Lack of scrutiny for Geithner aides
Advisers earning large amounts from firms advising on US policy without oversight.
Last Modified: 14 Oct 2009 20:09
The biggest US banks and securities firms are on course to pay their employees $140bn in 2009 [EPA]

Aides to the US treasury secretary who each earned large pay packets working for some of the country's largest investment companies have been advising the administration on its regulatory policy, despite never having faced senate confirmation.

None of the aides to Timothy Geithner have faced the public scrutiny given to senate-confirmed appointees, despite earning massive sums from Wall Street firms, nor are they required to testify in US congress to defend or explain the treasury's actions.

Geithner's "kitchen cabinet" has helped oversee the nation's $700bn banking rescue, as well as helping to draw up executive pay rules and revamp financial regulations.

According to financial disclosure forms obtained by the Bloomberg news agency, advisers including Lee Sachs, from Mariner Investment Group, and Gene Sperling, from Goldman Sachs, earned hundreds of thousands of dollars last year.

Barack Obama, the US president, has been extremely critical of Wall Street, blaming its high-risk, high-earning ethos for helping to bring about the global financial crisis.

But many treasury officials have been recruited from the financial world because of their expertise.

'Big mistakes '

James Gardner, a journalist and senior fellow at Demos, a public policy research group, warned the high number of former Wall Street employees working in the administration was affecting policy making.

"Goldman Sachs alone is almost the training ground for the treasury department and the federal reserve," he told Al Jazeera.

"One of the big mistakes that the Obama administration has made was in its choice of economic advisers - in relying so heavily on the big banks and Wall Street alumni.

"It's impossible for those folks to look at policies that effect their old companies with any detachment. Meanwhile, those same companies have tremendous political influence through campaign contributions."

Transparency concerns

Robin Amlot, managing editor of the Banker Middle East magazine, said: "I think the issue that is biting people is that they [Geithner's aides] have not gone through scrutiny by congress.

"They're in a position where they don't need to present themselves to be gone under a microscope by the House of Representatives, by the senate, and 'cleared' as it were," he said, speaking to Al Jazeera from Dubai.

"But what they have done, and I think we should stress this point, is that they have all promised ... to have no contact with their firms for at least a year.

"It is rather unfortunate ... that the claims of the Obama presidency towards a new dawn and a new transparency have run up against what appears to go on in the real world.

"It is something of a problem."

The disclosure comes as the latest revenue estimates by the Wall Street Journal newspaper suggested that some of the biggest US banks and securities firms are on course to pay their employees about $140bn in bonuses this year.

Al Jazeera and agencies
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