Obama Admin’s TPP Trade Officials Received Hefty Bonuses From Big Banks

[babsbunny]

http://billmoyers.com/2014/02/20/obama-admin%E2%80%99s-tpp-trade-officials-received-hefty-bonuses-from-big-banks/

February 20, 2014
by Lee Fang

Officials tapped by the Obama administration to lead the Trans-Pacific Partnership trade negotiations have received multimillion dollar bonuses from CitiGroup and Bank of America, financial disclosures obtained by Republic Report show.

Stefan Selig, a Bank of America investment banker nominated to become the undersecretary for international trade at the Department of Commerce, received more than $9 million in bonus pay as he was nominated to join the administration in November. The bonus pay came in addition to the $5.1 million in incentive pay awarded to Selig last year.

[jsr]

1. It's just a coincidence, of course

[Pretzel_Warrior]

2. Pretty damn misleading title

The people being discussed worked as investment bankers for said banks at the time of the bonuses.

You can question the pay structure in investment banking, but tying these bonuses to the fact that they've been tapped as trade negotiators is bullshit.

[Wilms]

4. You may want to read further in before you jump.

Many large corporations with a strong incentive to influence public policy award bonuses and other incentive pay to executives if they take jobs within the government. CitiGroup, for instance, provides an executive contract that awards additional retirement pay upon leaving to take a “full time high level position with the US government or regulatory body.” Goldman Sachs, Morgan Stanley, JPMorgan Chase, the Blackstone Group, Fannie Mae, Northern Trust and Northrop Grumman are among the other firms that offer financial rewards upon retirement for government service.

[Pretzel_Warrior]

5. I read that. There are less nefarious reasons for such payments

Here's an interesting piece from a watchdog group as to some of the reasons for bonuses and accelerated payments to executives who leave a company to work in the public sector.

http://www.pogo.org/our-work/reports/2013/big-businesses-offer-revolving-door-rewards.html

Professor Yermack told POGO there’s another reason for companies to include “government service” clauses in their long-term pay plans. The plans were intended to deter executives from going to work for competitors, and companies carve out exceptions because joining the government isn’t the same as going to work for a rival business.


“The basic issue is that a company does not want to continue paying you while you go to work for a competitor, but they are ruling out the idea that working for the government would be a form of competition,” Yermack told POGO.

A former senior executive and government official who spoke with POGO on background echoed this point. “Most employment contracts are intended to keep the person from leaving,” he said, but “most companies take the position that going into the government isn’t the same as going to a competitor.”

The former executive said many such clauses were added in the aftermath of a revolving door scandal involving Boeing.

In the early 1980s, five employees left Boeing to accept senior government positions. The employees received “severance payments” from Boeing—$485,000 in total—because the “shifts required forgoing the higher salaries that each employee would have earned at Boeing and also severing all financial connection with the company,” according to a 1990 Supreme Court decision. (The Court held that Boeing did not illegally supplement the employees’ federal salaries because none of the employees had started working for the government at the time of the payments.)

Many employment agreements now stipulate in advance that such payments must be accelerated to executives who go to work for the government, the former executive told POGO. That way an executive doesn’t have to forfeit his long-term pay benefits if he accepts a government position before those benefits vest. These clauses “are pretty standard, particularly for anybody who’s ever been in the government,” he said.

[Wilms]

6. Then keep reading further into your own linked article...

POGO doesn't seem particularly moved by Yermack's point.

At a time when Congress is considering a slate of nominees to serve in high-level positions across the federal government, these agreements underscore concerns raised by POGO and others about the revolving door between the government and big businesses.

These companies seem to be giving a special deal to executives who become government officials. In exchange, the companies may end up with friends in high places who understand their business, sympathize with it, and can craft policies in its favor.

At a minimum, these provisions show that the revolving door is such a fixture in Corporate America that it is written into the executive pay structure.

[Pretzel_Warrior]

7. I read my whole linked article, thank you

[Wilms]

8. Well then, do you, and do you think Hillary, share...

"concerns raised by POGO and others about the revolving door between the government and big businesses." Or is that kind of thing OK with you?

[woo me with science]

3. Of course they did.

Our government, both parties is corrupted by corporate money and no longer represents us.

Jimmy Carter: "We no longer have a functioning democracy."

It's well past time to call corruption, corruption.