Lawrence Summers, director of President Barack Obama’s National Economic Council, earned millions working at a hedge fund and speaking to banks such as Citigroup that later received taxpayer bailout money.
Hedge fund D E Shaw paid Summers more than $5 million in salary and other compensation in the past 16 months, according to a financial disclosure form released by the White House yesterday. Summers served as a managing director at the New York-based firm. Summers, a former Treasury Secretary, also earned more than $2.7 million in speaking fees alone.
“There was considerable interest in hearing his economic insights,” said Ben LaBolt, a White House spokesman. Summers “...has been at the forefront of this administration’s work to put in place a regulatory framework that will strengthen the financial system,” LaBolt said.
The disclosure statement illustrates the quandary Obama and his predecessors have faced in their decisions relating to personnel because “powerful people are almost always also rich people” who have earned money from private interests, said Steffen Schmidt, a political science professor at Iowa State University.
Obama’s “...choice going forward is to choose unknowns of modest means who may be less controversial in terms of their connections,” Schmidt said. “Except, those people would be far less knowledgeable and, thus, less of an asset to fix these same problems.”
Summers spoke to Citigroup, Goldman Sachs Group and Lehman Brothers Holdings. Lehman, which went bankrupt in September, paid Summers $67,500 for an engagement on July 30, the filing showed.