Courtesy of Pam Martens
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:
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