Bought and Paid For (43 page)

 

Jamie Dimon:
Chairman and CEO of JPMorgan Chase since December 2005. Dimon joined JPMorgan when it purchased Bank One, where he had been chairman and chief executive officer since March 2000. Although Dimon did not contribute directly to Obama's presidential campaign, he has been a powerhouse for the Democratic Party and supported Obama when he ran for Senate in 2004. Since 1989, Dimon and his wife have donated over half a million dollars to Democratic candidates and causes. Although he has said his firm didn't need the money, JPMorgan Chase received $25 billion in bailout funds.

 

Chris Dodd:
Longest-serving senator in the history of Connecticut. Dodd sits atop the powerful Senate Banking Committee and is one of the most influential Democrats in Congress. The financial collapse occurred under his watch, but that didn't stop Wall Street from funneling him a ton of cash. Since 2005 he has received just over $1.2 million in campaign contributions from the securities industry.

 

Rahm Emanuel:
Obama's chief of staff and top enforcer. Emanuel's ties to Wall Street run deep. A former member of the House of Representatives from Illinois, Emanuel briefly worked at Goldman Sachs and in 1999 managed Wasserstein Perella's Chicago office, earning $16 million for just two years of work. When Emanuel returned to public life, he relied more than ever on his Wall Street friends for fund-raising; in 2008 Emanuel received more money from the financial services industry than any other House member.

 

Larry Fink:
Chairman, chief executive officer, and founder of money-management firm BlackRock. Fink is considered a pioneer in the mortgage-backed securities market, an industry whose growth depended on government-assisted housing programs. Fink was an early supporter of Obama's candidacy and in the last several years has personally contributed only to candidates from the Democratic Party.

 

Greg Fleming:
Former president and chief operating officer of Merrill Lynch. From 2003 to 2007, Fleming was the head of Merrill's investment-banking unit. A cool operator, Fleming played an integral role in the government's orchestrated takeover of Merrill Lynch by Bank of America.

 

Barney Frank:
Powerful chair of the House Financial Services Committee. Frank, a Democrat from Massachusetts, is also the first openly gay member of Congress. Elected to the House in 1982, Frank enjoys great support from Wall Street: His two top campaign contributors are the American Bankers Association and JPMorgan Chase.

 

Richard “Dick” Fuld:
Former chairman and CEO of Lehman Brothers. Prior to the firm's bankruptcy, Fuld's fourteen-year reign at the helm of Lehman was the longest of any Wall Street CEO. While not terribly political, Fuld's firm was quick to profit from the government's expansion of existing housing policies. Ultimately, it was that push into real estate that led to the firm's collapse.

 

Mark Gallogly:
Managing principal of Centerbridge Partners, a private-equity firm. The consummate Wall Street insider, Gallogly was one of Obama's earliest and biggest supporters, introducing Obama to some of his biggest supporters in the financial service industry. After a long and successful career at Blackstone, Gallogly struck out on his own and created Centerbridge Partners. He sits on Obama's Economic Recovery Advisory Board.

 

Timothy “Tim” Geithner:
Current Treasury secretary and former president of the New York Federal Reserve Bank. Geithner played a key role in the unprecedented government bailout of the U.S. banking system. While he has never worked on Wall Street, he remains very close with the people he is charged with monitoring. At one point, Sandy Weill offered him the top job at Citigroup.

 

James Gorman:
Morgan Stanley's CEO since January 2010. Gorman replaced Wall Street legend John Mack. Gorman came to Morgan Stanley from Merrill Lynch, where he held a number of top management positions.

 

Alan Greenspan:
Chairman of the Federal Reserve from 1987 to 2006. Some economists have pointed to his aggressive lowering of interest rates following the attacks of September 11 as the fuel that lit the housing crisis. Greenspan had openly supported the use of derivatives as risk-mitigating tools and had even advocated for adjustable-rate mortgages.

 

John McCain:
Longtime Republican senator from Arizona. McCain is a self-described “maverick” and has often been a voice of criticism of Wall Street. That dislike could have cost the senator his best shot at being president, as McCain's campaign contributions from the securities industry trailed those of his chief rival by a nearly two-to-one margin.

 

Mitch McConnell:
Republican Senate minority leader from Kentucky. Although McConnell publicly claims to be no fan of Wall Street, he counts the securities industry as one of his leading sources of campaign contributions.

 

John Mack:
Former CEO of Morgan Stanley. Mack's career at Morgan Stanley spanned nearly thirty years. He left the company in 2001 amid a power struggle with then CEO Phil Purcell, eventually taking the helm at Credit Suisse First Boston. He returned to Morgan Stanley in 2005. Mack's sharp focus on cost cutting earned him the nickname “Mack the Knife.” But his parsimonious reputation did not stop him from taking $10 billion in taxpayer bailouts. Mack stepped down as CEO after he directed the firm's trading units to scale back on risk taking following the financial crisis of 2008.

 

Angelo Mozilo:
Deeply tanned former CEO of Countrywide Financial. Mozilo rose from being the son of a Bronx butcher to lead one of the world's biggest mortgage lenders, where he was an enthusiastic advocate of subprime mortgages. Mozilo's meteoric rise and fall became a symbol of the excesses of the real estate market. The growth of his firm was a direct result of the government's efforts to increase home affordability.

 

Barack Obama:
Forty-fourth president of the United States. Though he comes from humble origins and is only a few years removed from being a community organizer, with a relatively brief political career in the Illinois State Senate and the U.S. Senate, Obama's ties to Wall Street run deep. His cabinet is littered with Goldman alums, and during his campaign, Wall Street's contributions to Obama nearly doubled those the industry made to his rival, Senator John McCain.

 

Stanley “Stan” O'Neal:
Former CEO of Merrill Lynch. O'Neal led Merrill's fatal push into subprime mortgages while simultaneously working to destroy the firm's clubby insider culture, known as “Mother Merrill.” The grandson of a former slave, O'Neal is the highest-serving African American to have worked on Wall Street. Though not outwardly political, O'Neal did contribute to Obama's campaign. However, unlike many other Wall Street firms, during O'Neal's reign as CEO Merrill actually contributed more to the Republican party.

 

Vikram Pandit:
CEO of Citigroup. Pandit joined Citigroup after the bank purchased his hedge fund, Old Lane Partners, for $800 million in 2007. Prior to running his hedge fund, Pandit ran Morgan Stanley's investment-banking business, where he oversaw sales and trading. With over $50 billion in TARP money, no bank has benefited more from government bailouts than Citigroup.

 

Henry “Hank” Paulson:
Former Treasury secretary (serving during the heart of the financial crisis) and CEO and chairman of Goldman Sachs from 1999 to 2006. Few straddle the intersection of Wall Street and Washington as Paulson does. He was CEO of Goldman at the same time Jimmy Cayne, Stan O'Neal
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and Dick Fuld ran their respective firms, and in 2008 he engineered the federal bailout of America's financial institutions. Despite his financial support of Republican candidates through the years, Paulson is a committed environmentalist who has a number of close relationships with key House Democrats, including House Speaker Nancy Pelosi and Barney Frank.

 

Nancy Pelosi:
First female Speaker of the House of Representatives. Pelosi is one of the most powerful and liberal Democrats in the House. Though she has publicly rebuked Wall Street for its risky behavior, she played a key role in approving the government's massive bailout of the financial system.

 

Charles “Chuck” Prince:
Former CEO and chairman of Citigroup. In 2003 Prince inherited Sandy Weill's far-flung financial kingdom, which was created after the Clinton administration lobbied for the repeal of the Glass-Steagall Act. A former attorney with no background in trading mortgages, Prince stepped down from both positions due to heavy losses in the mortgage market.

 

Harry Reid:
Senate majority leader and the four-term Democratic senator from Nevada. Reid played a key role in crafting the government's massive bailouts of the U.S
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financial system. Though his home state is thousands of miles from Wall Street, Reid has received more campaign contributions from the financial services industry than he has from the gaming industry, which is based in his backyard.

 

Robert Rubin:
Treasury secretary under Clinton and cochairman and co- senior partner at Goldman Sachs in the nineties. Rubin went on to become a director and senior adviser at Citigroup before stepping down in January 2009. As Treasury secretary, Rubin was the chief architect of the Mexican bailouts and a driving force behind the Street-led bailout of Long-Term Capital Management. Though Rubin has repeatedly claimed he had no operational authority at Citigroup, many credit (or blame) him for the firm's push into the mortgage arena. Rubin enjoys a close personal relationship with both the Clintons and the Obamas.

 

Warren Spector:
Former co-president of Bear Stearns. Spector's twenty-four-year career at Bear came to a crashing halt after the implosion of the company's two subprime hedge funds. Spector headed Bear's mighty mortgage business, rising through the ranks at a young age to the top of the firm. Although some colleagues considered him aloof, and his left-leaning political views put him at odds with his boss, Jimmy Cayne, few doubted his financial prowess. After being ousted in the summer of 2007, Specter found part-time work as a volunteer for the Obama campaign. He was an early Wall Street supporter of the future president.

 

Michael Stamenson:
Former Merrill Lynch bond broker. Stamenson sold millions of dollars' worth of risky derivatives to the Orange County treasurer, Robert Citron. Those bets ultimately failed and led to the largest municipal bankruptcy in U.S history. Orange County filed suit against Merrill Lynch, and the case was ultimately settled for $400 million.

 

Larry Summers:
Treasury secretary under Bill Clinton. Robert Rubin's protégé, Summers's professional life has straddled academia, Washington, and Wall Street. As Treasury secretary, Summers championed the deregulation of Wall Street, arguing that the repeal of the Glass-Steagall Act would “better enable American companies to compete in the new economy.”

After serving in the Treasury, Summers returned to Harvard to become the university's first Jewish president. He resigned after questioning women's aptitude for math.

 

Paul Volcker:
Chairman of the Federal Reserve from 1979 to 1987. Volcker currently chairs Obama's Economic Recovery Advisory Board. Many economists credit Volcker with ending rampant inflation in the late seven-ties. Volcker was an early supporter of Obama and led the administration's efforts to reform the banks.

 

Sandy Weill:
Former CEO and chairman of Citigroup. Weill created the idea of the one-stop shopping megaconglomerate, engineering a series of mergers that eventually brought Citicorp and Travelers under the same roof and in the process created the world's largest financial company. The combination was only made possible through years of lobbying Congress to repeal the Glass-Steagall Act. During the financial crisis, only AIG took more in government bailouts than Citi did. But over the years, few firms have given more to the Democrats than Citigroup. In fact, since 1990 Citigroup has given nearly $14 million to the Democratic Party.

 

Reverend Jeremiah Wright:
Obama's former pastor. Wright's fiery and invective-filled sermons almost cost Obama the presidential election. Wright's ties to Obama run deep; he officiated Obama's wedding and baptized his two daughters. After initially trying to distance himself from Wright's comments, Obama eventually resigned from the Trinity United Church of Christ, where Wright had been a pastor.

ACORN:
The Association of Community Organizations for Reform Now is a left-wing organization that advocates on behalf of low- and moderate-income families. The organization has been accused in the press of helping in voter registration fraud in the last election. Additionally, ACORN found itself in the midst of a national controversy when a tape surfaced that appeared to show a low-level employee advising people how to hide prostitutes and avoid taxes. The incident led to a collapse in fund-raising, and the organization went bankrupt in 2010.

 

AIG:
American International Group is the largest insurer in the world, whose collapse threatened to take down the entire financial industry. Founded in 1919 and built into a colossus by Hank Greenberg, AIG's troubles began when it moved away from offering standard insurance products and started insuring complex mortgage securities, which left it vulnerable to the housing market. Since AIG's collapse, the U.S. government has bailed out the company to the tune of some $182 billion.