A Troubled Double Life

• Share

(2 of 3)

Money worries also assailed him. Despite taking a pay cut from $161,000 to $59,500 when he joined the SEC, Fedders was determined to maintain the style to which he had become accustomed as a successful securities lawyer. He barely trimmed his expenses and borrowed heavily to pay his state and federal taxes, maintain a 70-acre farm in Virginia and keep his five sons in private schools. After he moved out, Fedders was straining to support his family while living in a spartan one-bedroom apartment with ramshackle furniture he had bought from some departing college students.

Fedders admits that he always put work before family. At home he was a fastidious, obsessive man who did not permit anyone to wear shoes on the carpeting; on the job he was a demon for organization, logging long hours as he supervised a 200-strong enforcement staff and meticulously reviewed proposed cases. According to SEC Chairman John Shad, Fedders demonstrated "unique executive and managerial abilities by increasing the annual volume of enforcement actions by over 50%, with 5% less personnel."

In his efforts to crack down on insider trading, Fedders engineered an unprecedented agreement with Swiss authorities that made it harder for inside traders to hide behind Swiss banking secrecy laws. He also launched the probe that resulted in the indictment of a Wall Street Journal reporter for passing tips to investors before publishing them in his column. Fedders withdrew from that case after one of the targets of the investigation retained counsel from his old law firm. While some associates found Fedders overbearing, the consensus at the agency and on Wall Street was that he was a tough, thoroughgoing official, one who did not allow his financial and personal problems to affect his work. Said one top Washington securities lawyer: "You may not like what he's done at home, but you've got to admit he was first-rate in the job."

Some observers complained that the press had been too zealous in describing Fedders' travails, and protested that as long as an official is getting the job done, he should not be penalized for his private life. After trying to dissuade the Journal from printing the story, Fedders' lawyer, Nathan Lewin, dismissed the piece as "gratuitous" and "exaggerated." Yet a senior Administration official privately conceded that President Reagan could not keep on a known wife abuser, no matter how effectively he performed his job. Indeed, the White House had been informed of Fedders' behavior last year when Mrs. Fedders, after hearing Reagan decry "family violence" in a speech, composed a tell-all letter that was eventually forwarded by her sister to White House Counsel Fred Fielding. In it she wrote plaintively, "I do not understand how a man can enforce one set of laws and abuse another."

Charlotte Fedders was reluctant to let the case go to trial, but the two sides could not agree on alimony and child support. Fedders insisted that they be based on his current Government salary, while his wife argued that they be scaled upward once he returned to private practice and cashed in on his cachet as a former SEC enforcement chief. That rich future is now less assured. Said one top Washington lawyer: "He may be a damned good securities lawyer, but he's going to find it tough to land a job in this town."