February 2013 - Represent Consumers

Does Jack Lew's Citibank contract violate ethics laws?

The emerging details of prospective Treasury Secretary Jack Lew’s contract with Citibank raise fresh concerns about the persistent issue of the Obama administration’s revolving door with too big to fail banks.

During Lew’s confirmation hearing earlier this month, Sen. Orrin Hatch, R-Utah, questioned the president’s pick to run the Treasury Department about a provision in his employment contract with Citibank – where Lew landed after his previous tenure as a high-ranking official in the Clinton administration.

According to his Citibank contract, he would lose a hefty bonus worth nearly $1 million and other compensation if he left before he received it, except under two very specific circumstances – either he died or obtained a high-level job in the federal government.

If he became a lobbyist, he would lose the bonus. If he became a farmer or the governor of New York, no bonus. Only by getting one of the administration's top jobs could he swim in that vast ocean of cash.

The unusual terms of the contract create a huge potential conflict of interest for Lew, who stood to gain enormous wealth if he landed a government job. Citibank is ensuring that Lew can comfortably move back into the public sector without financial sacrifice. What do the bankers expect for their money? On many tough issues which will require Lew to represent consumers, borrowers and taxpayers when big banks lobby authorities for weaker regulation, can we count on Lew to strongly represent us, even though we have no millions to dangle in front of him?

During his confirmation hearing, Sen. Hatch noted “your employment agreement included a clause stating that ‘your guaranteed incentive and retention award’ would not be paid upon exit from Citigroup but there was an exception that you would receive that compensation ‘as a result of your acceptance of a full time high level position with the United States Government or a regulatory body.’ Now is this exception consistent with President Obama’s efforts to ‘close the revolving door’ that carries special interest influence in and out of the government?”

Lew’s answer doesn’t pass the smell test. “I’m not familiar with records that were kept, so I don’t have access to things that I don’t know about,” Lew testified.

Is Lew, with a reputation as a serious numbers cruncher, policy wonk and savvy political negotiator, suggesting that when it came to the terms of his own bonus, he didn’t read the relevant documents?

Either his statement is false or he just disqualified himself from any government job, especially one overseeing the nation’s complicated finances.

Lew’s response begs for further inquiry. Hatch didn’t pursue it during the hearing. Neither did any of the major media in their coverage. The only initial coverage came from Pam Martens in her “Wall Street on Parade” blog. She referred to the “bombshell” Hatch dropped during the hearing. A week later, Bloomberg columnist Jonathan Weil covered the issue, writing that it appeared that Citibank paid Lew a “sort of bounty” to get a high-powered job in the administration. Lew has certainly earned that Citibank bonus with a series of powerful positions, first in the State Department, then as director of President Obama’s Office of Management and Budget and then as his chief of staff.

Lew and the Obama administration may have other problems aside from whether Lew’s Citibank bonus disqualifies him from a job overseeing it and other megabanks. Government watchdog Bart Naylor, an analyst with Public Citizen in D.C., said, after reviewing excepts of Lew’s contract, that the Justice Department should investigate for a possible criminal violation of USC 18 Section 209, which reads:

“Whoever receives any salary, or any contribution to or supplementation of salary, as compensation for his services as an officer or employee of the executive branch of the United States Government, of any independent agency of the United States, or of the District of Columbia, from any source other than the Government of the United States, except as may be contributed out of the treasury of any State, county, or municipality; or

Whoever, whether an individual, partnership, association, corporation, or other organization pays, makes any contribution to, or in any way supplements, the salary of any such officer or employee under circumstances which would make its receipt a violation of this subsection—?”

Naylor, said: “ The Department of Justice should answer whether the contract between Citi and Mr. Lew is in accord with federal ethics law. This law prevents a private company from making `any contribution’ to an employee `for his services’ to the executive branch of the government. Citi’s contract states that Mr. Lew would sacrifice any bonus he earned unless he landed a high level federal job. Authorities must answer whether the $1 million bonus Mr. Lew qualified for by taking a high level government job constituted a `contribution’ from Citi.”

Even if Lew’s Citibank bonus doesn’t constitute a criminal violation, it certainly violates the spirit of the law and gravely undermines the public’s confidence in him and in the administration’s ability to protect the public from the onslaught of Citibank lobbying and political contributions. If the Obama administration wishes to retain any shred of credibility in its ability to regulate too big to fail banks, it should immediately launch an investigation into the circumstances surrounding Lew’s contract – and the contracts of the many other former Citibank officials who have served in the administration.

Here’s a partial list:

•Former Citigroup chief economist Lewis Alexander, who joined Treasury in 2009 as a top adviser to former Treasury Secretary Tim Geithner. Alexander is probably best known for having incorrectly predicted, while still at Citi in 2007, that the U.S. would avoid a recession from the crash of the housing bubble. He left the Treasury Department in 2011.

•Former vice-chairman of Citigroup’s global markets Lewis Susman was named to the plum assignment of U.S. ambassador to Great Britain in 2009. He earned his job the old-fashioned way, as one of President Obama’s top contributors and bundlers during the 2008 campaign.

• Michael Froman, a veteran of the revolving door who served in the Clinton Treasury Department before his work as a chief financial officer at Citibank, is credited with introducing President Obama to Robert Rubin, the former Clinton Treasury secretary who oversaw the dismantling of the Glass-Steagall Act before becoming Citibank CEO during the financial crisis. Froman is a special assistant to the president and deputy national security adviser for international economic affairs. The New York Times reported that Froman received more than $7.4 million in compensation from Citibank between January 2008 and joining the White House in February, 2009 – including a $2.25 million bonus, which the White House claimed Froman donated to charity.

•David Lipton, another Clinton Treasury veteran who was paid huge Citibank bonuses ($1.275 million in 2008 and $762,000 in 2009) while serving as the bank’s head of country global risk management. President Obama appointed him special assistant to the National Economic Council and the National Security Council.

The administration should get a clue, withdraw Lew’s nomination, and find somebody to lead the Treasury who puts the interests of the public and taxpayers ahead of those of the big bankers.

Failed policies fuel phony housing recovery

In his State of the Union speech, President Obama cited the recovery of the housing market as evidence the economy is getting stronger.

If by “recovery,” the president meant a fabulous bargain-shopping opportunity for flush hedge funds, he was spot on.

If was he was talking about what most people understand by “recovery” – restoring families’ stability, healthy communities and a sense of economic well-being – not so much.

While the president paid lip service to bolstering the middle class, four years of his administration’s failed policies have set the stage for the financial industry’s further plundering of one of our basic needs – housing.

Before the financial crisis the wizards of high finance figured out how to turn our homes into complex investment vehicles that made them billions – before they crashed the economy. Now the financial geniuses how figured out how to make a killing picking over the carcass of the collapsed housing boom.

Certainly housing prices appear to be going up, but a large reason for that is the hedge funds that are swooping in to take advantage of the low, low prices. CNN Money reports that Blackstone Group spent $2.7 billion to buy 17,000 single-family homes. Bloomberg reported that Blackstone was spending $100 million a week to buy distressed homes to rent and hold until prices rise.The buyout firm GTIS Partners said it plans to spend $1 billion through 2016 buying single-family properties and converting them to rentals, while Oaktree Capital Management of Los Angeles started a fund that would buy $450 million worth of single-family homes, the Los Angeles Times reported. Also here in Southern California, G8 Capital of Ladera Ranch bought several portfolios of distressed properties to rent.

The real estate investment firm McKinley Capital Partners of Oakland has purchased hundreds of homes in the San Francisco Bay Area. The Urban Strategies Council reported that in Oakland, speculators had bought 42 percent of all properties that went through foreclosure.

“This is an outrage,” Oakland Councilwoman Desley Brooks told the Oaklandlocal.com nonprofit news site. “People in Oakland typically (buy a home) and put in roots in a neighborhood and stay there and this strategy with investors is doing away with that. It's taking away from our ability to have neighborhoods where people know each other ... we need that in Oakland.”

While interest rates are at record lows, many individual buyers in hard-hit areas don’t have the savings, credit or income to buy.

Is this just the marketplace at work? I don’t think so. The Obama administration insisted that it was implementing policies to ease the foreclosure crisis, putting in place incentives to ensure banks would help homeowners through loan modifications and principal reductions for underwater homes.

But in contrast to the massive, no questions asked shoveling of money to prop up the big banks in the bailout, help for homeowners was late, inadequate and tepid. The incentives were too small and the policies lacked teeth to hold bankers accountable when they didn’t take action or when they foreclosed using fraudulent or forged documents.

A particularly damning admission about these policies came from the mouth of former Treasury Secretary Tim Geithner, as quoted by Neil Barofsky, former special inspector-general of Troubled Asset Relief Fund, aka the bailout. In his book,”Bailout,” Barfosky contends Geithner acknowledged that the foreclosure relief programs weren’t really intended to help homeowners but instead, to help banks manage their foreclosure portfolios, or in Geithner’s colorful words, to “foam the runway for the banks.”

The president has yet to make any such acknowledgement, and wants us to believe that his policies have helped middle-class Americans regain a foothold. Nothing could be further from the truth. It looks like these policies have facilitated a massive takeover of the affordable U.S. housing market by the same speculators who brought it down.

Foreclosures / Martin Column / President Barack Obama - 02/21/2013

Six reasons Republicans should get over it – and vote to raise the minimum wage

Just this once, Republicans should make an exception to their policy of opposing everything President Obama proposes and support an increase in the minimum wage.

There are many good reasons why a wide majority of Americans consistently support it. According to a 2012 poll, 73 percent of likely voters supported increasing the minimum wage to $10 an hour (the president is proposing $9 and then indexing it to the consumer price index for the first time). That’s not actually much of an increase: if the minimum wage kept pace with productivity gains it would be $16.50 an hour!

A minimum wage hike is that rare political issue which appeals across gender, age, race, education level, region and party, the poll showed.

But here are six other decent reasons for Republicans to abandon their opposition and support raising the minimum wage:

Before it was President Obama’s idea, many of them supported an increase. Six years ago, when George Bush was president, at least 67 Republicans still in Congress, including Rep. Paul Ryan, backed an increase from $5.75 to $7.25 an hour. Sen. Mitch McConnell, then Senate majority leader, said, “We're going to pass a good minimum wage increase bill because of Republican support and because Republicans insisted on a bipartisan package, not a partisan fight.” The 2012 Republican presidential nominee, Mitt Romney, also supported an increase – before conservatives pummeled him for his position and he flip-flopped.
It doesn’t place an undue burden on small business. It’s a myth that small business is the primary employer of low-wage workers. Sixty-six percent of low-wage workers work for major corporations like Wal-Mart and McDonalds – and they’re doing better than ever. According to a report from the National Employment Law Project, of the top 50 companies employing low-wage workers, 75 percent have higher revenues than before the recession and 73 percent are sitting on more cash. They paid their top executives an average of $9.4 million last year.
Several topnotch companies already pay more than minimum wage voluntarily – and they’re doing fine. Among them are two of the top fast-food companies in the country. The wildly popular In’n’Out Burger in California and Arizona pays its part-time workers $10 an hour to start and its full-time workers get health benefits. The 31-year old woman who now runs the family-owned chain is the country’s youngest female billionaire. In’n’Out’s newest California competitor, Five Guys Burgers and Fries, also pays above the minimum wage: $8 an hour plus incentives shared among shift teams.
It could help them with the illegal immigration issue. Back in September, 2011, Ron Unz,missing American Conservative commentator proposed that Republicans support an increase in the minimum wage as part of a comprehensive rethinking of the party’s immigration stance and broadening its base. A higher minimum wage, Unz suggested, might actually reduce illegal immigration.
If Republicans oppose a minimum wage hike, Democrats will clobber them with it in the 2014 election to help them take back the House of Representatives. “Dems believe that this battle goes directly to fundamental and deeply held voter beliefs about which party is really on the side of economically struggling Americans,” the Washington Post’s Greg Sargent reported. “Having just lost an election in which they were perceived as prioritizing the interests of the rich over everyone else, Republicans understand this, which is why they wrap their opposition to the minimum wage increase in a veil of concern for low wage workers.”
Rep. Paul Ryan, the unsuccessful Republican vice-presidential nominee and a 2016 presidential contender said his party must do a better job convincing people it has better ideas on “fighting poverty and helping people move up the `ladder of life.’” If he’s serious about that, helping people on the lowest rung with a pay hike would be a good start.

Martin Column / Minimum wage - 02/20/2013

For Jamie Dimon, it's a free country; others must pay

America's favorite banker is at it again.

At the posh gathering of the world’s global financial elite at Davos, Switzerland, J.P. Morgan Chase’s CEO has been whining that bankers have been scapegoated for the financial collapse.

You might be inclined to have some sympathy for Dimon, who got whacked with a 50 percent pay cut last year after his bank lost nearly $6.2 billion, and possibly up to $9 billion, in the notorious “London whale” trades, in which a J.P. Morgan Chase employee speculated with federally-insured deposits, as part of a hedging strategy gone awry – bets intended to reduce the bank’s risk increased it instead.

So Dimon was only paid $11.5 million and lost the distinction of being America’s highest paid banker.

If you don’t have your scorecard handy, Dimon is the one banker who managed to emerge from the financial collapse with his reputation intact, because of the widely held perception that J.P. Morgan had managed its risk well, avoiding the worst excessive behavior that typified too big to fail banks.

But since then Dimon and his bank have been tarnished by his continuing swaggering arrogance and revelations of the bank’s own numerous misdeeds.

He’s a fierce, if smooth, advocate for his fellow bankers against increased financial regulation. The “London whale” debacle, which he initially dismissed as a “tempest in a teapot” before going on Meet the Press to acknowledge the bank’s gargantuan mistakes, has not increased his capacity for introspection or self-criticism. “Life goes on,” he observed blithely.

Federal regulators ordered the bank to improve risk management in the wake of its stupendous London whale losses and to tighten money-laundering controls. A Senate subcommittee is also investigating the London whale trades.

Nor did the London whale losses increase his humility. Last August, Dimon came out roaring in an interview with New York magazine, saying he was not going to be one of those wimpy bankers afraid to criticize increased bank regulation because of fear of retribution. “We recently had an event with a hundred small bankers here, and 85 percent of them said they can’t challenge the regulation because of the potential retribution,” he told New York’s Jessica Pressler. “That’s a terrible thing. Okay? This is not the Soviet Union. This is the United States of America. That’s what I remember. Guess what,” he said, almost shouting at Pressler. “It’s a free. Fucking. Country.”

It may be a free country, but taxpayers and customers are going to pay dearly for J.P. Morgan Chase’s business practices.

Here’s a list of some of the controversies surrounding J.P Morgan:

• The New York Times recently reported that when outside analysts discovered serious flaws in thousands of mortgages that were packaged into securities by J.P. Morgan Chase, the bank either ignored the criticisms or watered them down. Evidence of J.P. Morgan’s handling of the outside reviews surfaced in emails disclosed in a lawsuit brought by investors who said they were misled about the value of the $1.6 billion in the packaged mortgage investments.

• The bank is also one of three U.S. banks under investigation for its role in manipulating the LIBOR interest rate, which determines the interest charged for a wide variety of retail and commercial loans. Authorities have already fined the British Barclays Bank $452 million for its role in the manipulation. The cost of LIBOR rigging to taxpayers is estimated at around $3 billion.

J.P Morgan paid $228 million and admitted wrongdoing to settle accusations that it rigged bids to win municipal bond business. Prosecutors said the bank entered into secret agreements with bidding agents to improperly see competitors’ bids..
The bank has agreed to pay authorities about $2 billion to settle claims of massive fraud and abuse in its foreclosure process across the country.
In 2011, the bank apologized for overcharging thousands of veterans on their mortgages and improperly foreclosed on others while they were on active duty overseas. J. P Morgan agreed to pay more than $30 million in damages.

In each of these cases, the amount of penalties is hardly going to worry J.P. Morgan, the country’s second-largest financial institution. In the fourth quarter of 2012, the company enjoyed record profits of $5.7 billion, up 53 percent over the same period a year earlier, on revenues of $23.7 billion.

Meanwhile, Dimon has found time to join with other top CEOs to champion a grand bargain to reduce the federal deficit, similar to the Simpson-Bowles plan that grew out of President Obama’s fiscal crisis commission. Dimon and other CEO’s have bravely concluded that the best way to reduce America’s debt is to shred the social safety net that Americans who suffered most through our deep recession have been clinging to.

Does Jamie Dimon’s track record really qualify him to offer us advice on the best way to fund the government and deliver essential government services like Social Security and Medicare. We can’t stop him from offering his two cents, but that’s about what’s it worth. While we’re free to ignore him, our politicians not so much, since J.P. Morgan’s PAC and individuals associated with the company spent $3.7 million on the 2012 elections. And while it favored Republicans, the bank still donated more than $236,000 to President Obama. Unless we decide to say otherwise, that could buy Jaime Dimon a lot of freedom.

Derivatives / Executive Pay / Financial Crisis / Martin Column - 02/13/2013

Standard & Poors' defense sounds familiar

What a shame that the feds’ big lawsuit against Standard and Poors probably won’t go to trial.

The public is missing the chance to view up close many of the players whose fraud and fecklessness helped fuel the financial collapse, wriggling and squirming under scrutiny by sharp lawyers in dramatic confrontation, with prosecutors who want to prove they can take on Wall Street and its high-priced lawyers, while Standard and Poor’s fights to save its business.

The stakes are too high for the government or the credit rating agency to take their chances turning the case over to a “jury of their peers.”

Before the Justice Department filed its case, Standard and Poors had already rejected a settlement offer that required it to pay $1 billion and admit responsibility. The case will eventually settle without that grand showdown in court, so the authorities can hold their face-saving press conference and the company will survive, stripped of a painful share of its profits but with enough semblance of its professional standing to go forward.

That means most of the jousting will take place in the court of public opinion, where both sides have shown considerable prowess.

For its part, the Obama administration has convinced a sizable chunk of the electorate that its efforts actually have reformed the financial system that led to the 2008 meltdown. Standard and Poors, meanwhile, has managed to prevent meaningful reform of the questionable practices that helped create that meltdown, despite damning official reports from the Financial Crisis Inquiry Commission and the Permanent Senate Subcommittee on Investigations that laid a large chunk of the blame for the collapse squarely on the failures of the credit rating agencies.

As part of its defense, Standard and Poors has suggested that it wasn’t inflating its ratings of investments based on worthless mortgages just because that’s what the big banks were paying it do.

No, the credit rating agency insists it was taken in, along with all the other highly paid geniuses who were profiting or pumping up the housing bubble.

If the case went to trial, Standard and Poor’s could conceivably call all the top Obama administration officials who likewise have said, over the years, that the financial collapse was an unforeseeable event that came from nowhere.

They could call on Treasury Secretary Geithner and Larry Summers, Obama’s chief economic adviser until November 2010, both of whom embraced this feeble notion.

It wouldn’t be difficult for prosecutors to undermine this defense, since there are plenty of experts who were predicting the collapse of the bubble, though none of them were in the D.C.-Wall Street power axis. They were ignored before the collapse, as they are being ignored now.

If the Standard & Poor’s case did make it to trial, prosecutors would perform a real service by demolishing this phony propaganda in order to win their case.

Financial Crisis Inquiry Commission / Martin Column / President Barack Obama - 02/10/2013

Former bank regulator profits from foreclosure fiasco

While the foreclosure crisis has brought devastation to millions of Americans, for a few Washington insiders it’s proved quite lucrative.

One of the most recent to cash in is Eugene Ludwig, former comptroller of the currency in the administration of his one-time Yale Law School pal, former President Bill Clinton.

While it’s supposed to regulate banks, the comptroller of the currency’s office has consistently suffered from a reputation for being too compliant to those it is supposed to oversee.

Ludwig, after his government service, formed a private global financial consulting and lobbying firm named Promontory Financial, working directly for banks and other financial firms. The company’s roster is filled with a mix of veterans of financial regulatory agencies, top banks and the law firms that represent them.

Ludwig, to say the least, has done well serving the financial industry. According to Washingtonian magazine, Ludwig owns one of the most expensive homes in Washington, a 13,000 square foot, 5-bedroom stone and shingle estate just down the street from the Spanish ambassador’s residence.

Lately, Ludwig’s firm has found itself in the middle of the Obama administration’s latest botched attempt to sort out the foreclosure fraud scandal.

Announced with great fanfare in 2011, the review of bank foreclosures in the wake of robo-signing scandal was supposed to be led by the current Office of the Controller of the Currency and the Federal Reserve.

Because the government doesn’t have the resources to scrutinize the banks itself, under the terms of the investigation, the banks hired consultants including Ludwig’s Promontory and accounting giants PwC (formerly PriceWaterhouseCooper) and Deloitte to examine individual foreclosures to determine which ones contained fraud in the process.

The investigation was troubled from the start. Homeowners’ advocates questioned how consulting firms like Promontory, with close long-standing financial ties to the banks, could do any kind of objective analysis of their foreclosures.

But that was just the beginning. Not only were the consultants often relying on the banks’ own evaluations of their foreclosures to make determinations about the validity of foreclosures, outreach was inadequate, the investigations were poorly designed and overly cumbersome and took much longer than expected. Meanwhile the consultants’ fees skyrocketed.

“This was never a well thought out process,” the National Consumer Law Center's Diane Thompson told American Banker in November. “The [lack of] independence is just one aspect of its crappiness.”

Finally, in December, the authorities ditched the entire investigation and announced an $8.5 billion settlement with the banks, with $3.3 billion in direct payments spread around between homeowners who claimed to have been the victims of fraudulent foreclosures, and promises to complete more loan modifications.

Ludwig’s firm and the other consultants didn’t suffer financially, however. They walked away from the debacle splitting a whopping $2 billion in fees.

But the stink from the settlement has attracted some attention, prompting the New York Times to scrutinize Promontory and other financial consulting firms’ role in facilitating bank misbehavior, not just in the foreclosure scandal, but in other unsavory bank business, such as drug money laundering, as well.

Several congresspeople, including Elizabeth Warren, D-Mass., Carolyn Maloney, D-New York, and Rep. Maxine Waters, D-Los Angeles, top Democrat on the House Banking Committee, are now seeking investigations into the foreclosure review and the consultants role.

The foreclosure review highlights a sad fact: more than four years after the financial collapse should have taught us the fallacy of deregulation, we’re still relying on bankers, and their former colleagues on the other side of the revolving door, to crack down on themselves.

Foreclosures / Martin Column / Revolving door - 02/06/2013

To protect investors and taxpayers, go outside the club

Here’s who would be better than President Obama’s pick to head the Securities and Exchange Commission: Almost anybody.

Couldn’t this administration find somebody who has not been spending her time defending too-big-to-fail banks, acting as an apologist for them, and whose law firm was paid to advise the government on the bailout?

That’s a description of Mary Jo White, most recently of the elite Debevoise & Plimpton law firm, one-time U.S. attorney for the Eastern District of New York…. and now the President’s choice to head the SEC.

There’s a long list of qualified people Obama might have chosen if he wanted to go outside the government-financial complex whose members have dominated economic policy, people with credible experience who have honed a critical perspective on the financial industry.

That list would start with Neil Barofsky, the former prosecutor who served as a tough special inspector general of the Troubled Asset Relief Program, better known as the taxpayer-funded bailout. It would also include Bill Black,who helped expose congressional corruption as a fearless federal regulator during the savings and loan scandal of the 1980s, now a University of Kansas City-Missouri law professor and white-collar crime expert – and consistent critic of the Obama administration’s failure to hold bankers accountable. High on the list would be Eliot Spitzer, the one-time attorney general of New York and television commentator and a sharp thorn in the side of bankers and the politicians who protect them. Christy Romero who also be on the list. Like White, she worked as a lawyer at an elite firm, but as the current special inspector general for the bailout she has been a fierce advocate for taxpayers.

Mary Jo White, according to the president, is “tough as nails.” At one time White was a hell of a prosecutor. When she was U.S. Attorney for the Eastern District of New York, though she prosecuted no major bank executives, she won convictions of the New York Mob boss known as Dapper Dan, John Gotti, and the World Trade Center bombers.

That was before she followed the well-worn path from public prosecutor to elite lawyer, joining the white-shoe law firm of Debevoise & Plimpton, where the average partner makes $2.1 million a year.

That was before she got cozy with J.P. Dimon and J.P Morgan, representing them in the widely criticized settlement of foreclosure fraud charges in a case involving 49 state attorneys general, the Feds and the too big to fail banks.

That was before representing Bank of America’s Ken Lewis on fraud charges and Morgan Stanley’s John Mack in an SEC insider-trading investigation.

Once she got through the revolving door, she worked the system on behalf of her clients, becoming a consummate well-paid insider in the Wall Street-Washington power nexus. In the process of strenuously protecting Mack from an interview at the SEC, White got herself into the middle of a full-fledged scandal, using her clout to help get a whistleblower at the federal agency canned, according to Rolling Stone’s Matt Taibbi. In addition, White’s husband is another veteran of the revolving-door, working as a top SEC official as well under previous do-nothing SEC commissioner Christopher Cox, in between stints as a bankers’ lawyer.

One fact that tells you al you need to know about what’s wrong with White as a banking enforcer is that her former client, Jamie Dimon told Fox Business News that White was “perfect” for the SEC job.

White might have made a better candidate to protect investors at the SEC if, since the bailout, she had expressed one iota concern about bankers’ excess, fraud or recklessness that led to the financial collapse.

Instead, White has expressed concern about prosecutors unfairly targeting bankers to get scalps to feed the angry public’s thirst for justice. In a legal brief on Lewis’ behalf, White wrote: “Some have looked to assign blame for every aspect of the financial crisis...This case is a product of that dynamic and does not withstand legal or factual scrutiny.”

In remarks at a New York University Law School event last year, White said: “You should be aggressive where there is a crime,” but prosecutors shouldn’t “fail to distinguish what is actually criminal and what is just mistaken behavior, what is even reckless risk-taking, and not bow to the frenzy.”

Her law firm meanwhile was itself cashing in on the bailout, receiving a contract worth $159,175 as one of 16 law firms Treasury hired to work on the bailout, American Lawyer reported.

White obviously lives in a far different world from most Americans, who are still rankled that so few bankers have been held accountable for the financial collapse.

Maybe it’s understandable that in her role as defender of too-big-to-fail bankers, she didn’t express much empathy for investors who lost savings, for cities and towns ravaged by foreclosure or workers laid off in the worst economic downturn since the Great Depression.

And it probably wouldn’t have endeared her to her clients if she had expressed outrage at the bankers’ epic greed and recklessness that led them to wreck our economy.

In her new job, she will face many tough challenges; overseeing implementation of many of the Dodd-Frank financial reform’s unfinished regulations, and convincing a deficit-obsessed Congress and president to beef up staffing and salaries at her chronically underfunded agency so that it can compete with her former colleagues at the fancy law firms. It’s hard to imagine White rising to this challenge, especially since after her SEC tenure she’ll probably head back to a big Wall Street firm.

Don’t get me wrong, I don’t believe there’s anything wrong with representing bankers – or mob bosses. Our legal system works best when both sides have strong, aggressive advocates. White made her choice to leave the relatively poorly paid public sector to join a private firm and provide bankers a “tough as nails” defense lawyer. But does that really qualify her as the best person to lead the SEC, an agency already reeling from a lack of credibility for not pursuing fraud in the financial sector aggressively enough? Don’t investors and taxpayers deserve protection from somebody whose primary concerns since the bailout haven't been profiting from it and keeping bankers comfortable?

Financial Crisis / Martin Column / President Barack Obama / Revolving door / Securities and Exchange Commission (SEC) - 02/04/2013