Treasury ethics attorneys have given Yellen flexibility to work on any related markets or broad financial services sector issues, with no limits on current or future matters, the Treasury official said. She may need to seek further authorization to deal with specific firms she listed.
In the memo granting Yellen permission to call the meeting of regulators, a Treasury ethics official, Brian Sonfield, said it would be "difficult, if not impossible" for Yellen to recuse herself from matters involving market volatility.
"You are the Secretary of the Treasury, the duties of which require you to be involved in a broad array of matters focused on these sectors," Sonfield wrote.
"Issues relating to these sectors could arise at any time without the opportunity for consultation with the ethics office," and "argue in favor of prior authorization."
source: https://www.streetinsider.com/Reuters/Exclusive%3A+Treasurys...
Do you see the problem? She is so trusted as an expert that people have given her authorisation to involve herself in matters related to firms she just took money from, regardless of the obvious incentives and conflicts of interest. Maybe you don't think those incentives or conflicts are a big deal, in which case I've got a bridge to sell you.
Isn’t seeking a waiver doing just that?
But delivering a speech that she may have delivered in other venues does not strike me as necessarily of conflict. I do think the ethics office should review after the fact and raise any concerns that arise, but generally I think we as citizens should be afforded the benefit of her expertise more often than not.
> delivering a speech that she may have delivered in other venues does not strike me as necessarily of conflict
This argument totally ignores the fact that the conflict of interest arises from the transaction, not from the content of her speech.
I hear you can get Zuckerberg or Gates for that kind of money, but they make more than that in an hour just from their existing wealth.
For that audience, a top economist could be a good choice for the same money.
Links to that actually happening is exactly the kind of evidence I'm asking for.
Links to that actually happening *for non government officials* is exactly the kind of evidence I'm asking for.
Here's an article about them: Matthew Mcconughey got $135k for one at the University of Houston; Katie Courik got $110k for speaking at the University of Oklahoma in 2006. Crucially, the article notes that a) fees are often confidential, but can go up to half a million dollars(!) and b) schools try to bargain them down.
https://www.insidehighered.com/news/2015/04/02/matthew-mccon...
Many universities also have "lecture funds" with pretty hefty budgets. I was not privy to the exact numbers, but assuming they run at cost, ticket price*capacity suggests some people are commanding six figures.
Edit: here's a link, since it only takes 10 seconds to find: https://www.allamericanspeakers.com/discover-your-speaker.ph...
Notable: Ava DuVernay (film director) starts at $200k. Tim Ferriss says $100k-$200k. Viola Davis: $200k and up. I'm certain that none of these people are obligated to these prices; if Citadel is buying, anyone would be silly to not raise the price. Conversely, all are certainly able to make speeches at discounted rates or gratis to schools, nonprofits, etc.
Also notable (because it refutes your priors) is a lack of public officials, or those who have held public office.
Edit (again): Here are private economists who make bank for speeches: https://www.allamericanspeakers.com/searchresults/economist#...
Sort by price and you'll see that people do hire economists to speak for six figures, even if they have no nexus to government. Yellen is higher-profile than most of these, and again anyone would be foolhardy to not double their rate for Citadel.
Here's Dan Schulman at Goldman Sachs: https://www.youtube.com/watch?v=4q_jVu5T80g
Or at a conference that runs $2300-$7000/head: https://www.youtube.com/watch?v=4q_jVu5T80g
This is admittedly a little bit murky, since some of these appearances might be part of the person's "day job": Helmut Panke talked at a bunch of auto shows about BWM and its new products. The ones I linked above, however, seem like they're probably not.
I'm not inviting Alec Baldwin for his knowledge / advice.
Are you saying Yellen is not being paid for her knowledge / advice?
It doesn't seem like a crazy idea for a corporate retreat-style event. Have a day full of internal presentations reviewing the last year, describing future initiatives, etc. After dinner, Yellen talks, telling some stories about her time on the Fed, working with Clinton, and maybe caps it off with a section about "Future Challenges." People like hearing/meeting celebrities, so it caps the day off nicely while being reasonably educational too.
People spent the energy to provide sources. Are you spending the same time?
What sources provides you the confidence to say that some demographics are "overwhelmingly dominated"...?
And that's exactly the bias I'm trying to eliminate with my question.
I am struggling to think that there are any examples that you won't dismiss, no matter how applicable.
Dan Schulman, Dara Khosrowshahi, Dr. Helmut Panke. And now I'm bored of scrolling through.
There is another bin that is "paid for brand-building advertisement." - i.e. celebrities.
The proposition is that ex-government officials are just getting paid market rate for her knowledge and insight.
If that's the case, it should be trivially easy to find non government officials people getting paid $300k a speech for their knowledge.
You've identified listings - which is better than I thought there would be ! - but not sales.
Yellen earned $7.2m in two years. If all three of those combined earned half as much in speaking fees over that same time, I'd be definitely convinced that it's ho-hum
If you're a motivated research reading this interested in answering this empirically, I'd suggest trying to find organizations that both pay this level of fees and have to disclose it to the public when they do (I'm hoping this might be the case for public companies under SEC regs, but that's just a hope)
But $300k is not outside the ballpark for what people make for speaking. It's fine to be outraged by that, but it is fair to call it "market".
The only reason outrage seems justified is that the demographics of those that can charge $300k a speech appears overwhelmingly dominated by government officials.
I'm open to being shown otherwise with explicit links.
I could be wrong here, what do I know. But that's my read on the situation, and it's why this sort of thing doesn't bother me that much.
They're often interesting, but they're fairly anodyne: a famous author talking about their recent book, a CEO talking about their successes or new focus on sustainability/diversity/etc, some broad perspective on current events. You can see how Goldman folks might benefit a little bit from knowing about (say) the likely timeline for vaccine roll-outs, but you could get much of the same info from an hour of NPR.
However, meeting the person seems like a nice perk or recruiting/marketing tool.
- all have an interest in finance
- are varying ages (so may not enjoy the same music)
- are from various countries (so may not be into the same sports)
and you have the budget, someone like Yellen is absolutely a substitute good for e.g. having a private Ludacris concert. It's entertainment and continuing education in one. Plus your staff get to brag about the private event to their millionaire peers who did not get that perk.
Citadel probably paid way more for their employees to listen than for her to speak, in terms of wages.
Yes
Why is it so hard to comprehend that some people have issue with government employees diving back and forth from regulation of entities to taking large sums of money from them?
* Fit in a few speeches * Be worth $700,000 * Not be confidential, go against FTC rules, or raise ethical concerns * Isn't known to other researchers or experts (that could actually provide a research paper with supporting materials)
Further, is this the market rate for other financial experts, or just ones that have access to power and the ability to influence? Are there any financial experts or academics being compensated $50,000/hour to speak and don't have influence or power over financial organizations?
Because she is already working for the state? If I was constantly holding talks for the competition instead of working I would get into a lot of trouble with my boss. I know this is different for politicians and some other government positions, to the point where in some countries a) they get a full living wage for doing literally nothing and b) get a bonus every time they show up(with show up meaning their presence was recorded for an attosecond that day). Its one of the reasons I consider the government of my home country a bad joke.
There aren't many of them so the is a resource scarcity. I'm not trying to suggest 700k in speaking fees isn't a bribe, but how much of a bribe is it?
I'd speak at a single conference for $1000, her $130k fee means her time is 130x more valuable as mine and I think that could be true.
There should be no going rate for a former fed chairman. It's a position of public trust that should not lead to personal profit.
If you want former fed chairs to never work in the industry again you're going to have to significantly increase compensation and make it a pension for life even after they retire. And the fact of the matter is that's just not how the system works right now so "well maybe we SHOULD tear down the whole system and do it differently" is not really a constructive point in the discussion, it's just a childish tantrum. If you think that's how the system should work, go pass some legislation.
Is a position as a lecture of Economics at Harvard considering working for personal profit? Writing books on subjects that they are experts in? How about writing for the NYTimes? Appearing on TV? What about if they did all those things before taking a government job?
If your answer is yes to those things, then taking a high-level government position becomes impossible for anyone working class. Since you believe that the position bars them from any worthwhile future employment, they have to be independently wealthy before entering government service.
I personally enjoy reading the works of Ben Bernanke and think that he should be allowed to continue his work in economics despite having held a top position at the federal government. He's intelligent, insightful, and a good teacher.
Before I answer, are you seriously arguing that taking a job as a professor is the same as getting paid 1 million dollars for ~10 hours of work?
The debate seems to be over the price. $700k / yr from lecturing to hedge funds is bad but $150k / yr to do the same at Harvard is good?
(2) Her salary is in line with others in her position and is given in exchange for doing actual work.
(3) Harvard is not in a position to directly profit from potentially privileged information leaking out in her lectures to students
(4) Harvard is not in a position to directly benefit from Yellen influencing current government regulators/policy makers
(5) Harvard is not in a position to directly benefit from Yellen taking a subsequent regulatory/policy position in government
They don't? Harvard's $40 billion endowment is larger than Citadel's assets managed. Harvard is a hedge fund that does education as a side hustle.
We can't go back in time and pass ethics laws.
Given this, Yellen should be getting $20,000 per speech, which would align way more realistically with expectations.
Bill Clinton also had his share of critics because of that.
Is there real evidence of paid speeches being bribery? As others have said about 100k-500k is the going rate for corporate speeches from athletes, actors, etc.
Pretty much. I think there should be a significant cool down period (let's say 5 years or so) after leaving a top public service or political position before you can make money from the private sector you were supposed to oversee. As far as I know something like that already applies to people who retire from the military and want to transition to a public civilian position.
Seriously though, why is that the case? If she's a public servant, she could donate her time to talks easily. When you're being paid that much money to speak, then are asked to sit in judgment on this company, are you really expecting her to bite the hand that feeds her? *At the absolute best it puts her in a terribly awkward position. At worst it's bribery.
This amounts to an argument that people can't go back and forth between the private and public spheres. To be fair, this is something some people believe, and was very visible in the case of Ajit Pai outrage. But if that's what we're saying, let's be clear about it.
Or I suppose you could say that anyone who has held a government position, left it, and then ever made money in the private sector is ineligible for future government work. In effect all this does is just bar past officials from being elected again. This again reduces the pool of qualified talent by a lot. Janet Yellen is probably the most qualified person in the country to be the fed chair, it seems like she should be allowed to imo.
I just also think they should recuse themselves from an investigation when those whom they've had significant dealings with are being investigated. $700k for 3 speaking gigs, we're not talking about a CEO she had lunch with one time, there is a significant business relationship there. That relationship might not affect Mrs. Yellen's judgment, but if she doesn't absolutely drop the hammer on Citadel it at least looks like bribery. The very fact that the question is raised is the problem.
Citadel's fees are among the highest. See for yourself:
https://extapps2.oge.gov/201/Presiden.nsf/PAS+Index/C22B882B...
> she might as well resign being treasury secretary
If she can't disentangle herself from the interests of her benefactors, then yeah. Maybe she should resign.
politicians are supposed to be public servants.
Is the current market rate for a speech $290k? And what are exactly the goods object of the transaction?
The goods object of the transaction is "continuing education perk for 500 highly-paid professionals." If I put 500 staff in a room and want to treat them, this is a nice perk that's not something they can buy on their own (even though many are millionaires).
Oh, if she's still receiving money from Citadel, I agree.
If she's not still receiving money from Citadel, I don't see the relevance. I would expect anyone qualified for the job to have made paid speeches at any number of important financial institutions over the years. It wouldn't be in our best interests as citizens to have them recuse every time a matter concerning one of them arises.
I really don't understand what people want from her.