Larry Summers, Robert Rubin: Will The Harvard Shadow Elite Bankrupt The University And The Country?

[chimpymustgo]

This is a book review of "Shadow Elite: How the World's New Power Brokers Undermine Democracy, Government, and the Free Market", by Janine Wedel. Will Summers, Rubin and company do to the US what they did to Harvard (and had a hand in, in Russia)! Know your "crime families". Incredible story.

*****
Harvard's Secret Seven

Harry R. Lewis,Gordon McKay Professor of Computer Science at Harvard and former Dean of Harvard College
Posted: January 12, 2010 07:30 AM

At the heart of the new system of power, says Janine Wedel, is "a decline in loyalty to institutions" and "the proliferation of players who swoop in and out of organizations with which they are affiliated." There is no more vivid example of this phenomenon than Harvard University, which for centuries was held together by institutional loyalty. Today, that loyalty has eroded, and those at the top act much more flexibly. Yet they still enjoy almost unlimited power. Like all forms of mismanagement, Harvard's woes call for transparency and accountability. The story resonates to Washington, where Harvard's power elite is deeply entangled

Harvard lost $11 billion from its endowment last year, plus another $2 billion by gambling with operating cash and $1 billion in bad bets on interest rate fluctuations. Harvard had been borrowing vast sums to leverage its assets and to expand its physical plant; its president, Lawrence Summers, had described as "extraordinary investments" what ordinary people would call crushing debt. The only way to balance the looming deficits was through huge investment returns. The speculating worked for a while, but when the bubble burst, Harvard was left almost insolvent.

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Harvard's board is intertwined with the shadow elite of Wedel's Chapter 5: the team of experts who disastrously advised the Russian government on capitalism in the 1990s. Engaged by the U.S. to show the Russians how the West controls corruption, the advisers became models of what to avoid
In 1991, Lawrence Summers became chief economist of the World Bank, moving to the Treasury Department in 1993. When Robert Rubin became Treasury Secretary in 1995, Summers became his Deputy Secretary, later succeeding him as Secretary.

In 1992, Andrei Shleifer, a Harvard professor and a close friend of Summers since Shleifer's college days at Harvard, became head of a Harvard project that directed U.S. government money for the development of the Russian economy. Tens of millions of dollars in noncompetitive U.S. contracts flowed to Harvard for Shleifer's Russian work, and his team directed the distribution of hundreds of millions more. Through the mid-1990s, complaints accumulated in Washington about self-dealing and improper investing by the Harvard team, and by mid-1997, the Harvard contracts had been canceled and the FBI had taken up the case. For two years it was before a federal grand jury.

In September, 2000, the government sued Harvard, Shleifer, and others, claiming that Shleifer was lining his own pockets and those of his wife, hedge fund manager Nancy Zimmerman--formerly a vice president at Goldman Sachs under Rubin.

Soon after, when Summers became a candidate for the Harvard presidency, Shleifer lobbied hard for him in Cambridge. Rubin assured the Fellows that the abrasiveness Summers had exhibited at Treasury was a thing of the past. They named him president--in spite of what was already known about his enabling role in the malodorous Russian affair, and the implausibility of a personality metamorphosis.

Summers did not recuse himself from the lawsuit until more than three months after his selection as president, and even then used his influence to protect Shleifer. The Fellows--including Rubin, whom Summers added to the Corporation--fought the case for years, spending upwards of $10M on lawyers. But in 2005 a federal judge found Shleifer to have conspired to defraud the government and held Harvard liable as well. To settle the civil claims, Shleifer paid the government $2M and Harvard paid $26.5M; Zimmerman's company had already paid $1.5M. Shleifer denied all wrongdoing, and Harvard disclosed nothing about any response of its own--a departure from its handling of misconduct by faculty farther from the center of power.

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Rubin is now gone from his leadership role and his board membership at Citigroup, hauling away $126M from a firm that was $65B poorer than when he joined it, with 75,000 fewer jobs. But he remains on the Harvard board, in spite of the financial meltdowns at both Citigroup and Harvard and his poor oversight of the problematic president he persuaded Harvard to hire.

The Rubin network remains alive and well in the White House, including not just Summers but several other Rubin protégés. Among the strangest of these power loops is that the well-connected Nancy Zimmerman has turned up as a member of Summers's economic policy brain trust.

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Much more at:

http://www.huffingtonpost.com/harry-r-lewis/larry-summers-robert-rubi_b_419224.html

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From Amazon:

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Many people today feel that they’re swimming in a sea of corruption. Who is really in charge? Why do the same people reappear under various professional identities, pressing a suspect agenda in one influential venue after another? According to award-winning public policy expert Janine Wedel, these are the “shadow elite,” and they are both powerful and dangerous.

In Shadow Elite, Wedel teaches us to recognize and understand how this new group blurs and erases the boundaries between government, private, and nonprofit organizations—all to their own benefit. The shadow elite ultimately answer only to each other. They can be found lurking behind the scenes of Iran-Contra, Blackwater, and the scandal of Harvard economists in post-Soviet Russia—and they are steadily gaining power. Profoundly original, Shadow Elite gives us the tools that we need to fight this disturbing, destructive, and antidemocratic trend.

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from http://www.amazon.com/Shadow-Elite-Undermine-Democracy-Government/dp/0465091067

[RUMMYisFROSTED]

1. k

[chimpymustgo]

2. The shadow elite are behind all of it.

"The shadow elite ultimately answer only to each other. They can be found lurking behind the scenes of Iran-Contra, Blackwater, and the scandal of Harvard economists in post-Soviet Russia—and they are steadily gaining power."

[Octafish]

3. Typical mafia ploy -- hollow out a viable entity and leave the empty shell

Works every time, when you control the cops, too.

Take Harvard and ENRON, please.

Most importantly: Thank you for an excellent post, chimpymustgo. The roots of the problem are the Big Money Wall Street turdballs in bed with you-know-who's buddies.

Take that Hank Paulson fellow -- he worked for one-time White House domestic boss John Ehrlichman of Nixon Plumbers fame.

[formercia]

4. The 'boys' at work.

Another generation of the predator class.

[laughingliberal]

5. All the usual suspects....

This can't end well.