corruption unbound
THE PAYOFF
![Lee Fang](volume_images/leefang-self.jpg)
by
LEE FANG
___________________________________
Lee
Fang writes for The
Republic Report (recommended by Bill Moyers) and is
a reporting fellow with the Investigative Fund at the Nation
Institute. He covers money in politics, conservative movements
and lobbying
Stefan
Selig, a Bank of America investment banker nominated to become
the undersecretary for international trade at the Department
of Commerce, received more than $9 million in bonus pay as he
was nominated to join the administration in November. The bonus
pay came in addition to the $5.1 million in incentive pay awarded
to Selig last year.
Michael
Froman, the current US Trade Representative, received over $4
million as part of multiple exit payments when he left CitiGroup
to join the Obama administration. Froman told Senate Finance
Committee members last summer that he donated approximately
75 percent of the $2.25 million bonus he received for his work
in 2008 to charity. CitiGroup also gave Froman a $2 million
payment in connection to his holdings in two investment funds,
which was awarded “in recognition of [Froman's] service
to Citi in various capacities since 1999.”
Many
large corporations with a strong incentive to influence public
policy award bonuses and other incentive pay to executives if
they take jobs within the government. CitiGroup, for instance,
provides an executive contract that awards additional retirement
pay upon leaving to take a “full time high level position
with the US government or regulatory body.” Goldman Sachs,
Morgan Stanley, JPMorgan Chase, the Blackstone Group, Fannie
Mae, Northern Trust and Northrop Grumman are among the other
firms that offer financial rewards upon retirement for government
service.
Froman
joined the administration in 2009. Selig is currently awaiting
Senate confirmation before he can take his post, which collaborates
with trade officials to support the TPP.
The
controversial TPP trade deal has rankled activists for containing
provisions that would newly empower corporations to sue governments
in ad hoc arbitration tribunals to demand compensation for laws
and regulations they claim undermine their business interests.
Leaked TPP negotiation documents show the Obama administration
is seeking to prevent foreign governments from issuing a broad
variety of financial rules designed to stem another bank crisis.
A leaked
text of the TPP’s investment chapter shows that the pact
would include the controversial investor-state dispute resolution
system. A fact-sheet provided by Public Citizen explains how
multi-national corporations may use the TPP deal to skirt domestic
courts and local laws. The arrangement would allow corporations
to go after governments before foreign tribunals to demand compensation
for tobacco, prescription drug and environment protections that
they claim would undermine their expected future profits. Last
year, Senator Elizabeth Warren warned that trade agreements
such as the TPP provide “a chance for these banks to get
something done quietly out of sight that they could not accomplish
in a public place with the cameras rolling and the lights on.”
Others
have raised similar alarm.
“Not
only do US treaties mandate that all forms of finance move across
borders freely and without delay, but deals such as the TPP
would allow private investors to directly file claims against
governments that regulate them, as opposed to a WTO-like system
where nation states (i.e. the regulators) decide whether claims
are brought,” notes Boston University associate professor
Kevin Gallagher.