Former Tennessee congressman Harold Ford Jr.'s northern exposure

Ford's investor-friendly positions as chairman of the centrist Democratic Leadership Council make him an ideal vehicle to protest Obama's "fat cat" insults and Schumer's post-crisis interest in financial regulation. Is that what you're looking for, New York?

By Jason Horowitz
Washington Post Staff Writer
Friday, January 15, 2010; C01

Harold Ford Jr. has gone viral.

"You can judge from the editorials in the city, and just the response in the city and in the state that people don't want party bosses telling anyone that you can't run," Ford said in a phone interview between meetings in New York on Thursday afternoon. "People want an independent strong voice representing New York in the Senate."

The former Tennessee congressman has reintroduced himself as public muller of a primary challenge against New York's low-polling junior senator, Kirsten Gillibrand (D). Ford has resided in New York for less time than many of the grad students taking his "political reality" class at New York University and he has no discernible support from the Democratic establishment. His conservative record on gay rights, abortion and gun control is so out of step with the party's primary voters that it makes Gillibrand's right-leaning record look progressive. Ford, the son of Tennessee's first black congressman, took a job as a Bank of America Merrill Lynch executive, and has cultivated a core constituency of Wall Street donors, many of whom are frustrated with President Obama's regulatory crackdown and what they see as a sudden cold shoulder from Sen. Chuck Schumer. Yet for all those moneyed ties, Ford has raised nothing -- literally, zilch -- to rival the millions of dollars in Gillibrand's coffers.

But as a shoestring publicity campaign for the Harold Ford brand, his 2010 media blitz has all been something to behold.

The New York political media, famished for a competitive political contest, has been more than willing to entertain this outsider as a potential contender for Gillibrand's seat. Ford, a talented 39-year-old with a book, titled "More Davids Than Goliaths," coming out a few weeks before the U.S. Senate primary this September, has cast his nascent primary challenge as that of a principled Democratic insurgent, staring down Schumer and Obama administration officials who have protected Gillibrand from opponents in the party.

In the interview, Ford said that the notion that he was doing this for publicity was "insulting to voters."

New Yorkers, he said, deserve a candidate who would fight for their interests, tax breaks and a health-care overhaul beneficial to the state, which he believes is not being done now. "Independence and jobs" were his echoing watchwords. "That's not about publicity," Ford said "That's real."

So, too, is the tacit approval of New York Mayor Michael Bloomberg, who privately boosted Caroline Kennedy's Senate bid after Hillary Clinton was appointed secretary of state. A year later, Bloomberg appears less invested though decidedly comfortable with letting his loyal operatives make a few bucks; his pollster Doug Schoen and campaign manager Bradley Tusk are advising Ford.

Like Bloomberg, Ford defends Wall Street bonuses as critical to the city's tax base. When asked in the interview whether he himself had received a bonus from his employer, his spokesman, Davidson Goldin, interrupted, as he did on other topics not related to Ford's rationale for running, which the media handler understood to be the sole focus of the interview. At that point in the interview, Ford stayed silent, but Goldin later offered that Ford's "salary is set by contract."

While Ford refused to compare himself to politicians who ultimately dropped their primary bids against Gillibrand, he acknowledged that his has been received differently.

"Maybe it's the benefit of time. People have had the opportunity to experience some of the policies passed in Washington," said Ford, adding, "and there is dissatisfaction with Senator Gillibrand."

Gillibrand, who has sat back and waited for intervention on her behalf from Schumer or the White House, is getting more involved.

"The notion that 'Tennessee' Harold Ford is an independent outsider is completely contrived," said Jefrey Pollock, Gillibrand's political adviser. "But his extreme views against reproductive rights, against marriage equality and against immigration are all too real. Kirsten Gillibrand is not backing down from this fight."

* * *

For Ford's rebel rationale to have any credibility, he needed a villain. He found one in Schumer, his former benefactor who raised money and campaigned for Ford during his narrow defeat to Bob Corker in the 2006 U.S. Senate race in Tennessee. Schumer has successfully swatted away Gillibrand's would-be primary challengers, and Ford argued that party pressure on him not to run "exacerbated" the situation and sped up his timetable.

"The only person Chuck Schumer has to blame is himself and his fellow Washington insiders for having the gall to interfere with a free election," said Goldin, Ford's spokesman. "And for blocking an independent Democrat from running."

But according to a source in Schumer's office familiar with conversations between Schumer and Ford, the senator called Ford after a November Politico story reported that the Memphis native was exploring his chances against Gillibrand. They agreed to a face-to-face meeting to discuss Ford's New York political future. But on the morning of the meeting, the New York Times reported that Ford was "weighing" a challenge to Gillibrand. In the days that followed, the Times reported the substance of the meeting under the headline "Schumer Urges Ford Not to Run."

"The only person the senator has talked to about Ford not running was Ford himself," said a person close to Schumer, who was granted anonymity to discuss the private conversations. The Schumer intimate suggested that Ford exploited his meeting with Schumer to build up his insurgent story line.

"He has not talked to anyone else because he has no interest in feeding this David-versus-Goliath fairy tale that seems to be the only thing the Ford campaign has going for it right now," the person close to Schumer said.

The Ford camp denies any such setup.

The White House and leaders in Washington have been less careful about fueling the Ford phenomenon. During a White House briefing on Jan. 11, press secretary Robert Gibbs reiterated the administration's support for Gillibrand. But then by telling reporters to "stay tuned" for administration efforts to knock Ford out, Gibbs may have unwittingly boosted Ford's status as an anti-establishment comer.

On Jan. 12, Ford sat down again for dinner with Schoen, the Bloomberg pollster, at the apartment of Richard Plepler, an HBO executive who is taking a leading role in promoting Ford's potential candidacy, according to a source with knowledge of the dinner who was granted anonymity to speak of the private meeting. Ford has also kept in daily touch with Tusk, Bloomberg's reelection manager.

"I'm involved a lot and Mayor Bloomberg is not," said Tusk, who said he is providing free advice for now but would sign on with Ford if he runs. As might be expected in New York politics, Tusk is himself a former aide to Schumer. "I deeply admire and respect Chuck and always have," he said. "But Gillibrand is her own entity."

Tusk argued that while Ford is not a household name among regular New York voters yet, he "has the ability to be known. The ability to raise money and the ability, clearly, to do press."

* * *

The one constituency with whom Ford does have high name-recognition is the city's top Democratic bundlers. "At least among my friends, Harold has an extremely strong base," said Orin Kramer, an investor at Boston Provident whose early support for Obama imbued him with gravity in the New York donor firmament. While Ford has yet to raise a cent for the race, Kramer said he would have financial support if he in fact ran.

"People regard him quite properly as an extraordinary political talent," Kramer said.

"We bonded with him years ago and he is one of our friends," said Robert Zimmerman, another influential fundraiser and Democratic National Committeeman. But according to several of these bundlers, it's not all about friendship. A show of support for Ford's potential candidacy also sends a message to Washington.

Ford's investor-friendly positions as chairman of the centrist Democratic Leadership Council make him an ideal vehicle to protest Obama's "fat cat" insults and Schumer's post-crisis interest in financial regulation.

"Mr. President, you did what you need to do, we now have to do what we have to do," said one prominent member of New York's Democratic donor universe, who was granted anonymity to freely reflect the sentiments of his peers. The donor said Wall Street needed to elect Ford as a "champion for New York's economy and financial services sector," because Schumer "is preoccupied with being majority leader and a national leader, and our junior senator is a second vote for Chuck."

("Nobody stands up for New York's economy more than Senator Schumer," said Schumer spokesman Brian Fallon. "But that doesn't mean doing whatever the banks want even when they're wrong.")

Many of these donors are simply underwhelmed by Gillibrand, whose garrulousness is much noted, and have not embraced her as they did Clinton before her. Gillibrand has expressed irritation at her inability to crack into the uppermost echelons of the fundraising circuit, namely into the sprawling Fifth Avenue apartment of the first couple in Democratic Party fundraising, Steven Rattner and Maureen White.

Rattner, the Bloomberg confidant and money manager, former Obama car czar and Times reporter who remains close with the paper's owner, Arthur Sulzberger, has gushed about Ford in print. According to one Gillibrand supporter, the senator has ascribed the reason for her discord with the couple to a broken-off relationship with White's younger brother more than a decade ago.

"If I got mad at every girlfriend one of my five brothers ever dated, I'd be mad at a lot of people," White said. "The only relevant part of that story is I've known her longer than most people.

"I'm not enthusiastic about Kirsten for a very simple reason," White continued, "New York State needs someone great. It's not clear to me that she has the talent to follow in the footsteps of Robert Kennedy, Daniel Patrick Moynihan or Hillary Clinton."

If Ford gets elected, White said, "he'll be a national presence for New York State from day one."

* * *

In 2006, Schumer, then chairman of the Democratic Senatorial Campaign Committee and architect of the Democratic takeover of the chamber, recruited Ford as the nominee to fill the seat vacated by Tennessee's Bill Frist. Schumer called him "a great candidate" and helped Ford raise millions of dollars for a bruising and tight contest against Corker, a Republican. The contest is perhaps most remembered for a racially charged ad aired by the Republican Party at the end of the election, in which a winking blonde said she met the unmarried Ford at a Playboy party. Schumer released funds to keep Ford ads airing on television until Election Day. But he fell just short.

Soon after his defeat, Ford started spending substantial time in New York City and became an official resident in 2008. Like Bloomberg, he got to know the benefit circuit, squiring around his now-wife, Emily Threlkeld, an executive with the fashion designer Carolina Herrera and the stepdaughter of Wall Street grandee Anson Beard -- as well as the table-hopping nightspots, like Graydon Carter's Waverly Inn.

An interview in the New York Times on Jan. 13 revealed the chasm between Ford and his recession-weary constituents more starkly. He preferred the Giants over the Jets because he was closer to their owner. He had been to Staten Island only by helicopter. He got pedicures.

For now, at least, Ford is counting on media interest in a competitive race and the strength of his anti-establishment message to keep his campaign going, whatever the ultimate goal.

"I'm considering it more and more seriously every day," he said.

Banks Prepare for Bigger Bonuses, and Public’s Wrath

Note from Greetings: OK.. this is just appalling...

By LOUISE STORY and ERIC DASH, NY Times

Published: January 9, 2010

Everyone on Wall Street is fixated on The Number.

The bank bonus season, that annual rite of big money and bigger egos, begins in earnest this week, and it looks as if it will be one of the largest and most controversial blowouts the industry has ever seen.

Bank executives are grappling with a question that exasperates, even infuriates, many recession-weary Americans: Just how big should their paydays be? Despite calls for restraint from Washington and a chafed public, resurgent banks are preparing to pay out bonuses that rival those of the boom years. The haul, in cash and stock, will run into many billions of dollars.

Industry executives acknowledge that the numbers being tossed around — six-, seven- and even eight-figure sums for some chief executives and top producers — will probably stun the many Americans still hurting from the financial collapse and ensuing Great Recession.

Goldman Sachs is expected to pay its employees an average of about $595,000 apiece for 2009, one of the most profitable years in its 141-year history. Workers in the investment bank of JPMorgan Chase stand to collect about $463,000 on average.

Many executives are bracing for more scrutiny of pay from Washington, as well as from officials like Andrew M. Cuomo, the attorney general of New York, who last year demanded that banks disclose details about their bonus payments. Some bankers worry that the United States, like Britain, might create an extra tax on bank bonuses, and Representative Dennis J. Kucinich, Democrat of Ohio, is proposing legislation to do so.

Those worries aside, few banks are taking immediate steps to reduce bonuses substantially. Instead, Wall Street is confronting a dilemma of riches: How to wrap its eye-popping paychecks in a mantle of moderation. Because of the potential blowback, some major banks are adjusting their pay practices, paring or even eliminating some cash bonuses in favor of stock awards and reducing the portion of their revenue earmarked for pay.

Some bank executives contend that financial institutions are beginning to recognize that they must recalibrate pay for a post-bailout world.

“The debate has shifted in the last nine months or so from just ‘less cash, more stock’ to ‘what’s the overall number?’ ” said Robert P. Kelly, the chairman and chief executive of the Bank of New York Mellon. Like many other bank chiefs, Mr. Kelly favors rewarding employees with more long-term stock and less cash to tether their fortunes to the success of their companies.

Though Wall Street bankers and traders earn six-figure base salaries, they generally receive most of their pay as a bonus based on the previous year’s performance. While average bonuses are expected to hover around half a million dollars, they will not be evenly distributed. Senior banking executives and top Wall Street producers expect to reap millions. Last year, the big winners were bond and currency traders, as well as investment bankers specializing in health care.

Even some industry veterans warn that such paydays could further tarnish the financial industry’s sullied reputation. John S. Reed, a founder of Citigroup, said Wall Street would not fully regain the public’s trust until banks scaled back bonuses for good — something that, to many, seems a distant prospect.

“There is nothing I’ve seen that gives me the slightest feeling that these people have learned anything from the crisis,” Mr. Reed said. “They just don’t get it. They are off in a different world.”

The power that the federal government once had over banker pay has waned in recent months as most big banks have started repaying the billions of dollars in federal aid that propped them up during the crisis. All have benefited from an array of federal programs and low interest rate policies that enabled the industry to roar back in profitability in 2009.

This year, compensation will again eat up much of Wall Street’s revenue. During the first nine months of 2009, five of the largest banks that received federal aid — Citigroup, Bank of America, Goldman Sachs, JPMorgan Chase and Morgan Stanley — together set aside about $90 billion for compensation. That figure includes salaries, benefits and bonuses, but at several companies, bonuses make up more than half of compensation.

Goldman broke with its peers in December and announced that its top 30 executives would be paid only in stock. Nearly everyone on Wall Street is waiting to see how much stock is awarded to Lloyd C. Blankfein, Goldman’s chairman and chief executive, who is a lightning rod for criticism over executive pay. In 2007, Mr. Blankfein was paid $68 million, a Wall Street record. He did not receive a bonus in 2008.

Goldman put aside $16.7 billion for compensation during the first nine months of 2009.

Responding to criticism over its pay practices, Goldman has already begun decreasing the percentage of revenue that it pays to employees. The bank set aside 50 percent in the first quarter, but that figure fell to 48 percent and then to 43 percent in the next two quarters.

JPMorgan executives and board members have also been wrestling with how much pay is appropriate.

“There are legitimate conflicts between the firm feeling like it is performing well and the public’s prevailing view that the Street was bailed out,” said one senior JPMorgan executive who was not authorized to speak for the company.

JPMorgan’s investment bank, which employs about 25,000 people, has already reduced the share of revenue going to the compensation pool, from 40 percent in the first quarter to 37 percent in the third quarter.

At Bank of America, traders and bankers are wondering how much Brian T. Moynihan, the bank’s new chief, will be awarded for 2010. Bank of America, which is still absorbing Merrill Lynch, is expected to pay large bonuses, given the bank’s sizable trading profits.

Bank of America has also introduced provisions that would enable it to reclaim employees’ pay in the event that the bank’s business sours, and it is increasing the percentage of bonuses paid in the form of stock.

“We’re paying for results, and there were some areas of the company that had terrific results, and they will be compensated for that,” said Bob Stickler, a Bank of America spokesman.

At Morgan Stanley, which has had weaker trading revenue than the other banks, managers are focusing on how to pay stars in line with the industry. The bank created a pay program this year for its top 25 workers, tying a fifth of their deferred pay to metrics based on the company’s later performance.

A company spokesman, Mark Lake, said: “Morgan Stanley’s board and management clearly understands the extraordinary environment in which we operate and, as a result, have made a series of changes to the firm’s compensation practices.”

The top 25 executives will be paid mostly in stock and deferred cash payments. John J. Mack, the chairman, is forgoing a bonus. He retired as chief executive at the end of 2009.

At Citigroup, whose sprawling consumer banking business is still ailing, some managers were disappointed in recent weeks by the preliminary estimates of their bonus pools, according to people familiar with the matter. Citigroup’s overall 2009 bonus pool is expected to be about $5.3 billion, about the same as it was for 2008, although the bank has far fewer employees.

The highest bonus awarded to a Citigroup executive is already known: The bank said in a regulatory filing last week that the head of its investment bank, John Havens, would receive $9 million in stock. But the bank’s chief executive, Vikram S. Pandit, is forgoing a bonus and taking a salary of just $1.

Bankers Vs. The People: Which Side Is The White House On?

By Dan Froomkin, Huffington Post, October 28, 2009

As the battle lines are drawn between the people and the bankers outside the ABA convention in Chicago, the question arises: Which side is the White House on, exactly?

Yes, the Obama administration is pushing to dramatically increase the regulation of consumer and other financial transactions that have run amok, but there is widespread concern from across the political spectrum that the White House is neither going far enough nor fighting hard enough. And time and again -- most notably with the ongoing $700 billion bailout -- Obama administration policies have put the interests of bankers and Wall Street ahead of those of impoverished families, unemployed workers or underwater homeowners.

One reason -- which has never been directly addressed by Obama -- may be that many of his chief financial advisers have pocketed extraordinary amount of money from banks and Wall Street, and presumably intend to do so again. They are part of the banker class, and their loyalties have been bought and paid for.

Back in April, when the White House released financial disclosure forms late one Friday, those few people paying attention learned just how stupendously beholden Obama's top economic adviser, Larry Summers, is to the financial industry that he is ostensibly trying to rein in.

Summers was paid $5.2 million for his part-time work for a massive hedge fund in 2008. He also took in more than $2.7 million in fees for speaking engagements at such places as Citigroup, Lehman Brothers, Merrill Lynch and Goldman Sachs -- including one visit alone that netted him $135,000 from Goldman Sachs.

That's right: $135,000 for one visit on one day. You can't pocket that kind of money and not be, on some level, corrupted.

Similarly, deputy national security adviser for international economic affairs Michael Froman received $7.4 million from Citigroup between January 2008 and January 2009 -- including a year-end bonus of $2.25 million that he received just days before coming to work at the White House for a man who was at that very moment calling just such bonuses "shameful".

And earlier this month, Bloomberg's Robert Schmidt significantly added to our understanding of just how co-opted Obama's financial team is by examining the financial disclosure forms of Treasury Secretary Timothy Geithner's closest aides.

The advisers include Gene Sperling, who last year took in $887,727 from Goldman Sachs and $158,000 for speeches mostly to financial companies, including the firm run by accused Ponzi scheme mastermind R. Allen Stanford.

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Another top aide, Lee Sachs, reported more than $3 million in salary and partnership income from Mariner Investment Group, a New York hedge fund.

Sachs, who joined Treasury in January, reported in February that he was still owed a 2008 bonus whose value was "not ascertainable." I wonder how that one turned out.

Also in Geithner's inner circle, according to Schmidt: "counselor Lewis Alexander, the former chief economist at Citigroup; Chief of Staff Mark Patterson, who was a lobbyist at Goldman Sachs, and Matthew Kabaker, a deputy assistant secretary who worked at private equity firm."

Alexander was paid $2.4 million in 2008 and the first few months of 2009 by Citigroup; Kabaker earned $5.8 million working on private equity deals at Blackstone in 2008 and 2009.

Patterson, Geithner's chief of staff, was a registered lobbyist for Goldman Sachs before joining the Obama campaign, and took in what seemed at first glance to be a relatively modest-by-Goldman-standards salary of $637,230 in 2008. But it turns out that was only for three months' work -- he left Goldman in early April.

All this money makes Obama's top financial advisors veritable poster boys for the Wall Street culture that the president in his speeches has publicly decried as a "house of cards" and a "Ponzi scheme" in which "a relatively few do spectacularly well while the middle class loses ground".

I'm not doubting the smarts of Obama's financial team -- but I do feel that the vast majority of people who take the kind of money we're talking about here can't help but be warped by it, and that in choosing to cash in, they essentially disqualified themselves from public service.

Unless they are willing to assertively act in ways that redeem themselves and show that their allegiances have not been purchased, they should step down and make way for people who see the people's side of things a little more clearly.

* * * * * * * * * * * *
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I Ponied Up for Sheryl Crow?

By MAUREEN DOWD, NY Times

LOS ANGELES

Talk about being teed off.

The economy is croaking and bankers are still partying at a golf tournament here on our dime.

It’s a good argument for nationalization, or better yet, internationalization. Outsource the jobs of these perfidious, oblivious bank executives to Bangalore; Bollywood bashes have to cost less than Hollywood ones.

The entertainment Web site TMZ broke the story Tuesday that Northern Trust of Chicago, which got $1.5 billion in bailout money and then laid off 450 workers, flew hundreds of clients and employees to Los Angeles last week and treated them to four days of posh hotel rooms, salmon and filet mignon dinners, music concerts, a PGA golf tournament at the Riviera Country Club with Mercedes shuttle rides and Tiffany swag bags.

“A rep from the PGA told us Northern Trust wrote one big, fat check in order to sponsor the event,” TMZ reported.

Northern No Trust had a lavish dinner at the Ritz Carlton on Wednesday with a concert by Chicago (at a $100,000 fee); rented a private hangar at the Santa Monica Airport on Thursday for another big dinner with a gig by Earth, Wind & Fire, and closed down the House of Blues on Sunset Strip on Saturday (at a cost of $50,000) for a dinner and serenade by Sheryl Crow.

In the ignoble tradition of rockers who sing for huge sums to sketchy people when we’re not looking, Crow — in her stint as a federal employee — warbled these lyrics to the oblivious revelers:

“Slow down, you’re gonna crash,
Baby, you’re a-screaming it’s a blast, blast, blast
Look out babe, you’ve got your blinders on ...
But there’s a new cat in town
He’s got high payin’ friends
Thinks he’s gonna change history.”

Northern Untrustworthy even offered junketeers the chance to attend a seminar on the credit crunch where they could no doubt learn that the U.S. government is just the latest way to finance your deals and keep your office swathed in $87,000 area rugs.

In what is now an established idiotic ritual of rationalization, the bank put out a letter noting that it “did not seek the government’s investment” even though it took it, and that it had raised $3 million for the Los Angeles Junior Chamber of Commerce Charity Foundation and other nonprofits. They riposted that they have a contract to do it every year for five years; but this isn’t every year.

The bank cloaks itself in a philanthropic glow while wasting our money, acting like the American Cancer Society when in fact it’s a cancer on American society.

It asserted that it earned an operating net income of $641 million last year and acted as though it did Americans a favor by taking federal cash.

I would ask Northern No Trust: If you’re totally solvent, why are you taking my tax dollars? If you’re not totally solvent, why are you giving my tax dollars to Sheryl Crow?

Coming in a moment when skeptical and angry Americans watched A.I.G., Citigroup, General Motors and Chrysler — firms that had already been given a federal steroid injection — get back in line for more billions, the golf scandal was just one more sign that the bailed-out rich are different from you and me: their appetites are unquenchable and their culture is uneducable.

President Obama served them notice on Tuesday night in his Congressional address, saying: “This time, C.E.O.’s won’t be able to use taxpayer money to pad their paychecks or buy fancy drapes or disappear on a private jet. Those days are over.”

But will they notice?

John “Antique Commode” Thain had to be ordered by a judge to tell Andrew Cuomo’s investigators which Merrill Lynch employees got those $3.6 billion in bonuses that Thain illicitly shoved through as his firm was failing and being taken over by Bank of America with the help of a $45 billion bailout. Kenneth Lewis, the Bank of America C.E.O., made the absurd assertion to Congress that his bank had “no authority” to stop the bonuses, even though he knew about them beforehand.

“They find out they’re $7 billion off on the estimate of losses for the fourth quarter and they never think maybe we should go back and adjust these bonuses?” Cuomo told me, as Thain was finally responding to investigators on Tuesday at the New York attorney general’s office. “He refused to answer questions on the basis that ‘the Bank of America didn’t want me to.’ You can take the Fifth Amendment or you can answer questions. But there’s no Bank of America privilege. The Bank of America doesn’t substitute for the Constitution. And who’s the Bank of America, by the way?”

He gets incensed about how ingrained, indoctrinated and insensitive the ex-masters of the universe are. “They think of themselves as kings and queens,” he said. And they’re not ready to abdicate.