The daughter of a president and niece of two senators listened attentively, asked probing questions and proposed various scenarios to resolve the dispute. Under her prompting, a compromise was reached.
"People were pushing themselves back from the table and folding their arms," recalled Stephanie Dua, chief executive officer of the Fund for Public Schools. "She was very good at defusing the situation. ... She has a very easy style about her but she's very sharp."
In a series of interviews with The Associated Press, friends and colleagues of Kennedy painted a picture of a reserved but intelligent and tenacious woman who writes her own speeches and who, despite her vast wealth, still takes the subway.
Those interviewed did not provide an impartial view — but, with several speaking publicly for the first time about their relationship, they offered a rare look inside the private world of a woman America fell in love with decades ago as she rode her pony over the White House lawn.
Much was made of Kennedy's decision last January to support Barack Obama's presidential campaign, but she is no stranger to politics. Paul G. Kirk Jr. remembers meeting her at the age of 16 or so, soaking in as much as she could while on the campaign trail with her uncle Teddy.
She was "lively, engaged, inquisitive," said the family friend and former head of the Democratic Party. "She might hear two or three people ask the senator the same question if he was in a forum. They'd get back in the car, and she'd follow up."
By the time she was in Columbia University Law School more than a decade later, her intellectual curiosity, and her studiousness, still made an impression.
"She's the A-plus student who does 110 percent," said classmate, friend and eventual co-author Ellen Alderman. "We were nerds ... the two Type A personalities who had worked very hard in school."
Inspired by some of their law school case studies, Kennedy and Alderman had a book proposal completed before they graduated. Soon they were traveling the country, interviewing people who had been caught up in civil rights cases for "In Our Defense: The Bill of Rights in Action."
Kennedy was very good at putting their interviewees at ease, Alderman said. There was never any talk then of a political career, she said, but looking back she's unsurprised.
"For me now it seems very natural," she said. "The most important part of the research we did was talking to people and listening to them. And she's terrific on the legal end, on the analysis and the issues, and she's terrific on the people end, on understanding how the law and government affects people every day."
Kennedy had her first daughter, Rose, around the same time she graduated from Columbia in 1988, and her professional life took shape around her children.
When Alderman became pregnant, she recalls, Kennedy became her "mommy mentor," showing her what she needed to pack a diaper bag, and giving her advice on work: "You can still do it, you're just not going to have eight, 10, 12 hours at a time," Alderman recalls her saying.
Kennedy had help around the house, but she never delegated parenting — picking her three kids up from school and knowing who their friends were and where they were, said Esther Newberg, her friend and literary agent. Kennedy joined the board at her children's school, and colleagues said she'd never attend a meeting if it meant missing a recital or another such event.
Kennedy's friends and colleagues talk about what a remarkably "normal" life she lives, but one could argue they're not the best judges. After all, her circle includes famous authors, a co-president of HBO, a former head of the Democratic National Committee, senators and the president-elect.
Kennedy's finances — estimated by some at more than $400 million — never came up, Alderman said. The co-authors swapped who paid for dinner, and they flew coach. Kennedy has an assistant but does not use a driver, takes the subway around New York and books her own flights, friends said.
Her six-room apartment is at an exclusive address on Park Avenue where a larger unit was recently listed for $13 million. Friends describe it as a low-key place covered with books and decorated with slip-covered sofas.
Kennedy and her husband, museum designer Edwin Schlossberg, enjoy entertaining, frequently hosting buffet-style gatherings, Newberg said. Sometimes, he cooks.
Like thousands of New Yorkers, the couple hosted a debate-watching party the night of the face-off between vice presidential candidates Sarah Palin and Joe Biden. Talkative guests were shuffled into a separate room with a television so the true political junkies could hunker down in the den and hear every word.
When she wasn't playing hostess, Caroline Kennedy chose the den.
Compared to the sharp-elbowed style common among New York politicians, Kennedy's personality in a series of recent media interviews has seemed quiet, soft-spoken.
But those who have worked with Kennedy said her sometimes reserved demeanor could be misleading. More than one spoke of an instance where they had watched her listen carefully to each person's point of view, then argue her point calmly but tenaciously until she achieved her goal.
"If you aren't as loud as I am, often people mistake that for not being effective and that's just wrong," said Elaine Jones, the former president of the NAACP Legal Defense and Educational Fund, where Kennedy served on the board. "I know how able, substantive and tough-minded Caroline is. Now others have got to see that in her. And she may have to project it."
While she never practiced law, Kennedy did heavy-duty research before board meetings and contributed to detailed legal debates over which cases would be selected by the NAACP fund, Jones said.
Kennedy also has been instrumental in selecting at least some of the John F. Kennedy Profile in Courage Award winners, who are honored for risking their careers to take a stand for their principles.
For the 2000 honor, she persuaded the award committee to select a relative unknown, Hilda Solis, now the likely incoming secretary of labor, said Kirk, a committee member. Kennedy won the panel over with her argument that it was important to acknowledge lesser-known public servants so as to inspire others at every level of government.
Kennedy writes all her own speeches, says another longtime friend and colleague, Heather Campion. Preparing for the 2008 Democratic National Convention, speech writer and strategist Bob Shrum recounted handing her a draft of her speech, only to see her rewrite it from top to bottom.
Kirk said she seems to have taken to heart an oft-repeated family quote that she has included in her speeches again and again over the years: "Each of us can make a difference and all of us must try."
After years of focusing on her young children, Kennedy began to look for an alternative to the books on which she had been working.
"I'd like to work with people. Being a writer is a solitary job," she told Campion shortly before she went to work for the New York City Board of Education in 2002.
In her 22 months working three days a week at the agency, she was credited with raising tens of millions of dollars and revamping fundraising operations. Friends argue those fundraising skills would serve her well if she's chosen as senator. Whoever is selected by Gov. David Paterson to fill Clinton's seat would have to run for election to the seat in 2010, and — if successful — again in 2012.
Kennedy's endorsement of Obama for the Democratic nomination came at a vital moment in his campaign, and friends said she loved campaigning and seemed invigorated by it.
"Presumably she could have had an appointment," said Campion, who at Kennedy's request broke decades of public silence about their friendship. "There are a lot of great ambassadorships," Campion said she told Kennedy earlier.
There seemed easier ways to contribute without thrusting herself into the intensive public scrutiny that would come with a Senate bid.
However, Campion recounted, Kennedy was unconvinced by the warning.
She said: "But I want to make a difference ... and I love New York."