abuse issue but also doesn’t want to admit it.
“We’re usually called in for the worst cases, when traditional rehab and intervention don’t work,” he says. “We’re really a last resort – we’re very customized, and it can be expensive, so it’s usually a life-and-death situation. But we have those cases often.”
Investigative Management offers private airplanes and upscale hotels in warm climates with private doctors. “The senior-level people may be more responsive to that than a typical 30-day program, and if you’re making a few million dollars a year you can afford to have customized service.” (Payment is also sometimes made by the company, depending on the situation.)
A Substance Abuse Revolution?
'Ron'’s introduction to Wall Street went something like this: “Here’s a credit card, I want you to be at Harry’s three nights a week.”
For the former senior VP at a bulge-bracket bank, that was the start of his descent into a personal hell. The popular downtown watering hole became a second home to the point that, over time, alcohol wasn’t enough. “What happened was that the alcohol didn’t work as much anymore, so you end up going to other stuff,” he says. For him, that meant cocaine.
“My bottom happened when there was no more to achieve,” he says. “I had four great kids, a huge house, a great job and everything was great – and that’s bad for an abuser,” he says.
During his time on the Street (he has returned to the financial-services industry but not in New York) Ron wasn’t going to be told he had a problem with drugs or alcohol. Now, he recognizes similar behavior in some employees at the firm where he works. It concerns him, but he says he would never “evangelize” people.
“It’s got to be initiated from the other side,” he says. “If you approach someone about their drinking or abuse and tell them they’re doing this and that, it can make it worse. I don’t inventory anyone else’s drinking; my disease is self-diagnosed.”
According to the National Institutes of Health, only 8% of people identified as drug abusers, and less than 40% of those diagnosed with drug dependence, have ever received any kind of intervention or treatment.
Wall Street doesn’t seem to have a problem with the likes of heroin or crack, but there’s no question it has a major problem with alcohol, and may very well with cocaine and prescription drugs.
“We have so much shame attached to it that people are afraid to admit it,” says CASA’s Califano. “I think we need a revolution in the way we think about it.”
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