Obama’s Crony Capitalism

15 10 2009

corrupt politician1

An article by Tom Braithwaite in yesterday’s Financial Times says that “Obama administration officials now working on fixing and regulating the financial system were beneficiaries of several million dollars in pay from Wall Street and private equity companies.”

They are:

  1. Gene Sperling, senior Treasury adviser who, prior to joining the Obama administration, was paid $887,727 by Goldman Sachs and $158,000 for speeches to companies that included Stanford Group, the company run by Sir Allen Stanford, who has since been charged with fraud. Sperling’s compensation from Goldman was for work on a philanthropic project. His overall pay, including for his main job at the Council on Foreign Relations, totalled $2.2m in the 13 months to January.
  2. Matthew Kabaker, another Treasury adviser who, in the two years before he joined the Obama administration to work on plans to support banks and spur lending, had earned $5.8m at the private equity firm Blackstone. Most of Kabaker’s $5.8m compensation was in stock.
  3. Lewis Alexander, yet another Treasury adviser, was chief economist to Citigroup before joining the Obama administration. Alexander was paid $2.4m in the last two years.
  4. Lawrence Summers, chief economic adviser to the White House, was paid $5.2m by DE Shaw, the hedge fund, in the two years before he joined the Obama administration.

In a pattern that is now familiar — think “CZARS”! — many of these Obama officials were appointed as “counselors”, which means they escaped Senate confirmation hearings which could have highlighted their past remuneration and employment and, therefore, conflicts of interest.

All of this put the lie to Obama who had vociferously criticized the culture that he said prevailed before last year’s financial crisis –- at a time when many of the Treasury officials were working on Wall Street and related businesses. In a speech in New York last month, Obama had righteously thundered that “We will not go back to the days of reckless behaviour and unchecked excess that was at the heart of this crisis, where too many were motivated only by the appetite for quick kills and bloated bonuses.”

Obama, look at your own administration!





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