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Fired For Love

branch of Fifth Third Bank
photo by Bill Rice

Romance can bring all sorts of complications in the business world. Yet, in 2016, I would like to think that it is equally complicated for men and women.

Unfortunately, stories like those of Heather Russell make it harder for me to hold on to that belief.

Russell lost her job as chief legal officer for Fifth Third Bancorp last month. At the time, Fifth Third said her departure was due to a “personal matter” that represented a “conflict of interest.” When The Wall Street Journal looked into the story, Russell issued a statement explaining that she had proactively informed her employer that she was involved in a personal relationship with Timothy Mayopoulos, the chief executive at Fannie Mae. She categorically denied that she had ever dealt with Fannie Mae in any capacity at work, or that there was any conflict of interest present.

Fifth Third declined to comment beyond its initial statement, which simply clarified that the conflict had nothing to do with any of Russell’s legal work for the bank.

Mayopoulos had also disclosed the relationship to his employer. In March, Mayopoulos sought guidance from Fannie Mae’s compliance department when Russell invited him to the Kentucky Derby. Though Mayopoulos ended up declining the tickets, Fannie Mae decided no action was necessary unless business decisions related to Fifth Third crossed his desk; even then, he simply needed to seek additional guidance from the company’s board before proceeding.

Mayopoulos and Russell are both adults, and all the facts indicate they handled their relationship’s ramifications for their employers in a mature, responsible manner. Yet one continues to hold a prestigious job and the other was summarily shown the door.

There are two possible scenarios here. First, the outcome could reflect a pure double standard. It’s OK for a man to get involved with a woman who works for, essentially, one of his company’s vendors, but it is not OK for a woman to get involved with an executive who works for one of her firm’s customers – particularly one controlled by the U.S. government.

But that leads us directly to the second possibility. Fannie Mae was effectively seized from its shareholders as part of the government bailout in 2008, making it now essentially an arm of the government. In the event that the government, through its bank regulatory structure, decided that Fifth Third had somehow exploited the personal relationship between its counsel and Fannie Mae’s CEO, Fifth Third could be in for some very steep fines. So the business risks were, objectively, bigger for Fifth Third than for Fannie Mae.

But still, guys – really?

Russell was Fifth Third’s top lawyer, not its only lawyer. The bank has other in-house attorneys and a full roster of outside counsel to choose from. Moreover, transactions with Fannie Mae constitute a very small part of Fifth Third’s overall business. Yet they couldn’t find someone else to stand in Russell’s place for those few transactions as long as Mayopoulos remained Fannie Mae’s CEO?

What is the bank planning to say to the next woman it recruits as its chief legal counsel? “We would like it if you stayed with your current husband as a condition of your employment here?” They do understand that the Eisenhower administration has left office, right?

With all the legal talent available, it is hard to believe Fifth Third could not simply find a way to document that they were aware of a relationship that both parties fully and timely disclosed. Fifth Third – and Fannie Mae, had Russell stayed in place – could easily have documented that appropriate steps were taken to address any potential future conflicts of interest. It would not have been especially difficult considering Russell and Mayopoulos’ positions.

The fact that both Russell and Mayopoulos were open about their relationship with colleagues and proactively offered their employers the information suggested that both of them had every reason to think their employer would handle the matter reasonably. Unfortunately, only one of them was right.

I thought we had made progress since Mary Cunningham was forced to resign her position at Bendix Corporation due to the suggestion of a romantic connection to CEO William Agee, who kept his job. Cunningham, unlike Agee, was 29 years old, good-looking and female, which meant that many people found it hard to believe she could become a company vice president only 16 months after graduating from Harvard Business School based on her intelligence and skills alone. The allegations of an affair, which were merely a bump in the road for Agee, drove Cunningham out of the company.

Most of the time, I go around believing that we have all grown up in the 36 years since Cunningham left Bendix. Then someone like Fifth Third comes along to burst my bubble.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us,” and Chapter 4, “The Family Business.” Larry was also among the authors of the firm’s book The High Achiever’s Guide To Wealth.

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