Ray Kelly New York's top cop talks about managing 52,000 employees, using technology, working for Mayor Bloomberg, and coping with shootings and tragedies.

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.

L.G.: Right, continuity was apparently very important. Mayor Giuliani thought it was very important that he stay on as well.

R.K.: Sure.

L.G.: Tell me if you picked up any management lessons from working at Bear Stearns. Obviously, you know a lot of corporate C.E.O.'s. Did you get to know Jimmy Cayne pretty well?

R.K.: I got to know Jimmy Cayne, but I can't tell you I got to know him well. It's a big organization, had 8,000 people when I was there. I would say I was there too short a period of time, I think I picked up a lot of management training from my time in the Marine Corps, which really was 30 years active in reserves. In my time in law enforcement, I was the C.E.O. of U.S. Customs, I was the undersecretary of the Treasury, and I had lots of federal agencies reporting to me-I even was the chairman of the New York State Athletic Commission for a period of time. So I've had a fair amount of executive experience, and I had it in this job, coming up in the job, so I can't say that 10 months in the private sector taught me a lot other than the fact that there were well-motivated, smart, good people in Bear Stearns that I still keep in contact with.

L.G.: And you can't tell me today that, had you stayed there, you could've prevented them from going large in subprime derivatives?

R.K.: I'm not certain I understand to this day what that all means. Credit default swaps are not my strong suit.

Page 2

L.G.: There's been a lot of talk lately that with Wall Street obviously in a terrible bear market, the economy going into the dumper, that has an impact on crime, particularly here in New York. During depressions and recessions, crime rates tend to rise. What's your sense?

R.K.: My primary concern is that this economic environment we find ourselves in will impact on the resources that we have available to police in this city. The mayor has some pretty difficult choices to make. We have to balance our budget every year. We're not like the federal government where you print money. The budget has to be balanced.

L.G.: And your budget is, what, close to $4 billion?

R.K.: Yes, and 94 percent of our budget is personal services, salaries, so to have any meaningful reductions in the police department, it has to affect our head count in some way, shape, or form. I don't know what they will be. What decisions we'll make haven't been made yet, but that's obviously my concern. So I see that as a bigger issue. I don't see former Lehman Brothers employees going out and sticking up 7-Elevens. I don't think that's the outcome of what we'll have here. The larger picture is the reduction we've done. I think we have transformed this department since September 11th, and we have made it not only a conventional crime-fighting organization, but a counterterrorism entity that I think, in terms of a municipality, is second to none. We have no guarantees, but we have done more to protect this city than any other city has, to the best of my knowledge, in the world.

L.G.: Right. But you also have the normal workaday police work.

R.K.: Absolutely, and we've been able to reduce crime 30 percent since this administration came in, in 2002, with 5,000 fewer officers than we had in 2001. We have about 36,000, but we had 41,000. In the middle of this administration, we had a horrific arbitrary decision of lowering the starting salary to $25,000 from what it was-$40,000-so we went back to the starting salary of 1986. That's another challenge. We've lost 5,000 officers, we've got additional obligations of protecting the city form a terrorist attack, and, oh, by the way, we lowered your starting salary almost 40 percent. Make it work. So we have be able to make it work. Crime is down 30 percent, as I say. Last year we had the lowest number of homicides that we've ever had since we've began to record them accurately in 1962.

L.G.: What was that?

R.K.: 496. Now, if you look at the homicide rate in the city-murder rate-not all homicides are murders, but if you look at the murder rate compared to other cities, New York is by far the safest big city in America. It's the safest out of the top 10, the safest out of the top 25. Now, if you look at New Orleans, New Orleans has a murder rate of 95 per 100,000 population, Baltimore has a murder rate of 45 per 100,000, Philadelphia, I believe is 27 per 100,000, Los Angeles is 10 per 100,000. And we're 6 per 100,000. This is, in my business, a remarkable number.

L.G.: Well, the New York City police department obviously has a reputation for management and crime reduction theory that works. And I gather you've lost a lot of your people to run other police departments. Why is it that other police departments, such as Baton Rouge, want to get New York-style management of their police?

R.K.: I can't criticize other departments, I don't know what's going on in other places. I will tell you this: In most cities, police officers are the most expensive civil service, so cities will come here and are looking for the magic formula, looking for a bit of a gimmick-CompStat or whatever. Now, all these things work, but there's no substitute for boots on the ground. You need the bodies to do it, and we've been able to do it with 5,000 fewer officers. But there's difficulty in other cities paying for the police services, and most cities have a formula that gives you roughly enough police officers to respond to 911 calls and some investigative ability. You need more than that, in my judgment, to aggressively attack crime problems. Not every city has crime problems, but in the cities that do, I think you have to, if at all possible, try to find the resources to provide an adequate number of police officers on the street. Most cities have a formula, about 2.1, 2.2 police officers per 1,000 population. We have about 4. Washington, D.C., has about 6-so it's not a panacea.

L.G.: You use CompStat [a hardheaded and occasionally severe management tool that relies on comparative statistics in individual precincts to evaluate performance, often harshly], right? And under Mayor [David] Dinkins, you developed community policing, so-called, and CompStat, I guess, is credited to Bill Bratton [Kelly's sometime rival who was Mayor Rudy Giuliani's police commissioner].

R.K.: CompStat is a system that we have in place here, on a borough basis, where commanders would come in and the borough commander would question what's going on in their precinct. What they did is simply take the system and put it on a citywide basis. We're doing something else here. We have a real-time crime center-did anyone talk to you about this? It really doesn't exist anywhere else in the country. What we have done is create a data warehouse here. When this administration came in here in 2002, we were still one of the world's biggest users of Wite-Out and carbon paper.

L.G.: And now you're so high-tech that when you read books, you do it on a Kindle?

R.K.: Yep, it's amazing. You can download it, you buy it for under $10, and it downloads in 30 seconds, I get the New York Times on it every day, automatically it shows up, and you can carry 50 books in it.

L.G.: So you're state of the art-no carbon paper and Wite-Out for you, man.

R.K.: We did lead the league, though-55 million drums of Wite-Out. And we have changed it significantly, brought in 12,000 computers, brought in the C.I.O. [chief information officer] from outside, and I got a recommendation from Lou Gerstner.

L.G.: The former I.B.M. chief executive.

R.K.: Right, and Jim Onalfo is our C.I.O. He was the C.I.O. of Kraft Foods and Stanley Works [the tool manufacturer]. But we had put in place this idea to create this data warehouse, we opened this in 2005, so we are pushing out real-time information when a crime happens, okay? CompStat is a retrospective look at what you did, for commanders to handle your crime problems. It's an auditing process.

L.G.: And it's a rather rough one.

R.K.: Well, it's direct, but it's lost a lot of that reputation.

L.G.: It's no longer like an EST session-people locked in a room and screamed at?

R.K.: No, no. So this is the other side of the coin. This is after the crime happens to push information to investigators in the field. I was just out at a shooting scene. We had six people shot, and we had one of them killed.

Page 3

L.G.: Today?

R.K.: Just today, in Brooklyn, in the 88th precinct. An off-duty policewoman was shot in the foot. She's in there getting a haircut, but two males chase this individual, shot other people in the process, but shoot him in the head and kill him. So, when a crime like this happens, we dispatch vans from the real-time crime center. A van was out there, they are gathering information, and pushing information out to the investigators who were on the scene. It's kind of a big deal, lots of cops there. One of the classic examples I give is, we always had a tattoo file. Like, I run somebody with a tattoo and it says "Ray" on it, you record that. But we weren't able to easily access it. With the real-time crime center, we access it. Shortly after this center opened, a Sbarro's was robbed on Fifth Avenue. Somebody comes in, he had "sugar" tattooed on his neck, so we go through our real-time crime center, access the tattoo file. Most people arrested with the "sugar" tattoo are women, but we had this guy, picked him out of photo array, showed it to people, and arrested him right away. It's a simple example. We have billions of pieces of information that's available-both proprietary information that we have in-house and external databases that we push out to the field. The notion is that we're dealing with recidivists here, so if we get people who commit crimes off the street more quickly, we're going to reduce crime. It's working.

L.G.: What have you done in terms of increasing the number of cameras in the city?

R.K.: We have put in our own program of 550 cameras. We did that in all five boroughs. The program is finished. We put them in high-crime areas. We had a federal grant to enable us to do that. I would love to put another layer of those cameras in place. Now there's the Lower Manhattan Security Initiative, you familiar with this at all? Okay. Lower Manhattan is still the most sensitive area, from Canal Street south, 1.7 square miles. So, we are putting in place a Lower Manhattan Security Initiative that will involve 3,000 cameras-1,000 public-sector cameras, 2,000 private-sector cameras, about 130 license-plate readers-some mobile, most fixed. Also actual physical barriers that can wall off the area in extreme situations, and a coordination center, at 55 Broadway, on the 28th floor. We will bring in public- and private-sector stakeholders, and, again, it's another big-screen operation that will provide an enhanced security with about 600 additional police officers as it's planned now, and encompasses the World Trade Center site, and it has the Goldman Sachs Tower, the World Financial Center, New York Stock Exchange, Bank of New York, Mercantile Exchange, and, of course, everything that's going to be built-the Freedom Tower and other buildings at the World Trade Center site. That is going to be done in conjunction with Securing the Cities, which is a federally financed program. We're going to use state of the art, and we're already distributing state-of-the-art radiation detectors from 50 miles out. It'll be merged with this program. It's the first city in the country to have this, and on the screen we'll be able to see. I've signed a memorandum of understand with at least 22 other jurisdictions, so that we're all in this together. The notion is that if we get a reading on our detectors-

L.G.: Like a dirty bomb?

R.K.: Exactly. Radiation is coming in and it's out in New Jersey, it goes up on the screen, we're all tied in together. So with these radiation detectors, we will have cameras, we will have license-plate readers at all 19 of the entry points into Manhattan. So it'll be a very densely covered area.

L.G.: What do you say to civil libertarians? I guess that's different. If you were just a corporate C.E.O., you'd be doing this and not everybody would be throwing brickbats at you.

R.K.: Well, I don't think everybody's is throwing brickbats.

L.G.: Not everybody, but there are people who are concerned about privacy.

R.K.: You'd be hard-pressed to find them, other than the civil liberties union, the A.C.L.U. That's something they bring up-nobody else brings it up. You go into a department store, your picture is taken 20 times. That's the world we live in, I think post-9/11, people accept that. We are only using cameras in public areas. Nothing private about it. There's no expectation of privacy when you walk down the street. This is the area that we are taking pictures of. We have no intention of archiving this material, for more than, say, 30 days.

L.G.: In other words, you won't do it?

R.K.: We won't do it. There's no purpose in doing it. We want to allay people's concerns about it. It's for real-time security. It will also have predictive software built in, again state of the art. What do I mean by predictive software? Let me give you a simple example. If a truck goes around the block three times, we'll say, that will set off a certain indicator, or there's a package on a certain location, unattended for X period of time, that will also set off an indicator. I believe the Lower Manhattan area will be the most secure, but also open, business district anywhere. It'll be far beyond what's happened in London, and the London authorities certainly agree. They've been helpful with us, but they know that we're moving beyond what they've done. We know that area has to be secure, but we know it has to be open to be commercially viable. So it's a balance, and we certainly attempt to strike that balance.

L.G.: You've also heard from people who were unhappy with the way the New York cops handled the 2004 Republican convention in terms of public protest. You're sometimes criticized as allegedly having less admiration for the right of public assembly than others.

R.K.: [Laughs] That's not the case. I think the Republican National Convention was one of this department's finest hours. We had 800,000 people who came here for a demonstration, and nobody was hurt except one cop who was beaten and kicked. Look what's happened at other conventions, much smaller conventions. Look what happened in Denver, Minneapolis, St. Paul-macing people. None of that happened here. They came here-"they" being certain elements-to shut down the city. You have to remember that this was an incumbent administration having its convention here, all the principals coming here. This wasn't an outgoing administration, this was conceivably an administration that was going to be reelected. So they came here with the intention-and stated openly-of shutting the city down. That didn't happen. What did happen is the criminal justice system was overloaded, and it's understandable that when you arrest that number of people, you're not going to be able to handle them in the way you handle a normal flow of arrests on another day. But I thought the cops did a terrific job. All you have to do is look at the statements of CNN and the New York Times who have praised us liberally for the work that we did during the convention.

L.G.: So basically the New York Times and CNN-those are your metrics?

R.K.: Absolutely, and many others say exactly the same thing. This is New York, this is the litigation capital of the world. We understand that, we accept that as the working environment we have to operate in.

L.G.: I want to get into some of your core management principles, but unlike a business, you also have a lot of crisis events to contend with, just internal situations which are public hot buttons. For instance, you had to deal with this horrible, tragic situation of the Taser incident, where the guy fell and died and then the lieutenant who was reprimanded committed suicide-which is just a horrific thing for you personally to have to deal with. Walk me through what that was like.

R.K.: Well, this was a terrible tragedy for all concerned. I know that we handle about 88,000 calls a year with emotionally disturbed persons, and the overwhelming majority are handled without any problem at all. But each one is different than the other one. We take our emergency service officers and we train them, and they'll have six months of additional training. They're hand-selected, and they are trained to deal with these situations. We're human beings, sometimes we make mistakes, but unfortunately in this business, when you make mistakes, it can cost lives. In the rest of the world, in the private sector, you make a mistake, it costs money. In this business, you make a mistake, it can cost lives. So the ante is much higher in policing when you make a mistake. It's unfortunate that the Taser was used in that situation. Of course, it resulted in a loss of life, but the overwhelming majority of situations that we handle are done well. And we have departments coming from all over the world to see how we handle the emotionally disturbed.

Page 4

L.G.: Right, but have you ever dealt with a situation where an official executive action on your part and the part of your managers was connected with a suicide of a police lieutenant? That's tough stuff to have to deal with-all the press with the lieutenant's family saying that you, Ray Kelly, are not welcome at the funeral.

R.K.: No, I did go. I think it was unfortunate. The father told me that he didn't think it out, he apologized. And this is not an easy job.

L.G.: You've got to be internally tough. I mean, that is emotionally wrenching.

R.K.: It's a very demanding job.

L.G.: You once described the New York City Police Department as being as mysterious to outsiders as the Vatican. What did you mean by that?

R.K.: [Laughs] It's as mysterious to outsiders as the Vatican. It's a complex place, and it certainly helps to grow up in the organization. I started as a police cadet in 1962, when there was an attempt to get college graduates into the police. So it was the first class of its kind, but I've been around here a long time. I was in 25 different assignments. So it is a big, complex place. It has its own culture. It has its own mystery. But it is a superb organization. I say that having been exposed to other large organizations. There's nothing like it.

L.G.: Well, in your role as "the pope," are there any mysteries to you? Anything you don't understand?

R.K.: Define "mystery." I'm sure I don't know what's happening in lots of quarters, but that's true for any major organization. There's a system in place that makes it run and makes it perform, I would submit, very effectively, 24 hours a day, seven days a week. Do we make mistakes? Sure, but this is the type of business in which you can make mistakes.

L.G.: What mistakes have you made that you regret, or that you learned from?

R.K.: I would say I really don't look back. I can't think of any mistake right now that jumps out at me, you know, that I would necessarily learn from. I'm sure there are some, but I don't dwell on them.

L.G.: Another incident that you had to deal with not so long ago was the Sean Bell shooting, another matter of huge public emotion and controversy. [In the wee hours of November 25, 2006, in Queens, plainclothes and undercover officers fired 50 times during a confrontation with a group of men leaving a bachelor party, wounding two and killing one, Sean Bell, on his wedding day.] What's the status of that?

R.K.: We did what we had to do. We asked the Rand Corp. to come in to take a look at our shooting policies. They did that, we put in place an internal undercover review committee, made up of chiefs from both inside and outside the department, who had about 250 years of police experience collectively. They made about 18 recommendations, and we adopted virtually all of those recommendations, including a breathalyzer test. We're the only major police department in the country that has that. After an officer uses a firearm, he takes a Breathalyzer test. So we responded to that situation. There is still an examination being conducted by the federal government to determine whether or not there was any federal violations involved in it. In the meantime, the case went to trial, the officers were acquitted. Administrative charges had been brought on these officers, but they've been put in abeyance. We've been asked not to go forward with those charges until the Justice Department finishes its examination.

L.G.: By the way, were you ever up for F.B.I. director? Louis Freeh got the job and you were a candidate?

R.K.: I was asked, yes, when I had this job the first time. I got a call from [Clinton White House Counsel Bernie Nussbaum], and I was asked if I'd be interested in it.

L.G.: Tell me-I noticed you gave a speech in France, at the European Policing Conference in Paris. Nice trip, Ray!

R.K.: You've been googling me! When was that?

L.G.: May 22nd of 2000. You were just talking about police work and some general principles, and you talked about the 10 commandments of management, and you only enumerated three. But I'd like to talk to you about those and any others you have. You said, "Do not hire your problems," "Do not economize on ethics," and "Do not resist outside help." Why don't you talk about those, and what are some of the other management principles that you operate by?

R.K.: I think those three are sound. I think vetting, making certain that you're hiring the best possible people for the job, given certain restrictions in civil service that you have to adhere to. But here we have a very intense background investigation, and we've hired almost half the department since 2002, and crime continues to go down. I would submit that is an indication of the quality of people that we've been able to hire.

L.G.: Even when their entry-level pay is pretty bad?

R.K.: That's right. I've had people in this office, I tell them we are in no way going to compromise our standards, I don't care if we can't hire one person. And I made that very clear, and I knew it was a temporary thing. As a matter of fact, now our applications and people expressing interest in the department, are up 90 percent as a result of the economic situation.

L.G.: Anyone from Lehman Brothers?

R.K.: Probably-also the fact that the salary is now up to $40,000. It went back up in August.

L.G.: So what have you done with those poor souls who joined at $25,000?

R.K.: Well, some of it is retroactive. The contract for the police officers has been lagging for several years. What was the other one we talked about?

L.G.: "Don't economize on ethics."

R.K.: I've put in place an ethics board here where we have chaplains and other people who you submit ethical questions to. I have promoted, with great emphasis and increasing numbers, people in our internal affairs bureau. Promotions have been disproportionate in that area. In terms of outside help, I've used McKinsey & Co. I've used Rand. I've used McKinsey for a few things, McKinsey came in to look at our lessons learned from September 11th. McKinsey also looks at our personnel practices, and Rand looked at our stop-and-frisk policies, also our firearms practices. We certainly are more than willing to use business practices, and obviously recognize esteemed consultants in the commercial world to help us to bring to bear their expertise.

Page 5

L.G.: Since you're a public official with a very high public profile, how important is being a communicator to the public at large as well as within the department? Let me read you something-this is from a Newsday columnist: "Ray Kelly has that classic, just-the-facts, tough-cop look. You know, with the pug-nosed broad features, the close-cropped gray hair, and the body that seems to be built out of solid rock. But don't be fooled. The police commissioner is a silver-tongued slickster of the first rank. He can take a dubious line and spin it more artfully than a whole army of public-relations wizards."

R.K.: Really? Hmm.

L.G.: Wrong? Right?

R.K.: Communication is part of the job. Did you read the Village Voice last week? I saw an article in it, "Ray Kelly's Surprising Under the Radar Campaign." This article presupposes that I would only go out and do a good job because I wanted to be mayor. In there, you'll read positive statements from the Muslim community, from the Orthodox Jewish community, and from Calvin Butts. So, in terms of I go out and speak to them, it's gets to your point-

L.G.: When you took over this most recent tour, you went to a lot of black churches-

R.K.: Well, last time I did it and this time I've done it as well. I mean, you have to be police commissioner of all the people. We have made this department the most diverse police department in the United States. In our police academy right now, we have recruits from more than 58 countries, and that's incredible. We have more Urdu, Pashtun, Hindi, Farsi, Fukienese speakers than any law-enforcement agency anywhere.

L.G.: Fukienese?

R.K.: Fukien Province in China. We have a significant population in the city, but it's been hard to get those speakers. The dialect is difficult to understand, it's different than Mandarin or Cantonese, significantly different. So we've done an awful lot here to make this department look like the population we police, the most diverse city in the world. We've got the most diverse police force in the world, and we've increased the numbers dramatically in this administration. This department is now 25 percent Hispanic, Latino, and 17 percent African American. The city is about 24 percent. Asian went from 1.5 percent to 4 percent. We just started a Muslim officers association, which we supported significantly. I think it is even mentioned in that Village Voice article.

L.G.: Was the thesis of this article that all this was for naught because you can't run for mayor?

R.K.: I guess so. That's it-the only reason you'd do a good job. "Ah, now this guy will sit in his office the rest of his time."

L.G.: But you wouldn't deny that you have some pretty good political skills and communication skills, would you?

R.K.: I hope so, I don't know.

L.G.: I haven't read too many incendiary quotes from Al Sharpton about you lately. What other management principles do you use? You obviously have a degree in public administration from Harvard, and you have a law degree from St. John's.

R.K.: Yes, and I have a Master of Law degree from N.Y.U.

L.G.: Any other credentials?

R.K.: I'm a graduate of Manhattan College. I'm a retired colonel in the Marine Corps Reserves.

L.G.: And you lead combat units in Vietnam.

R.K.: That's true.

L.G.: That's a pretty impressive résumé.

R.K.: Thank you.

L.G.: You don't need me to tell you that. Did you pick up some management principles from Harvard?

R.K.: Yes, I'm sure I did. I think my foundation in terms of management and leadership really rests with the Marine Corps and the training I received there. I talked to other Marines and other people in the service, not just the Marine Corps, and I think you use those skills every day, whether you're conscious of it or not-things like leadership principles, integrity, job knowledge, decisiveness, dependability, bearing, enthusiasm, endurance, judgment. Those sorts of things stay with you.

L.G.: So the Marine Corps was very formative for you in terms of being a leader, being a manager.

R.K.: Some of these things you do intuitively, reflexively, but when you think about the foundation of it, yes. A little thing, but if I go to a buffet with people, I have to eat last, because the officers eat last. It might sound corny, but these kinds of things stick in your head.

L.G.: Even if there's caviar and it's all gone?

R.K.: Well that's tough. I'm an anchovy fan, I like the salty stuff. But it's kind of the thing that they instill in you-the fundamental or foundation training that you get in the service and in the Marine Corps in particular. I had three older brothers in the Marine Corps. I had no choice, I had to go in. They beat me.

L.G.: They beat you to it?

R.K.: Physically.

Page 6

L.G.: Now you have a reputation of being a micromanager-that there's very little you won't put your hands into.

R.K.: If you think you can micromanage 52,000 people, you're crazy. I think there are certain things you have to pay attention to more than others because it has to do with integrity, to do with the reputation of the organization. So there are certain issues that you have to look at more closely than others. I would say micromanagement by definition is not good or bad, it is situational. It depends where you find yourself, and the instrumentality that you have to carry out the policies.

L.G.: Is it important to you to let the people who work for you do their jobs without too many drive-by management decisions?

R.K.: It depends on the issue, and it depends on the person. Because, ultimately, what happens in the police department has an impact on me. People see me as the face of the department, so there are certain areas and certain functions that I'd have to pay particular attention to.

L.G.: Do you think the skills that you have are translatable to the corporate life?

R.K.: Oh, I think so. I think leadership and management styles and skills are transferable. Because you're working with people, ultimately. If you're a scientist working in a corner someplace, maybe not. But if you're working with people, I think I can get people to perform and work for me, and that's ultimately what most of the private sector is about.

L.G.: And it's basically the only metric that means anything in terms of evaluating your performance is the crime rate?

R.K.: I wouldn't say that. It's one metric. What we said when this administration came in is that we'd govern by the three C's-that is crime suppression, counterterrorism, and community relations, or community affairs. And I think you can look in all three areas, and you're going to see significant accomplishments in this administration.

L.G.: One of them, counterterrorism, you know it's working, I suppose, if there's no incidents. The other one, community relations-that's pretty subjective, isn't it?

R.K.: I don't know how subjective it is. We've done surveys and we have over 80 percent, in some cases over 90 percent, approval ratings in terms of service provided by cops. That says a lot about people's perception of the job, how the department is doing. We're always going to have tension in some areas. What do we do as a function? We arrest people, we give them summonses, we're the bearers of bad news, we use force, sometimes we use deadly force. So we are always going to have some tension in certain areas, but by and large when you step back, I can say this, having been around a long time, that the relationships that we have with the communities we serve are better now than they have ever been, and they've continually improved. The message to people in the field is "Hey, you work for those people, you've got to make them happy," and virtually every precinct that I go to, and I go to a community council meeting, people are happy with their precinct commander, happy with their cops, generally speaking. Sure, are there exceptions? You know, "This cop said this, that," yeah, in 23 million citizen-contacts a year.

L.G.: But in terms of the way the police department is perceived, there's a lot of emphasis, at least in the press, on the crime rate. How long can it keep going on the right trajectory? And how do you explain if it plateaus or goes up?.

R.K.: Well, let's worry about it then. It hasn't happened.

L.G.: What C.E.O.'s do you admire? You mentioned the I.B.M. guy.

R.K.: Oh.that's a good question. Obviously Jack Welch. I have his book. And [Lloyd] Blankfein from Goldman Sachs, Hank Paulson. I admire Bob Rubin. I worked for Bob Rubin in the federal government, he asked me to become the undersecretary of the Treasury, and I did that when he was there.

L.G.: And are there any particular qualities that you feel-

R.K.: Hey, the No. 1 person I admire is Mike Bloomberg because he has done a magnificent job here.

L.G.: Oh, damn, I was hoping you'd forget to say that.

R.K.: Think about where this city was in November or December 2001, and think about where it is now. Last year was a record year for tourists in the city-it's remarkable. I have the editorials. This city was going to hell in a handbasket. Homelessness was going to break out. It wasn't a question of crime going up, it was how much crime was going to go up. People would've been willing to accept, talking about crime levels, if it was going to level off in 2001, we'll take it! It was guaranteed everything was going to go bad, but we have had almost 600 fewer murders in the city than we would've had if we continued at that level. We had about 150,000 fewer index crimes. But look at the tone, the tenor, the spirit, the pace of this city, post 9/11, and you've got to attribute that to one person, in my mind. Certainly, other people have contributed, But Mike Bloomberg in terms of leading the city. My hat's off to him. Obviously he's my boss, but I'm very impressed with his leadership style.

L.G.: And is Bill Bratton doing a good job out in L.A.?

R.K.: As far as I know. People ask me that, and this is very parochial job. I have no idea what's going on in Philadelphia, Washington, Boston. I'm looking at these five boroughs, and I'm also looking at the people that we have overseas, getting information from them, but I don't know what's going on.

L.G.: People thought maybe there were some personal animus between you and Bratton because of the way they came in and criticized programs you had set in place.

R.K.: That's not the case. I don't think about that. I've done a lot of things since then, I wish him well, I think he's doing well. I just don't know.

L.G.: And same with Rudy?

R.K.: Yeah, Rudy, you know, I have no relationship with him. I went to his wedding. He invited me to his wedding.

L.G.: Which one?

R.K.: The last one.

Visit Portfolio.com for the latest business news and opinion, executive profiles and careers. Portfolio.com© 2007 Condé Nast Inc. All rights reserved.