Obama Eyes Former U. Massachusetts Professor For Treasury Secretary

This story was written by Domenic Poli, Massachusetts Daily Collegian
A former University of Massachusetts professor is a dark-horse candidate for President-elect Barack Obama's Treasury secretary, according to news sources such as The Politico and Bloomberg.com.

Sheila Bair taught financial regulatory policy at the UMass Isenberg School of Management (ISOM) before going on leave after being appointed chairman of the Federal Deposit Insurance Corp. (FDIC) by President Bush in 2006.

Bair, a self-described moderate Republican, was named the second most powerful woman in the world by Forbes magazine this year, behind Chancellor of Germany Angela Merkel, and has proven to hold strong pro-regulation views in regards to the banking industry.

She has worked with the White House to combat foreclosures and has been praised by Democrats and Republicans alike for her seizure of IndyMac, a debt-ridden federally insured mortgage lender now run by the FDIC, and for selling off pieces of Washington Mutual (WaMu) and Wachovia after the two banks nearly collapsed.

"I believe in capitalism and markets. But in free-for-all markets, capitalism doesn't always work," Blair told an audience in February when she came to campus to speak on the current mortgage crisis, according to The Springfield Republican.

Thomas O'Brien, a professor and former dean of ISOM, became interested in hiring Bair when he learned that she was moving to Amherst to work for the UMass Center for Public Policy and Administration. She had just left her job as assistant secretary for financial institutions at the U.S. Department of the Treasury.

When Janet Rifkin, the dean of the UMass College of Social and Behavioral Sciences, which governs the CPPA, decided there was not enough money to support Bair, O'Brien recruited her to ISOM.

"I thought somebody with her background would be a terrific complement to the work we were already doing, we have a very strong financial group," said O'Brien, who teamed up with Bair to teach a course on corporate governance.

O'Brien said he first became aware of Bair's consideration for Treasury secretary after seeing her appear on TV repeatedly in the wake of the nation's current financial crisis.

O'Brien said he heard Sen. Christopher Dodd (D-Conn.), the chairman of the Senate Finance Committee, say that he thought Bair would make a good secretary.

O'Brien then learned that Warren Buffet, the CEO and largest shareholder of Berkshire Hathaway and one of the richest investors in the world, said the same thing.

"I think she's got the kind of experience and skills that make her a standout [candidate]," said O'Brien. "She's very well respected on both sides of the aisle. She's an excellent listener and she's a very astute Washington observer."

However, critics say Bair has been inconsistent in her regulation, crushing creditors at WaMu but spared them at Wachovia.

Others say she mismanaged negotiations with Wachovia by paring it with Citibank until Wells Fargo came in with a higher offer at the last minute.

Bair could not be reached for comment yesterday.

She has been the senior vice president for government relations for the New York Stock Exchange, the commissioner and acting chairman for the Commodity Futures Trading Commission, the counsel to then-Senate Majority Leader Bob Dole (R-Kan.) and is a bar-certified lawyer.

According to Politico.com, other top candidates for the job are Larry Summers, former President Clinton's last treasury secretary; Timothy Geithner, president of the Federal Reserve Bank of New York; Paul Volcker, former Federal Reserve chairman, and Robert Rubin, an Obama campaign adviser who served as Treasury secretary duing Clinton's first and second terms.
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