New Report: Obama Administration’s TPP Trade Officials Received Hefty Bonuses From Big Banks
New Report by Lee Fang Highlights How Proposed Trade Deal is a Sweetheart Deal for Wall Street and Way around Financial Reforms.
Officials tapped by the Obama administration to lead the Trans-Pacific Partnership trade negotiations have received multimillion dollar bonuses from CitiGroup and Bank of America, financial disclosures obtained by Republic Report show.
Stefan Selig, a Bank of America investment banker nominated to become the Under Secretary 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 U.S.
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 U.S. 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 the
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 from governments 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 compensations 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 (ie the regulators) decide whether claims are brought,”
notes Boston University associate professor Kevin Gallagher.
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For detailed information on the broken promises of trade legislation, click here.
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