Larry Summers: $8.5 Million Dollar Man
Lawrence H. Summers, one of President Obama’s top economic advisers, collected roughly $5.2 million in compensation from hedge fund D.E. Shaw over the past year and was paid more than $2.7 million in speaking fees by several troubled Wall Street firms and other organizations.
But Summers — who, as chairman of the National Economic Council, is a leading architect of the administration’s economic policies and helped shape the response to the global recession — appears to have collected the most income. Financial institutions including JP Morgan Chase, Citigroup, Goldman Sachs, Lehman Brothers and Merrill Lynch paid Summers for speaking appearances in 2008. Fees ranged from $45,000 for a Nov. 12 Merrill Lynch appearance to $135,000 for an April 16 visit to Goldman Sachs, according to his disclosure form. Summers reported donating two fees totaling $70,000, including the payment from Merrill Lynch, to charity.
In addition to his $5.2 million in salary and other compensation from D.E. Shaw, Summers received $586,996 in salary from Harvard University, where he is a president emeritus and worked as an economics professor until January, the document shows.
Via Greg Mankiw.
Update: Commenters have asked, “Has Summers been paid with taxpayers dollars?” I don’t know, but some of the companies that paid Summers speaking fees certainly did. These include Morgan Stanley, Goldman Sachs, Citigroup, and others. Here is an article with some more on this.
According to the Post, “Financial institutions including JP Morgan Chase, Citigroup, Goldman Sachs, Lehman Brothers and Merrill Lynch paid Summers for speaking appearances in 2008. Fees ranged from $45,000 for a Nov. 12 Merrill Lynch appearance, to $135,000 for an April 16 visit to Goldman Sachs, according to his disclosure form. Summers reported donating two fees totaling $70,000, including the payment from Merrill Lynch, to charity.”
From Merril Lynch’s 8-K,
On October 26, 2008, Merrill Lynch & Co., Inc. (“Merrill Lynch”) entered into a securities purchase agreement with the U.S. Treasury setting forth the terms upon which Merrill Lynch would issue a new series of preferred stock and warrants to the U.S. Treasury (the “TARP Purchase Agreement”). In view of the pending merger agreement with Bank of America Corporation (“Bank of America”), Merrill Lynch has determined that it will not sell securities to the U.S. Treasury under the CPP at this time, but may do so in the future under certain circumstances. The TARP Purchase Agreement provides for delayed settlement of a sale of $10 billion of a new series of Merrill Lynch preferred stock and warrants to purchase 64,991,334 shares of Merrill Lynch Common Stock at an exercise price of $23.08 per share. The TARP Purchase Agreement provides that the closing will take place on the earlier of (i) the second business day following a termination of the Merger Agreement with Bank of America and (ii) a date during the period beginning on January 2, 2009 and ending on January 31, 2009 if the Merger Agreement is still in effect but the merger has not been completed by the specified date, but, in the case of either (i) or (ii), in no event later than January 31, 2009. In addition, prior to January 2, 2009, if the Merger Agreement is still in effect but the merger has not been completed, Merrill Lynch has the right, after consultation with the Federal Reserve and Bank of America, to request that the U.S. Treasury consummate the CPP investment on or prior to January 1, 2009.
So Merrill Lynch was set to recieve TARP funds, but the merger put that deal on hold. But did Bank of America get any TARP funds? Bank of America’s 8-K from October 30th,
On October 26, 2008, Bank of America Corporation (the “Registrant”) entered into a Letter Agreement (the “Purchase Agreement”) with the United States Department of the Treasury (“Treasury”), pursuant to which the Registrant agreed to issue and sell (i) 600,000 shares of the Registrant’s Fixed Rate Cumulative Perpetual Preferred Stock, Series N (the “Series N Preferred Stock”) and (ii) a warrant (the “Warrant”) to purchase 73,075,674 shares of the Registrant’s common stock, par value $0.01 per share (the “Common Stock”), for an aggregate purchase price of $15,000,000,000 in cash. The Purchase Agreement is attached as Exhibit 10.1 hereto and is incorporated herein by reference.
Update II: Drip, drip, drip.
Michael Froman, deputy national security adviser for international economic affairs, worked for Citigroup and received more than $7.4 million from the bank from January of 2008 until he entered the Obama administration this year. This included a $2.25 million year-end bonus handed him this past January, within weeks of his joining the Obama administration.
Citigroup has thus far been the beneficiary of $45 billion in cash and over $300 billion in government guarantees of its bad debts.
A $2.25 million dollar bonus. My, my. Where are the usual suspects?
Louis Caldera, director of the White House Military Office, made $227,155 last year from IndyMac Bancorp, the California bank that heavily promoted subprime mortgages. It collapsed last summer and was placed under federal receivership.
As I’ve noted before, there is an incestuous relationship between Wall Street and Washington D.C. Get a high enough position in D.C. and you can move to a cushy job on Wall Street. Then if you are lucky back to D.C. for an even higher position. Rinse and repeat and soon you’ll be a multi-millionaire several times over. Party affiliation is irrelevant as this phenomenon occurs in both parties.