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Summers Banked Fees From TARP Recipients

The Washington Post has reported on the healthy 2008 earnings of some of President Obama's top advisors, including Lawrence Summers, chairman of the National Economic Council.
(CBS)
Summers (left), one of the principle architects of the economic recovery plan, took home $5.2 million from D.E. Shaw, a hedge fund in which he was a managing director, and $2.7 million in speaking fees from several financial companies that received TARP government bailouts.

According to the Post, "Financial institutions including JP Morgan Chase, Citigroup, Goldman Sachs, Lehman Brothers and Merrill Lynch paid Summers for speaking appearances in 2008. Fees ranged from $45,000 for a Nov. 12 Merrill Lynch appearance, to $135,000 for an April 16 visit to Goldman Sachs, according to his disclosure form. Summers reported donating two fees totaling $70,000, including the payment from Merrill Lynch, to charity."

The article makes clear that the speeches were given before Summers become an official public servant in the Obama administration.

It's also clear that everyone involved in the economic recovery program has less than six degrees of separation.

As Treasury Secretary in the Clinton administration and president of Harvard University, it's natural that Summers would be in line to collect generous speaking fees. After years of government service, books, board seats and speaking fees are the quickest way to financial security. [President Clinton has earned more than $50 million in speaking fees since he left office, including more than $6 million in 2008.

Summers has been more behind-the-scenes lately, as Treasury Secretary Timothy Geithner has made the rounds of political talk shows, including Sunday morning. Summers is probably thankful to avoid questions about his ties to the financial community.

Geithner's credibility has recently improved with articles about his efforts to create an electronic network to monitor complex financial instruments during his tenure as head of the Federal Reserve Bank of New York.

Whatever the case, perception informs reality. It can be difficult to build trust in an era of hyper-connectivity and increased transparency. The Obama administration is hoping that its actions and constant messaging will overcome the skepticism and mistrust that come from awkward revelations — such as Lawrence Summers' TARP speaking fees.

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