Neel Kashkari, ex-Treasury Secretary Henry Paulson’s pick to oversee TARP, has joined the bond firm PIMCO, the trillion dollar bond manager based in southern California.  The move comes just days after the Washington Post ran a lengthy profile of Kashkari and his life after Treasury.

Felix Salmon notes that with the move, PIMCO has cemented its status as a favorite outpost of former Washington policymakers (Alan Greenspan is an advisor there):

Pimco seems to be establishing itself as a key part of the revolving-door structure in contemporary finance: if you’re a senior government bureaucrat making decisions affecting the financial industry, there’s a good chance that if and when you leave there’ll be a job waiting for you in sunny southern California. It’s win-win for everybody: technocrats will tend to treat the financial industry with kid gloves when they’re in power, so as to maximize their chances of getting a good job upon their exit, while the likes of Pimco “make billions” as a result of doing so.

Former Washington types like Greenspan and Kashkari help PIMCO “make billions” by leveraging the relationships, influence, and access they developed in Washington.  It’s all part of PIMCO’s strategy, as outlined in this market commentary by PIMCO chief Bill Gross:

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On Sunday, The New York Times ran “Bill Gross of Pimco is on Treasury’s Speed-Dial,” a lengthy article on the cozy relations between PIMCO executives Bill Gross and Mohamed El-Erian and the Treasury Department. The piece had the confessional tone that is commonplace these days on the Times business page. To seek absolution for rapaciously self-interested actions, executives seem eager to tell all to Times reporters. Once the conflicts of interest and manipulation are out in the open, they lose their shock factor and can continue unabated.

The article traced the origin of PPIP to El-Erian, a much-hyped bond manager and emerging markets specialist. Although El-Erian’s plan for shedding toxic assets wasn’t adopted immediately, Treasury Secretary Timothy Geithner eventually warmed to it, and El-Erian and Gross helped shape it at every step. Now PIMCO appears first in line to benefit from the sweet terms they drew up for the government, should any bank ever decide to participate in the program.

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