The American Spectator : The Spectacle Blog : Obama's Fink

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Sen. Chuck Grassley (R-IA) once asked Treasury Secretary Tim Geithner why BlackRock Inc., a securities firm, received no-bid contracts for work with the federal government. Geithner answered, "They come with a world-class reputation."

The question is: given that reputation, why aren't U.S. taxpayers more concerned about BlackRock's activities with the Bush and Obama Administrations. Now, according to Time magazine, the Treasury Department has selected nine large firms to operate funds to buy toxic securities from troubled financial institutions. BlackRock is one of those firms.

And here's where the dubious rep comes in. BlackRock's CEO Laurence Fink is credited with being one of the first to trade mortgage-backed securities, which are widely viewed as key contributors to the market crash of 2008. Apparently, following the same logic that has the chicken farmer hiring the fox to identify the best way to protect the hen house, Fink is viewed as the go-to guy for the Obama Administration to fix the mortgage-backed security mess.

BlackRock claims to manage "hundreds of billions (of dollars) for governments," but Fink and other senior executives at the firm will not disclose the governments for which BlackRock does business.

Fink's rise to prominence resulted from his previous work with First Boston where he sold Freddie Mac on the idea of buying $1 billion in collateralized-mortgage obligations, e.g., slicing and pooling mortgages and selling them as bonds. While Fink was paid $21,000,000 in 2007 and $26,400,000 in 2008, entities dealing with him have suffered huge losses.

Rounding out his résumé, Fink was also a large fundraiser for Barack Obama. Given all of this, one has to wonder why Obama couldn't just do American investors and taxpayers a break and give Fink an ambassadorship or something that gets him out of the economy instead of giving him a role in the economy.

View all comments (7) | Leave a comment

Bob| 7.13.09 @ 9:15AM

I smell a dead cat on this one. Republicans are so much after Barack Obama they will stop at nothing to smear him.
How pathetic.

Someone with a Brain| 7.13.09 @ 10:47AM

He was one of the first to trade mortgage backed securities....in the late 1980s. So that must imply that the financial crises in 2008 was his fault. Great article. Idiot.

Tim| 7.13.09 @ 11:11AM

Woo! the counter attack was immediate and vicious. You must be onto something.

Someone with aBrainOnHisFender| 7.13.09 @ 12:04PM

You mean he was also responsible for the 1987 crash?

Tim| 7.13.09 @ 12:12PM

If we can't trust the rich and powerful then who can we trust?

Robert| 8.3.09 @ 5:46PM

Its about time someone started to take a critical look at BlackRock and in particular Fink's record.

Fink promoted himself as a leader in the development of mortgage backed securities; then when they went toxic Mr Teflon somehow managed to avoid getting tarnished - perhaps thanks to the New Jersey government quietly bailing out their failing funds. More recently BLK layed off 10-20% of their staff while at the same time getting press coverage praising Fink's leadership of the "unscathed" BlackRock. Unscathed? Check out BlackRocks Anthracite Capital Inc which is down an amazing 96%!!!

Fink does bad but gets great press - he must have some friends in high places - or maybe journalists just believe BlackRock's propoganda - its time they were investigated and outed.