LOS ANGELES—Federal Reserve Chairman Alan Greenspan once again found himself in legal trouble Monday, when he and several members of his extensive entourage were arrested for allegedly destroying a penthouse suite at the Beverly Hills Hotel.
Hotel officials say Greenspan, in town to address an annual convention of Federal Reserve District Bank presidents, caused an estimated $8,500 in damages to the room, the surrounding hallway and the swimming-pool area.
Said Beverly Hills Hotel manager Giles Laurent: "The television screen and cabinet had apparently been kicked in. Two chairs were thrown out the window. The mattress was ripped and its stuffing was flung all over the room, as well as into the hallway." Laurent added that minutes before police arrived, Greenspan, with the help of Deputy Treasury Secretary Larry Summers, pushed a vending machine off the balcony overlooking the hotel's swimming pool.
During his two-day stay at the posh hotel, Greenspan also accumulated a $781.55 room-service bill, which he has refused to pay until March 1, when he says interest rates on Deutsche Bundesbank bonds will rise to a more favorable 4.64 percent.
Witnesses to Greenspan's behavior during the days leading up to Monday's arrest said the 72-year-old head of the Federal Open Market Committee was in an unusually volatile mood.
"Upon arriving Friday, Mr. Greenspan demanded that four large bowls of M&Ms be delivered to his room, with all the orange ones removed," Beverly Hills Hotel concierge Alexander Poole said. "Then, when he got to his room and saw the bowls, he flew into a rage, knocking over lamps and screaming that he wanted the green M&Ms taken out, not the orange ones."
Greenspan got into more trouble Saturday night, when he, Fed Vice-Chair Alice Rivlin and several other members of his inner circle visited the trendy L.A. night spot The Viper Room. Clubgoers reported seeing Greenspan, still high off the dollar's late rally against the yen Friday afternoon, shout obscenities and throw ashtrays at the club's DJ. When security personnel attempted to restrain him, Greenspan became belligerent, yelling, "I'm Alan Fucking Greenspan," and vowing to put bouncer Frank Rizzo in a "hurt bracket." The incident is already being compared to his infamous July 1997 fistfight with John Kenneth Galbraith at New York's China Club.
According to Federal Reserve Board insiders, Greenspan, buoyed by the U.S. economy's robust 5 percent growth rate in 1998, as well as flattering cover stories in Barron's, Forbes and Time, has grown increasingly megalomaniacal in recent months.
"He'll spend hours talking about how he's the greatest economist who ever lived, how he's 'bigger than Keynes,'" said one member of the Fed Board of Governors who wished to remain anonymous. "Every time he prevents economic disaster in Brazil or Indonesia by manipulating interest rates, his bloated ego just swells even more. It's just the sort of irrational exuberance he himself once warned against."
Monday's arrest is only the latest in a long string of legal troubles for the controversial Greenspan, who has had 22 court dates since becoming Fed chief in 1987. Economists recall his drunken 1994 appearance on CNN's Moneyline, during which he unleashed a profanity-laden tirade against Bureau of Engraving & Printing director Larry Rolufs and punched host Lou Dobbs when he challenged Greenspan's reluctance to lower interest rates. In November 1993, he was arrested after running shirtless through D.C. traffic while waving a gun. And some world-market watchers believe the international gold standard has still not recovered from a May 1998 incident in which he allegedly exposed his genitals on the floor of the Tokyo Stock Exchange.
The Tokyo case is still pending.