‘Fast and Furious’ Linked to Immunity Deal Between U.S. and Sinaloa Cartel, Trafficking Defendant...

‘Fast and Furious’ Linked to Immunity Deal Between U.S. and Sinaloa Cartel, Trafficking Defendant Alleges in Court Papers

A Mexican drug trafficker awaiting trial in a Chicago federal court claims that the notorious Sinaloa cartel received weapons from "Operation Fast and Furious" under an alleged immunity agreement that the U.S. government made with cartel leaders, in exchange for information on rival gangs.

The defendant in a trafficking case before the U.S. District Court for the Northern District of Illinois, Vicente Jesus Zambada-Niebla, also claims the immunity deal allowed the criminal cartel to "continue to smuggle tons of illicit drugs" into the United States.

He wants the U.S. government to provide documents relating to the botched gun running sting operation along the southwest border, arguing that it would benefit his defense.

Operation Fast and Furious, which began in September 2009, saw the Phoenix office of the Bureau of Alcohol Tobacco, Firearms and Explosives supervise the sale of guns to straw purchasers with the intent of tracing the guns to Mexican drug trafficking organizations and prosecuting their members. The ATF allowed about 2,000 guns to be sold in this manner.

The operation came under congressional scrutiny after it was linked to the December 2010 murder of U.S. Border Patrol agent Brian Terry at the hands of Mexican bandits.

An investigative report, spearheaded by Rep. Darrell Issa (R-Calif.) and Sen. Chuck Grassley (R-Iowa), found that most of the weapons provided to Mexican criminals under the operation were going to the Sinaloa cartel, arguably one of the world's largest drug trafficking organizations.

In a court pleading filed last July, Zambada-Niebla made the claims about an immunity deal.

"Mr. Zambada-Niebla believes that the documentation that he requests will confirm that the weapons received by Sinaloa Cartel members and its leaders in Operation 'Fast & Furious' were provided under the agreement entered into between the United States government and [a Mexican lawyer] on behalf of the Sinaloa Cartel that is the subject of his defense...," it said.

"Mr. Zambada-Niebla believes that the documentation will also provide evidence showing that the United States government has a policy and pattern of providing benefits, including immunity, to cartel leaders, including the Sinaloa Cartel and their members, who are willing to provide information against rival drug cartels."

The defendant argued that he is protected from federal prosecution for trafficking drugs into the U.S. between 2004 and 2009 under an alleged immunity deal struck between the U.S. government and Sinaloa leaders.

According to court documents, Zambada-Niebla claims that the immunity deal provided the cartel's leadership with "carte blanche to continue to smuggle tons of illicit drugs into Chicago and the rest of the United States" in exchange for information on rival drug cartels.

U.S. prosecutors deny the existence of such an immunity deal between the U.S. government and the cartel.

Nevertheless, the U.S. government last September filed a motion to invoke the Classified Information Procedures Act, which is aimed at assuring that national security information stemming from criminal cases – such as details associated with CIA operations – are not leaked to the public during court proceedings.

In a court pleading filed in September, U.S. prosecutors claimed that Zambada-Niebla's allegations about Fast and Furious have no merit.

"Defendant requests all information in the possession of the U.S. government related to an ATF investigation referred to as 'Fast and Furious'..." it said. "Defendants request related to Fast and Furious... and other unrelated matters are gratuitous and wholly unrelated to any legitimate discovery issues in this case."

Zambada-Niebla, who was arrested in Mexico in March 2009 and extradited to the U.S. eleven months later, is accused of smuggling tons of cocaine and heroin into the U.S.

He claims he was working on behalf of the U.S. Department of Justice, Drug Enforcement Administration, FBI, and U.S. Immigrations and Customs Enforcement, court documents show.

The defendant's pleading highlighted a July 2011 letter sent by Issa and Grassley to Attorney General Eric Holder, "suggesting that multiple United States agencies were employing as informants members of Mexican drug organizations."

"The evidence seems to indicate that the Justice Department not only allowed criminals to smuggle weapons, but that tax payers' dollars in the form of informant payments, may have financed those engaging in such activities," the pleading added.

"Play particular attention to banks and banking...."
~~~~~~~~~~~~~~

Good point---"follow the money." This sleeper scandal came to mind when I read your post.

How a big US bank laundered billions from Mexico's murderous drug gangs [April 2011]

Wachovia Drug Money Laundering

The first link is from the Guardian. To my knowledge it was the most indepth article published.

A review of some of the facts [The entire article should be read]:

"On 10 April 2006, a DC-9 jet landed in the port city of Ciudad del Carmen, on the Gulf of Mexico, as the sun was setting. Mexican soldiers, waiting to intercept it, found 128 cases packed with 5.7 tons of cocaine, valued at $100m. But something else – more important and far-reaching – was discovered in the paper trail behind the purchase of the plane by the Sinaloa narco-trafficking cartel."

"During a 22-month investigation by agents from the US Drug Enforcement Administration, the Internal Revenue Service and others, it emerged that the cocaine smugglers had bought the plane with money they had laundered through one of the biggest banks in the United States: Wachovia, now part of the giant Wells Fargo."

Criminal proceedings were brought against Wachovia, though not against any specific individual.

The case never came to court.

In March 2010, Wachovia settled the biggest action to date brought under the US bank secrecy act.

Wachovia paid $110m in forfeiture, and a $50m fine.

"Wachovia was sanctioned for failing to apply the proper anti-laundering strictures to the transfer of $378.4bn [between May 2004-May 2007]– a sum equivalent to one-third of Mexico's gross national product – into dollar accounts from so-called casas de cambio (CDCs) in Mexico, currency exchange houses with which the bank did business."

Wachovia's total fine was less than 2% of the bank's $12.3bn profit for 2009.

"At the height of the 2008 banking crisis, Antonio Maria Costa, then head of the United Nations office on drugs and crime, said he had evidence to suggest the proceeds from drugs and crime were "the only liquid investment capital" available to banks on the brink of collapse. "Inter-bank loans were funded by money that originated from the drugs trade," he said. "There were signs that some banks were rescued that way.""

[Note to Hoosiermama: If the above paragraph is true, How could anyone follow THIS money trail?] The only entity with the means to do so is the government, and they don't have the will (foremost, because it would require the government to indict itself)---except in selected cases, like Wachovia, where punishing the crime became self-serving to the government.

The Guardian article was written with the assistance of Martin Woods (one of the most important whistleblowers of our time.") If for no other interest, the article is worth a read to hear his story. I barely touched the highlights---and perhaps not even the most important ones.

Martin Woods: "Is it in the interest of the American people to encourage both the drug cartels and the banks in this way? Is it in the interest of the Mexican people? It's simple: if you don't see the correlation between the money laundering by banks and the 30,000 people killed in Mexico, you're missing the point."

One last note: The article suggests that the settlement doesn't preclude additional liability on the specifics of this case---which just tells me that the government has a powerful inducement for Wachovia (purchased by Wells Fargo)to play ball.

http://www.nytimes.com/2010/03/18/business/18launder.html

Wachovia and U.S. Settle a Money Laundering Case
By REUTERS
Published: March 17, 2010

MIAMI (Reuters) — The Wachovia Bank, a unit of Wells Fargo & Company, has agreed to pay $160 million to settle accusations that it laundered Mexican drug money.

Under the agreement, Wachovia will forfeit $110 million, representing the proceeds of illegal narcotics sales that were laundered through the bank, the United States attorney’s office in the Southern District of Florida said.

The bank will pay an additional $50 million fine to the Treasury.

(snip)

http://query.nytimes.com/gst/fullpage.html?res=9D02E1D61E3BF933A25754C0A96E9C8B63&pagewanted=all

Wachovia hires a Treasury insider to lift it out of its banking woes
By Eric Dash
Published: July 10, 2008

From his perch inside the Treasury Department, Robert Steel has wrestled with the troubles plaguing America’s financial industry. Now he will confront those problems up close at the Wachovia Corporation, one of the nation’s largest banks.

On Wednesday, Wachovia ended its six-week search for a new leader when it named Steel, the under secretary of the Treasury for domestic finance, as its chief executive.

(snip)

Steel, a former vice chairman at Goldman Sachs, played a crucial role in formulating the Bush administration’s response to the running crisis in the mortgage markets. He also championed a controversial plan by Treasury Secretary Henry Paulson Jr., a colleague at Goldman, to overhaul the financial industry’s regulatory apparatus.

(snip)

http://freerepublic.info/focus/f-news/1965976/posts

Duke bolsters legal team in fighting lawsuit (Duke Hires Jamie Gorelick)
The Herald-Sun (Durham) ^ | Feb 6, 2008 | By Ray Gronberg

Posted on Wednesday, February 06, 2008 1:14:50 PM by Ken H

DURHAM — Duke University has added a former deputy attorney general of the United States to the legal team that will defend it against a federal civil-rights lawsuit filed by three members of the 2005-06 men’s lacrosse team.

Court papers filed this week indicate that Washington, D.C., attorney Jamie Gorelick will assist two Greensboro litigators in representing the school.

They’re also the attorneys of record for the Duke University Police Department, Board of Trustees Chairman Robert Steel, school President Richard Brodhead and numerous other university officials.

(snip)

wiki:

Robert King “Bob” Steel (b. August 3, 1951) is an American business leader and an expert on financial institutions and markets. In June 2010, he was named Deputy Mayor for Economic Development by New York City Mayor Michael Bloomberg. Previously, he had served as Under Secretary for Domestic Finance of the United States Treasury, as the last president and CEO of Wachovia Corporation, and as vice chair of Goldman Sachs.

(snip)

U.S. Treasury, 2006–08 ...

Wachovia/Wells Fargo, 2008–2010 ...

He is also a member of the Pew Charitable Trusts Task Force on Financial Reform, which advises the United States Congress on critical financial reform issues. In December 2009, he testified before the Joint Economic Committee of the U.S. House and Senate regarding financial reform.[40] He is also a member of The FDIC Advisory Committee on Economic Inclusion (ComE-IN), which focuses on how to improve underserved and low- and moderate-income consumers’ access to the financial mainstream.[41]

Although Steel was appointed to his Treasury post by a Republican president, he does not regard himself as an ideologue, and has been occasionally criticized for his political independence. For example, although Steel hosted fundraisers at his home for John McCain,[5] columnist Bob Novak complained that Steel is “no Republican,” citing that he had worked with Clinton Treasury Secretary Robert Rubin at Goldman Sachs and made campaign donations in 2002 to Democrats from his home state of North Carolina.[42]

Also, re: Robert Steel:

American Action Network, 2010–present

In 2010, Steel became a founding member of the Advisory Board of the American Action Network, a group devoted to developing and marketing conservative ideas. The group was described by the New York Times as a "center-right version of the Center for American Progress."

Wikipedia
~~~~~~~~~

Robert King "Bob" Steel

To abbreviate (really not abbreviated at all and overlaps with maggief's post): I was intending to gather a chronology and got over zealous with some interesting details:

Steel received his undergraduate degree from Duke in 1973, majoring in history and political science. He received his Master of Business Administration degree from the University of Chicago in 1984.

Steel spent nearly 30 years at Goldman Sachs, rising to vice chair of the firm. He joined the Chicago office in 1976 and served as that office's co-head of institutional sales.

Goldman Sachs, 1976–2004
Barclays Bank, 2005–06
U.S. Treasury, 2006–08

Steel was appointed Under Secretary for Domestic Finance at the United States Department of the Treasury on October 10, 2006 and served until July 9, 2008.

In March 2007, Steel testified before the U.S. House Financial Services Committee on reform of the housing Government Sponsored Enterprises (GSEs)

In April 2008, Steel testified before the U.S. Senate Banking Committee regarding the rescue of Bear Stearns. Steel explained that although the Treasury had believed that the rescue of Bear Stearns was necessary, it had encouraged a low sale price so as not to encourage risky behavior by other large institutions.[20]

Wachovia/Wells Fargo, July, 2008–2010
~~~~~~~~~~~~~~~

Steel certainly seems to be able to skirt trouble, even when under suspicion:

1) Also during Steel's term, the Duke campus experienced the false-rape charge known as the 2006 Duke University lacrosse case. Steel was criticized for supporting the university's president and asking that the legal proceedings take their course.[32]

When the charges were dismissed, Steel said the players "deserve our respect for the honorable way they have conducted themselves during this long legal ordeal .... Much as we wish that these three young men...could have been spared the agony of the past year, we believe that it was essential for the university to defer to the criminal justice system."[33]

In a suit by the lacrosse players, Steel is alleged to have helped suppress evidence of innocence to protect Duke's image, ordering Duke police to falsify their records to make the players appear more guilty, and explaining, "Sometimes good people have to suffer for the good of the organization".

["helped suppress evidence" and "ordering Duke police to falsify their records"--- What became of those charges?]

2) On July 9, 2008, Steel was named president and CEO of Wachovia.[6] Although Steel's predecessor, G. Kennedy Thompson had been criticized for exposing the firm to high-risk mortgages,[7] Steel hoped to put the company on firm footing until it failed in the Fall 2008 crisis. He bought one million shares of Wachovia stock on the open market and bought a house in Charlotte.[8] He also turned down a bonus he was due to receive.[9]

Steel was adamant that Wachovia would stay independent. However, by September 2008, market conditions had deteriorated severely. On September 26, Wachovia lost almost one percent of its deposits, leading regulators to force Wachovia to put itself up for sale.[10] After an initial deal with Citigroup for $1/share,[11] Steel and the Wachovia board accepted an offer to merge with Wells Fargo for $7/share.[12] (Wells Fargo would be purchasing 100% of Wachovia; .... The arrangement made Wells Fargo the second-largest retail brokerage in the United States.

In January 2009, The Wall Street Journal reported that the Securities and Exchange Commission was investigating claims Steel made about the future of the bank before it started talks about a potential merger.

Following the merger, Steel was invited to join the board of Wells Fargo and served on the firm's credit and finance committees.[15] In June 2010, upon being appointed Deputy Mayor for Economic Development of New York City, Steel resigned his seat on the Wells Fargo board.[16]
~~~~~~~~~~~~

The Wachovia drug-money laundering investigation spanned the years 2004-2007, and Steel presided over the settlement as CEO of Wachovia (2008-2010):

In April 2008 Wachovia was also investigated by United States federal prosecutors as part of a probe into drug money laundering by Mexican and Colombian money-transferring firms. The investigation of the alleged laundering also included other large U.S. banks.[69]

Wells Fargo has since admitted that its Wachovia unit was involved in money laundering for drug traffickers.[70] It allowed money to be transferred in and out of casas de cambio, without proper due diligence, in violation of the Bank Secrecy Act. In March 2010 Wachovia agreed to pay a $160 million dollar fine for involvement in Mexican drug cartel money laundering that could total up to $420 billion dollars.[71] Said Jeffrey Sloman, the chief US prosecutor in the case, "Wachovia's blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations."[72]
~~~~~~~~~~~~

Just prior to Steel joing Wachovia as CEO, Wachovia settled another large lawsuit in April 2008:

A May 2007 New York Times article described Wachovia's negligence in screening or taking action against companies connected to identity theft.[67] These companies used stolen identities to remove funds from personal Wachovia bank accounts via unsigned checks. The article goes on to say "In all, Wachovia accepted $142 million of unsigned checks from companies that made unauthorized withdrawals from thousands of accounts, federal prosecutors say.

Wachovia collected millions of dollars in fees from those companies, even as it failed to act on warnings, according to records." Furthermore, the article adds "In a lawsuit filed last year, the United States attorney in Philadelphia said Wachovia received thousands of warnings that it was processing fraudulent checks, but ignored them."

On April 25, 2008, Wachovia agreed to pay up to $144 million to end the investigation without admitting wrongdoing.[68] The investigation found that Wachovia had failed to conduct suitable due diligence, and that it would have discovered the thefts if it had followed normal procedures. The penalty is one of the largest ever demanded by the Office of the Comptroller of the Currency.

SOURCES from Wikipedia:

Robert K Steel
Wachovia
Bear Stearns

Here’s your Chicago connection ...

http://www.robertksteel.com/

Biography of Robert K. Steel

Robert “Bob” Steel was born in 1951, and grew up in Durham, North Carolina. In 1973, he graduated from Duke University with a B.A. in history and political science.

Mr. Steel moved to Chicago in 1976 to work in institutional sales at Goldman Sachs. He earned his M.B.A. from University of Chicago in 1984.

In 1987, Goldman Sachs sent him to work in its London office, where he spent seven years helping to privatize state-owned businesses in Europe. After his first year, Mr. Steel became partner and headed the European Equities Division. In 1994, he moved to New York City to co-lead the U.S. Equities Division.

Two years later, he was elected vice chairman of Goldman Sachs. He retired in 2004, assuming the role of advisory director.

Upon leaving Goldman Sachs, Mr. Steel became further involved in the non-profit sector. He co-founded SeaChange Capital Partners, which assists nonprofit organizations scale rapidly via a nationwide donor network. He also chaired The After-School Corporation, which is devoted to providing young Americans enriching activities through after-school programs.

In 2004, Mr. Steel began teaching at the John F. Kennedy School of Government. His teaching excellence helped increase student enrollment, for which he was awarded a bonus by the university president.

In 2005, the National Humanities Center, a private institute dedicated to the study of humanities, elected Bob Steel to its board of trustees. He also began serving as a non-executive director of Barclays Bank.

In 2005, Mr. Steel became chairman of Duke University’s board of trustees, after serving on the board for eleven years, five of which he was vice chairman.

In 2006, President George W. Bush asked Mr. Steel to serve his country as Under Secretary for Domestic Finance at the U.S. Department of Treasury. For nearly two years, Bob Steel was chief advisor to the secretary on financial and economic matters. As Under Secretary, Mr. Steel tackled complex challenges in credit markets and the economy. He is credited with reviving the President’s Working Group, which was the core group then prepared to respond to the global economic crisis of 2008. He managed the Department’s Blueprint for Modernized Regulatory Structure, which recommended several of the reforms since pursued by the Obama administration. And he helped manage Department affairs day-to-day. When Secretary Geithner took office under President Obama, the Wall Street Journal noted that what the incoming Secretary needed was “the next Bob Steel.”

For his achievements at the Treasury Department, Mr. Steel was awarded the Alexander Hamilton Award, the highest award given to any Treasury employee.

In 2008, he became president and CEO of Wachovia bank. During his tenure, Mr. Steel led Wachovia into a business-saving merger with Wells Fargo.

Bob Steel currently serves on the board of Wells Fargo, and he chairs the Aspen Institute, a non-profit organization that promotes value-based leadership. He also serves on the Pew Charitable Trusts’ Task Force on Financial Reform, which advises Congress on critical financial issues; and serves as director emeritus for The After-School Corporation.

Mr. Steel is a frequent television commentator, providing insight and analysis on economic and financial issues.

In his free time, Bob Steel enjoys golfing, skiing, hiking and spending time with his family, including his wife Gillian and their three daughters.

http://www.bizjournals.com/triad/stories/2008/07/07/daily35.html

Robert Steel is a North Carolina native. He grew up in Durham near Duke University’s east campus. He attended Durham public schools and then Duke, graduating with a bachelor of arts in history and political science in 1973.

After college, Steel relocated to Chicago for his first job in asset management. In 1976, he joined Goldman Sachs & Co. in institutional sales in the Chicago office. While at Goldman, Steel earned a master’s in business administration from the University of Chicago. He graduated in 1984 and became co-head of institutional sales in Chicago.

In 1986, he transferred to London, where he founded Goldman’s European equity capital markets group and was extensively involved in privatization and capital raising efforts for European corporations and governments. He later became head of equities for Europe. In 1994, he moved to New York and was head of the equities division from 1998 to 2001, when he was named a vice chairman of Goldman. Steel retired from Goldman in 2004 but still serves as an adviser to the firm.

He also is a nonexecutive director of Barclays plc and Barclays Bank plc.

In October 2006, Steel became Under Secretary of the Treasury for Domestic Finance. In that role, he was the principal adviser to the U.S. Treasury secretary on matters of domestic matters. He also led the department’s activities with respect to the domestic financial system, fiscal policy and operations, governmental assets and liabilities, and related economic and financial matters.

(snip)

(no links)

Durham’s own leads Duke Trustees - A Bull City first: R.K. Steel , raised near East Campus, replaces Nicholas
Herald-Sun, The (Durham, NC) - May 15, 2005
Author: PAUL BONNER

Robert K. Steel on Saturday became the first Durham native to be elected chairman of Duke’s board of trustees since the university was created from Trinity College in 1924.

Steel , who retired as vice chairman of Goldman Sachs & Co. in New York City last year and lives in Greenwich, Conn., has been on the board of trustees since 1996, serving as vice chairman since 2000. On July 1, he replaces as chairman Peter M. Nicholas, who will retire from the board.

Steel is a Duke alumnus, as were both his parents, the late Charles Steel III and Elizabeth Steel . Charles Steel III also was a Durham City Council member from 1957 to 1977. He died in October. Robert Steel grew up in Durham in the family’s Trinity Park home near the Duke East Campus, attending Durham Public Schools and graduating from Durham High School.

(snip)

Obituary - STEEL III
Herald-Sun, The (Durham, NC) - October 28, 2004

STEEL III DURHAM - Mr. Charles Leighton Steel III died Wednesday, October 27, 2004. He was born January 13, 1921, in Philadelphia, Pennsylvania. He grew up in Teaneck, New Jersey where his father was the high school principal. He graduated from Duke University in 1942 where he was captain of the lacrosse team. Following graduation, he entered the Marine Corps as an officer candidate and trained as a paratrooper. He served in the South Pacific and then as a member of the 28th Regiment, Fifth Marine Division that conducted the amphibious assault on Iwo Jima and raised the flag on Mount Surabachi. He was promoted to the rank of Captain, and after occupation duty in Japan he returned to Durham and established Steel Music Company as an operator and distributor of jukeboxes.

He was later a general agent for Life Insurance Company of North Carolina and Georgia International Life Insurance Company. He was active in civic affairs serving five terms as a member of the Durham City Council and was elected Mayor pro tempore by his fellow Council members.

http://www.conservapedia.com/Jim_Cramer

On September 29, 2008, during a segment of Mad Money on CNBC, Jim Cramer discussed the Wachovia call he made on September 15, 2008.[44][45] Wachovia CEO Bob Steel told Mad Money viewers that out of $500 billion in loans on the bank’s books, only $10 billion were bad. Just two weeks later, Citigroup bought Wachovia for a highly discounted price, because the actual total was $42 billion, and the FDIC was about to seize Wachovia. Cramer trusted CEO Bob Steel, who he’s known as a solid financier for 25 years, and he urged viewers to do the same. More than anything, Cramer was mad at himself for letting his viewers down. “I let you down,” Cramer said. “I let my judgment of Steel cloud my thinking about Wachovia.”[45] He apologized both on Mad Money and on the Today Show for believing in Steel.

...

Mr. Steel is survived by seven sons, Charles Leighton Steel IV, Robert King Steel , John Deaton Steel , Richard Leighton Steel , William Seldon Steel , James McIntyre Steel , and Paul Riddell Steel ; and seven grandchildren. He is also survived by his sister, Betty Ann Martens of Dayton, Virginia; and his brother, John S. Steel of Harwichport, Massachusetts.

On March 9, 2009, on Mad Money,[51] Jim Cramer said Frank Rich “chastised me for endorsing Wachovia’s stock after then-CEO Bob Steel came onto Mad Money and spoke positively about the bank.” After the bank collapsed, Cramer reminded viewers that he takes pride in “the part about accountability,”[52] and is the first person to admit when wrong. Cramer mentioned, “Look, I was taken in, the guy pantsed me. I made a mistake. The SEC is investigating Steel’s appearance on the show for truthfulness, though. I made a mistake, but they’re investigating him to see if he lied. Bigger issue. Sometimes you just get had.”[51]

http://www.cnbc.com/id/26728133/CNBC_EXCLUSIVE_CNBC_TRANSCRIPT_CNBC_S_JIM_CRAMER_INTERVIEWS_WACHOVIA_PRESIDENT_CEO_ROBERT_STEEL_ON_MAD_MONEY_W_JIM_CRAMER_TONIGHT

CNBC EXCLUSIVE: CNBC TRANSCRIPT: CNBC’S JIM CRAMER INTERVIEWS WACHOVIA PRESIDENT & CEO ROBERT STEEL ON “MAD MONEY W/JIM CRAMER” TONIGHT

http://www.chicagobooth.edu/magazine/30/2/feature2.aspx

Guiding Domestic Finance
by Melissa M. Bernardoni
Published: June 7, 2008

EXCERPT

Steel: I didn’t have a mindset toward an analytical approach, so I found the ideas of linear programming, and how series relate, and statistics with Harry Roberts quite helpful.

As one becomes more interested in planning and managerial issues, these skills become even more valuable. Look at what’s happened in finance. When I started at Goldman Sachs in 1976, there were few derivatives aspects to the capital markets, so you didn’t need to understand the concepts of derivatives very clearly. Today you’re not as well positioned if you’re not comfortable with more sophisticated financial relationships, for which Chicago gives a terrific foundation. I’ve always liked the analogy that the GSB gives you tools you can apply to any situation. At Chicago, I picked up many tools, especially on the analytical side, that I had not developed in my undergraduate program. I had a liberal arts background, so Chicago really let me burnish another side of my potential.

For me, the most enjoyable were all the investment classes: Jim Lorie’s, Merton Miller’s. That was like dessert for me; I found it interesting and just plain fun.

Snyder: Your experience in privatization put you at an important intersection between finance and public policy. Was that part of the backdrop for your involvement with [Harvard’s John F.] Kennedy School [of Government]? It might seem unusual for a partner at Goldman to decide he wants to be involved in a significant way with the Kennedy School.

Steel: Goldman Sachs has a pretty long tradition of encouraging people to engage in all parts of life outside the firm. Consider many of the people who led the firm while I was there: John Whitehead, former deputy secretary of state; Bob Rubin, the first head of the National Economic Council and then secretary of the treasury; Steve Friedman, former head of the National Economic Council and now head of the president’s foreign advisory force on intelligence; Jon Corzine, ’73, former U.S. senator and New Jersey’s current governor; and Hank Paulson, secretary of the treasury. There’s a tradition from the top of being interested in public service and the world outside 85 Broad Street.

I decided to leave Goldman Sachs full time in 2004. A colleague from Goldman Sachs had been working on a class at Harvard and invited me to join him. We co-taught that class for two years, which was a lot of fun. We talked about the economic aspects of public policy and looked at issues, whether it was Social Security or Medicare/Medicaid or Basel, as financial and public policy issues. Public policy schools and business schools have their respective lenses on these issues and we tried to bring them closer to the middle. These are challenging economic issues with a big public policy effect. It was a comfortable transition from Goldman Sachs to think about these issues, and it served as a nice—and completely serendipitous—transition to this job.

Snyder: How did you end up in this job?

Steel: Secretary Paulson called in late June 2006. He and I had been close associates for almost 30 years. I joined Goldman Sachs in 1976 in Chicago and the secretary also worked in the Chicago office, having joined the firm about a year earlier. We were on the 60th floor of the Sears Tower, when that was a new building, and the office had less than 100 people. There are different divisions of the firm, but in a regional office you can’t help but know each other. Over the years, he has been my associate, my partner, and my boss. I’ve always had tremendous respect for him. So when he called and suggested there might be a way that I could help at Treasury, I was quite honored.

Sorry ... copy and paste error ... this is part of the obit posted above..

Should read:

Obituary - STEEL III
Herald-Sun, The (Durham, NC) - October 28, 2004

http://www.conservapedia.com/Jim_Cramer

...

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