By Marita Noon
The nomination of Jack Lew for Treasury Secretary has uncovered a lot of dirt, but it also has dust swirling regarding the incestuous relationship between the Obama Administration and Wall Street. The story surely tarnishes the President’s image as “a man of the people, standing up to Wall Street.
In Lew we find much of what President Obama publicly derides—but, as Forbes reports, is “prepared to accept from his closest associates.”
In 2009, Obama said it was the “height of irresponsibility” for “executives at major financial firms who turned to the American people, hat in hand, when they were in trouble, even as they paid themselves their customary lavish bonuses.” And added: “For top executives to award themselves these kinds of compensation packages in the midst of this economic crisis isn’t just bad taste—it’s bad strategy—and I will not tolerate it as President.” Yet, Lew, during a short stint at Citi received an “obscene” bonus of $950,000—after we, the taxpayers, bailed out Citi to the tune of $476.2 billion.
Obama rails against Cayman investments. In 2008, during a Democrat primary debate, he talked about “closing tax loopholes and tax havens” and specifically addressed a building in the Cayman Islands that supposedly houses 12,000 corporations. “That’s either the biggest building or the biggest tax scam on record.” In 2012, the Obama campaign vilified Mitt Romney for investments in Cayman accounts. Yet, Lew was invested in a Citigroup venture capital fund registered in the Cayman Islands.
But Lew exposes a bigger story: the “commingling of Wall Street interests and the public trust,” as exemplified by former Treasury Secretary Robert Rubin.
Rubin left Treasury in 1999 and moved to Citigroup—where he was offered $15 million a year and unlimited use of the corporate jets. At Citi, Rubin crafted the “management and strategic decisions” and reports say that he “advocated ratcheting up the risk-taking.” “On his watch, the federal government was forced to inject $45 billion of taxpayer money into the company and guarantee some $300 billion of illiquid assets”—yet he was still paid “around $126 million in cash and stock.” Rubin’s bank-friendly policies, implemented during his time at Treasury, are believed to be what weakened the financial system and ultimately brought about the collapse.
Lew was hired on at Citi due to a recommendation from Rubin. Lew was with Citi from 2006 to 2009—during the financial disaster. His last position was as COO of Citi’s Alternative Investment Group—which according to Forbes, “lay at the epicenter of the financial crisis.” In the first quarter of 2008, Lew’s group lost $509 million while he was “paid $1.1 million for less than a year’s work.” Lew learned well from Rubin.
Lew left Citi for a “full-time high level position,” as deputy secretary of state under Hillary Clinton. In 2010, he became head of the Office of Management and Budget replacing Rubin-protégé Peter Orszag, who went to Citi.
The fact that “Citi” comes up over and over in this tale is no mistake. Citi and the Obama Administration appear to breathe as one.
In 2008, Citigroup was one of the Obama campaign’s biggest donors and several Citi executives served as campaign bundlers.
Michael Froman was one such Citi executive—also serving as COO of Citi’s Alternative Investment Group—who raised campaign cash and then went to work for the Obama Administration, where he was responsible for coordinating policy on issues such as energy and climate. Froman had previously served as chief of staff to Treasury Secretary Rubin. (Other Citi/Obama connections include Richard Parsons and Luis Susman as shown in Christine Lakatos’ newest expose: Citi’s Massive “Green” Money Machine.)
In his second term, Obama has pledged to make climate change a priority. Since 2007, Citi has been committed to “climate change activities.” In fact, they brag about being “a leader in alternative energy transactions across sectors, geographies and products.” In its 2011 Global Citizenship Report, Citi crows about having the “largest market share” of US Department of Energy financings for alternative energy—which means they are making big bucks from the green energy sector of the 2009 stimulus-spending spree. Lakatos has found that that 58 percent of Citi’s “clients,” listed in the documents from Michael Eckhart’s 2012 “Renewable Energy Seminar” received government subsidies, the majority from the 2009 Stimulus bill, totaling approximately $16 billion of taxpayer money.
Eckhart joined Citigroup in February 2011, after spending the last decade as the founding President and a member of the Board of Directors of the American Council on Renewable Energy. Eckhart “helped design the Department of Energy grant programs.”
This is just a sampling of the Citigroup swamp. Lew’s employment agreement allowed him to keep his pay perks if he left Citi for a “full-time high level position with the United States government or regulatory body”—obviously Citi likes to keep their friends close. Which leaves us to wonder: will Lew’s motivation be “a desire to serve the people, or an opportunity to serve himself and his friends”—as was said about his mentor Rubin?
We now know Obama will “tolerate” Wall Street walking all over the White House.
The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc. and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). Together they work to educate the public and influence policy makers regarding energy, its role in freedom, and the American way of life. Combining energy, news, politics, and, the environment through public events, speaking engagements, and media, the organizations’ combined efforts serve as America’s voice for energ