Summers lost Harvard billions
By Kevin Connor • Nov 29, 2009 at 12:27 EST
The Boston Globe has an excellent piece on Larry Summers’ mismanagement of Harvard’s finances today. As president from 2001 to 2006, Summers overstepped his presidential duties and pushed most of the university‘s cash into the market, against the frantic warnings of his investment chiefs. These moves lost Harvard close to $2 billion.
The article opens with a debate, Summers’ preferred mode of personal interaction:
It happened at least once a year, every year. In a roomful of a dozen Harvard University financial officials, Jack Meyer, the hugely successful head of Harvard’s endowment, and Lawrence Summers, then the school’s president, would face off in a heated debate. The topic: cash and how the university was managing – or mismanaging – its basic operating funds.
Through the first half of this decade, Meyer repeatedly warned Summers and other Harvard officials that the school was being too aggressive with billions of dollars in cash, according to people present for the discussions, investing almost all of it with the endowment’s risky mix of stocks, bonds, hedge funds, and private equity. Meyer’s successor, Mohamed El-Erian, would later sound the same warnings to Summers, and to Harvard financial staff and board members.
Summers essentially makes Wall Street look both smart and humble. An incredible feat!
The entire article is well worth a read.
Summers works two floors above the Oval Office right now. You have to wonder: what kinds of debates is he (brilliantly) winning right now?
Names in the news, 11.25.2009
By Kevin Connor • Nov 25, 2009 at 13:10 EST
* The White House has announced that President Obama will attend the UN climate change conference in Copenhagen.
* Military contractors employed by Blackwater are at the center of a secret program of targeted assassinations in Pakistan, according to The Nation‘s Jeremy Scahill. The operatives are also helping direct a drone bombing campaign, all from a US Joint Special Operations Command forward base in Karachi.
* AIG CEO Robert Benmosche has signed a non-compete deal and plans to stay on and continue collecting his $11 million bonus. Benmosche had been grumbling about government-imposed limits on his taxpayer-owned company.
* Following White House counsel Greg Craig‘s departure, the resignation of Phillip Carter signals more fallout from the administration’s “disappointing civil liberties record,” writes David Dayen. As assistant secretary of defense for detainee policy, Carter was playing a key role in the Gitmo closing effort.
Names in the news, 11.23.2009
By Kevin Connor • Nov 23, 2009 at 14:22 EST
Former White House counsel Greg Craig first won then lost the torture transparency debate to National Security Council staffer Denis McDonough and a posse of ex-CIA directors, according to a must-read piece in Time.
Senator Mary Landrieu got $300 million in Medicaid for her state in exchange for her vote to allow the Senate to debate the healthcare reform bill. Republicans have dubbed this episode of Washington dealmaking the Louisiana Purchase.
Rumors are flying that JP Morgan CEO Jamie Dimon would be next in line to replace Geithner as Treasury Secretary.
Meanwhile, Goldman Sachs continues to explain, ever-so-patiently, why we shouldn’t blame them for stealing taxpayer money.
Note: Ellen, who did an incredible job compiling the morning links these past five months, has moved on to a new full-time gig. Though she continues to log in over the intertubes and profile the powers that be, she is no longer keeping close watch for LittleSis names in the news, so we will be experimenting with some new ways of managing that constant flow and finding stuff that matters and relates to our work here at LittleSis.
And, to borrow a line from Ellen: we here at LittleSis salute you!
New Ways to Follow the Money on LittleSis
By Matthew Skomarovsky • Nov 23, 2009 at 11:55 EST
Faithful readers may have noticed that a good chunk of our recent research has centered on analysis of campaign contributions made by various power players:
This has been made possible by a new tool we’ve built that makes it easy to match people in LittleSis with campaign contributions compiled by OpenSecrets.org:
Ever since OpenSecrets opened its data earlier this year, we’ve been working on a useful little tool to let our analysts import campaign contribution data from OpenSecrets straight into LittleSis. This tool allows users to quickly determine which political candidates a given person has donated to since 1990, and how much has been given to each. It’s easy, for example, to see exactly how Senator Rockefeller likes to spread the wealth.
Our team has been putting it to the test for a couple months, and we’re finally ready to open it up to wider use.
The Dow of Geithner
By Kevin Connor • Nov 21, 2009 at 15:14 EST
In early March, as the AIG bonus controversy fueled public outrage at Wall Street’s chief enablers in Washington, it looked like Treasury Secretary Geithner would be forced out of his post before he got a chance to smell the cherry blossoms. Their backs to the wall, Geithner and friends subsequently waged a confidence game, slinging together an alphabet soup of Wall Street rescue programs (remember TALF?) formulated in close consultation with market movers.
The strategy worked, and we’ve seen an extended sucker’s rally since March — enough to convince the media and political establishment that the economy is sound, despite plenty of evidence to the contrary (chief sucker: David Brooks). This is best illustrated by this chart of the Dow in 2009:
Watt aide was “Friend of Angelo”
By Kevin Connor • Nov 18, 2009 at 10:04 EST
A key former aide to the North Carolina Democrat threatening popular legislation to audit the Fed once received a sweetheart Countrywide loan designed to influence predatory lending legislation introduced by the Representative. From a July 2009 CBS piece on the “Friends of Angelo,” (powerful recipients of sweetheart deals from the mortgage lender, named for Countrywide’s CEO, Angelo Mozilo):
Joyce Brayboy, the Chief of Staff for Rep. Melvin Watt was funneled into Countrywide’s VIP program. Countrywide’s lobbyist urged the loan officer to “carefully” handle the loan saying Brayboy “reports directly to Congressman Mel Watt who introduced predatory lending legislation to address unscrupulous lending practices, and they do view Countryside as a trusted advisor.” Watt serves on the House Financial Services Committee.
As I’ve previously noted, Brayboy was Watt’s longtime chief of staff (until 2007) and has lobbied for the American Bankers Association since leaving Capitol Hill.
Democrats are currently blocking an investigation of the Countrywide scandal.
Inquiries into the company’s special treatment of Senators Dodd and Conrad have concluded that they did not know they were receiving favorable terms.
At the Huffington Post, Ryan Grim is reporting that the broad-based, bi-partisan “Audit the Fed” movement is being threatened by an amendment introduced by Mel Watt, a member of the House Financial Services Committee:
Rep. Mel Watt, a Democrat from North Carolina, has introduced an amendment intended as an alternative to the measure to audit the Federal Reserve introduced by Reps. Ron Paul (R-Texas) and Alan Grayson‘s (D-Fla.). But instead of increasing transparency, as the amendment claims to do, Watt’s measure would instead make the institution more opaque.
The Grayson-Paul bill is co-sponsored by a staggering 310 representatives (out of 435 total). Why would Watt and oppose such a popular measure, and effectively do the bidding of powerful financial interests?
One possible explanation: Watt has extremely close ties to the American Bankers Association, the financial industry’s chief lobby. Joyce Brayboy, previously Watt’s chief of staff for 12 years, has been lobbying for the ABA since leaving Capitol Hill.
Brayboy is a senior vice president at the Glover Park Group, a lobbying firm which has represented the ABA since 2007 — the same year that Brayboy joined the firm.
Update: The ABA has been among Watt’s top five contributors in every cycle since 2000, according to OpenSecrets data.
Geithner’s backdoor bailout
By Kevin Connor • Nov 17, 2009 at 11:13 EST
A new report from the TARP inspector general details how Tim Geithner dropped the ball in negotiations with AIG counterparties after the insurance giant’s collapse.
As New York Fed president, Geithner had considerable power to force counterparties like Goldman Sachs to take losses on their swaps with AIG, but didn’t. As a result, taxpayer money was essentially passed through to banks like Goldman Sachs (now preparing to pay out record bonuses).
The New York Times revealed today that over 40 members of Congress read statements on the floor that parrotted talking points prepared for them by lobbyists for pharmaceutical giant Genentech. As sundin notes, the story is a must-read and perhaps “all too believable,” given the way Washington works.
But the Times misses a key piece of the puzzle: two of the Genentech lobbyists at the firm that wrote the pharma-friendly talking points are ex-staffers to Anna Eshoo and Joe Barton, co-sponsors of a key measure in the bill designed to benefit Big Pharma.
The Coal Fourteen
By Kevin Connor • Nov 13, 2009 at 13:42 EST
Fourteen Democratic Senators stood up for coal yesterday, notes the Wonk Room’s Brad Johnson:
In a letter to Senate leaders, a bloc of senators with powerful coal interests in their states called for “fair emissions allowances in climate change legislation.” Their definition of “fair,” unfortunately, turns out to be full taxpayer subsidies for global warming polluters. They call for the free allocation of pollution permits to electric utilities to be distributed “fully based on emissions.”
Curious about who funds these Senators, I created a list of the fourteen Senators (D-Coal). If you look at the funding tab, you can see the people in LittleSis who tend to give to these Senators most frequently.
Many of them are just big Democratic donors, but the first name jumps out: David Castagnetti, who Sunlight’s Paul Blumenthal recently pointed to as a former Baucus staffer lobbying against climate legislation. Castagnetti represents clients like Koch Industries.
Update: Castagnetti also represents the Edison Electric Institute, which is actually against the changes suggested in the Harkin Letter (h/t Brad).