Wall Street Pays Bankers to Work in Government and It Doesn't Want Anyone to Know

[Octafish]

by David Dayen
The New Republic, Feb. 4, 2015

EXCERPT...

The handouts recently received attention when Antonio Weiss, the former investment banker at Lazard now serving as counselor to Treasury Secretary Jack Lew, acknowledged in financial disclosures that he would be paid $21 million in unvested income and deferred compensation upon exiting the company for a job in government. Weiss withdrew from consideration to become the undersecretary for domestic finance under pressure from financial reformers, but the counselor position—which does not require congressional confirmation—probably still entitles him to the $21 million. The terms of the award are part of a Lazard employee agreement that nobody has seen.

These payments are routine at major banks, several of which have explicit policies, found in filings with the SEC, outlining automatic awards for executives who rotate into government. Goldman Sachs offers “a lump sum cash payment” for government service, for example.

Other banks’ policies are subtler. Banks often defer certain types of compensation in order to retain talent. When an executive terminates employment, unvested stock options and other forms of deferred compensation are usually forfeited. But several companies let executives’ equity options continue to vest if they leave for a government position, or allow them to keep retention bonuses that would otherwise be returned to the firm. A 2004 tax law banned accelerated payments but made an exemption for employees who leave for government service. Critics wonder whether the gifts are intended to fill the government with friendly faces who will act in their former employer’s interests.

“It fuels the revolving door between banks and the government,” said Michael Smallberg, an investigator for the Project On Government Oversight (POGO), whose 2013 report detailed these types of compensation agreements. The average executive branch salary is substantially less than these millions in awards, so the bonuses effectively supplement the lower pay, raising questions about who the government officials actually work for.

SNIP...

Last November, Trumka wrote letters to seven mega-banks—Citi, Goldman Sachs, Morgan Stanley, JPMorgan Chase, Bank of America, Wells Fargo and Lazard—asking their compensation committees to explain why giving incentives to executives for government service benefits shareholders or the company. The labor federation holds shares in many public companies through its pension funds. “We oppose compensation plans that provide windfalls to their executives unrelated to performance,” the letter states.

CONTINUED...

http://www.newrepublic.com/article/120967/wall-street-pays-bankers-work-government-and-wants-it-secret

Goes a long way toward explaining why, no matter how hard we work for change, the rich keep getting richer and the wars go on and on and on.

[octoberlib]

1. Gotta get their minions in there

to influence policy. So corrupt.

[Octafish]

3. Dick Cheney pioneered the piratization process at the Pentagon...

Mr. Other Priorities' main qualifications for Secretary of Defense seems to have been his voting record in support of War Inc. History unmentioned in the Corporate Owned News:

Cheney's Multi-Million Dollar Revolving Door

News: As Bush Sr.'s secretary of defense, Dick Cheney steered millions of dollars in government business to a private military contractor -- whose parent company just happened to give him a high-paying job after he left the government.

By Robert Bryce
Mother Jones
August 2, 2000

EXCERPT...

In 1992, the Pentagon, then under Cheney's direction, paid Texas-based Brown & Root Services $3.9 million to produce a classified report detailing how private companies -- like itself -- could help provide logistics for American troops in potential war zones around the world. BRS specializes in such work; from 1962 to 1972, for instance, the company worked in the former South Vietnam building roads, landing strips, harbors, and military bases. Later in 1992, the Pentagon gave the company an additional $5 million to update its report. That same year, BRS won a massive, five-year logistics contract from the US Army Corps of Engineers to work alongside American GIs in places like Zaire, Haiti, Somalia, Kosovo, the Balkans, and Saudi Arabia.

After Bill Clinton's election cost Cheney his government job, he wound up in 1995 as CEO of Halliburton Company, the Dallas-based oil services giant -- which just happens to own Brown & Root Services. Since then, Cheney has collected more than $10 million in salary and stock payments from the company. In addition, he is currently the company's largest individual shareholder, holding stock and options worth another $40 million. Those holdings have undoubtedly been made more valuable by the ever-more lucrative contracts BRS continues to score with the Pentagon.

Between 1992 and 1999, the Pentagon paid BRS more than $1.2 billion for its work in trouble spots around the globe. In May of 1999, the US Army Corps of Engineers re-enlisted the company's help in the Balkans, giving it a new five-year contract worth $731 million.

CONTINUED...

http://www.motherjones.com/news/feature/2000/08/cheney.html

Must've been an awkward time for Sneer, going into the Pentagon where the officers and enlisted personnel could stare at the corrupt draft dodger. Then, of course, an enormous and ongoing series of cash bonuses from Halliburton has long since made that hurtful memory go away.

[erronis]

21. As long as there's been war machinery, there's been corruption and greed

My dim recollection of world and US history leads me to understand that profiteering has been part of every battle, every invasion, every murderous use of power. Several major US companies were helping the Axis arm themselves against the US - for a price, of course.

Cheney and Halliburton, KBR, beltway bandits are modern examples of these advocates of belligerency using their weapons of killing.

And also, of course, these WallSt. types that are double-dipping with Federal jobs in D.C. aren't serving two masters (government and WallSt.) They only have one master - the one that pays/will pay multiple millions of dollars for their "services".

[Octafish]

28. ''War is a Racket.'' -- Gen. Smedley Darlington Butler, USMC (ret.)

Absolutely, erronis. The good general received two Medals of Honor and singlehandedly stopped the fascist coup against FDR observed:

"War is a racket. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives." -- Smedley D. Butler

Butler said he felt like a gangster collecting for racketeers.

For DUers and all who enjoy reading about the nation's true state of affairs: "War Is a Racket" in PDF form.

[fasttense]

39. When you allow capital to rule economic systems

Of practically the entire planet, those with the most money will rule you.

[marym625]

2. K&R!

[Octafish]

6. Citigroup Wrote the Wall Street Giveaway The House Just Approved (MoJo via WillyT)

The bill, drafted almost entirely by Citigroup, would allow banks to do more high-risk trading with taxpayer-backed money.

By Erika Eichelberger
Mother Jones, Dec. 10, 2014

EXCERPT...

A year ago, Mother Jones reported that a House bill that would allow banks like Citigroup to do more high-risk trading with taxpayer-backed money was written almost entirely by Citigroup lobbyists. The bill passed the House in October 2013, but the Senate never voted on it. For months, it was all but dead. Yet on Tuesday night, the Citi-written bill resurfaced. Lawmakers snuck the measure into a massive 11th-hour government funding bill that congressional leaders negotiated in the hopes of averting a government shutdown. President Barack Obama is expected to sign the legislation.

"This is outrageous," says Marcus Stanley, the financial policy director at the advocacy group Americans for Financial Reform. "This is to benefit big banks, bottom line."

As I reported last year, the bill eviscerates a section of the 2010 Dodd-Frank financial reform act called the "push-out rule":

Banks hate the push-out rule…because this provision will forbid them from trading certain derivatives (which are complicated financial instruments with values derived from underlying variables, such as crop prices or interest rates). Under this rule, banks will have to move these risky trades into separate non-bank affiliates that aren't insured by the Federal Deposit Insurance Corporation (FDIC) and are less likely to receive government bailouts. The bill would smother the push-out rule in its crib by permitting banks to use government-insured deposits to bet on a wider range of these risky derivatives.



The Citi-drafted legislation will benefit five of the largest banks in the country—Citigroup, JPMorgan Chase, Goldman Sachs, Bank of America, and Wells Fargo. These financial institutions control more than 90 percent of the $700 trillion derivatives market. If this measure becomes law, these banks will be able to use FDIC-insured money to bet on nearly anything they want. And if there's another economic downturn, they can count on a taxpayer bailout of their derivatives trading business.

CONTINUED...

http://www.motherjones.com/politics/2014/12/spending-bill-992-derivatives-citigroup-lobbyists

[marym625]

13. yes, I read that

Even more reason I was blown away at President Obama and his administration pushing for it to pass. Disgusting.

[StoneCarver]

33. yes i read that...

Obama is a moderate republican. I used to be a republican. I wish it were different, but it ain't so. What can I do to make Hillary and Obama different? It is like we don't even make a difference.
Stone Carver.

[marym625]

34. You hit the nail on the head

We don't matter.

[RiverLover]

15. Great info.

Thank you!

[Scuba]

4. Weiss was a fool. Hillary got her money upfront.

[Octafish]

7. He wasn't counting on Elizabeth Warren noticing.

Seems she doesn't "Go along to get along," as Speaker Sam was wont to say.

[Romulox]

5. Don't forget the relatives of politicians (e.g. Chelsea Clinton and hubby). nt

[Octafish]

9. Reading that one thread is better than getting an MBA

http://www.democraticunderground.com/?com=view_post&forum=1002&pid=6178887

[Faryn Balyncd]

8. Legalized corruption

[Octafish]

12. Word.

Last edited Sun Feb 8, 2015, 10:55 PM - Edit history (3)

It's like in Goldfinger, after Bond wins their golf bet they meet at Goldfinger's car to square up. Steamed that Bond out-cheated him, Goldfinger orders Odd Job to show off his martial skills by throwing his murderous bowler hat, knocking the head off a faux Roman statue of a Greek goddess.

Bond asks, "But what will the club secretary say?"

Goldfinger answers, "Nothing, Mr. Bond. I own the club."

[tclambert]

25. Exactly right.

"Hey, what if we get our lobbyists to write a law, shop it around, get some Congesscritter to sponsor it, and make our highly immoral, highly corrupt behavior technically legal? If we can profit off it, the bribery required to subvert democracy is a small cost on the balance sheet."

"And hey, what if we call it 'buying access' instead of 'buying influence' or 'buying votes?' And instead of bribery, we call it 'contributions to anonymous political action committees?' Remind me to send a thank you note to Chief Justice Roberts for that Citizens United decision that legalized buying elections. Oh, gotta remember to say 'money is free speech' rather than buying elections."

[antigop]

10. and they avoid capital gains tax, according to a tax loophole

Page 107 of "Why I Left Goldman Sachs" by Greg Smith:

In retrospect, I recognized that this was also the trade of the century for Hank Paulson. To avoid conflict of interest while at the government, he was obligated to sell all his Goldman stock ($500 million worth) at the top of the market, before the crash. Also, due to a tax loophole, for accepting government service, he avoided paying capital gains tax.

[Octafish]

16. Bless their little offshoring hearts.

There's a small silver lining for their personal sacrifice to serve the people.

Thanks for the heads-up, antigop. The game really is rigged, the playing field is tilted, and the officials changed in the same locker room as the winning team after the game and joined the celebration.

Warren Buffet's secretary pays a bigger percentage in taxes than he does:

The wealthiest 400 people in the world saw their combined net worth grow by $92 billion last year, hitting $4.1 trillion. The bonanza for the super-rich was underwritten by governments and central banks around the world, which fueled surging stock markets and record corporate profits by pumping hundreds of billions into the financial markets.

SOURCE: http://www.wsws.org/en/articles/2015/01/03/bill-j03.html

But, hey! He pay more on volume, right? Right? Am I right?

[antigop]

26. It's hard to have any hope. Yes, it's rigged, but I thank you, Octafish, for all of your posts. nt

[sabrina 1]

11. In Europe, Greece is a perfect example, Wall St, Goldman Sachs to be precise, installed GS People

at the head of their Government, removing the elected Representative of the people. This so they could ensure their policies, Austerity, continue to rob nations like Greece, as they did for years in Third World countries.

I think it's too late to stop them now. They have so much influence in this and other governments that anyone who does try, see Whistle Blowers and the use of the Sedition Act, will be 'dealt with'.

[Octafish]

17. Greece has noted it's no hobnailed boot on their face; it's a vampire squid.

Sorry to mix Orwell and Taibbi metaphors for the game of greedheads:

Goldman Sachs, Greece Didn’t Disclose Swap Contract

By Elisa Martinuzzi
Bloomberg - February 17, 2010 13:31 EST

Feb. 17 (Bloomberg) -- Goldman Sachs Group Inc. managed $15 billion of bond sales for Greece after arranging a currency swap that allowed the government to hide the extent of its deficit.

No mention was made of the swap in sales documents for the securities in at least six of the 10 sales the bank arranged for Greece since the transaction, according to a review of the prospectuses by Bloomberg. The New York-based firm helped Greece raise $1 billion of off-balance-sheet funding in 2002 through the swap, which European Union regulators said they knew nothing about until recent days.

Failing to disclose the swap may have allowed Goldman, a co-lead manager on many of the sales, other underwriters and Greece to get a better price for the securities, said Bill Blain, co-head of fixed income at Matrix Corporate Capital LLP, a London-based broker and fund manager.

“The price of bonds should reflect the reality of Greece’s finances,” Blain said. “If a bank was selling them to investors on the basis of publicly available information, and they were aware that information was incorrect, then investors have been fooled.”

CONTINUED...

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=akqC4y5U7MnU

Then, there's the Big Picture...

Draghi at the Central Bank

Is Goldman Sachs Poised to Takeover Europe?

by MIKE WHITNEY
CounterPunch, OCTOBER 31, 2011

Goldman Sachs is about to take over Europe, but you wouldn’t know it by reading the papers.

On Tuesday, G-Sax alum, Mario Draghi, will take the helm at the European Central Bank replacing retiring ECB president Jean-Claude Trichet. The appointment has slipped by the media virtually unnoticed even though the ECB is the most powerful institution in the EU and is likely to play a critical role in solving the debt crisis.

Draghi was formally a Managing Director at Goldman. He also served as an advisor to the Bank of Italy in 1990, chairman of the Italian Committee for Privatisations, and was an Executive Director of The World Bank from 1984 to 1990. His bio. affirms his globalist pedigree which makes him the perfect candidate to replace the curmudgeonly Trichet who failed to comply with all of Big Finance’s demands. That’s not likely to be the case with Draghi.

The new ECB chief faces the difficult task of trying to pacify Germany while implementing policies that are opposed by the German political class as well as the German people. It won’t be easy, even for a skilled diplomat like Draghi. But Draghi will move forward with his bank-centric agenda, because it may be the last chance to keep the 17-member monetary union from disintegrating.

First, he will lower interest rates by .50 basis pts (from 1.5% to 1.%) at the ECB meeting on November 3 even though headline inflation in the eurozone is presently 3 percent and even though the move is bound to raise eyebrows in Berlin. Then he will announce that the ECB will step up its controversial bond buying program (already 170 billion euros) in order to push yields on soaring Italian debt below 6 percent. The Italian 10-year bond has zoomed to over 6.15 percent since the EU leaders announced their “breakthrough” agreement last Thursday. That means that bondholders do not believe the deal will solve the crisis. Draghi will act quickly to address the situation despite German opposition. Italy has 1.9 trillion euros in debt, 200 billion of which will come-due next year. Rising yields pose an existential threat for the faltering country.

In exchange for ECB support, Draghi will demand that Prime Minister Silvio Berlusconi (Bunga-bunga) push through unpopular reforms that target the unions and pensions. Italy will also be required to privatize more of its public assets and services. At the same time, the bank bailouts will continue mainly through easing new capital requirements and by underwriting bank debt so banks can issue bonds that are guaranteed by the ECB. Here’s the scoop from Bloomberg:

“European banks, which need to refinance more than $1 trillion of debt next year, may struggle to fund themselves until policy makers follow through on a pledge to guarantee their bond sales.

European Union leaders promised this week to “urgently” look at ways to guarantee bank debt in a bid to thaw funding markets frozen by the sovereign debt crisis. Lenders have found it hard to sell bonds for the past two years and have increasingly turned to the European Central Bank for unlimited short-term emergency financing…

In the U.S., the Temporary Liquidity Guarantee Program allowed banks to issue bonds with backing from the FDIC for as long as three years…

European governments including France, Spain, the U.K. and Germany guaranteed some bonds issued by their banks to reassure investors after the collapse of Lehman Brothers Holdings Inc. in September 2008. In May 2010, the EU ended the program when it said banks that relied on the pledges would face a review of their long-term viability.” (“European Bank Debt-Guarantee Proposals May Struggle to Thaw Funding Market”, Bloomberg)

Guarantees on bank debt is a direct subsidy to big finance, which is why we think that a former G-Sax exec. will support the policy.

Draghi is no fool, he knows that the German plan that was announced last week is more of the same “extend and pretend”. It has no chance of ending the crisis. Regardless of the stock market’s (positive) reaction, borrowing costs are still rising, the credit markets are in turmoil, and the clock is ticking. It’s now or never. Either the ECB takes the initiative and acts as lender of last resort or the eurozone is toast.

CONTINUED...

http://www.counterpunch.org/2011/10/31/is-goldman-sachs-poised-to-takeover-europe/

I'd say 99-percent of the People are missing from the benefits of austerity picture, but they just happen to be off camera. Goldman Sachs' government division will make sure they are brought back in the frame for the scene where they get to pick up the tab.

[sabrina 1]

19. The corruption in Europe is so blatant, the only conclusion to come to as to why it is allowed to

continue, is that the Corporate Coup is almost complete.

Draghi's installment seems to suggest that. The foxes, again guarding the hen houses.


And their targets, their MO, is always the same.

In exchange for ECB support, Draghi will demand that Prime Minister Silvio Berlusconi (Bunga-bunga) push through unpopular reforms that target the unions and pensions. Italy will also be required to privatize more of its public assets and services. At the same time, the bank bailouts will continue mainly through easing new capital requirements and by underwriting bank debt so banks can issue bonds that are guaranteed by the ECB.

The theft of the sovereignty and their public assets, see Argentina, continues.

As someone, can't remember who right now, said recently 'it is as if an invading army has swept through Europe'. They didn't need conventional weapons this time. They defeated the continent with financial terrorism.

Thank you for the links, Octafish. Been watching what is going on there for several years and wondering, when they people finally rise up against them?

Greece appears to have begun the process. But will they be allowed to take their country back? I am very worried about the new government. The ruthlessness of these Corporate invaders knows no bounds.

[madokie]

14. thank you for bringing this to my attention

it 'splains everything pretty much

[Octafish]

20. Money. Those with a lot of it seem to want a lot, lot, lot more.

Last edited Sat Feb 7, 2015, 01:55 PM - Edit history (1)

Maybe that's why there's not much room in their hearts for sharing it. Ask Larry Summers, seems like he would know:

Summers looked at Stiglitz like Stiglitz was some kind of naive fool who'd read too many civics books.

http://www.gregpalast.com/larry-summers-goldman-sacked/

Which explains why TPP will create so much "opportunity" for so few people: they'll have to open up their countries' resources for exploitation by law.

Most importantly: You are most welcome, madokie! Thank you for grokking what is being done to those in authority by those with the means.

[JEB]

18. I'm willing to sell, but I'm just a serf.

[Octafish]

27. Remember, our fellow peasant who tape-recorded her fellow SEC Goldman Regulators?

Whatever happened to Carmen Segarra?

[JEB]

32. It going to take more than pitchforks

to clean up that level of corruption. Thanks for your efforts to keep the truth popping up here. Keeps me going.

[Lucky Luciano]

22. The government pays bankers to work in the government.

Check me on this, but my understanding is that vested stock that has not been sold can be sold without capital gains taxes before taking the role. So, for example, Hank Paulson had $700mm if GS stock with an extremely low cost basis that he was "forced" to sell to avoid the conflict of interest he would have by holding the stock and being Sec if Treasury. Probably saved $200mm in taxes for that.

[Octafish]

42. I know who knows the answer. In fact, he'd lock up every crook in government.

William K. Black, the government's S&L crime investigator who Charles Keating wanted dead.

http://neweconomicperspectives.org/2014/04/ten-lessons-must-learn-charles-keating.html

[midnight]

23. Thanks for this information.

[Octafish]

43. Citigroup’s Man Goes to the Treasury Department

By Jonathan Weil
Feb. 21, 2013

Jack Lew is the nominee for Treasury secretary whose own bonus as an investment banker was bailed out by the Treasury Department when it rescued Citigroup Inc. in 2008. He owes much to America’s taxpayers. He should also be grateful to Citigroup for agreeing to let him rejoin the government without suffering much for it financially.

An intriguing revelation from Lew’s Senate confirmation hearing last week was that he stood to be paid handsomely by Citigroup if he left the company for a top U.S. government job, under his 2006 employment agreement with the bank. The wording of the pay provisions made it seem, at least to me, as if Citigroup might have agreed to pay Lew some sort of a bounty to seek out, and be appointed to, such a position.

Lew didn’t shed much light on the subject after Senator Orrin Hatch, a Utah Republican, asked him about it at the hearing. “I’m not familiar with records that were kept, so I don’t have access to things that I don’t know about,” Lew said. It wasn’t clear which records (or even which question) Lew was referring to, and Hatch didn’t press the matter.

So I did some digging. I wasn’t able to find someone who would show me an entire copy of Lew’s employment agreement with Citigroup. But I did get a look at the first three pages of it, as well as a related addendum from January 2008. Here goes.

RUBIN CONNECTION

SNIP...

Lew stood to receive $250,001 to $500,000 worth of accelerated restricted Citigroup stock when he left the company, according to a disclosure report he filed in January 2009. The same document listed $1.1 million of “salary and discretionary cash comp” from Citigroup. Lew said at last week’s hearing that his salary for 2008 was $350,000.

Lew was named a deputy secretary of State in 2009, Office of Management and Budget director again in 2010, and then became President Barack Obama’s chief of staff in 2012. Now he’s up for Treasury secretary, where he would play a critical role in overseeing the U.S.’s financial industry and rescuing it should another crisis ensue. Citigroup couldn’t have planned this better if it tried, which raises the natural question: Did it try?

CONTINUED...

http://www.bloombergview.com/articles/2013-02-21/citigroup-s-man-goes-to-the-treasury-department

Most importantly: You are most welcome, midnight. Thank you for reading and caring.

[midnight]

51. You might enjoy this link that shows discussion between Elizabeth Warren, and Katie Couric.

http://news.yahoo.com/katie-couric-interviews-elizabeth-warren-221313968.html

[ND-Dem]

24. k & r

[Octafish]

46. Sen. Warren Criticizes Washington-Wall Street 'Revolving Door'

by Andrew Romano
Katie Couric/YAHOO

In an exclusive interview Wednesday with Yahoo Global News Anchor Katie Couric, Massachusetts Sen. Elizabeth Warren slammed former House Majority Leader Eric Cantor for accepting a multimillion-dollar job with a Wall Street investment bank shortly after leaving Congress.

"This is wrong," Warren said in regard to Cantor's new role as vice chairman and managing director at Moelis & Co. "People work in Washington and, man, they hit that revolving door with a speed that would blind you." She went on to claim that banks hire politicians like Cantor "not because they bring great expertise and insight, but because they’re selling access back into their former colleagues who are still writing policy."

Asked whether Hillary Clinton is also too cozy with Wall Street, Warren didn't exactly give the 2016 Democratic presidential front-runner a pass. "I worry a lot about the relationship between all of our regulators, government, Wall Street," she said. "I worry across the board."

CONTINUED...

http://news.yahoo.com/katie-couric-interviews-elizabeth-warren-221313968.html

We need to drain the swamp.

[Enthusiast]

29. Kicked

and recommended!

[Octafish]

47. Federal Judge says Corruption is all legal-like now...

Old news to you, Enthusiast. Likely 99-percent of America hasn't heard.

Corruption Is Now Officially Legal in the U.S., "But Must Be Done Right"

by Erich Zeuss
GlobalResearch.ca

On December 10th, Wall Street’s federal appeals court, the 2nd Circuit Court of Appeals, ruled that if inside information about what is going to happen to a corporation is taken advantage of by an investor, it’s okay, so long as the source of the inside-tip isn’t directly paid for passing it along.

In other words, if you have friends who have inside information that they received from their friends, they are free to pass it along to you, and you are free to pass inside information that you possess along to them to pass along to others, but neither of you is permitted to pay the other for any inside tip — the information can legally be acted on only if the tipper is not paid for the tip.

CONTINUED w/links...

http://www.globalresearch.ca/corruption-is-now-officially-legal-in-the-u-s-but-must-be-done-right/5419612

PS: Now that Insider Trading is all legal like for the Swells, maybe we'll see some action start to trickle down.

[Enthusiast]

49. There is a mountain of corruption from sea to shining sea.

And not a shred of true patriotism.

[BrotherIvan]

30. This might be the most important post I've read all week

This is institutionalized bribery. I hope Warren or any other uncorrupted Dem will start shouting about it and propose legislation to make it illegal.

Please share with your peeps everyone. People need to know this.

[Enthusiast]

50. Uncorrupted Dems don't grow on trees.

Or something.

[rhett o rick]

31. k&r. Thanks for posting. nm

[Octafish]

53. Then there's the private company owned by BFEE that the NSA uses to spy on America...

Behind the Curtain: Booz Allen Hamilton and its Owner, The Carlyle Group

Written by Bob Adelmann
The New American; June 13, 2013

According to writers Thomas Heath and Marjorie Censer at the Washington Post, The Carlyle Group and its errant child, Booz Allen Hamilton (BAH), have a public relations problem, thanks to NSA leaker and former BAH employee Edward Snowden. By the time top management at BAH learned that one of their top level agents had gone rogue, and terminated his employment, it was too late.

For years Carlyle had, according to the Post, “nurtured a reputation as a financially sophisticated asset manager that buys and sells everything from railroads to oil refineries”; but now the light from the Snowden revelations has revealed nothing more than two companies, parent and child, “bound by the thread of turning government secrets into profits.”

And have they ever. When The Carlyle Group bought BAH back in 2008, it was totally dependent upon government contracts in the fields of information technology (IT) and systems engineering for its bread and butter. But there wasn't much butter: After two years the company’s gross revenues were $5.1 billion but net profits were a minuscule $25 million, close to a rounding error on the company’s financial statement. In 2012, however, BAH grossed $5.8 billion and showed earnings of $219 million, nearly a nine-fold increase in net revenues and a nice gain in value for Carlyle.

Unwittingly, the Post authors exposed the real reason for the jump in profitability: close ties and interconnected relationships between top people at Carlyle and BAH, and the agencies with which they are working. The authors quoted George Price, an equity analyst at BB&T Capital: "[Booz Allen has] got a great brand, they've focused over time on hiring top people, including bringing on people who have a lot of senior government experience." (Emphasis added.)

For instance, James Clapper had a stint at BAH before becoming the current Director of National Intelligence; George Little consulted with BAH before taking a position at the Central Intelligence Agency; John McConnell, now vice chairman at BAH, was director of the National Security Agency (NSA) in the ‘90s before moving up to director of national intelligence in 2007; Todd Park began his career with BAH and now serves as the country's chief technology officer; James Woolsey, currently a senior vice president at BAH, served in the past as director of the Central Intelligence Agency; and so on.

BAH has had more than a little problem with self-dealing and conflicts of interest over the years. For instance in 2006 the European Commission asked the American Civil Liberties Union (ACLU) and Privacy International (PI) to investigate BAH’s involvement with President George Bush’s SWIFT surveillance program, which was viewed by that administration as “just another tool” in its so-called “War on Terror.” The only problem is that it was illegal, as it violated U.S., Belgian, and European privacy laws. BAH was right in the middle of it. According to the ACLU/PI report,

Though Booz Allen’s role is to verify that the access to the SWIFT data is not abused, its relationship with the U.S. Government calls its objectivity significantly into question. (Emphasis added.)

Among Booz Allen’s senior consulting staff are several former members of the intelligence community, including a former Director of the CIA and a former director of the NSA.

As noted by Barry Steinhardt, an ACLU director, “It’s bad enough that the [Bush] administration is trying to hold out a private company as a substitute for genuine checks and balances on its surveillance activities. But of all companies to perform audits on a secret surveillance program, it would be difficult to find one less objective and more intertwined with the U.S. government security establishment.” (Emphasis added.)

CONTINUED w Links n Privatized INTEL...

http://www.thenewamerican.com/usnews/crime/item/15696-behind-the-curtain-booz-allen-hamilton-and-its-owner-the-carlyle-group

Thank you for caring about democracy, rhett o rick!

[marym625]

35. Great information throughout the thread

Thank you for all of it.

Another kick

[DeSwiss]

36. K&R

''Critics wonder whether the gifts are intended to fill the government with friendly faces who will act in their former employer’s interests.''

- Who are these idiots who wonder?


No wonder we're fucked......

[woo me with science]

37. To the Greatest Page.

[blkmusclmachine]

38. 14 Defining Characteristics Of Fascism

13. Rampant Cronyism and Corruption - Fascist regimes almost always are governed by groups of friends and associates who appoint each other to government positions and use governmental power and authority to protect their friends from accountability. It is not uncommon in fascist regimes for national resources and even treasures to be appropriated or even outright stolen by government leaders.

http://www.rense.com/general37/char.htm

[Rose Siding]

40. Well that's dramatically corrupt

Too bad the campaign finance industry got too big to fail

[ctsnowman]

41. K & R

[woo me with science]

44. On top. On top.

[MrMickeysMom]

45. “It fuels the revolving door between banks and the government...”

You mean that wheel can excel beyond Warp factor 10? They'll never have time to bite the hand that feeds them for that "performance" now.

Gad-zooks!

[Trillo]

48. I can sure understand why critics would call that deferred compensation/government employment

loophole into question.

Another thing to call into question is the royalty aspect itself. What workers get such deals? "Executive" seems to mean fuck the workers, and that means all the rest of us when considering the government-service loophole.

[woo me with science]

52. kick