For additional context, the most recent payments for speaking fees from Citadel were barely three months ago[1]:
> The Chicago-based hedge fund paid Yellen $292,500 for a speech on Oct. 17, 2019, $180,000 for one on Dec. 3, 2019, and $337,500 to speak at a series of webinars held from Oct. 9-27, 2020.
Speaker fees are a way of laundering bribes, plain and simple.
Watch the docu on OxyCotin. Doctors who made the most in sales for the Sacklers got paid hundreds of thousands to give lectures.. that literally nobody attended. They all kept giving the lectures, time after time.
Which was in no shape or form foreseeable at the time. They might as well have given that money to a random person on the street in the expectation that they might be put in charge of the SEC.
Just basic logical fallacy that "some people are bribed this way, ergo, she was bribed this way".
This is a matter of public record, and she was made $7M in speaking fees in the past two years. It is a small percentage of her income, and not worth more a small fraction the future value of her reputation. The idea Yellen - one of just three living Fed chairs and one of the most influential figures in economics - would do political favors for $300k is honestly ridiculous.
I have asked it elsewhere, but if you want to prevent this, you are making it illegal or disqualifying. I would personally like to know where the line would be drawn for public service. It seems like having an employment relationship would be far more influencing than a speaking engagement. It is important to emphasize this speech is disclosed and public knowledge.
Bribery doesn't have to work the way you imagine it, sacks full of cash being exchanged in a dark parking garage in exchange for vote.
It's just a reminder - when it comes to time make that big decision, hey, remember who your friends are.
I of course think it should be both illegal and disqualifying. The line is very clear - reception or accepting the promise of large sums of money should be disqualifying for positions of high office. Simple as.
The most upsetting part about this is that it is completely expected that a politician will strive to do what is in their best interest and the interest of their supporters. Please note it doesn't matter what party you support politicians are generally all the same in that they use their positions to seek power and wealth from their positions at the expense of their constituents.
Regulatory capture is a gigantic problem, especially in finance.
It’s obvious that we don’t have the right incentive structure with the SEC, either. If you can make 20x more using the skills you’d need to investigate companies trading instead, the talent pool is reduced to those motivated by power/ideology. I’ve always thought financial regulators should have some kind of incentive structure that closes this gap but it’s not clear how to do that without skewing the enforcement priorities.
Or making some "government efficiency" watchdog group scream in anger.
If Yellen were mostly interested in money, she has already chaired the Federal Reserve. 700K is a pittance compared to the millions she would earn in the private sector. Yet people begrudge her the 220K she does earn. Treasury Secretary and Chair of the Fed would be a multi million dollar a year jobs in the private sector.
The point was it’s not a small sum for her, it’s in fact more than triple her yearly salary. An adjacent point was she makes little compared to how much she could be getting, and people still complain.
I don't equate speaking fees with bribes. Especially in this sector
The type of people who would overlook crimes by others because the company that the criminals worked for once paid them to give a speech & attend a mixer is probably not the type that would work at the SEC for any meaningful length of time. The pay disparity is just too great.
Malicious people work for the SEC just long enough to understand the inner workings and/or collect critical intel that they can leverage into private sector jobs.
If Yellen lacked scruples, she would have gone into the private sector after leaving the Fed. But instead of collection a probably 8-figure paycheck, she opted to continue to work in government. Which indicates to me, that she takes pride in doing her job well.
There are many people in this thread and others across the internet and media who are talking about the conflict of interest. However, there's little showing what potentially bad things she is doing.
Yellen has lots of experience with the regulatory and finance institutions and their inner workings. For sharing her perspectives on how things work, what pressures they face, and how best to engage with them, she should be paid quite well. That's what these Citadel talks look like, at least until someone can connect the dots better than they have been connected.
For example, what nefarious plot is there? What regulator capture is she engaging in? Somewhere else in the thread someone mentioned car import issues with Reagan; where is the equivalent with Yellen?
Until there is a salient point to be made about her conflicts of interest, doesn't it make sense to give her the benefit of the doubt?
My point is that 700K is a small sum compared to what she could be getting if money were her motivation. If she were interested in money, working at Treasury and previously accepting money for speeches earns her a fraction of what she could earn otherwise.
> 700K is a pittance compared to the millions she would earn in the private sector.
We're talking about that amount of money for just a few days of "work".
> Yet people begrudge her the 220K she does earn. Treasury Secretary and Chair of the Fed would be a multi million dollar a year jobs in the private sector.
That doesn't make any sense. These jobs don't exist in the private sector.
In any case, Treasury Secretary is not a lifetime gig. At most 8 years, probably less. And then Yellen will go back to the private sector, to cash in even more. These are ongoing, transactional relationships. Think of these speaking fees as a down payment.
>At most 8 years, probably less. And then Yellen will go back to the private sector
Yellen was in public positions from 1977-1980, 1994-1999, and 2004-2018. She was a professor at Harvard from 1971-1976 and at UC Berkeley from 1980-1994. She's certainly made a lot of money from these sorts of speaking fees and there's criticism to be had, but she's spent far more time in academic or public positions than she has "in the private sector".
I don't think she's the same case as, e.g., someone who was employed by an investment bank for a long time, takes a federal position for a year or two, then goes back to working in banking.
> I don't think she's the same case as, e.g., someone who was employed by an investment bank for a long time, takes a federal position for a year or two, then goes back to working in banking.
True. Yellen clearly prefers public sector work.
However, I think there's a false dichotomy being presented. There's no inherent conflict between working in the public sector and being corrupt. The list of corrupt politicians is endless. Why not do what you love and cash in? Best of both worlds, from the corrupt politician's perspective.
It's a symptom of complex systems. There's really no need for the financial system to be this complicated beyond serving the needs and wants of insiders.
If you have complexity you will have corruption. The more complexity, the more corruption. Some complexity is necessary, but most is not.
So instead of simplifying the system, you have to hire people that understand it to police it. Unfortunately the competent financial police are paid a small fraction of what they'd be worth in private industry, so now you have a mix of altruistic, incompetent, and opportunistic people. The latter pretending to be the former.
I don’t believe that complexity means something nefarious is going on. Everything has been getting more complex, just compare the cost of building a mile of subway or a power line today vs. a hundred years ago.
Heck, just any active codebase. Complexity is the default and is very very hard to fight.
It's not that complexity is a direct cause of corruption, but that it gives corruption a place to hide. A complex system with incentives to abuse it will be far more corrupt than a simple system with incentives to abuse it.
You can a) reduce the incentives for abuse, b) reduce the complexity needed to hide abuses, c) both.
Since government is basically power, the incentives to abuse that power always exist. So look for complex government systems and you will inevitable find abuse (if you can navigate the system's complexity).
I think the FBI but they got yelled at in the 70s[0] for doing that sort of work and given new guidelines to prevent it[1] and apparently haven't done much like it since.
I don’t see any real pressure for her to recuse herself. The dominant political party in the USA ran on the simultaneous platforms of “the swamp is fake” and “the swamp is better than the alternative”. Well this is the swamp the populists were talking about. The democrats are now are emboldened with a clear mandate from the people that these relationships are an acceptable price to pay.
Whichever populists you’re talking about went along with the swamp being just as swampy as ever, if not more so during Trump’s tenure.
Trump, Fox, and establishment Republicans all directly or indirectly said “the swamp is better than the alternatives”. See, for example, many of the excuses given for hiring all the 9 figure and up net worth cabinet members.
If only we could all get on the same page about this as a society. The previous administration ran the single swampiest administration in American history. The current administration is dramatically less swampy, but still as swampy as a typical administration.
This is something that absolutely needs to be fixed in our society, and something that should unify 99% of people. But half of the country is under the delusion that the previous administration was somehow fixing this, simply because they said they were. This division makes it impossible to ever get anything done.
Can an insider explain the shenanigans behind this?
The speech is surely not worth that much. Is the exorbitant amount of money paid for the speech just an opportunity to be a patron of a "thought leader", i.e a legal bribe in other words?
It's a material amount that can only be spent in the context of 'getting something for it'. What that is is nebulous, and it could be something as simple as an introduction to someone as of yet unknown at a future date. But it's something worth $700K, not a 'speech'.
Yes, but also, when the next business cycle market crash happens, and the plebes are screaming about hedge funds, Citadel can also pick up the phone and call their 'friend' Janet Yellen, to introduce them to the Sec. Treasury, and that Senator who's putting putting up a huff about some new legislation.
If you hire U2 to do a a private show for your staff, you don't get those kinds of added bonuses.
When there are 100 'large firms' calling, it's the 'friends' calls the get answered first, if at all, because hey, we're all busy.
When Masayoshi got 45 minutes in Trump Tower to convince Trump to push forward the Sprint/TMobile merger, do you think that Trump just handed out that favour for free? Because it was 'Good For American Business'? Or maybe at some later date, Trump might find himself in need of investors for his Trump Tower Tokyo, or some help in getting regulators to approve it?
This is a very fair question and shouldn't be down-voted.
It's a way for powerful people to pay other powerful people for arbitrary things like 'speeches' so that they can exchange favours off the books in a very indirect way.
It doesn't have to be illegal or even nefarious, but it should raise eyebrows as a possible conflict of interest.
I had the exact opposite impression. 700k to bribe a former chair of the Fed and (at the time) likely future treasury secretary seems so paltry that it just being a speaking fee seemed quite reasonable. Citadel pays people in their 20s more than that.
From a quick Google search, there are plenty of actors and sportspeople who charge six figures for a speech.
I've seen this a couple of times and I don't understand the outrage. Yellen is a financial professional. Would we expect her to a) not speak at Citadel if asked or b) request less than market rates for doing so?
I really don't understand what people want from her.
Sure it does. Senior figures in the government should be barred from accepting these sort of fees after their service. Those that have accepted these sort of fees should not be appointed to positions of public trust.
Lots of people want to hear what a Fed Chairman has to say and it is impossible to disentangle their future work from that former position.
Is a position as a lecture of Economics at Harvard considering working for personal profit? Writing books on subjects that they are experts in? How about writing for the NYTimes? Appearing on TV? What about if they did all those things before taking a government job?
If your answer is yes to those things, then taking a high-level government position becomes impossible for anyone working class. Since you believe that the position bars them from any worthwhile future employment, they have to be independently wealthy before entering government service.
I personally enjoy reading the works of Ben Bernanke and think that he should be allowed to continue his work in economics despite having held a top position at the federal government. He's intelligent, insightful, and a good teacher.
If they were given the job because of their position in the government, why does it matter if the job is as a professor, author, talking head, or executive? It's all "profiting from the position."
The debate seems to be over the price. $700k / yr from lecturing to hedge funds is bad but $150k / yr to do the same at Harvard is good?
The Fed Chairman makes $203k per year. That's not a "set for life" level of salary. After their term is up they're gonna need ongoing financial support from some source or another. And being independently wealthy is not an appropriate solution either, then you've ensured that nobody who is not "of certain means" can ever hold that position regardless of competence.
If you want former fed chairs to never work in the industry again you're going to have to significantly increase compensation and make it a pension for life even after they retire. And the fact of the matter is that's just not how the system works right now so "well maybe we SHOULD tear down the whole system and do it differently" is not really a constructive point in the discussion, it's just a childish tantrum. If you think that's how the system should work, go pass some legislation.
It baffles me that you believe she should make six figures to give a single speech simply because that's the only way for her to avoid being broke in her mid 70s.
Because she is already working for the state? If I was constantly holding talks for the competition instead of working I would get into a lot of trouble with my boss. I know this is different for politicians and some other government positions, to the point where in some countries a) they get a full living wage for doing literally nothing and b) get a bonus every time they show up(with show up meaning their presence was recorded for an attosecond that day). Its one of the reasons I consider the government of my home country a bad joke.
What could she say at those speaking engagements that could possibly:
* Fit in a few speeches
* Be worth $700,000
* Not be confidential, go against FTC rules, or raise ethical concerns
* Isn't known to other researchers or experts (that could actually provide a research paper with supporting materials)
Further, is this the market rate for other financial experts, or just ones that have access to power and the ability to influence? Are there any financial experts or academics being compensated $50,000/hour to speak and don't have influence or power over financial organizations?
What part of "she was and now is an agent of the state" is not understood?
Why is it so hard to comprehend that some people have issue with government employees diving back and forth from regulation of entities to taking large sums of money from them?
Seriously though, why is that the case? If she's a public servant, she could donate her time to talks easily. When you're being paid that much money to speak, then are asked to sit in judgment on this company, are you really expecting her to bite the hand that feeds her? *At the absolute best it puts her in a terribly awkward position. At worst it's bribery.
Those speeches weren't while she was a public servant.
This amounts to an argument that people can't go back and forth between the private and public spheres. To be fair, this is something some people believe, and was very visible in the case of Ajit Pai outrage. But if that's what we're saying, let's be clear about it.
I think it's totally fine, and probably preferable, for people to go back and forth. Absolutely in favor of it.
I just also think they should recuse themselves from an investigation when those whom they've had significant dealings with are being investigated. $700k for 3 speaking gigs, we're not talking about a CEO she had lunch with one time, there is a significant business relationship there. That relationship might not affect Mrs. Yellen's judgment, but if she doesn't absolutely drop the hammer on Citadel it at least looks like bribery. The very fact that the question is raised is the problem.
So what? After you’ve become the fed chair you’re no longer allowed to make money? Suddenly the pool of people who will ever agree to take the job gets smaller and it will be held by much wealthier people on average.
Or I suppose you could say that anyone who has held a government position, left it, and then ever made money in the private sector is ineligible for future government work. In effect all this does is just bar past officials from being elected again. This again reduces the pool of qualified talent by a lot. Janet Yellen is probably the most qualified person in the country to be the fed chair, it seems like she should be allowed to imo.
Oh, if she's still receiving money from Citadel, I agree.
If she's not still receiving money from Citadel, I don't see the relevance. I would expect anyone qualified for the job to have made paid speeches at any number of important financial institutions over the years. It wouldn't be in our best interests as citizens to have them recuse every time a matter concerning one of them arises.
If Yellen had been appointed a judge instead of Secretary of the Treasury, and a court case involving Citadel came before her, would you expect her to recuse?
I don't think giving a few speeches is worthy of recusal, no. Unless people are alleging that she entwined with them in some material way (e.g. consulting, advisory, etc.) then I honestly don't see the problem. The party who could have a problem is Citadel, who might be at risk for finding out that she gave the same speech for less money to a nonprofit.
I don't know anything about this particular instance, but it is generally believed that speaking fees are that high because they are a form of legal bribery.
Bill Clinton also had his share of critics because of that.
Generally believed by whom? People on the internet?
Is there real evidence of paid speeches being bribery? As others have said about 100k-500k is the going rate for corporate speeches from athletes, actors, etc.
The only reason outrage seems justified is that the demographics of those that can charge $300k a speech appears overwhelmingly dominated by government officials.
I'm open to being shown otherwise with explicit links.
There are links in peer comments. But you are correct that the people that can command high dollars for speaking engagements are widely known. Reaching a high post in government fits the bill, as does being a top actor, entertainer, athlete, etc.
I was only answering your question, but why can't it be both? Companies like to have celebrities talk to their employees, and rich companies have to pay well.
Citadel probably paid way more for their employees to listen than for her to speak, in terms of wages.
To be honest, yes, I think that's exactly what's happening. As with the former presidents as well. These companies are happy to shell out a few hundred grand because that's chump change for them and now their employees get to brag to their friends that they heard a talk from Janet Yellen last Tuesday. Celebrity speakers (and I have no doubt that in the world of finance Yellen is a celebrity) are a nice employee perk.
I could be wrong here, what do I know. But that's my read on the situation, and it's why this sort of thing doesn't bother me that much.
They're often interesting, but they're fairly anodyne: a famous author talking about their recent book, a CEO talking about their successes or new focus on sustainability/diversity/etc, some broad perspective on current events. You can see how Goldman folks might benefit a little bit from knowing about (say) the likely timeline for vaccine roll-outs, but you could get much of the same info from an hour of NPR.
However, meeting the person seems like a nice perk or recruiting/marketing tool.
If you have to entertain a room full of millionaires who
- all have an interest in finance
- are varying ages (so may not enjoy the same music)
- are from various countries (so may not be into the same sports)
and you have the budget, someone like Yellen is absolutely a substitute good for e.g. having a private Ludacris concert. It's entertainment and continuing education in one. Plus your staff get to brag about the private event to their millionaire peers who did not get that perk.
This site's categories top out at >$200k, but that category includes Aaron Sorkin, Alec Baldwin, 2 Chainz, Brett Farve, Criss Angel, Dara Khosrowshani, Gordon Ramsey, and James Dyson (I got bored of scrolling but there were a lot more too).
Charles Koch falls in the bin of "earns more on their wealth during that time."
There is another bin that is "paid for brand-building advertisement." - i.e. celebrities.
The proposition is that ex-government officials are just getting paid market rate for her knowledge and insight.
If that's the case, it should be trivially easy to find non government officials people getting paid $300k a speech for their knowledge.
You've identified listings - which is better than I thought there would be ! - but not sales.
Yellen earned $7.2m in two years. If all three of those combined earned half as much in speaking fees over that same time, I'd be definitely convinced that it's ho-hum
If you're a motivated research reading this interested in answering this empirically, I'd suggest trying to find organizations that both pay this level of fees and have to disclose it to the public when they do (I'm hoping this might be the case for public companies under SEC regs, but that's just a hope)
> The only reason outrage seems justified is that the demographics of those that can charge $300k a speech appears overwhelmingly dominated by government officials.
People spent the energy to provide sources. Are you spending the same time?
What sources provides you the confidence to say that some demographics are "overwhelmingly dominated"...?
You asked for "non politician, non regulator, non government officials", so that's what I dug up.
It doesn't seem like a crazy idea for a corporate retreat-style event. Have a day full of internal presentations reviewing the last year, describing future initiatives, etc. After dinner, Yellen talks, telling some stories about her time on the Fed, working with Clinton, and maybe caps it off with a section about "Future Challenges." People like hearing/meeting celebrities, so it caps the day off nicely while being reasonably educational too.
Those are all entertainers with broad appeal. What if you had an audience of millionaires with a broad age range, all with an interest in finance? And you wanted to entertain them? 2 Chainz might not be the best choice.
For that audience, a top economist could be a good choice for the same money.
Are you asking for links to places where other celebrities get paid six figures for an appearance? There are other posts in this thread with links to venues where you can find any number of celebrities with posted prices in the six figures.
Notable: Ava DuVernay (film director) starts at $200k. Tim Ferriss says $100k-$200k. Viola Davis: $200k and up. I'm certain that none of these people are obligated to these prices; if Citadel is buying, anyone would be silly to not raise the price. Conversely, all are certainly able to make speeches at discounted rates or gratis to schools, nonprofits, etc.
Also notable (because it refutes your priors) is a lack of public officials, or those who have held public office.
Sort by price and you'll see that people do hire economists to speak for six figures, even if they have no nexus to government. Yellen is higher-profile than most of these, and again anyone would be foolhardy to not double their rate for Citadel.
Here's an article about them: Matthew Mcconughey got $135k for one at the University of Houston; Katie Courik got $110k for speaking at the University of Oklahoma in 2006. Crucially, the article notes that a) fees are often confidential, but can go up to half a million dollars(!) and b) schools try to bargain them down.
Many universities also have "lecture funds" with pretty hefty budgets. I was not privy to the exact numbers, but assuming they run at cost, ticket price*capacity suggests some people are commanding six figures.
This is admittedly a little bit murky, since some of these appearances might be part of the person's "day job": Helmut Panke talked at a bunch of auto shows about BWM and its new products. The ones I linked above, however, seem like they're probably not.
For top professionals, that is exactly the ballpark.
The goods object of the transaction is "continuing education perk for 500 highly-paid professionals." If I put 500 staff in a room and want to treat them, this is a nice perk that's not something they can buy on their own (even though many are millionaires).
It is just ridiculous to call her "a financial professional". She was a top regulation official. Now she is a top regulation official again. How can you just call her "a financial professional". I don't understand your "don't understand". Did you just hear her name the first time or something?
Not really. It sounds like someone does research on financial regulation or a technical bureaucrat who works in related agencies, not a national top government official.
I wasn't aware of her career in regulation outside of finance. I think it's fair to say that her regulatory career has been focused on the economy, and that's what most people know her for.
So you are saying there is a clean cut between the Secretary of the Treasury and the Federal Reserve Chair from the finance sector? And somehow she is also a "financial professional" at the same time, which is just fine?
That's an A-list celebrity, they're supposed to be the highest paid speakers. A top executive or professional typically makes 10% what A-list celebrity makes for speeches.
Given this, Yellen should be getting $20,000 per speech, which would align way more realistically with expectations.
Yellen earned more than $700,000 in speaking fees from Citadel, as recently as last fall. In an ethics agreement she pledged not to involve herself in specific matters involving the firm without first seeking authorization.
Treasury ethics attorneys have given Yellen flexibility to work on any related markets or broad financial services sector issues, with no limits on current or future matters, the Treasury official said. She may need to seek further authorization to deal with specific firms she listed.
In the memo granting Yellen permission to call the meeting of regulators, a Treasury ethics official, Brian Sonfield, said it would be "difficult, if not impossible" for Yellen to recuse herself from matters involving market volatility.
"You are the Secretary of the Treasury, the duties of which require you to be involved in a broad array of matters focused on these sectors," Sonfield wrote.
"Issues relating to these sectors could arise at any time without the opportunity for consultation with the ethics office," and "argue in favor of prior authorization."
Do you see the problem? She is so trusted as an expert that people have given her authorisation to involve herself in matters related to firms she just took money from, regardless of the obvious incentives and conflicts of interest. Maybe you don't think those incentives or conflicts are a big deal, in which case I've got a bridge to sell you.
I honestly don't see the problem with giving speeches at market rate. If the allegation was that she opened Citadel's books and provided advisory services to them, I would consider that different.
But delivering a speech that she may have delivered in other venues does not strike me as necessarily of conflict. I do think the ethics office should review after the fact and raise any concerns that arise, but generally I think we as citizens should be afforded the benefit of her expertise more often than not.
If you participate in a business that can impact your decisions as a regulator or policy maker, that's a conflict of interest. The problem isn't the price of the speeches. It's the fact that she got paid that money by someone who has a huge interest in a financial system that she's charged to oversee.
> delivering a speech that she may have delivered in other venues does not strike me as necessarily of conflict
This argument totally ignores the fact that the conflict of interest arises from the transaction, not from the content of her speech.
> Would we expect her to a) not speak at Citadel if asked or b) request less than market rates for doing so?
Pretty much. I think there should be a significant cool down period (let's say 5 years or so) after leaving a top public service or political position before you can make money from the private sector you were supposed to oversee. As far as I know something like that already applies to people who retire from the military and want to transition to a public civilian position.
By Redditors who have wasted money following investment advice from other Redditors, yes. Specifically it's claimed that after Citadel gave a failing hedge fund lots of money to exit their position, the hedge fund lied about exiting its position and actually didn't start exiting its position until a different division of Citadel asked Robinhood to stop GME buys the following day.
Focus on Yellen's speaking fee is simply trying to explain away in advance why many people given access to data which could prove it either way and tasked with investigating will conclude this baseless conspiracy theory is a baseless conspiracy theory.
Yes, several retail investors have accused them of acting illegally to protect their emergency loan to Melvin capital by raising their collateral fees for certain stock transactions, resulting in restrictions on GME buys. Citadel effectively has a conflict of interest in letting GME buys occur, and it was after they had that conflict that GME buys became restricted.
Unfortunately this is more the norm than the exception.
On a tangent, something similar happened with a Canadian Charity called WE [1] and them being chosen to run a billion dollar grant program for Canadian students during covid. It later came out that the charity had paid speaking/appearance fees to the PM's family as well as to the finance minister at the time. After enough outcry from the media + opposition + people, the finance minister resigned and WE was stripped of the contract.
'Speaking Fees' are absolutely the new form of fraud/bribery/kickback.
It's the most arbitrarily thing imaginable, and you can just throw up any number for 'services performed'.
After Obama completed his term, he was immediately on the 'Speaking Fee' tour, including several million paid by a group of Italian banks in desperation [1], totally insolvent - for a a 45 minute speech (!). I wonder if what they needed was a 'Pep Talk' from a 'Former President' ... or perhaps someone influential to put in a good word with the ECB to push for loser monetary policy that might help save failing Italian banks?
I don't think speaking fees imply some kind of bad behaviour, but they are definitely smoke and often represent a conflict of interest.
It's a little bit funny that people don't recognize this: $700K (or whatever large amount), this is a material amount of money, you don't just spend this for no reason, you 'get something' for it.
As Hillary Clinton was about to win the 2016 presidency, masses of cash flowed into the Clinton Foundation (Norway and Australia were pumping in 10's of millions) but just as she lost - 'charitable donations' dried up. Have a look at this chart [2].
Just stare at this chart for a minute: massive cash flows to the charity someone expecting to be the most powerful person in the world, and then those cash flows completely evaporate as soon as we found it she wasn't going to have that power?
So, did Norway, Australia and all these international agencies and governments magically decided to be 'less charitable' in 2016?
Or was it that they were 'expecting to get something in return' for their massive charitable donations?
Let's not be naive.
It doesn't mean there is criminality or even excessive payments, but it's obviously a conflict of interest. If may be something as simple as 'The Norwegian Sovereign Wealth Fund wants 10 Minutes with the President, to get an introduction to some agency' - and that's it. A very expensive call, but possibly worth it.
And this is not 'political' and certainly not 'one side of the aisle' it's just business.
I think colleges do it for cachet, but finance companies do it for ROI.
Think about the business models...The college business model depends on maintaining prestige to continuously attract applicants willing to pay high admission rates. The finance business model uses money to make more money, and the risk to reward ration can be swayed depending on decisions made by certain individuals.
Speaking fees is how one legally bribes politicians. Such is how my cynical self sees it. The Clintons earned over $150 in speaking fees since leaving the presidency. Does anyone think their speeches are worth $10 million a year? At the end of the Clinton presidency he signed into law a repeal of Glass-Steagall. Reagan famously was paid around $10 million after his presidency to give some speeches in Japan. He got rid of car import quotas.
Perhaps I'm being too conspiratorial or cynical but it seems to me that this is the polite understanding between business and those with political power. We'll pay you a lot of money for very little work if you pass legislation that we like.
I don't claim to know all the facts, but at some point you have to stop being naive.
It's obvious these companies expect some sort of political benefit for paying these outrageous speaking fees, the part we don't know is to what extent there is an "agreement".
I will concede the agreements may not be communicated in any way, and just based on expectations. However, these fees would not continue to be paid if expectations did not continue to be mostly met.
I think your cynicism is warranted here, and this crap is a major reason I never wanted HRC for president. If you wondered why stories about trump's foreign emoluments, the Goya ads, etc. never went past some ragefests in left-leaning media... look no further than the politicians on both sides of the aisle drooling over their own future income. Not all on either side, but an overwhelming majority.
Emoluments/Hatch Act violations would have been prosecuted if Democrats controlled the Senate. When there's zero Republican votes that can be peeled away even on existential charges like corruptions of the electoral and judicial processes (soliciting foreign nations to drum up charges to have political opponents jailed, organizing an insurrection against the capitol to prevent votes being counted, etc) then there's no point in bringing "minor" charges like corruption.
This is very much an issue where both parties are not the same, Democrats do police their own and when they control the levers of power they do police the executive branch as well. House ethics investigations do happen all the time, and they would happen in the senate (and against hte executive) had democrats controlled the levers of power there too.
The whole reason this controversy exists is because Biden is enforcing rules and Yellen is specifically asking for an exemption from the rules. This would have been business as usual under Trump. He didn't even bother to divest from his own conflicts of interest let alone anyone else's. Remember his secretary of transportation taking low-interest loans from the chinese government to help her shipping company, while she was in office, for example? But with republicans controlling the Senate there was nothing that could realistically be done about it, the constitutional remedy for improper behavior from a cabinet member is impeachment.
"OK, these are the rules and this is maybe a little iffy, I'm going to document the conflict of interest and ask for permission" is how the system is supposed to work (at least according to the corporate/regulatory compliance training I periodically have to do), and that's hugely different from the "lol imma do it anyway" that existed under republicans. Pretending that's the same is not intellectually honest at all.
In a sense I feel like this kind of corruption is a bit like short selling.
You perform a corrupt act in the present with a tacit understanding that, at some point in the future, the beneficiaries of that act will pay you back.
The fact that this is a temporal play makes it seem like its not corrupt, but in fact all it does is put white gloves on the same kind of dirty deeds that happen in poorer countries all the time.
They’re referring to the temporal nature of the action in which profit is generated, not the populist misunderstanding and demonization of borrowing shares.
Nope. My opinion on short-selling is, let's say, nuanced, but in this case I was making strictly a technical analogy.
It feels to me like this type of corruption is a temporal play in which you "lend" your influence in the present to somebody. Using your influence they pass legislation/regulation etc. that yields them lots of money in the future. Once you leave office, the people that you lent your influence to will pay you back with the proceeds they obtained while they were making use of your influence.
The more "standard" type of corruption (the kind people in nice suits usually think of when they say "corruption") doesn't involve a temporal play. You get money in the present for using your influence directly in order to benefit the people who paid you, also in the present/near future.
Perhaps my analogy to short selling is not fully accurate, but this is kind of how it feels to me.
It is fishy in the first place for a long stock holder to lend their shares to speculators that will do whatever it takes to bring the price of the share down. Naked shorting should not be legal.
One of the two shorts is now naked. There is an obligation of 2 shares and availability of one. If both of the guys demand their share back at the same time, one will not get it. As I was writing it I realized that this is the definition of a Ponzi scheme.
Player C thinks that they own a real share, but they own thin air.
That isn’t naked short selling. Naked short selling means A skips the borrowing part, and just says “I have a share to sell”, but doesn’t actually have it (nor have they arranged to borrow it). They sell it, planning on buying it before they actually have to deliver it. This is illegal.
My example was not naked short selling. At the end of the transactions, only E has a real share. B and C both have an IOU for a share.... they can’t loan it out again or sell it unless they recall the loan (which they can do at any time).
If you think this is a Ponzi scheme, just wait until you hear about fractional reserve banking! Every single bank loans out money it doesn’t ‘have’.... it loans out money account holders put in. That means there is more money in circulation than actually exists, because the person whose money was loaned out still has their full balance in their bank account.
To your question of “if both people demand their share back they will not get it”.... this is exactly what a short squeeze is. You are right, if the lenders demand their shares back, the short sellers have to scramble to get them back... they have to buy a share on the open market to sell.
Now, in normal times a short seller would just borrow a share from someone else to return to the person demanding it back, because normally there is always someone willing to lend their shares (for more and more interest as demand goes up)... of course, if all the shareholders refuse to loan out their share, shorts are screwed... and will have to pay crazy amounts of money to buy back shares that are really expensive.
This is what wallstreetbets is trying to do... get all the shares owned by their users who all refuse to loan them out, driving the price ridiculously high.
On several forums I participate in I'm getting hints of this idea that short selling is getting a bad reputation when in fact it can serve good purposes in a functioning market. It seems like it's becoming politically incorrect to short a stock.
Perfect example - Newt Gingrich got a 4.5 million dollar book deal from Murdoch right before Congress was to hear about allowing Murdoch to purchase the Fox network.
If Yellen wanted to sell out, she would have worked in industry. Janet Yellen had the job of leading the most important bank in the world, yet her salary was that of an third-year at Citdadel. At the end of the day, a couple hundred thousands of dollars for a talk is nothing for Citadel. Companies will often spend more than that for private concerts.
The comment you replied to presented an industry position as the alternative to what she was doing, speaking. So if you're going to reframe those as equivalent, you should have stated that originally.
She left a top position at the Fed several years ago. If she didn't go into the private sector after that, it's unlikely that she has any desire to do so, ever.
Janet Yellen is 74. I would expect that she would retire or do what she has done, teach or research. She was at the Brookings Institution after being Chairman of the Fed. I suppose she could have been a senior VP at Goldman Sachs if she had wanted to be, but apparently she didn't.
My point is that you don't dedicate their life to public service, just to purposefully get your former classmates in the private sector, who had always been magnitudes richer than you, even richer. If you did decide to change your mind, your speaking fees would be much more than a couple hundred thousand dollars.
Exactly this. Bill Clinton's life goal wasn't to use the Presidency as a stepping stone to wealth. He just wanted to be President, and would probably still be running if there weren't term limits. But once you enter the government, you suddenly realize that people are willing to throw large sums of money at you to become "friends". Even if politicians don't start out corrupt, corruption is hard to avoid while in office.
Do you have any evidence or is this pure speculation? There are fewer treasury securities and fed chairs than there are CEOs of major financial institution. If they were really bribed, I'd expect the bribes to be much bigger.
She's already served as the chair of the Federal Reserve, so she could be working a cushy job right now. And, being 74 years old, she likely won't have many more working years left to offset taking a low salary now.
If most politicians are willing to walk inside the line (which is a good thing), maybe we need to change where the line is, if it's not benefitting society.
A normal person's investments get around 4-6% increase per year. A politician's investments get 25-35% increase per year. It's hard to rationalize that happening across the board without insider trading.
Obama very publicly "held politicians accountable" with the STOCK act and then very privately pulled it's teeth a couple months later (keeping it technically illegal while making it all but impossible to investigate).
Politicians should not be permitted to pass legislation concerning their conduct. Perhaps it should be put to state and national ballots as appropriate with a direct vote from the people.
Does a tech speaker have the ability to influence legislation or rule in a hearing about the company that is paying them to speak?
If so, and if they don't recuse themselves, there would indeed be a problem. Fortunately, tech speakers don't have anywhere near that kind of direct power.
If company y pays the manager in charge of purchasing at company x $600,000 to speak, then they bid on contracts with company x, there would also be a problem.
There's a limited supply of living former presidents. Far fewer than the number of institutions looking to up their prestige by getting a former president to give a speech. How much do you think it should cost to get a former president to give a talk?
Here's another argument. Non-political celebrities also have very high speaking fees (or the equivalent). Yet obviously these celebrities aren't being tacitly bribed. What is your explanation for that?
> How much do you think it should cost to get a former president to give a talk?
That's not the right question. The question is whether ex-Presidents ought to accept these bribes. Compare the post-Presidencies of Bill Clinton and Jimmy Carter, starkly different.
> Yet obviously these celebrities aren't being tacitly bribed. What is your explanation for that?
Celebrities aren't in positions of public service, so the whole concept of a "bribe" doesn't apply.
Presidents are different than Treasury Secretaries because historically they became impotent and sought no further office. A bribery scheme is hard to enforce when the president becomes impotent during the period they'd like to get payment.
Celebrities are different because they make tons of money and are business propositions in and of themselves, meaning their star power could bring immense attraction to the event, which is part of what commencement speakers are for.
Even if an official seeks no further office and is "impotent" at the time of payment, the prospect of speaking fees can still be a perverse incentive. There's no evidence this is happening here, but theoretically an official could install policies favorable to a company, then be rewarded after leaving office with outsize speaking fees, and this would be a stable system of corruption because the company would have the reputation of following through on a practice of rewarding officials who produce favorable policies.
One could take this further and apply it to the entire concept of a revolving door; if an official can make a career out of lobbying and consulting after leaving public office, they'll be incentivized to prioritize future employers over the public interest.
Realistically, it's difficult to fully remove perverse incentives and still be able to attract talent (this applies to technical recruiting as well!). But there still need to be systems of accountability. Unfortunately, with two-party non-proportional representation, and a limited opportunity for voters to provide referendums on the corruption of party members separate from their policy viewpoints, there are many layers of insulation that prevent people from being held to account.
You realize that it's legal to form a political action committee and give literally unlimited amounts of money to any politician while they hold office, right?
The current president often has a deep dislike of the former president and entities perceived as close to him, and can quite happily make decisions unfavourable to your company safe in the knowledge that the speaking circuit won't be short of other people willing to pay him.
> The current president often has a deep dislike of the former president and entities perceived as close to him
This is not necessarily true. The Clintons, Bushes, and Obamas are like one big happy family. Trump is the exception because he pissed off everyone, but even he used to be friendly with the Clintons.
Anyway this misses the point: in general, the system of buying political favors only works when political favors are repaid, and everyone operating in that system knows it.
> How much do you think it should cost to get a former president to give a talk?
Nothing. Or, on second thought, maybe a large donation to a children's hospital. I would expect a public servant from the highest office to be committed to public service. The presidency shouldn't be monetized, but if a former president really needs money they could always sell a book. That doesn't create any perverse incentives like speaking fees.
Maybe your plan would work if we had a generous a pension plan that required a certain number of community service hours. One problem would be that most of these speeches are anything but public or open to the community.
I don't know, seems to me that speaking fees are inherently corrupt. You shouldn't have to pay someone for the privilege of giving them a platform.
Public figures don't get paid for TV or newspaper interviews, journalistic ethics explicitly forbids it, because paying people for being the source of information is seen as inherently corrupting.
Presidents have a 200k/yr lifetime pension that's pegged to inflation, plus a $1 million/yr travel budget and a fully funded and staffed personal office. Bill Clinton has been paid over $20 million by the US government since he left office through these programs. While in office presidents earn 400k, with all their living expenses paid for separately, meaning they get about 1.6 million dollars per four-year term straight into their savings accounts. Many of them make millions from sales of their memoirs alone. There is no reason for them to be demanding additional millions in exchange for giving a ten minute pep talk to a hedge fund except as a backdoor for corruption.
> There is no reason for them to be demanding additional millions in exchange for giving a ten minute pep talk to a hedge fund except as a backdoor for corruption.
I don't see how this follows from your argument. As you acknowledge Clinton has a massive platform whenever he wants his views aired, and plenty of normal people are willing to pay his publisher money to read his book. Why would he fly to some hedge fund's dinner party to talk to a handful of half cut money-movers for free? I'd say that would be more suspicious, frankly.
To avoid the appearance of a quid-pro-quo, at least?
Like, the guy clearly doesn't need money, he can do whatever he wants. There is no opportunity cost for him, he doesn't need to make appearances to put food on the table, the financial difference between a $300,000 appearance at Goldman and a free appearance at a kid's birthday party is essentially nothing to him.
If he thinks it's fun to hang out with hedge fund managers, he can do that, good for him, who cares. But them giving him tens of millions of dollars, on top of the tens of millions of dollars that the US government is already giving him, (which by the way is supposed to exist to disincentivize Presidents from seeking gifts or employment after leaving office), is extremely suspicious especially in light of the fact that his crowning achievement in office was deregulating their entire industry.
The "he doesn't need money" argument cuts against there being any tangible upside to quid pro quo too...
Nobody who charges six figure fees for speaking engagements needs the money to put food on the table. Getting paid silly money for a night of patronising some organization you wouldn't otherwise care less about is an ego thing, and plenty of stupidly rich people enjoy their egos being stroked by speaking fees without having any other favours to offer. I mean, some stupidly rich people still enjoy making obviously corrupt manoeuvres too, but that's not necessary to explain why ex-POTUSes and Hollywood stars start being interested in being private party entertainment when the sixth zero is added to the bill.
And literally nobody would say "that's fine, he probably just thinks its fun to hang out with hedge fund managers" if the guy who repealed Glass Steagall insisted he was donating his time and reputation to helping hedge funds impress their LPs. Especially not if foreign telephone manufacturers wanting him to do a keynote speech were still willing to offer massive sums of money.
It's nothing to do with "prestige", it's about return on investment. It's usually a payment for friendly behavior in the past, or to increase the likelihood of friendly behavior in the future (or to essentially tap into their personal network at some point in the future).
Celebrities are bribed, they're called endorsements. Former presidents are worth less and less as they lose their connections. Their price tag depends on how much power they still wield....which is why Clinton and Obama still command high prices.
This sort of monetization of the Presidency would have shocked 18th-Century sensibilities. An example:
George Washington was a big supporter of canal-building. To honor Washington, the Virginia legislature decided in 1795 to gift him shares in two canal companies it had established. Washington agonized over what to do, because accepting the shares would give the impression that he was using the Presidency for his own personal gain, while rejecting them would be insulting. He also wanted to publicly show his support for the canal projects. He ended up requesting that the shares to be used to fund a university and a seminary.
Washington's status at this point was already secure enough that nobody would have seriously accused him of corruption, but he was extremely wary of doing anything that could in any way be perceived as self-interested. The fact that former politicians are taking massive speaking fees from businesses that their policies affected looks corrupt, and that in itself is already bad enough.
Isn't the fact that these speaking fees come largely after someone is out of politics a huge knock against this type of conspiracy theory? Don't get me wrong, these type of payments are ridiculous. But is there any non-circumstantial evidence that this is a direct quid pro quo?
>Yellen is not out of politics and also no, why would that be a problem?
She was when she made those speaking fees. Do you know she planned to reenter politics? Did Reagan or Bill Clinton have plans to reenter politics after their presidencies?
>We often pay bills after recieving service. Quite normal.
Except we agree to those bills beforehand. This would require that these payments be guaranteed years before they are made. Often times the leadership of these companies changes so that expands the list of people who need to be involved in this conspiracy. When the number of people involved in a conspiracy go up, the likelihood of that conspiracy being revealed goes up.
Once again I will ask is there any evidence for this conspiracy beyond these circumstantial connections?
You're asking for something extraordinary. The only direct evidence you could possibly have would be video or testimony of Ken Griffin or Janet Yellen admitting that the high fees are related to a quid-pro-quo that goes beyond speaking. But circumstantial evidence is still evidence, and a preponderance of it should play a role in your judgment.
Some people work at Citadel for years after graduating from top colleges without making $700k in total income, yet Citadel shelled out that amount over the course of two years for a bunch of speeches from an altogether boring economist.
Janet Yellen is a laughably bad speaker. See for yourself:
Now she's the Treasury Secretary and she has power and authority to manage a situation that directly affects Citadel. They make money off Robinhood. They back Melvin. And they benefit from a regulatory environment that is all too forgiving to market-makers.
We aren't just talking about Yellen here. Three other people have been directly named. You can expand that list to a much wider category of politicians. What evidence is there that the post-politics speaking circuit is an avenue for bribery that doesn't amount to the equivalent "well it is obvious"? There would be thousands of people involved in this over the years. Has any former participant spoken out about it? Has anyone been caught in the act?
People like Yellen are not paid for their oratory skill (and oratory skill is not something that is particularly valuable in her current or previous roles). They are paid because they are smart, accomplished, respected, and well known. When an organization has them come speak, people want to come listen and it lends the hosting organization prestige.
We are talking about Yellen here because unlike Bill Clinton or whomever, she's the one in a position of power and she's the one "summoning regulators to discuss" Melvin (a hedge fund backed by Citadel) and Robinhood (whose number one PFOF client is Citadel).
The regulations currently protect market-makers like Citadel from having to adhere to many of the rules that other market participants have to follow. This includes the locate requirement of Reg SHO, as well as the buy-in procedure for failure to deliver. How are we supposed to trust Yellen to regulate one of her own biggest customers (maybe the biggest)?
It's an absolute joke to pay Yellen six figures to give a speech, and that's why people are thinking, "wait a sec, this is bribery right?" Are you suggesting that Yellen should get paid because she is "smart, accomplished, respected, and well known"? The impropriety of these lavish payments comes from the fact that she's a cabinet secretary expected to keep these very firms in line.
FINRA doesn't let vendors give their individual clients gifts of more than a hundred dollars per year. Yet the current TREASURY SECRETARY raked in $7mm in the past two years for giving bad speeches and somehow we're supposed to just be cool with that? Give me a break. She shouldn't be involved with this.
We are talking about the general practice and not specifically Yellen. The comment I replied to did not mention her. My top comment didn't mention her. I only referenced her in response to someone bringing her up directly and it was in the same paragraph as I mentioned Reagan and Bill Clinton. If you think this system is bribery, then Yellen is not the only guilty party.
I also said in my top comment that these speaking fees are ridiculous. I don't think they are good use of money. However it is quite a leap to go from these being a poor use of money to them being obvious bribery. Plenty of people and organizations spend money on stupid things. This includes speaking fees for non-politicians. All sorts of famous people from actors to philanthropists to technologists get paid to speak in front of crowds. Are they all forms of bribery?
If you are going to accuse people of corruption, you need to have evidence that is stronger than the existence of a motive, which is basically all you have currently.
> We are talking about the general practice and not specifically Yellen.
> Are they all forms of bribery?
Reagan and Clinton didn't become cabinet officials after cashing in on speeches, and both the article and this thread center on Yellen. Don't attempt to move the goal posts.
> If you are going to accuse people of corruption, you need to have
> evidence that is stronger than the existence of a motive, which is
> basically all you have currently.
Yellen disclosed the sources of her honoraria and acknowledged a financial interest (here: https://extapps2.oge.gov/201/Presiden.nsf/PAS+Index/18A4D129...). She received written permission based on the determination "that the interest is not so substantial as to be deemed likely to affect the integrity" of her work. The question isn't whether she has committed a crime (she has not), nor whether she has motive to unfairly benefit Citadel (she does). Rather, the question is whether that financial interest is substantial enough to likely affect her work (a discretionary call already made by a government official), and whether the process itself is fair to other market participants (I contend that it is not).
I've been in the speaking industry ever since I started working full time "illegally" when I was still a teenager for a politically focused speakers bureau.
No doubt it my mind, WSB and other agencies are "laundering" political kickbacks through speaking fees. It's long been an open secret/assumption in the industry.
I co-founded a startup that published speaking fees, the IASB tried to find an angle to come after us but failed. Eventually proxies came after us to try and intimidate us from publishing fee and speaking calendars for politicians and pundits.
the diff here is they were former presidents giving paid speeches whereas Yellen gave paid speeches than entered into a Government position. VERY different!
This wouldn't even be an argument if Citadel wasn't operating in the the market as if it were a casino. Yellen is extremely talented and an expert in her field. She should be paid for those skills and knowledge.
This idea that public officials shouldn't be participating in the society that we have created and that they should be held up to the Standards of Mother Teresa or Ghandi is idiotic, IMO.
The mere fact that we are even discussing this is ridiculous, and instead should be discussing what do we expect from our markets. Should they be a free market that should resemble the "fundamental" price of an asset or is it just a casino where everyone is in search of a greater fool and acting accordingly? It seems more and more likely that if we allow for it to behave like B, we're not going to get A.
One benefit of all this is people coming together on a non-partisan basis. I hope this makes people realize that political ideologies (left or right) don't make a significant impact in our day-to-day lives, but that the tension is weaponized against us via divide & conquer...all so things like this get pushed under the rug.
I'm aware the term "swamp" may stir up some Trump era animosity, but this is the definition of a member of "the swamp". They're literally everywhere in positions of power.
You seem to have fallen for being bashful to suggest people in power may be corrupt. Not harping on you directly, but I'm getting tired of the word conspiracy being thrown at everything.
Politician/authority figure gets paid exorbitant amounts of money for inane services by entities who directly profited from contested policy enactments. That's not a conspiracy. That's just bribery with extra steps to make it "legal". Just because some people dont like it or embarrasses some authority figures, doesn't make it "some crackpot conspiracy". Just like throwing the word nazi around was a craze just recently for anyone that doesn't agree with your general life views.
The people's responsibility is to point out conflicts of interest and potential corruption. No politician or authority figure should be safe from that, no matter their party or demographic.
> "I continue to be befuddled by the apparently common habit of using agricultural euphemisms to refer to illicit financial transactions. “Don’t call bribes chickens,” I suggested a while ago, after U.S. prosecutors charged someone with doing that. If your business has nothing to do with chickens, then when prosecutors see winking references to chickens in your email, they are going to know that you mean bribes, and a jury is going to agree. Much better to say “success fees,” so you have some argument that you were doing somehow legitimate transactions."
Perhaps. Cynicism is highly valuable -- a smell test. But cynicism is not conclusory. Others have responded noting examples and rationales as to why paid speeches are not necessarily bribes.
I'll also note that you include a citation about the Clinton's speaking fees, you don't cite anything to support or argue that Clinton speeches led to the repeal of Glass-Steagall, despite your implicit connection there. I write this as no Clinton fan BTW, in part for this repeal.
It's easy to get angry over the nebulous concept of creeping corruption in our political systems. This is because getting into the nitty-gritty details and actually determining which particular speech is a bribe and which is not is difficult and boring. In the long term, I suggest that this sort of anger can lead to a political apathy which is damaging to a functioning democracy.
Now, with all that said, Yellen should probably recuse herself given the recency and amount of these talks. Independent of whether or not she was actually corrupt, it's a bad look.
I definitely don't have proof. It's all supposition. Reagan going to Japan for $10 million was the first instance that I remember in my life. I think it was because he got rid of import quotas on Japanese cars. Clintons and Rubin got very rich shortly after the repeal of Glass-Steagall. Obama is rich now and his government famously never prosecuted or investigated the banking industry. Tyson foods was a relative unknown until Clinton became President. Halliburton benefited greatly with Cheney as VP. Ajit Pai will likely make a ton of money now that his chairmanship has ended.
None of this is proof but to me it paints a clear picture of regulatory capture and corruption.
This is, in fact, cynical. Getting a luminary like an ex-president is a huge draw and extremely valuable to the institutions paying for them. Someone like Bill Clinton, took a lot of speaking fees _after leaving office_. Meaning, if someone was trying to bribe a president, maybe they shouldn't have waited until his terms were expired. What exactly is the quid pro quo that could possibly have transacted? When Hillary signed on as SecState, did she ever did a single favor for any of the place that paid her fees? She spent literal days in front of Congress testifying to political opponents. The Clintons are probably the literal most investigated people in the history of American politics. What actual conflict of interest has ever been uncovered? I can honestly with 99% confidence that these two are not at all corrupt.
As a counterpoint, we have seen far worse corruption in broad daylight and it's not coming from people who took speaking fees.
May I further suggest that the decades-long propaganda campaign against the Clintons has worked wonderfully and you are possibly a victim of it. And not just you, but millions of people.
Rubin and Clinton passed the repeal of Glass-Steagall. Rubin goes on to make many millions of dollars at Citigroup and the Clinton make many millions of dollars in speaking fees for speeches at Citigroup, Goldman Sachs, and other places. These speaking engagements were not at venues for the general public and tickets were not sold for these speeches. These companies paid millions to have the Clintons speak at them.
It may not have been corruption but it certainly has that appearance to me. The Obama administration famously never prosecuted the finance industry. He's now making millions a year. Reagan got millions to visit Japan shortly after leaving office. The leaders of our government are getting rich after being in government. I think it's corruption.
Much of the investigations against the Clintons have been political theater. It's hard to prove the sort of corruption I'm pointing out. It's also in no politician's best interest to do so. They make millions after service so their economic interest is to investigate inane accusations rather than real corruption.
Glass-Steagall repeal had broad bipartisan support and was an act of congress that Clinton signed. I think it's kinda preposterous to think that Clinton pushed this bill past both houses or might have vetoed if he didn't expect to get paid speaking fees from Citi years later. More likely, he supported it because he thought it was a good idea at the time and Citi hired him to speak because he was very influential and knowledgable about economic policy. They've also given loads of speeches for public health groups, environmental groups, colleges, etc. More like they are supporting people who are ideologically aligned to their interests rather than anything resembling a quid pro quo.
It's an extremely low bar for what you could consider corruption. Maybe coziness at worst. Like would these policies simply not have happened without speaking fees?
People as smart as Rubin, Clinton, and Greenspan knew this was bad policy. Greenspan famously encouraged ARMs before the crash. After his chairmanship he was amply rewarded.
It could, of course, all be as you say and these are just instances of public servants doing what is in the public good who go on to get enriched by the industries their policies benefited. I don't think so though.
Public servants often do not make enough money in public service to make these kinds of ethically gray payments easy to turn down.
I don't know about Yellen's personal finances, but the chairman/woman of the Fed makes $203k/yr. I bet 50%+ of the people reading my comment make more money than that, and unless my comment is graced by a well-known CEO I sincerely doubt any of you have as important a job.
Maybe if we want to hold our public servants (generals, commissioners, congressmen, secretaries of x, etc) to higher ethical standards we should compensate them well enough that a speaking fee like this is "more money" rather than "help pay off my mortgage".
Not disagreeing with the larger point, but, I think you would be surprised how many shops (think hedge funds, think tanks, etc), would easily pay a few hundred thousand dollars to have a big-wig visit for a few minutes and boost employee morale and do some handshaking. It’s major signaling that can easily amount to 10m a year.
People like e.g. Bjarne Stroustroup or Linus Torvalds are also paid 6-figure speaking fees depending on the venue, and they're far less-known names than Yellen or Clinton. And not because tech conferences are trying to bribe or corrupt their speakers (i hope), but because having a big name really drives attendance.
It probably sometimes happens that speaking fees are paid as a bribe, but that's illegal and also not specific to speaking fees (similar popular schemes are to hire the person as consultant, or to buy something from him for a much higher price than the real value). It also raises the same red flags, when it turns out that the speaking fees were far above market value.
Unless that was the case here (I don't know how much other speakers are paid at Citadel), it seems premature to assume nefarious behavior.
I don't know anything about Stroustroup or Torvalds, but Wozniak wanted $80k to talk to my computing group at CMU back in the day. That's definitely 6 figures now.
I understand and agree with your point, but I think the word enriched is too ambiguous here. He definitely enriched the software industry, just not monetarily.
Logistically, this is the stupidest way to bribe someone. There is a clear paper trail and everyone knows about it. The wealthy have dozens of highly discrete ways to legally transfer money to each other. Also given the number of speaking engagements every year, how likely is it that all or most of them are "bribes"?
Corporate speaking fees are Cameo for very rich people. They pay a less-than-rounding-error amount of money to have someone famous show up and interact with them. Similar to me paying Perez Hilton $50 on Cameo to record a message for my buddies. It doesn't make a lot of financial sense to pay someone famous to talk to you. but people do it anyway, because people pay for rare experiences.
Brief association with fame has a direct financial value, it always has. You don't need a conspiracy to explain that.
Have you never watched a drug smuggler movie? Half the headaches are trying to launder the money.
Speeches are the best way to bribe someone. Once they give the speech, it's "services rendered". There's no shady money transfers to explain, since it's all out in the open. There's no risk of fraud. There's no way to be caught in a lie, because the entire payment is pegged to physically speaking in front of a group, which they actually did do. The only questionable thing is the amount paid, which is subjective.
Discretion is part of a bribe's value proposition. The existence of this post is why public speaking fees are a horrible vehicle for corruption. You have people complaining and asking for recusal. It's negative publicity and a hindrance to corrupt acts.
At Yellen's level, access to information is what has the most value. That's how I would bribe someone like that. No paper trail
>You have people complaining and asking for recusal. It's negative publicity and a hindrance to corrupt acts.
It's hard to look at the past decade or two and think there was a hinderance to corrupt acts. Sure, people complain but rich people got their tax breaks, Wall St. gets friendly policy, and mega corps get bailed out. The system is clearly working for those involved.
Those speeches can be also quite valuable, if you are for example running a conference. Few big name speakers can do a lot to attract paying visitors.
Just a local example. Nordic Business Forum[1] has had for example Barrack Obama as speaker. They have maybe 7k visitors, ticket prices are around 1k-3k€/person. They tend to be sold out well in advance.
Few years old list of per speech prices for high profile speakers [2]. For example Obama $400k, Tony Blair $200k.
> Reagan famously was paid around $10 million after his presidency to give some speeches in Japan. He got rid of car import quotas.
...and if Reagan had instead imposed tariffs on imported cars, he probably would have later been paid to give speeches by groups that liked the tariffs.
That's how it will be for nearly every consequential Presidential decision other than those few that have broad bipartisan support and little controversy.
The more absurd thing is criticism of Yellen on this part is being defended - by the White House press secretary no less - as a woman's right to use her skills to make money. Yes, women should absolutely be able to rise to their talent and ambition, but it's a clear conflict of interest for government official. It's a disingenuous use of the most vacuous forms of language to defend open corruption.
But then again, if we wanted finance experts to chair the Fed and be the treasury secretary without any prior monetary relationships with banks and hedge funds, we would probably have just some academics. A lot of academics in economics/finance get paid for legal testimony on behalf of companies and such, too.
I think this highlights an important blind spot some people have when they focus on identity politics. A huge gap between elites and the rest of society is somehow more okay if the elites are more diverse in gender or skin color. I don't feel it's much better but am at risk of being told I don't care about diversity or intentionally changing the subject.
I have no problem with elites, personally. Just (alleged) corruption.
I think most social justice advocates would agree that corruption and regulatory capture are bad. If anything, I'd expect a response more like "why are women like Yellen and Hillary Clinton being uniquely targeted with these accusations?" (whether they are or aren't). I'm not sure where the parent poster is sourcing the claimed identity-based defenses of her alleged corruption, though.
I think you'll find that most people who focus on identity politics would rather have that gap closed for everyone, than to see specifically people who look like them in places of power why they themselves continue to languish. The issue is that these people who focus on identity politics aren't actually stupid and, in fact, do understand the rules of this game that they were swept into (without their consent, mind you): power accrues more power and tribalism is rampant. Under the status quo, people who've been marginalized in the past have a better chance when they increase their numbers in seats of power. Further, strides forward in economic and social wellbeing tend to leave them behind unless they speak up.
So the dilemma in the situation you describe is between whether to ignore diversity concerns and in turn be ignored, or to speak up and risk losing class solidarity. It sucks that we have to make that decision; it would be better if less-marginalized people made proactive efforts to ensure we're involved in and will explicitly benefit from initiatives or movements that implicitly aligns with our interests.
There’s also the hazard of if they’re not worth paying for their financial services they just might not be worth paying for those services. And thus shouldn’t be in charge of Finance.
It'll "work" on the people who wouldn't question anything coming out of the administration anyway. Anyone else, including those on the blue team who aren't unquestioningly faithful, will not accept this nonsense.
I hope people can see through it, but I've also come to realize that good PR can be insidious. Having a really 'dumb' excuse like the one we see here can work because it actually makes people focus on how stupid the excuse is.
It takes oxygen away from the actual controversy and shifts the discussion to how stupid the cover is. You might even have people start arguing about gender and earnings gaps. Diversion successful.
Your edit drastically undersells the extent to which you were wrong on this one.
> Amateur sleuths found fertile ground to fan conspiracies. They didn’t hesitate in casting Jeff Psaki, a money manager at Citadel, as proof of dark arts at the firm. It started with claims that Psaki, an ex-Goldman trader, was married to White House Press Secretary Jen Psaki. He’s not: He’s her second cousin and has never spoken to her, a person who knows him said. But on it went, ricocheting from chatboards to Twitter and beyond.
Resolution of conflicts of interest linked to a multi billion dollar failure should probably be supported by a more authoritative source than “a person who knows him”. I afford everyone the benefit of the doubt in everyday life, when it comes to politicians and this much money is involved I don’t. I respect people who see it differently.
Gaslighting combined with a Red Herring of racism, sexism, etc. is the ultimate way to achieve any political goal in today's US politics. I hope people realize this and are exercising critical thinking as appropriate.
These are incredibly powerful magical spells to stop debate in its tracks. Few organizations in the US are immune. Doesn't matter whether it is a Facebook group, a University, a Trillion dollar corporation or the US Government. Debate can be stopped.
Oh, most do. This kind of vacuous PR nonsense is blatantly transparent and isn't really fooling anybody.
Those who are already on the "team" (i.e. - they identify as a member of the party but have no particular ideology of their own) may appear swayed, but usually this is just a bad faith effort on the part of party loyalists to stifle criticism from within.
Really fooled or not, the radical progressives have won the cultural war, no? TV anchors and politicians use racism and sexism to attack pretty much any opposing views. Case in point, WaPo(?) article said WSB folks were white supremacists/Trump supporters, never mind majority of them are actually supporters of Sanders.
Where is the voice of the people who are not really fooled?
we as a society will move on from it at some point. It's not really about winning the cultural war, it's about the elites manipulating the population and thus using the language du jour.
20-30 years ago it would have been about family values, christian values, and down with the gays. In 20-30 years it'll be something else, but what won't change is those in power stay in power.
They've been doing it to black people for decades. Swoop into inner cities and promise all sorts of welfare etc. get their vote and completely ignore them afterwards. Has it helped? It makes no sense to me that they believe an old rich white elite that's been part of the system they're calling racist for half a century is suddenly going to bring them out of poverty.
The hypocrisy of Harris/Biden to get up and declare the system corrupt... THEY ARE THE SYSTEM.
You can interpret anything as gaslighting. This sort of discussion rarely productive without concrete evidence. Maybe the wealthy are trying to burn Yellen's political capital because she's in favor of additional taxes. Maybe it's really corporations who are stirring up populist narratives because it gets less qualified candidates elected, who then need to turn to corporations for expertise.
Is it too much to ask a person who received $300k 3 months ago from PARTY A to recuse themselves for weighing in on an issue involving PARTY A for some amount of time?! More than 3 months, I would recommend.
What's even more pernicious is expectation of future payments. Even if Yellen had never taken any money from Citadel or even if it was 7 years ago, how do we know her decision-making isn't affected by the prospect of making $400k per speech after retiring, as Obama did - from Citadel! - a few months after giving up the presidency.
This applies to anyone in any position of power or influence ever. All we can hope for is that they are as minimally corrupt as possible, and all transactions and communications are transparent. Even then, you’ll get into trouble with privacy norms and being unable to conclusively prove “you scratch my back, I’ll scratch yours” moves.
It's not too much to ask. But Citadel is not involved in any significant way with the Gamestop fiasco. Any claims to the contrary are crackpot conspiracy theories without any evidence.
Citadel's a market maker that processes a lot of transactions in pretty much every stock in the universe. It'd be like me saying that someone with ties to power company shouldn't investigate the mafia, because the mafia regularly used electricity.
That's not a verified fact. It's based on a CNBC reporter repeating what an unnamed source from Melvin told them, and even so, the way they worded it was vague, in that it could have simply been a small part of the short position that was closed.
This is exactly why we need an unbiased source to look into this matter.
> It's based on a CNBC reporter repeating what an unnamed source from Melvin told them
FTA:
> "Melvin Capital has repositioned our portfolio over the past few days. We have closed out our position in GME (GameStop)," the spokesman said in a statement.
Citadel was clearly infusing cash into Melvin to compensate for Melvin's massive losses on GME, though. What's the significance of Melvin's position in the stock in the few days before or after Citadel bailed them out when the reasons remain the same?
> Yes, sure, but it's a clear conflict of interest for government official.
"Yellen has requested an ethics waiver to hold the meeting, a Treasury spokeswoman said, confirming a Reuters report."
I don't see it as a clear conflict of interest that needs recusal out the gate. How much is that $700,000 to Yellen? The payments are done. What other speaking engagements has she made and how much did they account for? I remember when Tom Wheeler was put in to lead the FCC, and people were very much against him because of his ties to the industry, but by the time he was done, people had turned around on him.
So, here you have a case where someone isn't hiding something, is asking for a waiver, and being up front about this, and you are calling this open corruption.
Really? Open corruption? This means they've actively done something wrong, or corrupt, and I don't see that here.
Should this be looked at and watched? Sure.
Does that mean there is outright "corruption" here? No.
It's open because it's out in the open. It's not corruption as in behind-doors bribery or such, but it is getting there. It's certainly a moral corruption - it's absolutely not conducive to her representing the the people in any democratic fashion.
Melvin Capital is the hedge fund that's directly hurting from retail investor actions. That's an easy google you can do yourself.
Citadel stands to lose quite a bit of money from retail investors now and potential in the future. So them giving a regulatory authority 700k to talk about the issue... is it really hard to imagine which way Yellen is going to lean on this one?
What kind of question is this? It's two-thirds of a million dollars. You are treating it like they bought her some chicken nuggets after soccer practice.
If that amount is really such a pittance, she should pay it back to Citadel.
>The more absurd thing is criticism of Yellen on this part is being defended - by the White House press secretary no less as a woman's right to use her skills to make money. Yes, women should absolutely be able to rise to their talent and ambition
Everyone in the other comments is just assuming this as true, I don't see the sexism argument anywhere in what the press secretary said.
its the same as asking a prostitute to play a main role in a short porn movie in which you’re the second actor. totally legit and you ahould see the face if you ran into undercover operator on the orher end.
Guys hate to be the one saying this, but $700k for speaking fees at this level is really not that much money and certainly not enough to influence someone who thinks in 4 commas.
If Citadel accounted for 70% of all her speaking fees, that would warrant a closer look - this is a move along carry on for me.
I think it's more about the message this sends than actually thinking there's corruption. We just spent 4 years having our institutions especially those related to corruption torn down by the president. Now seems like a great time to ensure proper procedures are followed, even if they're a bit excessive.
But, I think the outrage here is a bit more general. Buying speeches is essentially influence tokens. Any amount and the idea it's happening for personal gain of a government official in America is what frustrates people. It kind of reads as if you're saying 'eh, it's not really that many influence tokens'.
For example, if this amount is a "move along, carry on" for you, I'd be curious to know when you draw the line specifically?
It's just more appealing to believe in conspiracy theories and that the world is against you.
Wait until these same people find out about various "senior advisors", board memberships, and think tanks!
This isn't ideal but public service isn't a vow of poverty and someone will pay them. What is important (and appears to be the case here) is that they are public and disclosed. Citadel is only 10% of her overall speaking fees over two years. She owes them nothing.
> This isn't ideal but public service isn't a vow of poverty and someone will pay them. What is important (and appears to be the case here) is that they are public and disclosed. Citadel is only 10% of her overall speaking fees over two years. She owes them nothing.
When we give money to someone, there is an expectation of receiving something in return.
How long was the talk? An hour? 700k per hour for a talk? What was so groundbreaking that a public official was paid 700k/hour but didn't say it in public?
Doesn't really matter. She probably told them many things she's said in public. My org has paid just as much for invited speakers to say things I could hear them say on Youtube. $700k is to get her person inside of the room to give an exclusive talk. There are myriad reasons for that, one of which may be you intend to ask her return favors. But that's certainly not the only reason as people here seem to be implying. Other reasons include:
- Because you can: $700k is not a lot of money to these orgs
- Because you have to: if you don't spend the money you lose it in the budget
- Because you want to brag: social media points for you and all your employees (look who we got to meet and you didn't!)
- Because you want to attract new talent: your org is more attractive if you offer these events to your employees
etc.
I think any of these are just as plausible as corruption.
Yes, they paid for for the speech. You pay a consultant to write software for you, and they deliver software. You pay a public figure for a speech, and they write and deliver a speech.
I know you may object to how much she is paid. However, there are only 15 former chairs of the US Federal Reserve in history, and at the time she was one of 3 living (and not currently serving) ones, the first woman, and Paul Volcker is 92. Based on some basic searches, a celebrity commencement speech fee may run from $50-100K, and I would argue that Yellen's thoughts are far more valuable.
Let's turn this around. What freedoms would you take away from people that wanted to be government appointees? What if she had been an executive of Citadel for a year instead? If she doesn't do speaking fees, Janet Yellen still has a mortgage and bills. Speaking fees are public, have low quid pro quo leverage, and they are disclosed.
This seems to be the best possible arrangement to have qualified people in positions of power.
Just because she "thinks in 4 commas" doesn't mean that she personally is trifled by 700 000$ in speaking fees. If it truly is insignificant then she should be willing to do it for a standard hourly rate, or for free. Clearly this isn't the case.
so you think someone as internationally famous as Janet Yellen should charge the same rate as someone no one has heard of? Let me introduce you to a concept called supply and demand...
There's two possible positions here. Either the sums that Yellen is charging are so insignificant as to not influence her, in which case a pay cut shouldn't change anything for her, or the sums are appropriate for her in which case by definition they are an influence.
Is it though? Do these companies regularly pay out thousands because they're fools? Most business decisions are made with some return in mind; they must feel in the grand scheme it's worth it-- that they'll make more back. I think it's more foolish to dismiss the very real possibility of bias if she holds this meeting, solely on the basis of 'she makes so much money why would she even care about 700k?'
If I want to attract top employees in the financial industry, who are used to making a lot of money, then I need to offer them something they can't buy. Exclusive talks with people they find interesting is one way to do that. As a company I would put that in my recruitment material. Any company who doesn't do this is now at a disadvantage. They're going to want to get their own exclusive talks now. You want top employees, you have to offer top perks, and you're competing with other very wealthy firms who have the ability to pay essentially unlimited money for said perks. That's going to drive the price of speeches up.
The "speaking" fees are really just bribes, lets me honest about it. It's so corrupt and so obvious and begs the question what are you going to do about it?
their bets are long-term. same date 13F filing for Melvin Cap show short bet against GameStop as well, so we can safely assume they are on the same short side together.
Same reason why people buy stocks when it's tanking (remember, for every seller there's a buyer): because they think the fund's undervalued and they can buy it at a discount.
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[ 2.8 ms ] story [ 260 ms ] thread> The Chicago-based hedge fund paid Yellen $292,500 for a speech on Oct. 17, 2019, $180,000 for one on Dec. 3, 2019, and $337,500 to speak at a series of webinars held from Oct. 9-27, 2020.
[1]: https://dailycaller.com/2021/01/28/janet-yellen-gamestop-cit...
Watch the docu on OxyCotin. Doctors who made the most in sales for the Sacklers got paid hundreds of thousands to give lectures.. that literally nobody attended. They all kept giving the lectures, time after time.
This is a matter of public record, and she was made $7M in speaking fees in the past two years. It is a small percentage of her income, and not worth more a small fraction the future value of her reputation. The idea Yellen - one of just three living Fed chairs and one of the most influential figures in economics - would do political favors for $300k is honestly ridiculous.
I have asked it elsewhere, but if you want to prevent this, you are making it illegal or disqualifying. I would personally like to know where the line would be drawn for public service. It seems like having an employment relationship would be far more influencing than a speaking engagement. It is important to emphasize this speech is disclosed and public knowledge.
It's just a reminder - when it comes to time make that big decision, hey, remember who your friends are.
I of course think it should be both illegal and disqualifying. The line is very clear - reception or accepting the promise of large sums of money should be disqualifying for positions of high office. Simple as.
Let see what happens.
It’s obvious that we don’t have the right incentive structure with the SEC, either. If you can make 20x more using the skills you’d need to investigate companies trading instead, the talent pool is reduced to those motivated by power/ideology. I’ve always thought financial regulators should have some kind of incentive structure that closes this gap but it’s not clear how to do that without skewing the enforcement priorities.
If Yellen were mostly interested in money, she has already chaired the Federal Reserve. 700K is a pittance compared to the millions she would earn in the private sector. Yet people begrudge her the 220K she does earn. Treasury Secretary and Chair of the Fed would be a multi million dollar a year jobs in the private sector.
700k might be a small sum (I don't think it is, but ok) for her, but she still accepted it.
Her taking up that offer is no surprise.
The type of people who would overlook crimes by others because the company that the criminals worked for once paid them to give a speech & attend a mixer is probably not the type that would work at the SEC for any meaningful length of time. The pay disparity is just too great.
Malicious people work for the SEC just long enough to understand the inner workings and/or collect critical intel that they can leverage into private sector jobs.
If Yellen lacked scruples, she would have gone into the private sector after leaving the Fed. But instead of collection a probably 8-figure paycheck, she opted to continue to work in government. Which indicates to me, that she takes pride in doing her job well.
1. She did go into the private sector. She got paid for speeches. That's not a public sector job.
2. It's not mutually exclusive to enjoy public sector work while also lacking scruples. The list of corrupt politicians is endless.
There are many people in this thread and others across the internet and media who are talking about the conflict of interest. However, there's little showing what potentially bad things she is doing.
Yellen has lots of experience with the regulatory and finance institutions and their inner workings. For sharing her perspectives on how things work, what pressures they face, and how best to engage with them, she should be paid quite well. That's what these Citadel talks look like, at least until someone can connect the dots better than they have been connected.
For example, what nefarious plot is there? What regulator capture is she engaging in? Somewhere else in the thread someone mentioned car import issues with Reagan; where is the equivalent with Yellen?
Until there is a salient point to be made about her conflicts of interest, doesn't it make sense to give her the benefit of the doubt?
Corporate America has taught us that even the potential appearance of bribes is a bad thing for the random employee.
We can’t accept a $30 gift card to Amazon without potentially having to talk to HR.
What you’re suggesting is that someone like Yellen is 50,000 times less interesting to consider as a possible point of corruption.
We're talking about that amount of money for just a few days of "work".
> Yet people begrudge her the 220K she does earn. Treasury Secretary and Chair of the Fed would be a multi million dollar a year jobs in the private sector.
That doesn't make any sense. These jobs don't exist in the private sector.
In any case, Treasury Secretary is not a lifetime gig. At most 8 years, probably less. And then Yellen will go back to the private sector, to cash in even more. These are ongoing, transactional relationships. Think of these speaking fees as a down payment.
Hmm?
Yellen was in public positions from 1977-1980, 1994-1999, and 2004-2018. She was a professor at Harvard from 1971-1976 and at UC Berkeley from 1980-1994. She's certainly made a lot of money from these sorts of speaking fees and there's criticism to be had, but she's spent far more time in academic or public positions than she has "in the private sector".
I don't think she's the same case as, e.g., someone who was employed by an investment bank for a long time, takes a federal position for a year or two, then goes back to working in banking.
True. Yellen clearly prefers public sector work.
However, I think there's a false dichotomy being presented. There's no inherent conflict between working in the public sector and being corrupt. The list of corrupt politicians is endless. Why not do what you love and cash in? Best of both worlds, from the corrupt politician's perspective.
If you have complexity you will have corruption. The more complexity, the more corruption. Some complexity is necessary, but most is not.
So instead of simplifying the system, you have to hire people that understand it to police it. Unfortunately the competent financial police are paid a small fraction of what they'd be worth in private industry, so now you have a mix of altruistic, incompetent, and opportunistic people. The latter pretending to be the former.
Heck, just any active codebase. Complexity is the default and is very very hard to fight.
You can a) reduce the incentives for abuse, b) reduce the complexity needed to hide abuses, c) both.
Since government is basically power, the incentives to abuse that power always exist. So look for complex government systems and you will inevitable find abuse (if you can navigate the system's complexity).
We need decentralized economics and finance.
[0]https://en.m.wikipedia.org/wiki/Abscam [1]https://oig.justice.gov/sites/default/files/archive/special/...
https://en.wikipedia.org/wiki/Jack_Abramoff
Back in the news last June:
https://www.courthousenews.com/lobbyist-abramoff-charged-in-...
Trump, Fox, and establishment Republicans all directly or indirectly said “the swamp is better than the alternatives”. See, for example, many of the excuses given for hiring all the 9 figure and up net worth cabinet members.
This is something that absolutely needs to be fixed in our society, and something that should unify 99% of people. But half of the country is under the delusion that the previous administration was somehow fixing this, simply because they said they were. This division makes it impossible to ever get anything done.
The speech is surely not worth that much. Is the exorbitant amount of money paid for the speech just an opportunity to be a patron of a "thought leader", i.e a legal bribe in other words?
$700k is not a material amount of money for Citadel, especially if it may contain information that can give them an edge.
If you hire U2 to do a a private show for your staff, you don't get those kinds of added bonuses.
When Masayoshi got 45 minutes in Trump Tower to convince Trump to push forward the Sprint/TMobile merger, do you think that Trump just handed out that favour for free? Because it was 'Good For American Business'? Or maybe at some later date, Trump might find himself in need of investors for his Trump Tower Tokyo, or some help in getting regulators to approve it?
That's not a speech, is a consult.
It's a way for powerful people to pay other powerful people for arbitrary things like 'speeches' so that they can exchange favours off the books in a very indirect way.
It doesn't have to be illegal or even nefarious, but it should raise eyebrows as a possible conflict of interest.
Monetary payments leave paper trails. What's an easy way around that? Come give a 30 minute speech!
From a quick Google search, there are plenty of actors and sportspeople who charge six figures for a speech.
I really don't understand what people want from her.
Yes
There aren't many of them so the is a resource scarcity. I'm not trying to suggest 700k in speaking fees isn't a bribe, but how much of a bribe is it?
I'd speak at a single conference for $1000, her $130k fee means her time is 130x more valuable as mine and I think that could be true.
There should be no going rate for a former fed chairman. It's a position of public trust that should not lead to personal profit.
We can't go back in time and pass ethics laws.
Is a position as a lecture of Economics at Harvard considering working for personal profit? Writing books on subjects that they are experts in? How about writing for the NYTimes? Appearing on TV? What about if they did all those things before taking a government job?
If your answer is yes to those things, then taking a high-level government position becomes impossible for anyone working class. Since you believe that the position bars them from any worthwhile future employment, they have to be independently wealthy before entering government service.
I personally enjoy reading the works of Ben Bernanke and think that he should be allowed to continue his work in economics despite having held a top position at the federal government. He's intelligent, insightful, and a good teacher.
Before I answer, are you seriously arguing that taking a job as a professor is the same as getting paid 1 million dollars for ~10 hours of work?
The debate seems to be over the price. $700k / yr from lecturing to hedge funds is bad but $150k / yr to do the same at Harvard is good?
(2) Her salary is in line with others in her position and is given in exchange for doing actual work.
(3) Harvard is not in a position to directly profit from potentially privileged information leaking out in her lectures to students
(4) Harvard is not in a position to directly benefit from Yellen influencing current government regulators/policy makers
(5) Harvard is not in a position to directly benefit from Yellen taking a subsequent regulatory/policy position in government
They don't? Harvard's $40 billion endowment is larger than Citadel's assets managed. Harvard is a hedge fund that does education as a side hustle.
If you want former fed chairs to never work in the industry again you're going to have to significantly increase compensation and make it a pension for life even after they retire. And the fact of the matter is that's just not how the system works right now so "well maybe we SHOULD tear down the whole system and do it differently" is not really a constructive point in the discussion, it's just a childish tantrum. If you think that's how the system should work, go pass some legislation.
Because she is already working for the state? If I was constantly holding talks for the competition instead of working I would get into a lot of trouble with my boss. I know this is different for politicians and some other government positions, to the point where in some countries a) they get a full living wage for doing literally nothing and b) get a bonus every time they show up(with show up meaning their presence was recorded for an attosecond that day). Its one of the reasons I consider the government of my home country a bad joke.
* Fit in a few speeches * Be worth $700,000 * Not be confidential, go against FTC rules, or raise ethical concerns * Isn't known to other researchers or experts (that could actually provide a research paper with supporting materials)
Further, is this the market rate for other financial experts, or just ones that have access to power and the ability to influence? Are there any financial experts or academics being compensated $50,000/hour to speak and don't have influence or power over financial organizations?
Why is it so hard to comprehend that some people have issue with government employees diving back and forth from regulation of entities to taking large sums of money from them?
Seriously though, why is that the case? If she's a public servant, she could donate her time to talks easily. When you're being paid that much money to speak, then are asked to sit in judgment on this company, are you really expecting her to bite the hand that feeds her? *At the absolute best it puts her in a terribly awkward position. At worst it's bribery.
This amounts to an argument that people can't go back and forth between the private and public spheres. To be fair, this is something some people believe, and was very visible in the case of Ajit Pai outrage. But if that's what we're saying, let's be clear about it.
I just also think they should recuse themselves from an investigation when those whom they've had significant dealings with are being investigated. $700k for 3 speaking gigs, we're not talking about a CEO she had lunch with one time, there is a significant business relationship there. That relationship might not affect Mrs. Yellen's judgment, but if she doesn't absolutely drop the hammer on Citadel it at least looks like bribery. The very fact that the question is raised is the problem.
Or I suppose you could say that anyone who has held a government position, left it, and then ever made money in the private sector is ineligible for future government work. In effect all this does is just bar past officials from being elected again. This again reduces the pool of qualified talent by a lot. Janet Yellen is probably the most qualified person in the country to be the fed chair, it seems like she should be allowed to imo.
Citadel's fees are among the highest. See for yourself:
https://extapps2.oge.gov/201/Presiden.nsf/PAS+Index/C22B882B...
> she might as well resign being treasury secretary
If she can't disentangle herself from the interests of her benefactors, then yeah. Maybe she should resign.
Oh, if she's still receiving money from Citadel, I agree.
If she's not still receiving money from Citadel, I don't see the relevance. I would expect anyone qualified for the job to have made paid speeches at any number of important financial institutions over the years. It wouldn't be in our best interests as citizens to have them recuse every time a matter concerning one of them arises.
Bill Clinton also had his share of critics because of that.
Is there real evidence of paid speeches being bribery? As others have said about 100k-500k is the going rate for corporate speeches from athletes, actors, etc.
politicians are supposed to be public servants.
I hear you can get Zuckerberg or Gates for that kind of money, but they make more than that in an hour just from their existing wealth.
But $300k is not outside the ballpark for what people make for speaking. It's fine to be outraged by that, but it is fair to call it "market".
The only reason outrage seems justified is that the demographics of those that can charge $300k a speech appears overwhelmingly dominated by government officials.
I'm open to being shown otherwise with explicit links.
Citadel probably paid way more for their employees to listen than for her to speak, in terms of wages.
I could be wrong here, what do I know. But that's my read on the situation, and it's why this sort of thing doesn't bother me that much.
They're often interesting, but they're fairly anodyne: a famous author talking about their recent book, a CEO talking about their successes or new focus on sustainability/diversity/etc, some broad perspective on current events. You can see how Goldman folks might benefit a little bit from knowing about (say) the likely timeline for vaccine roll-outs, but you could get much of the same info from an hour of NPR.
However, meeting the person seems like a nice perk or recruiting/marketing tool.
- all have an interest in finance
- are varying ages (so may not enjoy the same music)
- are from various countries (so may not be into the same sports)
and you have the budget, someone like Yellen is absolutely a substitute good for e.g. having a private Ludacris concert. It's entertainment and continuing education in one. Plus your staff get to brag about the private event to their millionaire peers who did not get that perk.
https://www.allamericanspeakers.com/searchfee.php?fee=6
I'm not inviting Alec Baldwin for his knowledge / advice.
Are you saying Yellen is not being paid for her knowledge / advice?
I am struggling to think that there are any examples that you won't dismiss, no matter how applicable.
Dan Schulman, Dara Khosrowshahi, Dr. Helmut Panke. And now I'm bored of scrolling through.
There is another bin that is "paid for brand-building advertisement." - i.e. celebrities.
The proposition is that ex-government officials are just getting paid market rate for her knowledge and insight.
If that's the case, it should be trivially easy to find non government officials people getting paid $300k a speech for their knowledge.
You've identified listings - which is better than I thought there would be ! - but not sales.
Yellen earned $7.2m in two years. If all three of those combined earned half as much in speaking fees over that same time, I'd be definitely convinced that it's ho-hum
If you're a motivated research reading this interested in answering this empirically, I'd suggest trying to find organizations that both pay this level of fees and have to disclose it to the public when they do (I'm hoping this might be the case for public companies under SEC regs, but that's just a hope)
People spent the energy to provide sources. Are you spending the same time?
What sources provides you the confidence to say that some demographics are "overwhelmingly dominated"...?
And that's exactly the bias I'm trying to eliminate with my question.
It doesn't seem like a crazy idea for a corporate retreat-style event. Have a day full of internal presentations reviewing the last year, describing future initiatives, etc. After dinner, Yellen talks, telling some stories about her time on the Fed, working with Clinton, and maybe caps it off with a section about "Future Challenges." People like hearing/meeting celebrities, so it caps the day off nicely while being reasonably educational too.
For that audience, a top economist could be a good choice for the same money.
Links to that actually happening is exactly the kind of evidence I'm asking for.
Links to that actually happening *for non government officials* is exactly the kind of evidence I'm asking for.
Edit: here's a link, since it only takes 10 seconds to find: https://www.allamericanspeakers.com/discover-your-speaker.ph...
Notable: Ava DuVernay (film director) starts at $200k. Tim Ferriss says $100k-$200k. Viola Davis: $200k and up. I'm certain that none of these people are obligated to these prices; if Citadel is buying, anyone would be silly to not raise the price. Conversely, all are certainly able to make speeches at discounted rates or gratis to schools, nonprofits, etc.
Also notable (because it refutes your priors) is a lack of public officials, or those who have held public office.
Edit (again): Here are private economists who make bank for speeches: https://www.allamericanspeakers.com/searchresults/economist#...
Sort by price and you'll see that people do hire economists to speak for six figures, even if they have no nexus to government. Yellen is higher-profile than most of these, and again anyone would be foolhardy to not double their rate for Citadel.
Here's an article about them: Matthew Mcconughey got $135k for one at the University of Houston; Katie Courik got $110k for speaking at the University of Oklahoma in 2006. Crucially, the article notes that a) fees are often confidential, but can go up to half a million dollars(!) and b) schools try to bargain them down.
https://www.insidehighered.com/news/2015/04/02/matthew-mccon...
Many universities also have "lecture funds" with pretty hefty budgets. I was not privy to the exact numbers, but assuming they run at cost, ticket price*capacity suggests some people are commanding six figures.
Here's Dan Schulman at Goldman Sachs: https://www.youtube.com/watch?v=4q_jVu5T80g
Or at a conference that runs $2300-$7000/head: https://www.youtube.com/watch?v=4q_jVu5T80g
This is admittedly a little bit murky, since some of these appearances might be part of the person's "day job": Helmut Panke talked at a bunch of auto shows about BWM and its new products. The ones I linked above, however, seem like they're probably not.
Is the current market rate for a speech $290k? And what are exactly the goods object of the transaction?
The goods object of the transaction is "continuing education perk for 500 highly-paid professionals." If I put 500 staff in a room and want to treat them, this is a nice perk that's not something they can buy on their own (even though many are millionaires).
Given this, Yellen should be getting $20,000 per speech, which would align way more realistically with expectations.
Treasury ethics attorneys have given Yellen flexibility to work on any related markets or broad financial services sector issues, with no limits on current or future matters, the Treasury official said. She may need to seek further authorization to deal with specific firms she listed.
In the memo granting Yellen permission to call the meeting of regulators, a Treasury ethics official, Brian Sonfield, said it would be "difficult, if not impossible" for Yellen to recuse herself from matters involving market volatility.
"You are the Secretary of the Treasury, the duties of which require you to be involved in a broad array of matters focused on these sectors," Sonfield wrote.
"Issues relating to these sectors could arise at any time without the opportunity for consultation with the ethics office," and "argue in favor of prior authorization."
source: https://www.streetinsider.com/Reuters/Exclusive%3A+Treasurys...
Do you see the problem? She is so trusted as an expert that people have given her authorisation to involve herself in matters related to firms she just took money from, regardless of the obvious incentives and conflicts of interest. Maybe you don't think those incentives or conflicts are a big deal, in which case I've got a bridge to sell you.
Isn’t seeking a waiver doing just that?
But delivering a speech that she may have delivered in other venues does not strike me as necessarily of conflict. I do think the ethics office should review after the fact and raise any concerns that arise, but generally I think we as citizens should be afforded the benefit of her expertise more often than not.
> delivering a speech that she may have delivered in other venues does not strike me as necessarily of conflict
This argument totally ignores the fact that the conflict of interest arises from the transaction, not from the content of her speech.
Pretty much. I think there should be a significant cool down period (let's say 5 years or so) after leaving a top public service or political position before you can make money from the private sector you were supposed to oversee. As far as I know something like that already applies to people who retire from the military and want to transition to a public civilian position.
Focus on Yellen's speaking fee is simply trying to explain away in advance why many people given access to data which could prove it either way and tasked with investigating will conclude this baseless conspiracy theory is a baseless conspiracy theory.
On a tangent, something similar happened with a Canadian Charity called WE [1] and them being chosen to run a billion dollar grant program for Canadian students during covid. It later came out that the charity had paid speaking/appearance fees to the PM's family as well as to the finance minister at the time. After enough outcry from the media + opposition + people, the finance minister resigned and WE was stripped of the contract.
[1] https://en.wikipedia.org/wiki/WE_Charity_scandal
It's the most arbitrarily thing imaginable, and you can just throw up any number for 'services performed'.
After Obama completed his term, he was immediately on the 'Speaking Fee' tour, including several million paid by a group of Italian banks in desperation [1], totally insolvent - for a a 45 minute speech (!). I wonder if what they needed was a 'Pep Talk' from a 'Former President' ... or perhaps someone influential to put in a good word with the ECB to push for loser monetary policy that might help save failing Italian banks?
I don't think speaking fees imply some kind of bad behaviour, but they are definitely smoke and often represent a conflict of interest.
It's a little bit funny that people don't recognize this: $700K (or whatever large amount), this is a material amount of money, you don't just spend this for no reason, you 'get something' for it.
As Hillary Clinton was about to win the 2016 presidency, masses of cash flowed into the Clinton Foundation (Norway and Australia were pumping in 10's of millions) but just as she lost - 'charitable donations' dried up. Have a look at this chart [2].
Just stare at this chart for a minute: massive cash flows to the charity someone expecting to be the most powerful person in the world, and then those cash flows completely evaporate as soon as we found it she wasn't going to have that power?
So, did Norway, Australia and all these international agencies and governments magically decided to be 'less charitable' in 2016?
Or was it that they were 'expecting to get something in return' for their massive charitable donations?
Let's not be naive.
It doesn't mean there is criminality or even excessive payments, but it's obviously a conflict of interest. If may be something as simple as 'The Norwegian Sovereign Wealth Fund wants 10 Minutes with the President, to get an introduction to some agency' - and that's it. A very expensive call, but possibly worth it.
And this is not 'political' and certainly not 'one side of the aisle' it's just business.
[1] https://www.express.co.uk/news/world/802063/Barack-Obama-spe...
[2] https://www.opensecrets.org/news/2018/12/clinton-foundation-...
Imagine the billions in property damage due to peaceful protests if a Trump appointee didn't recuse themselves.
Think about the business models...The college business model depends on maintaining prestige to continuously attract applicants willing to pay high admission rates. The finance business model uses money to make more money, and the risk to reward ration can be swayed depending on decisions made by certain individuals.
Perhaps I'm being too conspiratorial or cynical but it seems to me that this is the polite understanding between business and those with political power. We'll pay you a lot of money for very little work if you pass legislation that we like.
https://www.cnn.com/2016/02/05/politics/hillary-clinton-bill...
It's obvious these companies expect some sort of political benefit for paying these outrageous speaking fees, the part we don't know is to what extent there is an "agreement".
I will concede the agreements may not be communicated in any way, and just based on expectations. However, these fees would not continue to be paid if expectations did not continue to be mostly met.
I suppose that's technically true
This is very much an issue where both parties are not the same, Democrats do police their own and when they control the levers of power they do police the executive branch as well. House ethics investigations do happen all the time, and they would happen in the senate (and against hte executive) had democrats controlled the levers of power there too.
The whole reason this controversy exists is because Biden is enforcing rules and Yellen is specifically asking for an exemption from the rules. This would have been business as usual under Trump. He didn't even bother to divest from his own conflicts of interest let alone anyone else's. Remember his secretary of transportation taking low-interest loans from the chinese government to help her shipping company, while she was in office, for example? But with republicans controlling the Senate there was nothing that could realistically be done about it, the constitutional remedy for improper behavior from a cabinet member is impeachment.
"OK, these are the rules and this is maybe a little iffy, I'm going to document the conflict of interest and ask for permission" is how the system is supposed to work (at least according to the corporate/regulatory compliance training I periodically have to do), and that's hugely different from the "lol imma do it anyway" that existed under republicans. Pretending that's the same is not intellectually honest at all.
No need to doubt yourself on this one :D
In a sense I feel like this kind of corruption is a bit like short selling. You perform a corrupt act in the present with a tacit understanding that, at some point in the future, the beneficiaries of that act will pay you back.
The fact that this is a temporal play makes it seem like its not corrupt, but in fact all it does is put white gloves on the same kind of dirty deeds that happen in poorer countries all the time.
Really its not different, you just choose to respect this process and choose to dismiss another country’s process as “corrupt bribery”.
What’s happening in poorer countries is often just as roundabout.
It feels to me like this type of corruption is a temporal play in which you "lend" your influence in the present to somebody. Using your influence they pass legislation/regulation etc. that yields them lots of money in the future. Once you leave office, the people that you lent your influence to will pay you back with the proceeds they obtained while they were making use of your influence.
The more "standard" type of corruption (the kind people in nice suits usually think of when they say "corruption") doesn't involve a temporal play. You get money in the present for using your influence directly in order to benefit the people who paid you, also in the present/near future.
Perhaps my analogy to short selling is not fully accurate, but this is kind of how it feels to me.
A borrows a share from B, sells it to C D borrows the share sold to C, sells it to E.
The same share was borrowed twice and sold twice. That has nothing to do with naked shorting.
Player C thinks that they own a real share, but they own thin air.
My example was not naked short selling. At the end of the transactions, only E has a real share. B and C both have an IOU for a share.... they can’t loan it out again or sell it unless they recall the loan (which they can do at any time).
If you think this is a Ponzi scheme, just wait until you hear about fractional reserve banking! Every single bank loans out money it doesn’t ‘have’.... it loans out money account holders put in. That means there is more money in circulation than actually exists, because the person whose money was loaned out still has their full balance in their bank account.
You can read about stock lending here: https://www.marketwatch.com/story/how-to-shake-loose-change-...
To your question of “if both people demand their share back they will not get it”.... this is exactly what a short squeeze is. You are right, if the lenders demand their shares back, the short sellers have to scramble to get them back... they have to buy a share on the open market to sell.
Now, in normal times a short seller would just borrow a share from someone else to return to the person demanding it back, because normally there is always someone willing to lend their shares (for more and more interest as demand goes up)... of course, if all the shareholders refuse to loan out their share, shorts are screwed... and will have to pay crazy amounts of money to buy back shares that are really expensive.
This is what wallstreetbets is trying to do... get all the shares owned by their users who all refuse to loan them out, driving the price ridiculously high.
https://www.washingtonpost.com/archive/politics/1994/12/23/g...
What do you think Yellen is going to do 4-8 years from now?
Like, you have executives at some companies serving on boardships in unrelated industries. They aren't working two jobs.
What she did was give glorified TED Talks to a group. It's a performance.
Even more reason to think that it's "selling out" and not "real" work.
It's also possible that she's more valuable to Citadel in her current role. They might not want to remove her from it.
No one gets into public service in order to enrich others, but one day people wake up and find themselves open to a little bit of corruption.
https://www.npr.org/2016/08/17/490102648/the-clintons-wrote-...
> "The Clintons have always been very careful to walk about two inches inside the line,"
Obama very publicly "held politicians accountable" with the STOCK act and then very privately pulled it's teeth a couple months later (keeping it technically illegal while making it all but impossible to investigate).
Politicians should not be permitted to pass legislation concerning their conduct. Perhaps it should be put to state and national ballots as appropriate with a direct vote from the people.
The events that speakers are tied to would have zero attendees without big names attached to them.
I don’t see hackernews decry tech speakers who get paid to speak?
Without the ethics waiver there would be no hearing on Robinhood at all.
If so, and if they don't recuse themselves, there would indeed be a problem. Fortunately, tech speakers don't have anywhere near that kind of direct power.
If company y pays the manager in charge of purchasing at company x $600,000 to speak, then they bid on contracts with company x, there would also be a problem.
There's a limited supply of living former presidents. Far fewer than the number of institutions looking to up their prestige by getting a former president to give a speech. How much do you think it should cost to get a former president to give a talk?
Here's another argument. Non-political celebrities also have very high speaking fees (or the equivalent). Yet obviously these celebrities aren't being tacitly bribed. What is your explanation for that?
That's not the right question. The question is whether ex-Presidents ought to accept these bribes. Compare the post-Presidencies of Bill Clinton and Jimmy Carter, starkly different.
> Yet obviously these celebrities aren't being tacitly bribed. What is your explanation for that?
Celebrities aren't in positions of public service, so the whole concept of a "bribe" doesn't apply.
To add to this, we should also be holding Presidents to a higher ethics standard than, say, Kim Kardashian.
Celebrities are different because they make tons of money and are business propositions in and of themselves, meaning their star power could bring immense attraction to the event, which is part of what commencement speakers are for.
One could take this further and apply it to the entire concept of a revolving door; if an official can make a career out of lobbying and consulting after leaving public office, they'll be incentivized to prioritize future employers over the public interest.
Realistically, it's difficult to fully remove perverse incentives and still be able to attract talent (this applies to technical recruiting as well!). But there still need to be systems of accountability. Unfortunately, with two-party non-proportional representation, and a limited opportunity for voters to provide referendums on the corruption of party members separate from their policy viewpoints, there are many layers of insulation that prevent people from being held to account.
This is not necessarily true. The Clintons, Bushes, and Obamas are like one big happy family. Trump is the exception because he pissed off everyone, but even he used to be friendly with the Clintons.
Anyway this misses the point: in general, the system of buying political favors only works when political favors are repaid, and everyone operating in that system knows it.
https://www.thoughtco.com/former-presidents-speaking-fees-33... Former President Jimmy Carter "seldom accepts speaking fees," The Associated Press wrote in 2002, "and when he does he typically donates the proceeds to his charitable foundation."
> Clinton runs one of the most successful charitable orgs in the world.
So does Bill Gates. So what? Clinton also made more than $100 million for himself in speaking fees.
Nothing. Or, on second thought, maybe a large donation to a children's hospital. I would expect a public servant from the highest office to be committed to public service. The presidency shouldn't be monetized, but if a former president really needs money they could always sell a book. That doesn't create any perverse incentives like speaking fees.
Public figures don't get paid for TV or newspaper interviews, journalistic ethics explicitly forbids it, because paying people for being the source of information is seen as inherently corrupting.
Presidents have a 200k/yr lifetime pension that's pegged to inflation, plus a $1 million/yr travel budget and a fully funded and staffed personal office. Bill Clinton has been paid over $20 million by the US government since he left office through these programs. While in office presidents earn 400k, with all their living expenses paid for separately, meaning they get about 1.6 million dollars per four-year term straight into their savings accounts. Many of them make millions from sales of their memoirs alone. There is no reason for them to be demanding additional millions in exchange for giving a ten minute pep talk to a hedge fund except as a backdoor for corruption.
I don't see how this follows from your argument. As you acknowledge Clinton has a massive platform whenever he wants his views aired, and plenty of normal people are willing to pay his publisher money to read his book. Why would he fly to some hedge fund's dinner party to talk to a handful of half cut money-movers for free? I'd say that would be more suspicious, frankly.
Like, the guy clearly doesn't need money, he can do whatever he wants. There is no opportunity cost for him, he doesn't need to make appearances to put food on the table, the financial difference between a $300,000 appearance at Goldman and a free appearance at a kid's birthday party is essentially nothing to him.
If he thinks it's fun to hang out with hedge fund managers, he can do that, good for him, who cares. But them giving him tens of millions of dollars, on top of the tens of millions of dollars that the US government is already giving him, (which by the way is supposed to exist to disincentivize Presidents from seeking gifts or employment after leaving office), is extremely suspicious especially in light of the fact that his crowning achievement in office was deregulating their entire industry.
Nobody who charges six figure fees for speaking engagements needs the money to put food on the table. Getting paid silly money for a night of patronising some organization you wouldn't otherwise care less about is an ego thing, and plenty of stupidly rich people enjoy their egos being stroked by speaking fees without having any other favours to offer. I mean, some stupidly rich people still enjoy making obviously corrupt manoeuvres too, but that's not necessary to explain why ex-POTUSes and Hollywood stars start being interested in being private party entertainment when the sixth zero is added to the bill.
And literally nobody would say "that's fine, he probably just thinks its fun to hang out with hedge fund managers" if the guy who repealed Glass Steagall insisted he was donating his time and reputation to helping hedge funds impress their LPs. Especially not if foreign telephone manufacturers wanting him to do a keynote speech were still willing to offer massive sums of money.
After their last term, their official political career is basically over and almost anything they know worth telling is classified.
It seems hard to justify increasing prices after the fact outside graft.
Celebrities are bribed, they're called endorsements. Former presidents are worth less and less as they lose their connections. Their price tag depends on how much power they still wield....which is why Clinton and Obama still command high prices.
George Washington was a big supporter of canal-building. To honor Washington, the Virginia legislature decided in 1795 to gift him shares in two canal companies it had established. Washington agonized over what to do, because accepting the shares would give the impression that he was using the Presidency for his own personal gain, while rejecting them would be insulting. He also wanted to publicly show his support for the canal projects. He ended up requesting that the shares to be used to fund a university and a seminary.
Washington's status at this point was already secure enough that nobody would have seriously accused him of corruption, but he was extremely wary of doing anything that could in any way be perceived as self-interested. The fact that former politicians are taking massive speaking fees from businesses that their policies affected looks corrupt, and that in itself is already bad enough.
Also, Yellen isn't a former president, she is a former fed chair. It's not even remotely the same line of work.
She was when she made those speaking fees. Do you know she planned to reenter politics? Did Reagan or Bill Clinton have plans to reenter politics after their presidencies?
>We often pay bills after recieving service. Quite normal.
Except we agree to those bills beforehand. This would require that these payments be guaranteed years before they are made. Often times the leadership of these companies changes so that expands the list of people who need to be involved in this conspiracy. When the number of people involved in a conspiracy go up, the likelihood of that conspiracy being revealed goes up.
Once again I will ask is there any evidence for this conspiracy beyond these circumstantial connections?
I'm sure those who paid them did too.
> When the number of people involved in a conspiracy go up, the likelihood of that conspiracy being revealed goes up.
And when they're all involved, nobody is left to care, investigate or prosecute.
> Once again I will ask is there any evidence for this conspiracy beyond these circumstantial connections?
The evidence is everywhere. They do favors for specific people and groups and get paid by those people and groups. It's really not complicated.
So everyone in government is in on this conspiracy?
>The evidence is everywhere. They do favors for specific people and groups and get paid by those people and groups. It's really not complicated.
That is circumstantial evidence. Is there any evidence that doesn’t equate to tying yarn on a cork board?
Some people work at Citadel for years after graduating from top colleges without making $700k in total income, yet Citadel shelled out that amount over the course of two years for a bunch of speeches from an altogether boring economist.
Janet Yellen is a laughably bad speaker. See for yourself:
https://www.youtube.com/watch?v=1YAEHJvNscs
Now she's the Treasury Secretary and she has power and authority to manage a situation that directly affects Citadel. They make money off Robinhood. They back Melvin. And they benefit from a regulatory environment that is all too forgiving to market-makers.
People like Yellen are not paid for their oratory skill (and oratory skill is not something that is particularly valuable in her current or previous roles). They are paid because they are smart, accomplished, respected, and well known. When an organization has them come speak, people want to come listen and it lends the hosting organization prestige.
The regulations currently protect market-makers like Citadel from having to adhere to many of the rules that other market participants have to follow. This includes the locate requirement of Reg SHO, as well as the buy-in procedure for failure to deliver. How are we supposed to trust Yellen to regulate one of her own biggest customers (maybe the biggest)?
It's an absolute joke to pay Yellen six figures to give a speech, and that's why people are thinking, "wait a sec, this is bribery right?" Are you suggesting that Yellen should get paid because she is "smart, accomplished, respected, and well known"? The impropriety of these lavish payments comes from the fact that she's a cabinet secretary expected to keep these very firms in line.
FINRA doesn't let vendors give their individual clients gifts of more than a hundred dollars per year. Yet the current TREASURY SECRETARY raked in $7mm in the past two years for giving bad speeches and somehow we're supposed to just be cool with that? Give me a break. She shouldn't be involved with this.
I also said in my top comment that these speaking fees are ridiculous. I don't think they are good use of money. However it is quite a leap to go from these being a poor use of money to them being obvious bribery. Plenty of people and organizations spend money on stupid things. This includes speaking fees for non-politicians. All sorts of famous people from actors to philanthropists to technologists get paid to speak in front of crowds. Are they all forms of bribery?
If you are going to accuse people of corruption, you need to have evidence that is stronger than the existence of a motive, which is basically all you have currently.
Read (b)(1) here: https://www.law.cornell.edu/uscode/text/18/208
Then, read (d) here: https://www.law.cornell.edu/cfr/text/5/2635.502
Yellen disclosed the sources of her honoraria and acknowledged a financial interest (here: https://extapps2.oge.gov/201/Presiden.nsf/PAS+Index/18A4D129...). She received written permission based on the determination "that the interest is not so substantial as to be deemed likely to affect the integrity" of her work. The question isn't whether she has committed a crime (she has not), nor whether she has motive to unfairly benefit Citadel (she does). Rather, the question is whether that financial interest is substantial enough to likely affect her work (a discretionary call already made by a government official), and whether the process itself is fair to other market participants (I contend that it is not).
No doubt it my mind, WSB and other agencies are "laundering" political kickbacks through speaking fees. It's long been an open secret/assumption in the industry.
I co-founded a startup that published speaking fees, the IASB tried to find an angle to come after us but failed. Eventually proxies came after us to try and intimidate us from publishing fee and speaking calendars for politicians and pundits.
Wow. Can you tell more?
Bright lights tend to disinfect.
If something like this could be coordinated globally, it would be a great way to put pressure on power.
Wow what happened today, WallStreetBets is now an official agency paying kickbacks?
https://www.wsb.com/about/
This wouldn't even be an argument if Citadel wasn't operating in the the market as if it were a casino. Yellen is extremely talented and an expert in her field. She should be paid for those skills and knowledge.
This idea that public officials shouldn't be participating in the society that we have created and that they should be held up to the Standards of Mother Teresa or Ghandi is idiotic, IMO.
The mere fact that we are even discussing this is ridiculous, and instead should be discussing what do we expect from our markets. Should they be a free market that should resemble the "fundamental" price of an asset or is it just a casino where everyone is in search of a greater fool and acting accordingly? It seems more and more likely that if we allow for it to behave like B, we're not going to get A.
I don't think so. I think this is a way to hold quote unquote liberals to a higher standard than everyone else.
I'm aware the term "swamp" may stir up some Trump era animosity, but this is the definition of a member of "the swamp". They're literally everywhere in positions of power.
Politician/authority figure gets paid exorbitant amounts of money for inane services by entities who directly profited from contested policy enactments. That's not a conspiracy. That's just bribery with extra steps to make it "legal". Just because some people dont like it or embarrasses some authority figures, doesn't make it "some crackpot conspiracy". Just like throwing the word nazi around was a craze just recently for anyone that doesn't agree with your general life views.
The people's responsibility is to point out conflicts of interest and potential corruption. No politician or authority figure should be safe from that, no matter their party or demographic.
https://www.bloomberg.com/opinion/articles/2019-03-01/insura...
Don't call your bribes 'success fees', call them 'speaking fees'.
I'll also note that you include a citation about the Clinton's speaking fees, you don't cite anything to support or argue that Clinton speeches led to the repeal of Glass-Steagall, despite your implicit connection there. I write this as no Clinton fan BTW, in part for this repeal.
It's easy to get angry over the nebulous concept of creeping corruption in our political systems. This is because getting into the nitty-gritty details and actually determining which particular speech is a bribe and which is not is difficult and boring. In the long term, I suggest that this sort of anger can lead to a political apathy which is damaging to a functioning democracy.
Now, with all that said, Yellen should probably recuse herself given the recency and amount of these talks. Independent of whether or not she was actually corrupt, it's a bad look.
None of this is proof but to me it paints a clear picture of regulatory capture and corruption.
going to guess you are missing the `m` from `$150m`
So have I, just in free beer!
As a counterpoint, we have seen far worse corruption in broad daylight and it's not coming from people who took speaking fees.
May I further suggest that the decades-long propaganda campaign against the Clintons has worked wonderfully and you are possibly a victim of it. And not just you, but millions of people.
It may not have been corruption but it certainly has that appearance to me. The Obama administration famously never prosecuted the finance industry. He's now making millions a year. Reagan got millions to visit Japan shortly after leaving office. The leaders of our government are getting rich after being in government. I think it's corruption.
Much of the investigations against the Clintons have been political theater. It's hard to prove the sort of corruption I'm pointing out. It's also in no politician's best interest to do so. They make millions after service so their economic interest is to investigate inane accusations rather than real corruption.
It's an extremely low bar for what you could consider corruption. Maybe coziness at worst. Like would these policies simply not have happened without speaking fees?
It could, of course, all be as you say and these are just instances of public servants doing what is in the public good who go on to get enriched by the industries their policies benefited. I don't think so though.
I don't know about Yellen's personal finances, but the chairman/woman of the Fed makes $203k/yr. I bet 50%+ of the people reading my comment make more money than that, and unless my comment is graced by a well-known CEO I sincerely doubt any of you have as important a job.
Maybe if we want to hold our public servants (generals, commissioners, congressmen, secretaries of x, etc) to higher ethical standards we should compensate them well enough that a speaking fee like this is "more money" rather than "help pay off my mortgage".
Unlikely, according to the BLS the 2019 Median Pay for software engineers in the US is $107,510 per year
https://www.bls.gov/ooh/computer-and-information-technology/...
It probably sometimes happens that speaking fees are paid as a bribe, but that's illegal and also not specific to speaking fees (similar popular schemes are to hire the person as consultant, or to buy something from him for a much higher price than the real value). It also raises the same red flags, when it turns out that the speaking fees were far above market value.
Unless that was the case here (I don't know how much other speakers are paid at Citadel), it seems premature to assume nefarious behavior.
Can you give some examples?
Corporate speaking fees are Cameo for very rich people. They pay a less-than-rounding-error amount of money to have someone famous show up and interact with them. Similar to me paying Perez Hilton $50 on Cameo to record a message for my buddies. It doesn't make a lot of financial sense to pay someone famous to talk to you. but people do it anyway, because people pay for rare experiences.
Brief association with fame has a direct financial value, it always has. You don't need a conspiracy to explain that.
It’s not similar if the person in power enacts laws that directly benefit the person who paid for the speech.
Association with fame has relatively small value.
Speeches are the best way to bribe someone. Once they give the speech, it's "services rendered". There's no shady money transfers to explain, since it's all out in the open. There's no risk of fraud. There's no way to be caught in a lie, because the entire payment is pegged to physically speaking in front of a group, which they actually did do. The only questionable thing is the amount paid, which is subjective.
At Yellen's level, access to information is what has the most value. That's how I would bribe someone like that. No paper trail
A lot better than prison though.
It's hard to look at the past decade or two and think there was a hinderance to corrupt acts. Sure, people complain but rich people got their tax breaks, Wall St. gets friendly policy, and mega corps get bailed out. The system is clearly working for those involved.
In other words, it's perfectly legal bribery, and thus the smartest way to bribe someone. Just like political campaign contributions.
Why risk illegal bribery when you can go the safe route, where everyone knows, but nobody goes to jail?
I don't feel it's any different than writing a book.
Bernie Sanders made good money off books: https://www.cnn.com/2019/04/13/politics/bernie-sanders-milli...
Bush's speeches, for reference: https://abcnews.go.com/Business/president-lady-bush-profit-s...
[1] https://en.wikipedia.org/wiki/Lobbying
Just a local example. Nordic Business Forum[1] has had for example Barrack Obama as speaker. They have maybe 7k visitors, ticket prices are around 1k-3k€/person. They tend to be sold out well in advance.
Few years old list of per speech prices for high profile speakers [2]. For example Obama $400k, Tony Blair $200k.
[1] https://www.nbforum.com/ [2] https://www.thestreet.com/investing/highest-paid-public-spea...
...and if Reagan had instead imposed tariffs on imported cars, he probably would have later been paid to give speeches by groups that liked the tariffs.
That's how it will be for nearly every consequential Presidential decision other than those few that have broad bipartisan support and little controversy.
Man, a whole 150 dollars, those Clintons must be making bank! :P
Seems like a great impartial position.
But then again, if we wanted finance experts to chair the Fed and be the treasury secretary without any prior monetary relationships with banks and hedge funds, we would probably have just some academics. A lot of academics in economics/finance get paid for legal testimony on behalf of companies and such, too.
I think most social justice advocates would agree that corruption and regulatory capture are bad. If anything, I'd expect a response more like "why are women like Yellen and Hillary Clinton being uniquely targeted with these accusations?" (whether they are or aren't). I'm not sure where the parent poster is sourcing the claimed identity-based defenses of her alleged corruption, though.
So the dilemma in the situation you describe is between whether to ignore diversity concerns and in turn be ignored, or to speak up and risk losing class solidarity. It sucks that we have to make that decision; it would be better if less-marginalized people made proactive efforts to ensure we're involved in and will explicitly benefit from initiatives or movements that implicitly aligns with our interests.
It takes oxygen away from the actual controversy and shifts the discussion to how stupid the cover is. You might even have people start arguing about gender and earnings gaps. Diversion successful.
The White House press secretary whose brother works at Citadel.
Edit: Her cousin* according to Bloomberg https://www.bloomberg.com/news/articles/2021-01-31/the-citad...
https://www.legacy.com/obituaries/greenwichtime/obituary.asp...
> Amateur sleuths found fertile ground to fan conspiracies. They didn’t hesitate in casting Jeff Psaki, a money manager at Citadel, as proof of dark arts at the firm. It started with claims that Psaki, an ex-Goldman trader, was married to White House Press Secretary Jen Psaki. He’s not: He’s her second cousin and has never spoken to her, a person who knows him said. But on it went, ricocheting from chatboards to Twitter and beyond.
Quick, name all your second cousins!
I also wish progressives realized they were being used as tools in this battle.
Those who are already on the "team" (i.e. - they identify as a member of the party but have no particular ideology of their own) may appear swayed, but usually this is just a bad faith effort on the part of party loyalists to stifle criticism from within.
Where is the voice of the people who are not really fooled?
20-30 years ago it would have been about family values, christian values, and down with the gays. In 20-30 years it'll be something else, but what won't change is those in power stay in power.
The hypocrisy of Harris/Biden to get up and declare the system corrupt... THEY ARE THE SYSTEM.
Citadel's a market maker that processes a lot of transactions in pretty much every stock in the universe. It'd be like me saying that someone with ties to power company shouldn't investigate the mafia, because the mafia regularly used electricity.
https://www.usnews.com/news/top-news/articles/2021-01-27/hed...
This is exactly why we need an unbiased source to look into this matter.
FTA:
> "Melvin Capital has repositioned our portfolio over the past few days. We have closed out our position in GME (GameStop)," the spokesman said in a statement.
"Yellen has requested an ethics waiver to hold the meeting, a Treasury spokeswoman said, confirming a Reuters report."
I don't see it as a clear conflict of interest that needs recusal out the gate. How much is that $700,000 to Yellen? The payments are done. What other speaking engagements has she made and how much did they account for? I remember when Tom Wheeler was put in to lead the FCC, and people were very much against him because of his ties to the industry, but by the time he was done, people had turned around on him.
So, here you have a case where someone isn't hiding something, is asking for a waiver, and being up front about this, and you are calling this open corruption.
Really? Open corruption? This means they've actively done something wrong, or corrupt, and I don't see that here.
Should this be looked at and watched? Sure.
Does that mean there is outright "corruption" here? No.
Citadel has a good interest stake in Melvin Capital: https://www.wsj.com/articles/citadel-point72-to-invest-2-75-...
Melvin Capital is the hedge fund that's directly hurting from retail investor actions. That's an easy google you can do yourself.
Citadel stands to lose quite a bit of money from retail investors now and potential in the future. So them giving a regulatory authority 700k to talk about the issue... is it really hard to imagine which way Yellen is going to lean on this one?
What kind of question is this? It's two-thirds of a million dollars. You are treating it like they bought her some chicken nuggets after soccer practice.
If that amount is really such a pittance, she should pay it back to Citadel.
I can't even think of a way that attitude makes sense.
Everyone in the other comments is just assuming this as true, I don't see the sexism argument anywhere in what the press secretary said.
Anyone got a source?
If Citadel accounted for 70% of all her speaking fees, that would warrant a closer look - this is a move along carry on for me.
But, I think the outrage here is a bit more general. Buying speeches is essentially influence tokens. Any amount and the idea it's happening for personal gain of a government official in America is what frustrates people. It kind of reads as if you're saying 'eh, it's not really that many influence tokens'.
For example, if this amount is a "move along, carry on" for you, I'd be curious to know when you draw the line specifically?
Wait until these same people find out about various "senior advisors", board memberships, and think tanks!
This isn't ideal but public service isn't a vow of poverty and someone will pay them. What is important (and appears to be the case here) is that they are public and disclosed. Citadel is only 10% of her overall speaking fees over two years. She owes them nothing.
When we give money to someone, there is an expectation of receiving something in return.
- Because you can: $700k is not a lot of money to these orgs
- Because you have to: if you don't spend the money you lose it in the budget
- Because you want to brag: social media points for you and all your employees (look who we got to meet and you didn't!)
- Because you want to attract new talent: your org is more attractive if you offer these events to your employees
etc.
I think any of these are just as plausible as corruption.
If you give a judge a slice of pizza and they accept it, they can be fired.
We all understand this. Yet, "speaking fees" are accepted =)
I know you may object to how much she is paid. However, there are only 15 former chairs of the US Federal Reserve in history, and at the time she was one of 3 living (and not currently serving) ones, the first woman, and Paul Volcker is 92. Based on some basic searches, a celebrity commencement speech fee may run from $50-100K, and I would argue that Yellen's thoughts are far more valuable.
Let's turn this around. What freedoms would you take away from people that wanted to be government appointees? What if she had been an executive of Citadel for a year instead? If she doesn't do speaking fees, Janet Yellen still has a mortgage and bills. Speaking fees are public, have low quid pro quo leverage, and they are disclosed.
This seems to be the best possible arrangement to have qualified people in positions of power.
According to Wikipedia, her net worth is 16,000,000. (I must be missing some commas somewhere.)
You don't think offering someone 4% of their net worth to speak for an hour could buy some influence?
The problem is getting more money than the people they serve just because they happen to be servants of the people.
https://www.bloomberg.com/news/articles/2020-03-24/fed-hires...
The "speaking" fees are really just bribes, lets me honest about it. It's so corrupt and so obvious and begs the question what are you going to do about it?
https://wallstreetonparade.com/2021/02/citadel-didnt-just-ba...
why would Citadel bail out melvin ?
Same reason why people buy stocks when it's tanking (remember, for every seller there's a buyer): because they think the fund's undervalued and they can buy it at a discount.