Janet Yellen has given millions of speeches to Wall Street banks that she will regulate soon

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The former chairman of the Federal Reserve carried nearly a million dollars alone in several speeches to Citigroup (VS), according to financial reporting documents filed last week. Since his resignation from the Fed in early 2018, Yellen has also delivered paid speeches to other companies, including Google, Goldman Sachs, Bank of America and Salesforce.

It’s common for former officials, including Fed executives, to earn money by giving speeches that share their views on economics and politics. However, the disclosure of Yellen’s lucrative speech fees is inconvenient as she may soon be Biden’s resource person on economics and finance.

If confirmed as Secretary of the Treasury, Yellen will have enormous influence on everything from taxes and the climate to tariffs and government spending. Yellen is also reportedly chairing a team of US regulators that are responding to emerging risks in the financial system.

“This disclosure dovetails with some broader democratic concerns about the revolving door and the access of some financial services companies to key decision makers,” Isaac Boltansky, director of policy research at Compass Point Research & Trading, said in an email.

Speeches of big banks

The fact that the majority of Yellen’s speaking fees come from the financial industry could raise concerns that she is too comfortable with Wall Street.

Yellen listed $ 952,200 in income from speeches to Citi, one of the nation’s largest banks. She also disclosed PIMCO’s speech fees, Barclays (BCS), Citadel, BNP Paribas, UBS (UBS), Swiss credit (CS), ING, Standard Chartered Bank and City National Bank.

Former government officials have come under fire for their post-political relationships with big banks and corporations.

During the 2016 campaign, then-candidate Donald Trump criticized his opponent, former Secretary of State Hillary Clinton, for giving millions of speeches to banks, brokerage firms and Professional Affiliations. Transcripts of some of these speeches have been published by WikiLeaks.
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Biden’s transition team played down concerns about Yellen’s earnings on Wall Street and noted that some speeches were moderated or covered by reporters.

“Take a look at his law enforcement record – he’s not someone who pulls the punches when it comes to bad actors or bad behavior,” said a transition official from Biden at CNN Business.

Yellen appealed to some progressives in part because of his crackdown on Wells fargo (WFC). In February 2018, the Yellen-led Fed imposed unprecedented growth restrictions on Wells Fargo, sanctions from which the scandal-ravaged bank has yet to recover.

“She hasn’t shied away from telling an audience that the rules governing their business should be tougher and tighter – and that could create problems for the economy otherwise,” Biden’s transition official said.

Avoid conflicts of interest

However, the transcripts of Yellen’s speeches to Wall Street banks have not been made public. And Biden’s transition manager didn’t immediately provide specific examples of Yellen telling companies that maybe the rules should be tightened.

In a recent letter to ethics officials, Yellen pledged to take steps to “avoid any real or apparent conflict of interest” if she is confirmed to lead the Treasury Department.
Specifically, Yellen has promised that no later than 90 days after confirmation, it will sell its stakes in several large companies, including Pfizer (PFE), Raytheon (RTN), DuPont (DD), ConocoPhillips (COP) and CNN parent AT&T (T).

Additionally, Yellen plans to step down from the Washington Speakers Bureau, which represented the former Fed chief in paid speeches.

Yellen also wrote that for a period of a year after her last speech, she planned to recuse herself from matters relating to several companies, including Salesforce (CRM), Japan’s leading financial and investment bank Daiwa Securities. Yellen has stated that she “will not participate personally or substantially in any particular matter” unless authorized to do so.
However, Yellen also indicated that she would seek written permission to participate in matters related to other companies for which she has earned speaking fees, including Barclays, Citi (VS), Citadel, Credit Suisse and Goldman Sachs (GS).

Confirmation without a doubt

Analysts said the revelations should not derail Yellen’s confirmation by the US Senate.

“Yellen will face questions about these speeches during the confirmation process, but it is difficult to envision this disclosure impacting her chances of becoming Treasury secretary,” Boltansky said. “The point is, she hasn’t done absolutely anything wrong and will continue to navigate until confirmation.”

Yellen’s forms were 21 pages long and included his collection of stamps, estimated to be worth between $ 15,001 and $ 50,000.

Other former Fed officials have also paid lucrative speaking fees after leaving the US central bank. For example, Ben Bernanke, who led the Fed during the 2008 financial crisis, earned up to $ 250,000 per speech at one point. In 2015, Bernanke was hired as a senior advisor to Chicago-based hedge fund firm Citadel – a role he still holds today.
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Biden’s appointment of Yellen received broad support, including from progressive leaders like Senator Elizabeth Warren. Even some Republicans such as Senator Chuck Grassley and Senator John Thune have spoken positively about Yellen.

Greg Valliere, chief US policy strategist at AGF Investments, doubts the speaking fees will prevent Yellen from becoming the first woman to head the US Treasury Department.

“She has such a reservoir of goodwill on Capitol Hill that she will easily earn confirmation,” Valliere said.

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