Cohen withdraws from Treasury consideration: source

[bijou]

WASHINGTON (Reuters) - Prominent Wall Street lawyer H. Rodgin Cohen has withdrawn from consideration to become deputy U.S. Treasury Secretary, a Democratic source said on Thursday, dealing another setback to the department's efforts fill critical positions.

The source, who spoke on condition of anonymity, said vetting issues came up in the final stages of considering Cohen for the job.

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[youtube=425,350]rY0WxgSXdEE[/youtube]

[Eupher]

vetting issues, eh?

Non-payment of taxes, perhaps?

[bijou]

vetting issues, eh?

Non-payment of taxes, perhaps?

Doesn't say but it could also be to do with his contacts on Wall Street, perhaps he is a recipient of Madoff money in some way?

[Eupher]

More likely a conflict of interest with a firm that is regulated under Treasury.

Kinda hard to regulate somebody who's paying you a retainer.

[bijou]

Newsbusters has done some digging

...The New York Times item goes all the way back to June 11, 1989. Reporter Michael Quint's portrayal is of a man who was on the cutting edge of a historic wave of consolidation in the banking industry, something populist Democrats and perhaps even some Republicans would have found hard to swallow in Treasury's second-in-command:

THE LAWYER OF CHOICE: H. Rodgin Cohen; He's the Counselor Banks Call in a Crisis

Talk with a banker about hostile takeovers and more than likely the first lawyer to be mentioned will be H. Rodgin Cohen, partner at the New York law firm of Sullivan & Cromwell.

..... With more than 13,000 banks in the country, analysts have been predicting for years that thousands will eventually be eliminated by mergers. According to Mr. Cohen, that consolidation is likely to include combinations of many large banking companies, despite studies showing that efficiency does not increase when large banks become giants.

"There is room for substantial cost savings, even if there are no economies of scale to be gained,'' he said. ''They will not need two accountants, two law firms, two advertising agencies and two corporate development staffs."

The trend toward larger mergers is likely to continue, he said, "because the difficulty of putting together a series of small deals can exceed that of a single big deal."


Quint also recalls that Cohen was heavily involved in the negotiations to release American hostages held in Iran for 444 days from 1979 to 1981:

The Iranian hostage crisis in 1980 was a different kind of banking story. Representing Marine Midland Bank and European American Bank, he was part of what he called the ''cash-for-people'' negotiations. If the banks would unfreeze Iranian deposits, the Iranians agreed to use some money to pay outstanding loans, and the remainder was to be sent to their bank accounts outside America. ''When the phone call came saying the hostages had landed, it was the most exhilarating feeling I've experienced,'' Mr. Cohen said.


Though Cohen was no doubt working with the outgoing Carter administration during these negotiations, the Iranian regime, in what was seen as a parting personal insult to Carter, did not actually release the hostages until minutes after new president Ronald Reagan was inaugurated in January 1981. It's not unreasonable to believe that several Democrats with long memories are more than a little displeased with Cohen's "most exhilarating feeling."

Cohen's more recent work might also have posed more than a few unwanted problems for the administration, as an October 9, 2008 article at TheDeal.com describes (bold is mine):

Fed bailouts, mergers, stake sales and bankruptcies ... as Wall Street has transformed, Sullivan & Cromwell LLP chairman H. Rodgin Cohen has been there.

Alongside Wachtell, Lipton, Rosen & Katz co-chair Edward Herlihy, Cohen is easily one of the top banking M&A attorneys and as a Wall Street Journal item Thursday put it, counts "virtually all of Wall Street as his client." He's had a busy few months and in particular, a busy few weeks.


The Deal.com piece leans heavily on that Wall Street Journal report, which appeared that same day (link will probably go to article preview; Google the article's title, "A Lawyer for All Wall Street Navigates Tempestuous Times," to see the whole thing). Journal reporters Matthew Karnitschnig and David Enrich paint a picture of man who may, as much if not more than anyone else, be responsible for why the banking business is in its current condition (bolds are mine):

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