By Pam Martens and Russ Martens: January 24, 2021 ~
Haven’t we learned anything about properly vetting people for the highest offices in the U.S. government?
Former Fed Chair and Treasury Secretary nominee Janet Yellen has failed to report the details of millions of dollars in fees that she earned in 2018, the year she stepped down as Fed Chair, as she went on a whirlwind of speaking engagements in foreign cities around the world. Yellen’s “leadership” role with the Bloomberg New Economy Forums which had the “active participation and support” of an organization openly tied to the Chinese Communist Party, raises further serious red flags. And yet, Yellen sailed through her Senate Finance Committee confirmation hearing this past week, gaining a favorable vote of 26-0. A full Senate vote to confirm Yellen as Treasury Secretary is expected to occur tomorrow.
What Yellen did disclose on her Office of Government Ethics financial disclosure form showed that in 2019 and 2020 she made a cash haul of more than $7 million in speaking fees, the majority of which came from Wall Street trading houses, mega banks and hedge funds. Yellen stepped down as Chair of the Fed on February 3, 2018. Over the next 10 months, in addition to her foreign gigs, Yellen also appeared at numerous stateside paid engagements for Wall Street firms like JPMorgan Chase, Morgan Stanley, and Jefferies. She has failed to make public the transcripts of her speeches at these events or the specific amounts she was paid.
After the news broke of Yellen’s $7 million haul, Senior Reporter Jesse Eisinger of ProPublica Tweeted: “Deeply troubling two-fisted money grab from banks by Janet Yellen. This is corruption, but isn’t called that because it’s so quotidian.” Eisinger also noted: “Sure, Yellen might think she can make independent decisions once in office. But how arrogant is it to imagine that money corrupts everyone but you?”
Many of the banks Yellen accepted cash windfalls from were regulated by the Fed prior to her departure. These banks are also recidivist lawbreakers. JPMorgan Chase has been charged with, and admitted to, five criminal felony counts brought by the U.S. Department of Justice while it was being supervised by the Fed. The public deserves to know how much Yellen received from JPMorgan Chase in the year after she left the Fed. Citigroup, a smaller bank than JPMorgan Chase, paid Yellen over $990,000 in 2019 and 2020, according to her financial disclosure form. Citigroup received the largest Fed bailout in global banking history following the Wall Street crash of 2008.
We have learned that Yellen didn’t even come clean with the abbreviated information she did provide to the Office of Government Ethics. For example, Yellen was a speaker at the Bloomberg New Economy Forum in Singapore in 2018; appeared virtually at the event in 2020; and was a member of its Advisory Board. The Office of Government Ethics asks nominees to list “Employment Agreements and Arrangements.” There is no mention of her role on the Advisory Board of the Bloomberg New Economy Forum or any speaking fees she may have collected to speak at its 2018 and 2020 events. (Considering that Yellen charged the Texas Christian University $135,000 to speak in March of 2019, it seems highly unlikely Yellen would travel 9600 miles to Singapore for a billionaire’s event on a pro bono basis.)
One of the Co-Chairs of the Advisory Board for the Bloomberg New Economy Forum in 2018 was Zeng Peiyan, the former Vice Premier of the State Council of the People’s Republic of China. That Forum opened on November 6, 2018 in Singapore with a Keynote Address from Wang Qishan, the Vice President of the People’s Republic of China, according to a program brochure for the event. The billionaire founder of the New Economy Forum, former New York City Mayor Michael Bloomberg, gave the opening welcome remarks. Bloomberg ridiculously gushed over Wang Qishan, saying: “Today he is the most influential political figure in China and in the world” – “in the world” being the operative phrase.
Yellen was on a panel that same day that looked at “The Future of Capitalism,” which asked the question: “Is the Chinese model a better option for New Economy countries?” The explanation for this seemingly anti-American discussion was this, according to the program: “In the West, stark wealth disparities stoke popular resentment against business elites, establishment political parties and global institutions. Capitalism needs a new face. What would it look like?”
We think it behooves Michael Bloomberg, whose wealth derives from leasing his data terminals to trading floors around the world, including in China, to release a recording of this entire panel discussion. China is a Communist country with a serial and ongoing history of abhorrent human rights abuses of its people, as documented by Amnesty International. To suggest it should be a “model” for anything demands scrutiny. And what Yellen, the nominee for one of the most powerful posts in the U.S. government, said in this discussion needs to be shared with the American people, given the remarks she made in Paris in 2018, which we discuss shortly.
The Bloomberg 2018 event was originally scheduled to be held in Beijing. It had the “active participation and support” of the China Center for International Economic Exchanges (CCIEE), as reported by Bloomberg LP. The South China Morning Post reported that the venue was changed because it conflicted with the 2018 China International Import Expo in Shanghai, also held in November 2018.
The following year’s Bloomberg New Economy Forum was held in Beijing on November 20-22, 2019 and was “hosted” by Bloomberg and CCIEE, according to a press release for the event. Yellen is listed as an “advisor” for the event. It is unclear if she actually attended or spoke at the 2019 Forum but her financial disclosure report reveals that she received $157,500 from HSM for a speaking event that occurred on the same day as the second day of the Bloomberg 2019 Forum, November 21, 2019.
HSM potentially stands for HSM Air Services, which says it is “dedicated to bring in high-quality foreign airlines for tourism to all levels of cities in China, providing more options and travel destinations for Chinese travelers by establishing direct schedule flight routes.” Why an air service company would pay $157,500 to hear wonky talk from the former Chair of the Federal Reserve is worthy of further exploration.
Yellen also reported on her financial disclosure form that she received an unspecified amount of money from the Chinese global media group, Caixin, for an unspecified speaking engagement. She noted the city was Beijing.
CCIEE, which gave “active participation and support” to the 2018 Bloomberg New Economy Forum and co-hosted the same event in 2019 and 2020, is tightly aligned with the Communist Party of China. Article 25 of the organization’s charter requires that in order to serve as its Chairman, Vice Chairman and Secretary-General, the individual must “adhere to the line, principles and policies of the Chinese Communist Party.” Its current Chairman is Zeng Peiyan, the Co-Chair of the Advisory Board of the New Economy Forum in 2018 and the former Vice Premier of the State Council of China. CCIEE’s two “permanent” Vice Chairmen are Wei Liqun, the former Director of Research Office of the State Council and Zhang Xiaoqiang, the former Vice Chairman of the National Development and Reform Commission. Yellen is listed as part of the Bloomberg New Economy Forum’s “Leadership.”
Michael Bloomberg has shown an authoritarian inclination himself over the years. Bloomberg served three terms as the Mayor of New York City, from January 2002 to January 2014. The last term was only made possible by the Mayor spending tens of millions of dollars of his own money repealing the two-term limits in effect at the time for Mayor of New York City. Millions of New Yorkers were outraged by this move by the Mayor. Bloomberg’s outlay, from his own pocket, to grab those three terms as Mayor, came to a cool quarter of a billion dollars according to Gabe Pressman’s reporting at NBC.
The bulk of Bloomberg’s wealth, estimated by Forbes at $54.9 billion as of January 24, 2021, results from leasing his Bloomberg data and news terminals at $20,000 or more per year, per terminal, to tens of thousands of trading desks around the world, including China.
Attempting to juggle the conflicts of being a news outlet reporting on crimes at investment banks and trading firms while leasing a very lucrative product to those very same firms has raised questions on numerous occasions regarding the integrity of the leadership at Bloomberg News.
In June of 2015, Damaris Colhoun reported at the Columbia Journalism Review that “highly respected journalists” who had been “lured away from The Wall Street Journal,” to Bloomberg News were being “sidelined or pushed out….” Colhoun explained how new investigations are commenced at Bloomberg News, writing:
“…for an investigation to pass muster, it must hew to a more restrictive definition of an appropriate Bloomberg subject, namely finance, money, and power. To some, this represents a curtailing of ambition, one that favors softer, magazine-style articles over deep, sustained investigations…
“That’s why it’s often been a thorny endeavor for Bloomberg to launch major investigations of corporate and other targets that pose a conflict of interest, akin to pointing a gun in the customer’s face.”
In 2013, Edward Wong, writing for the New York Times, revealed that Bloomberg reporters were alleging that the Editor-in-Chief at Bloomberg News, Matt Winkler, had spiked articles about corruption in China after reporters had worked on them for the better part of a year. In April of last year, NPR’s David Folkenflik revealed audio of a conference call involving that episode with Winkler, Bloomberg news executives and the investigative reporting team. One portion of the call described how the reporters should find a nuanced way to cover the wealth of the ruling elites in China:
“It has to be done with a strategic framework and a tactical method that is…smart enough to allow us to continue and not run afoul of the Nazis who are in front of us and behind us everywhere. And that’s who they are. And we should have no illusions about it.”
Winkler added this:
“There’s a way to use the information you have in such a way that enables us to report, but not kill ourselves in the process and wipe out everything we’ve tried to build there.”
At the time of the uproar in 2013, the New York Post’s Keith Kelly reported that one of Bloomberg’s investigative reporters involved in the story, Michael Forsythe, “was escorted from Bloomberg’s Hong Kong office on Nov. 14…after he was fingered as the person who leaked embarrassing claims about how the news and data giant spiked a story that could have angered leaders in China.”
The story took a turn for the worse, if that’s possible, last February when Forsythe’s wife, Leta Hong Fincher, penned an expose at The Intercept, revealing that Bloomberg News had attempted to force her to sign one of its notorious non-disclosure agreements (NDAs). Fincher wrote:
“…my story shows the lengths that the Bloomberg machine will go to in order to avoid offending Beijing. Bloomberg’s company, Bloomberg LP, is so dependent on the vast China market for its business that its lawyers threatened to devastate my family financially if I didn’t sign an NDA silencing me about how Bloomberg News killed a story critical of Chinese Communist Party leaders. It was only when I hired Edward Snowden’s lawyers in Hong Kong that Bloomberg LP eventually called off their hounds after many attempts to intimidate me.”
A comedic public shaming video of the Bloomberg China affair was released on the Internet in 2013 when the story first broke.
China is a very important source of future leases for Bloomberg’s cash cow, the Bloomberg terminal, thus it is understandable that Mike Bloomberg wants to curry favor with China. The Washington Post’s Michael Kranish reported last January that in March of 2018, Bloomberg “announced that it would add 333 Chinese government bonds to its Bloomberg Barclays Global Aggregate Bond Index. That opened the way for tens of billions of dollars to flow from investment funds in the United States and elsewhere to four Chinese institutions that issue bonds, including the Chinese government and the China Development Bank.”
Given what the U.S. has just been through with the grossly inadequate vetting of Trump, Yellen’s entanglements with Bloomberg and the CCIEE demand further scrutiny by the Senate Finance and Senate Intelligence Committees prior to moving forward with the full Senate vote to confirm her. (We hold out little hope that will actually happen.)
Yellen’s comments at the June 28, 2018 Amundi World Investment Forum in Paris, France also require further scrutiny. Yellen made the U.S. economy sound like it was wheezing out its last breath in an interview she gave to Pascal Blanqué, the Chief Investment Officer of the large investment firm. Yellen has not disclosed how much she was paid for this event, just that it was more than $5,000.
Yellen stated this in Paris:
“Potential growth is really quite low. I think one way to see that is that since the financial crisis [in 2008] growth in the United States has averaged about 2-1/4 percent. And throughout all of those years the unemployment rate has been moving down. And that tells you that potential growth which would require essentially a stable unemployment rate is running under 2-1/4 percent. I would peg it at present around 1-3/4 percent. Is it going to move up over time? We all look at the digital revolution and see reasons to be hopeful. Innovations in artificial intelligence that are in many ways exciting and some observers think could boost potential output growth going forward, but my own assumption would be, for the purposes of having to write down a forecast, that it’s probably going to stay in the range that it’s been.
“In the United States at least one factor that’s been pushing productivity growth down, and I think will do so going forward, is that the educational attainment of the labor force, which had been rising at quite a rapid rate, that’s going to level off or at least diminish. Investment spending has been pretty weak and total factor productivity growth just hasn’t been running at a rapid rate.
“Part of that’s a mystery but part of it is it looks like a decline in dynamism in the U.S. economy. That, in some ways, is a mystery as well. Why has that happened?
“In the U.S. studies suggest that something that contributes to productivity growth is that successful firms expand and attract workers and capital. And less successful firms grow slowly or may even die off. And that reallocation of resources boosts productivity. It’s part of what boosts productivity and contributes to productivity growth. And it looks like the dynamism of the U.S. economy has diminished and that’s contributing less. Why, exactly, I’m not certain.
“But it’s possible productivity growth will pick up. We’ve had periods like the second half of the 90s where productivity growth was very strong and picked up but I wouldn’t count on that going forward.”
We think most Americans would agree that the least we should demand from the U.S. Treasury Secretary is an optimism about the future prospects of the U.S. when she’s speaking in foreign countries.