By Pam Martens and Russ Martens: October 21, 2016
Michael Froman
If there is any truth to the allegation that Russia is behind the hacking of emails being released by WikiLeaks, then the American public owes Russia a huge debt of gratitude. At a time when the American people are sharply focused on how the leader of the free world is chosen, WikiLeaks is giving us an unprecedented, historical opportunity to understand how corporate money in politics has corrupted everything we believe in as a democracy.
This week, for example, emails from WikiLeaks show that President Obama, using the email address of bobama@ameritech.net, was communicating directly with Michael Froman of Citigroup in 2008, who fed Obama lists of recommended appointments to his cabinet. In an email from Froman dated October 6, 2008, with Froman using his Citigroup email address of fromanm@citi.com, Hillary Clinton shows up on Froman’s list for Secretary of State or head of the U.S. Department of Health and Human Services (HHS). In a separate list attached to the email, Eric Holder was recommended for U.S. Attorney General at the Department of Justice or as White House Counsel. (See the email and the attachments here.) In less than a month after Obama’s election as President on November 4, 2008, Obama had nominated Clinton to be his Secretary of State and Holder as his Attorney General. Despite the unprecedented corruption rooted out on Wall Street by regulators, Holder failed to prosecute any of Wall Street’s top executives for the crimes that led to the greatest financial crash since the Great Depression.
Froman had served as Chief of Staff to Robert Rubin when Rubin was Secretary of the Treasury in the Bill Clinton administration. Rubin led the effort to repeal the Glass-Steagall Act, which barred investment banks and brokerage firms on Wall Street from merging with commercial banks that held FDIC insured deposits for savers. The Glass-Steagall Act had been in force since 1933, after Congress had conducted three years of hearings showing the recklessness and corruption of the major Wall Street banks. Rubin left the Treasury Department and promptly took a job at Citigroup, the primary beneficiary of the repeal in 1999. Over the next decade, as Citigroup was serially charged by its regulators for abusing the public trust, Rubin collected compensation of $126 million.
Froman followed Rubin to Citigroup where he served as Chief Operating Officer of Citi Alternative Investments and later as Managing Director of Citi Infrastructure Investors, a unit of Citi Alternative Investments. The latter is the division that blew up the bank in the same month that Obama was elected President. Froman had been a major bundler for Obama, raising funds that USA Today placed at $200,000 to $500,000.
Just seven days after Froman sent his Hillary and Holder recommendations to Obama in 2008, Citigroup received $25 billion in a bailout. Other Wall Street banks received similar amounts. But what happened just 19 days after Obama’s election was unprecedented in the annals of U.S. financial history. Citigroup received an additional infusion of $20 billion in equity from the government, assets guarantees on more than $300 billion of its toxic assets, and, it was secretly receiving billions of dollars in low-cost loans from the Federal Reserve – an amount that would cumulatively add up to $2.5 trillion from 2007 to 2010. This is how we reported in November 2008 on Citigroup’s teetering status as the President-Elect was secretly receiving his personnel marching orders from one of Citi’s executives:
“Citigroup’s five-day death spiral last week was surreal. I know 20-something newlyweds who have better financial backup plans than this global banking giant. On Monday came the Town Hall meeting with employees to announce the sacking of 52,000 workers. (Aren’t Town Hall meetings supposed to instill confidence?) On Tuesday came the announcement of Citigroup losing 53 per cent of an internal hedge fund’s money in a month and bringing $17 billion of assets that had been hiding out in the Cayman Islands back onto its balance sheet. Wednesday brought the cheery news that a law firm was alleging that Citigroup peddled something called the MAT Five Fund as ‘safe’ and ‘secure’ only to watch it lose 80 per cent of its value. On Thursday, Saudi Prince Walid bin Talal, from that visionary country that won’t let women drive cars, stepped forward to reassure us that Citigroup is ‘undervalued’ and he was buying more shares. Not having any Princes of our own, we tend to associate them with fairytales. The next day the stock dropped another 20 percent with 1.02 billion shares changing hands. It closed at $3.77.”
Matt Taibbi of Rolling Stone would report that “In January 2009, just over a month after the bailout, Citigroup paid Froman a year-end bonus of $2.25 million. But as outrageous as it was, that payoff would prove to be chump change for the banker crowd, who were about to get everything they wanted — and more — from the new president.” Jack Lew, who worked in the same division at Citigroup as Froman and had also worked in the Bill Clinton administration, received a bonus from Citigroup of $940,000 following its massive bailout. An insolvent bank, existing on a lifeline from the taxpayer, was paying those bonuses. Lew became U.S. Treasury Secretary in Obama’s second term, following Obama’s appointment of Tim Geithner as U.S. Treasury Secretary in his first term. Geithner was President at the New York Fed at the time it was funneling much of the secret $2.5 trillion in loans to Citigroup. (See related articles below.)
Froman was not just involved in recommendations on top level cabinet posts, he was also overseeing rank and file positions. In an email dated Saturday, October 18, 2008, Froman, again using his official Citigroup email address, sent the following email to Obama’s advisers:
“Review Teams
“Attached is the latest version of the Agency Review teams. It is a closely held document, so please treat it with the same sensitivity as ours. If you all could take a quick look at the lists for the agencies in your area, that would be helpful. I think the hope is that, while there are no guarantees, some of the people on these lists might make their way into the agencies ultimately. Our role, therefore, is to check whether there is much overlap between the names here and the names were seeing/generating for sub-cabinet positions in each agency. There doesn’t need to be total overlap, but if there is a total disconnect, it would probably be better to rectify that now vs. later.
“I hate to ask, since I just send you another long spreadsheet to check, but if you could do this tomorrow and get back to Lisa (copied here) and myself, that would be great. Thanks.”
Early in Obama’s first term, Froman was appointed as Deputy Assistant to the President and Deputy National Security Adviser for International Economic Affairs. Today, Froman is U.S. Trade Representative and the man behind the highly controversial and highly secretive Trans-Pacific Partnership trade deal.
This is how Politico sums up how trade deals are being deliberated under Froman’s command:
“If you want to hear the details of the Trans-Pacific Partnership trade deal the Obama administration is hoping to pass, you’ve got to be a member of Congress, and you’ve got to go to classified briefings and leave your staff and cellphone at the door.
“If you’re a member who wants to read the text, you’ve got to go to a room in the basement of the Capitol Visitor Center and be handed it one section at a time, watched over as you read, and forced to hand over any notes you make before leaving.”
If Russia is behind these leaked emails and keeping Americans informed on how their government actually works behind the scenes, then it’s not a smear against Russia but a smear against how miserably corporate media has failed in this job.
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