Confessions of an Ivy League Frat Boy: Inside Dartmouth's Hazing Abuses

Culture: Confessions of an Ivy League Frat Boy: Inside Dartmouth's Hazing Abuses

By Janet Reitman
March 28, 2012 | 2:05pm

Long before Andrew Lohse became a pariah at Dartmouth College, he was just another scarily accomplished teenager with lofty ambitions. Five feet 10 with large blue eyes and the kind of sweet-faced demeanor that always earned him a pass, he grew up in the not-quite-rural, not-quite-suburban, decidedly middle-class town of Branchburg, New Jersey, and attended a public school where he made mostly A's, scored 2190 on his SATs and compiled an exhaustive list of extracurricular activities that included varsity lacrosse, model U.N. (he was president), National Honor Society, band, orchestra, Spanish club, debate and – on weekends – a special pre-college program at the Manhattan School of Music, where he received a degree in jazz bass. He also wrote songs; gigged semiprofessionally at restaurants throughout New York, New Jersey and Connecticut; played drums for a rock band; chased, and conquered, numerous girls; and by his high school graduation, in 2008, had reached the pinnacle of adolescent cool by dating "this really hot skanky cheerleader," as he puts it.

That fall, he enrolled at Dartmouth, where he had wanted to go for as long as he could remember. His late grandfather, Austin Lohse, had played football and lacrosse for Big Green, and both Andrew and his older brother, Jon, a Dartmouth junior, idolized him as the embodiment of the high-achieving, hard-drinking, fraternal ethos of the Dartmouth Man, or what Lohse calls a "true bro." A Dartmouth Man is a specific type of creature, and when I ask Lohse what constitutes true bro-ness, he provides an idealized portrait of white-male privilege: "good-looking, preppy, charismatic, excellent at cocktail parties, masculine, intelligent, wealthy (or soon to become so), a little bit rough around the edges" – not, in other words, a "douchey, superpolished Yalie."

A true bro, Lohse adds, can also drink inhuman amounts of beer, vomit profusely and keep on going, and perform a number of other hard-partying feats – Dartmouth provided the real-life inspiration for Animal House – that most people, including virtually all of Lohse's high school friends, would find astounding. This, like the high salaries that Dartmouth graduates command – the sixth-highest in the country, according to the most recent estimates – is a point of pride. "We win," is how one of Lohse's former buddies puts it.

On January 25th, Andrew Lohse took a major detour from the winning streak he'd been on for most of his life when, breaking with the Dartmouth code of omerta, he detailed some of the choicest bits of his college experience in an op-ed for the student paper The Dartmouth. "I was a member of a fraternity that asked pledges, in order to become a brother, to: swim in a kiddie pool of vomit, urine, fecal matter, semen and rotten food products; eat omelets made of vomit; chug cups of vinegar, which in one case caused a pledge to vomit blood; drink beer poured down fellow pledges' ass cracks... among other abuses," he wrote. He accused Dartmouth's storied Greek system – 17 fraternities, 11 sororities and three coed houses, to which roughly half of the student body belongs – of perpetuating a culture of "pervasive hazing, substance abuse and sexual assault," as well as an "intoxicating nihilism" that dominates campus social life. "One of the things I've learned at Dartmouth – one thing that sets a psychological precedent for many Dartmouth men – is that good people can do awful things to one another for absolutely no reason," he said. "Fraternity life is at the core of the college's human and cultural dysfunctions." Lohse concluded by recommending that Dartmouth overhaul its Greek system, and perhaps get rid of fraternities entirely.

This did not go over well. At a college where two-thirds of the upperclassmen are members of Greek houses, fraternities essentially control the social life on campus. To criticize Dartmouth's frats, which date back more than 150 years, is tantamount to criticizing Dartmouth itself, the smallest and most insular school in the Ivy League. Nestled on a picturesque campus in tiny Hanover, New Hampshire, the college has produced a long list of celebrated alumni – among them two Treasury secretaries (Timothy Geithner, '83, and Henry Paulson Jr., '68), a Labor secretary (Robert Reich, '68) and a hefty sampling of the one percent (including the CEOs of GE, eBay and Freddie Mac, and the former chairman of the Carlyle Group). Many of these titans of industry are products of the fraternity culture: Billionaire hedge-fund manager Stephen Mandel, who chairs Dartmouth's board of trustees, was a brother in Psi Upsilon, the oldest fraternity on campus. Jeffery Immelt, the CEO of GE, was a Phi Delt, as were a number of other prominent trustees, among them Morgan Stanley senior adviser R. Bradford Evans, billionaire oilman Trevor Rees-Jones and venture capitalist William W. Helman IV. Hank Paulson belonged to Lohse's fraternity, Sigma Alpha Epsilon, or SAE.

In response to Lohse's op-ed, the Dartmouth community let loose a torrent of vitriol against him on The Dartmouth's website. Lohse, it was decided, was "disgruntled" and a "criminal." His "blanket and bitter portrayal of the Greek system" was not only false, complained one alumnus, "but offensive to tens of thousands of Dartmouth alumni who cherished the memories of their fraternities." Another alumnus put it this way in a mock letter to a human-resources manager: "Dear Hiring Manager, do yourself a favor: Don't hire Andrew Lohse... He will bring disgrace to your institution, just as he did when he embarrassed Dartmouth and SAE." The consensus, as another alum put it: "If you don't want to be initiated, don't pledge."

Though two of Lohse's SAE brothers have confirmed his allegations are generally on the mark, the fraternity has turned on Lohse, portraying him as a calculating fabulist who bought into the Greek system wholeheartedly and then turned against it out of sheer vindictiveness. In a letter to Rolling Stone, SAE's lawyer, Harvey Silverglate, labeled some of Lohse's most extreme allegations "demonstrably untrue" and compared Lohse to the stripper who falsely accused a number of Duke lacrosse players of raping her in 2006. "Lohse is... a seemingly unstable individual," Silverglate wrote, "with a very poor reputation for truth-telling and a very big axe to grind."

This is not the first time that SAE has come under fire for hazing abuses, or the first time the house has closed ranks against an attack: In 2009, a member of the Dartmouth faculty accused the fraternity of making pledges chug milk and vinegar until they threw up. According to Lohse and two other SAE alums, the brothers agreed to deny the charges, and discussed in detail how to respond when questioned by college officials. This "culture of silence," as some on campus describe it, is both a product of the Greek system's ethos and the shield that enables it to operate with impunity.

"The fraternities here have a tremendous sense of entitlement – a different entitlement than you find at Harvard or other Ivy League schools," says Michael Bronski, a Dartmouth professor of women's and gender studies. "Their members are secure that they have bright futures, and they just don't care. I actually see the culture as being predicated on hazing. There's a level of violence at the heart of it that would be completely unacceptable anywhere else, but here, it's just the way things are."

Not so long ago, hazing was viewed at many universities as nothing but pranks, which deans might have privately deplored but nonetheless tolerated. Today, hazing is illegal in 44 states, including New Hampshire – and many colleges have aggressively cracked down on fraternity abuses. Those that failed to do so have increasingly found themselves on the wrong side of the law. Last spring, Yale became the subject of a federal Title IX investigation after a group of 16 current and former students accused the school of creating a "hostile environment" for women, citing a prank in which the pledges of Delta Kappa Epsilon, the same fraternity that boasted both Bush presidents as members, paraded outside the Yale campus chanting, "No means yes! Yes means anal!" Only a few months earlier, in February 2011, a 19-year-old Cornell sophomore died of alcohol poisoning after taking part in an SAE hazing ritual. In response, the boy's mother filed a $25 million lawsuit against SAE, Cornell shuttered its chapter, and the president of the university directed the college's Greek organizations to end the pledging process, effective fall 2012.

Alarmed by the skyrocketing rate of binge drinking, which studies show is nearly twice as high among fraternity residents, a growing number of colleges have opted to kick frats off campus or do away with them altogether. Williams College was the first to shutter its fraternities, in the 1960s, and many others have since followed suit, including Amherst, Bowdoin, Colby and Middlebury. But Dartmouth, whose unofficial motto is "Lest the Old Traditions Fail," has resisted that transformation, just as it has stood fast against many other movements for social and political progress. Dartmouth was one of the last of the Ivies to admit women, in 1972, and only in the face of fierce resistance from alumni. In 1986, conservative students armed with sledgehammers attacked a village of symbolic shanties erected on campus to protest South African apartheid. More recently, students assailed members of an Occupy vigil at Dartmouth, heckling them with cries of "Faggots! Occupy my asshole!"

"Dartmouth is a very appearance-oriented place," sophomore Becca Rothfeld tells me when I visit the campus in February. "As long as everything is all right superficially, no one is willing to inquire as to the reality of the situation. Everyone knows that hazing goes on, but no one wants to discuss it – just like they don't want to talk about racism, sexism, homophobia, classism." She shrugs, apparently resigned to the situation. "People don't really talk about things at Dartmouth, let alone argue or get outraged about them."

This winter, in the wake of Lohse's op-ed, 105 Dartmouth professors, concerned about this entrenched mindset of avoidance, signed a letter condemning hazing as "moral thuggery" and urged the college to overhaul the Greek system. It was the faculty's third concerted effort to reform the system since the 1990s. Dissent, a signature part of the undergraduate experience at many liberal-arts colleges, is, at Dartmouth, common only to the faculty. "No matter what your actual 'Dartmouth Experience' is, everyone usually falls in line and says, 'Yes, we all love Dartmouth,'" laments English professor Ivy Schweitzer, who has taught at the college for 29 years. "It's really a very corporate way of thinking."

Within the Ivy League, Dartmouth is considered the most "corporate" of the schools, with a reputation for sending graduates to Wall Street and the upper echelons of the corporate world. Statistics show that roughly a quarter of each graduating class find jobs in finance and business – a figure many students consider low, given Dartmouth's prominent ties to its Wall Street alumni, who often come back to campus to recruit. "I've been at our house when a senior partner from a financial-services firm and a chief recruiter from someplace like Bain are standing around drinking with us as we haze our pledges," says senior Nathan Gusdorf. (In the kind of irony rife at Dartmouth, Gusdorf is an organizer of Dartmouth's Occupy movement as well as a brother in Zeta Psi, a house that was "de-recognized" by the college for 10 years after it circulated a newsletter in which some of the brothers promised to reveal "patented date-rape techniques.") "Presumably, you would find a lot of drinking and plenty of frat boys at any university," says Gusdorf, "but here, drunk frat boys are handed so much power right off the bat. People do incredibly bad things to one another here, because they know they're going to get away with it."

That attitude of inherent entitlement often carries over after graduation. "One of the few dependable ways into the one percent is via these elite feeder systems, like Dartmouth," says David Rothkopf, a visiting scholar at the Carnegie Endowment for International Peace and the author of Power Inc., which examines the influence wielded by multinational corporations in the global era. "These schools are about their role as networked conduits to the top as much as they are about education."

Or, as one of Lohse's SAE brothers puts it: "Having a 3.7 and being the president of a hard-guy frat is far more valuable than having a 4.0 and being independent when it comes to going to a place like Goldman Sachs. And that corporate milieu mirrors the fraternity culture."

On a warm February afternoon, I visit Andrew Lohse at his mother's house in Brattleboro, Vermont. Almost 22, he is a handsome kid with tousled brown hair and a polite, almost self-effacing manner. The aggressively preppy look he once favored – ratty Oxford shirts and Nantucket Reds, a style one of Lohse's former friends refers to as "go-fuck-yourself" fashion – has been significantly toned down. In the dining room, his Macbook sits on a table surrounded by legal pads, newspapers and books by Noam Chomsky, F. Scott Fitzgerald and Jay McInerney. He's writing a memoir: a "generational tale" that he hopes will be part Bright Lights, Big City, part The Sun Also Rises and part This Side of Paradise, and describes as "a one-way ticket to the secret violence at the heart of the baptismal rites of the new elite." At which point he stops himself. "I bet that sounds incredibly douchey and brash and stupid."

Lohse is a highly self-aware young man who nonetheless came to Dartmouth filled with what he now sees as stupid ideas. His goal, he says, was to raise his station in life as much as his grandfather, a man of humble stock who became a wealthy banker, had done by forging powerful connections. "I read a lot of Fitzgerald before I came to college," Lohse says, "and I guess I wanted to be like that, like a character. I took the idea of creating an identity really seriously. But it wasn't really me. I'm just a regular kid from Nowhere, New Jersey."

In some ways, Dartmouth's own history centers on the concept of identity. Founded in 1769 by a Congregational minister, Eleazar Wheelock, its initial mission was to educate the local Abenaki Indians, a dream that was never realized. Instead, Dartmouth became a college for wealthy white boys who adopted the Indian as their mascot and "Wah-hoo-wah!" as their war cry. They also drank heavily: One cherished facet of the Wheelock myth is that he "tamed" the Indians with New England rum. "It's all a false sense of history," says Lohse. "But it's also very tied into this idea that by going to Dartmouth you're being 'tamed' and civilized and ultimately made into a member of the upper class."

Like most Dartmouth students, Lohse began his journey into this exclusive society just prior to the start of his freshman year, with a five-day wilderness orientation called Trips. This is a Dartmouth tradition, where students hike, kayak, mountain bike or otherwise explore the White Mountains for a few days, winding up at the Dartmouth-owned Moosilauke Ravine Lodge, or the "lodj," where they gather for a communal dinner, followed by song-and-dance routines, and they are even asked to sit on the floor and listen to ghost stories. "Hazed into happiness" is how Gusdorf puts it.

Lohse found the experience both exhilarating and disconcerting. "There is a very specific message you get on Trips," he says, "which is 'We're all your friends, you're part of this awesome new world of Dartmouth, and if you're not having the absolute best time of your life, then there's something really wrong with you.' You are immediately assimilated into this homogeneous way of thinking, where you can't see any of it as uncomfortable or weird, even though it is." One facet of the Trips experience is being served green eggs and ham in the "lodj" and reading Dr. Seuss (a Dartmouth alum, whose real name was Theodor Geisel). "It's like they reduce you to a child in order to remake you," says Lohse. "And then you're in on the joke. You go to one of the best schools in America and you sit on the floor and eat green eggs and ham... and you're going to run the world really soon."

Lohse understood that to enter this privileged class requires one to make the appropriate connections, and he immediately set about trying to forge them. As a freshman, he contributed to The Dartmouth Review, the college's staunchly conservative newspaper, founded by a group of young neocons in 1980. He also began to develop his "rush strategy" to prepare for joining a fraternity. "Deciding which fraternity to pledge is the most important political decision a Dartmouth man will make," says Lohse.

It is also, for many, a social necessity. For a college town, Hanover is a fairly boring place to spend four years. Its one main street is lined with cute cafes and high-end shops, but offers virtually no student diversions beyond a movie theater. This leaves the fraternities, whose parties are open to all. Fraternities (unlike sororities, most of which are dry) also happen to be the only campus entities that serve alcohol to minors, which about 70 percent of Dartmouth undergrads happen to be. And the beer is free: Brothers pay for it out of their social dues, with houses sometimes blowing $25,000 per term on beer and other forms of entertainment. Roughly half of Dartmouth's 4,200 students may be affiliated with a Greek organization, but the other half takes part in the system by default.

In high school, Lohse had never been much of a partier. "I never drank before coming to Dartmouth," he says. "I mean, I cut school to go to a John McCain rally." But he knew he'd have to master his aversion to alcohol to gain any kind of traction. According to the National Institute on Alcohol Abuse and Alcoholism, the conventional definition of a "binge" is five drinks in a two-hour period for men. Dartmouth frat boys pride themselves on being able to drink six cups of beer in less than 30 seconds – it's called a "quick six," and requires a person to literally open their gullet and pour the liquid down. There is a YouTube video in which a Dartmouth student does this in less than 10 seconds, but even this feat may not be a record.

All of this binge boozing leads inevitably to binge vomiting. Puking and then continuing to drink – the term is "boot and rally" – is an indelible part of Dartmouth social culture, heralded by successive classes of students. "You're horrified at first, but then you get used to it," says Lohse. "There's a certain way of doing things at Dartmouth, and if you want to succeed, you just have to do it that way."

Lohse had been introduced to the Dartmouth frat culture in high school, while visiting his brother, Jon, a member of Sigma Phi Epsilon. It was in Sig Ep's basement where Andrew, then 16, first encountered pong, Dartmouth's signature drinking game, played with sawed-off paddles and "about five times as much beer as you play with at other colleges." Fraternity basements, legendary for their grottiness, are elevated to a whole new level at Dartmouth. Their precise pungency is hard to describe: urine, vomit, stale beer and sour food, all combined in layers of caked sludge, which emits a noxious odor that can linger on your skin for days. Lohse was grossed out. "I was standing under this dripping pipe, looking at people drinking this watery Keystone Light beer, and I felt cheated," he says.

But Lohse still desperately wanted to pledge. Since Dartmouth students can't formally join a fraternity until their sophomore year, he and his friends cruised a number of frats as freshmen, trying to decide which house to rush. Alpha Delta, the infamous Animal House frat, was pretty much out of the question, as were the other elite or "A side" houses on campus, since they recruited jocks and prep-school types who "would have seen right through me," says Lohse. In a way, he was relieved. Rumors about hazing abounded. One fraternity reportedly beat their pledges; another was said to place them in dog crates while the brothers vomited on them. Another frat ordered its new members to crawl between the legs of a line of naked brothers, "with, you know, their ball sacks flapping on their heads." A fourth was rumored to require its pledges to have sex with a frozen turkey.

That left SAE. it had a reputation as a somewhat louche, not particularly athletic fraternity for rich boys, who often wound up "tapped" to join one of Dartmouth's elite senior societies – frats within frats that offer a special inroad to the country's future movers and shakers. Lohse made SAE his first choice.

He wasn't a shoo-in, by any means. "Andrew was a polarizing figure from day one," says a brother. The more conservative members of the house were strongly opposed to Lohse, who had quit The Dartmouth Review midway through his freshman year and had gone to write for its rival, the liberal Dartmouth Free Press. This was heresy in the eyes of his Review colleagues, some of whom were also in SAE. "They came very close to ding-ing him," recalls an SAE brother. Lohse only received a "bid," or offer to pledge the frat, after several brothers came to his defense, citing his popularity with women. A friend recalls walking into Lohse's room one night to find a girl in his bed, alone, while Lohse was in bed with another girl down the hall.

One night in October 2009, early in his sophomore year, Lohse was studying in his dorm room when he heard someone pounding on his door. A senior stood at the threshold. "You and you," he said, pointing to Lohse and one of his roommates. "Blindfolds. Follow me. Be silent." The boys dutifully did as they were told, grabbing ties to wrap around their eyes and following the older brother down the stairs and into a waiting car. "Shut the fuck up right now!" a brother in the front seat barked, shoving a bottle into Lohse's hands and ordering him to drink. It was MD 20/20, known as Mad Dog, the toxic beverage whose high alcohol content – 13 percent – and cheapness has made it popular with homeless men and hard-partying college boys everywhere. Lohse chugged. The stuff tasted like Lysol.

The pledges were driven to a remote spot across the Vermont border, where they were marched up a wooded trail and into a clearing. A group of SAE brothers stood before them, lit by a tiki torch. "Who among you most deserves a bid and why?" they asked. Lohse looked around as 10 sophomores scribbled down on paper why they deserved to be chosen. Then a brother handed each of them a bottle of Boone's Farm Blue Hawaiian – a Windex-colored cohort of Mad Dog – and told them that whoever drank it the fastest got to remain. You go to Dartmouth, Lohse told himself as he pounded the Boone's. You don't lose.

Later that night, Lohse, now very drunk, faced a Review brother who had wanted to blackball him. The brother held Lohse's embossed bid card in one hand and a lighter in the other. Ten cups of beer sat on a table. "Do a quick six in the time it takes for this to burn," he told Lohse, setting the bid card on fire. "Go!" Lohse chugged, but was only up to his third cup when time ran out. Seeing his future go up in flames, Lohse vomited all over himself – at which point the brothers told him they were just kidding.

Lohse was given the pledge name "Regina," after the character in Mean Girls, in honor of his aggressive social climbing. During his seven-week pledge term, he and his fellow SAE pledges, known as "whale shits," were on call to cater to the whims of the brothers. Most of the formal "hazing" was reserved for meetings and challenges: Pledges would be required to perform endless "quick sixes," recite SAE's creed, "The True Gentleman," while lying in a kiddie pool full of ice, or take shots of mystery alcohol while being quizzed on arcane fraternity lore. (This same ritual, with the addition of tying the pledge's hands and feet with zip ties, led to the death of Cornell sophomore George Desdunes, the SAE pledge who died last February.) There were also "milk meetings," where pledges were asked to chug a gallon of milk in 20 minutes, which always resulted in plentiful booting. "You get points for how many times you booted on other people," says Lohse, who adds that the pledge trainers kept count while they sat on large throne-like chairs in a basement room. One brother recalls the night some of the pledges were served a scramble of vomit and eggs, known as a "vomlet."

"Andrew kicked ass at pledge term, did everything required of him and then some," one SAE brother says. But Lohse also began to complain, quietly at first, to a few sympathetic older SAEs. Why did smart, decent people who were supposed to be "brothers" have to do this to one another? Why did he need to debase himself like this just to belong to a group? Lohse, recalls one brother, "implored some of the guys to tone it down a bit. No one listened to him."

"Sink Night," when new initiates affirm, or "sink," their commitment to a fraternity, was particularly brutal. Lohse recalls the evening in hazy images: lit candles, blacked-out windows, a relentless pounding on the walls of the elegant pool room of the SAE house, where the pledges- spent more than an hour standing in a circle around the pool table in total silence, as brothers burst in and out of the room, forcing them to down bottles of Mad Dog. Lohse remembers the intimidating feel of shirtless male bodies standing around him as he was interrogated in a brother's room, where he was ordered to drink three shots and recite SAE's three cardinal rules: What happens in the house stays in the house. Trust the brotherhood. Always protect your pledge brothers.

At last, he and the other whale shits were escorted to the basement, where they were formally baptized as SAE pledges in a kiddie pool filled with a noxious sludge. "By that point you are really, really drunk – which is the point, because if you weren't, you'd never get in it," says Lohse, who was later told that brothers had peed, defecated, vomited and ejaculated into the pool. His account of the kiddie pool has been almost universally contested by others who took part; according to an SAE brother, the pool was actually filled with food products like water, bread, vinegar, soy sauce, salsa and hot dogs. "When you mix all that stuff together, it smells really gross," the ex-brother says. "And when you're in it, you don't know what it is. We let the pledges' imaginations get the best of them." Lohse, for his part, hasn't backed down. "I know this because I watched them make the batch for the 2011 term," he says. "We were told they needed a few more guys to piss and boot in it."

Such rituals were not restricted to SAE. One student tells me that during his pledge term, the brothers in his house set up a tarp in the fraternity basement, covered it in vomit, and made the pledges do a "slip and slide." He loved it. "Everyone peed on it and threw in their chaw," he says. "I thought it was great. I did it 10 times. But I was getting kind of cut up, so the pledge trainer told me I really should stop so I wouldn't get too many infections."

Ritualized vomiting was simply part of brotherly life. SAE has a "boot room," which is essentially a bathroom where brothers in the midst of a rigorous game of pong can stick their finger down their throat – the term is "pulling the trigger" – and then resume the game. At some houses, pledges are not allowed to pull their own triggers, but must get a friend to do it for them. "It's all about the challenge," says one of Lohse's SAE brothers. A game that is played at nearly every Dartmouth fraternity is called Thunderdome, or Dome. The entire goal of the two-man contest is to make the other person drink until he vomits – at which point the winner "claims his right" by throwing up on the loser.

"You don't learn about Doming until you become a brother," says Lohse. "When you realize you're going to have to do this, it's really shocking." SAE, he adds, was never as strict about the "boot on his head" thing as other houses, though it did take place sometimes – "I've been booted on and booted on others," he says. (Another SAE brother confirmed, "Everyone in the house was encouraged to vomit on each other, but the act of actually vomiting on another individual happened only rarely.")

So internalized did these rituals become that even long-graduated brothers reflect on Dome, and other games, with fondness. "Seeing two friends pulling each other's trigger was one of the most glorious things I've ever seen in my life," says Snowden Wright, an SAE brother who graduated in 2004. "It was like two kittens licking each other clean. Pure friendship." I assume Wright is kidding; he assures me he isn't.

By the end of his pledge term, Andrew Lohse had vomited so much that the enamel on his teeth had largely burned away. But he was now a full-fledged brother, and he threw himself into fraternity culture, adopting an attitude that one former friend calls "the frat star who didn't give a fuck."

Throughout his sophomore year, Lohse lived up to every facet of debauchery he could conjure, from hooking up with multiple women to making sure he was the last to leave the basement at 3 or 4 a.m. "There was a nihilistic quality to Andrew," says Aimee Le, a senior who befriended Lohse in his sophomore year. "The difference between Andrew and his fraternity brothers was that most of the other brothers would try to justify their actions to themselves. Andrew wouldn't even bother."

Hazing left its mark on some of Lohse's brothers; one confided to Lohse that he had sought counseling, haunted by traumas like vomlet. Yet that same brother later hazed the next class of pledges. "It's a vicious cycle, but it's how hazing works," says Lohse. "You accepted this was the culture at Dartmouth, and if you wanted to advance in the culture, you got with the program."

Brothers aren't the only ones injured by this unspoken pact around fraternity life. Sexual assault is rampant at Dartmouth; some female students say they circulate the names of men considered "dangerous" and fraternity houses viewed as "unsafe." Between 2008 and 2010, according to the college's official statistics, Dartmouth averaged about 15 reports of sexual assault each year among its 6,000 students. Brown, a school with 8,500 students, averaged eight assaults; Harvard, with 21,000 students, had 21. And those numbers are likely just a fraction of the actual count: One study showed that 95 percent of all sexual assaults among college students are never reported. In 2006, Dartmouth's Sexual Abuse Awareness Program estimated that there were actually 109 incidents on campus.

"It's depressing coming of age here," says Deanna Portero, a senior from New York. While Dartmouth has an equal ratio of men to women, she says, it often feels as though nothing has changed since the 1970s. Today, a girl who wants to play pong at a frat party can do so only if she plays with a brother. Not to play is prudish; to be someone's pong partner, though, "generally means you're going to hook up with him afterwards," says Portero. "And if you don't like it, 'Fuck you – don't drink our beer.'"

Nearly every woman I speak to on campus complains of the predatory nature of the fraternities and the dangers that go beyond drinking. "There are always a few guys in every house who are known to use date-rape drugs," says Stewart Towle, a member of Sigma Nu, who de-pledged in 2011 because of a number of practices he considered dehumanizing. He says some fraternities would remove an intoxicated person from their house before making a "Good Sam" call to campus security to inform them that the person may have alcohol poisoning. Dartmouth's policy states that there will be no repercussions on either the students who made the call, or the student for whom the call was being made. However, whoever gave that student alcohol could still get in trouble with the police – and in the case of a fraternity, this might result in a fine of up to $100,000. As a result, many fraternities tend to make sure the drunken person is well outside the house before calling security.

One senior, who I'll call Lisa, was "curbed" in this manner the second night of her freshman year. She'd been invited to a fraternity by one of its members. Thinking it an honor, Lisa enthusiastically accepted, and once she got there, she had two drinks. The next thing she remembers is waking up in the hospital with an IV in her arm. "Apparently, security found me in front of the house. That was my introduction to the frats: passing out from drinking, waking up in the hospital and not having any idea what happened." What she did notice were bruises that looked like bites on her chest that hadn't been there before. "To be very honest," she says, "I didn't really want to know what actually happened."

Dani Levin is the president of the Sigma Delta sorority, and a peer sexual-assault counselor. "I get calls almost every weekend," she says. During the few days I was in Hanover, she received several, including one from a woman who said she'd been assaulted, and then threatened by her assailant's fraternity brothers not to tell anyone.

Incidents like this are not lost on Dartmouth administrators. Last spring, college president Jim Yong Kim, an anthropologist, medical doctor and the co-founder of the international NGO Partners in Health, established an intercollegiate collaborative known as the National College Health Improvement Project to study high-risk drinking in the same way that Kim approached communicable diseases in Rwanda and Peru. The group is slated to report its findings next year. "We don't expect to have solutions," says Dartmouth spokesman Justin Anderson, "but what we will have is a ton of data and ways to measure the results."

For many in the Dartmouth community, this data-driven approach falls short. "I just don't see that working at all," says Joe Asch, a former Bain consultant and Dartmouth alum who is the lead writer for Dartblog, a site that covers Dartmouth politics. "It all makes for great PR, but this is about a group of college administrators who've all tried different approaches to a serious problem on their campuses, none of which have made a dent." Even more crucially, such initiatives are not directed at fraternity culture itself, which many see as the heart of the problem.

Besides, say many at Dartmouth, the chances that the school will actually change its approach to fraternities seems slim. Kim, whose three-story mansion sits on Fraternity Row, is a strong supporter of the Greek system; he has suggested on several occasions that fraternity membership may have health benefits, citing studies that show that people with long-standing friendships suffer fewer heart attacks. In a strange abdication of authority, Kim even professes to have little influence over the fraternities. "I barely have any power," he told The Dartmouth in a recent interview. "I'm a convener."

In reality, Kim is one of the only officials in a position to regulate the fraternities. More than half of Dartmouth's frats are "local" – houses that split off from their national organizations years ago, and are thus unaccountable to any standards other than those set by the college and their boards.

This autonomy, coupled with large endowments – SAE, which retains its ties to the national body, has, by one estimate, more than $1 million in a trust – makes the fraternities a potent power base. Kim's predecessor, James Wright, was appointed Dartmouth's 16th president in 1998 and embarked on a plan to end the Greek system "as we know it" by requiring fraternities to substantially go coed. In response, 1,000 irate students marched on Wright's house and held protest rallies in which they accused the once-popular president, himself a Dartmouth alum, of treason. "Judas, Brutus, Arnold, Wright," read a banner that hung from the window of one fraternity house. Wright declined to elaborate on the conflict, other than to tell me there was "push back" from both alumni and fraternities over his proposal; by July 1999, he had backed off. Instead, he implemented an infinitely softer set of reforms. "It was a whitewash," says Professor Ivy Schweitzer.

Kim – who was recently nominated by the Obama administration to head the World Bank – was initially seen as a potential challenge to the status quo. But instead, he's proven to be just the opposite. Not long after he took office, Kim met with Dartmouth alums and reassured them he had no intention of overhauling the fraternities. "One of the things you learn as an anthropologist," he said, "you don't come in and change the culture."

Throughout his sophomore year, Lohse ran, desperately by his own admission, for a multitude of political offices available at SAE. Yet with the exception of a short stint as a "rush chair," where he "sold the lie" to new pledges, hardly anyone voted for him. "He had a temper and a reputation of being kind of too big for his shoes," says a former brother.

"I guess it started to dawn on me that most of the SAEs didn't really like me," Lohse says. "And then I realized that I had been forcing myself to like them."

Lohse did become close with two popular seniors who openly flouted house rules by bringing cocaine into SAE, which they often snorted with Lohse in their spacious suite on the third floor. As with all fraternities, drugs were by no means uncommon at SAE, but coke had a particular cachet; one of the seniors most fond of the drug would promote it to his brothers as a sign of one's elitism. "He used to say it was the 'white-collar' drug," says Lohse, "where weed was 'blue-collar.'"

Not all members approved of the drug use, though. In May 2010, toward the end of Lohse's sophomore year, a straight-laced ROTC cadet named Phil Aubart caught Lohse and another brother snorting lines off a composite photo of SAE grads, in the house's pool room. Aubart called Dartmouth security, who notified the police. Lohse was charged with cocaine possession and witness tampering – a charge that he incurred for pouring a cup of beer on Aubart's door and allegedly spitting on him in retaliation. Other brothers, who considered Aubart a "snitch," destroyed a table he had built, peed on his socks and sent him threatening e-mails. Aubart ultimately moved out of the fraternity, severing his ties with SAE.

Lohse, who was still a sophomore, pleaded no contest to the charges and received a $750 fine. While the brother busted with Lohse went on to graduate, Lohse was suspended from Dartmouth for a year. "The hypocrisy in that bothered me," Lohse says. "We made bad choices, but I was doing drugs – I wasn't harming other people. There are aspects of Dartmouth's culture that do harm people, that are just corrupt to the core, and nothing happens."

That November, living at home and angry over what he saw as the unfairness of his predicament, Lohse quietly visited the campus to report SAE for hazing. He had been encouraged to make the move by several friends and by his brother, Jon, who had quit his own fraternity during his senior year. Lohse met with Dartmouth's associate dean for campus life, April Thompson, and David Spalding, Kim's chief of staff, who was a brother at Alpha Delta of Animal House infamy. He told himself the move was in the fraternity's – and Dartmouth's – best interests. "I saw my role as a reformer," he says. "I would argue that making these issues front and center is a very positive thing to do."

Telling none of his friends or fraternity brothers that he was in Hanover, Lohse presented the school officials with a "dossier of fraternity-hazing and substance-abuse-related- information." For well over an hour, he detailed his experiences and even named names; at one point, he showed the administrators a photo of his pledge class standing in front of a table holding more than 550 cups of beer, explaining that evening's mission: to consume all of it. Spalding, Lohse says, "was aghast."

But Lohse "still clung to the idea that things could be different without me having to be truly public" – in part, he says, to protect himself from the kind of retaliation Aubart endured after informing on Lohse and the other SAEs. Both Thompson and Spalding assured Lohse that protecting his anonymity would be "a priority," he says. "I thought I could reform SAE on the inside," he says. "I never saw it as 'narcing' on them."

Two weeks passed without word from anyone at Dartmouth. Just after Thanksgiving, Lohse e-mailed Thompson to follow up. He was told that, acting on the information he had provided about SAE's upcoming "Hell Night," the last and traditionally most intense night of the pledge term, the Hanover police were preparing to stage a sting operation in the hopes of catching the fraternity breaking the law. Lohse responded with a lengthy e-mail, arguing that focusing on one fraternity would do nothing to prompt a sweeping overhaul of the Greek system.

The sting, in fact, proved to be a failure: The cops had tried to bust the brothers in the act of hazing pledges in a public place, but all they saw that night was a bunch of drunken kids near a statue of Robert Frost, reciting the code of the True Gentleman. "We're not idiots," says an SAE brother. "The stuff we do outside can't be seen as hazing." Lohse believed the fraternity had been tipped off – and indeed, Spalding later told The Dartmouth that administrators had discussed plans for Hell Night with the president of SAE to ensure that the event would not violate the college's hazing policy.

Counseled by his brother and his friends, Lohse decided to force the college's hand by going to the media. On the advice of Professor Bronski, who had written for The Village Voice, Lohse even tried to set up meetings with reporters from The Boston Globe and The New York Times. But at the last minute, Lohse backed off. "I wasn't ready," he says. "A part of me still wanted to go back to Dartmouth and return to my fraternity and party." That winter he took off for Asia, where he spent a few months traveling with his brother and working for a small NGO in Nepal. He continued to e-mail Thompson, asking about the status of the investigation, but says she failed to respond. He also says he began getting his act together. "The longer I stayed away, the less I drank," he says, "and the less I felt like the person I was at Dartmouth."

Lohse returned to Hanover last summer, to prepare for his junior year. He also returned to SAE, where he was still a brother, even if one now tainted by a cocaine bust. "He told everyone he'd traveled the world and was a changed person," says a former friend. "But he was still drinking and smoking weed, still actively pursuing all the things that had gotten him in trouble to begin with." To some, Lohse still seemed furious by what had happened to him. "Andrew has the full weight of the law brought down upon him, gets suspended and gets angrier at something he had already been really angry about," says an SAE brother.

Lohse channeled some of his rage by becoming a columnist for The Dartmouth, where he took on subjects like Dartmouth's culture of corporate recruiting, describing it in one op-ed as having "siphoned off some of our great minds into a dead-end field that sanitizes the intellect, offers almost nothing to human society and conditions people to act in ways that are decidedly inhuman." At the same time, he clung, albeit tepidly, to his identity as a "true bro." Last October, right before fall rush, he wrote a column extolling the fraternal experience: "I must concede that, happily or tragically, many of my most poignant experiences here have dealt with fraternity life [and] I've been trying to come to terms with them all – and with how I let those experiences become too tightly entwined with my identity." His advice to those who pledged was to support one another. "Don't forget who you are and don't be consumed by who you think you are becoming," he wrote. "Trust me, the two will never be as distinct as you are led to believe."

But Lohse himself was spiraling downward. After being out in the "real world" and traveling in Asia, which he describes as an "awakening," he now had trouble taking Dartmouth seriously, with its petty fraternity politics and drinking culture. Feeling ostracized by his fellow students, he fell into a depression he calls a "toxic mixture of anxiety and alienation." Some former friends recall Lohse himself as the polarizing force: He would show up drunk at people's doors at 3 a.m., or spend half the night on a desperate search for drugs. "The problem with Andrew is he's always the victim, he doesn't take responsibility for what he does," says one of his former buddies. "But you always want to give him the benefit of the doubt because he's so charismatic. You get high with Andrew Lohse, and all of a sudden he's on a 20-minute tangent about literature and liberal politics, and he's fascinating and exciting to be around, and makes you believe that you can do great things, because he wants to do great things. But one by one, I think a lot of his friends just gave up."

By homecoming weekend, Lohse had descended to the darkest place he'd ever known. "The harder I tried to believe in it all, the more I couldn't, until I just cracked," he says. "I might have drank myself to death there, I just hated it so much."

The Thursday night of homecoming is SAE's annual champagne formal, which Lohse attended, already drunk on red wine. He then proceeded to drink almost two bottles of champagne, followed by lots of bourbon and multiple beers. By 6 a.m., most of the SAE brothers had passed out, and Lohse and some of the pledges took off for breakfast.

In the story he tells of this incident, Lohse was walking across the college green, near a roped-off area where the annual homecoming bonfire would be held the next night. As he cut across the "restricted area," a campus security guard ordered the boys to leave. What followed was, depending on one's reading, a profound expression of drunken entitlement, or "an existential act of rebellion," as Lohse maintains. "I can walk wherever I want to walk," he told the guard. Then he picked up a plastic folding chair and tossed it in her direction.

Lohse was escorted to the college infirmary and given a Breathalyzer, which registered his blood-alcohol level at 0.24 – three times the legal limit. Arrested for disorderly conduct, he was handcuffed and taken to the county jail. Sitting on a bench, waiting for his mother, he considered what had become of the overachieving boy who followed his grandfather to the Ivy League. Whatever the true nature of the Dartmouth Man, he had consumed what remained of Andrew Lohse.

The week after his arrest, Lohse withdrew from Dartmouth on "medical leave," an indeterminate timeout often taken by students with eating disorders or drug or alcohol problems. "The day I left, I said goodbye to a guy I thought was one of my best friends, and told him I had a problem," Lohse recalls. "He told me with the way everyone drinks, he had no way to tell who had an alcohol problem." Back at his mother's house, Lohse enrolled in an outpatient rehab program. By Christmas, he'd recovered sufficiently to decide that he was ready to take the action his brother and friends had long advocated. "It didn't feel right until I tried to close my eyes to everything I knew and realized it was impossible," he says. "I just wasn't afraid of the backlash any longer."

The idea of an editorial came slowly; Lohse wrote between 15 and 20 drafts. Finally, one day in January, he sat down and "just crushed it out." After submitting it to his editors, who fact-checked his allegations thoroughly, he phoned his three closest brothers at SAE. One never returned his call. The second was terrified about what his parents and future employer might think – he had just secured a job at a leading Wall Street firm. But the third turned on Lohse. "He launched into a tirade about how I was a traitor," Lohse recalls.

Lohse tried to calm the brother down. "Do you think all the stuff the house did, like the vomlet, was good?" he asked. "Or beneficial?"

The brother became even more enraged. "I ate the vomlet!" he yelled. "I made other pledges eat it! That's brotherhood!"

In the months since he wrote his article, Lohse has virtually lost all of his Dartmouth friends. "I felt like an idiot because I'd defended him," says one brother in a rival fraternity, "and here he was, throwing

@WSJ Watching the Ivory Tower Topple, the growth of online education #li

Watching the Ivory Tower Topple

Turn down the Rihanna. No more bikinis and beer. Spring break is winding down, and college students are heading back to campus—which, if they're at a name-brand school, is the one place, whatever their actual smarts or behavior, that guarantees them approval. Kids don't put Harvard stickers on their rear windshields, parents do.

But for how long? These schools have much to recommend them: impressive students, organic dining halls, presidential alumni. To maintain their reputations, however, elite colleges have long relied on limiting access—Harvard's class of 2015 is about 1,700 students, Yale's is 1,300—and that may be coming to an end. Revolutionaries outside the ivy walls are hammering their way not onto campus but straight into class.

FINN
Alamy

Elite schools have long relied on limiting access—but for how long?

It's a thrilling collegiate coup. Last fall, a couple of hundred Stanford students registered for Sebastian Thrun's class on artificial intelligence. He offered the course free online, too, through his new company Udacity, and 160,000 students signed up. For the written assignments and exams, both groups got identical questions—and 210 students got a perfect overall score. They all came from the online group.

So if you bluffed your way into the Ivy League with plumped-up credentials or an essay edited by somebody else, it's time to start breaking a sweat.

"I like to compare it to film," Mr. Thrun told me at a coffee shop between Stanford and Mountain View, Calif., where his day job is running Google X, the company's experimental lab. "Before film there was theater—small casting companies reaching 300 people at a time. Then celluloid was invented, and you could record something and replicate it. A good movie wouldn't reach 300 but 3,000, and soon 300,000 and soon three million. That changed the economics."

It is education's time to change now. At the high-school level, interactive study sites are increasingly ingenious: Look at Piazza, Blackboard and Quizlet, founded by a 17-year-old. TED-Ed just launched a channel on You Tube, with three- to 10-minute lessons for kids. YouTube's EDU Portal has been viewed 22 billion times. Khan Academy, a favorite of Bill Gates, has four million unique users a month and thousands of educational videos, from "Napoleon's Peninsular Campaigns" to "Python Lists." If you think that last one is about snakes, please download Khan's new iPad app immediately.

The next big thing, though, is college-level MOOCs and MOOSes: Massive Open Online Courses and Seminars. Harvard already showcases coursework like professor Michael Sandel's "Justice" lectures online, gratis. Now Georgia Institute of Technology, MIT, Stanford and others are offering advanced online courses, some with accreditation.

"The current search for new educational funnels must be reversed," wrote Austrian philosopher Ivan Illich, in "Deschooling Society." He called for "educational webs" woven among us all. That was 1971. Today, Web courses don't just meet but beat their impersonal offline counterparts. Studies show that tutorial-style teaching is more effective than lecturing (as Oxford and Cambridge have known for centuries), even when prerecorded. Mr. Thrun's online students told him that the course felt more personal.

In this new educational model, the shy and the easily distracted get advantages. You can rewind a video and watch whenever and as many times as you like. Plus, teachers save time with computerized grading and students save money. (U.S. college debt, nearly $1 trillion, is bigger than housing or credit card debt.)

Most important, the system promotes driven and talented students who might otherwise be denied access to higher education: a kid in Afghanistan, a young mother in Scotland, an ignored pupil in Detroit. From Mr. Thrun's class (translated into 44 languages) Udacity chose 200 students based purely on performance and, a few weeks ago, forwarded their resumes to companies including Amazon, Bank of America and BMW.

There are glitches, of course, including a high online dropout rate, complaints about speed, questions on accreditation and the predictable whining from old-school alumni who have gotten too cozy in their club chairs.

To be truly egalitarian, classes will need to go not just online but mobile. Still, the upshot of it all is clear: more smart people is better. Just watch that ivory tower topple.

Corrections & Amplifications
Udacity recently forwarded the resumes of 200 students to companies. An earlier version of this article incorrectly said 15 students.

@wsj Tax Breaks Exceed $1T. Which of these need to be eliminated?

Tax Breaks Exceed $1 Trillion: Report

By JOHN D. MCKINNON

A congressional report detailing the value of major tax breaks shows they amount to more than $1 trillion a year—roughly the size of the annual federal budget deficit—and benefit wide swaths of the population.

The figures could be useful to lawmakers of both parties and President Barack Obama, who are looking for ways to shrink future deficits and offset the anticipated cost of overhauling the much-criticized U.S. tax code, an effort likely to include tax-rate cuts. Both parties are looking to trim or eliminate tax breaks to achieve those goals.

Mr. Obama has suggested eliminating breaks for corporate jets and oil and gas companies to reduce deficits. He also has raised the possibility of reducing tax breaks for U.S. multinationals that ship jobs overseas, as a way to offset the cost of lowering the corporate tax rate to 28% from the current 35%.

House Republicans proposed in their new budget this week to reduce or eliminate an unspecified array of tax breaks in order to offset the costs of lowering top tax rates for both corporations and individuals to 25% from the current 35%.

The new report, by the nonpartisan Congressional Research Service, underscores how far-reaching many of the tax breaks are, which makes changing them a politically daunting task.

They include the exclusion from taxable income for employer-provided health insurance, the biggest break, at $164.2 billion a year in 2014; the exclusion for employer-provided pensions, the second-biggest, at $162.7 billion; and the exclusions for Medicare and Social Security benefits.

TAXBREAK

Other big breaks include the mortgage-interest deduction, third-largest; taxing capital-gains income at lower rates than other income; the earned-income credit for the working poor; and deductions for state and local taxes.

The report, citing political opposition, technical challenges and other reasons, said that "it may prove difficult to gain more than $100 billion to $150 billion in additional tax revenues" by eliminating tax breaks. That likely would leave little for reducing tax rates, perhaps only enough for one or two percentage points in the top individual rate, while maintaining the same level of revenue, the report said.

House Republicans dismissed the report's significance, saying it only confirms that overhauling the tax code will be politically challenging. They pointed to the work of Mr. Obama's 2010 deficit-reduction panel, co-chaired by former White House chief of staff Erskine Bowles and former Sen. Alan Simpson, as evidence that large-scale tax changes are possible. The Bowles-Simpson panel drafted a deficit-reduction plan that would trim tax breaks and lower to 28% the top tax rate for businesses and individuals, though the overall plan failed to draw enough support to gain congressional votes.

"Reports suggesting that tax reform isn't easy are greatly appreciated," a House GOP aide said. "Probably tomorrow there will be a report saying the Earth is round."

The top-ranking Democrat on the House Ways and Means Committee, Rep. Sander Levin of Michigan, said the report foreshadows a difficult fight over tax breaks that will pit the interests of middle-class households against those of higher earners.

"Some of the most popular tax provisions—including the exclusion for health coverage and the deduction for mortgage interest—largely benefit middle-income families," Mr. Levin said in a statement.

House Republicans point to data showing that upper-income taxpayers benefit much more per capita from tax breaks than lower earners, so reducing breaks across the board would maintain a progressive system, they say.

Write to John D. McKinnon at john.mckinnon@wsj.com

Congrats Villanova School of Business on 13 ranking

Villanova University: Press Release for March 21, 2012

VILLANOVA, Pa. – The Villanova School of Business (VSB) was once again recognized as one of the best undergraduate business schools in the nation in the 2012 Bloomberg Businessweek ranking.  VSB ranked #13, placing it among the top 15 business schools in the nation.

The annual ranking is determined by academic quality, professional development, business relevance, and student satisfaction. In the ranking released today, VSB performed exceptionally well in a number of categories:

  • Overall Academic Quality Rank: 2
  • Student Grade for Teaching Quality: A+
  • Student Grade for Job Placement: A+  

“In keeping with Villanova’s Augustinian approach, VSB integrates ethics and social responsibility into educational and extracurricular experiences,” says Kevin D. Clark, Interim Dean. “VSB students are consistently encouraged to view themselves and their work within the context of making a positive contribution to global business and society at large. With more than 50 percent of VSB students studying abroad, the third highest rate in the nation, our students are well-prepared to succeed in global careers.”

VSB is known for its commitment to teaching excellence, relevant research, academic rigor, superior faculty, state-of-the-art learning facilities, and the integration of ethics and service into curricular and extracurricular experiences. The Clay Center at VSB, an advising and professional development center for business students, serves hundreds of undergraduates per week. The school actively engages its students within a personalized learning environment created to develop and hone business skills.

This year’s graduating class was the first to experience Villanova’s new undergraduate business curriculum, which emphasizes four areas of business excellence: a global mindset, innovation, ethics, and analytics. This cutting edge curriculum underscores a holistic multi-disciplinarily approach that is responsive to the rapidly-changing world of business.

For more information on the Villanova School of Business, please visit: www.villanova.edu. To see the complete ranking, please visit: www.businessweek.com.

Since 1842, Villanova University’s Augustinian Catholic intellectual tradition has been the cornerstone of an academic community in which students learn to think critically, act compassionately and succeed while serving others. There are more than 10,000 undergraduate, graduate and law students in the University’s five colleges—the College of Liberal Arts and Sciences, the Villanova School of Business, the College of Engineering, the College of Nursing and the Villanova University School of Law. As students grow intellectually, Villanova prepares them to become ethical leaders who create positive change everywhere life takes them. Visit www.villanova.edu/business.

Stephen.Bates | +1 202 730-9760
mobile.short.typos

good news on my 1st day at #EMC Social/Open/Agile #BigData @Greenplum @scottmcnealy

EMC Goes Social, Open and Agile With Big Data

Greenplum Chorus Social Tools Now Available Featuring 3rd Party Applications;

New OpenChorus Initiative Releases Greenplum Chorus to Open Source Community;

Pivotal Labs Acquisition Accelerates Development of Big Data Applications in the Enterprise

HOPKINTON, Mass. – March 20, 2012

News Summary:

EMC Corporation (NYSE: EMC) today announced:

  • Availability of Greenplum Chorus, the industry’s first social toolset for Big Data, enabling Data Science teams to collaborate on datasets in a Facebook-like way.
  • The new OpenChorus (openchorus.org) initiative, including release of the Greenplum Chorus source code under an open source license in the second half of 2012. The goal of OpenChorus is to accelerate innovation and adoption of collaborative and social data applications running on top of the Greenplum Chorus platform.
  • Examples of Chorus extensibility from the Greenplum partner ecosystem, including Greenplum partners Alpine Data Labs and Squid Solutions, for the rapid development and integration of new Chorus-enhanced Big Data applications.
  • The acquisition of San Francisco-based Pivotal Labs, a privately-held provider of agile software development services and tools, to accelerate the development of Big Data applications in the enterprise.
  • An online event titled “Social Meets Big Data: Live Webcast” with executives from EMC and Pivotal Labs will be broadcast today, Tuesday, March 20 - 9:45 A.M. Pacific, 12:45 P.M. Eastern and 5:45 P.M GMT. Event details can be found at http://bit.ly/qduws or at EMC.com.

Additional Press Releases:

Full Story:

EMC Corporation (NYSE: EMC) today announced a new wave of products and services all with a singular goal – to enable organizations to derive greater insight and economic value from Big Data – datasets so large they break traditional IT infrastructures. Instrumental to customers achieving this goal is the enablement and empowerment of the Data Science team – Greenplum Chorus is the industry’s first social and collaborative toolset designed explicitly for the Data Science team.

Today EMC announced the availability of Greenplum Chorus, delivering a Facebook-like social collaboration tool for Data Science teams to iterate on the development of datasets and ensure that useful insights are delivered to the business quickly. In addition to being social, Greenplum Chorus is now also open. Today EMC announced the OpenChorus Initiative (openchorus.org), with a mission to accelerate innovation and adoption of collaborative and social data applications running on top of the Greenplum Chorus platform. The Greenplum Chorus source code will be released under an open source license in the second half of 2012. Project updates will be available at openchorus.org.

The Greenplum partner ecosystem serves as a critical means through which customers receive the solutions they require to connect Greenplum analytic tools with their existing data sources. Greenplum partner ecosystem can deliver even more value – solutions integrated with the Chorus platform through its rich APIs (like solutions from early access partners Alpine Data Labs and Squid Solutions) directly impact the productivity and effectiveness of the Data Science team.

With Greenplum Chorus, Big Data is becoming more social and more open. With the announcement of EMC’s acquisition of Pivotal Labs today it now promises to become more agile. Pivotal Labs represents the gold-standard in agile software development. Through modern agile development methodologies and modern programming frameworks (such as Ruby on Rails) Pivotal will accelerate the development and adoption of Big Data applications in the enterprise.

Industry Quotes

Joi Ito, Director, MIT Media Lab

“I believe EMC has seized a great opportunity to move way beyond the current industry focus and noise around analytics to what is a much bigger story. Specifically, I see the company leveraging unstoppable movements such as social networking, open-source software, and agile development for next-generation applications.”

Customer and Partner Quotes

Katrin Ribant, EVP, Data Platforms, Havas Digital Global

“Through the use of Chorus, groups of data scientists in multiple countries are able to come together on the development of Artemis, Havas Digital's proprietary analytics platform. This enables faster provisioning of sand boxes and better collaboration around testing and refinement of analysis and new analytics.”

Eva Ho, Vice President of Marketing & Operations, Factual

“We are delighted to be a partner of EMC Greenplum. The Greenplum Unified Analytics Platform and Chorus will be an essential data engineering platform for data scientists in all types of enterprises, giving them unparalleled access to new tools and resources to answer critical business questions using big data. By embedding high quality third-party data sets, like the ones from Factual, into the solution, it will make it even easier for data scientists to jumpstart projects, and hopefully derive actionable insights and results from data analysis even faster.”

EMC Quotes

Scott McNealy, executive advisor, Greenplum, a division of EMC

“Data science gets its juice from the tools data scientists rely upon to work their magic. History, take Java for example, has proven that the open source model routinely delivers better tools, drawing the best contributions from users, quick-turn release cycles and more. Open source Chorus can deliver the widespread adoption and collaboration Big Data is begging for. A strictly proprietary model can't keep up and EMC is doing what leaders do. Lead.”

Scott Yara, Senior Vice President of Products, Greenplum, a division of EMC

“Chorus stands at the intersection of social and Big Data. The pairing of social and collaboration helps groups collaborate and actually get valuable insights from their data. That is a very social and collaborative process. It touches a lot of people inside an organization. While most of the industry is focused on loading speeds, processing times and so on, EMC is taking the lead on ‘socializing’ Big Data analytics.”

Additional Resources

About Greenplum

Greenplum, a division of EMC, is driving the future of Big Data analytics with breakthrough products including Greenplum Data Computing Appliance, Greenplum Database, Greenplum Community Edition, Greenplum HD, and Greenplum Chorus—the industry's first Enterprise Data Cloud platform. The division's products embody the power of open systems, cloud computing, virtualization and social collaboration—enabling global organizations to gain greater insight and value from their data than ever before possible.

About EMC

EMC Corporation is a global leader in enabling businesses and service providers to transform their operations and deliver IT as a service. Fundamental to this transformation is cloud computing. Through innovative products and services, EMC accelerates the journey to cloud computing, helping IT departments to store, manage, protect and analyze their most valuable asset—information—in a more agile, trusted and cost-efficient way. Additional information about EMC can be found at www.EMC.com.

# # #

EMC, Enterprise Data Cloud, Greenplum, Greenplum Chorus and Greenplum Database are either registered trademarks or trademarks of EMC Corporation in the United States and other countries. All other trademarks used herein are the property of their respective owners.

Forward-Looking Statements

This release contains “forward-looking statements” as defined under the Federal Securities Laws. Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors, including but not limited to: (i) adverse changes in general economic or market conditions; (ii) delays or reductions in information technology spending; (iii) the relative and varying rates of product price and component cost declines and the volume and mixture of product and services revenues; (iv) competitive factors, including but not limited to pricing pressures and new product introductions; (v) component and product quality and availability; (vi) fluctuations in VMware, Inc.’s operating results and risks associated with trading of VMware stock; (vii) the transition to new products, the uncertainty of customer acceptance of new product offerings and rapid technological and market change; (viii) risks associated with managing the growth of our business, including risks associated with acquisitions and investments and the challenges and costs of integration, restructuring and achieving anticipated synergies; (ix) the ability to attract and retain highly qualified employees; (x) insufficient, excess or obsolete inventory; (xi) fluctuating currency exchange rates; (xii) threats and other disruptions to our secure data centers or networks; (xiii) our ability to protect our proprietary technology; (xiv) war or acts of terrorism; and (xv) other one-time events and other important factors disclosed previously and from time to time in EMC’s filings with the U.S. Securities and Exchange Commission. EMC disclaims any obligation to update any such forward-looking statements after the date of this release.

Letter From Mr. Tim Cook of the Apple Inc. Re: $100 Billions United States Dollars

IMPORTANT: Letter From Mr. Tim Cook of the Apple Inc. Re: $100 Billions United States Dollars

Dear One,

I am Mr. Tim Cook, CEO of the Apple Inc. I followed Mr. Steven P. Jobs who also is CEO of Apple Inc. though dead now. Mr. Jobs worked with the Apple Inc. for over two decade before the cold hand of death took him away on the 5th of October 2011. He and I made a vow to uplift the down-trodden and the less-privileged individuals within the United States for America, Europe, China and South America, Africa and the rest of the globe as he had passion for poor persons with Googles Androids phones.

When my late CEO was alive he deposited the sum of $100 Billion (One Hundred Billion United States Dollars) with a bank here in the California. Presently, this money is still with the bank. Recently, Mr. Peter Oppenheimer, CFO of the Apple Inc. told me that we have a limited or numbered days on earth and that our life span will not exceed 150days due to the Maya calendar of 2012.

With this hard reality that has befallen Mr. Peter Oppenheimer, Mr. Phil Schiller nice all around guy of the Apple Inc., and me I have decided to donate this fund to a non-governmental,or a non religious, and or a non profit organization or better still an individual, that will utilize this money the way I am going to instruct herein.I want a non governmental, or a non religious, and or a non profit,organization or better still an individual, that will use this gift which comes from Mr. Steven P. Jobs sweat to fund the upkeep of widows,widowers,orphans, destitute, the down-trodden, physically challenged children,barren-women and persons with Android phones.

As soon as I receive your reply I shall give you the contact of the bank here in the California. I will also issue you a Letter of Authority that will empower you as the original beneficiary of this fund. My happiness is that I lived a life worthy of emulation. Please always be prayerful all through your life. Any delay in your reply will give me room in souring for a non-governmental, or a non religious, and or a non profit organization or better still an individual for this same purpose.Please assure me that you will act just as I have stated herein. Hope to hear from you soon and God bless you and members of your family.

Mr. Tim Cook, CEO of the Apple Inc. (Benefactor)

Image by Valery Marchive (LeMagIT) used under Creative Commons

No Relief in Sight at Gas Pump - WSJ.com

No Relief in Sight at Pump

By JERRY A. DICOLO

U.S. gasoline prices jumped 6% in February, and market experts predict they will climb higher because critical refining operations in the Northeast are shutting down.

From New York to Philadelphia, refineries that turn oil into gasoline have been idled or shut permanently because their owners are losing money on them. Sunoco Inc. is expected to close the region's largest refinery in July, taking another 335,000 barrels per day in production capacity off the market.

The East Coast refineries are getting squeezed by the soaring cost of crude oil, the major component in gasoline. The cost of oil has jumped in the past year due to global economic growth and rising tensions between Western nations and Iran, a major producer. Refineries haven't been able to increase their own prices enough to compensate.

The government said Friday that the increase in gas prices had contributed to a 0.4% overall increase in consumer prices in February. Prices at the pump averaged $3.831 a gallon on Friday, according to the AAA, formerly known as the American Automobile Association.

Rising gas prices pose a risk to the economic recovery, which is showing signs of gaining steam after faltering last year.

The surge is putting pressure on President Barack Obama to take steps to tamp down prices, and it threatens to erode credit he may get for an improving jobs market. On Thursday, U.K. Prime Minister David Cameron said he and Mr. Obama had discussed tapping their nations' strategic oil reserves to help alleviate tight oil supplies world-wide. In a speech Thursday, Mr. Obama said "there is no quick fix" for high gasoline prices.

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Damian Dovarganes/Associated Press

A motorist who ran out of gas Friday was pushed into a Los Angeles station where prices topped $5 a gallon.

Still, analysts said tapping reserves may do little to resolve the pricing pressure, which is likely to get worse as summer approaches and vacationing Americans hit the highways. Gas usage typically is 3% higher in the summer.

Commodities markets are forecasting rising prices. Gasoline futures on the New York Mercantile Exchange are up 22% this year, and settled Friday at a 10-month high of $3.3569 a gallon. Average pump prices tend to follow futures by a few weeks, averaging about 70 cents a gallon more, after taxes and transport costs. Based on futures, retail prices should average above $4 a gallon soon.

Refineries in the Northeast are under financial pressure for two reasons. They have limited access to cheaper, high-grade crude oil produced in the middle of the U.S. because there are not enough pipelines, which is forcing them to pay more for oil from elsewhere, most of it from overseas. And many of their facilities aren't set up to process lower-grade crude that is cheaper.

Economy

As Northeastern refining capacity declines, it will force distributors in the region to buy gasoline from elsewhere, pushing up prices across the country and increasing the likelihood of price spikes, government officials and analysts warn.

"There's now going to be a question if we can get enough gasoline into the East Coast for summer," said David Greely, an energy analyst at Goldman Sachs Group Inc. The U.S. Energy Department has warned a shortfall could develop as early as July.

Prices could head to record levels, potentially as high as $5 a gallon in coming months, said Ed Morse, global head of commodities research at Citigroup Inc.

Oil and fuel products come into New York by tanker and pipeline. Much of the oil originates in the Atlantic basin from places like Nigeria and the North Sea. It is then refined into gasoline. The East Coast imports gasoline, too, although that is expensive.

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Gasoline production in the Northeast is expected to decline to 350,000 barrels a day in 2013, from 580,000 barrels a day in 2011, according to government estimates. By 2013, the government estimates, motorists in the Northeast will be using 240,000 barrels more each day than refineries and imports are providing right now.

There are plenty of refineries around the world to keep the U.S. well supplied with gasoline and other fuels over the long term. But the drop in refining capacity over the past year means the industry hasn't had time to reconfigure its supply routes from areas such as the Gulf Coast and Europe.

"The global refining system is ample enough to replace those lost barrels. The problem is they're not in the right place," said Mr. Morse of Citigroup.

Mark Routt, a consultant for KBC Advanced Technologies, said the industry will figure out a way to easily and cheaply get gasoline to the East Coast, from the Gulf Coast and the Midwest, but it will take time.

Colonial Pipeline Co. this week announced plans to expand its pipeline system to increase shipments to the Northeast, but that won't be completed until 2014.

At the beginning of 2010, the East Coast had 12 refineries. Since then, four have closed for good or have been idled, according to the U.S. Energy Information Administration.

ConocoPhillips's Trainer refinery and Sunoco's Marcus Hook refinery, both in Pennsylvania, were idled in December.

Philadelphia-based Sunoco, which refines and sells fuel, said it will shut its plant in that city by July if it doesn't find a buyer. Known in the industry as "Sunoco Philly," the refinery is the oldest and biggest on the East Coast. It first turned crude into fuel in 1870, 38 years before Henry Ford sold his first Model T.

Sunoco spokesman Thomas Golembeski said high oil prices and falling demand destroyed profit margins. "Our Northeast refining business has lost nearly a billion dollars in the past three years, and those losses have threatened Sunoco's very existence as a company," he said.

He said Sunoco has taken steps to make sure there are adequate supplies for customers this summer, even if the refinery is closed.

Some analysts doubt that gas prices will continue to rise for long. For one, overall demand has fallen in the U.S. and is expected to hit an 11-year low this year, due both to increasing vehicle fuel efficiency and high gas prices. Typically, as demand falls, so do prices.

Alan Gelder, head of oils research at consulting firm Wood Mackenzie, said prices are already high enough to support additional shipments from refineries in Europe or the Gulf Coast, so "supplies are not a concern."

But John Woods, an independent trader, said hedge funds and other large speculators are making bullish bets on gasoline. Such bets have risen in number by 51% since the beginning of the year, according to data from the Commodity Futures Trading Commission.

"The smart money is doing it now, because you get more of a jump on it," Mr. Woods said.

—David Bird, Ben Lefebvre and Neil Shah contributed to this article.

Write to Jerry A. DiColo at jerry.dicolo@dowjones.com

Matt Taibbi in Rolling Stone: Bank of America: Too Crooked to Fail

Politics: Bank of America: Too Crooked to Fail

By Matt Taibbi
March 14, 2012 | 10:55am

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Natalie Behring/Getty Images

At least Bank of America got its name right. The ultimate Too Big to Fail bank really is America, a hypergluttonous ward of the state whose limitless fraud and criminal conspiracies we'll all be paying for until the end of time. Did you hear about the plot to rig global interest rates? The $137 million fine for bilking needy schools and cities? The ingenious plan to suck multiple fees out of the unemployment checks of jobless workers? Take your eyes off them for 10 seconds and guaranteed, they'll be into some shit again: This bank is like the world's worst-behaved teenager, taking your car and running over kittens and fire hydrants on the way to Vegas for the weekend, maxing out your credit cards in the three days you spend at your aunt's funeral. They're out of control, yet they'll never do time or go out of business, because the government remains creepily committed to their survival, like overindulgent parents who refuse to believe their 40-year-old live-at-home son could possibly be responsible for those dead hookers in the backyard.

It's been four years since the government, in the name of preventing a depression, saved this megabank from ruin by pumping $45 billion of taxpayer money into its arm. Since then, the Obama administration has looked the other way as the bank committed an astonishing variety of crimes – some elaborate and brilliant in their conception, some so crude that they'd be beneath your average street thug. Bank of America has systematically ripped off almost everyone with whom it has a significant business relationship, cheating investors, insurers, depositors, homeowners, shareholders, pensioners and taxpayers. It brought tens of thousands of Americans to foreclosure court using bogus, "robo-signed" evidence – a type of mass perjury that it helped pioneer. It hawked worthless mortgages to dozens of unions and state pension funds, draining them of hundreds of millions in value. And when it wasn't ripping off workers and pensioners, it was helping to push insurance giants like AMBAC into bankruptcy by fraudulently inducing them to spend hundreds of millions insuring those same worthless mortgages.

But despite being the very definition of an unaccountable corporate villain, Bank of America is now bigger and more dangerous than ever. It controls more than 12 percent of America's bank deposits (skirting a federal law designed to prohibit any firm from controlling more than 10 percent), as well as 17 percent of all American home mortgages. By looking the other way and rewarding the bank's bad behavior with a massive government bailout, we actually allowed a huge financial company to not just grow so big that its collapse would imperil the whole economy, but to get away with any and all crimes it might commit. Too Big to Fail is one thing; it's also far too corrupt to survive.

All the government bailouts succeeded in doing was to make the bank even more prone to catastrophic failure – and now that catastrophe might finally be at hand. Bank of America's share price has plunged into the single digits, and the bank faces battles in courtrooms all over America to avoid paying back the hundreds of billions it stole from everyone in sight. Its credit rating, already downgraded to a few rungs above junk status, could plummet with the next bad analyst report, causing a frenzied rush to the exits by creditors, investors and stockholders – an institutional run on the bank.

They're in deep trouble, but they won't die, because our current president, like the last one, apparently believes it's better to project a false image of financial soundness than to allow one of our oligarchic banks to collapse under the weight of its own corruption. Last year, the Federal Reserve allowed Bank of America to move a huge portfolio of dangerous bets into a side of the company that happens to be FDIC-insured, putting all of us on the hook for as much as $55 trillion in irresponsible gambles. Then, in February, the Justice Department's so-called foreclosure settlement, which will supposedly provide $26 billion in relief for ripped-off homeowners, actually rewarded the bank with a legal waiver that will allow it to escape untold billions in lawsuits. And this month the Fed will release the results of its annual stress test, in which the bank will once again be permitted to perpetuate its fiction of solvency by grossly overrating the mountains of toxic loans on its books. At this point, the rescue effort is so sweeping and elaborate that it goes far beyond simply gouging the tax dollars of millions of struggling families, many of whom have already been ripped off by the bank – it's making the government, and by extension all of us, full-blown accomplices to the fraud.

Anyone who wants to know what the Occupy Wall Street protests are all about need only look at the way Bank of America does business. It comes down to this: These guys are some of the very biggest assholes on Earth. They lie, cheat and steal as reflexively as addicts, they laugh at people who are suffering and don't have money, they pay themselves huge salaries with money stolen from old people and taxpayers – and on top of it all, they completely suck at banking. And yet the state won't let them go out of business, no matter how much they deserve it, and it won't slap them in jail, no matter what crimes they commit. That makes them not bankers or capitalists, but a class of person that was never supposed to exist in America: royalty.

Self-appointed royalty, it's true – but just as dumb and inbred as the real thing, and every bit as expensive to support. Like all royals, they reached their position in society by being relentlessly dedicated to the cause of Bigness, Unaccountability and the Worthlessness of Others. And just like royals, they spend most of their lives getting deeper in debt, and laughing every year when our taxes go to covering their whist markers. Two and a half centuries after we kicked out the British, it's really come to this?

Bank of America started out in San Francisco in 1904 as an emblem of American capitalism. Founded by a first-generation Italian-American named Amadeo Giannini – it was even originally called the Bank of Italy – the bank set out to serve immigrants denied credit by other banks, and it was instrumental in helping to rebuild the city after the devastating earthquake of 1906.

But like many of the truly bad ideas in history, the present-day version of Bank of America was the product of a testosterone overdose. The concept of an overmassive, acquiring-everything-in-sight, bicoastal megabank was hatched in the terminal inferiority complex of a greed-sick asshole – actually two greed-sick assholes, both of them CEOs of Southern regional banks, who launched a cartoonish arms race of bank acquisitions that would ultimately turn the American business world upside down.

The antagonists were Hugh McColl Jr. and Ed Crutchfield, the respective leaders of North Carolina National Bank (which would take over Bank of America) and First Union (which turned into Wachovia), both based in Charlotte, North Carolina. Obsessed with each other, these two men transformed their personal competition into one of the most ridiculous and elaborate penis-measuring contests in the history of American business – even engaging in the garish Freudian spectacle of vying to see who would have the tallest skyscraper in Charlotte. First Union kicked things off in 1971 by erecting the 32-story Jefferson First Union Tower, then the biggest building in town – until McColl's bank built the 40-story NCNB Plaza in 1974. Then, in the late Eighties, Crutchfield topped McColl with the city's first post-modern high-rise, One First Union Center, at 42 stories. That held the prize until 1992, when McColl went haywire and put up the hideous 60-story Bank of America Corporate Center, a giant slab of gray metal affectionately known around Charlotte as the "Taj McColl." When asked by reporters if he was pleased that his 60-story monster overwhelmed his rival's 42-story weenie, McColl didn't hesitate. "Do I prefer having the tall one?" he said. "Yes."

For a time, this ridiculous rivalry between two strutting Southern peacocks was restrained by the law – specifically, the McFadden-Pepper Act of 1927 and the Douglas Amendment to the Bank Holding Company Act of 1956. These two federal statutes, which made it illegal for a bank holding company to own and operate banks in more than one state, were effectively designed to prevent exactly the Too Big to Fail problem we now find ourselves faced with. The goal, as Sen. Paul Douglas explained at the time, was "to prevent an undue concentration of banking and financial power, and instead keep the private control of credit diffused as much as possible."

But these laws didn't sit well with Hugh McColl. To him, size was everything. "We realized that if we didn't leave North Carolina," he explained later in his career, "we would never amount to anything – that we would not be important." Note that he didn't say the ban on expansion prevented him from turning a profit or earning good returns for his shareholders – only that it put a limit on his sense of self-importance. So McColl and his banking minions set out to break down the interstate banking laws. First, in 1981, they used a legal loophole in Florida law to buy a bank branch there – evading the federal ban on out-of-state owners. Then, following a Supreme Court decision in 1985 that allowed banks to cross state lines within a designated region, he and Crutchfield went on a conquering spree worthy of a Mongol horde, buying up a host of banks in other Southern states. McColl, a silver-haired ex-Marine who would eventually be celebrated for bringing a "military approach" to his business, went to ridiculous lengths to play up the manly conquest aspect of his bank's merger frenzy, rewarding key employees with crystal hand grenades. By 1995, McColl had acquired more than 200 banks and thrifts across the South, while Crutchfield had snapped up 50.

A few years later, after Congress repealed most of the barriers to interstate banking, McColl took over Bank of America, realizing his dream of creating what one trade publication called "the first ocean-to-ocean bank in the nation's history." Later, after McColl retired, his successors kept up his acquisitive legacy, buying notorious mortgage lender Countrywide Financial in 2008, and using some of the $25 billion in federal bailout funds they received to acquire dying investment bank Merrill Lynch. Both firms were infamous for their exotic gambles and their systematic cutting of regulatory corners – meaning that the shopping spree had burdened Bank of America with a huge portfolio of doomed trades and criminal conspiracies.

But to McColl, it was all worth it – because he would never have been important if he hadn't also been big. "I have no regrets about building it large," he said in 2010, when asked if he considered all the monster consolidations a mistake in light of the crash of 2008. "I may have some regrets about not building it larger."

This deeply American terror of not always having the absolutely hugest dick in the room is what put us in the inescapable box called Too Big to Fail. When the bailouts were dreamed up to save Bank of America, the government was essentially committing public resources to preserve this lunatic spending spree – which means two successive presidential administrations have now spent nearly half a decade and hundreds of billions of tax dollars defending the premise that Hugh McColl should always be allowed to have the "taller one."

And why? The rationale for allowing that merger spree in the first place was based on a phony assumption: that big banks would somehow be more efficient and more profitable than small ones. "The whole premise of a Citibank or a Chase or a Bank of America is wrongheaded," says Susan Webber, an analyst who writes one of the most popular and respected financial blogs under the pseudo-nym Yves Smith. "Studies consistently show that after a certain size threshold, bank efficiency taps out. In fact, it turns out that all those cost savings the banks were supposed to enjoy from being bigger were actually based on cutting corners and fraud."

And man, what a lot of fraud!

In the end, it all comes back to mortgages. Though Bank of America would ultimately be charged with committing a dizzyingly diverse variety of corporate misdeeds, the bulk of the trouble the bank is in today arises from the Great Mortgage Scam of the mid-2000s, which caused the biggest financial bubble in history.

The shorthand version of the scam is by now familiar: Banks and mortgage lenders conspired to create a gigantic volume of very risky home loans, delivering outsize mortgages to dubious borrowers like immigrants without identification, the unemployed and people with poor credit histories. Then the banks took those dicey home loans and sprinkled them with bogus math, using inscrutable financial gizmos like collateralized mortgage obligations to rechristen the risky home loans as high-grade, AAA-rated securities that could be sold off to unions, pensioners, foreign banks, retirement funds and any other suckers the banks could find. In essence, America's financial institutions grew vast fields of cheap oregano, and then went around the world marketing their product as high-grade weed.

The holy trinity of Bank of America, Countrywide and Merrill Lynch represented the worst conceivable team of financial powers to get hold of this scam. It was a little like the Wall Street version of Michael Bay's nonclassic Con Air, in which the world's creepiest serial killer, most demented terrorist and most depraved redneck are all thrown together on the same plane. In this case, it was the most careless mortgage lender (the spray-tanned huckster Angelo Mozilo from Countrywide, who was named the second-worst CEO of all time by Portfolio magazine), the most dangerous mortgage gambler (Merrill, whose CEO was the self-worshipping jerkwad John Thain, the ex-Goldman banker who bought himself an $87,000 area rug as his company was cratering in 2008) and the most relentless packager of mortgage pools (Bank of America), all put together under one roof and let loose on the world. These guys were so corrupt, they even shocked one another: According to a federal lawsuit, top executives at Countrywide complained privately that Bank of America's "appetite for risky products was greater than that of Countrywide."

The three lenders also pioneered ways to sell their toxic pools of mortgages to suckers. Bank of America's typical marketing pitch to a union or a state pension fund involved a double or even triple guarantee. First, it promised, in writing, that all its loans had passed due diligence tests and met its high internal standards. Next, it promised that if any of the loans in the mortgage pool turned out to be defective or in default, it would buy them back. And finally, it assured customers that if all else failed, the pools of mortgages were all insured, or "wrapped," by bond insurers like AMBAC and MBIA.

It sounded like a can't-lose deal. Not only did the bank offer a written guarantee of the high quality of the loans it was selling, it also promised to buy back any bad loans, which were often insured to boot. What could go wrong?

As it turned out, everything. From tits to toes, the mortgage pools created, packaged and sold by Countrywide, Merrill Lynch and Bank of America were a complete sham: worthless and often falling apart virtually from the day they were delivered.

First of all, despite the fact that the banks had promised that all the loans in their pools met their internal lending standards, that turned out to be completely untrue. An SEC- investigation later found out, for instance, that Countrywide essentially had no standards for whom to lend to. As a federal judge put it, "Countrywide routinely ignored its official underwriting guidelines to such an extent that Countrywide would underwrite any loan it could sell." Translation: Countrywide gave home loans to anything with a pulse, provided they had a sucker lined up to buy the loan.

How did they make these loans in the first place? By committing every kind of lending fraud imaginable – particularly by entering fake data on home loan applications, magically turning minimum-wage janitors into creditworthy wage earners. In 2006, according to a report by Credit Suisse, a whopping 49 percent of the nation's subprime loans were "liar's loans," meaning that lenders could state the incomes of borrowers without requiring any proof of employment. And no one lied more than Countrywide and Bank of America. In an internal e-mail distributed in June 2006, Countrywide's executives worried that 40 percent of the firm's "reduced documentation loans" potentially had "income overstated by more than 10 percent... and a significant percent of those loans would have income overstated by 50 percent or more."

"What large numbers of Countrywide employees did every day was commit fraud by knowingly making and approving loans they knew borrowers couldn't repay," says William Black, a former federal banking regulator. "To do so, it was essential that the loans be made to appear to be relatively less risky. This required pervasive documentation fraud."

So what happened when institutional investors realized that the loans they had bought from Countrywide were nothing but shams? Instead of buying back the bad loans as promised, and as required by its own contracts, the bank simply refused to answer its phone. A typical transaction involved U.S. Bancorp, which in 2005 served as a trustee for a group of investors that bought 4,484 Countrywide mortgages for $1.75 billion – only to discover their shiny new investment vehicle started throwing rods before they could even drive it off the lot. "Soon after being sold to the Trust," U.S. Bancorp later observed in a lawsuit, "Countrywide's loans began to become delinquent and default at a startling rate." The trustees hired a consultant to examine 786 loans in the pool, and found that an astonishing two-thirds of them were defective in some way. Yet, confronted with the fraud, Countrywide failed to repurchase a single loan, offering "no basis for its refusal."

And what about that ostensible insurance that Bank of America sold with its bundles of mortgages? Well, those policies turned out not to be worth very much, since so many of the loans defaulted that they blew the insurers out of business. If you went bust buying bad mortgages from Bank of America, chances are, so did your insurer. At best, you two could now share a blanket in the poorhouse.

Many of the nation's largest insurers, in fact, are now suing the pants off Bank of America, claiming they were fraudulently induced to insure the bank's "high lending standards." AMBAC, the second-largest bond insurer in America, went bankrupt in 2010 after paying out some $466 million in claims over 35,000 Countrywide home loans. After analyzing a dozen of the mortgage pools, AMBAC found that a staggering 97 percent of the loans didn't meet the stated underwriting standards. That same year, the Association of Financial Guaranty Insurers, a trade group representing firms like AMBAC, told Bank of America that it should be repurchasing as much as $20 billion in defective mortgages.

Some of these institutional investors were at least partial accomplices to their own downfall. In the boom era of easy money, financial professionals everywhere were chasing the lusciously high yields offered by these bundles of subprime mortgages, and everyone knew the deals weren't exactly risk-free. But ultimately, Bank of America was knowingly selling a defective product – and down the road, that product was bound to blow up on somebody innocent. "A teacher or a fireman goes to work and saves money for their retirement via their pensions," says Manal Mehta, a partner at the hedge fund Branch Hill Capital who spent two years researching Bank of America. "That pension fund buys toxic securities put together by Wall Street that were designed to fail. So when that security blows up, wealth flows directly from that pension fund into the hands of a select few."

This is the crossroads where Bank of America now lives – trying to convince the government to allow it to remain in business, perhaps even asking for another bailout or two, while it avoids paying back untold billions to all of the institutional customers it screwed, the list of which has grown so long as to almost be comical. Last year, the bank settled with a group of pension and retirement funds, including public employees from Mississippi to Los Angeles, that charged Bank of America and Merrill with misrepresenting the value of more than $16 billion in mortgage-backed securities. In the end, the bank paid only $315 million.

In the first half of last year, Bank of America paid $12.7 billion to settle claims brought by defrauded customers. But countless other investors are still howling for Bank of America to take back its counterfeit product. Allstate, the maker of those reassuring Dennis Haysbert-narrated commercials, claims it got stuck with $700 million in defective mortgages from Countrywide. The states of Iowa, Oregon and Maine, as well as the United Methodist Church, are suing Bank of America over fraudulent deals, claiming hundreds of billions in collective losses. And there are similar lawsuits for nonmortgage-related securities, like a revolting sale of doomed municipal securities to the state of Hawaii and Maui County. In that case, Merrill Lynch brokers allegedly dumped $944 million in auction-rate securities on the Hawaiians, even though the brokers knew that the auction-rate market was already going bust. "Market is collapsing," a Merrill executive named John Price admitted in an internal e-mail, before joking about having to give up pricey dinners at a fancy Manhattan restaurant. "No more $2K dinners at CRU!!"

In the end, says Mehta, Bank of America's fraud resulted in "one of the biggest reverse transfers of wealth in history – from pensioners to financiers. What the 99 percent should understand is that Wall Street knowingly inflated the bubble by engaging in rampant mortgage fraud – and then profited from the collapse of their own exuberance by devising a way to shift the losses to countless pension funds, endowments and other innocent investors." The assembled worldwide collection of swindled pensioners and unions and investors is a little like the crowd that storms the basketball court in the Will Ferrell movie Semi-Pro when the home team's owner welshes on his promise to hand out free corn dogs if the score tops 125 points. Corn dogs, Bank of America! Where are the freaking corn dogs!

Incredible as it sounds, owing practically everyone in the world billions of dollars apiece is only half of Bank of America's problem. The bank didn't just flee the scene of its various securities rip-offs. It also made a habit out of breaking the law and engaging in ethical lapses on a grand scale, all over the globe. Once your money ends up in their pockets, they just slither off into the night, no matter their legal or professional obligations.

Case in point: With all those hundreds of thousands of mortgages the bank bought, it simply stopped filing basic paperwork – even the stuff required by law, like keeping chains of title. A blizzard of subsequent lawsuits from pissed-off localities reveals that the bank used this systematic scam to avoid paying local fees. Last year, a single county – Dallas County in Texas – sued Bank of America for ducking fees since 1997. "Our research shows it could be more than $100 million," Craig Watkins, the county's district attorney, told reporters. Think of that next time your county leaves a road unpaved, or is forced to raise property taxes to keep the schools open.

But the lack of paperwork also presented a problem for the bank: When it needed to foreclose on someone, it had no evidence to take to court. So Bank of America unleashed a practice called robo-signing, which essentially involved drawing up fake documents for court procedures. Two years ago, a Bank of America robo-signer named Renee Hertzler gave a deposition in which she admitted not only to creating as many as 8,000 legal affidavits a month, but also to signing documents with a fake title.

Yet here's how seriously fucked the financial markets are: Even the most vocal critics of Bank of America consider the mass, factory-style production of tens of thousands of fake legal documents per month not that big a deal. "Robo-signing is like focusing on Bernie Madoff's accountant," quips April Charney, a well-known foreclosure lawyer who has spent large chunks of the past two decades in battle with Bank of America.

Robo-signing is not the disease – it's a symptom of Bank of America's entire attitude toward the law. A bank that's willing to commit whole departments to inventing legal affidavits might also, for instance, intentionally ding depositors with bogus overdraft fees. (A class action suit accused Bank of America of heisting some $4.5 billion from its customers this way; the bank settled the suit for a mere 10 cents on the dollar.)

Or it might give up trying to win government contracts honestly and get involved with rigging municipal bids – a mobster's crime, for which the accused used to do serious time, back when the bids were for construction and garbage instead of municipal bonds, and the defendants were Eye-talians in gold chains instead of Ivy Leaguers in ties and Chanel glasses. We now know that Bank of America routinely conspired with other banks to make sure it paid low prices for the privilege of managing the moneys of various cities and towns. If the city of Baltimore or the University of Mississippi or the Guam Power Authority issued bonds to raise money, the bank would huddle up with the likes of Bear Stearns and Morgan Stanley and decide whose "turn" it was to win the bid. Bank of America paid a $137 million fine for its sabotage of the government-contracting process – and in an attempt to avoid prosecution, it applied to the Justice Department's corporate leniency program, essentially confessing its criminal status: As plaintiff attorneys noted, the application "means that Bank of America is an admitted felon." Think about that when you hear about all the bailouts the bank has gotten in the past four years. A street felon who gets out of jail can't even vote in some states – and yet Bank of America is allowed to receive billions in federal aid and dominate the electoral process with campaign contributions?

Some of the bank's other collusive schemes are even more ambitious. Last year, the bank was sued, alongside some of its competitors, for conspiring to rig the London Interbank Offered Rate. Many adjustable-rate financial products are based on LIBOR – so if the big banks could get together and artificially lower the rate, they would pay out less to customers who bought those products. "About $350 trillion worth of financial products globally reference LIBOR," says one antitrust lawyer familiar with the case. "Which means," she adds in a striking understatement, "that the scale of this conspiracy is extremely large."

What's most striking in all of these scams is the corporate culture of Bank of America: These guys are just dicks. Time and again, they go out of their way to fleece their own customers, without a trace of remorse. In classic con-artist behavior, Bank of America even tried to rip off homeowners a second time by gaming President Obama's HAMP program, which was designed to aid families who had already been victimized by the banks. In a lawsuit filed last year, homeowners claim they were asked to submit a mountain of paperwork before receiving a modified loan – only to have the bank misplace the documents when it was time to pay up. "The vast majority tell us the same thing," says Steve Berman, an attorney for the plaintiffs. "Bank of America claims to have lost their paperwork, failed to return phone calls, made false claims about the status of their loans and even took actions toward foreclosure without informing homeowners of their options." The scheme allowed the bank to bleed struggling homeowners for a few last desperate months by holding out the carrot of federal aid they would never receive.

Even when caught red-handed and nailed by courts for behavior like this, Bank of America has remained smugly unrepentant. As part of an $8.4 billion settlement it entered into with multiple states over predatory lending practices, the bank agreed to provide homeowners with modified loans and promised not to raise rates on borrowers. But no sooner was the deal signed than the bank "materially and almost immediately violated" the terms, according to Nevada Attorney General Catherine Cortez Masto. It not only jacked up rates on homeowners, it even instituted a policy punishing any bank employee who spent more than 10 minutes helping a victim get a loan modification.

The bank's list of victims goes on and on. The disabled? Just a few weeks ago, the government charged Bank of America with violating the Fair Housing Act by illegally requiring proof of disability from people who rely on disability income to make their mortgage payments. Minorities? Last December, the bank settled with the Justice Department for $335 million over Countrywide's practice of dumping risky subprime loans on qualified black and Hispanic borrowers. The poor? In South Carolina, Bank of America won a contract to distribute unemployment benefits through prepaid debit cards – and then charged multiple fees to jobless folk who had the gall to withdraw their money from anywhere other than a Bank of America ATM. Seriously, who hasn't this bank conspired to defraud? Puppies? One-eyed Sri Lankans?

Bank of America likes to boast that it has changed its ways, replacing many of the top executives who helped create the mortgage bubble. But the man promoted from within to lead the new team, CEO Brian Moynihan, is just as loathsome and tone-deaf as his previous bosses. As befits a new royal, Moynihan defended a plan to gouge all debit-card users with $5 fees by citing his divine privilege: "We have a right to make a profit." And despite the bank's litany of crimes, Moynihan seems to think we're just overreacting. After all, he gives to charities! "I get a little incensed when you think about how much good all of you do, whether it's volunteer hours, charitable giving we do, serving clients and customers well," he told employees last October. Then, addressing would-be protesters: "You ought to think a little about that before you start yelling at us."

In sum, Bank of America torched dozens of institutional investors with billions in worthless loans, repeatedly refused to abide by contractual obligations to buy them back, evaded hundreds of millions in local fees and taxes, pushed tens of thousands of people into foreclosure using phony documents, ignored multiple court orders to stop its illegal robo-signing, and exploited President Obama's signature mortgage-relief program. The bank fixed the bids on bonds for schools and cities and utilities all over America, and even conspired to try to game the game itself – by fixing global interest rates!

So what does the government do about a rogue firm like this, one that inflates market-wrecking bubbles, commits mass fraud and generally treats the law like its own personal urinal cake? Well, it goes without saying that you rescue that "admitted felon" at all costs – even if you have to spend billions in taxpayer money to do it.

Bank of America should have gone out of business back in 2008. Just as the mortgage market was crashing, it made an inconceivably stupid investment in subprime mortgages, acquiring Countrywide and the billions in potential lawsuits that came with it. "They tried to catch a falling knife and lost their hand and foot in the process," says Joshua Rosner, a noted financial analyst. It then spent $50 billion buying a firm, Merrill Lynch, that was rife with billions in debts. With those two anchors on its balance sheet, Hugh McColl's bicoastal dream bank should have gone the way of the dinosaur.

But it didn't. Instead, in the midst of the crash, the government forked over $45 billion in aid to Bank of America – $20 billion as an incentive to bring its cross-eyed bride Merrill Lynch to the altar, and another $25 billion as part of the overall TARP bailout. In addition, the government agreed to guarantee $118 billion in Bank of America debt.

So what did the bank do with that money? First, it sat by while lame-duck executives at Merrill paid themselves $3.6 billion in bonuses – even though Merrill lost more than $27 billion that year. In all, 696 executives received more than $1 million each for helping to crash the storied firm. (The bank wound up hit with a $150 million fine for its failure to inform shareholders about the Merrill losses and bonuses.) Bank of America, meanwhile, paid out more than $3.3 billion in bonuses to itself, including more than $1 million each to 172 executives.

In fact, the real bailouts of Bank of America didn't even begin until well after TARP. In the years since the crash, the bank has issued more than $44 billion in FDIC-insured debt through a little-known Federal Reserve plan called the Temporary Liquidity Guarantee Program. The plan essentially allows companies whose credit ratings are fucked to borrow against the government's good name – and if the loans aren't paid back, the government is on the hook for all of it. Bank of America has also stayed afloat by constantly borrowing billions in low--interest emergency loans from the Fed – part of $7.7 trillion in "secret" loans that were not disclosed by the central bank until last year. When the data was finally released, we found out that, on just one day in 2008, Bank of America owed the Fed a staggering $86 billion.

That means that when you take out a credit card or a mortgage or a refinancing from Bank of America, you're essentially borrowing from the state; the "private" bank is simply taking a cut as a middleman. "For banks, the cost of capital is the key to success," says former New York governor Eliot Spitzer. "So by lowering their cost of capital to almost zero, the Fed has almost guaranteed that the banks will make big profits."

Another public lifeline is Fannie Mae and Freddie Mac, the giant, nationalized mortgage lenders. Need to make some cash? Toss a bunch of home loan applications onto a city street, then sell the resulting mortgages to Fannie and Freddie, which are basically a gigantic pile of public money guarded by second-rate managers. Just like the state pensions in Iowa and Maine and Missis-sippi, Fannie and Freddie were targeted for sales of toxic mortgages, and just like those entities, they have sued Bank of America, claiming they were suckered into buying more than $30 billion in shitty securities. But unlike those other suckers, Fannie and Freddie continued to buy crap loans from Bank of America even after it was clear they'd been hoodwinked. Last year, the bank created more than $156 billion in mortgages – nearly $38 billion of which were bought by Fannie. Having the government as an ever-ready customer, standing by to buy mortgages at full retail prices, has always been an ongoing hidden bailout to the banks.

But even the government has its limits. In February, Fannie announced it would no longer keep blindly buying mortgages from Bank of America. Why? Because the bank, already slow to buy back its defective mortgages, had gotten even slower. By the end of last year, the government reported, more than half of all the crappy loans that Fannie wanted to return came from a single bad bank – Bank of America.

But if you think that Fannie cutting off the bank is good news, think again. If it can't get the money it's owed from Bank of America, it'll just go begging to the Treasury. Fannie has already asked for $4.5 billion to cover losses this year – and if Bank of America doesn't pony up, it'll have to reach even deeper into our pockets, making for yet another shadow bailout to the firm.

It gets worse. Last fall, some of the bank's biggest creditors and counterparties started to get nervous about the mountain of toxic bets still sitting on Merrill Lynch's books – a generation of ill-considered, complex, exotic derivative trades, bets on bets on bets on shaky subprime mortgages, sitting there on the company balance sheet, waiting to explode. Nobody felt good lending Bank of America money with that dangerous shitpile lying there. So they asked the bank to move a chunk of that mess from Merrill Lynch onto Bank of America's own balance sheet. Why? Because Bank of America is a federally insured depository institution. Which means that the FDIC, and by extension you and me, is now on the hook for as much as $55 trillion in potential losses. Black, the former regulator, calls the transfer an "obscenity. As a regulator, I would have never allowed it. Transferring risk to the insured institution crosses the reddest of red lines."

But by far the biggest bailout to Bank of America has come via the sweetheart deals it cut to settle the massive lawsuits filed against it. Some of the deals, which were brokered by the Justice Department and state attorneys general, allowed the bank to get away with paying pennies on the dollar on its mountains of debt. Worst of all was the recent $26 billion foreclosure settlement involving Bank of America and four other major firms. The deal, in which the banks agreed to pay cash to screwed-over homeowners in exchange for immunity from federal prosecution on robo-signing issues, was hailed as a big multibillion-dollar bite out of the banks. President Obama was all but strutting over his beatdown of Wall Street. "We are Americans, and we look out for one another; we get each other's backs," he declared. "We're going to make sure that banks live up to their end of the bargain."

In fact, the government has a lousy track record when it comes to enforcing settlements. The foreclosure deal arrives on the heels of an $8.4 billion investor settlement, whose provisions Bank of America had already been accused of violating, raising rates and abusing homeowners as soon as the deal was struck. The bank also violated a previous settlement with the Federal Trade Commission, illegally slapping $36 million in fees on struggling homeowners after specifically agreeing not to do so. So Bank of America's reward for blowing off its previous settlements for mistreating homeowners was to get another soft-touch deal from the government, which they will presumably be just as free to ignore. Why? Because while state officials have ultimate enforcement authority over the foreclosure settlement, the early enforcement reviews will be handled by "internal quality control groups." In other words, Bank of America itself will be grading its own compliance!

Even if Bank of America coughs up its share of the $26 billion settlement, the deal is woefully inadequate to address the wider fraud that went on in creating and pooling mortgages. "It's like handing a box of tissues to someone whose immune system has been destroyed by AIDS," says Rosner. "It doesn't come close to addressing the scale of the problem." Many Wall Street observers think that without the waiver from federal prosecution provided by the settlement, Bank of America would have faced billions in lawsuits for robo-signing offenses alone.

Oh, and one more thing, since we're talking about avoiding bills: Bank of America didn't pay a dime in federal taxes last year. Or the year before. In fact, they got a $1 billion refund last year. They claimed it was because they had pretax losses of $5.4 billion in 2010. They paid out $35 billion in bonuses and compensation that year. You do the math.

And here's the biggest scam of all: After all that help – all the billions in bailouts, the tens of billions in Fed loans, the hundreds of billions in legal damages made to disappear, the untold billions more of unpaid bills and buybacks – Bank of America is still failing. In December, the bank's share price dipped below $5, and after being cut off by Fannie in February, the bank announced a truly shameless plan to jack up fees for depositors by as much as $25 a month – what one market analyst called a "measure of last resort."

The company reported positive earnings last year, with net income of $84 million, but analysts aren't convinced. David Trainer, a MarketWatch commentator, switched his rating of Bank of America to "very dangerous" in part because its accounting is wildly optimistic. Among other things, the bank's projections assume a growth rate of 20 percent every year for the next 18 years. What's more, the bank has set aside only $8.5 billion for buybacks of those crap corn-dog loans from enraged customers – even though some analysts think the number should be much higher, perhaps as high as $27 billion. Because more lawsuits are so likely, says Mehta, it's "virtually impossible to decipher if Bank of America requires more equity, or even another tax-payer bailout."

But the only number that really matters is this one: $37 billion. That's the total bonus and compensation pool this broke-ass, state-dependent, owing-everybody-in-sight bank paid out to its employees last year. This, in essence, is the business model underlying Too Big to Fail: massive growth based on huge volumes of high-risk loans, coupled with lots of fraud and cutting corners, followed by huge payouts to executives. Then, with the company on the verge of collapse, the inevitable state rescue. In this whole picture, the only money that's ever "real" is the fat bonuses the executives cash out of the bank at the end of each year. "Fraud is a sure thing," says Black. "The firm fails, unless it is bailed out, but the controlling officers walk away wealthy."

The Dodd-Frank financial reform approved by Congress last year was supposed to fix the problem of Too Big to Fail, giving the government the power to take over and disband troubled megafirms instead of bailing them out. "The way to cut our Gordian financial knot is simple," MIT economist Simon Johnson wrote in The New York Times. "Force the big banks to become smaller." But few in the financial community believe that will ever happen. "If Bank of America crashes, the first thing that would happen is Dodd-Frank would be revealed as a fraud," says Rosner. "The Fed and the Treasury would ask Congress for a bailout to 'save the economy.' It's the worst-kept secret on Wall Street."

In a pure capitalist system, an institution as moronic and corrupt as Bank of America would be swiftly punished by the market – the executives would get to loot their own firms once, then they'd be looking for jobs again. But with the limitless government support of Too Big to Fail, these failing financial giants get to stay undead forever, continually looting the taxpayer, their depositors, their shareholders and anyone else they can get their hands on. The threat posed by Bank of America isn't just financial – it's a full-blown assault on the American dream. Where's the incentive to play fair and do well, when what we see rewarded at the highest levels of society is failure, stupidity, incompetence and meanness? If this is what winning in our system looks like, who doesn't want to be a loser? Throughout history, it's precisely this kind of corrupt perversion that has given birth to countercultural revolutions. If failure can't fail, the rest of us can never succeed.

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This story is from the March 29th, 2012 issue of Rolling Stone.

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Why I Am Leaving Goldman Sachs - NYTimes.com

Why I Am Leaving Goldman Sachs

TODAY is my last day at Goldman Sachs. After almost 12 years at the firm — first as a summer intern while at Stanford, then in New York for 10 years, and now in London — I believe I have worked here long enough to understand the trajectory of its culture, its people and its identity. And I can honestly say that the environment now is as toxic and destructive as I have ever seen it.

To put the problem in the simplest terms, the interests of the client continue to be sidelined in the way the firm operates and thinks about making money. Goldman Sachs is one of the world’s largest and most important investment banks and it is too integral to global finance to continue to act this way. The firm has veered so far from the place I joined right out of college that I can no longer in good conscience say that I identify with what it stands for.

It might sound surprising to a skeptical public, but culture was always a vital part of Goldman Sachs’s success. It revolved around teamwork, integrity, a spirit of humility, and always doing right by our clients. The culture was the secret sauce that made this place great and allowed us to earn our clients’ trust for 143 years. It wasn’t just about making money; this alone will not sustain a firm for so long. It had something to do with pride and belief in the organization. I am sad to say that I look around today and see virtually no trace of the culture that made me love working for this firm for many years. I no longer have the pride, or the belief.

But this was not always the case. For more than a decade I recruited and mentored candidates through our grueling interview process. I was selected as one of 10 people (out of a firm of more than 30,000) to appear on our recruiting video, which is played on every college campus we visit around the world. In 2006 I managed the summer intern program in sales and trading in New York for the 80 college students who made the cut, out of the thousands who applied.

I knew it was time to leave when I realized I could no longer look students in the eye and tell them what a great place this was to work.

When the history books are written about Goldman Sachs, they may reflect that the current chief executive officer, Lloyd C. Blankfein, and the president, Gary D. Cohn, lost hold of the firm’s culture on their watch. I truly believe that this decline in the firm’s moral fiber represents the single most serious threat to its long-run survival.

Over the course of my career I have had the privilege of advising two of the largest hedge funds on the planet, five of the largest asset managers in the United States, and three of the most prominent sovereign wealth funds in the Middle East and Asia. My clients have a total asset base of more than a trillion dollars. I have always taken a lot of pride in advising my clients to do what I believe is right for them, even if it means less money for the firm. This view is becoming increasingly unpopular at Goldman Sachs. Another sign that it was time to leave.

How did we get here? The firm changed the way it thought about leadership. Leadership used to be about ideas, setting an example and doing the right thing. Today, if you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence.

What are three quick ways to become a leader? a) Execute on the firm’s “axes,” which is Goldman-speak for persuading your clients to invest in the stocks or other products that we are trying to get rid of because they are not seen as having a lot of potential profit. b) “Hunt Elephants.” In English: get your clients — some of whom are sophisticated, and some of whom aren’t — to trade whatever will bring the biggest profit to Goldman. Call me old-fashioned, but I don’t like selling my clients a product that is wrong for them. c) Find yourself sitting in a seat where your job is to trade any illiquid, opaque product with a three-letter acronym.

Greg Smith is resigning today as a Goldman Sachs executive director and head of the firm’s United States equity derivatives business in Europe, the Middle East and Africa.

Today, many of these leaders display a Goldman Sachs culture quotient of exactly zero percent. I attend derivatives sales meetings where not one single minute is spent asking questions about how we can help clients. It’s purely about how we can make the most possible money off of them. If you were an alien from Mars and sat in on one of these meetings, you would believe that a client’s success or progress was not part of the thought process at all.

It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as “muppets,” sometimes over internal e-mail. Even after the S.E.C., Fabulous Fab, Abacus, God’s work, Carl Levin, Vampire Squids? No humility? I mean, come on. Integrity? It is eroding. I don’t know of any illegal behavior, but will people push the envelope and pitch lucrative and complicated products to clients even if they are not the simplest investments or the ones most directly aligned with the client’s goals? Absolutely. Every day, in fact.

It astounds me how little senior management gets a basic truth: If clients don’t trust you they will eventually stop doing business with you. It doesn’t matter how smart you are.

These days, the most common question I get from junior analysts about derivatives is, “How much money did we make off the client?” It bothers me every time I hear it, because it is a clear reflection of what they are observing from their leaders about the way they should behave. Now project 10 years into the future: You don’t have to be a rocket scientist to figure out that the junior analyst sitting quietly in the corner of the room hearing about “muppets,” “ripping eyeballs out” and “getting paid” doesn’t exactly turn into a model citizen.

When I was a first-year analyst I didn’t know where the bathroom was, or how to tie my shoelaces. I was taught to be concerned with learning the ropes, finding out what a derivative was, understanding finance, getting to know our clients and what motivated them, learning how they defined success and what we could do to help them get there.

My proudest moments in life — getting a full scholarship to go from South Africa to Stanford University, being selected as a Rhodes Scholar national finalist, winning a bronze medal for table tennis at the Maccabiah Games in Israel, known as the Jewish Olympics — have all come through hard work, with no shortcuts. Goldman Sachs today has become too much about shortcuts and not enough about achievement. It just doesn’t feel right to me anymore.

I hope this can be a wake-up call to the board of directors. Make the client the focal point of your business again. Without clients you will not make money. In fact, you will not exist. Weed out the morally bankrupt people, no matter how much money they make for the firm. And get the culture right again, so people want to work here for the right reasons. People who care only about making money will not sustain this firm — or the trust of its clients — for very much longer.

Greg Smith is resigning today as a Goldman Sachs executive director and head of the firm’s United States equity derivatives business in Europe, the Middle East and Africa.

Stephen.Bates | +1 202 730-9760
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Why the engineering talent issue in Silicon Valley is such an issue > What Twitter Acquires With Posterous

What Twitter Acquires With Posterous

Posterous may have lost the online popularity contest to Tumblr, but the social blog service has won a worthy consolation prize: It has been acquired by Twitter, an even more popular micro-blogging service.

Sachin Agarwal, founder and CEO of Posterous, announced the deal in a post on Monday.

"The opportunities in front of Twitter are exciting, and we couldn’t be happier about bringing our team’s expertise to a product that reaches hundreds of millions of users around the globe," he said. "Plus, the people at Twitter are genuinely nice folks who share our vision for making sharing simpler."

The price of the deal was not disclosed.

Launched in May, 2008, as a Y-Combinator-funded start-up, Posterous received early attention for its post-via-email capability and ease of use. Though widely used, it has grown slowly while rival Tumblr, started about a year earlier, has seen its popularity soar.

[ Social networking has its downsides. Read Facebook Social Engineering Attack Strikes NATO. ]

Twitter's post about the deal suggests Posterous has been "acquhired," which is to say bought more for its software engineers than for anything else.

"We're always looking for talented people who have the passion and personality to join Twitter," the company said in its blog post. "Acquisitions have given us people and technology that have enabled us to more quickly build a better Twitter for you."

As to whether a better Posterous will follow from the deal, that appears doubtful. The start-up ducks its own question, "Will Posterous eventually shut down?" Rather than answering with a reassuring and unambiguous "No," Posterous explains that users can continue to access their Posterous Spaces as they have in the past. The company then leavens that non-answer with a measure of doubt: "We'll give you ample notice before any changes or disruptions to the service and we'll provide specific instructions for exporting your content to another service."

Developer Marco Arment, who built Tumblr before leaving to work on Instapaper, suggested Posterous will shut down within six months.

"Now I have a better answer than 'LOL' for that (one) guy who asked me to add send-to-Posterous support to Instapaper a few months ago," he quipped in a Twitter post.

Windows is currently a nobody in the tablet market. That could change with the release of Windows 8, the first version designed for touch screens and the tablet form factor. With the new Metro user interface, Microsoft will try to serve both tablet and desktop markets. Can it succeed? Find out at our Byte webcast, What Impact Will Windows 8 Have On The Tablet Market?. It happens March 14. (Free registration required.)