Obama Admin’s TPP Trade Officials Received Hefty Bonuses From Big Banks

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This post first appeared at Republic Report.

U.S. Trade Representative Michael Froman attends a leaders' retreat during the Asia-Pacific Economic Cooperation (APEC) forum in Bali, Indonesia, Monday, Oct. 7, 2013. (AP Photo/Dita Alangkara, Pool)
US Trade Representative Michael Froman attends a leaders' retreat during the Asia-Pacific Economic Cooperation (APEC) forum in Bali, Indonesia, Oct. 7, 2013. (AP Photo/Dita Alangkara, Pool)

Officials tapped by the Obama administration to lead the Trans-Pacific Partnership trade negotiations have received multimillion dollar bonuses from CitiGroup and Bank of America, financial disclosures obtained by Republic Report show.

Stefan Selig, a Bank of America investment banker nominated to become the undersecretary for international trade at the Department of Commerce, received more than $9 million in bonus pay as he was nominated to join the administration in November. The bonus pay came in addition to the $5.1 million in incentive pay awarded to Selig last year.

Michael Froman, the current US Trade Representative, received over $4 million as part of multiple exit payments when he left CitiGroup to join the Obama administration. Froman told Senate Finance Committee members last summer that he donated approximately 75 percent of the $2.25 million bonus he received for his work in 2008 to charity. CitiGroup also gave Froman a $2 million payment in connection to his holdings in two investment funds, which was awarded “in recognition of [Froman's] service to Citi in various capacities since 1999.”

Many large corporations with a strong incentive to influence public policy award bonuses and other incentive pay to executives if they take jobs within the government. CitiGroup, for instance, provides an executive contract that awards additional retirement pay upon leaving to take a “full time high level position with the US government or regulatory body.” Goldman Sachs, Morgan Stanley, JPMorgan Chase, the Blackstone Group, Fannie Mae, Northern Trust and Northrop Grumman are among the other firms that offer financial rewards upon retirement for government service.

Froman joined the administration in 2009. Selig is currently awaiting Senate confirmation before he can take his post, which collaborates with trade officials to support the TPP.

The controversial TPP trade deal has rankled activists for containing provisions that would newly empower corporations to sue governments in ad hoc arbitration tribunals to demand compensation for laws and regulations they claim undermine their business interests. Leaked TPP negotiation documents show the Obama administration is seeking to prevent foreign governments from issuing a broad variety of financial rules designed to stem another bank crisis.

A leaked text of the TPP’s investment chapter shows that the pact would include the controversial investor-state dispute resolution system. A fact-sheet provided by Public Citizen explains how multi-national corporations may use the TPP deal to skirt domestic courts and local laws. The arrangement would allow corporations to go after governments before foreign tribunals to demand compensation for tobacco, prescription drug and environment protections that they claim would undermine their expected future profits. Last year, Senator Elizabeth Warren warned that trade agreements such as the TPP provide “a chance for these banks to get something done quietly out of sight that they could not accomplish in a public place with the cameras rolling and the lights on.”

Others have raised similar alarm.

“Not only do US treaties mandate that all forms of finance move across borders freely and without delay, but deals such as the TPP would allow private investors to directly file claims against governments that regulate them, as opposed to a WTO-like system where nation states (i.e. the regulators) decide whether claims are brought,” notes Boston University associate professor Kevin Gallagher.

Lee Fang is a reporting fellow with the Investigative Fund at the Nation Institute. He covers money in politics, conservative movements and lobbying. Follow him on Twitter @lhfang.
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  • Anonymous

    What was the agency thinking to tap people with such major conflicts of interest? What was the administration thinking to let them.

  • PATTY PUG

    I am thoroughly disappointed with our bankers and government.

  • moderator

    EconAnalysis,

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  • Chuck

    Apparently the term “Conflict of interest” has no meaning anymore.

  • Jfiddle

    Paid troll in the house?

  • 12255

    …greedy and poor governments, no guessing which side of the debate you support…

  • Anonymous

    Just redefining business.

    Your conflict is in their interest…. profit!

  • Anonymous

    Don’t worry, they’re pretty impressed with themselves.

  • Anonymous

    I suspect EconAnalysis that you come from an industry that benefits from TPP. Your entitled to your opinion no matter how erroneous, however some of us seeong this as eroding our democracy further.

  • Anonymous

    Not good stop TPP

  • Anonymous

    Keep shining a light on these cockroaches. You know it’s a problem when they scurry when you do so. I wish getting rid of them was as easy as calling the Orkin man, we sorely need some kind of fumigation here.

  • SICK IN SEATTLE!

    Thanks for reporting,KEEP IT UP,WEneed to be saturated with this to force Change! I know America is getting really FED UP WITH THIS CORUPTION!

  • htmalom

    There is very little about trade in TPP. It basically gives global corporations tools to circumvent laws. Nafta wasn’t really about trade either. It made it easier for corporations to get cheaper labor from Mexico and to exploit resources from Canada. Common people get screwed-bottom line. At the very least we get no say in what happens.

  • Anonymous

    Let’s look at NAFTA – the North American Free Trade Agreement between the US, Canada, and Mexico.

    Why does there need to be such a trade agreement between THREE countries?

    The US could reach a trade agreement with Mexico. The US could reach a trade agreement with Canada. Mexico and Canada could reach a trade agreement between themselves. So what is the benefit of a multi-country free trade agreement? Who benefits from this? Why all the secrecy in negotiating it? Why does Congress want to give fast-track authority to reach such an agreement to the President?

    Multi-country free trade agreements should be avoided. The United States should make trade agreements with each country individually. Of the 12 countries in the proposed TPP, Trans-Pacific Partnership, each of the 12 countries individually should negotiate a trade agreement with the other 11 countries. Who should all of the 10 other coutries be affected by what only TWO of the countries agree to?

  • David Fulenwider

    “the TPP is key to increasing America’s exports–” Is that a promise or a hope? Any guarantees? “Free trade helps all nations involved.” Only if it is truly free!!! There are plenty of examples of America being snookered by trading partners who find ways to keep U.S. exports out. Think about Japan as one example. You sound a bit naive.

  • Anonymous

    Clinton PROMISED the same with NAFTA. How has that worked out for most Americans? Cheaper goods, yes, but at what price? Millions of jobs “lost” or shifted to lower-paying service sectors. Manufacturing (and greenhouse gas production) shifted to countries with lax environmental and consumer product protections. (China has benefited in the short-term economically but at what long-term environmental/health cost? Will it even be economically sustainable?) It’s spurious to argue that the only alternative to unlimited free trade, to corporations overriding national laws and regulations, is a country “being forced to produce everything they could ever want with the limited resources within their own borders”. A case could be made that the more dependent we are on outsourced production the more vulnerable we are to manipulations/breaks of supply due to economic/political changes in the producing nations. Unless, of course, you don’t consider the cost of our massive military/security apparatus keeping supply lines open part of the cost of doing business. Just as our jobs shifted from liveable-wage manufacturing thanks to NAFTA to “relatively more efficient and productive” service employ where workers have their healthcare insurance (Medicaid) and food stamps subsidized by taxpayers. NAFTA created a large trade deficit with Mexico, Canada and other nations. Hundreds of thousands of Mexican corn farmers were forced to leave their land due to low-priced, taxpayer-subsidized U.S. corn flooding their markets, often moving to overcrowded cities. This “helps all nations involved”? A more accurate statement would be that free trade, as defined in NAFTA or the TPP, helps all corporations involved. No surprise there as major corporate/financial players largely wrote these agreements.

  • NJHope

    I just have to question every single thing Obama is doing now. The signs are not good. Not good at all.

  • William Jacoby

    Will he get the bonus even if Congress denies the President fast-track?

    Between these people in trade talks and Clapper/Hayward in NSA/Booz, we really need to realize what is going on. Obama isn’t stupid; so why is this stuff happening?

  • Jane

    The TPP is an abomination. I voted for the President twice. I’m now completely disillusioned. Hardly anyone reports on the horrors that are being formulated in secret by corporate lobbyists in this “trade” agreement. But really, it’s not a trade deal at all. It’s a protectionist racket for corporations. A SOPA-like wish list of monopoly protections for Pharmaceutical Corporations and Media conglomerates. It’s disgusting, and if it is rammed down our throats, it will be to the detriment of generations of Americans.

    PS. As if drug prices aren’t high enough – these trade deal, from leaked drafts concerning Intellectual Property IP – patent protections for drugs will be dramatically expanding and generics will largely be prevented from coming to market. This will result in hundreds of billions of dollars in increased prices, and will create newly unassailable monopolies that will sue governments if they feel regulations to protect people cut into their *potential* profits. It’s obscene.

  • Jane

    One-sided reporting? There is hardly ANY reporting going on concerning how bad this treaty is. This isn’t about free trade or jobs. This is about new protections for corporations. You can keep blathering on about protectionists and anti-free trade, but what you really are saying is that you think the government should be creating unassailable monopolies via treaty. This doesn’t encourage competition. There is already plenty of incentive for pharmaceuticals and media conglomerates. They are tremendously profitable. Now they want the laws re-written so that they enjoy even MORE protections. This isn’t about NO protections, this is about not expanding protections and demolishing the public domain, which is what these dramatic IP expansions are aimed at.

    People aren’t alarmed enough. Oh, and why do you think that is? Perhaps that because these talks are conducted entirely in secret – except for “stakeholders”, which apparently doesn’t include the citizenry, only corporate lobbyists, which have free access and are essentially writing the terms of the deal.

    This will create higher drug prices, less competition, and monopolies that are difficult to impossible to reign in, as local regulations and authority become moot in the face of secret international tribunals.

    The particularly galling thing about your argument is that you’re pretending some free-market position. This is nothing about having a free-market. It’s about destroying the market in favor of corporate protectionism.

    But of course, if I want to read a post like yours, I’ll just go look at the official talking points given out by the administration – an administration, which by the way, I voted for twice – to my ever lasting shame.

  • Anonymous

    Obama is a disappointment. He is no better than greedy republicans. He presented himself to the public as a man for the people. Still he talks the talk, but does not walk the walk. Each appointment of his is one after one a corporate patsy. So who is there to trust. Sorry but Hillary is too entrenched, and has not stuck her neck out on one issue. She will not take the high road, then neither has the republican party. I would trust Senator Elizabeth Warren.

  • Anonymous

    We need to abolish the Federal Reserve but the last president that tried to do that was shot in the head in Dallas, Tx. “Washington DC is the entertainment branch of the Military Industrial Complex” Frank Zappa

  • Anonymous

    What makes you think Congress aren’t getting bonuses for this as well ?

  • William Jacoby

    Will no Congressmen take the lead in making the revolving door illegal? Can they start with Michael Hayden? Do we have to award private bonuses and salaries on top of public pensions and salaries to people who have repealed the Constitution and are shipping jobs overseas? Any Congressman who won’t investigate this phenomenon must be presumed to be preparing his resume for K Street. I’m sure many are.

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  • Anonymous

    Another corporate pimp. What a suprise. Best country money can buy!

  • Anonymous

    The cost of campaigns is the basis of this corruption of what politicians serve. Public financing of campaigns or free television time would help level the playing field and free politicians from being obligated to the rich. Possibly more public TV stations could help with candidates exposure and also add education availability.
    The revolving door is corrupting the system also.

  • Jerry Squarey

    I thought Obama was going to enforce the revolving door policy, just a slight of hand I guess. He can’t possibly think Selig will bring an unbiased approach. Bank of America should have changed it’s name to Bank of Greed after 2008 because that defines their Mission Statement.

  • Jerry Squarey

    He has disappointed me also. I voted for him the first time because I could relate in many ways. Then the bailout. Then one broken promise after another, I think legacy will be his failure of the people of this country, not affordable healthcare.

  • Jerry Squarey

    Sounds like it’s key to increasing imports, money money money, more for greedy Bankers, Big Corporate power mongers and Wall Street. Having most of the money in this country just ain’t enough, gotta have more. The only place to get it is to expand out into the world. If you’re familiar with the World Domination game Risk, TPP sure looks a lot like it.