Wamu's former CEO: Bank's demise "abominable, to put it mildly"
Lou Pepper saw it coming, but he's still dismayed about the "pathetic" collapse of Washington Mutual
Seattle Times business reporter
Lou Pepper saw it coming, but he's still dismayed about the collapse of Washington Mutual, a bank he ran for almost a decade before Kerry Killinger became CEO in 1990.
"That it comes to a demise like this is absolutely pathetic," said Pepper, who is 84 and lives outside La Conner, Skagit County. "It was a great institution for 110 years or more, and to see it so mishandled that it would be the largest bank failure in the country is abominable, to put it mildly."
Over the past few years, Pepper said, he has been "shocked and angry" at changes within Washington Mutual. He hesitated to point a finger over its failure, because "there's no one person to blame for this. There's always help."
Still, "I suppose you can look at the top three people and could give equal blame to them if you're going to blame people. But why blame anyone? It's done. It's over with. It's gone."
The bank's end contrasts with its long history of survival and prosperity.
"It's the biggest bank failure in the history of the country, and that's a bank that made it through the Depression without anybody losing a dime," Pepper said.
Began work in 1953
He began working for Washington Mutual as outside counsel in 1953. He became a board member, then left his law practice to help the bank through some interest-rate difficulties and soon became CEO.
"It had a magnificent reputation, and it was wonderful to work for," he said.
Pepper remembers WaMu as a bank that worried competitors when it came to town, and pioneered such services as cross-bank ATM use and telephone bill payment.
"I have enormous sadness for the poor people there who have been hung out to dry, in effect, and for the community, which is losing a great institution," Pepper said.
Pepper left his role as an adviser to WaMu about three years ago, because "it had turned into a different place. ... It wasn't as friendly, it wasn't as nice."
Size was not the problem, he said.
"Big institutions can succeed, but they have to be run like little institutions," he said. "You have to give autonomy to the branches, and have people being nice to each other. You can't have this monolith."
Pepper said friends have called to remind him of the good that WaMu has done over the decades, and "what's been accomplished by those wonderful people who work at that bank."
He paused. "You get through things like this, too," Pepper said of himself. "It'll be much harder for the poor people working there and the community, which will gradually get to know how much they lost."
Seattle Times researcher
David Turim contributed
to this report.
Melissa Allison: 206-464-3312 or firstname.lastname@example.org
Copyright © 2008 The Seattle Times Company
UPDATE - 09:46 AM
Exxon Mobil wins ruling in Alaska oil spill case
UPDATE - 09:32 AM
Bank stocks push indexes higher; oil prices dip
UPDATE - 08:04 AM
Ford CEO Mulally gets $56.5M in stock award
UPDATE - 07:54 AM
Underwater mortgages rise as home prices fall
NEW - 09:43 AM
Warner Bros. to offer movie rentals on Facebook