60 Minutes (1968) s45e04 Episode Script
Medical Marijuana | Goldman Sachs Employee Greg Smith | Steven Spielberg
00:02:10,340 --> 00:02:15,099 When people go to the polls two weeks from now they won't just be voting for candidates, in some states, they'll be passing judgment on social issues.
In Oregon, Washington and the Rocky Mountain state of Colorado it's the legalization of marijuana.
Part of this has to do with cash-starved governments looking for new things to tax for more revenue.
But much of it has to do with the growing acceptance or at least tolerance for a drug that was once considered the devil's weed and a flashpoint for cultural and generational warfare.
Seventeen states have now legalized its medical use for the treatment of things like glaucoma, the effects of chemotherapy, and chronic pain; defying federal laws that still consider marijuana more dangerous than cocaine and methamphetamine.
If you want to know what legalized marijuana might look like, the place to go is Colorado, which has the most developed medical marijuana industry in the country.
In Denver, if you want to find a medical marijuana dispensary, just look for the green cross.
You won't have to go far.
There are 204 of them in the Mile High City -- that's roughly three times the number of Starbucks and McDonald's combined.
They come in all sizes and shapes.
There is the health food store motif and '70s style head shops.
There are storefronts pitching low cost weed, and boutiques offering gourmet ganja.
No stems and seeds here, just walnut-sized buds freshly harvested in the cultivation room out back.
Matt Cook: When patients arrive, this is where they'll have to show their patient registry card and their driver's license to gain access to the actual marijuana center, itself.
Steve Kroft: You could smell it.
(laugh) This is all private enterprise, licensed and regulated and taxed by the state.
It was enshrined in the Colorado constitution after voters approved an amendment allowing the sale of marijuana to people who can demonstrate that they may benefit from its avowed medicinal properties.
Matt Cook, a former narcotics officer, wrote the law and served as the state's first director of enforcement.
Matt Cook: If you'll note, video security cameras in the system--in the ceiling.
Steve Kroft: Any reason for that? Matt Cook: There is.
We created a very transparent, regulatory scheme and wanted to ensure that what they said they were doing, they were actually doing.
No state has gone to the lengths to manage medical marijuana that Colorado has.
Every licensed dispensary must grow at least 70 percent of its own product indoors so harvesting and sales can be closely monitored.
This crop is worth about a quarter of million dollars.
Matt Cook: We track everything from seed to sale.
And they have to account for 100 percent of it.
We've got a gentleman here that has a live, if you will, software program that does all of the tracking for this commodity.
Each plant has a bar code and is registered to a specific patient.
Most dispensaries will cultivate a couple of dozen different strains, some of them proprietary, like ales at a microbrewery -- engineered to have particular characteristics as our budtender, Carrie, explained.
Carrie: This is called Jack Frost, but it's a triple A: alert, awake, and aware.
If you needed to medicate in the a.
m.
before going to work, no one would ever be able to detect that you took any medicine, just as you would any other medicines that you take.
So no physical lethargy, is my point.
We should point out that those properties are anecdotal and not based on studies by the FDA or the DEA, a subject we will get to shortly.
There is also no correlation between the more popular brand names and the ailments they alleviate.
Dopium is a medication available at Denver Relief, owned by Ean Seeb.
It's gotten high marks from critics -- yes, there are medical marijuana critics in Colorado, even competitions.
Steve Kroft: You won the Colorado Medical Marijuana Harvest Cup? Couple of years ago? Ean Seeb: We did.
In 2009.
And our Biodiesel won five out of the six categories and first place.
So we won the overall award.
It was a sweeping victory, if you will.
And then we put-- Steve Kroft: Biodiesel? Ean Seeb: Yeah.
I-- Steve Kroft: That's the name of it? Ean Seeb: Yes, it is.
And it's become-- Steve Kroft: Doesn't sound like medicine.
(laugh) Ean Seeb: There's a lot of strains out there that don't sound like medicine because this didn't used to be legal.
And those strain names have not changed.
You know, strains back in the '70s.
You know, there was Afghani that we still have, AK-47 that came from the Hindu Kush region of Afghanistan originally.
But it's not all brand loyalty and nostalgia.
There are lots of new things on the dispensary shelf, especially for non-smokers.
They're called edibles, the marriage of botanical science and the culinary arts: marijuana infused cookies, candy, chocolate truffles, even olive oil.
And for patients watching their waistline, there are marijuana pills that come in different strengths, just like Tylenol and Advil.
Carrie: You simply take it with a glass of water and it puts you where you need to be.
The people who have invested money in all of this are known locally as ganjapreneurs.
Colorado has had a history of gold rushes and silver rushes, and some people have dubbed this the green rush, not just for the color of medical marijuana, but for the money that might eventually be made here if you are among the first to stake a claim.
Kristi Kelly was doing marketing in Washington, when she decided to invest in a medical marijuana dispensary.
Kristi Kelly: There's not a lot of opportunities in any one lifetime where you can be a part of something from such an early stage.
And so, ultimately, my partners begged me to come out.
And my husband and I packed up our bags and shut down our life in DC and moved out here.
Tripp Keber: The company's evolution has been fairly dynamic.
Tripp Keber is CEO of Dixie Elixirs, the leading manufacturer of cannabis-laced edibles.
It supplies most of the state's 537 dispensaries from this factory, which he calls state of the art for the industry, which means small scale.
Tripp Keber: So here we have Lexi, who is one of our production specialists.
She's preparing our medicated chocolate rolls, which are certainly one of our most popular edibles products.
Steve Kroft: Smells really good.
It looks good.
Female voice: Thank you.
(laugh) Dixie Elixir's product line includes ice creams and medicated beverages that come in 10 different flavors.
Tripp Keber: We have a 75-milligram, 12-ounce sparkling red currant, would be the equivalent of four or five doses of medicine for a patient.
Steve Kroft: What would happen to me if I drank one of these? Tripp Keber: You would have a very long, but mellow afternoon.
(laughter) Keber and his partners have poured a million dollars into this business, and have also pioneered edible products and capsules they say contain all of the medicinal benefits of marijuana, but without the high.
Steve Kroft: What's your business plan? Tripp Keber: So our plan-- you know, and I'm-- Steve Kroft: Long-term and short-term.
Tripp Keber: Sure, the long-term plan for this business for Dixie Elixirs and Edibles as I've never been really shy to share is ultimately to sell it.
I truly believe that whether it's Big Alcohol, Big Tobacco or Big Pharma, a company like one of those is going to look very, very closely at medical cannabis.
It's about a two billion dollar market in in 2016.
So you're seeing hockey stick growth.
And I think companies like Dixie are well-positioned to be acquired as the industry develops.
It's a risky proposition.
The industry requires a big capital investment and the medical marijuana marketplace is already saturated.
But Matt Cook, who wrote the rule book for all this and is now a consultant to the medical marijuana industry, says it's helped pull Denver out of the recession -- occupying once vacant retail and industrial space, providing thousands of jobs and new revenue for the state of Colorado.
Steve Kroft: What's the economic impact been? Matt Cook: It's huge.
There's over a million square feet of leased space in the Denver area.
Look at all the electrical contractors, the HVAC contractors, a number of ancillary businesses.
It's huge.
Tax revenues exceeded-- I believe the last number I heard was in excess of $20 million.
But in spite of all the euphoria, there is a cloud hanging over the cannabis industry in Colorado, and it's not marijuana smoke.
It's the federal Controlled Substances Act, which still lists marijuana as a Schedule One drug, every bit as dangerous as heroin, with no medical benefit.
And the Justice Department is not happy with the wide-scale commercialization of Colorado cannabis.
Sam Kamin is a law professor at the University of Denver, and one of the reigning experts on the subject.
Steve Kroft: In Colorado, you can grow it if you're licensed and you can sell it if you're licensed to people who have a card to buy it.
Sam Kamin: Yes, but-- Steve Kroft: And all of those people are violating federal law.
Sam Kamin: Exactly.
And that's the really strange thing is that we have this, you know, sort of hundreds of dispensaries servicing as many as 100,000 people and every transaction that occurs is a federal crime and every -- all the manufacturing of the product, from the growing of it to the making of the products and everything else, all of those are serious federal crimes.
Steve Kroft: Even though the state of Colorado has passed a constitutional amendment-- amendment allowing it-- Sam Kamin: Exactly.
Steve Kroft: --sanctioning it.
Sam Kamin: Exactly.
Right? The federal government sees it as a serious crime.
They say, "We know that California and 16 other states, the District of Columbia -- we know you guys think it's medicine.
It's not.
We hear that you want to legalize it.
You can't.
We can't make you undo your statutes, but we can sure come in and prosecute your citizens that are violating federal law.
" Steve Kroft: But they haven't.
Sam Kamin: But they haven't.
And there's a reason for that.
Some might call it the triumph of the marketplace.
The federal government doesn't have enough manpower to shut down the medical marijuana business in Colorado or prosecute all the purveyors and patients.
And the voters don't want it.
Boulder County District attorney Stan Garnett says it's virtually impossible to impanel a jury on a marijuana case here, let alone get a conviction.
Stan Garnett: What we deal with is what prosecutors call jury nullification, where juries say, "I know what the law is, but I'm not going to follow it.
" This community has made it very clear that criminal enforcement of marijuana is not something they want me to spend any time on.
Steve Kroft: It is really an issue here? Stan Garnett: It's really not an issue.
And that is more or less the position of Justice Department in Washington.
Deputy Attorney General James Cole has told U.
S.
attorneys not to waste resources prosecuting patients or caregivers that are in clear compliance with state medical marijuana laws.
James Cole: Our focus is really on keeping it away from children.
Our focus is keeping it out of the hands of organized crime.
Our focus is making sure that people aren't, through marijuana dispensaries, using it as a pretext to do large-scale interstate drug dealing.
These are the areas where we're really trying to focus.
Steve Kroft: So the message is, if you're licensed in the state of Colorado and you follow the law, then you should be okay.
James Cole: Each case is going to rise and fall on its own unique facts.
Any of that is still in violation of the Controlled Substances Act of the federal law.
We're not interested in bothering people who are sick and are using it in the recommendation of a doctor.
We are concerned with people who are using it as a pretext to become large-scale drug dealers.
Steve Kroft: So it sounds like the federal government is tolerating it.
Sam Kamin: It is tolerating it.
And at the same time is below the surface, trying to make it very difficult for these folks.
It's doing it through banking regulations.
If you talk to dispensary owners, one of the things that they will lament is, no one will do business with us.
The Justice Department has let it be known if financial institutions do business with medical marijuana centers, they could be at risk for civil or criminal prosecution under the Controlled Substances Act or federal money laundering statutes.
It's made it difficult, if not impossible for dispensaries to get loans, open company bank accounts or process patients' credit cards.
Sam Kamin: It can't stay like this.
Either we have to have settled expectations that this is a federal crime, the federal government's not going to tolerate it.
Or the federal government is going to let states like Colorado regulate it, tax it, experiment with it.
To have it exist in both worlds simultaneously is unsustainable.
We can't have a multimillion dollar industry built on criminal conduct.
A federal appeals court in Washington D.
C.
is currently hearing a case that could remove marijuana from the list of the most dangerous drugs, and into a category that would allow it to be prescribed by doctors.
On the political front, the referendums in Colorado and Washington state to legalize marijuana for recreational use are considered too close to call.
Many of us have, at some point in our lives, dreamed of quitting our jobs very loudly and telling our bosses exactly what we really think.
Very few of us ever do it.
But seven months ago, a vice president at the legendary investment bank Goldman Sachs did just that, resigning in an article on the op-ed page of The New York Times.
The article caused a sensation -- not just because its author Greg Smith was saying, three-and-a-half years after the financial crisis, that the bank was headed on the wrong ethical course, but also because it's so unusual to learn anything at all about the inner workings of Goldman Sachs.
When people leave Goldman, they tend to do it quietly.
Though the firm's gold-plated reputation took a big hit after the 2008 financial crisis, it's still regarded as the smartest, most profitable and politically well-connected firm on Wall Street, and the toughest place to get a job.
Now, on the eve of publishing a book about his experiences at Goldman, Greg Smith is talking for the first time about what led him to leave the firm, and to do it in such a public way.
Greg Smith: I literally wanted to hit the board of directors over the head, and say, Listen, I was proud of Goldman Sachs.
I worked here for a long time.
Anderson Cooper: So an op-ed resignation, you hoped it would be a wake up call? Greg Smith: I really did.
Because there are a lotta people who acknowledge things internally.
But no one is willing to say it publicly.
And my view was the only way, you force people to change the system, is by saying something publicly.
At the time he left Goldman Sachs, Greg Smith was 33 years old, and making roughly half a million dollars a year as a vice president, a mid-level position in the division of Goldman Sachs that trades securities for hedge funds, pension funds, and other big investors.
He'd been at the firm for about 12 years, and could hardly have scripted a more dramatic exit.
"Integrity? It is eroding," he wrote in The New York Times.
"The environment now is as toxic and destructive as I have ever seen itit makes me ill how callously people talk about ripping their clients off.
" Greg Smith: You know, this might be hard for people at Goldman Sachs to understand, but I loved the place.
I put a lot of my heart and soul into it.
I don't view it as a betrayal.
I actually think the leaders of Goldman Sachs today don't have the long run interests of the institution at heart.
Anderson Cooper: Did anybody within the firm know you were going to be leaving? Greg Smith: No.
Anderson Cooper: So, the first time many people within Goldman Sachs learned you were leaving was when they opened up The New York Times and saw this op-ed.
Greg Smith: Yeah, I mean the idea of the op-ed was not to do any destruction.
Anderson Cooper: I think some people are-- just aren't going to believe that, that-- to not give notice to a company you've worked for for 12 years, and in the most public way possible in the page of The New York Times, to say that they are going against all the values that they once held, how can that not be seen by-- as a betrayal? Greg Smith: Well, it's true.
I mean, I think the company is going against the values it once held.
[Goldman Sachs recruiting video: Join a culture of excellence, with a reputation for integrityGoldman Sachs.
.]
For years Greg Smith was one of the company's true believers.
He was selected to appear in this 2006 recruiting video, in which he talked about the business principles Goldman teaches to every new employee.
[Greg Smith in video: One of the principles I really like is about reputation and how important our reputation is.
And that really comes to integrity and how important integrity is within the firm.
.]
Born and raised in South Africa, Smith was an economics major at Stanford University when Goldman recruited him as a summer intern in 2000 and hired him the following year.
Smith rose through the ranks at a time when Goldman's revenues from trading increased five-fold in five years.
It was the result of a boom in complex financial products and a loosening of financial regulations that enabled Goldman and other banks to vastly increase profits by doing transactions for their clients while trading with their own money as well.
Greg Smith: Goldman Sachs, and other firms on Wall Street, started learning how to use the information they were getting from their clients, in order to bet with their own money.
At times, betting against their clients.
And you know, that's a real changed mentality from how do we do what our client wants to do? Not how do we take advantage of what the client's doing to make money for ourselves? Smith's job was to sell derivatives not the complicated bets that nearly blew up the financial system in the collapse of 2008, but more straightforward, openly traded products like options to buy stock or commodities.
The problem, he says, is that inside Goldman's offices the promotions and big money went to people who sold complex products with unseen risks and hidden fees.
Greg Smith: So what Wall Street will do is, they will approach one of these philanthropies, or endowments, or teachers' retirement pensions funds, in Alabama, or Virginia, or Oregon, and they'll say to them, "We have this great product that is gonna serve your needs.
" And it looks very alluring to these investors.
But what they don't realize is that up front, they're immediately paying the bank two million dollars or three million dollars because of their lack of sophistication.
Anderson Cooper: So they don't say to the client: the price you're paying for us to execute this trade is a million dollars?" Greg Smith: That's a huge part of the problem.
Not at all.
Anderson Cooper: How can it be that the client doesn't understand what the bank is making? Greg Smith: These are very complicated derivative securities which takes a Ph.
D.
in physics or in engineering to understand.
And there are pension funds and mutual funds that represent people's 401(k)s and retirement savings that are trading the most complex instruments out there without fully understanding them.
Anderson Cooper: So, did the people you work with want unsophisticated clients? Greg Smith: Getting an unsophisticated client was the golden prize.
The quickest way to make money on Wall Street is to take the most sophisticated product and try to sell it to the least sophisticated client.
Smith says he first heard of a very sophisticated product called "Abacus," in 2010 when the SEC accused Goldman of misleading investors who bought it.
Goldman paid a record $550 million fine to settle the charges.
Goldman Chairman Lloyd Blankfein was grilled about that deal and others by the Senate Subcommittee on Investigations.
Committee Chairman Carl Levin wanted to know why clients should trust Goldman if it was recommending they buy securities that the company was betting against.
[Carl Levin: You are betting against the very product you are selling & you're just not troubled by it? Blankfein: I'm sorry, I can't endorse your characterization.]
CEO Blankfein and other Goldman executives testified that when the firm does certain types of transactions with institutional investors, it's understood that the company doesn't have the same responsibility it does when it's acting as a financial adviser.
Greg Smith: I was flabbergasted.
What I can tell you is that's not what the client is thinking.
The teachers' retirement fund, who's coming to Goldman Sachs or Morgan Stanley, is thinking that Goldman Sachs is one of the biggest, smartest banks in the world.
The reason I'm coming to them is to get their advice on what to do.
We wanted to hear what Goldman Sachs had to say, but after one off-camera meeting, we were told the firm wanted to see what was in Smith's book before giving an interview.
So we spoke with Frank Partnoy, a highly respected professor of law and finance at the University of San Diego and a former derivatives salesman himself.
He told us he didn't think it was fair to single out Goldman Sachs.
Frank Partnoy: If we look back at and we look at Wall Street firms that were responsible for the financial crisis, the firms that in mortgages, it's not Goldman Sachs.
If every bank had been like Goldman Sachs we would not have had a financial crisis.
Anderson Cooper: What about in terms of ethics? Frank Partnoy: In terms of ethics I think Goldman Sachs is regarded as among the most ethical banks.
I'm not sure that says a lot.
On Wall Street-- Wall Street ethics is a sort of oxymoron.
But Goldman Sachs, you can trust more than just about anyone else.
Anderson Cooper: Greg Smith was-- he was a vice president-- relatively junior position at Goldman Sachs.
Why do you think it got so much attention what he did? Frank Partnoy: Because people who work at Goldman Sachs don't talk about working at Goldman Sachs.
There's-- Anderson Cooper: It's like Fight Club? Frank Partnoy: It is a little bit, or maybe like the Mafia that people are reluctant to talk about what's happened there.
It's a golden goose and you don't shoot the golden goose.
People there make a lot of money and they don't want to talk about it.
Smith says he grew even more disillusioned after the Senate hearings, when he and a Goldman Sachs partner met in Asia with a major client, the head of one of the biggest funds in the world.
Greg Smith: And he looks me and a partner in the eye and says, "Let me be honest with you guys.
We don't trust you at all.
But don't worry.
There's nothing to worry about.
We're gonna keep doing business with you because you're the biggest bank.
You're the smartest.
And actually we have to do business with you.
" Now my jaw almost dropped because hearing from one of your biggest clients that they don't trust you when your whole mantra and reputation is built on trust, to me, it was the worst possible thing you can hear.
And then I leave the meeting and the partner from Goldman Sachs who I was with is jubilant.
"This is great news.
The client is gonna keep doing business with us because they have to.
" In 2011, Smith moved to Goldman's London office, the very month the company announced a wide-ranging effort to improve its business practices.
Smith saw little change.
He say's his coworkers in London repeatedly referred to their clients as "Muppets" and not in the kindhearted way their Sesame Street creators intended.
Greg Smith: In Europe, a Muppet is a term for someone you can manipulate, someone who is an idiot.
Anderson Cooper: So people at Goldman Sachs, who you worked with, used to call their clients idiots, essentially? Greg Smith: All the time.
Not to their face, but behind their back.
Anderson Cooper: You heard people you work with talk about overcharging clients, bragging about it? Greg Smith: Within week one, I met a junior guy who was 24 or 25 years old and the first thing he told me was he'd just traded a sophisticated derivative with a Muppet client who paid the firm an extra million dollars because the client was so trusting that he didn't check the price with other banks.
Now you could think to yourself, "Is this some rogue guy who's just talking callously about clients?" But his boss, who's a managing director, was sitting right next to him nodding and chuckling along.
And-- Anderson Cooper: The boss was laughing about it? Greg Smith: Absolutely.
They were both laughing about it.
Off camera, Goldman executives told us they conducted an investigation after Smith's article came out and found no evidence of wrongdoing.
The firm did show us one London email in which clients were referred to as Muppets, but pointed out there was no mention of ripping those Muppets off.
Anderson Cooper: Something that Goldman says is, "Look"-- they have-- there are procedures in place where if you have concerns, you can raise a red flag and you can even do it confidentially.
And yet, they say you didn't do that.
Greg Smith: Well, I spoke to nine senior partners of the firm, people who had been partners since 2004.
If anyone at Goldman Sachs says, "We were surprised by this," they shouldn't have been.
Anderson Cooper: Goldman says that you wanted a million dollars in compensation, that you wanted a promotion and you later learned that you were not going to get that and that's what's behind this.
Greg Smith: I think that would be a criticism I would expect to hear from Goldman Sachs.
Anderson Cooper: Had they given you a promotion, had they given you a million dollars in compensation, would you still have quit? Greg Smith: Absolutely.
Anderson Cooper: I think a lotta people would find that hard to believe.
Greg Smith: Well, well, what I can say to you is-- and, this may seem stupid, but I didn't go to Wall Street purely to make lots of money.
Anderson Cooper: But I don't know anybody who's ever gone to Wall Street w-- and not had the idea of making money-- Greg Smith: Oh, no, I definitely wanted to make money.
But I left because things had veered so far from what I actually believed was right that I could have just left and walked out and said nothing about it.
But I would have felt that was not the right thing to do.
Anderson Cooper: [to Partnoy.]
How do you think what he's saying is going to be viewed on Wall Street? Frank Partnoy: I think people at Goldman Sachs will breathe a huge sigh of relief.
Anderson Cooper: Relief? Frank Partnoy: I think they'll read this book and they'll say, "I thought there were going to be significant allegations of fraud and there aren't.
" Anderson Cooper: I guess one of the most troubling things that Smith is saying is that large pension funds, philanthropic institutions, they're being sold very complicated financial products that they don't even understand.
Is that true? Frank Partnoy: It is true.
And it's a real problem right now, particularly in an environment where interest rates are so low.
And these institutions call a Wall Street bank and say, "We need something that will juice up our return, we need to make more money.
" And they're vulnerable when they do that.
Now that his book "Why I left Goldman Sachs" is finished, Smith told us he's not sure exactly what he'll do next.
Anderson Cooper: Why would any Wall Street bank in the future ever hire you? Greg Smith: I was not doing this in order to get hired at another Wall Street bank.
I really thought this through and thought it would be a constructive thing to do.
And while Wall Street doesn't like to be criticized, I think the criticism is warranted.
Say "Steven Spielberg" and we all see a dozen images: a shark, an alien space ship, Indiana Jones in a snake pit, soldiers landing on the beaches of Normandy.
His movies educate and enthrall; boggle and terrify.
And now he's directed his 27th film about one of the most admired men in history and one of his heroes, Abraham Lincoln.
But before we tell you about that, we discovered things about Spielberg that took us by surprise: stories from his childhood that are reflected in many of his extraordinary films.
Steven Spielberg is now 65.
He told us that when he's directing, he still gets just as worried, panicked, filled with dread as he did when he first started out.
Lesley Stahl: You're a nervous wreck.
Steven Spielberg: Yeah, it's true.
Lesley Stahl: Is it a fear? Steven Spielberg: It's not really fear.
It's just much more of an anticipation of the unknown.
And you know, the unknown could be food poisoning.
It's just the kind of level of anxiety not being able to write my life as well as I can write my movies.
Lesley Stahl: What about a way to handle your fears? Steven Spielberg: There's no better way than to tell a story about them and infect everybody else.
Although, I'll tell you something, it doesn't get it off your chest.
It doesn't.
Lesley Stahl: The fear comes right back again? Steven Spielberg: Comes right back again like it belongs to you.
I own my fear.
Lesley Stahl: And you're going to hold onto it, actually, it sounds like to me.
Steven Spielberg: Well, it's commercial, so I don't want to.
Lesley Stahl: Exactly, exactly.
Steven Spielberg: I don't want to lose it.
He's been scaring us for almost 40 years.
But he's also touched us, amazed us, inspired us, filled us with wonder and brought history to life.
With such an eclectic repertoire, we wondered if anything tied his movies together.
It turns out there is: Lesley Stahl: You have said that all your movies go back to your childhood.
Steven Spielberg: Most of them do.
Spielberg spent his childhood in the suburbs of Phoenix, Arizona, with his three sisters, mom and dad.
Leah Adler: Anything he wanted, we did.
Arnold Spielberg: Yeah, that's true-- Leah Adler: We never said no.
Arnold Spielberg is now 95 and Leah is 92.
Leah Adler: Steve really did run us.
He called the shots.
Leah was a full-time mom who Steven says was his co-conspirator.
Steven Spielberg: My mom didn't parent us as much as she sort of big-sistered us.
She was Peter Pan.
She refused to grow up.
Arnold was a computer engineer.
Steven Spielberg: I missed my dad a lot growing up, even though we were together as a family.
My dad was really a workaholic.
And he was always working.
Leah Adler: They were not close.
You-- you were always so involved.
Arnold Spielberg: I was busy at work.
Steven had trouble fitting in: he wasn't a good student, and wasn't good at sports.
He was bullied.
Steven Spielberg: I was a nerd in those days.
Outsider.
Like the kid that played the clarinet in the band and orchestra, which I did.
Leah Adler: We lived in an all non-Jewish neighborhood.
These people used to chant, "The Spielberg's are dirty Jews.
" And one night, Steve climbed out of his bedroom window and peanut buttered their windows, which I thought was marvelous.
Lesley Stahl: Do you remember what you did? Steven Spielberg: I took Skippy peanut butter and smeared it all over their windows.
Lesley Stahl: Yeah.
Steven Spielberg: Did she say that to you? Lesley Stahl: Yes, she did.
Steven Spielberg: She told you that? Lesley Stahl: She told us that.
Steven Spielberg: OK.
I guess this is-- I guess right now we're beyond the statute of limitations, so I can't get sued for vandalism.
Lesley Stahl: But, you came under some serious anti-Semitic attacks.
How did you react? How did you deal with it? Steven Spielberg: I denied it for a long time.
Lesley Stahl: Denied what? That-- Steven Spielberg: My Judaism.
Lesley Stahl: --you were Jewish? Oh.
Steven Spielberg: Uh-huh (affirm).
Lesley Stahl: Were you ashamed? Steven Spielberg: Uh-huh (affirm).
I often told people my last name was German, not Jewish.
I'm sure my grandparents are rolling over in their graves right now, hearing me say that.
But I think that-- you know, that I was in denial for a long time.
Lesley Stahl: So when people say that a lot of your movies are about outsiders, that's what you must've felt.
Steven Spielberg: Oh, yeah.
I was an outsider for all-- most of my formative years.
What saved him was a camera he got from his dad.
When he was 16 he made his first talkie called "Firelight.
" A science fiction thriller he produced, directed, wrote, edited and showed at the local movie theater.
Lesley Stahl: You obviously got a lot of approval for these early films.
You got a lot of attention.
Was that what motivated you to go on with it? Was that, "Oh my God, I'm finally being accepted?" Steven Spielberg: Well, I had found a way to accept myself in my own life by making movies.
I had found that I could do something well.
And he kept on doing it with a TV movie, now a cult thriller called "Duel" about a menacing truck.
By 22 he was the youngest director ever signed to a long-term Hollywood contract, and soon he was churning out hits, like one of his biggest hits, "E.
T.
" It was based on his parents divorce when he was 19.
Steven Spielberg: "E.
T.
" began with me trying to write a story about my parents' divorce.
Lesley Stahl: That was your family; that was your mother? Steven Spielberg: Uh-huh.
Lesley Stahl: She's quite upset that the father has left.
Steven Spielberg: Sure.
Lesley Stahl: As if he walked out on her.
[From the film "E.
T.
".]
Mother: Maybe you ought to call your father and tell him about it.
Son: I can't, he's in Mexico with Sally.
Daughter: Where's Mexico? Lesley Stahl: This was your sense of it? So you blamed your father? Steven Spielberg: I did pin it on him.
But that wasn't what really happened.
Arnold Spielberg: She fell in love with another guy.
Leah Adler: Yes, with one of his friends.
Lesley Stahl: You fell in love with one of his friends.
Did Steven know that? Arnold Spielberg: No.
He didn't know that right away.
He thought I divorced her.
Lesley Stahl: So, wait a minute, you fell in love with his friend.
You left him, but Steven blamed you.
Arnold Spielberg: That's right-- Lesley Stahl: Thought you had left her.
Arnold Spielberg: Yeah-- Lesley Stahl: And you didn't tell him? Arnold Spielberg: That's right, not for years.
Lesley Stahl: Why? Arnold Spielberg: I don't know, I think I was just protecting her, because I was in love with her.
Lesley Stahl: Even though she left you, you were still in love with her? Arnold Spielberg: Yeah, still do.
Leah Adler: He forgave me I think.
I was so unhappy.
He covered for me.
Steven Spielberg: Even after I knew the truth, I blamed my dad.
Lesley Stahl: Oh, my goodness.
Steven Spielberg: It's still a mystery to me, but even though my mother was like an older sister to me, I kind of put her up on a pedestal.
And my dad was much more terrestrial, much more grounded, much more salt of the earth.
And for some reason, it was easier for me to blame him than it was to someone who I was already-- exalted.
This may explain why the workaholic, absent father is a recurring character in Spielberg's movies like the businessman in hook [From the film "Hook".]
Father: Jack, next season I'm coming to six games.
I promise, my word is my bond.
Son: Yea, junk bond.
Arnold Spielberg: When he blamed me, he-- it came right out in the movies.
Lesley Stahl: You were the bad guy? Arnold Spielberg: Not so much the bad guy as absent guy.
Lesley Stahl: That's the way he saw it.
Arnold Spielberg: Probably, expressed his need for more attention than I gave him.
Lesley Stahl: You stayed kind of angry at your dad for years.
Steven Spielberg: I did.
For too long, for many, many, many wasted years.
Lesley Stahl: Fifteen years.
Steven Spielberg: Fifteen years.
It was bigger than I was, and I wasn't able, really, to come through it for a long, long time.
It was Steven's wife, actress Kate Capshaw, who encouraged him to make peace with his father.
Steven Spielberg: My dad and I had an amazing reconciliation, which is going on almost-- almost 18 years, where we have really, really been in each other's lives.
And those feelings that I expressed earlier, I no longer feel today.
Lesley Stahl: I see this, you tell me if I've got it right.
When you were angry at him, you made a lot of movies about fathers who abandoned their kids-- Steven Spielberg: Yeah.
Lesley Stahl: -and left their kids, and the fathers are bad guys.
And all of a sudden there's a change.
And the fathers start becoming the heroes.
Steven Spielberg: Exactly.
"War of the Worlds" for instance starts out with Tom cruise as an impatient, inattentive father.
[From the "War of the Worlds".]
Son: You're an [bleep.]
.
I hate coming here.
Father: Why you act like such a [bleep.]
.
After he courageously saves his children from an alien invasion, the movie ends up with an emotional father-son reconciliation.
Even "Schindler's List" about the Holocaust grew out of a decision by Spielberg to face down the anti-Semitism he grew up with in Phoenix.
Lesley Stahl: You never expected people to go see it, I heard.
Steven Spielberg: No.
I didn't.
That's why I shot it in black and white.
I did everything I needed to do to tell the story the way I thought the story should be told, to give it as much integrity as I could, never expecting it to make a dollar.
But it did, and then some: it made 320 million.
Spielberg won his first Oscars for Directing and Best Picture.
And his career went to a whole new level.
And now he's turned his nervous energy into making a movie about Abraham Lincoln, a subject he researched for twelve years: immersing himself in the look, the sounds, the smallest details of life in 1865.
Steven Spielberg: I've always wanted to tell a story about Lincoln.
I saw a paternal father figure, I saw someone who was completely, stubbornly committed to his ideals, to his vision.
The movie is about how Lincoln gets the 13th amendment abolishing slavery passed by Congress.
It's a little-known story in the last four months of his life.
Daniel Day-Lewis is Lincoln.
Abraham Lincoln: Abolishing slavery by constitutional provisions settles the fate for all coming time.
Not only of the millions now in bondage, but of unborn millions to come.
Lesley Stahl: There's not a lot of action.
There's no Spielberg special effects.
Steven Spielberg: Right.
Lesley Stahl: It's a movie about process and politics.
Have you ever done a movie even remotely-- Steven Spielberg: Never.
Like this? Lesley Stahl: Not even close.
Steven Spielberg: Never.
No.
I knew I could do the action in my sleep at this point in my career.
In my life, the action doesn't hold any-- it doesn't attract me anymore.
With only one brief battle scene, the movie's more like a stage play with lots of dialog as Lincoln cajoles and horse trades for votes.
Abraham Lincoln: Bloods been spilt to afford us this moment.
Now, now, now! Spielberg decided to hold off releasing the movie until after the November election, because he didn't want the film to become a tug of war about party politics.
Steven Spielberg: I think the film is very relevant for today.
It's about leadership.
Lesley Stahl: And there are certainly lessons about talking with people from the other side.
Steven Spielberg: Right.
And about telling the truth about how you feel.
Lesley Stahl: But what about the brooding, depressed Lincoln? Steven Spielberg: I think there is a sense of a darkness with him.
He was living with two agendas, both of which had to do with healing, had to do with a solution, first, to abolish slavery, end the war.
But he also had his personal life.
And I think there's darkness in there.
In his personal life, he was contending with his depressed wife, played by Sally Field.
Abraham Lincoln: No one has ever lived who knows better than you.
And this being a Spielberg film, you also see Lincoln struggling to raise his sons.
Lesley Stahl: This is definitely a heroic father movie.
Steven Spielberg: He was the father of the nation in need of repair.
And in a sense, the movies I've made recently have reflected the positive relationships that my dad and I have enjoyed for 20, 25 years.
Lesley Stahl: How important was that reconciliation for your ability to make a movie like this? Steven Spielberg: I think one of the worst things that happened to me was, you know, my voluntary fallout with my father.
And then the greatest thing that happened to me was when I saw the light, and realized I needed to love him in a way that he could love me back.
Lesley Stahl: Steven does say that his own creativity seems to still grow out of this household.
Arnold Spielberg: Well, we must've left some sort of impression.
Lesley Stahl: I'll say that.
Leah married Arnold's friend, who has since died; Arnold and his wife are now close to Leah.
Lesley Stahl: The three of you are very close? Arnold Spielberg and Leah Adler: Yes.
Lesley Stahl: Isn't life something.
Arnold Spielberg: Yeah.
Leah Adler: Isn't it a hoot.
Lesley Stahl: Isn't it a hoot.
Arnold Spielberg: And she's a nice woman.
In Oregon, Washington and the Rocky Mountain state of Colorado it's the legalization of marijuana.
Part of this has to do with cash-starved governments looking for new things to tax for more revenue.
But much of it has to do with the growing acceptance or at least tolerance for a drug that was once considered the devil's weed and a flashpoint for cultural and generational warfare.
Seventeen states have now legalized its medical use for the treatment of things like glaucoma, the effects of chemotherapy, and chronic pain; defying federal laws that still consider marijuana more dangerous than cocaine and methamphetamine.
If you want to know what legalized marijuana might look like, the place to go is Colorado, which has the most developed medical marijuana industry in the country.
In Denver, if you want to find a medical marijuana dispensary, just look for the green cross.
You won't have to go far.
There are 204 of them in the Mile High City -- that's roughly three times the number of Starbucks and McDonald's combined.
They come in all sizes and shapes.
There is the health food store motif and '70s style head shops.
There are storefronts pitching low cost weed, and boutiques offering gourmet ganja.
No stems and seeds here, just walnut-sized buds freshly harvested in the cultivation room out back.
Matt Cook: When patients arrive, this is where they'll have to show their patient registry card and their driver's license to gain access to the actual marijuana center, itself.
Steve Kroft: You could smell it.
(laugh) This is all private enterprise, licensed and regulated and taxed by the state.
It was enshrined in the Colorado constitution after voters approved an amendment allowing the sale of marijuana to people who can demonstrate that they may benefit from its avowed medicinal properties.
Matt Cook, a former narcotics officer, wrote the law and served as the state's first director of enforcement.
Matt Cook: If you'll note, video security cameras in the system--in the ceiling.
Steve Kroft: Any reason for that? Matt Cook: There is.
We created a very transparent, regulatory scheme and wanted to ensure that what they said they were doing, they were actually doing.
No state has gone to the lengths to manage medical marijuana that Colorado has.
Every licensed dispensary must grow at least 70 percent of its own product indoors so harvesting and sales can be closely monitored.
This crop is worth about a quarter of million dollars.
Matt Cook: We track everything from seed to sale.
And they have to account for 100 percent of it.
We've got a gentleman here that has a live, if you will, software program that does all of the tracking for this commodity.
Each plant has a bar code and is registered to a specific patient.
Most dispensaries will cultivate a couple of dozen different strains, some of them proprietary, like ales at a microbrewery -- engineered to have particular characteristics as our budtender, Carrie, explained.
Carrie: This is called Jack Frost, but it's a triple A: alert, awake, and aware.
If you needed to medicate in the a.
m.
before going to work, no one would ever be able to detect that you took any medicine, just as you would any other medicines that you take.
So no physical lethargy, is my point.
We should point out that those properties are anecdotal and not based on studies by the FDA or the DEA, a subject we will get to shortly.
There is also no correlation between the more popular brand names and the ailments they alleviate.
Dopium is a medication available at Denver Relief, owned by Ean Seeb.
It's gotten high marks from critics -- yes, there are medical marijuana critics in Colorado, even competitions.
Steve Kroft: You won the Colorado Medical Marijuana Harvest Cup? Couple of years ago? Ean Seeb: We did.
In 2009.
And our Biodiesel won five out of the six categories and first place.
So we won the overall award.
It was a sweeping victory, if you will.
And then we put-- Steve Kroft: Biodiesel? Ean Seeb: Yeah.
I-- Steve Kroft: That's the name of it? Ean Seeb: Yes, it is.
And it's become-- Steve Kroft: Doesn't sound like medicine.
(laugh) Ean Seeb: There's a lot of strains out there that don't sound like medicine because this didn't used to be legal.
And those strain names have not changed.
You know, strains back in the '70s.
You know, there was Afghani that we still have, AK-47 that came from the Hindu Kush region of Afghanistan originally.
But it's not all brand loyalty and nostalgia.
There are lots of new things on the dispensary shelf, especially for non-smokers.
They're called edibles, the marriage of botanical science and the culinary arts: marijuana infused cookies, candy, chocolate truffles, even olive oil.
And for patients watching their waistline, there are marijuana pills that come in different strengths, just like Tylenol and Advil.
Carrie: You simply take it with a glass of water and it puts you where you need to be.
The people who have invested money in all of this are known locally as ganjapreneurs.
Colorado has had a history of gold rushes and silver rushes, and some people have dubbed this the green rush, not just for the color of medical marijuana, but for the money that might eventually be made here if you are among the first to stake a claim.
Kristi Kelly was doing marketing in Washington, when she decided to invest in a medical marijuana dispensary.
Kristi Kelly: There's not a lot of opportunities in any one lifetime where you can be a part of something from such an early stage.
And so, ultimately, my partners begged me to come out.
And my husband and I packed up our bags and shut down our life in DC and moved out here.
Tripp Keber: The company's evolution has been fairly dynamic.
Tripp Keber is CEO of Dixie Elixirs, the leading manufacturer of cannabis-laced edibles.
It supplies most of the state's 537 dispensaries from this factory, which he calls state of the art for the industry, which means small scale.
Tripp Keber: So here we have Lexi, who is one of our production specialists.
She's preparing our medicated chocolate rolls, which are certainly one of our most popular edibles products.
Steve Kroft: Smells really good.
It looks good.
Female voice: Thank you.
(laugh) Dixie Elixir's product line includes ice creams and medicated beverages that come in 10 different flavors.
Tripp Keber: We have a 75-milligram, 12-ounce sparkling red currant, would be the equivalent of four or five doses of medicine for a patient.
Steve Kroft: What would happen to me if I drank one of these? Tripp Keber: You would have a very long, but mellow afternoon.
(laughter) Keber and his partners have poured a million dollars into this business, and have also pioneered edible products and capsules they say contain all of the medicinal benefits of marijuana, but without the high.
Steve Kroft: What's your business plan? Tripp Keber: So our plan-- you know, and I'm-- Steve Kroft: Long-term and short-term.
Tripp Keber: Sure, the long-term plan for this business for Dixie Elixirs and Edibles as I've never been really shy to share is ultimately to sell it.
I truly believe that whether it's Big Alcohol, Big Tobacco or Big Pharma, a company like one of those is going to look very, very closely at medical cannabis.
It's about a two billion dollar market in in 2016.
So you're seeing hockey stick growth.
And I think companies like Dixie are well-positioned to be acquired as the industry develops.
It's a risky proposition.
The industry requires a big capital investment and the medical marijuana marketplace is already saturated.
But Matt Cook, who wrote the rule book for all this and is now a consultant to the medical marijuana industry, says it's helped pull Denver out of the recession -- occupying once vacant retail and industrial space, providing thousands of jobs and new revenue for the state of Colorado.
Steve Kroft: What's the economic impact been? Matt Cook: It's huge.
There's over a million square feet of leased space in the Denver area.
Look at all the electrical contractors, the HVAC contractors, a number of ancillary businesses.
It's huge.
Tax revenues exceeded-- I believe the last number I heard was in excess of $20 million.
But in spite of all the euphoria, there is a cloud hanging over the cannabis industry in Colorado, and it's not marijuana smoke.
It's the federal Controlled Substances Act, which still lists marijuana as a Schedule One drug, every bit as dangerous as heroin, with no medical benefit.
And the Justice Department is not happy with the wide-scale commercialization of Colorado cannabis.
Sam Kamin is a law professor at the University of Denver, and one of the reigning experts on the subject.
Steve Kroft: In Colorado, you can grow it if you're licensed and you can sell it if you're licensed to people who have a card to buy it.
Sam Kamin: Yes, but-- Steve Kroft: And all of those people are violating federal law.
Sam Kamin: Exactly.
And that's the really strange thing is that we have this, you know, sort of hundreds of dispensaries servicing as many as 100,000 people and every transaction that occurs is a federal crime and every -- all the manufacturing of the product, from the growing of it to the making of the products and everything else, all of those are serious federal crimes.
Steve Kroft: Even though the state of Colorado has passed a constitutional amendment-- amendment allowing it-- Sam Kamin: Exactly.
Steve Kroft: --sanctioning it.
Sam Kamin: Exactly.
Right? The federal government sees it as a serious crime.
They say, "We know that California and 16 other states, the District of Columbia -- we know you guys think it's medicine.
It's not.
We hear that you want to legalize it.
You can't.
We can't make you undo your statutes, but we can sure come in and prosecute your citizens that are violating federal law.
" Steve Kroft: But they haven't.
Sam Kamin: But they haven't.
And there's a reason for that.
Some might call it the triumph of the marketplace.
The federal government doesn't have enough manpower to shut down the medical marijuana business in Colorado or prosecute all the purveyors and patients.
And the voters don't want it.
Boulder County District attorney Stan Garnett says it's virtually impossible to impanel a jury on a marijuana case here, let alone get a conviction.
Stan Garnett: What we deal with is what prosecutors call jury nullification, where juries say, "I know what the law is, but I'm not going to follow it.
" This community has made it very clear that criminal enforcement of marijuana is not something they want me to spend any time on.
Steve Kroft: It is really an issue here? Stan Garnett: It's really not an issue.
And that is more or less the position of Justice Department in Washington.
Deputy Attorney General James Cole has told U.
S.
attorneys not to waste resources prosecuting patients or caregivers that are in clear compliance with state medical marijuana laws.
James Cole: Our focus is really on keeping it away from children.
Our focus is keeping it out of the hands of organized crime.
Our focus is making sure that people aren't, through marijuana dispensaries, using it as a pretext to do large-scale interstate drug dealing.
These are the areas where we're really trying to focus.
Steve Kroft: So the message is, if you're licensed in the state of Colorado and you follow the law, then you should be okay.
James Cole: Each case is going to rise and fall on its own unique facts.
Any of that is still in violation of the Controlled Substances Act of the federal law.
We're not interested in bothering people who are sick and are using it in the recommendation of a doctor.
We are concerned with people who are using it as a pretext to become large-scale drug dealers.
Steve Kroft: So it sounds like the federal government is tolerating it.
Sam Kamin: It is tolerating it.
And at the same time is below the surface, trying to make it very difficult for these folks.
It's doing it through banking regulations.
If you talk to dispensary owners, one of the things that they will lament is, no one will do business with us.
The Justice Department has let it be known if financial institutions do business with medical marijuana centers, they could be at risk for civil or criminal prosecution under the Controlled Substances Act or federal money laundering statutes.
It's made it difficult, if not impossible for dispensaries to get loans, open company bank accounts or process patients' credit cards.
Sam Kamin: It can't stay like this.
Either we have to have settled expectations that this is a federal crime, the federal government's not going to tolerate it.
Or the federal government is going to let states like Colorado regulate it, tax it, experiment with it.
To have it exist in both worlds simultaneously is unsustainable.
We can't have a multimillion dollar industry built on criminal conduct.
A federal appeals court in Washington D.
C.
is currently hearing a case that could remove marijuana from the list of the most dangerous drugs, and into a category that would allow it to be prescribed by doctors.
On the political front, the referendums in Colorado and Washington state to legalize marijuana for recreational use are considered too close to call.
Many of us have, at some point in our lives, dreamed of quitting our jobs very loudly and telling our bosses exactly what we really think.
Very few of us ever do it.
But seven months ago, a vice president at the legendary investment bank Goldman Sachs did just that, resigning in an article on the op-ed page of The New York Times.
The article caused a sensation -- not just because its author Greg Smith was saying, three-and-a-half years after the financial crisis, that the bank was headed on the wrong ethical course, but also because it's so unusual to learn anything at all about the inner workings of Goldman Sachs.
When people leave Goldman, they tend to do it quietly.
Though the firm's gold-plated reputation took a big hit after the 2008 financial crisis, it's still regarded as the smartest, most profitable and politically well-connected firm on Wall Street, and the toughest place to get a job.
Now, on the eve of publishing a book about his experiences at Goldman, Greg Smith is talking for the first time about what led him to leave the firm, and to do it in such a public way.
Greg Smith: I literally wanted to hit the board of directors over the head, and say, Listen, I was proud of Goldman Sachs.
I worked here for a long time.
Anderson Cooper: So an op-ed resignation, you hoped it would be a wake up call? Greg Smith: I really did.
Because there are a lotta people who acknowledge things internally.
But no one is willing to say it publicly.
And my view was the only way, you force people to change the system, is by saying something publicly.
At the time he left Goldman Sachs, Greg Smith was 33 years old, and making roughly half a million dollars a year as a vice president, a mid-level position in the division of Goldman Sachs that trades securities for hedge funds, pension funds, and other big investors.
He'd been at the firm for about 12 years, and could hardly have scripted a more dramatic exit.
"Integrity? It is eroding," he wrote in The New York Times.
"The environment now is as toxic and destructive as I have ever seen itit makes me ill how callously people talk about ripping their clients off.
" Greg Smith: You know, this might be hard for people at Goldman Sachs to understand, but I loved the place.
I put a lot of my heart and soul into it.
I don't view it as a betrayal.
I actually think the leaders of Goldman Sachs today don't have the long run interests of the institution at heart.
Anderson Cooper: Did anybody within the firm know you were going to be leaving? Greg Smith: No.
Anderson Cooper: So, the first time many people within Goldman Sachs learned you were leaving was when they opened up The New York Times and saw this op-ed.
Greg Smith: Yeah, I mean the idea of the op-ed was not to do any destruction.
Anderson Cooper: I think some people are-- just aren't going to believe that, that-- to not give notice to a company you've worked for for 12 years, and in the most public way possible in the page of The New York Times, to say that they are going against all the values that they once held, how can that not be seen by-- as a betrayal? Greg Smith: Well, it's true.
I mean, I think the company is going against the values it once held.
[Goldman Sachs recruiting video: Join a culture of excellence, with a reputation for integrityGoldman Sachs.
.]
For years Greg Smith was one of the company's true believers.
He was selected to appear in this 2006 recruiting video, in which he talked about the business principles Goldman teaches to every new employee.
[Greg Smith in video: One of the principles I really like is about reputation and how important our reputation is.
And that really comes to integrity and how important integrity is within the firm.
.]
Born and raised in South Africa, Smith was an economics major at Stanford University when Goldman recruited him as a summer intern in 2000 and hired him the following year.
Smith rose through the ranks at a time when Goldman's revenues from trading increased five-fold in five years.
It was the result of a boom in complex financial products and a loosening of financial regulations that enabled Goldman and other banks to vastly increase profits by doing transactions for their clients while trading with their own money as well.
Greg Smith: Goldman Sachs, and other firms on Wall Street, started learning how to use the information they were getting from their clients, in order to bet with their own money.
At times, betting against their clients.
And you know, that's a real changed mentality from how do we do what our client wants to do? Not how do we take advantage of what the client's doing to make money for ourselves? Smith's job was to sell derivatives not the complicated bets that nearly blew up the financial system in the collapse of 2008, but more straightforward, openly traded products like options to buy stock or commodities.
The problem, he says, is that inside Goldman's offices the promotions and big money went to people who sold complex products with unseen risks and hidden fees.
Greg Smith: So what Wall Street will do is, they will approach one of these philanthropies, or endowments, or teachers' retirement pensions funds, in Alabama, or Virginia, or Oregon, and they'll say to them, "We have this great product that is gonna serve your needs.
" And it looks very alluring to these investors.
But what they don't realize is that up front, they're immediately paying the bank two million dollars or three million dollars because of their lack of sophistication.
Anderson Cooper: So they don't say to the client: the price you're paying for us to execute this trade is a million dollars?" Greg Smith: That's a huge part of the problem.
Not at all.
Anderson Cooper: How can it be that the client doesn't understand what the bank is making? Greg Smith: These are very complicated derivative securities which takes a Ph.
D.
in physics or in engineering to understand.
And there are pension funds and mutual funds that represent people's 401(k)s and retirement savings that are trading the most complex instruments out there without fully understanding them.
Anderson Cooper: So, did the people you work with want unsophisticated clients? Greg Smith: Getting an unsophisticated client was the golden prize.
The quickest way to make money on Wall Street is to take the most sophisticated product and try to sell it to the least sophisticated client.
Smith says he first heard of a very sophisticated product called "Abacus," in 2010 when the SEC accused Goldman of misleading investors who bought it.
Goldman paid a record $550 million fine to settle the charges.
Goldman Chairman Lloyd Blankfein was grilled about that deal and others by the Senate Subcommittee on Investigations.
Committee Chairman Carl Levin wanted to know why clients should trust Goldman if it was recommending they buy securities that the company was betting against.
[Carl Levin: You are betting against the very product you are selling & you're just not troubled by it? Blankfein: I'm sorry, I can't endorse your characterization.]
CEO Blankfein and other Goldman executives testified that when the firm does certain types of transactions with institutional investors, it's understood that the company doesn't have the same responsibility it does when it's acting as a financial adviser.
Greg Smith: I was flabbergasted.
What I can tell you is that's not what the client is thinking.
The teachers' retirement fund, who's coming to Goldman Sachs or Morgan Stanley, is thinking that Goldman Sachs is one of the biggest, smartest banks in the world.
The reason I'm coming to them is to get their advice on what to do.
We wanted to hear what Goldman Sachs had to say, but after one off-camera meeting, we were told the firm wanted to see what was in Smith's book before giving an interview.
So we spoke with Frank Partnoy, a highly respected professor of law and finance at the University of San Diego and a former derivatives salesman himself.
He told us he didn't think it was fair to single out Goldman Sachs.
Frank Partnoy: If we look back at and we look at Wall Street firms that were responsible for the financial crisis, the firms that in mortgages, it's not Goldman Sachs.
If every bank had been like Goldman Sachs we would not have had a financial crisis.
Anderson Cooper: What about in terms of ethics? Frank Partnoy: In terms of ethics I think Goldman Sachs is regarded as among the most ethical banks.
I'm not sure that says a lot.
On Wall Street-- Wall Street ethics is a sort of oxymoron.
But Goldman Sachs, you can trust more than just about anyone else.
Anderson Cooper: Greg Smith was-- he was a vice president-- relatively junior position at Goldman Sachs.
Why do you think it got so much attention what he did? Frank Partnoy: Because people who work at Goldman Sachs don't talk about working at Goldman Sachs.
There's-- Anderson Cooper: It's like Fight Club? Frank Partnoy: It is a little bit, or maybe like the Mafia that people are reluctant to talk about what's happened there.
It's a golden goose and you don't shoot the golden goose.
People there make a lot of money and they don't want to talk about it.
Smith says he grew even more disillusioned after the Senate hearings, when he and a Goldman Sachs partner met in Asia with a major client, the head of one of the biggest funds in the world.
Greg Smith: And he looks me and a partner in the eye and says, "Let me be honest with you guys.
We don't trust you at all.
But don't worry.
There's nothing to worry about.
We're gonna keep doing business with you because you're the biggest bank.
You're the smartest.
And actually we have to do business with you.
" Now my jaw almost dropped because hearing from one of your biggest clients that they don't trust you when your whole mantra and reputation is built on trust, to me, it was the worst possible thing you can hear.
And then I leave the meeting and the partner from Goldman Sachs who I was with is jubilant.
"This is great news.
The client is gonna keep doing business with us because they have to.
" In 2011, Smith moved to Goldman's London office, the very month the company announced a wide-ranging effort to improve its business practices.
Smith saw little change.
He say's his coworkers in London repeatedly referred to their clients as "Muppets" and not in the kindhearted way their Sesame Street creators intended.
Greg Smith: In Europe, a Muppet is a term for someone you can manipulate, someone who is an idiot.
Anderson Cooper: So people at Goldman Sachs, who you worked with, used to call their clients idiots, essentially? Greg Smith: All the time.
Not to their face, but behind their back.
Anderson Cooper: You heard people you work with talk about overcharging clients, bragging about it? Greg Smith: Within week one, I met a junior guy who was 24 or 25 years old and the first thing he told me was he'd just traded a sophisticated derivative with a Muppet client who paid the firm an extra million dollars because the client was so trusting that he didn't check the price with other banks.
Now you could think to yourself, "Is this some rogue guy who's just talking callously about clients?" But his boss, who's a managing director, was sitting right next to him nodding and chuckling along.
And-- Anderson Cooper: The boss was laughing about it? Greg Smith: Absolutely.
They were both laughing about it.
Off camera, Goldman executives told us they conducted an investigation after Smith's article came out and found no evidence of wrongdoing.
The firm did show us one London email in which clients were referred to as Muppets, but pointed out there was no mention of ripping those Muppets off.
Anderson Cooper: Something that Goldman says is, "Look"-- they have-- there are procedures in place where if you have concerns, you can raise a red flag and you can even do it confidentially.
And yet, they say you didn't do that.
Greg Smith: Well, I spoke to nine senior partners of the firm, people who had been partners since 2004.
If anyone at Goldman Sachs says, "We were surprised by this," they shouldn't have been.
Anderson Cooper: Goldman says that you wanted a million dollars in compensation, that you wanted a promotion and you later learned that you were not going to get that and that's what's behind this.
Greg Smith: I think that would be a criticism I would expect to hear from Goldman Sachs.
Anderson Cooper: Had they given you a promotion, had they given you a million dollars in compensation, would you still have quit? Greg Smith: Absolutely.
Anderson Cooper: I think a lotta people would find that hard to believe.
Greg Smith: Well, well, what I can say to you is-- and, this may seem stupid, but I didn't go to Wall Street purely to make lots of money.
Anderson Cooper: But I don't know anybody who's ever gone to Wall Street w-- and not had the idea of making money-- Greg Smith: Oh, no, I definitely wanted to make money.
But I left because things had veered so far from what I actually believed was right that I could have just left and walked out and said nothing about it.
But I would have felt that was not the right thing to do.
Anderson Cooper: [to Partnoy.]
How do you think what he's saying is going to be viewed on Wall Street? Frank Partnoy: I think people at Goldman Sachs will breathe a huge sigh of relief.
Anderson Cooper: Relief? Frank Partnoy: I think they'll read this book and they'll say, "I thought there were going to be significant allegations of fraud and there aren't.
" Anderson Cooper: I guess one of the most troubling things that Smith is saying is that large pension funds, philanthropic institutions, they're being sold very complicated financial products that they don't even understand.
Is that true? Frank Partnoy: It is true.
And it's a real problem right now, particularly in an environment where interest rates are so low.
And these institutions call a Wall Street bank and say, "We need something that will juice up our return, we need to make more money.
" And they're vulnerable when they do that.
Now that his book "Why I left Goldman Sachs" is finished, Smith told us he's not sure exactly what he'll do next.
Anderson Cooper: Why would any Wall Street bank in the future ever hire you? Greg Smith: I was not doing this in order to get hired at another Wall Street bank.
I really thought this through and thought it would be a constructive thing to do.
And while Wall Street doesn't like to be criticized, I think the criticism is warranted.
Say "Steven Spielberg" and we all see a dozen images: a shark, an alien space ship, Indiana Jones in a snake pit, soldiers landing on the beaches of Normandy.
His movies educate and enthrall; boggle and terrify.
And now he's directed his 27th film about one of the most admired men in history and one of his heroes, Abraham Lincoln.
But before we tell you about that, we discovered things about Spielberg that took us by surprise: stories from his childhood that are reflected in many of his extraordinary films.
Steven Spielberg is now 65.
He told us that when he's directing, he still gets just as worried, panicked, filled with dread as he did when he first started out.
Lesley Stahl: You're a nervous wreck.
Steven Spielberg: Yeah, it's true.
Lesley Stahl: Is it a fear? Steven Spielberg: It's not really fear.
It's just much more of an anticipation of the unknown.
And you know, the unknown could be food poisoning.
It's just the kind of level of anxiety not being able to write my life as well as I can write my movies.
Lesley Stahl: What about a way to handle your fears? Steven Spielberg: There's no better way than to tell a story about them and infect everybody else.
Although, I'll tell you something, it doesn't get it off your chest.
It doesn't.
Lesley Stahl: The fear comes right back again? Steven Spielberg: Comes right back again like it belongs to you.
I own my fear.
Lesley Stahl: And you're going to hold onto it, actually, it sounds like to me.
Steven Spielberg: Well, it's commercial, so I don't want to.
Lesley Stahl: Exactly, exactly.
Steven Spielberg: I don't want to lose it.
He's been scaring us for almost 40 years.
But he's also touched us, amazed us, inspired us, filled us with wonder and brought history to life.
With such an eclectic repertoire, we wondered if anything tied his movies together.
It turns out there is: Lesley Stahl: You have said that all your movies go back to your childhood.
Steven Spielberg: Most of them do.
Spielberg spent his childhood in the suburbs of Phoenix, Arizona, with his three sisters, mom and dad.
Leah Adler: Anything he wanted, we did.
Arnold Spielberg: Yeah, that's true-- Leah Adler: We never said no.
Arnold Spielberg is now 95 and Leah is 92.
Leah Adler: Steve really did run us.
He called the shots.
Leah was a full-time mom who Steven says was his co-conspirator.
Steven Spielberg: My mom didn't parent us as much as she sort of big-sistered us.
She was Peter Pan.
She refused to grow up.
Arnold was a computer engineer.
Steven Spielberg: I missed my dad a lot growing up, even though we were together as a family.
My dad was really a workaholic.
And he was always working.
Leah Adler: They were not close.
You-- you were always so involved.
Arnold Spielberg: I was busy at work.
Steven had trouble fitting in: he wasn't a good student, and wasn't good at sports.
He was bullied.
Steven Spielberg: I was a nerd in those days.
Outsider.
Like the kid that played the clarinet in the band and orchestra, which I did.
Leah Adler: We lived in an all non-Jewish neighborhood.
These people used to chant, "The Spielberg's are dirty Jews.
" And one night, Steve climbed out of his bedroom window and peanut buttered their windows, which I thought was marvelous.
Lesley Stahl: Do you remember what you did? Steven Spielberg: I took Skippy peanut butter and smeared it all over their windows.
Lesley Stahl: Yeah.
Steven Spielberg: Did she say that to you? Lesley Stahl: Yes, she did.
Steven Spielberg: She told you that? Lesley Stahl: She told us that.
Steven Spielberg: OK.
I guess this is-- I guess right now we're beyond the statute of limitations, so I can't get sued for vandalism.
Lesley Stahl: But, you came under some serious anti-Semitic attacks.
How did you react? How did you deal with it? Steven Spielberg: I denied it for a long time.
Lesley Stahl: Denied what? That-- Steven Spielberg: My Judaism.
Lesley Stahl: --you were Jewish? Oh.
Steven Spielberg: Uh-huh (affirm).
Lesley Stahl: Were you ashamed? Steven Spielberg: Uh-huh (affirm).
I often told people my last name was German, not Jewish.
I'm sure my grandparents are rolling over in their graves right now, hearing me say that.
But I think that-- you know, that I was in denial for a long time.
Lesley Stahl: So when people say that a lot of your movies are about outsiders, that's what you must've felt.
Steven Spielberg: Oh, yeah.
I was an outsider for all-- most of my formative years.
What saved him was a camera he got from his dad.
When he was 16 he made his first talkie called "Firelight.
" A science fiction thriller he produced, directed, wrote, edited and showed at the local movie theater.
Lesley Stahl: You obviously got a lot of approval for these early films.
You got a lot of attention.
Was that what motivated you to go on with it? Was that, "Oh my God, I'm finally being accepted?" Steven Spielberg: Well, I had found a way to accept myself in my own life by making movies.
I had found that I could do something well.
And he kept on doing it with a TV movie, now a cult thriller called "Duel" about a menacing truck.
By 22 he was the youngest director ever signed to a long-term Hollywood contract, and soon he was churning out hits, like one of his biggest hits, "E.
T.
" It was based on his parents divorce when he was 19.
Steven Spielberg: "E.
T.
" began with me trying to write a story about my parents' divorce.
Lesley Stahl: That was your family; that was your mother? Steven Spielberg: Uh-huh.
Lesley Stahl: She's quite upset that the father has left.
Steven Spielberg: Sure.
Lesley Stahl: As if he walked out on her.
[From the film "E.
T.
".]
Mother: Maybe you ought to call your father and tell him about it.
Son: I can't, he's in Mexico with Sally.
Daughter: Where's Mexico? Lesley Stahl: This was your sense of it? So you blamed your father? Steven Spielberg: I did pin it on him.
But that wasn't what really happened.
Arnold Spielberg: She fell in love with another guy.
Leah Adler: Yes, with one of his friends.
Lesley Stahl: You fell in love with one of his friends.
Did Steven know that? Arnold Spielberg: No.
He didn't know that right away.
He thought I divorced her.
Lesley Stahl: So, wait a minute, you fell in love with his friend.
You left him, but Steven blamed you.
Arnold Spielberg: That's right-- Lesley Stahl: Thought you had left her.
Arnold Spielberg: Yeah-- Lesley Stahl: And you didn't tell him? Arnold Spielberg: That's right, not for years.
Lesley Stahl: Why? Arnold Spielberg: I don't know, I think I was just protecting her, because I was in love with her.
Lesley Stahl: Even though she left you, you were still in love with her? Arnold Spielberg: Yeah, still do.
Leah Adler: He forgave me I think.
I was so unhappy.
He covered for me.
Steven Spielberg: Even after I knew the truth, I blamed my dad.
Lesley Stahl: Oh, my goodness.
Steven Spielberg: It's still a mystery to me, but even though my mother was like an older sister to me, I kind of put her up on a pedestal.
And my dad was much more terrestrial, much more grounded, much more salt of the earth.
And for some reason, it was easier for me to blame him than it was to someone who I was already-- exalted.
This may explain why the workaholic, absent father is a recurring character in Spielberg's movies like the businessman in hook [From the film "Hook".]
Father: Jack, next season I'm coming to six games.
I promise, my word is my bond.
Son: Yea, junk bond.
Arnold Spielberg: When he blamed me, he-- it came right out in the movies.
Lesley Stahl: You were the bad guy? Arnold Spielberg: Not so much the bad guy as absent guy.
Lesley Stahl: That's the way he saw it.
Arnold Spielberg: Probably, expressed his need for more attention than I gave him.
Lesley Stahl: You stayed kind of angry at your dad for years.
Steven Spielberg: I did.
For too long, for many, many, many wasted years.
Lesley Stahl: Fifteen years.
Steven Spielberg: Fifteen years.
It was bigger than I was, and I wasn't able, really, to come through it for a long, long time.
It was Steven's wife, actress Kate Capshaw, who encouraged him to make peace with his father.
Steven Spielberg: My dad and I had an amazing reconciliation, which is going on almost-- almost 18 years, where we have really, really been in each other's lives.
And those feelings that I expressed earlier, I no longer feel today.
Lesley Stahl: I see this, you tell me if I've got it right.
When you were angry at him, you made a lot of movies about fathers who abandoned their kids-- Steven Spielberg: Yeah.
Lesley Stahl: -and left their kids, and the fathers are bad guys.
And all of a sudden there's a change.
And the fathers start becoming the heroes.
Steven Spielberg: Exactly.
"War of the Worlds" for instance starts out with Tom cruise as an impatient, inattentive father.
[From the "War of the Worlds".]
Son: You're an [bleep.]
.
I hate coming here.
Father: Why you act like such a [bleep.]
.
After he courageously saves his children from an alien invasion, the movie ends up with an emotional father-son reconciliation.
Even "Schindler's List" about the Holocaust grew out of a decision by Spielberg to face down the anti-Semitism he grew up with in Phoenix.
Lesley Stahl: You never expected people to go see it, I heard.
Steven Spielberg: No.
I didn't.
That's why I shot it in black and white.
I did everything I needed to do to tell the story the way I thought the story should be told, to give it as much integrity as I could, never expecting it to make a dollar.
But it did, and then some: it made 320 million.
Spielberg won his first Oscars for Directing and Best Picture.
And his career went to a whole new level.
And now he's turned his nervous energy into making a movie about Abraham Lincoln, a subject he researched for twelve years: immersing himself in the look, the sounds, the smallest details of life in 1865.
Steven Spielberg: I've always wanted to tell a story about Lincoln.
I saw a paternal father figure, I saw someone who was completely, stubbornly committed to his ideals, to his vision.
The movie is about how Lincoln gets the 13th amendment abolishing slavery passed by Congress.
It's a little-known story in the last four months of his life.
Daniel Day-Lewis is Lincoln.
Abraham Lincoln: Abolishing slavery by constitutional provisions settles the fate for all coming time.
Not only of the millions now in bondage, but of unborn millions to come.
Lesley Stahl: There's not a lot of action.
There's no Spielberg special effects.
Steven Spielberg: Right.
Lesley Stahl: It's a movie about process and politics.
Have you ever done a movie even remotely-- Steven Spielberg: Never.
Like this? Lesley Stahl: Not even close.
Steven Spielberg: Never.
No.
I knew I could do the action in my sleep at this point in my career.
In my life, the action doesn't hold any-- it doesn't attract me anymore.
With only one brief battle scene, the movie's more like a stage play with lots of dialog as Lincoln cajoles and horse trades for votes.
Abraham Lincoln: Bloods been spilt to afford us this moment.
Now, now, now! Spielberg decided to hold off releasing the movie until after the November election, because he didn't want the film to become a tug of war about party politics.
Steven Spielberg: I think the film is very relevant for today.
It's about leadership.
Lesley Stahl: And there are certainly lessons about talking with people from the other side.
Steven Spielberg: Right.
And about telling the truth about how you feel.
Lesley Stahl: But what about the brooding, depressed Lincoln? Steven Spielberg: I think there is a sense of a darkness with him.
He was living with two agendas, both of which had to do with healing, had to do with a solution, first, to abolish slavery, end the war.
But he also had his personal life.
And I think there's darkness in there.
In his personal life, he was contending with his depressed wife, played by Sally Field.
Abraham Lincoln: No one has ever lived who knows better than you.
And this being a Spielberg film, you also see Lincoln struggling to raise his sons.
Lesley Stahl: This is definitely a heroic father movie.
Steven Spielberg: He was the father of the nation in need of repair.
And in a sense, the movies I've made recently have reflected the positive relationships that my dad and I have enjoyed for 20, 25 years.
Lesley Stahl: How important was that reconciliation for your ability to make a movie like this? Steven Spielberg: I think one of the worst things that happened to me was, you know, my voluntary fallout with my father.
And then the greatest thing that happened to me was when I saw the light, and realized I needed to love him in a way that he could love me back.
Lesley Stahl: Steven does say that his own creativity seems to still grow out of this household.
Arnold Spielberg: Well, we must've left some sort of impression.
Lesley Stahl: I'll say that.
Leah married Arnold's friend, who has since died; Arnold and his wife are now close to Leah.
Lesley Stahl: The three of you are very close? Arnold Spielberg and Leah Adler: Yes.
Lesley Stahl: Isn't life something.
Arnold Spielberg: Yeah.
Leah Adler: Isn't it a hoot.
Lesley Stahl: Isn't it a hoot.
Arnold Spielberg: And she's a nice woman.