Services rendered
Legalised bribes
As a thanks to my paid subscribers they received this article yesterday. After a day, it opens up for everybody else.
Andrew Cuomo published his first memoir, “All Things Possible”, in 2014.
HarperCollins - an outfit that prints and sells books - paid him a $700,000 advance.
They printed 200,000 copies.
And within half a year, it had sold the grand sum of 3,000 hardcovers and 13 audiobooks. I hope they're okay. I hope they found help.
In my world 700k divided by 3k means around $250 a book. Publishers MAYBE earn $10-12 after costs. That would imply a loss which, in any normal industry, would end your career. And for the author? A debut like that? You’ll get thrown out and spend the rest of your life writing little poems on the back of scratch calendars.
So what happened? Cuomo stayed governor, and because his first book had such a resounding success... a bidding war was staged for his pandemic “leadership” book, “American Crisis”, and they paid $5.1 million for it.
It sold all of 45,000 copies. (for those in the back of the class, that’s $113/book)
Because Cuomo used his staff to help him write that book (no ChatGPT this time, and because they ran out of ideas for new taxes), the state ethics board voted to claw back the money.
Federal investigators even opened a probe.
Cuomo spent the next few years in court defending his right to keep it.
He kept the money in the end.
Joe Biden, post-presidency, signed a reported $10 million deal with Hachette - yet another book-selling venue - for his... (checking notes) ...memoirs. You know… A book of how you recall your life…
I have no idea what they were thinking, but I am SURE it’ll make great comedy!
Why are they wasting money like this?
Oh sorry, not wasting. They’re buying name recognition of course. Prestige. The hope that THAT one book will rule them all. Oh no, sorry. Wrong genre.
Maybe that one book on how good ol’ Joe remembers will incite a huge political controversy? We all know controversy sells, right?
Far more likely people will use the material to become the next Ross!
But hey! They bet on names. BIG names. BIG advances are the admission for BIG names… Who am I to disagree about the economics?
So much for the official reasons… Care to take a guess what I believe is the real reason? (hint hint: read the subtitle)
So imagine this: you’re an elected official. You conned and cheated and campaigned and backstabbed your way into a public position. Now a bank needs a certain favorable ruling. Or a defense contractor needs a contract as they’re running out of money - again. Or that kind, pharmaceutical lady needs some assistance to push her drug through the pipeline.
You deliver, because you can.
Clean hands too. Nothing was exchanged, nothing moves, you’ve just done your job.
But after you leave office, that bank’s CEO calls a publisher (you know, that book-selling company). Or a speaking bureau. Or some consulting firm.
The publisher bids $10 million for your memoirs that MIGHT move a few thousand copies. The bank will host an annual symposium and pay you $400,000 for all of 45 minutes of your “strategic” insights.
And because you’re such a smart kid, that consulting firm puts you on retainer at $2 million a year, for guidance that is never really specified.
The economics don’t need to match. Those speeches don’t need to justify the fee. THAT transaction closed years ago.
This? That’s just the settlement.
Barack Obama spent eight years calling Wall Street “fat cats” and pushing Dodd-Frank. Eleven months before leaving office, he even joked at the 2016 White House Correspondents’ Dinner in front of the press corps: “If this material goes well, I’ll use it at Goldman Sachs next year. Earn me some serious Tubmans.”
Everyone laughed. It was funny because surely he wouldn’t. Or maybe because they knew.
And lo-and-behold… less than 100 days after leaving office, Cantor Fitzgerald paid him $400,000 for a 45-minute keynote at their healthcare conference. I’m sure there is a connection between healthcare and bond trading, but I’m not smart enough to get it…
Then he got $800,000 more for two speeches. At least nine sessions to Cantor Fitzgerald alone, each at $400,000. I’m guessing Barack’s wisdom had no bounds and HAD to be widely distributed…
Hillary Clinton received a $14 million advance for “Hard Choices” - her account of being Secretary of State. Simon & Schuster - yep, another publisher - paid $14 million. Final sales? Somewhere around 280,000 hardcovers. Optimistically, it made maybe $3-4 million in actual reader revenue.
She separately collected $675,000 for three speeches to Goldman Sachs while running for president. On a platform of stricter financial regulation.
Eventually the transcripts became public and they showed she had been collegial. Warm. Sympathetic to the challenges of modern finance.
At a town hall, a moderator asked if she’d had to accept that amount.
“That’s what they offered”.
It’s probably the most honest sentence spoken in American politics in a generation.
Bill and Hillary have earned over $153 million in speaking fees since leaving the White House.
Bill left in 2001. No bear market nor correction in the market for the Clintons’ strategic insights in 25 years.
If for nothing else you need to respect their commitment to milk every single last dollar out of their previous positions!
Eric Holder served as Attorney General from 2009 to 2015. He did not prosecute a single major bank executive after the 2008 financial crisis. You know… the one that stripped millions of ordinary people of their homes and savings.
He also declined to prosecute HSBC after the bank admitted to laundering $881 million for the Sinaloa drug cartel, on the grounds that prosecution might destabilise the financial system.
Too big to fail…
In April 2015 he left the DOJ and walked back into Covington & Burling, the white-shoe law firm he’d been at before the Obama years. Whose client list just so happens to include several of the largest banks on earth.
No book. No bidding war. Just - never disclosed - consultancy fees. (Senior partners at that kind of firm earn $2-3 million a year.)
So I hear you shouting across the fiber: “THIS IS ILLEGAL, PROSECUTE IT!”
Guess what. I’m not the first person to talk about this. Because there was a lawsuit about this. And the Supreme Court even formalized it!
Imagine this: you’re the hypothetical mayor of let’s say Portage (IN), and you - again hypothetically speaking - run a procurement process for let’s say modernizing garbage trucks. And wonder of wonders, your friend won that contract!
Nothing wrong with that of course. Those things happen…
But afterward, the dealership gave him $13,000.
So it went to court.
Two juries convicted him.
He went to prison.
But he fought all the way to the Supreme Court. Which let him out, 6-3.
Federal law, they said, prohibits quid pro quo bribery - payment promised before an official act. A “gratuity” - defined as “payments made to an official after an official act as a token of appreciation” - is something else.
The $13,000 came after the contracts were awarded. Therefore: not bribery.
A tip.
The majority was written by Justice Kavanaugh.
Among the six who voted for it: Amy Coney Barrett, who in 2021 received a $2 million advance from Penguin Random House’s Sentinel imprint - a publisher - for a book she was going to write. It appeared 4 years later.
“After-the-fact payments for official acts aren’t bribery.”
Makes you put things into perspective I guess…
No1 wants to point this out. No1 can afford it.
Publishers are subsidiaries of conglomerates that lobby the government.
Speaking bureaus run on access to future administrations.
Law firms pay retainers because their partners need the same favors next cycle.
And the journalists who might cover it work for media companies owned by those same conglomerates.
EVERYONE in the room is aware of this.
… So No1 does call it out.
So next time you hear about ridiculously high speaking fees, or a book deal from a prominent governmental official?
You know what to say:
It’s not a bribe, it’s a tip.
And it’s completely legal.
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[Portfolio] → What I do with my own money
How would you even start to disassemble this system? Anyone who gets anywhere near enough power that sounds like they aren't going to go along is either going to get offered insane amounts of money (that look exactly like the methods in this post), or if they are more principled, 'disappeared' on a hike one day.
I think this particular form of bribery began when President Reagan accepted $5 million from Rupert Murdoch for his autobiography. The official general reaction of the bien pensants was "This seems very fishy", the honest, non-public reaction was, "What a great idea!" Murdoch was a pioneer in so many ways, and imitation is the sincerest form of flattery . . .