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A.W. 'Tom' Clausen dies at 89; longtime Bank of America leader

Between two stints as B of A's chief executive, Clausen was president of the World Bank.

January 23, 2013|Times staff and wire reports
  • A.W. "Tom" Clausen, shown in 1980, led B of A back to profitability and dividends during his second stint as chief executive, which began in 1986.
A.W. "Tom" Clausen, shown in 1980, led B of A back to profitability… (Los Angeles Times )

A.W. "Tom" Clausen, a no-nonsense Midwesterner who led San Francisco-based Bank of America before and after serving as president of the World Bank, died Monday at a hospital in Burlingame, Calif. He was 89.

The cause was complications from pneumonia, according to his wife, Helen.

Clausen began his career at a Bank of America branch in Los Angeles in 1950 as a part-time cash counter. He rose through the ranks to become president and chief executive officer of the bank and its holding company, BankAmerica Corp., in 1970 and led the institution for 11 years.

He left in 1981 to head the World Bank, returning to Bank of America in 1986 when it was beset by problems that some analysts said had their roots in Clausen's first tenure. By 1990, when he finished his second stint as the bank's chief, its stock and earnings had rallied. Credit for the improved performance went to Clausen.

Even while presiding over Bank of America in the 1970s, when it was the nation's largest bank, Clausen regularly spoke publicly about the economic development of Third World countries. That focus paid dividends when President Carter nominated him in 1980 to succeed Robert McNamara as president of the World Bank.

During Clausen's five-year term, from July 1981 to June 1986, the World Bank struggled with diminishing funds to help developing nations endure one of the worst recessions since World War II. Many critics blamed the World Bank's declining influence during the period on Clausen's lack of charisma and reluctance to fight the Reagan administration for more funds and a larger role in addressing the world debt crisis.

A 1984 New York Times article said the World Bank under Clausen "has taken little more than a bit part in the hair-raising financial dramas that have marked this decade. As a result, critics say, the institution is in danger of becoming irrelevant."

Clausen defended his tenure, saying that he accomplished what he could — including lowering interest rates on World Bank loans and speeding loan disbursements — considering that the bank had 147 different governments as members.

"There is nothing you can do that will please, or will benefit, all," he told the New York Times.

Alden Winship Clausen was born Feb. 17, 1923, in Hamilton, Ill., the son of Morton Clausen, publisher of the town's weekly newspaper, and the former Elsie Kroll. He adopted the nickname Tom during his Hamilton years.

He graduated from Carthage College in Kenosha, Wis., in 1944 and joined the U.S. Army Air Forces, serving as a meteorological officer. After the war he obtained his law degree from the University of Minnesota.

He took a part-time job at a Bank of America branch in Los Angeles while waiting for his future wife, Mary Margaret Crassweller, to agree to marry him. They were married for 51 years, until her death in 2001.

Hooked by finance, he earned a spot in the bank's management training program. He became a senior vice president in 1965, executive vice president in 1968, board vice chairman in 1969, and president and chief executive in 1970.

Admirers found much to praise about his stewardship, during which the bank's assets and earnings more than quadrupled. He "produced more profits during his 10 years than any banker in history," Fortune magazine wrote in 1988.

But critics said the earnings had been overstated and also blamed him for many of the problems that emerged after he left, including a failure to invest in new technologies such as automated teller machines, and mishandling the bank's response to deregulation.

When he returned to Bank of America after his World Bank tenure, it was struggling from loan and other losses that fanned speculation it would be taken over by the U.S. government. The Los Angeles Times reported in 1989 that it had, among other problems, $8 billion worth of troubled loans to developing countries.

Clausen denied that he deserved the blame for the bank's woes but ordered a number of painful remedies, including the elimination of 20,000 jobs and the sale of revenue-generating operations.

When he retired in May 1990, Bank of America had bounced back: It had reinstated dividend payments, one of Clausen's goals, and posted record 1989 earnings of $1.1 billion.

Clausen, a longtime resident of Hillsborough, Calif., married Helen Higgins in 2002. She survives him along with his sons from his first marriage, Eric and Mark, and five grandchildren.

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