21 Million Reasons to Look Out for the Banks
It takes a lot to shock a bunch of lawyers who practice False Claims Act cases.
Those of us in this field tend to think we have seen all manner of fraud, corporate greed and just plain bad stuff.
Recently however, an article by David Dayen of the New Republic exposed something very troubling, and it flew all over the list serves we all review.
It ain’t illegal and that may be the most troubling thing about it. Apparently, Antonio Weiss, the man nominated to be Under Secretary of the Treasury for domestic finance and now serving as counselor to the Secretary of the Treasury, acknowledged that he would be paid—wait for it—$21 Million dollars in “invested income and deferred compensation” by his former employer to serve in the government. His former employer is an investment bank, just in case you thought he somehow was getting this money from an unrelated industry. Indeed, when he was nominated for the undersecretary position I heard pundits talk about the need for subject matter expertise within the Treasury Department. Maybe that expertise comes at a price.
The reporter who broke the story wrote that Mr. Weiss would likely still be entitled to the money in his current position of Counselor to the Secretary of the Treasury.
Even more worrisome, the article claims such payments are “routine” at major banks.
Now look, people have to eat. People are in my view entitled to go from one job to another. There may be no connection here whatsoever to recent news that the Banks are lobbying to get regulations on Federal Housing Authority Insurance loosened so that if they make a mistake nobody could sue them. It may be a mere coincidence that the rules regarding mortgage servicing duties give an awful lot of wiggle room to the banks who service mortgages even when they screw up. The regulations in any government agency can hold the key to a successful case against a company bent on defrauding the government. If the regulations are too loose, it can be hard to sue. Hence the False Claims lawyers concern as to who is in charge of which policies here.
Hey, I supported bailing out the Banks when they were about to collapse in 2007, too. I bought and still buy the argument that we need a financial sector to have an economy.
However, at some point this looks like something…well, rotten.
$21 Million is not taking a tip. It is a little difficult to believe that the regulations promulgated by the treasury and the decisions being made by the Treasury reflect the average citizen’s concerns when the plutocrats serving there not only come from big banks but also get big money from big banks to go work at the Treasury Department.
Once Mr. Weiss takes the position, do you think it’s possible that he would not take a call from the Chairman of his investment bank? Even when that bank is continuing to pay him $21 Million Dollars?
It all is apparently legal. Nobody is saying anything different. Nobody even has any evidence that anyone has done anything…err…wrong, but on the other hand, the banks won’t say much about it.
I predict we will see a wave of denials and explanations, like: the Treasury is really complicated and only a few people understand how anything works and as a result those people are highly compensated. It’s true that these people would be paid a lot if they did not enter government service, and gee, it’s only fair that they not suffer in the service of their country.
I don’t see the banks paying $21 Million to Mr. Weiss if he decides to serve his government by entering the military reserve or becoming a park ranger, however.
Is it really a coincidence that this happens with people who decide to go from an investment bank to serve in the Treasury Department?
This arrangement raises way too many questions when we look at it from the standpoint of trying to fight fraud in the United States.