Former Treasury Secretary Timothy Geithner has, predictably, cashed in his favors to Wall Street by joining a financial services firm, Warburg Pincus. According to a press release from the private equity firm, Geithner will be President of the company and a Managing Director as well as a member of the Executive Management Group. In other words, Geithner will be well compensated at Warburg Pincus which has over $35 billion of assets under management.
In his role, Mr. Geithner will work closely with Warburg Pincus’ Co-Chief Executive Officers, Charles R. Kaye and Joseph P. Landy, on overall firm strategy and management, investing and portfolio management, organizational and funding structure, and investor relations.
Oh, I would imagine Mr. Geithner has quite a Rolodex of investors he can bring to the firm, investors who owe him a favor or two after he helped secure them trillions in TARP money and Fed loans. Geithner, if nothing else, has a considerable number of IOUs from his time at the New York Fed and US Treasury Department.
Geithner is set to do quite well for himself after his “public” service. He also is getting a $500,000 book deal.
Mr. Geithner said, “Warburg Pincus has an excellent record of performance, a very compelling global strategy and an ethical reputation of the highest regard, I look forward to working with my new colleagues and to contributing to the firm’s continued growth and success.”
Hiring former government officials to cash in on their connections is an ethically dubious proposition at best. So check back on that reputation.
As if any more hypocrisy was needed in Geithner’s exploitation of his government service, the part of Wall Street Warburg Pincus operates in is private equity – the branch of finance capitalism that President Obama and Co. scrutinized continually when running against Bain Capital alum Mitt Romney.
The Obama 2012 Campaign endlessly noted the transgressive nature of private equity business practices as well as the chiseling of solid companies through fees and the reckless piling on of debt that drives many host companies into bankruptcy. And now that the campaign is over, a top Obama Administration official has decided to join a prominent private equity firm.
You can’t make this stuff up.
Photo from Government of Argentina under public domain.