The Amount Of Wall Street Money In WH Pockets Is Stunning

It’s not just Congress that is in hock to the financial industry. Dan Froomkin assembles all the reporting on how much money Obama’s economic team has raked in from Wall Street, and it is jaw-dropping.

* Larry Summers, Obama’s chief economic adviser, was paid $5.2 million for his part-time work for a massive hedge fund in 2008 alone. He also took in more than $2.7 million in fees for speaking engagements at such places as Citigroup, Lehman Brothers, Merrill Lynch and Goldman Sachs — including one visit alone that netted him $135,000 from Goldman Sachs.

* Michael Froman is deputy national security adviser for international economic affairs, and a hugely influential White House player with key roles in both the National Security Council and National Economic Council. He made more than $7.4 million at Citigroup from January 2008 to January 2009, including a year-end bonus of $2.25 million that he received just days before coming to work at the White House — though well after he had already served in a key post in the transition. Froman was a senior executives at Citigroup’s Alternative Investment division, which “ran up hundreds of millions of dollars in losses [in 2008] on their esoteric collection of investments, including real estate funds and private highway construction projects, even as they collected seven-figure salaries and bonuses.”

* David A. Lipton, a presidential special assistant who also serves on both the national security and economic councils, made $1.5 million from Citigroup in 2008, managing its Global Country Risk group — another shining Citigroup success. He received a bonus in 2009, right around the time he started work at the White House, of $762,000.

* Jacob J. Lew, a deputy secretary of state, is another key player in international economics. He, like Forman, was at top officer of Citigroup Alternative Investments, earning $1.1 million in 2008 – plus an as-yet undisclosed bonus in 2009.

* Gene Sperling, a top adviser to Treasury Secretary Timothy Geithner, in 2008 earned $887,727 from Goldman Sachs simply for providing “advice on charitable giving.” He also made $158,000 for speeches mostly to financial companies.

* Lee Sachs, another top Geithner aide, “reported more than $3 million in salary and partnership income from Mariner Investment Group, a New York hedge fund.” When he took his new job, he reported that he was still owed a bonus where the value was “not ascertainable.”

* Lewis Alexander, yet another top Geithner aide, is the former chief economist at Citigroup, for which he was paid $2.4 million in 2008 and the first few months of 2009.

* Mark Patterson, Geithner’s chief of staff, was one of the top lobbyists at Goldman Sachs before joining the Obama campaign. He took in what seemed at first glance to be a relatively modest-by-Goldman-standards salary of $637,230 in 2008. But it turns out that was only for three months’ work — he left Goldman in early April. Until then, his title had been vice president for government relations, and he acted as a lobbyist on a wide range of issues including tax treatment of corporate reorganization transactions, nonbinding shareholder votes on executive compensation, and over-the-counter energy derivatives.

Froomkin doesn’t get into Treasury Secretary Geithner’s relationship with Wall St. (to Geithner’s credit it is less a buckraking bonanza than a backroom, clubhouse bond). But he does trace this particular financial mafia back to the Capo di Capo, former Treasury Secretary, Citigroup honcho, and deregulatory mastermind, Robert Rubin, who helped crater Citi and the financial system and walked away with $126 million.

Yes, these are the guys in charge of advising Obama on how to rein in Wall St. and restoring sanity to the financial services sector. It goes a long way toward explaining why the White House is on the political rack and losing the faith of both its own base and Independents.

But if there is one good thing already coming from the Scott Brown election,it is that the White House perhaps realizes it can no longer survive on the wrong side of white-hot popular resentment. Yesterday, reform hero Elizabeth Warren was invited in to meet with David Axelrod. Today, the most sensible, and credible advocate of real reform, former Fed Chief Paul Volcker, is reportedly joining the President as he lays out some proposals to put real restrictions on the Wall St. casino.

Personally, I’ve always thought the best clawback strategy would be a surtax on incomes over, say, $5 million. There aren’t many salaries in the United States that top that mark, except on Wall Street (though perhaps a number of overpaid CEOs would beg to differ).

Update: President Obama, with Volcker standing behind him, just proposed sharp, new limits on banks that are aimed at preventing excessive risk-taking and insulating the public from risks that banks choose to take. One key element: a “Volcker Rule” that would separate commercial banking (which is backed by the U.S. government) from private equity, hedge funds and speculative trading. The proposals will cause a lot of agita on Capitol Hill, but there is a key and promising shift here: instead of deferring to what seems politically feasible on Capitol Hill (which is of course limited by the billions that the financial lobby pours into lobbying), Obama is actually challenging Congress to do the right thing and enact real reform. Now he’ll have to fight, but that’s what his base has wanted him to do all along.