According to a New York Times article by Jo Becker and Gretchen Morgenson, his calendars from 2007 and 2008 were chocked full of professional and private contacts with executives of banks--Citigroup, Goldman Sachs and Morgan Stanley--whose activities were regulated by Geithner's New York Fed.
The article reported that Geithner was especially tight with executives of Citigroup and that he met frequently with Sanford Weill, a major shareholder and former chairman.
"As the bank was entering a financial tailspin, Mr. Weill approached Mr. Geithner about taking over as Citi's chief executive," the Times said, adding:
"But for all his ties to Citi, Mr. Geithner repeatedly missed or overlooked signs that the bank--along with the rest of the financial system--was falling apart. When he did spot trouble, analysts say, his responses [as head of the New York Fed] were too measured, or too late."
Given the magnitude of compensation available to top executives, Weill was not just offering Geithner a job as CEO, but rather was dangling the keys to the jewelry vault at the castle, assuming that Citi did not collapse first.
Now, as Treasury secretary, Geithner is the point man for arranging massive infusions of taxpayer dollars into Citi and other major Wall Street banks to ensure that they don't go under, that the old financial system survives.
Throwing Off the TARP
Geithner's strategy for salvaging the banks has been criticized by some economists and many citizens as too generous with the taxpayers' money and too lenient toward the chief culprits of the financial debacle.
But--combined with the Federal Reserve's decision to lend the banks money at nearly zero percent interest and other emergency measures --the bailouts have put some banks in a strong enough position that they already are chafing under the federal government's demand that they cut their compensation.
Some banks are offering to pay back the direct federal bailout money to evade the compensation constraints, while their media allies--from CNBC and Fox to the Wall Street Journal and the Washington Post's editorial page--have complained about excessive government interference in the private sector.
By escaping from the Troubled Asset Relief Program, the bankers could return to the party-on days when they viewed themselves as "masters of the universe" who could buy pretty much anything or anyone they wanted.
The pressing question about Geithner is whether his personal contacts with Weill and other banking executives--and the prospect of landing a future job as CEO of Citi or some other major bank--influenced his policy decisions.
Given the staggering sums of money, it's hard to believe that it wouldn't have.
After four years as a Bloomberg News editor reading proxy filings that disclose executive compensation, I came away with a profound sense that the sums had gotten so crazy that almost everyone who could grab a piece would do whatever it took to get one.
Another one of my sayings became: "The closer you are to the money, the more you get to keep."
