The liberal commentariat is abuzz over the news that former president Obama is getting paid $400,000 for a speech to the Wall Street firm Cantor Fitzgerald despite earlier calling those firms ‘fat cats’. I don’t know why they are surprised. Obama has always been friendly towards the big banks and anyone who followed his career could see that even before he was first elected. All his talk criticizing them was just talk, the usual populist posturing of Democrats.
During his term of office, Obama hired top people from Wall Street and bailed out the big banks after the financial crisis without taking any serious action to prevent them gambling with other people’s money again. The top people in his justice department Eric Holder and Lanny Bruer never threatened the heads of the Wall Street firms with criminal prosecution and both returned to extremely lucrative positions at the big law firm Covington and Burling that has these firms as major clients. And Obama’s choice of Mary Jo White to head the Securities and Exchange Commission was another person who treated Wall Street gently and was known to do so when she formerly headed the US Attorney’s Office for the Southern District of New York that covered Manhattan. Her career involved repeatedly going through the revolving door between the big banks and the government agencies that were supposed to monitor them.
As Jon Schwarz writes, the firm that is paying Obama so much has a rather unsavory history.
Cantor Fitzgerald, a major Wall Street brokerage house, lost 658 of its 960 employees when the World Trade Center was destroyed in the September 11, 2001 terror attacks. But when it settled a long-running lawsuit against American Airlines for $135 million in 2013, the proceeds didn’t go to the families of the dead.
At the time of the settlement, Cantor’s CEO Howard Lutnick issued a statement: “For the insurance companies, this was just another case, just another settlement, but not for us. We could never, and will never, consider it ordinary. For us, there is no way to describe this compromise with inapt words like ordinary, fair or reasonable.”
But Lutnick and his fellow Cantor partners reportedly kept some of the money for the firm and distributed the rest to themselves, in proportion to their ownership stake. Lutnick, the firm’s biggest partner, may have received as much as $25 million.
And according to Liz O’Brien and Marilyn Rocha-Carmo, widows of two of the Cantor employees killed on 9/11, the firm never informed them of the settlement — nor even that the company had filed the lawsuit in the first place.
While there may or may not be a direct quid pro quo between Obama and the Wall Street firms, this speech will be seen as a payoff to Obama for his kindness towards them and will undoubtedly signal to future presidents (if they even needed such a signal) that if they play nice with the financial sector, they too, after leaving office, can get huge speaking fees for treating the big banks favorably. What is obvious is that even after Hillary Clinton was rightly pilloried for her secret speeches to Wall Street and the tone deafness it displayed when she was clearly planning to run for president, Democrats are deeply beholden to the financial sector and cannot resist feeding at that trough.
Jonathan Westin, executive director of New York Communities for Change, a Brooklyn-based non-profit organisation, said he was dismayed to learn of Mr Obama “doing favours” for big banks.
“It feels like we’re relying on the same tactics that got us in this mess in the first place — cosying up to Wall Street and alienating the entire Democratic base,” he said.
Obama and his wife have already signed book contracts for a whopping $65 million so it is not as if he is hard up. And even if, as a result of all this negative publicity, he gives the speaking fee to charity or his own foundation, that does not remove the damage done because it still reeks of influence peddling, just like the Clintons giving their fees to their own foundation was still unseemly.
The Democrats are deeply beholden to Wall Street so take all their railing at the banks during campaigns with a huge grain of salt.