Bank Execs Had Direct Line To Geithner

A select group of powerful Wall Street bankers have Treasury Secretary Timothy Geithner's ear. The Associated Press reviewed seven month of Geithner's phone records, and found that even on his busiest days the treasury secretary made time to talk to executives from Citigroup, JPMorgan Chase and Goldman Sachs. Matt Apuzzo, an investigative reporter for The AP, says those three institutions have a greater ability to influence policy than any other bank.

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ROBERT SIEGEL, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.

MICHELE NORRIS, host:

And I'm Michele Norris.

When President Obama tapped Timothy Geithner to head the Treasury Department, there were worries that Geithner had unusually close relationships with many executives who run massive financial institutions. The concern dates back to the days when Geithner was president of the New York Federal Reserve, and they continued as he championed and crafted the taxpayer bailout for troubled banks.

They surfaced again recently when The Associated Press examined Geithner's cell phone records and discovered that the Treasury secretary spends a lot of time on the phone with the heads of three mega banks: JPMorgan Chase, Goldman Sachs and CitiGroup.

Matt Apuzzo is one of the authors of that story. He's an investigative reporter with the AP, and he joins me now in the studio. Welcome to the program.

Mr. MATT APUZZO (Investigative Reporter, The Associated Press): Hey, thanks for having me.

NORRIS: So, who was Mr. Geithner talking to in all these calls?

Mr. APUZZO: Well, he spent a lot of time in particular on the phone with Lloyd Blankfein, who is the head of Goldman Sachs, and Jamie Dimon from JPMorgan and executives at CitiGroup - multiple executives there.

NORRIS: And do we know when and why he's having all these conversations?

Mr. APUZZO: Yes. It's interesting. I mean, on the surface - surprise, surprise - the secretary of the Treasury is talking to big banks: news flash. But what's very interesting here is he seems to have this kitchen cabinet, if you will, of these three big banks that he talks to, not just when it's something about big banks, he talks to them during the auto crisis; he talks to them late at night; he talks to them first thing in the morning.

There's this great sequence of phone calls one night in the middle of the auto crisis where the secretary takes three phone calls and it's Goldman Sachs, JPMorgan, the president of the United States; hangs up with the president and then he's immediately back on the phone with JPMorgan.

And when you look at it in that way, you can see that those three banks have greater influence - they have a greater ability to influence policy than any other bank. I mean, it's really an unmatched ability to have the secretary of the Treasury's ear when he's right about to speak with the president, when he's just about to go up to Capitol Hill.

NORRIS: So he has, I guess what you call his banking BFFs that he talks to on a regular basis. Who's not on this list? Who are some of the representatives from big banks, or even small banks, who would want this kind of access?

Mr. APUZZO: Well, the big group of people who are not on the list are community bankers. These are the small bankers - they don't have political clout to just pick up the phone and say, hey, I'd like to talk to the secretary of the Treasury. And they've had problems from the very beginning with the way the Treasury Department, under President Bush and now President Obama, have handled, you know, the financial mess.

Because the small banks, the community banks, say we weren't the ones out there making, you know, exotic mortgages and option ARMs and, you know, no-doc loans. We weren't doing that, you know. So…

NORRIS: They weren't involved in that kind of exotic banking.

Mr. APUZZO: Right. And so, you're bailing out these huge banks, these Wall Street banks, you're not paying enough attention to our needs. So that's one group of people who's not on the list. And the other people who don't get talked to nearly as much are executives at Bank of America, which is another huge bank, Wells Fargo and Morgan Stanley.

NORRIS: Is there evidence that the big banks have fared better than some of the other banks, other large banks, in the taxpayer bailout or on the road to recovery? Or could you make the argument that just because he's unusually close to a small number of banks that that doesn't mean that those banks are necessarily getting favorable treatment?

Mr. APUZZO: This isn't evidence that the secretary's doing something wrong. It's a glimpse at how a cabinet secretary makes decisions, who he's talking to, who has his ear. We don't know what was in those conservations. You know, we have no idea from the records what was in those conversations. But what's important is these banks have the ability, an unmatched ability to influence policy at the highest levels of the Treasury.

NORRIS: Matt Apuzzo is an investigative reporter with The Associated Press.

Thanks so much for coming in.

Mr. APUZZO: Great, thanks for having me.

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