Janet Yellen, the newly confirmed Treasury Secretary whose job, in part, will be to regulate the financial sector, earned $7.2 million-plus from speaking gigs at banks and Wall Street firms in 2019 and 2020, according to her financial disclosure forms.
A big chunk of that $7 million — $810,000 — came from speaking to Citadel, a hedge fund founded by Republican megadonor Ken Griffin.
Citadel reportedly bailed out Melvin Capital Management, a hedge fund slammed with losses in the GameStop short squeeze brought on by smaller investors, to the tune of $2 billion.
Small-dollar investors on a Reddit board arranged to buy GameStop stock and reap financial windfalls from hedge funds that were “shorting” the stock — an investing strategy that involves betting a stock will go down.
The hedge funds predicted stock would go down in value for the ailing mall-based game distributor. Instead, the stock went up, resulting in losses for short-sellers and forcing hedge funds to pay the new investors the difference.
“Separate from the GameStop issue, the secretary of Treasury is one of the world-renowned experts on markets, on the economy. It shouldn’t be a surprise to anyone she was paid to give her perspective and advice before she came into office — before she came in to be the Treasury secretary, I should say,” Psaki said at a White House briefing, according to the New York Post.
“Separate from the GameStop issue, the secretary of Treasury is one of the world-renowned experts on markets, on the economy,” Psaki said.
In the past two years, Yellen earned speaking fees from Wall Street and large corporations including Citi, Goldman Sachs, Google, City National Bank, UBS, Citadel LLC, Barclays, Credit Suisse, Salesforce and more, Politico reported.
Yellen promised to go to Treasury’s ethics lawyers to “seek written authorization to participate personally and substantially in any particular matter” that involves a firm that paid her in the prior year.
On Twitter, accusations of self-dealing were tempered with approval that ethics was once again a “thing” at the White House.
“Unless JANET YELLEN receives a written waiver, she will be barred by her ethics agreement from participating in any matter involving CITADEL, which makes millions in fees from ROBINHOOD, until Oct. 2021 (or 1 year after her last paid speech to Citadel),” New York Times Washington bureau writer Kenneth Vogel tweeted.
A Twitter user responded, “Biden’s pick not looking so great dealing with a crisis of self-dealing and conflict of interest within the first week.”
Another tweeted, “Yay for ethics again! Remember when the incoming Republicans’ first order of business was to eliminate the Ethics Office?Yeah…having ethics is a good thing.”
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A Biden transition official defended Yellen’s speaking fees. “Take a look at her record on enforcement — this is not someone who pulls punches when it comes to bad actors or bad behavior,” the official said. “You can expect she will bring the same high ethical standards and tough enforcement philosophy to Treasury.”
Sen. Elizabeth Warren (D-Mass.) has been critical of the “revolving door” between government officials and corporations, according to Politico. In the past, Warren called Yellen an “outstanding choice.”
