In one of the most astonishing speeches ever given from the senate floor, progressive Democrat, Senator Elizabeth Warren, called out the Obama administration for being a wholly owned subsidiary of Citibank. Her speech was prompted by a Wall Street bomb inserted at the last minute in the Omnibus spending package gutting a key provision from the already watered down Dodd-Frank Act of 2010. That provision regulated how banks trade in derivatives. The banks wanted to, once again, gamble with FDIC insured deposits and, if the derivative deals blow up as before, to be bailed out, once again, by taxpayers.
Obama, a master of triangulation, urged that, in the spirit of bipartisanship, members of Congress vote for the bill, which he has since signed. Senator Warren says the deregulation of derivatives was in the bill because Obama and his Citibank friends wanted it there.
Warren’s extraordinary 10-minute speech
Transcript: Citibank given tremendous power in the Obama administration
Mr. President, in recent years, many Wall Street institutions have exerted extraordinary influence in Washington’s corridors of power, but Citigroup has risen above the others. Its grip over economic policymaking in the executive branch is unprecedented. Consider a few examples:
- Three of the last four Treasury Secretaries under Democratic presidents have had close Citigroup ties. The fourth was offered the CEO position at Citigroup, but turned it down.
- The Vice Chair of the Federal Reserve is a Citigroup alum.
- The Undersecretary for International Affairs at Treasury is a Citigroup alum.
- The U.S. Trade Representative and the person nominated to be his deputy – who is currently an assistant secretary at Treasury – are Citigroup alums.
- A recent chairman of the National Economic Council at the White House was a Citigroup alum.
- Another recent Chairman of the Office of Management and Budget went to Citigroup immediately after leaving the White House.
- Another recent Chairman of the Office of Management of Budget and Management is also a Citi alum — but I’m double counting here because now he’s the Secretary of the Treasury.
That’s a lot of powerful people, all from one bank. But they aren’t Citigroup’s only source of power. Over the years, the company has spent millions of dollars on lobbying Congress and funding the political campaigns of its friends in the House and the Senate.
Citigroup has also spent millions trying to influence the political process in ways that are far more subtle—and hidden from public view. Last year, I wrote Citigroup and other big banks a letter asking them to disclose the amount of shareholder money they have been diverting to think tanks to influence public policy.
Citigroup’s response to my letter? Stonewalling. A year has gone by, and Citigroup didn’t even acknowledge receiving the letter.
Citigroup has a lot of money, it spends a lot of money, and it uses that money to grow and consolidate a lot of power. And it pays off. Consider a couple facts.
Fact one: During the financial crisis, when all the support through TARP and from the FDIC and the Fed is added up, Citi received nearly half a trillion dollars in bailouts. That’s half a trillion with a “t.” That’s almost $140 billion more than the next biggest bank got.
Fact two: During Dodd-Frank, there was an amendment introduced by my colleague Senator Brown and Senator Kaufman that would have broken up Citigroup and the nation’s other largest banks. That amendment had bipartisan support, and it might have passed, but it ran into powerful opposition from an alliance between Wall Streeters on Wall Street and Wall Streeters who held powerful government jobs. They teamed up and blocked the move to break up the banks—and now Citi is bigger than ever.
The role that senior officials working in the Treasury department played in killing the amendment was not subtle: A senior Treasury official acknowledged it at the time in a background interview with New York Magazine. The official from Treasury said, and I’m quoting here, “If we’d been for it, it probably would have happened. But we weren’t, so it didn’t.” That’s power.
Mr. President, Democrats don’t like Wall Street bailouts. Republicans don’t like Wall Street bailouts. The American people are disgusted by Wall Street bailouts. And yet here we are — five years after Dodd-Frank – with Congress on the verge of ramming through a provision that would do nothing for middle class, do nothing for community banks – do nothing but raise the risk that taxpayers will have to bail out the biggest banks once again.
There’s a lot of talk lately about how the Dodd-Frank Act isn’t perfect. There’s a lot of talk coming from Citigroup about how the Dodd-Frank Act isn’t perfect.
So let me say this to anyone who is listening at Citi: I agree with you. Dodd-Frank isn’t perfect.
It should have broken you into pieces.
Realities to ponder:
- It was Obama’s choice to give Citibank extraordinary power and influence in his administration.
- It was Obama’s choice to keep the Bush era architects of torture as close advisors.
- It was Obama’s choice to invite warmongering neocons into his administration.
It’s time for us to challenge bank-owned Democrats who spout progressive platitudes to the public while slavishly serving the interests of the elite. In a courageous act, Elizabeth Warren has taken the first step, and she is taking names.