Is Larry Summers Taking Kickbacks From The Banks He’s Bailing Out?

Featured / Investigative Report / May 30, 2009

By Mark Ames

In an interview for this article, William Black, a former bank regulator who exposed the $160 billion Savings & Loan scandal and its ties to powerful U.S. Senators, remarked,“Summers wasn’t hired [by Revolution Money] for his expertise because he doesn’t have relevant expertise in this kind of credit card operation.”

“He’s not a techie. He doesn’t have business expertise,” Black said. “So this is solely someone hired for the name and contacts because he’s politically active and politically connected. And that’s made all the more clear by the fact that Frank Raines was put on the board at a time when he was pushed out in disgrace from Fannie Mae. Why? Because of his political connections.”

And it worked, as the recent investment shows.

“That’s the pattern of this entity,” said Black, “Which hasn’t been doing well financially and desperately needs to get money from others, and has been able to get money from banks at a time when [these same banks] largely stopped lending to productive enterprises. But with this politically-connected entity [Revolution Money], they’re happy to dump money.”

According to a company spokesperson, Summers resigned from the board of directors at Revolution Money this January, just three months before the banks invested. On one of Revolution Money’s main websites, Revolution Money Exchange, you could still see Summers’ name still listed as a director when this story was filed

(Oddly, company filings obtained for this article show that Summers wasn’t even on Revolution Money’s board of directors in 2007-8, even though both he and Revolution Money repeatedly stated that he was on the board, and only served on GratisCard’s board in 2006, “c/o Revolution GC Holdings LLC.”)

Whatever the case, Summers was pushing Revolution Money as recently as last September, in an interview with Portfolio magazine:

“I’ve enjoyed being involved with a number of smaller companies such as the Revolution Money venture, which has a potentially very exciting credit-card technology, using credit and debit technology, using the internet that, in a sense, brings together bricks and clicks by providing both a capacity for regular retail transactions and also for online.”

Whether or not Summers has a personal interest in the company, it still stinks that a company where the head of the National Economic Council served on the board of until just a few months ago subsequently received millions in investment funds from banks Summers bailed out. Taxpayer dollars went into these banks, and from the banks into the Summers-connected firm, a firm he was hired onto precisely because his connections could bring in this kind of money.

His involvement wasn’t just incidental—if you look at the press releases, Larry Summers’ name is always touted as part of its selling point — one press release in 2007 refers to Summers as “Legendary.”

Moreover, Summers’ longtime chief of staff, Marne Levine, who also served as Summers’ chief of staff when he was in Treasury under Clinton and again at Harvard, joined Summers at Revolution Money, serving as “Director of Product Management.”

Black pointed out another sleazy aspect of Revolution Money’s pitch: it proudly boasted in late 2007 that it would make it easier than ever for people with low credit ratings to find access to lines of credit. In other words, Revolution Money billed itself as the ultimate ghetto loan shark.

According to a 2007 press release, the same one boasting of “Legendary” Larry Summers, “Unlike most bank credit card issuers who are limited to a narrow scope of credit approval guidelines specific to their bank, RevolutionCard seamlessly utilizes multiple partners to achieve unparalleled consumer approval rates.”

Nineteen months later, Larry Summers, now in control of the economy, told Meet The Press, “We need to do things to stop the marketing of credit in ways that addicts people to it and so that our households are again savings, and families are again preparing to send their kids to college, for their retirement and so forth.”

So once again, Larry Summers creates a problem that the rich profit from, then is put in charge of “fixing” it after vulnerable Americans have been picked clean.

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Whether or not the three bailed-out banks’ investment in Revolution Money last month represents some kind of bribe or kickback or even the appearance of corruption is almost secondary, because the shameless cronyism is the problem, and this is the reason why America is in the horrible mess today.

“Polite society was supposed to impose social pressures to make sure this wasn’t tolerated,” Black said. “Like the old phrase about hogs being slaughtered. But now the hogs get even wealthier, even fatter.”

Everything about Summers, from his horrible track record in the developing world in the 1990s to the sleaze and plunder he’s overseeing in the White House should make us terrified. Hell, he even looks like some old Batman villain: Summers, whose trademark bullfrog neck was enough of a distraction before Obama brought him into the White House, has seen his gelatinous layers of neck-fat swell up like an amphibian guarding its eggs ever since he took control of the economy.

Get this monster out of the White House now, before he devours us all.

This article first appeared in Alternet.

Buy Mark Ames’ book Going Postal: Rage, Murder and Rebellion from Reagan’s Workplaces to Clinton’s Columbine.

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17 Comments

Add your own

1. wengler | May 30th, 2009 at 9:57 am
We need a re-enactment of the death of Crassus to begin to get these self-appointed financial overlords into line.
2. Marko | May 30th, 2009 at 2:58 pm
Why is it that the only place I’m seeing real journalism from these days is Mark Ames? I mean, good work man…I’m just depressed that little known places like exiled (and a couple of others) are the only places to find actual honest to god journalism these days.
3. rick | May 30th, 2009 at 3:55 pm
This was on Alternet, too, sans the giant, sublime swine.
Ames has spite to draw from!
My take is reading patterns stay Sunday School and tribal. Just look at the talking-points culture of political debate. And then people have this subconscious belief they’re “bettering” themselves by reading. There’s such a pious tenor to most people’s conception of reading that it magnifies moral violations, makes people puff up their orthodoxy-detectors. Unless the content’s utterly trivial.
What’s not untrivial: the swine picture. The old Bertrand Russell “liberal” misanthropy’s been barred from liberal critiques, implicitly, for a long time. Even though powerful people being corrupt, self-satisfied, self-interested, incompetent, ignorant scum was the best “liberal” critique available. But who the fuck knows what liberal or conservative mean anymore. The Daily Show and alterno-columnists are freely taking shots at Obama, now, even as Republican reptiles are being revealed as grotesquely ideologically-constrained hacks of the sort one always imagined they were.
4. Bardamu | May 31st, 2009 at 3:57 am
Yes, it’s a good article, and yes – Ames is unique in his ability to produce well argued and vital pieces which inform as they (often raucously) amuse. I can’t excuse the poor subbing, though.
If you can’t afford to pay someone to do this, send your articles and straplines to me and I’ll do them for nothing.
‘Reign in’ indeed. It’s not the first, you know.
5. Simple | May 31st, 2009 at 5:22 am
Now that was a whole lot of $5.00 words…
6. Matt | May 31st, 2009 at 11:36 am
The reason why most journalists don’t even attempt these stories is because they’re so afraid of losing what little work they have: and when they do write them, editors kill them out of political considerations. So we get a lot of talking points, and some good, but bland, investigative NYT stories. Good job, Ames.
7. yabadabadoo | May 31st, 2009 at 5:53 pm
This is good, but I still miss Ames’ whore stories.
8. xymph disciple | May 31st, 2009 at 8:58 pm
The reason why most journalists don’t even attempt these stories is because they’re so afraid of losing what little work they have: and when they do write them, editors kill them out of political considerations.–Matt
Damn straight. I have had no pity whatsoever whenever these nonsensically pious discussions about the demise of the newspaper come up. Newspapers could save themselves any time they felt like it by being newspapers and instead they are a maddening form of advertising which you must pay the advertised party for.
People didn’t go to blogs just for an echo chamber, they went to get away from our detached and antidemocratic ruling caste’s echo chambers in the mass media. Newspapers have the resources to trump nearly any blog with investigative reporting and international offices and instead they choose to run Israeli propaganda so lazily thrown together it makes Jews throw up and human interest stories that might propaganda be from anti-human robots.
The loss of the newspaper is tied to that phony Fearless-Nazi-Hunter pseudo-moral superficially-liberal culture, the kind that worships meaninglessly vague Twilight Zone episodes about “fascism” being “bad,” and clucks in a superior manner about how relevant that is today. This moralistic rather than moral mindset was in part behind all of the worst American crimes of the latter half of the twentieth century, from the health care scam to Vietnam to the war on drugs and the Reagan Revolution.
Until AT&T kills the internet it must terrify our masters to think about the simple variety and depth of information available for free online.
9. goonouncoogy | May 31st, 2009 at 10:13 pm
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10. Cri-cri | June 1st, 2009 at 1:12 am
nice article
Ames at his best finding bad people in our government and destroying their public images, ideologies, reputations (or what’s left of them). Hard work of a post-industrial information age warrior but somebody has to do it.
11. 'Disastrous for America' | June 1st, 2009 at 1:39 am
Would be interesting if Ames could temporarily use mr Brecher as a journalistic partner to investigate any Summers-aircraft carriers lobby connections.
12. Armen | June 1st, 2009 at 1:57 am
Jesus Christ, this is turning out to be worse than the Bush years. At least then I had the consolation that other people–way more stupid than I am–voted for him…
13. Baked Dr. Luny | June 1st, 2009 at 2:27 pm
Of course it’s worse than the Bush years. By the end of his term Bush was somewhat kept in check by the fact that everyone hated him, but with approval ratings in the 60% range Obama could eat out Osama bin Laden’s asshole and be praised in the media for being diplomatic. Keep in mind that Bush and Obama are both backed by pretty much the same people, some of the corporate slugs might be different, but they’re just as committed to fucking America in her collective ass.
14. rick | June 1st, 2009 at 7:57 pm
@ alien name guy
I’ve had similar thoughts on newspapers. Brecher’s maybe the best columnist in the world, and his employment is just as mechanically unthinkable, by any “moral”ly imbecilic institution in our grotesque world. Ames is up there. His bits in the eXile book (and beyond) are probably the best autobiographical novel shit I’ve ever read. I’m pretty sure I’m the best novelist of the generation, but very uneven essayist. I’ve written for this fine publication, and nobody will publish what I’m actually good at. Let Them Die.
http://www.youtube.com/watch?v=Swvf3w6hcY4
But why are you bringing up Israel? WHAT THE FUCK DOES ANYTHING HAVE TO DO WITH VIETNAM?!?!? I mean what do you want? It’s a “moral” trainwreck, like this
http://www.youtube.com/watch?v=tlaFJvW74Wc
Israel and Palestine are worthy of Keyboard Cat, nothing more. Big moral narratives are grotesquely stupid.
15. mark nuckols | June 5th, 2009 at 12:24 am
I am a nuckolhead which is why I’m still trolling this site. Name is Mark Nuckols, by the way. Weird, ain’t it, how I’ve been stalking these guys for 10 years. Some day I should get a life.
16. Mish | June 10th, 2009 at 7:01 am
Hey Ames, there’s a new Bret Stephens editorial about Putin today in the WSJ – “Putinism’s Piranha Stage.” Check it out, you’re sure to get a few laughs at Bret’s expense.
17. Janeliker | January 23rd, 2012 at 11:48 am
Isn’t Larry Summers a reptile?! I had not even heard of him before let alone seen him, until he appeared as a possible head of the World Bank on Channel Four tonight, and was horrendously struck by how reptilian he looked and gestured and though I am open-minded about this reptilian agenda, I felt I had to come on the internet to see what I could find out about him and what others had said. Could anyone reply sensibly to this and with an open mind?