The Billionaire's Apprentice: The Rise of the Indian-American Elite and the Fall of the Galleon Hedge Fund (45 page)

This book would not have been possible without the ambitious vision of Shawn Coyne. From the beginning, Shawn, my agent, saw that this book was much more than a book about insider trading. He realized early on that the Galleon case was the perfect way to tell the story that I had been wrestling with for years: the rise and maturation of the South Asian diaspora in the United States. Shawn worked with me every step of the way, serving as editorial counsel on the project and guiding me as I navigated the twists and turns of this complex tale. John Brodie, my editor at Business Plus, enhanced the manuscript with his deft touch and keen appreciation of the important ingredients of a great story, honed by over twenty years as a working journalist. He, Meredith Haggerty, Carolyn Kurek, and the entire team at Grand Central did everything they could to make my first book a smooth journey.

A few others played a great role in producing this book. Sue Radlauer, the librarian at
Forbes
, devoted hours and hours of her own time, too immeasurable to count, to unearthing sources for me, finding research by academics, and tracking down articles that offered a key nugget or two. Like all librarians, Sue is a prodigious digger and invariably produced far more than I asked for, often going the extra mile to put the information she gleaned in context for me.

N. Ram, the former editor in chief of the
Hindu
, the largest newspaper in South India, opened up to me the most valuable possession a journalist has: his Rolodex, which he had cultivated through a remarkable forty-six-year career as one of the country’s finest journalists. Ram read the manuscript and offered constructive suggestions on how to strengthen it. Although he knew of me only through his daughter Vidya, with whom I worked at
Forbes
, I am grateful that he had the faith to believe in me and trust me with his contacts. I am also indebted to Vidya for introductions in her ever-widening circle of sources.

A close friend in London, Uma Waide, who edits books, made gentle but important suggestions to the manuscript. I have always respected Uma as a friend. In the past two years, I have come to admire her as an editor.

Seena Simon, an old friend from my early days in New York, read the manuscript with a critical eye. A number of former colleagues from
Forbes
were invaluable too. Kai Falkenberg was unflinching in her advice on legal issues, Naazneen Karmali helped open doors in India, Janet Novack assisted in all things Washington, and Tom Post got the ball rolling by championing a piece about Raj Rajaratnam for the Forbes 400 more than two years ago.

I am grateful to my fact checker and researcher, Matthew Resignola, who was tireless in chasing down people and checking memos, even offering to help during the Christmas holidays.

Much of the reporting for this book was done in New York, which once was my home. A number of old friends and some new ones eased my reentry to the city. First and foremost, I want to thank my old colleague from the
Wall Street Journal
, Ianthe Dugan, who made her home “a home away from home”; the Southworths and their daughter Leela; Dave Smith and Amy Stiller, my friends from my old building who made me feel as if I had never left; and my cousins.

Several others helped in this endeavor in various ways: Peter Lattman, George Packer, Andrew Sorkin, Kaja Whitehouse, Scott DeCarlo, Quinn Martin, Vai Rajan, Azam Ahmed, David Glovin, Patricia Hurtado, Chad Bray, Kara Scannell, Parmy Olson, Juju Menon, Raghu Kumar, Shaku Sindle, Anjollie Feradov, and my old friends at home in London, Shonu Das, Sara Calian, Amanda Partridge, and Stephen Macmillan. Finally, a special thanks to my former editor at the
Wall Street Journal
, Michael Siconolfi, for teaching me how to fish.

Writing a book is a lonely experience, and I would not have survived had it not been for Martin, who has accompanied me on this journey. His quirky sense of humor made me laugh when all I wanted to do was cry, and his love has nourished me when I flagged. All I hope is that one day I can do the same for him.

My father came to the United States in 1958 to study for his doctorate at Princeton University, and my mother came a year later on her own for an internship at the Brooklyn Public Library. Even at eighty-two, she is still a librarian at heart, eager to dig up a book or find a source for me. Like many in this story, my parents are symbols of Indian achievement in the United States. I am grateful to them for their love and support and, most important, for the values they instilled in me. No one could be blessed with more wonderful parents.

This book was born with the arrests on October 16, 2009, of Raj Rajaratnam, Anil Kumar, and Rajiv Goel. Ever since I wrote a piece for the
Wall Street Journal
in 2006 about the Doon School and its graduates who had made it to the highest echelons of corporate America, I had been struggling to find an engaging way to write about the South Asian diaspora in the United States. The Galleon arrests provided the perfect vehicle. What is remarkable about the case is that it told many stories in a single story. It was a tale of the early migration of Indians to the United States, their breathtakingly swift rise and heady success in America, and last but most important, the emergence of a second generation of Indians who would ignore the blind loyalties their fathers held to kin and country and serve as a model of assimilated Indians in America. Of course, when I started on this odyssey I had no way of knowing that the story would also offer a compelling tale of India under the rule of the British and a window into the sacrifices that men like Rajat’s father made so that every Indian today has the privilege to live in an independent and free country.

This book is based on more than two hundred interviews in three countries: the United States, the United Kingdom, and India. To understand the forces that influenced Gupta, I traveled to Calcutta, now Kolkata, where I visited his uncle’s house, and interviewed his cousins, one of whom lives in the very same house where Rajat’s father was brought after his death. I also examined police records and spoke to journalists who knew his father, which helped round out the picture of Gupta’s father that I had started to form by trolling through records in the British Library and the Library of Congress.

A word is necessary on the spelling of an important name in the book. Rajat Gupta spells his father’s name Ashwini, which is the way his name would have been pronounced in Bengali. However, the account of Gupta’s father’s freedom-fighting crimes is drawn from historical sources and newspaper articles in which his name is given as Aswini. Such inconsistencies in name spellings are not uncommon in India and arise from the challenge of translating Indian names into English. My research establishes that Rajat’s father and the Aswini Gupta depicted in historical records and newspapers are one and the same person. A piece entitled “Aswini Gupta: A Life Sketch” that ran in the
Hindusthan Standard
on November 5, 1964, says that Gupta, the head of its news bureau in Delhi, was the younger brother of Mrs. Tatini Das, a former principal of Bethune College, Calcutta. He is similarly identified as the brother of Mrs. Tatini Das in newspaper reports in the mid-1930s on a crime and conviction case that was a cause célèbre in Calcutta. Finally, Indian cities in the book are referred to by their names at the time of the events in the story with a few exceptions, such as Pondicherry, which, despite its official name change, still goes by its old colonial name.

My research on Gupta continued in Delhi, which I visited three times. There I began to form an impression of the adolescent Gupta, and through the sources I cultivated for the
Journal
story on the Doon School, I was able to track Anil Kumar’s metamorphosis from quiet, unassuming schoolboy to master-of-the-universe wannabe.

In a sense, like the characters in my book, I was twice blessed in my reporting. This is the first book on an insider trading case written with the aid of nearly fifty wiretapped calls, some of which run nearly 30 minutes. The wiretaps offered an extraordinary glimpse into white-collar crimes, typically shrouded from public view, being perpetrated in real time. More important for me as a writer, the wiretaps were key in developing an understanding of a protagonist’s real character and a person’s state of mind. In situations where a person’s thinking could not be drawn from a direct interview of the subject, the wiretaps were invaluable.

All quoted conversations from these recordings are footnoted as coming from the relevant recordings and reflect the actual words spoken by the participants in the exchange. Other quoted conversations re-created in the book do not necessarily come from the individuals party to the conversations but rather reflect remarks heard by others or are contained in testimony or court documents such as FBI interview notes. Unlike the wiretaps, these re-created but quoted conversations in some cases rely on the individuals’ memories and represent their best recollections. Like the wiretaps, though, these sources were important in painting a scene or providing a window into a person’s thinking. Invariably, in a story like this, individuals try to retouch the truth after the fact or in their public declarations. This book relies to a large extent on conversations some of the key players had with their close circle of friends. In my view, it is in these private, unguarded moments that the closest semblance of the “truth” emerges.

In instances where there are two competing versions of events, I have footnoted the conflicting account and explained the reason I chose the version that appears in the text. Typical is the recounting of Anil Kumar’s role in the growth of the McKinsey Knowledge Center. My reporting points to Kumar’s playing a pivotal role in getting the Knowledge Center off the ground and leveraging his relationship with Gupta to secure approval from McKinsey’s Shareholder Committee. McKinsey disagrees. A spokesman flatly says, “That is not accurate. To our knowledge, Anil Kumar did not play such a role in getting support for the knowledge initiative.” My decision to follow my reporting in the text is based on interviews I conducted with individuals who were involved in the setup of the center at the time and who, in my mind, don’t have a vested interest in the way Kumar is portrayed. These individuals, while conceding that they were not fans of Kumar’s, said he was instrumental in the creation of the center.

This book was enriched by two trials, which I attended, one involving Raj Rajaratnam and the other Rajat Gupta, and two hearings that produced a huge volume of court testimony and documents including contemporaneous FBI interview notes of witnesses. While neither Rajaratnam nor Gupta took the stand in their defense at their trials, this gold mine of information combined with the wiretaps offered a penetrating portrait of both men. In addition, in the case of Gupta, my reporting was enhanced by two sources: a remarkably revealing three-hour taped talk Gupta gave to a class entitled Creativity and Personal Mastery taught by Srikumar Rao and a self-published history of McKinsey,
A History of the Firm
, by George David Smith, John T. Seaman Jr., and Morgen Witzel. Those two sources, along with more than eight hundred pages of letters that were submitted on Gupta’s behalf before his sentencing, helped pierce the veil of a deeply private man with a well-cultivated public persona. (The letters were made available under an order by Judge Rakoff in response to a request by the
Wall Street Journal
.)

I am grateful to my colleagues in business journalism for some stellar reporting on this case. A handful of stories stand out. On the investigation, Susan Pulliam of the
Wall Street Journal
led the way with her early story, “The Network: The Feds Close In: Fund Chief Snared by Taps, Turncoats—Prosecutors Stalk Galleon’s Rajaratnam After Finding a Revelatory Text Message.” George Packer of the
New Yorker
enriched the story with his piece “A Dirty Business: New York City’s Top Prosecutor Takes on Wall Street Crime.” By far the best reporting on Raj Rajaratnam came from a
Wall Street Journal
story on December 29, 2009, by Robert A. Guth and Justin Scheck, entitled “The Network: The Rise of Raj: The Man Who Wired Silicon Valley—Fund Boss Built Empire on Charm, Smarts and Information.” Peter Lattman, at the
New York Times
, who has a keen eye for everything from legal maneuvers to sartorial style, served up some of the most riveting reporting on the two trials.

David Glovin and Patricia Hurtado of Bloomberg News left no stone unturned in their coverage of the Gupta and Rajaratnam cases. And finally, as I delved into the life of Rajat Gupta, I found myself turning again and again to a story written nearly two decades ago about him by Sreenath Sreenivasan.

Although I am a member of the South Asian diaspora, this story was as hard to report as any in my twenty-four-year career as a journalist. The Galleon case was the first black mark on a community that had enjoyed unflinchingly positive press. Like any immigrant group thrust into the limelight, South Asians were reluctant to air their dirty laundry in public. A few were aghast at the actions of their friends and spoke on the record. But many more were bewildered and hesitated to speak for attribution. They were worried about jeopardizing the legal outcomes; even as this book was being finished, two of the central characters, Gupta and Rajaratnam, were appealing their cases. As a result, much of the storytelling in the latter part of the book relies on anonymous sources, mostly declared friends of some of the key players who followed the case both through publicly available press reports and through private exchanges with their embattled friends. Their insights, often different from the public declarations of support they offered, are reflected in the pages of this book.