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Where’s The Pay Czar? Geithner Aides

From Bloomberg:

Geithner Aides Reaped Millions Working for Banks, Hedge Funds

By Robert Schmidt

Oct. 14 (Bloomberg) — Some of Treasury Secretary Timothy Geithner’s closest aides, none of whom faced Senate confirmation, earned millions of dollars a year working for Goldman Sachs Group Inc., Citigroup Inc. and other Wall Street firms, according to financial disclosure forms.

The advisers include Gene Sperling, who last year took in $887,727 from Goldman Sachs and $158,000 for speeches mostly to financial companies, including the firm run by accused Ponzi scheme mastermind R. Allen Stanford. Another top aide, Lee Sachs, reported more than $3 million in salary and partnership income from Mariner Investment Group, a New York hedge fund.

As part of Geithner’s kitchen cabinet, Sperling and Sachs wield influence behind the scenes at the Treasury Department, where they help oversee the $700 billion banking rescue and craft executive pay rules and the revamp of financial regulations. Yet they haven’t faced the public scrutiny given to Senate-confirmed appointees, nor are they compelled to testify in Congress to defend or explain the Treasury’s policies

While it isn’t unusual for Treasury officials to come from the financial industry, President Barack Obama has been critical of Wall Street, blaming its high-risk, high-pay culture for helping cause the financial-market meltdown.

Speaking to financial executives last month, Obama said: “We will not go back to the days of reckless behavior 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.”

At the same time, the president has promised to change Washington by keeping lobbyists for special interests at a distance and by making decisions in the open.

Sperling and Sachs are each paid $162,900 at the Treasury. Along with four others, they hold the title of counselor to Geithner. Sachs, 46, withdrew earlier this year from consideration to be the Treasury’s top domestic finance official, a job that would have required Senate confirmation

Treasury spokesman Andrew Williams said the department needs people with a deep understanding of markets and the financial system, especially as it works to fend off the worst recession in half a century…

Along with Sperling and Sachs, Geithner’s inner circle also includes counselor Lewis Alexander, the former chief economist at Citigroup; Chief of Staff Mark Patterson, who was a lobbyist at Goldman Sachs, and Matthew Kabaker, a deputy assistant secretary who worked at private equity firm Blackstone Group LP. Patterson’s and Kabaker’s jobs did not require confirmation…

Alexander, who left Citigroup in March to join the Treasury, was paid $2.4 million in 2008 and the first few months of 2009, according to his financial-disclosure form. He advises Geithner on economic trends and does research on financial markets.

Kabaker, who works on domestic finance policy and helped craft the Treasury plan to spur banks to sell their toxic assets, earned $5.8 million working on private equity deals at Blackstone in 2008 and 2009 before joining the Treasury at the end of January, his disclosure form shows. Much of the compensation was in stock that Kabaker, who worked at Blackstone for 10 years, was awarded when it went public in 2007…

In Sperling’s primary job, he was paid $116,653 by the Council on Foreign Relations for work related to education in developing countries.

Sperling’s disclosure shows he supplemented his salary through a variety of consulting jobs, board seats, speaking fees and fellowships, to bring his total income to more than $2.2 million in the 13 months ending in January.

He was paid $480,051 as a director of the Philadelphia Stock Exchange and $250,000 for providing quarterly economic briefings to two hedge fund firms, Brevan Howard Asset Management LLP and Sterling Stamos Capital Management.

Sperling spoke at a Washington event hosted by the Houston- based Stanford Group Co. in November 2008, three months before its chairman was sued by the Securities and Exchange Commission for allegedly bilking investors of $7 billion. He also spoke at a Washington event in October 2007 that was sponsored by Citigroup, which has received $45 billion in government assistance.

Sperling, 50, was paid for his speeches through the Harry Walker Agency, which books speakers. His disclosure form does not list how much he was paid for each speech.

Sperling also drew a $137,500 salary from Bloomberg News for writing a monthly column and appearing on television, according to his disclosure.

Goldman Sachs paid Sperling the $887,727 for advice on its charitable giving. That made the bank his highest-paying employer. Even Geithner’s chief of staff Patterson, who was a full-time lobbyist at the firm, did not make as much as Sperling did on a part-time basis. Patterson reported earning $637,492 from Goldman Sachs last year…

Shocking, is it not?

Of course, not.

(Thanks to Debjeet for the heads up.)

This article was posted by Steve on Wednesday, October 14th, 2009. Comments are currently closed.

6 Responses to “Where’s The Pay Czar? Geithner Aides”

  1. MinnesotaRush says:

    My goodness! All these experts .. advisers .. counselors .. regulators, etc .. who would of thought we’d have any financial crisis’s?!? Ever???

    They’re certainly paid well enough. If they’re that good, whassup???

  2. caligirl9 says:

    I think I have a new mantra until 2012, when (I pray) better sense prevails …

    The Democrats’ mottos:
    1. Do as I say, not as I do.
    2. What’s good for me isn’t good for you
    3. Value-added taxes add value
    4. Who better to catch crooks than crooks?

    I am sure more will come to us as days go on.

    • Petronius says:

      5. If it moves, tax it.
      6. If it keeps moving, regulate it.
      7. And if it stops moving, subsidize it.
      8. You know who you be messin’ wid?
      9. Bushdiditbushdiditbushdiditbushdidit.

  3. Lurkin_no_mo says:

    “While it isn’t unusual for Treasury officials to come from the financial industry, President Barack Obama has been critical of Wall Street, blaming its high-risk, high-pay culture for helping cause the financial-market meltdown…”
    Strange, I thought it was caused by giving houses to people who couldn’t afford or care to pay for them…

  4. Reality Bytes says:

    Hey – Did his nose grow since he came on board? And look at those gums – my God Man! Austin Powers’ got nuthin’ on your choppers!

  5. canary says:

    Geithner smiled a week or so ago too. oh…Obama “was at the heart of this crisis, where too many were motivated only by the appetite for ‘quick kills’. Those scary violatile democrats are reminding me of the 70’s ‘snif’

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