You know, for some time, it seems that any time someone complains that Obama's economic team is too close to the banks, the answer is that we are seeing some sort of chess game, and it's just that the White House is 3 steps ahead of everyone else.
I don't buy it. I think that Larry Summers just jumped the shark into accepting bribes, as this Wall Street Journal analysis of his 2008 disclosure forms shows.
Among other things, he got $5.2 million from hedge fund D.E. Shaw for his thoroughly part time (he was a full time professor at Harvard) position, and he got $2.7 million for speaking, with his fees ranging from, "$10,000 for a Yale University speech to $135,000 for an appearance paid for by Goldman Sachs & Co."
So we know that the market rate for his speeches is about $10K, but Wall Street investment firms were paying more than 10 times that in a year in which the Democrats were favored, and he was likely to be on the team of either Democratic nominee.
A Tiny Revolution went through his disclosure form (PDF) and came up with the following, with Merrill-Lynch being a week after the election, and Charles River Ventures being the day before:
- GIANT BAILOUT SECTOR
- Goldman Sachs: $202,500 (two speeches)
- Citigroup: $99,000 (two speeches)
- JP Morgan: $67,500
- Merrill Lynch: $45,000 (donated to charity)
- DOMESTIC FINANCIAL SECTOR
- Investec Bank: $157,500
- State Street Corporation: $112,500
- Pricewaterhouse Coopers LLC: $67,500
- Lehman Brothers: $67,500
- American Express: $67,500
- Siguler Guff & Company (private equity): $67,500
- TA Associates (private equity): $67,500
- Charles River Ventures (Venture Capital): $67,500
- FOREIGN FINANCIAL SECTOR
- Skagen Funds (Scandinavian mutual fund): $180,000 (three speeches)
- Centro de Liderazgo y Gestion (the Center for Leadership and Management, in Colombia): $112,500
- Association of Mexican Bankers: $90,000
- Securities Industry & Financial Markets Association: $33,750
- Pension Real Estate Association: $67,500
- Hudson Institute: $10,000
It should be noted that the Hudson institute is a very
right wing "think" tank which has consistently been dogged by accusations of racism and Islamophobia, and it's at the same "market rate" as Yale.
I can't see this as anything but bribe taking, with the various financial institutions paying forward to get favorable treatment.
What sort of treatment were the looking for? Well, there was probably not a specific request, a quid pro quo, if you will, but something like the White House coming up with phony entities to act as intermediaries in order to skirt Congressional limitations on executive compensation:
The Obama administration is engineering its new bailout initiatives in a way that it believes will allow firms benefiting from the programs to avoid restrictions imposed by Congress, including limits on lavish executive pay, according to government officials.
Administration officials have concluded that this approach is vital for persuading firms to participate in programs funded by the $700 billion financial rescue package.
You know, the threat of being frog marched out of their workplace in handcuffs would work better.
The administration believes it can sidestep the rules because, in many cases, it has decided not to provide federal aid directly to financial companies, the sources said. Instead, the government has set up special entities that act as middlemen, channeling the bailout funds to the firms and, via this two-step process, stripping away the requirement that the restrictions be imposed, according to officials.
Although some experts are questioning the legality of this strategy, the officials said it gives them latitude to determine whether firms should be subject to the congressional restrictions, which would require recipients to turn over ownership stakes to the government, as well as curb executive pay.
The administration has decided that the conditions should not apply in at least three of the five initiatives funded by the rescue package.
Enough is enough.
This is more than being too close to the financial sector, this is corruption, and it pervades Obama's economic team.
Larry Summers, and possibly Timothy Geithner, need to spend more time with their families.
Cross posted from 40 Years in the Desert.