New York Police Chief Ray Kelly

Image: Brent Murray

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New York Police Commissioner Ray Kelly—top cop under two different mayors, David Dinkins and (after an eight-year interregnum) Michael Bloomberg—knows more about managing big enterprises than many a corporate C.E.O.
 
At 67, Kelly is a bona fide celebrity—the familiar face of New York's Finest. He is also a smart politician who was all set to run for mayor until his boss, media billionaire Bloomberg, decided to have the city's term-limits law changed so he could stand for a third term. (Kelly is savvy enough to pretend he wasn't disappointed.)
     
He is a career public servant who absorbed his fundamental management principles as an officer in the U.S. Marine Corps. Eight years ago, after Clinton administration jobs heading up enforcement at the Treasury Department and overseeing the Customs Service, he spent all of 10 less-than-satisfying months in the private sector—as the executive in charge of global security at Bear Stearns, the Wall Street firm that cratered earlier this year.
        
Kelly discovered that he preferred the high-stakes challenge of working for the taxpayers, even though the consequences can sometimes be dire. "In the rest of the world, in the private sector, you make a mistake, it costs money," he told Portfolio.com in an exclusive interview. "In this business, you make a mistake, it can cost lives."

Lloyd Grove: You're basically the C.E.O. of a Fortune 500 company here.
 
Ray Kelly: With 52,000 employees.
 
L.G.: So a rather large Fortune 500 company.
 
R.K.: Yes, it is.
 
L.G.: First of all, how disappointed are you that you don't have the option now of running for mayor?
 
R.K.: [Laughs] I am very pleased that Mike Bloomberg has decided to run again. I think it's great for the city.
 
L.G.: If he asked you, would you stay on?
 
R.K.: Well, we haven't had that conversation, but I'm very fond of the city. I love my job.
 
L.G.: You spent exactly one year in the private sector, working for Bear Stearns.
 
R.K.: Less than one year—about 10 months.
 
L.G.: Did it just bore your ass off?
 
R.K.: It's different, I'll put it that way.
 
L.G.: What are the differences working in corporate America for an investment bank like that, versus working in public service, where you've spent all your life?
 
R.K.: Well, I've met a lot of great people in the private sector—well motivated, very smart. In the public sector, you believe that you're doing big things, great things, things that really impact on a lot of people, and in the private sector, obviously, the scope is much narrower, and you're not involved, at least directly, in contributing to the public good. So that's a significant difference. I think here, although it might sound corny, you really do have an opportunity to make a difference that impacts beneficially on many lives.

L.G.: You were running global security for Bear Stearns. What did that job consist of?
 
R.K.: Well, it consisted of a lot of things—basically the focus on fraud and seeing to it that certain rules and regulations were adhered to.

L.G.: At some point did you realize this just wasn't for you?
 
R.K.: It wasn't so much that, I think it was the horrific events of September 11th that made me realize that I wanted to be back in the game, I had something to contribute, and I felt more at home, given the events of September 11th, back in the public sector, as opposed to the private sector.
 
L.G.: So, Mike Bloomberg asked you to come back.
 
R.K.: Yes, he did.
 
L.G.: Before that, you were actually quoted as supporting Bernie Kerik, hoping that he would stay on.
 
R.K.: Um, it was an issue as to continuity, I think, after September 11th. That was the context in which I had made those statements.

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