The more absurd thing is criticism of Yellen on this part is being defended - by the White House press secretary no less - as a woman's right to use her skills to make money. Yes, women should absolutely be able to rise to their talent and ambition, but it's a clear conflict of interest for government official. It's a disingenuous use of the most vacuous forms of language to defend open corruption.<p>But then again, if we wanted finance experts to chair the Fed and be the treasury secretary without any prior monetary relationships with banks and hedge funds, we would probably have just some academics. A lot of academics in economics/finance get paid for legal testimony on behalf of companies and such, too.
For additional context, the most recent payments for speaking fees from Citadel were barely three months ago[1]:<p>> The Chicago-based hedge fund paid Yellen $292,500 for a speech on Oct. 17, 2019, $180,000 for one on Dec. 3, 2019, and $337,500 to speak at a series of webinars held from Oct. 9-27, 2020.<p>[1]: <a href="https://dailycaller.com/2021/01/28/janet-yellen-gamestop-citadel/" rel="nofollow">https://dailycaller.com/2021/01/28/janet-yellen-gamestop-cit...</a>
Regulatory capture is a gigantic problem, especially in finance.<p>It’s obvious that we don’t have the right incentive structure with the SEC, either. If you can make 20x more using the skills you’d need to investigate companies trading instead, the talent pool is reduced to those motivated by power/ideology. I’ve always thought financial regulators should have some kind of incentive structure that closes this gap but it’s not clear how to do that without skewing the enforcement priorities.
Speaking fees is how one legally bribes politicians. Such is how my cynical self sees it. The Clintons earned over $150 in speaking fees since leaving the presidency. Does anyone think their speeches are worth $10 million a year? At the end of the Clinton presidency he signed into law a repeal of Glass-Steagall. Reagan famously was paid around $10 million after his presidency to give some speeches in Japan. He got rid of car import quotas.<p>Perhaps I'm being too conspiratorial or cynical but it seems to me that this is the polite understanding between business and those with political power. We'll pay you a lot of money for very little work if you pass legislation that we like.<p><a href="https://www.cnn.com/2016/02/05/politics/hillary-clinton-bill-clinton-paid-speeches/index.html" rel="nofollow">https://www.cnn.com/2016/02/05/politics/hillary-clinton-bill...</a>
I've seen this a couple of times and I don't understand the outrage. Yellen is a financial professional. Would we expect her to a) not speak at Citadel if asked or b) request less than market rates for doing so?<p>I really don't understand what people want from her.
Unfortunately this is more the norm than the exception.<p>On a tangent, something similar happened with a Canadian Charity called WE [1] and them being chosen to run a billion dollar grant program for Canadian students during covid. It later came out that the charity had paid speaking/appearance fees to the PM's family as well as to the finance minister at the time. After enough outcry from the media + opposition + people, the finance minister resigned and WE was stripped of the contract.<p>[1] <a href="https://en.wikipedia.org/wiki/WE_Charity_scandal" rel="nofollow">https://en.wikipedia.org/wiki/WE_Charity_scandal</a>
Guys hate to be the one saying this, but $700k for speaking fees at this level is really not that much money and certainly not enough to influence someone who thinks in 4 commas.<p>If Citadel accounted for 70% of all her speaking fees, that would warrant a closer look - this is a move along carry on for me.
Whether or not she should have accepted the fees is not relevant, the point is she should recuse herself from any investigation into companies that she has a personal business relationship with. That is basic ethics. What is the reason she should not recuse herself?
Speaking fees turn prestige into money, and money into prestige. People that are more famous than rich get a little richer; institutions get to associate themselves with those people, and be the kind of place where you might see those people. A simple transaction, if a bit grubby for injecting money into social capital relations.<p>That all seems fine! Most speaking fee arrangements - even with politicians - seem to me to be in this mode. Are there cases where kickbacks or bribes are given as speaking fees? Sure, elsewhere in this thread there's discussion of no-name doctors (who happened to prescribe lots of Oxycontin) giving lectures to empty halls for hundreds of thousands of dollars seems like a bribe. But that's because the no-name MD is getting _way_ more than the going rate for his status!<p>When the speaker is already well known, the institution is already getting something for its money, so overlaying an implication of clandestine, speculative (retroactive?) quid pro quo is an unnecessary over-read.<p>Also, like, Barney Frank is on the board of a bank. Chris Dodd asks 40-70k to speak. Mike Oxley worked for NASDAQ. These 'sinecures' don't seem like they're conditional on passing laws that Wall St. likes.
Let's not forget, government regularly hands out massive amounts of money to private enterprise --<p><a href="https://www.bloomberg.com/news/articles/2020-03-24/fed-hires-blackrock-for-agency-cmbs-corporate-debt-programs" rel="nofollow">https://www.bloomberg.com/news/articles/2020-03-24/fed-hires...</a><p>The "speaking" fees are really just bribes, lets me honest about it. It's so corrupt and so obvious and begs the question what are you going to do about it?
I'm pretty astonished at the level of certainty going on here that this was corrupt. Isn't spouting off on that the easy path? Can it at least be accepted that it is <i>possible</i> to accept speaking fees without engaging in a quid pro quo for later favors? Given that, shouldn't there be a hint of evidence that there is some sort of actual agreement or plans to do a bribed action, aside from the speech and speaking fees themselves?
We are compensating high office holders all wrong. We are paying them pennies on what they could make in the private sector for a similar position of power, and leaving them to make up the difference by extracting money from favors and prestige. It virtually guarantees corruption.<p>They should be paid an enormous salary plus an excellent pension for life, with the caveat that they are not allowed to accept income from any other source for the rest of their life. This would not be a lot of money. If we paid everyone in the house, senate, and cabinet $10M / y, that would cost < $5B per year, which is nothing to the government. You could make the pensions like $2M / year, and the total cost would probably come in at < $10B.
The most upsetting part about this is that it is completely expected that a politician will strive to do what is in their best interest and the interest of their supporters. Please note it doesn't matter what party you support politicians are generally all the same in that they use their positions to seek power and wealth from their positions at the expense of their constituents.
The submitted title was "Yellen Accepted $700K Speaking Fees from Citadel; Will Not Recuse from Hearing". That broke the site guidelines, which ask: "<i>Please use the original title, unless it is misleading or linkbait; don't editorialize.</i>"<p>Cherry-picking a detail and making that the title instead is the primary form of editorializing, so please don't do that. Titles are by far the biggest influence on threads. On HN, submitting an article doesn't confer any special right to frame the content for everyone else.<p>If you want to say what you think is important about an article, that's fine, but do it by adding a comment to the thread. Then your view is on a level playing field with everyone else's.<p><a href="https://hn.algolia.com/?dateRange=all&page=0&prefix=false&sort=byDate&type=comment&query=%22level%20playing%20field%22%20by:dang" rel="nofollow">https://hn.algolia.com/?dateRange=all&page=0&prefix=false&so...</a>
I find my problem with people defending figures like Yellen accepting speaking money is that they will often put forward the most charitable explanation of this behavior. "She's an accomplished woman who held one of the most powerful positions in global financial regulation! Of course big banks and hedge funds want her to come and speak."<p>Why should we give our public officials the benefit of the doubt? Why should they get the charitable viewpoint? Imo, if you hold the absolutely shocking amounts of power someone like Yellen does, where your post has significant control on the oversight and regulation of the most powerful free market economy in history, you NEED to have your feet held to the fire with regards to stuff like bribery. Our system has become corrupted due to charitable explanations.
If she finds for them, it's because they paid her. If she finds against them, it's because they didn't pay her enough.<p>Seems like a great impartial position.
How much did Mnuchin's vacations cost taxpayers? Oh yeah ... more.<p>"In the report, the OIG reviewed nine travel requests by Mnuchin for military air transportation since March 2017, of which seven were approved and taken, one was withdrawn, and one was approved with travel pending in late October 2017.[110] The total cost of the seven trips taken was $811,800, calculated from per-hour cost and operating hours for the specific aircraft, or Air Force-provided direct costs of operations."<p>And this was MY money he torched, not wallstreet<p>And this was just ONE of the shady things he did while serving. I'll take Yellen 7 days out of the week if the alternative are ghouls like Mnuchin.
There should absolutely be a cap on "speaking" fees a current or former Government official should be able to receive. It is absolutely institutionalised corruption or post facto bribery.
FYI, previous title on HN was "Yellen Accepted $700K Speaking Fees from Citadel; Will Not Recuse from Hearing".<p>That's why it's the main topic in the comments.<p>> "Yellen received more than $700,000 in speaking fees from Citadel, the financial empire run by billionaire Ken Griffin. Griffin runs a hedge fund and controls Citadel Securities, a giant market making firm that executes trades for Robinhood’s customers."
Is this because of the potential threat of a dollar squeeze? Seems like the market is too deep for that... Or is it just about the impact of volatility and the cost to the system of covering positions?<p>Why on earth are all the comments about her speaking fees? That paragraph was totally superfluous in the article.
You have to wonder, why would the hedgies pay her that kind of money for speaking engagements while she was still a civilian? Did they foresee that she would be their regulator in the near future?
Citadel hedge fund (not the market maker) has a large short bet on GameStop and profits from short selling<p><a href="https://wallstreetonparade.com/2021/02/citadel-didnt-just-bail-out-a-gamestop-short-seller-citadel-also-had-a-big-short-position-in-gamestop/" rel="nofollow">https://wallstreetonparade.com/2021/02/citadel-didnt-just-ba...</a>
I wrote her a letter (paper) asking her to withdraw her ethics waiver.<p>Who grants this waiver? Can I write to somebody who can prevent her from getting it.
The whole hedge fund colluding conspiracy has been debunked [1]<p>RH and Citadel weren't colluding at all. It was their clearing house (Apex, which is used by almost 50% of brokerage firms) that demanded they raise the collateral by 100% which in turn required the brokers to stop transferring shares as the clearing house were not comfortable with floating large number of shares with limited quantity and high volume.<p>I'm afraid that because WSB has politicized this to "David vs Goliath" without even considering that a small group of their users ARE the real Goliaths, hyping and mobilizing their userbase incapable of critical thinking to drive share prices up and down.<p>Now they are simply going to make life more difficult for retail traders and we are going to see new regulations against using social media to pump up stocks.<p>I hope that those people who were pumping up $GME, saying it was going to $30,000 have been using Tor or VPN. The conspiracies coming out of WSB has been nothing short of Qanon-like in terms of its vigor, fixation and paranoia. It feels exactly like what r/the_donald was in 2016 before they were rightfully shut down.<p>[1] - <a href="https://news.ycombinator.com/item?id=26016048" rel="nofollow">https://news.ycombinator.com/item?id=26016048</a>
The amount of mental jugglery in the comments in amusing. It is as if it is physically impossible and greatly naive to expect/have a person with great integrity in their financial/ethical conduct for public office while that is the very criteria that is tooted from the roof-tops whenever public office is concerned.
On the one hand $700k is more than a lifetime of savings for many. On the other hand I sometimes get surprised by how cheap the most influential politicians in the world are. I guess this sort of thing is regular enough so it adds up?!
It seems that the biggest underling issue is that people are at key junctures to make decisions for groups. We have the technology to directly vote, we should change out Govt to more freely allow for that.
Interesting that this is now a much more generous title than, "Yellen Accepted $700K Speaking Fees from Citadel; Will Not Recuse from Hearing"
We all moaned and sighed and called Trump and family a bunch of grifters.<p>Now we get Biden and his administration of professional grifters.<p>It should shock us all it costs 1.9T for a country with 330 million peopled to give 150 million of those $2000. That means 1.6T in grift going down.....
I don’t see any real pressure for her to recuse herself. The dominant political party in the USA ran on the simultaneous platforms of “the swamp is fake” and “the swamp is better than the alternative”. Well this is the swamp the populists were talking about. The democrats are now are emboldened with a clear mandate from the people that these relationships are an acceptable price to pay.
Can an insider explain the shenanigans behind this?<p>The speech is surely not worth that much. Is the exorbitant amount of money paid for the speech just an opportunity to be a patron of a "thought leader", i.e a legal bribe in other words?
'Speaking Fees' are absolutely the new form of fraud/bribery/kickback.<p>It's the most arbitrarily thing imaginable, and you can just throw up any number for 'services performed'.<p>After Obama completed his term, he was immediately on the 'Speaking Fee' tour, including several million paid by a group of Italian banks in desperation [1], totally insolvent - for a a 45 minute speech (!). I wonder if what they needed was a 'Pep Talk' from a 'Former President' ... or perhaps someone influential to put in a good word with the ECB to push for loser monetary policy that might help save failing Italian banks?<p>I don't think speaking fees imply some kind of bad behaviour, but they are definitely smoke and often represent a conflict of interest.<p>It's a little bit funny that people don't recognize this: $700K (or whatever large amount), this is a material amount of money, you don't just spend this for no reason, you 'get something' for it.<p>As Hillary Clinton was about to win the 2016 presidency, masses of cash flowed into the Clinton Foundation (Norway and Australia were pumping in 10's of millions) but just as she lost - 'charitable donations' dried up. Have a look at this chart [2].<p>Just stare at this chart for a minute: massive cash flows to the charity someone expecting to be the most powerful person in the world, and then those cash flows completely evaporate as soon as we found it she wasn't going to have that power?<p>So, did Norway, Australia and all these international agencies and governments magically decided to be 'less charitable' in 2016?<p>Or was it that they were 'expecting to get something in return' for their massive charitable donations?<p>Let's not be naive.<p>It doesn't mean there is criminality or even excessive payments, but it's obviously a conflict of interest. If may be something as simple as 'The Norwegian Sovereign Wealth Fund wants 10 Minutes with the President, to get an introduction to some agency' - and that's it. A very expensive call, but possibly worth it.<p>And this is not 'political' and certainly not 'one side of the aisle' it's just business.<p>[1] <a href="https://www.express.co.uk/news/world/802063/Barack-Obama-speech-Global-Food-Innovation-Summit-Milan-private-speech-Wall-Street" rel="nofollow">https://www.express.co.uk/news/world/802063/Barack-Obama-spe...</a><p>[2] <a href="https://www.opensecrets.org/news/2018/12/clinton-foundation-revenue-low/" rel="nofollow">https://www.opensecrets.org/news/2018/12/clinton-foundation-...</a>
Imagine the media response if this was a Trump appointee.<p>Imagine the billions in property damage due to peaceful protests if a Trump appointee didn't recuse themselves.