Is there anything wrong with mayoral candidate Rahm Emanuel making $18.5 million dollars as an investment banker in the 2 ½ years after he got out of the Clinton White House – much of it from Clinton donors?Pallasch points to just two primary deals that Emanuel worked on as an investment banker that scored him the big bucks, plus the fact that the firm that hired him, Wasserstein Perella, was sold twice during the short time he worked for the company. Not surprisingly, both deals involved people with close ties to the Clinton administration who continue to do well with the Obama administration:
“I defy you to tell me anybody you know who jumped out of government into a business for which he had no credentials or background, made $18.5 million in two years and then jumped back into government,” said Gery Chico, Emanuel’s rival for the mayor’s office . . .
What credentials did Emanuel present to go to work in investment banking after a career raising campaign funds for Mayor Daley and President Clinton, then advising Clinton on policy issues?
“There is, in that culture, two types of bankers: a person who knows the numbers, industry specific; and a person who kind of also deals with relationships,” Emanuel told the Sun-Times editorial board. “I was what was considered, at that time, although I don’t think this is really interesting, relationship banking, and that’s what I did.”
Experts said Emanuel’s earnings put him in the top 5 percent of investment bankers. But some who watched Emanuel rake in the bucks during his brief foray into investment banking say he played the same rules as everybody else and just did it better. He had the advantage of a “golden Rolodex” coming out of the Clinton White House.As you can see, Emanuel may have made off handsomely during his short stint as an investment banker, but he is also now officially owned by these people who stuffed his pockets full of money. Evan Bayh and his wife Susan have essentially played the same game during his political career to enrich himself. It's the reason I believe we have lost our government. Frankly, you can't trust hardly anyone in an elected position in government to represent the common good. Virtually all of them have been bought and paid for by powerful interests.
“I worked in the private sector and was remunerated as a private sector [employee],” Emanuel said.
In 1998, As Emanuel prepared to leave his post in the Clinton White House, Bruce Wasserstein, a major donor to Clinton and other Democrats, sent the head of his Chicago office to interview Emanuel about coming to work for his firm.
Despite his lack of experience, Emanuel was made managing director of the Chicago office in 1999 and put together several big deals.
“One of them, a merger between the Chicago Unicom and Philadelphia Peco, that merger not only kept the corporate headquarters here and expanded it so Chicago has one of the leading energy companies here in the city of Chicago,” Emanuel said.
That $8.2 billion merger created Exelon, parent company of Commonwealth Edison. The Obama White House tapped Exelon CEO John Rowe to lobby lawmakers to support the administration’s greenhouse gas-reducing legislation. Obama senior adviser David Axelrod has worked for Exelon.
“John Rowe and I had known each other, and when I came out of the White House, he called me and said, ‘We’re looking at doing a merger, would you guys be willing to be our banker?’ Wasserstein, Perella, we had expertise in that area,” Emanuel said.
The newly merged utility ended up laying off 3,350 workers, or 10 percent of its work force.
Emanuel also oversaw GTCR Golder Rauner’s purchase of SecurityLink from SBC Ameritech, where Emanuel’s successor as White House chief of staff, William Daley, would later become firm president.
“GTCR private equity in Chicago bought from SBC their home security business,” Emanuel said. ”That turned out to be a great business deal for the investors as well as the company, which was eventually bought by Tyco [Intl. Ltd.]”
Wasserstein, Perella was sold twice during his tenure, and Emanuel profited handsomely each time, he said.
Gov. Mitch Daniels similarly had no business experience before he became a top executive at Eli Lilly after leaving the Reagan White House in 1988. He had worked for politicians his entire adult life. By the time he ran for governor in 2004, he had earned more than $50 million from Lilly and the corporate boards on which he served, including IPL, which was sold to AES in a move that screwed over the local utility's employees, as well as people who had invested in the company. While the top executives and board members of IPL, including Daniels, made millions off the sale, the stock price plummeted and wiped out the long-term investments of many people. Not surprisingly, the Indiana Utility Regulatory Commission run by Daniels appointees has a way too comfortable relationship with the utility companies. Former Indianapolis Mayor Bart Peterson is now making his tens of millions working in the same job Daniels once held after he gave tax breaks to the company worth several hundred million dollars as mayor.
The more I've come to know about business and the stock market in this country, the more convinced I am that the only people who make money are the people who trade on inside information. Insider trading as regulated by the SEC is suppose to be illegal, but as far as I can tell, it is rarely enforced. We've seen so many of Indianapolis' elites get rich quick off insider trading and nothing happens to them. The other form of insider trading, using inside information and contacts within government, has an equally corrupting impact. Some of the same people who make money in this town off insider stock trading are also some of the same people who made off like bandits when the City of Indianapolis awarded cable TV franchises back in the early 1980s and when the state of Indiana awarded riverboat gambling and pari-mutuel horse racing licenses in the 1990s. Unless you lie, cheat and steal, your chances of getting ahead in this country in both business and politics are now slim to none.