While more people are coming to see the power the large banks and corporations have, it is reasonable to ask: How can we really know they have this much power? Thanks to the release of the Podesta Files by WikiLeaks we can now put together a very clear picture of the way one man who worked at Citibank in the centre of Wall Street was able to determine the key people in the Obama administration in 2007 and later shape US trade and investment strategy. This man is Michael Froman. He is the most powerful person you have never hear of.
Think about this for a moment. One man coordinated the wishes of Wall Street, the large US banks and giant multinationals, and presented to Barak Obama the people they – Wall Street, etc.- wanted to to see running the US government. This includes foreign policy, the economy, legal decisions via the Justice Department, etc. Is it any surprise that under Obama the giant banks were seen as too big to fail and too big to jail? Later, in 2009, the same Michael Froman became the deputy national security adviser for international economic affairs.
Eventually in 2013 he was appointed as United States Trade Representative where he took charge of the negotiations for the giant US “free trade” deals like the TPP and the TTIP. These were intended to have global consequences for people in the Asia-Pacific region – like Australia - and the EU. You may not have hear of him, but his job after Obama became president was to organize as much of the world as he could into “trade” agreements which were clearly designed to increase the profits of hundreds of large US banks and corporations. If this is not influence on a world-wide scale, I don't know what is.
HOW DID WALL STREET CAPTURE OBAMA?
The people who manage large banks generally do not run the world themselves. Final political power is in the hands of politicians, so Wall Street makes sure that the people who hold political power are inclined to do things the banks want them to. The most powerful country in the world today is the United States, and the President of the US is clearly the most powerful politician in the world. On the face of it the President is chosen in an election, so how do the banks get the person elected to do what they want?
In 2007 John Podesta was co-chair of the Barack Obama’s transition team. The team's job was to work out who would take up the different Cabinet positions if Obama won the election in November. Among his emails during October 2007 there are several from the lawyer Michael Froman. He was Managing Director of Citigroup Management Corp. from 1999 to 2009. One of the most important emails was sent on October 6th and is entitled “Lists”. It reads as follows:
Attached are three documents: -- A list of African American, Latino and Asian American candidates, broken down by Cabinet/Deputy and Under/Assistant/Deputy Assistant level, plus a list of Native American, Arab/Muslim American and Disabled American candidates. We have much longer lists for most of the groups, and the lists will continue to grow as we reach out further and more openly, but these are the names to date that seem to be coming up as recommended by various sources for senior level jobs. (…)
While you did not ask for this, I prepared and attached a similar document on women.
At the risk of being presumptuous, I also scoped out how the Cabinet-level appointments might be put together, probability-weighting the likelihood of appointing a diverse candidate for each position (given one view of the short list) and coming up with a straw man distribution. (Obviously, multiple permutations of this are possible. This was just one example to show how it might pan out.) Let me know when you'd like to discuss. I am around this morning until about 11:30.(1)
Looking at the correspondence between Podesta and Froman it is clear that Froman had been chosen as the key person to consult “various sources” on who would be appropriate to occupy the different Cabinet positions. Who was he and what was his connection to candidate Obama?
WHO WAS MICHAEL FROMAN?
Michael Froman was a classmate of Barack Obama at Harvard Law School where he worked with Obama on the Harvard Law Review. He spent much of his early career within the Treasury Department where he rose to Chief of Staff under Robert Rubin. Before the Bush administration replaced Bill Clinton in 2001, both Froman and Rubin moved to Citygroup.(2) This is part of what is called the “revolving door” between the political world of Washington and the financial world of Wall Street, where people move easily from one world to the other.
Froman seems to have had little to do with Obama until Obama's 2004 Senate campaign, when Froman volunteered to advise Obama on policy. He also introduced Obama to Robert Rubin.(3) It would appear that the two men fit together perfectly. The relatively unknown Obama needed supporters who were well connected both policially and financially. For his part Froman could see a promising political figure he could “advise”, that is, explain the needs of the financial world he was part of. By 2007 Froman was obviously chosen by Obama and Podesta to consult widely among the “important people” in the financial community to provide lists of candidates for the most important jobs in the new administration. While there were other members of the transition team, it is clear most of the work was done by Froman.
WHAT DID MICHAEL FROMAN DO FOR BARACK OBAMA?
The short answer to this question is that he picked most of Obama's first cabinet. One might say Froman cooked the meal which Obama served to the citizens of the US. We can say this because we have Froman's email sent on October 22nd entitled “Here's the briefing book”. It shows in great detail the work Froman did to organize the first Obama Cabinet. It had a number of attachments which together reveal the thorough way Froman did his homework. The central document, entitled “BO Personnel Update”, begins as follows:
October 22, 2008
TO: Senator Obama
FROM: Mike Froman
CC: Federico Pena
RE: Personnel Update and Next Steps
Attached are some materials on personnel:
-- The latest, revised list of slates for Cabinet and senior White House positions;
-- Lists of the diverse pools of candidates identified thus far for senior positions;
-- Short summary biographies for the short-listed candidates for the major White House, national security and economic policy positions. (...)
We have developed a data base with approximately 1000 candidates referred to us by people associated with the campaign, outside advisors, former Cabinet members and leaders in the respective policy areas for senior positions in the Administration.
We have completed or are in the process of completing public vetting reports on approximately 200 of them.
In addition, we have started the private vetting process, involving a deeper dive into candidates’ backgrounds, tax returns, areas of potential controversy, etc., with three candidates you have identified as wanting to serve in one senior role or another (i.e., Napolitano, S. Rice, Steinberg).(4)
Among the attachments there are documents entitled “Slates”, “Cabinet Example”, “Diversity List”, “Women” and short CVs for Tom Daschle, Rahm Emanuel, and Eric E. Holder, as well as Cvs for all the people who might be considered for running the Treasury and National Security.
According to an article in the New Republic Froman's cabinet list was “almost entirely on the money”. He picked
Eric Holder for the Justice Department
Janet Napolitano for Homeland Security
Robert Gates for Defense
Rahm Emanuel for chief of staff
Peter Orszag for the Office of Management and Budget
Arne Duncan for Education
Eric Shinseki for Veterans Affairs
Kathleen Sebelius for Health and Human Services
Melody Barnes for the Domestic Policy Council.
For the Treasury, three possibilities were on the list: Robert Rubin, Larry Summers, and Timothy Geithner.(5)
Usually it would take reporters or historians years to piece together the background to the formation of a President's Cabinet. In this case it is handed to us on a platter by Micheal Froman himself.
FROMAN'S INFLUENCE DID NOT END IN 2007
After the election Froman “joined the White House for a second run in 2009. He went back to the position he held during the Clinton years, as deputy assistant to the president and deputy national security adviser for international economic affairs, at the National Security Council and the National Economic Council until 2013.”(6) Then in June 2013 he became the United States Trade Representative (USTR). In this position he served as Obama’s principal advisor, negotiator and spokesperson on international trade and investment issues.
In particular Froman has worked to open global markets for U.S. goods and services, enforce America’s rights in the global trading system, and foster development through trade. Since 2013 he has lead negotiations on the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP). He has also pushed for agreements on services, information technology and trade facilitation at the World Trade Organization.(7)
It remains to be seen what will come of his efforts under the new President Donald Trump. Still it is clear Michael Froman has worked hard to reshape the world economic system to the benefit of the largest corporations in the US. When people think of the power of the US they usually think of its military power. However its economic power is pervasive and hidden. While it gets little attention in the press its influence is felt by virtually all countries and all people in the world. Even with the defeat of the TPP the power of Wall Street is inescapable in today's world.