Mary Jo White's Wealth

To get a flavor of the obscene wealth of the 1%, in this case the top tier of the 1%, read Peter Lattman's story today about Mary Jo White's financial disclosure form. Mary Jo White is Obama's nominee to lead the Securities and Exchange Commission; she was United States Attorney for the Southern District of New York during Clintontime; she is a Democrat. Currently she is a partner with Debevoise & Plimpton, while her husband, John White, is a partner at Cravath, Swaine & Moore. Lattman refers to both law firms as "white shoe."

Ms. White and her husband, John White, have a net worth of at least $16 million, according to the filing. Ms. White, 65, heads the litigation department at Debevoise; Mr. White, 65, is co-chairman of the corporate governance practice at Cravath.

At the end of his brief story, Lattman, who is a likable guy I often see presenting news on the Times' webcasts, speculates that the Whites' wealth is much greater:

The Whites have amassed likely far more than $16 million, a number representing the low end of a range of possible amounts. Government officials are required to disclose their net worth only within broad ranges. 

For instance, the Whites own seven different investments — including a Vanguard high yield bond fund and a Vanguard emerging markets fund — worth $1 million to $5 million. At the low end, those seven funds would be worth $7 million; but at the high end, they would be valued at $35 million.

For those of us who have a hard time understanding the magnitude of that wealth, Mary Jo White's retirement deal with Debevoise will put it in perspective:

As for Ms. White, a former United States attorney in Manhattan, she received more than $2.4 million as a Debevoise partner last year, according to the filing. And she said that she planned to retire as a Debevoise partner upon becoming S.E.C. chairwoman, at which point she would enjoy the benefits of the firm’s lucrative retirement plan. The disclosure says that Ms. White will receive a monthly lifetime retirement payment of $42,500, amounting to $510,000 annually. 

However, instead of making a monthly retirement payment for the next four years while she runs the commission, Debevoise will make a lump-sum payment within 60 days of her appointment, the filing disclosed.

So Mary Jo White's monthly retirement check from Debevoise would be a little shy of the national median annual income in the United States. One wonders what the size of the lump-sum payout will be.

When White's appointment was announced last month the headlines communicated that it was a "get tough" signal from Obama to Wall Street. But here is the question. Can someone who is in the top tier of the 1% put the wood to the 1%? I saw a Bill Moyers interview of Matt Taibbi recently, and Taibbi is skeptical:

BILL MOYERS: You were shocked when you heard that President Obama had named Mary Jo White to lead the Securities and Exchange Commission. And you wrote that she was a partner in a law firm that represented a lot of these big banks. You know, Bank of America, Goldman Sachs, Chase, AIG, Morgan Stanley. 

You said, "She dropped out and made the move a lot of regulators make, leaving government to make bucket loads of money, working for the people she used to police." And I gather your great concern is that you don't want to see the country's top financial cop being indebted to the people who created the bank role? 

MATT TAIBBI: Right. Yeah, absolutely. I mean, it's just simple common sense. I mean, you're sitting on $10 million, $15 million, however much money she made working there at Debevoise and Plimpton when she was a partner and you owe that money to this specific group of clients and now you're in charge of policing them, just psychologically think of that. It doesn't really work, you know? It doesn't really work in terms of how aggressive a prosecutor should be, what his attitude towards the people he's supposed to be policing should be. It's just, the circumstances just aren't quite right. You'd much rather see a career civil servant in that in that situation. 

BILL MOYERS: She was once a tough prosecutor. What's your beef? 

MATT TAIBBI: Well, you know, I have people who are telling me that I'm wrong about this, that Mary Jo White was an excellent prosecutor and she's a good choice. But, you know I've done stories in the past about an episode, you had an SEC investigator named Gary Aguirre who was pursing an insider trading case against the future CEO of Morgan Stanley. He asked for permission to interview that future CEO. His name was John Mack. It was denied. And it was because there was communication between Morgan Stanley's lawyer, who at the time was Mary Jo White and the higher ups at the SEC who included the director of enforcement, Linda Thomsen. Aguirre was later fired for complaining about having this investigation squelched. 

BILL MOYERS: Blowing the whistle. 

MATT TAIBBI: For blowing the whistle. But the SEC was later forced to pay a $750,000 wrongful termination suit to Aguirre in that case. But what's so interesting is that Aguirre's boss, the guy who killed that case went to work for Mary Jo White's firm nine months after the case died. And he got, you know, a multi-million dollar position. It's a classic example of how the revolving door works in Washington. You know, you have these regulators at the SEC. And they know that there's that job out there waiting for them. So how hard are they really going to regulate these companies when they know they can get that money?

But in Washington, you know, people kind of shake their heads at it because it's so common you know, that these people, they move from government back to, you know, these high priced legal defense firms that represent the banks. And then they go back to government again. And it's this sort of, this coterie of, you know, 100, 200 lawyers who really run this entire thing. And it's all the same people on both sides.

It's hard not to think of Yeats' "The Second Coming": "Turning and turning in the widening gyre."