Tags: geithner | sperling | obama

Geithner Aides Reaped Millions from Banks

Thursday, 15 Oct 2009 06:55 PM

By Rick Pedraza

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Key advisers to Treasury Secretary Timothy Geithner have been earning millions of dollars from the institutions they are helping to regulate, according to Bloomberg News.

The aides, none of whom faced Senate confirmation for their involvement in the overhaul of the nation’s regulatory system, received salary and partnership income from some of Wall Street’s top financial benefactors of the economic bailout.

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According to Bloomberg, Geithner adviser Gene Sperling pulled in nearly $900,000 from Goldman Sachs last year for advice he gave the company on charitable contributions. Sperling also received $480,051 as a director for the Philadelphia Stock Exchange, and $250,000 for quarterly economic briefings from Brevan Howard Asset Management LLP and Sterling Stamos Capital Management –– two hedge funds. The Council on Foreign Relations paid $116,653 to Sperling for work related to education in developing countries.

The Stanford Group and other financial companies linked to the financial bailout reportedly paid Sperling more than $150,000 for speeches he gave at events. The Stanford Group was run by alleged ponzi scheme fraudster Allen Stanford.

In addition Sperling, Geithner aide Lee Sachs, another close adviser, earned $3 million in salary and partnership income from New York hedge fund Mariner Investment Group. Sachs, who withdrew earlier this year from consideration to be the Treasury Department’s top domestic finance official, would have required Senate confirmation to accept that post.

Both Sperling and Sachs are in positions of influence behind the scenes at Geithner’s Treasury Department, which oversees the $700 billion banking bailout, and all are subject to federal ethics rules, including a pledge to avoid contact with their former firms for at least a year.

“My sole work for Goldman Sachs was as lead consultant on the creation, design, and initial implementation of ‘10,000 Women,’ their $100 million philanthropic effort to give business and leadership education to poor women around the world,” Sperling told Bloomberg News.

"It's appropriate for Treasury officials to keep in touch with those who work in the markets every day, particularly when the economy and the markets are so fragile," Treasury spokesman Andrew Williams told the Associated Press.

Critics warn the high number of former Wall Street employees working in the administration may affect policy making. The disclosure comes as the latest revenue estimates by the Wall Street Journal show that some of the biggest U.S. banks and securities firms will former employees more than $140 billion in bonuses this year.

Geithner was the subject last week of a report from the Associated Press that disclosed that the treasury secretary takes numerous calls from top Wall Street figures prior to meetings with members of Congress and President Barack Obama.

Records obtained by AP through the Freedom of Information Act show Geithner has had more contact with Citigroup than House Financial Services Committee Chairman Barney Frank, D-Mass., who is in charge of promoting Geithner’s regulatory reform.

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