Top White House economic adviser Lawrence Summers received about $5.2 million over the past year in compensation from hedge fund D.E. Shaw, and also received hundreds of thousands of dollars in speaking fees from major financial institutions.
A financial disclosure form released by the White House Friday afternoon shows that Mr. Summers made frequent appearances before Wall Street firms including J.P. Morgan, Citigroup, Goldman Sachs and Lehman Brothers. He also received significant income from Harvard University and from investments, the form shows.
In total, Mr. Summers made a total of about 40 speaking appearances to financial sector firms and other places, with fees totaling about $2.77 million. Fees ranged from $10,000 for a Yale University speech to $135,000 for an appearance paid for by Goldman Sachs & Co. [via WSJ]
What’s troubling here is that Summers was making tens/hundreds of thousands of dollars in speaking engagements from firms that have direct financial interests before the government or are backed by taxpayer guarantees [TARP]. (See the original disclosure document here.) Goldman Sachs (GS), which has received $12 billion in bailout funds, paid Summers $135,000 for a speech on April 16, ’08 and another $67,500 for a speech on June 18, ’08. Citigroup (C), which has received $50 billion from the taxpayers, paid Summers $45,000 for a speech in March 2008 and another $54,000 for a speech that May. And the list of financial firms lining up check in hand includes JP Morgan (JPM), Lehman Brothers (LEHMQ.PK), State Street (STT) and so on. This shows how close to Wall Street Summers is.
Summers joined D.E. Shaw Group in late fiscal 2006 as a managing director. In 2008 he raked in over $5 million working only part-time.
NEW YORK, November 24, 2008—Today President-elect Barack Obama announced his intention to name Lawrence H. Summers as Assistant to the President for Economic Policy and Director of the National Economic Council. Following the announcement, Dr. Summers noted that he will be stepping down from his part-time role at the D. E. Shaw group. [PR-Inside]
Besides the fact Summers got compensated for lecturing everyone on economics, while completely missing what was coming ; the morality of this story consists in the long standing DC tradition of lobbying power and paying for access to influence policy. In addition, and more importantly, the article exposes the fact that the elite likes to be populist only when and if it serves its needs.