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Summers Raked in Speaking Fees from Wall Street

By Philip Rucker
Lawrence Summers, the chairman of President Obama's Council of 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 from several troubled Wall Street firms and other organizations.

Financial disclosure forms released late Friday by the White House show that many of Obama's top aides earned generous salaries, investment income and fees for delivering speeches and serving on corporate boards. National Security Adviser James L. Jones, for example, earned $1.1 million last year board compensation from five corporations, including Boeing Corp.

Two of Obama's closest advisers from Chicago earned large sums as well. David Axelrod, Obama's chief political strategist, received $1.55 million in compensation from the public affairs firms he co-owned and agreed to sell his ownership stake for $3 million over five years, his form shows. Senior adviser Valerie Jarrett earned $850,000 in salary and deferred compensation from Habitat Executive Services, Inc., as well as $346,687 in directors' fees from groups including Navigant Consulting and manufacturing firm USG Corp., according to the documents.

But Summers, a leading architect of the administration's economic policies and response to the global recession, appears to have collected the most income. Financial institutions including JP Morgan, 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.

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.

In 2008, Summers made a total of about 40 speaking engagements to corporations, universities, trade associations and other groups, even as he informally advised Obama's presidential campaign. But White House aides said the speeches occurred before he joined the Obama transition team in an official capacity.

White House spokesman Ben LaBolt said Summers recognized that the global financial system "faced a moment of peril and he laid out detailed plans to inject necessary spending, step up regulation, ease home foreclosures and keep markets open to encourage growth."

"Given that Dr. Summers is widely recognized as one of the country's most distinguished economists and formerly served as treasury secretary, there was considerable interest in hearing his economic insights from companies across various industries," LaBolt added.

By Post Editor  |  April 3, 2009; 8:17 PM ET
Categories:  44 The Obama Presidency  
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Comments

No experience without corruption.
The financial establishment has taken the country's economy hostage and threatens to do more harm if we don't meet their demands. I hope Obama is just negotiating by using insiders because it's safer that a direct assault on those reprobates.

Posted by: rooster54 | April 4, 2009 10:17 AM | Report abuse

ha who knew, another crook. Its stuff like this that keeps giving the GOP ammo.
I seen an online game thats coming out called Obama12, End of days. heres a link
http://hotpres.com/pres/ObamaGame.html
its all over youtube.
just wonder, hmm I wonder if the GOP isnt behind this. :0

Posted by: pastor123 | April 4, 2009 4:01 AM | Report abuse

Larry Summers IS NOT the chairman of the economic advisers! What kind of reporters do you have?? Has anyone fact-checked the very first sentence of the report?

WaPo is not what it used to be.

Posted by: ERICJORDI | April 4, 2009 3:05 AM | Report abuse

Nonsense!

It's crazy to oppose regulating executive compensation while simultaneously outing any individual who has been handsomely paid for work in the private sector.

We've had decades of corporate mergers and acquisitions. Giant companies insisted they must pay ever more for CEO's who insisted they must pay ever more for certain Keynoters.

Too big to fail
Too big to manage
Too big to exist.

I wonder if anti-trust laws could have kept these Titanic companies from being built in the first place. It might have kept executive salaries in check and created a larger pool of management talent.

Posted by: JohnQuimby | April 4, 2009 2:07 AM | Report abuse

Larry Summers is chairman of the Council of Economic Advisers? Did I miss some breaking news? Is Christina Romer now doing crop forecasts at the Agriculture Department?

I have to say that over the long term I'm more troubled that the Washington Post has reporters and a copy desk that would let an editorial pratfall like this into print than the fact that the director of the National Economic Council (that would be Dr. Summers) cashed a few hefty honorarium checks from Wall Street firms.

By the way, the chances of a copy error of this magnitude occurring at the Post's executive editor's former newspaper, The Wall Street Journal, are basically nil. The Journal had something called a monitor desk, a final set of eyes where after stories had been written and edited, they were handed to a final set of editors on the Monitor Desk for one more read to make sure errors a lot less conspicuous than the one we're discussing didn't get into print.

Come on Marcus. We're rooting for you, and for newspapers in general, but your people can do better than this.

Posted by: genec1 | April 3, 2009 11:23 PM | Report abuse

Lawrence Summers is the Chairman of the National Economic Council in the White House not the Chairman of the Council of Economic Advisers. Get your facts straight!

Posted by: pratherd46 | April 3, 2009 10:25 PM | Report abuse

what do you mean, "ummmm, soo???." just because its obama and not bush you're going to pull a blonde routine?

this is an egregious example of the main problem targeted by obama's purported reform agenda: people who make large sums working for company X being put in a position to regulate company X.

its especially egregious now since the government is picking winners and losers in the financial sector in a way we have neve seen in our country's history.

the only way this isnt a big deal is if the obama reform agenda was just a fantasy all along

Posted by: dummypants | April 3, 2009 10:21 PM | Report abuse

What did he do for the D. E. Shaw hedge fund to get over $5 million? Will that be one of the hedge funds to buy toxic wastes at artificial prices and make a killing as Joseph Stiglitz says.

What this shows is the naivete of those who worry about lobbyists. The disaster are the Iron Triangles, the most favorite of which is the military industrial complex. Each policy sphere is naturally dominated by the relevant Department, Congressional committees, and interest group. The financial Iron Triangle is Treasury, the committees of those like Dodd and Kanjorski, and Wall Street. They are in a game of shifting jobs between the public and private sector, friendly payoffs throgh things like speeches, etc. Lobbyists are a minor part of the problem.

The President could have tried to get conflicting advice (e.g, from Stiglitz or Krugman). He could have tried to resist advice and regulate. But instead he simply has accepted totally the de-regulation advice of Wall Street and the chief ideologue of deregulation, Summers. The market has GGbeen going up because it is convinced that the one effective regulation, Sarbanes on mark to market, has just been gutted. It was announced yesterday during the G-20.

Now we are going ahead with a privatization of bad debts that is likely to make Russian privatization look good. Of course, Obama's chief adviser at G-20, Lipton, was the man in charge of shock therapy and Russian privatization. It is just unbelievably ugly.

Posted by: jhough1 | April 3, 2009 10:03 PM | Report abuse

Umm, SO!!!!!!!!!!!

Posted by: freespiritheart1 | April 3, 2009 10:00 PM | Report abuse

Two words: No surprise.

Posted by: elh74 | April 3, 2009 9:55 PM | Report abuse

Yep, sounds like capitalism at work, and we DO live in a capitalist country, don't we?

I voted for Obama and support most of his initiatives and policymaking. He's working towards transparency and I would not be the first to say that he and his administration have a long, long way to go (though they're doing quite a bit better than their SUPER-greedy predecessors....what about Cheney and all those contracts given to Halliburton when the US started the IRAQ war...now THERE'S some iILLEGAL s***!).
Did Summers make an egregious sum of money BEFORE joining the administration? H*** yes!!!! Did he break any laws? Don't think so. Are we jealous???? Hmmm....

Look fellow ordinary citizens, this is the way government works.....it is broken and it will always work/be broken in this way. Get used to it. Unless you are an uber-mensch in whatever party is in power (policy issues/philosophy/political agenda aside), this kind of greed and money,money,money among the ruling class will always be....Period. Hard to stomach? Yes. Nonetheless, what has been shall always be when speaking of government.

That said, this broken democracy sure enough is far more appealing to me at least, than the governments of so many despots in Africa and Russia, China, N. Korea, to say nothing of all the thieves atop so many failed governments/countries around the world. Hey, we're here in the US only by an accident of birth.

Posted by: ehphd | April 3, 2009 9:50 PM | Report abuse

This afternoon, I heard on NPR that Summers drives a 1995 Mazda Protege. The NPR piece was on an investigation on whether the government overseers to GM drive domestic or foreign cars. Most according to the investigators drive foreign brands. So Summers made close to 10 million dollars last year and is driving a 1995 Mazda...it looks the financial institutions were shovelling money in his pocket to hear his views and who would not take it. If money was his only motivator I don't think he would take a White House gig that pays less than the rates for four or five speeches at one of these almost bankrupt money houses.

Posted by: ere591 | April 3, 2009 9:37 PM | Report abuse

Barack Obama knew about his friend's obscene speaking fees. It is, as they call it in England "the old boys club".

The US masses who are poorly educated, will always remain outside the Pale.

Deal with it !!!
GC

Posted by: GalacticCannibal | April 3, 2009 9:33 PM | Report abuse

The comments that resort to the dichotomous democrat, conservative rants are ridiculous. I am a liberal and am outraged at this wall street revolving door, connections with power merry go round and so should everybody. BUT IT IS both parties playing this game because that's the way we allowed the system to turn. Its not a dem/republican issue. It is a moral one. Campaign finance reform anyone?.

Posted by: drgirl | April 3, 2009 9:28 PM | Report abuse

Imagine that! Someone whose expertise is valuable actually going work for the government to try to fix the economy that was trashed by ideologues from the Republican Party.

Posted by: cdierd1944 | April 3, 2009 9:26 PM | Report abuse

There are a couple problems here.

First, Summers is one of those White House "advisors" who never have to go through any congressional vetting process to assume a White House post. He has served in the White House before, under Clinton, but since his new appointment, there was never any inquiry into his activities and potential conflicts of interest during the past decade.

Second, given the outrage of people over exorbitant bonuses at Wall Street firms, why not similar outrage when those firms lavish exorbitant honorariums on ex-political figures like Bill Clinton, Larry Summers, Tom Daschle, and others? This people rake in tens and hundreds of thousands of dollars for speaking an hour. Are anyone's words really worth that much, or are these fees really just payments for the influence that these speakers have had or will have on behalf of the companies?

Given the amount of money that Obama's administration has handed out to banks and other firms, and that Summers was raking in huge speaking fees from some of the same firms just months ago, the circumstances certainly look bad. And if Congress is going to move through an ex post facto law to force employees at these companies who hold perfectly legal contracts to give back to the companies or to the government the compensation to which the employees are legally entitled, why not also move to "recover" the excessive fees spent on speakers like Summers?

I mean, besides the fact that we claim to live in a free country where the government doesn't dictate every detail of our lives, why don't we? But then ideas of freedom and liberty don't really seem to register in Washington anymore as a rationale for not interfering to blackmail the ouster of a corporate CEO, not stealing compensation from employees, etc., etc., so I doubt that they will have much sway in this case.

Or do Obama administration officials once again hold themselves to a different standard than they hold everyone else? Geithner doesn't pay all of his taxes, and when caught doesn't have to pay the punitive fines, but forces the rest of us to do so. AIG employees have to give up the compensation to which they are legally entitled because the government is bailing out the company, but had Summers received a fat speaking fee from them a couple months back, he wouldn't have to return it, right? I think I'm understanding the logic here. Greed rules.

Posted by: blert | April 3, 2009 9:15 PM | Report abuse

Typical scumbag Bush Republicans cashing in on their contacts after leading this country into financial ruin...

What? He's a Democrat? Oh, never mind.

Posted by: hisroc | April 3, 2009 9:14 PM | Report abuse

Just another rich, elite liberal. And the Democrats claim to represent the middle class and the workers. What a joke. It is almost as big a joke as those who actually believe that the Democrats are just one of the common people.

Posted by: johne37179 | April 3, 2009 9:12 PM | Report abuse

$45,000 Merril Lynch - $145,000 Goldman Sachs... Henry Kissenger, Harvard made you choose: Politics or Academics. Larry, you have carte blanche [sound]. Are the fees reasonable? Are the audiences sufficiently 'broad' to pass the insider trading, old boy networking? Were any other audiences addressed in the spirit of applicants are accepted or denied before their finances are examined? Were any books written in conjunction with the speaking? Who were the other speakers these groups paid similar amounts to? Why does it feel like nepotism, cronyism, [[loose screen luffs against metal making a sound]] '/. Sure, your a nice guy, and intelligent, and fun to read, or listen to, Larry, but the lack of an inborn instinct to be wanting to be sure nobody could r e a s o a b l y misunderstand your motives points to a character weakness that is likely why you are chief advisor rather than US President yourself. Can you repent and give some free speeches to orphan and under privileged groups? Can you s p r e a d your knowledge around? [sound] to those who are not tuned in to the nuances of FDR? Who wants you to repent and be forgiven. All of you. If this report has failed to mention significant charities you've done to off set the "insider" cash flows sent your way, please amend the record. [^] Meanwhile, since who doesn't have a library link to click to go to the original documents yet. who'll need to use more of whose time to look into this. WJC got $100 K speaking fees coming out of the [screen]j...

Posted by: randomsample | April 3, 2009 9:11 PM | Report abuse

I no longer care. I have come to accept the fact that those of us who do Real Work in this country are considered chumps by those who are at the top of the economic heap, and that we will always pay more taxes and have less security than the scammers and speculators. At least I don't need to worry about getting laid off: I got Bushed in December and have hardly anything left for the richies to take away from me. Yay!

Posted by: roblimo | April 3, 2009 9:07 PM | Report abuse

Another example of "change"; it is too bad that the so called nonpolitical press never looked under the "rhetoric".

Posted by: Ethicist | April 3, 2009 9:04 PM | Report abuse

Children, can we say, 'Mountain out of a mole hole?' There is no lobbying here. What I'm seeing is a number of people whom companies pay just to hear their thoughts. Given that, I'd kind of like them on my payroll. Oh yeah, they are.

So I'm getting that the point of the article is that government shouldn't hire successful people. Sorry but I'm not buying that. We need the best of the best right now. If ethics laws are violated then report on that.

To do otherwise is counterproductive.

Posted by: juggernautenterprises | April 3, 2009 9:04 PM | Report abuse

Can you at least get his job title right. He is not Chairman of CEA.

My impression is that I'm sedeing more mistakes of this kind in the Post. Consequence of cutbacks?

Posted by: ASIinDC | April 3, 2009 9:02 PM | Report abuse

It sounds like capitalism at work to me. Anything wrong with this?
---------
Yes.

Posted by: thegreatpotatospamof2003 | April 3, 2009 8:58 PM | Report abuse

Hmmm.....

Posted by: lingering_lead | April 3, 2009 8:53 PM | Report abuse

It sounds like capitalism at work to me. Anything wrong with this? And to think that "W" will get speaking fees after his presidency. The problem would be if Summers got speaking fees after he signed on to the White House staff.

Posted by: EarlC | April 3, 2009 8:51 PM | Report abuse

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