Bought and Paid For
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52 “Nanny-state paternalism” from “The Break-Up, Did Obama Just Dump His Best Friend on Wall Street?,” New Republic, June 17, 2010.
53 “well exceeds the already enormous $89 billion” from “This Bailout Is a Bargain? Think Again,” New York Times, April 16, 2010.
54 Average salary of financial CEOs in 2006 from “Is Goldman, Lehman Pay Set in Smoke-Filled Room?,” Bloomberg Businessweek, April 4, 2007.
54 Goldman, trading profits, and quarterly profit breakdown for Bank of America, Citigroup from SNL Financial.
56 “Helped repeal the Glass-Steagall Act” from “Congress Passes Wide-Ranging Bill Easing Bank Laws,” New York Times, November 5, 1999.
56 Larry Summers’s total earnings from work at D.E. Shaw and subsequent speeches from “Hedge Fund Paid Summers $5.2 Million in Past Year,” Wall Street Journal, April 5, 2009.
61 “Citigroup was forced to sell Phibro” from “Citigroup Sells Phibro Unit to Occidental Petroleum,” Bloomberg, October 8, 2009.
63 Consumer loan statistics and banks’ quarterly profit breakdowns provided by SNL Financial.
65 “$7,000 for every citizen in the city” from “Your Share of City’s Sky-High Debt Is $7,153,” Daily News, January 23, 2009.
65 Michael Stamenson’s “rattlesnake” quote and description of lavish lifestyle from “The Master of Orange County, a Merrill Lynch Broker Survives Municipal Bankruptcy,” New York Times, June 22, 1998.
66 “I would say Stamenson is” from ibid.
66 Description of Robert Citron including patronage of the Elks Club from “Ill-Fated Fund Manager: Mr. Main St., Not Wall St.,” New York Times, December 11, 1994.
67 Description of Wall Street consortium that financed Orange County from “Orange County, Calif., Makes Bankruptcy Filing,” New York Times, December 7, 1994.
67 Robert Citron’s purchase of $100 million in swaps from “Market Place; in Orange County, Strategies Sour,” New York Time, December 5, 1994.
68 “$6.3 billion” in derivatives from ibid.
68 “Misappropriating public funds” from “Citron Pleads Guilty to Felonies,” Los Angeles Times, April 28, 1995.
68 “Joke” comment form Securities and Exchange Commission official from author’s interviews with people close to the matter.
69 Merrill fine of $470 million from “The Master of Orange County, a Merrill Lynch Broker Survives Municipal Bankruptcy,” New York Times, June 22, 1998.
70 Stamenson’s description of Citron as a “highly unsophisticated” investor from “Ill-Fated Fund Manager: Mr. Main St., Not Wall St.,” New York Times, December 11, 1994.
70 “Stamenson had donated $4,000” from “The Master of Orange County, a Merrill Lynch Broker Survives Municipal Bankruptcy,” New York Times, June 22, 1998.
Chapter 3: Deep, Deep Roots
71 “Where’s Sandy, where’s Sandy” and description of Reverend Jackson’s relationship with Sandy Weill from author’s interviews with people close to the matter.
76 “He donated $1 million” from “Dimons Give $1 Million to University of Chicago,” Chicago Business, Crains, June 1, 2005.
76 “$3,000 per month” from “Goldman Sachs Will Be Sitting Pretty with Emanuel in Obama White House,” Washington Examiner, November 21, 2008.
76 $450 trillion estimated outstanding national amount of derivative contracts provided by the International Swaps and Derivatives Association (ISDA).
77 Account of Robert Rubin pestering colleagues during the Super Bowl and description of office from “An Old Wall Street Pro’s Voice in the Campaign,” New York Times, September 22, 1996.
79 “The objective of promoting United States exports” from “Mexican Bailout Defended Amid G.O.P. Criticism,” New York Times, July 15, 1995.
80 Robert Rubin’s role in crafting Mexican bailouts from “A Struggle to Deal with a $20 Billion Precedent,” New York Times, February 23, 1995.
81 Senator Alfonse D’Amato accusing Lawrence Summers of misleading Congress about true state of Mexican economy from “D’Amato Seeks to Limit Foreign Bailouts,” New York Times, July 22, 1995.
81 “The looting of America” and Pat Buchanan’s subsequent accusation that the Mexican bailout benefited Goldman Sachs from “Mexican Rescue Plan: Washington; Rescue; Durable or Brief,” New York Times, February 2, 1995, and “Mexico: Who Was Right?,” New York Times, August 25, 1995.
83 “There is a point to that!” and joke between Summers and Rubin from “Mexico Repays Bailout by U.S. Ahead of Time,” New York Times, January 16, 1997.
84 Description of conversation between Rubin and Gary Gensler from An Uncertain World, Tough Choices from Wall Street to Washington, New York: Random House, 2003.
87 Rubin’s quote that “Citigroup was the best” offer from author’s interviews with people close to the matter.
87 Greenberg’s refusal to pay Rubin “$8 million a year to fly around the world” from author’s interviews with people close to the matter.
88 “Fish, read books, and play tennis” from “Former Treasury Secretary Joins Leadership Triangle at Citigroup,” New York Times, October 27, 1999.
89 Clinton administration’s efforts to increase homeownership rates from “Fannie Mae Eases Credit to Aid Mortgage Lending,” New York Times, September 30, 1999.
Chapter 4: “So, Do You Want to Come to the Administration?”
91 Description of Warren Spector’s fund-raising activities for Obama from author’s interviews with people close to the matter.
93 “$145.9 billion” cost for Fannie and Freddie bailout from “Cost of Seizing Fannie and Freddie Surges for Taxpayers,” New York Times, June 19, 2010.
94 Cayne’s description of Spector as “Lord Fauntleroy” from author’s interviews with Jimmy Cayne.
94 “Tight shorts” from author’s interview with Jimmy Cayne.
95 Fink’s description of Obama as a “moderate” from author’s interviews with people close to the matter.
95 “Dimon’s personal donations” from “JPMorgan CEO Jamie Dimon Donates Serious Cash to Democrats,” OpenSecrets.org, July 21, 2009.
96 Description of Spector’s first meeting with Obama and subsequent reaction from author’s interviews with people close to the matter.
98 Poll data showing Obama was leading McCain from “Obama Seen as More Likely to Beat McCain,” New York Times, February 26, 2008.
99 John Mack’s membership in an exclusive country club from “A Path to a Seat on the Board? Try the Fairway,” New York Times, March 11, 2006.
100 Rubin’s prodding of Citigroup traders to take more risks from author’s interviews with people close to the matter.
100 Description of “Barack’s Bundlers” from “Money Chooses Sides,” New York magazine, April 15, 2007.
100 “It’s Rahm” comment from Tom Nides to John Mack from author’s interviews with people present during the conversation.
101 Details of Nides’s and Emanuel’s relationship from author’s interviews with people close to the matter.
101 Account of Emanuel plunging a knife into a piece of steak from “Life Imitates West Wing for Obama’s Attack Dog, Rahm Emanuel,” Sunday Times (London), November 7, 2008.
102 Rahm Emanuel’s $16 million salary from “In Banking, Emanuel Made Money and Connections,” New York Times, December 3, 2008.
105 Account of McCain and Paulson heated dispute from author’s interviews with people in the room.
107 Buffett’s $5 billion investment in Goldman Sachs from “Buffett to Invest $5 Billion in Goldman,” Wall Street Journal, September 24, 2008.
107 Dimon’s recognition that bailout money helped prevent a possible collapse of JPMorgan from author’s interviews with people close to the matter.
107 Nides’s invitation to work for the Obama administration from author’s interviews with Morgan Stanley executives.
109 Account of Nides’s first speech as head of SIFMA from transcript of speech given at SIFMA 2009 annual meeting.
110 “No one here would ever hire Tim” from “Obama Is from Mars, Wall Street Is from Venus,” New York magazine, May 22, 2010.
Chapter 5: “We Know Each Other from Chicago”
113 Account of Perella celebrating at San Pietro from author’s interviews with people close to the matter.
114 Description of Dimon’s relationship with Bill Daley from “In Washington, One Bank Chief Still Holds Sway,” New York Times, July 19, 2009.
115 Reverend Wright’s sermon in which he claimed “God damn America” from “Obama’s Pastor: God Damn America, U.S. to Blame for 9/11,” ABC News, March 13, 2008.
115 Wright’s description of Italian Americans as “garlic noses” from “Rev. Jeremiah Wright and Them ‘Jews,’” San Francisco Examiner, June 21, 2009.
115 Wright’s prediction that the “Jews” would drive Obama from his church from “Rev. Jeremiah Wright Says ‘Jews’ Are Keeping Him from President Obama,” Daily Press, June 10, 2009.
115 Wright’s description of Louis Farrakhan as a leader who “truly epitomized greatness” from “Obama’s Farrakhan Test,” Washington Post, January 15, 2008.
115 “Perella soon discovered” from author’s interviews with people close to the matter.
117 Peter Sidoti’s estimation of small business hiring from Sidoti & Company Research.
120 “Total bullshit” and FBR’s Paul Miller’s reaction to the news that Citigroup would turn profitable from author’s interview with Miller.
122 Goldman’s claim that the company was forced to take government money from “Banker: Take Your TARP Money Back,” CNNMoney.com, March 27, 2009, and from “Goldman Sachs Would Like to Repay Treasury, CFO Says,” Bloomberg, February 4, 2009.
123 “He came to Wall Street” and profile of Pandit from “The Most Powerless Powerful Man on Wall Street,” New York magazine, March 1, 2009.
124 Dimon’s remarks to CNBC’s Melissa Francis from February 18, 2009.
124 Ken Lewis’s comments about Bank of America’s business from “Bank of America Soars after CEO Says Bank Was Profitable,” USA Today, March 12, 2009.
126 John Edwards investment in Fortress from “Edwards Says He Didn’t Know About Subprime Push,” Washington Post, May 11, 2007.
127 Lack of bank lending from “Regulators Urge Banks to Lend to Small Businesses,” Wall Street Journal, February 6, 2010.
128 Citigroup’s profit analysis provided by SNL Financial.
128 Bank of America’s and Goldman’s profit analysis provided by SNL Financial.
131 Lucas van Praag’s account of Goldman’s business from author’s interview with van Praag.
131 Morgan Stanley’s $8 billion loss from “$9.4 Billion Write-Down at Morgan Stanley,” New York Times, December 20, 2007.
131 John Mack’s decision to alter Morgan Stanley’s business plan from author’s interview with Mack.
132 “vampire squid” from “The Great American Bubble Machine,” Rolling Stone, July 23, 2009.
133 “Someone making $100 million” and description of Andrew Hall’s trading activities from author’s interview with Kenneth Feinberg.
136 Description of Mack’s meeting with Lawrence Summers from author’s interviews with people close to the matter.
Chapter 6: Doing God’s Work
138 “Now’s not that time” from “Obama Pressures Wall Street Over Pay,” New York Times, January 29, 2009.
140 “Let me get this straight” from Jonathan Alter’s The Promise, New York, Simon & Schuster, 2010.
140 AIG’s obligations and payout to Goldman Sachs from “Goldman Sachs Still Has $6 Billion in AIG Exposure,” Bloomberg, March 20, 2009.
140 Goldman’s bonus pool from “Bank Set for Record Pay,” Wall Street Journal, January 14, 2010.
140 “$67 million bonus in 2007” from “Goldman Awards Blankfein a Record $67.9 Million Bonus,” Bloomberg, December 21, 2007.
141 Buffett’s $5 billion investment in Goldman Sachs from “Buffett to Invest $5 Billion in Goldman,” Wall Street Journal, September 24, 2008.
141 Account of Senate majority leader Harry Reid and Goldman president Gary Cohn from author’s interviews with people close to the matter.
142 Hate mail to John Mack and Lloyd Blankfein from author’s interviews with people close to the matter.
143 “God’s Work” from “Meet Mr. Goldman Sachs,” Times (London), November 8, 2009.
145 Description of Blankfein’s upbringing from “Lloyd Blankfein, a Profile,” Forbes, December 16, 2009.
146 2008 Wall Street compensation figures from “Wall Street on Track to Award Record Pay,” Wall Street Journal, October 14, 2009.
153 Internal e-mails from Goldman executives describing its inventory of CDOs as “shitty” from “Sachs and the Shitty,” The Economist, April 29, 2010.
153 Goldman’s role in Greek financial crisis from “Wall St. Helped to Mask Debt Fueling Europe’s Crisis,” New York Times, February 13, 2010.
Chapter 7: Fat Cats and Fat Bonuses
158 Account of discussion between Rubin and Obama regarding Valerie Jarrett from author’s interviews with people familiar with the conversation.
159 BlackRock’s fees for managing Maiden Lane assignments from www.newyorkfed.org/aboutthefed/Blackrock .
159 “Being in the flow of information” from “BlackRock to Earn $71 Million to Oversee Maiden Lane,” Bloomberg, July 14, 2009.
163 “We’re the only thing separating you guys from the pitchforks” from author’s interviews with people close to the matter.
163 Obama’s comments that Blankfein and Dimon were “savvy businessmen” from “Obama Doesn’t ‘Begrudge’ Bonuses for Blankfein, Dimon,” Bloomberg, February 10, 2010.
165 Description of Ken Langone’s exchange with Lawrence Fink from author’s interviews with people familiar with the discussion.
165 Account of Perella’s exchange with Fink from author’s interviews with people familiar with the discussion.
166 Account of Steve Croft interview from 60 Minutes, March 23, 2009.
168 Account of discussion between Mack and Blankfein from author’s interviews with people familiar with the discussion.
171 Description of Dimon’s trip to Washington and use of private plane from author’s interviews with people close to the matter and “Blankfein, Mack Flub Making Obama Meeting; Dimon Cozies Up,” Wall Street Journal, December 14, 2009.
173 Spencer Bachus’s comments about “a pet rattlesnake” from author’s interview with Bachus.
174 Account of Spitzer’s use of a prostitute from “Spitzer Is Linked to Prostitution Ring,” New York Times, March, 10, 2008.
175 Account of Congressman John Boehner’s meeting with Dimon from author’s interviews with people close to the matter.
176 Senator Kirsten Gillibrand’s claim that “70 percent of New Yorkers hate Wall Street” from author’s interviews with people familiar with the matter.
176 Account of Goldman lobbyist pressuring Congresswoman Carolyn Maloney to not investigate the firm’s activities from author’s interviews with people familiar with the discussion.
177 “16 percent of the economy” from “Record Share of the Economy Spent on Healthcare,” Washington Post, January 10, 2006.
178 Report that Moody’s Investor Service might downgrade rating of U.S. debt from “Moody’s: U.S. Rating Could Be Pressured in Long Term,” Reuters, January 10, 2009.
Chapter 8: Money Well Spent
181 “There’s no guarantee” from author’s interview with Lucas van Praag.
181 Goldman’s “$23 billion” in bonuses from “With Bigger Bonuses, Another Upside for Banks,” New York Times, December 31, 2009.
182 James Gorman’s salary from “Morgan Chief Sees $15 Million Pay Day,” New York Times, April 5, 2010.
183 2009 compensation statistics for Bank of A
merica, JPMorgan, Citigroup, and Morgan Stanley from “Banks Set for Record Pay,” Wall Street Journal, January 14, 2010.
186 Treasury’s claim that the government would make $8 billion in profit from its investment in Citigroup from “U.S. Will Begin Selling Citigroup Shares, Could Make Almost $8 Billion,” USA Today, March, 29, 2010.
187 “I hear about all these wonderful innovations” from “Paul Volcker: Think More Boldly,” Wall Street Journal, December 14, 2009.
192 Blankfein’s 2010 $9 million annual compensation from “Blankfein’s $9 Million Bonus Is PR Genius,” Wall Street Journal, February 5, 2010.
194 “Volcker is crazy” from author’s interviews with people close to the conversation.
197 “Goldman will surely deny” from “A Tale of Two Bailouts,” Wall Street Journal, July16, 2009.
199 Account of Treasury official who orchestrated AIG bailout while owning Goldman Sachs stock from “In U.S. Bailout of A.I.G., Forgiveness for Big Banks,” New York Times, June 29, 2010.
202 Description of Buffett and Goldman’s program to empower small businesses from “Goldman Sachs, Buffett Team to Empower Small Businesses,” Washington Post, November 18, 2009.
202 “By the end of 2009” from Goldman Sachs Letter to Shareholders, Goldman Sachs 2009 annual report.
204 Details of Mary Schapiro’s compensation from “Starting Public-Sector Jobs with Parting Gifts in Hand,” Washington Post, February 10, 2009.
206 Account of Dimon’s conversation with Senator Gillibrand from author’s interviews with people familiar with the matter.
210 “Vikram will survive” from author’s conversations with people close to the discussion.
212 “We’re all Democrats” from “General Electric Pursues Pot of Government Stimulus Gold,” Wall Street Journal, November, 17, 2009.
212 “$1 in compensation” from “Citi’s Pandit Vows to Take $1 Salary and No Bonus,” New York Post, February 12, 2009.
213 Account of Vikram Pandit’s and Sheila Bair’s mutual disdain from author’s conversations with people close to the matter.