Treasury Secretary Timothy Geithner was head of the Federal Reserve Bank of New York and is a member of the Council on Foreign Relations and the Trilateral Commission.
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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.
“These people are incredibly smart, they’re incredibly talented and they bring knowledge,” said Bill Brown, a visiting professor at Duke University School of Law and former managing director at Morgan Stanley. “The risk is they will further exacerbate the problem of our regulators identifying with Wall Street.”
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. (See: The US Government: Bought and Paid For)
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.
Geithner’s predecessor, Henry Paulson, brought on a coterie of non-confirmed advisers from Goldman Sachs at the end of his term. Paulson, who had been the firm’s chief executive officer, defended the arrangement as necessary to quickly bring in top talent when the financial system was on the verge of collapse.
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Tags: Banking, CFR, Citigroup, Council on Foreign Relations, Economy, Goldman Sachs, Government, Hedge Funds, Henry Paulson, Politics, Timothy Geithner, Treasury, U.S., Wall Street