With his choice of Rahm Emanuel, President-elect Barack Obama is getting not just a politically savvy player, but a man with deep ties to the business community, especially to Wall Street.
Emanuel is a former investment banker, who has been one of Congress’ top recipients of Wall Street contributions since his 2002 election, according to the Center for Responsive Politics.
At a time when the president-elect will be navigating the worst financial crisis in 80 years, Emanuel’s ties to Wall Street could prove potential benefit and detriment. On the one hand, he will bring an insider’s understanding of the world of finance to the White House. But he will also be watched closely for signs of favoring Wall Street over Main Street - an oft-repeated criticism of President George W. Bush by candidate Obama.
Rahm I. Emanuel
The Illinois congressman, whose fund-raising abilities are legendary, was the top House recipient in the 2008 election cycle of contributions from hedge funds, private equity firms and the securities/investment industry.
His top contributors over the course of his Congressional career were Madison Dearborn Partners ($93,600), AT&T Inc. ($86,450), Swiss bank UBS AG ($85,100), Goldman Sachs ($74,750) and JPMorgan Chase & Co. ($73,600) and Dresdner, Kleinwort & Wasserstein ($73,250). (Several of those companies were also big contributors to Obama.)
Many of Emanuel’s relationships with Wall Street’s movers and shakers on Wall Street were personal. After devoting himself to the Clinton White House in the 1990s, Emanuel embarked on a new career in business, saying he wanted to make money to ensure his family’s security.
In 1999, he went to work for Bruce Wasserstein, a major Democratic donor and Wall Street financier, becoming a partner in the Chicago office of investment bank Wasserstein Perella & Co. Over the course of two-and-a-half years as managing partner, he reportedly made more than $16 million.
In those years, he also joined several boards, becoming a director of housing financier Freddie Mac in a period when the agency was plagued with scandal involving campaign contributions and accounting irregularities.
The Securities and Exchange Commission last year charged the housing finance company with accounting fraud between 1998 and 2002, although Emanuel was not named. He recused himself from votes related to Freddie Mac when he was elected to Congress.
He also became a director of the Chicago Mercantile Exchange, now owned by CME Group Inc. and of smaller companies such as RxDrugstore and public relations firm BSMG Worldwide Inc., now a part of Interpublic Group, according to Fortune.
While at Wasserstein Perella, he advised power company Commonwealth Edison in its $8.2 billion acquisition of Pennsylvania-based Peco Energy, according to the Chicago Tribune. He also helped GTCR Golder Rauner, a Chicago-based venture capital and private equity firm, in its purchase of the SecurityLink home security unit from SBC Communications, now AT&T.
After Emanuel became a lawmaker in 2002, his interest in business and finance deepened as Chicago companies looked to him for help. A Dow Jones story detailed some of his efforts in their behalf:
Last year, Emanuel and Sen. Richard Durbin, D-Ill., wrote to the Federal Communications Commission, urging the agency to act quickly on the sale of Tribune Co. to real-estate magnate Sam Zell. The lawmakers said the FCC shouldn’t allow its review of its media- ownership rules to delay completion of the transaction.
Earlier this year, the two Illinois lawmakers wrote the Justice Department, criticizing it for raising questions about the merger between CME and the New York Mercantile Exchange.
Emanuel insists he has also scrutinized the business community.
In 2006, he questioned SEC Chairman Christopher Cox about stock-options backdating, a scandal in which companies pretended that options were granted at an earlier, more beneficial date when the price was lower.
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1 Comments
#1. Danny L. McDaniel 11.15.2008
Rahm Emanual has strong ties to Wall Street and the guys at the top which are currently in financial trouble. I hope the new adminstration has better financial sense then the ones they want to bail out. My guess, there will be alot of unanswered phone calls at the White House starting January 20, 2009. When the Obama team sees the depth and velocity of the problem it will become beyond crisis and more of a salvage operation.
Instead of planning for a bailout they may want to start a new New Deal program for the country. This mess is so large that many enterprises should be allowed to fail and be relegated to the trash bin of American history.
Danny L. McDaniel
Lafayette, Indiana
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