Seven Secrets for Negotiating with Government: How to Deal with Local, State, National, or Foreign Governments—and Come Out Ahead

• CHAPTER FOUR •

TheMythoftheMonolith

How Government Organization Affects Negotiations

‘‘Youwill find thattheState is thekin d of organ ization

which,though it d oes big things badly, does

small thing s badly, too.’’

—JOHN KENN ETH GALBRAITH

In December 1990 and February 1991, a team of bond traders at

Salomon Brothers, then the fifth largest financial firm in the United

States, submitted unauthorized bids in the name of clients in a de-

liberate violation of U.S. Treasury Department rules governing

auctions of U.S. government securities. Through this stratagem,

the Salomon Brothers bond traders circumvented a recent Trea-

sury rule limiting any firm’s bid and award on five-year govern-

ment notes to no more than 35 percent of the issue. When word

of this ploy ...