Petraeus as Professor: How Elite Paybacks Are Made

Oops! David Petraeus was going to get paid $200 thousand a year as a very part-time “visiting professor” at City University of New York. That would be for exactly two lectures a year. He would be happily raking in the money right now except Gawker spoiled his fun by breaking the news.

But now it is all fixed.

“After several weeks of public criticism, CUNY announced the pay cut today. ‘The general never was taking on this teaching assignment for the money,’ says Petraeus’ lawyer, per the Times. ‘Once controversy arose about the amount he was being paid, he decided it was much more important to keep the focus on the students, on the school and on the teaching, and not have it be about the money.’ The dean of CUNY’s honors college, nevertheless, stands by the price tag. ‘We felt that we had the opportunity to bring somebody of extreme stature to be with our students and that whether the salary was $200,000 or $150,000 he was absolutely worth it,’ she says.”

What nonsense. The Gawker provides documentation that shows it was all about the money. What seems to have really gone wrong for CUNY is that it expected there to be a “private donor” who would pay for Petraeus’ six-hour work year. If Petraeus’ pay came from the general fund, that would raise many issues considering that CUNY is not a private institution.

What would it mean if CUNY had found a donor to cover this salary? It would have been a kickback from someone that owed Petraeus a favor or who hoped to gain a favor from him. It seems that Petraeus’ record has left him without a long line of buyers wishing to repay or purchase his services.

Consider how it worked for Timothy Geithner, who recently made a cool $400k for three speeches with more to come. The AmericaBlog got it right: “Geithner is the model for legal bribery in DC.” The institutions who paid for his incredibly expensive speaking services were some of the Wall Street creatures that he protected as Secretary of the Treasury.

Or consider Bill Clinton:

“On December 21, 2000, President Bill Clinton signed a bill called the Commodities Futures Modernization Act. This law ensured that derivatives could not be regulated, setting the stage for the financial crisis.  Just two months later, on February 5, 2001, Clinton received  $125,000 from Morgan Stanley, in the form of a payment for a speech Clinton gave for the company in New York City.  A few weeks later, Credit Suisse also hired Clinton for a speech, at a $125,000 speaking fee, also in New York.  It turns out, Bill Clinton could make a lot of money, for not very much work. Today, Clinton is worth something on the order of $80 million (probably much more, but we don’t really know), and these speeches have become a lucrative and consistent revenue stream for his family.”

This is what Petraeus was attempting to tap into. Whether or not he succeeded is not the point. The point is that these incredible remuneration schemes are how elites pay each other off.

Just wait until Obama leaves office and watch his payday unfold.