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Lee Sachs

Former Counselor to the Treasury Secretary (January 2009-March 2010)

(Pete Souza/
Official White House Photo)

Why He Matters

Like Treasury Secretary Timothy Geithner's other two counselors, Sachs was a former Clinton administration official. But unlike his colleagues, Jake Siewert and Gene Sperling, Sachs kept a low profile; in fact, for a time many people didn't know he was working at the Treasury.

As Geithner's right-hand man handling the financial crisis, Sachs had plenty of influence, but little oversight; informal counselors don't need Senate confirmation. As one of the first economic officials to join the Obama transition, Sachs headed the crisis-response team. He strongly urged the Treasury not to nationalize failing U.S. banks and, in the past, had called for a government clearinghouse to regulate derivatives.

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Background

At a Glance

Career History: Partner and fund manager at Mariner Investment Group (2005 to 2009); Vice chairman of Perseus; CEO of Cornerstone Asset Management; Assistant secretary for financial markets at the Treasury Department (1999 to 2001)
Hometown: Short Hills, N.J.

Alma Mater: Denison University, B.A. (economics and political science), 1985
DC Office: 1500 Pennsylvania Avenue, NW Washington, D.C. 20220; Phone: (202) 622-2000

Path to Power

A native of Short Hills, N.J., Lewis A. Sachs moved west to Ohio for college, attending Denison University. Sachs studied economics and political science and was elected class president. He graduated in 1985 and landed a job at the investment bank Bear Stearns & Co.

Sachs thought he would only stay at Bear Stearns for a couple years before attending law school, but Bear Stearns didn't want to let him go. Sachs eventually stayed at the company for 13 years. In 1991, Sachs became the youngest senior managing director in the firm's then-68 year history. Three years later, Sachs joined the company's board of directors.

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The Issues

As one of the first economic officials to join the Obama transition team, Sachs shuttled between the Fed and the George W. Bush Treasury. Serving as a counselor to Geithner, Sachs wielded tremendous influence, but didn't have to endure the arduous Senate confirmation process. Geithner placed Sachs on his crisis-response team in which he oversaw a half-dozen Treasury aides.

In spring 2009, Sachs' name began to surface as a candidate for the number-three Treasury position. But he removed his name from consideration citing personal reasons and continued in his role as a counselor to Geithner.

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In March 2010, Sachs announced that he would be stepping down. Sachs came aboard the Treasury to help stabilize the financial sector, and he believes he has accomplished that goal. He will step down at the end of March 2010.

Nationalizing Banks

In March 2009, some Obama economic officials wanted to implement more aggressive policies to save the crumbling economy, possibly even nationalizing struggling U.S. banks. In a March 15, 2009 meeting, which Obama attended, Geithner admitted his personal desire to move more aggressively, but quickly explained why the current plan was, in fact, the best option.

Sachs supported Geithner, and took a strong stance against nationalizing banks. "There are hundreds of billions of dollars of value in these institutions," Sachs has said more than once. "If you're going to go and destroy that ... you'd better know there are WMD [weapons of mass destruction] there."

After the meeting ended, the White House decided to stay the course. Geithner stood firm and Sachs "was very much his wing man on that," an unnamed administration official told The New Republic.

"That was the moment it really hit a lot of people that, rather than Tim and Lee looking cautious, maybe they were thinking through the risks at a deeper level than other people were," said another anoymous administration official.

Centralized Clearinghouse for Derivatives

During the Clinton administration, Sachs became a strong supporter of creating a centralized clearinghouse for derivatives.

While at the Treasury, Sachs was a member of the President's Working Group on Financial Markets. In November 1999, the group published a report that called for a centralized clearinghouse where derivatives would be traded. This clearinghouse would allow for more transparency when trading the obscure financial tool. Plus, the group suggested that a government agency, like the Commodities and Futures Trading Commission (CFTC), regulate the clearinghouse.

But the Federal Reserve and a Republican-led Congress disagreed, and the clearinghouse was never formed.

The Network

Sachs is a veteran government official who made his mark late in the Clinton administration. While working as an assistant secretary at the Clinton Treasury, Sachs reported to Gary Gensler. Gensler serves as Obama's commissioner of the Commodities and Futures Trading Commission. Obama's National Economic Council Director Lawrence Summers was Clinton's Treasury secretary while Sachs worked there.

Sachs is a counselor to Treasury Secretary Timothy Geithner. He also works in the same agency as Deputy Secretary Neal S. Wolin, who served as Treasury general counsel during the Clinton administration.

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Campaign Contributions

Sachs has donated over $68,000 since 1990, nearly all of which has gone to support Democratic candidates. Since 1995, Sachs has donated $5,000 to Sen. Richard Lugar (R-Ind.). In 2008, Sachs donated $4,600 to Barack Obama during Obama's presidential campaign.

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