Will Larry Summers repeat history if named Treasury Secretary?

Larry Summers has emerged within the media speculation machine as one of the leading candidates for the post of Secretary of Treasury. If he assumes that position under the Barack Obama presidency, he will undoubtedly play a key role in helping to manage the nation out of its current economic crisis.

Summers, no doubt, has the background in economics to deal with that mission, but it is worth noting that while he served in a leadership role in the Treasury Department under the Clinton administration, the agency chalked up a less-than-stellar record on civil rights issues, particularly with respect to Hispanic employees of the U.S. Customs Service then under the department’s umbrella.

After leaving Treasury in 2001, Summers, a strong proponent of free trade and globalization, moved on to become president of Harvard University, where he became embroiled in controversies revolving around his attitudes toward women and minorities. Shortly after arriving at Harvard, he picked a fight with prominent African American Studies professor Cornel West, essentially accusing him of being a lazy scholar. In the wake of that dustup, West left Harvard and went to Princeton University, alleging that Summers was an “unprincipled power player.”

In 2005, Summers again made headlines after he alleged, in essence, that women might be innately inferior to men in the disciplines of science and engineering. These, and other controversies, along wi th Summers allegedly arrogant leadership style, prompted a call for his resignation from the top post at Harvard. He eventually tendered his resignation in early 2006.

So, agree or disagree with his positions, it seems Summers’ expertise in economics often is overshadowed by his tendency to shoot off his mouth on subjects that tend to spark national political controversies. Some might now say he has seen the error of his miscalculations since that time, but given the stakes for the nation and the new Obama administration, which cannot afford a major political distraction as it gets out of the gate, some doubt has to linger over whether Summers is now a new cat, or simply the same leopard with the same spots.

And his history of spotty behavior in political judgment is not confined to Harvard. While he was serving in leadership roles at the Treasury Department during the Clinton administration, some of the same issues related to his attitudes toward racial and gender equity that sparked controversy for him at Harvard also surfaced within Treasury and even drew the attention of Congress.

Summers was appointed Secretary of the Treasury in July 1999 under Clinton after serving in the No. 2 spot at Treasury for four years and before that as Treasury undersecretary for international affairs for two years prior to assuming the deputy secretary post.

While he was acting as deputy secretary of Treasury, a controversy erupted over the department leadership’s attitude toward equal employment opportunity litigation, and Hispanic employees in particular.

Narco News documented that controversy, now relegated to the dusty pages of history, as it played out in the U.S. Customs Service, then under the umbrella of Treasury, in its online investigative series Borderline Security.

Here is a passage from the series that lays out the issues:

The fact that the U.S. Customs service’s upper management has a take-no-prisoners approach to battling Equal Employment Opportunity (EEO) discrimination lawsuits is not surprising, if the word of a former assistant commissioner of Customs is to be trusted. From 1993 through 1997, Walter Biondi served initially as Customs’ assistant commissioner of Internal Affairs and then as assistant commissioner of Enforcement and Investigations – two of the highest posts in the service.

Under questioning in a 1999 legal deposition, Biondi describes the hardened attitude adopted by the upper ranks of Customs management with respect to EEO filings. In the deposition, Biondi recounts what then Deputy Commissioner of Customs Sam Banks told a group of Customs managers at a 1997 conference:

“He (Banks) told the senior managers present who were complaining about the EEO program and EEO complaints, who were complaining about the time it took to deal with EEO complaints, that things were going to change, that he was not going to be as easy as (the retiring Customs Commissioner George Weise) was in resolving EEO complaints. People were going to have to fight to the bitter end. ... There was applause from the group that was there. It is what they wanted to hear.”

Biondi also testified about what Commissioner Weise had told him about another meeting, which Weise attended in late 1996 or early 1997 with then Treasury Undersecretary for Enforcement Raymond Kelly and Treasury Deputy Assistant Secretary Elizabeth Bresee. At this meeting, Kelly said that “anybody who filed an EEO complaint against their agency is a disloyal employee, should be shown no favor and treated accordingly,” Biondi states in the deposition, recounting what he was told by Weise.

Biondi went on to testify that when he asked Weise if anyone spoke up to point out that such a policy was not appropriate, Weise replied, “Given that he was the Undersecretary of the Treasury, nobody said anything.”

In 1998, Kelly became commissioner of U.S. Customs; Bresee later became the Treasury Assistant Secretary for Enforcement.

“Thus, officials at the highest levels of the Department of Treasury, in effect, ordered retaliation throughout Treasury’s law enforcement bureaus against those who filed EEO complaints,” assert pleadings in the class-action lawsuit filed in May 2002 by Hispanic Customs agents.

Another glimpse of the attitude senior Customs officials have toward the agency’s Hispanic employees can be found in a July 1999 report from the House Appropriations Committee. That report took issue with a portion of a U.S. Treasury Department report that stated the following:

“Most serious, however, is the belief that (Customs) inspectors who are hired locally, particularly along the Southwest border and assigned to the local ports of entry, could be at greater risk of being compromised by family members and friends who may exploit their relationships to facilitate criminal activities. Although they could not offer any solid evidence, Customs officials express a real apprehension over the possibility that individuals are attempting to infiltrate Customs by seeking jobs as inspectors for the sole purpose of engaging in corrupt and criminal behavior.”

The members of the House Appropriations Committee blasted that passage, stating for the record that “the committee takes strong exception to any implication that individuals of Hispanic background are particularly susceptible to corruption and expects the Customs Service to address unsubstantiated bias by senior Customs officials ….”

U.S. Customs spokesman Dennis Murphy stressed at the time that the report in question was drafted by Treasury, not Customs. Until late 2002, the Customs Service was under the jurisdictional umbrella of the U.S. Treasury Department.

Although Murphy could not provide any specific details on how Customs dealt with the request by the Appropriations Committee to “address unsubstantiated bias,” he did say Customs formed some high-level committees “to address recruitment and retention, particularly of minorities.”

Murphy also added, “I know there were briefings provided for members (of Congress) who were interested in this issue with regard to what the facts are and what we are doing.”

Apparently, though, those briefings failed to satisfy the concerns of all members of the Appropriations Committee. In the summer of 2000, the House committee again revisited the issue, expressing continued concern with Customs’ efforts to address the implication that Hispanic Customs employees were somehow more prone to corruption.

In a July 2000 report to the entire House, the Appropriations Committee stated the following:

“Customs offered but failed to provide the committee evidence supporting these views, and statistics provided by Customs did not support the allegation described in the (Treasury) report. In addition, written responses from BATF, DEA, FBI and the Secret Service indicated that these agencies did not agree with the concern that such local hiring (along the Southwest border) posed a greater risk of individuals being compromised.

“Although Treasury and Customs now agree that the passage from the report did not reflect accurately their beliefs or practices, the committee is concerned that Treasury has been slow in taking steps to communicate this to senior managers and others involved with Customs integrity issues. The committee continues to take strong exception to any implication that individuals of Hispanic background are particularly susceptible to corruption and directs Treasury and Customs to contest any such unsubstantiated bias by senior Customs officials….”

During Summers' prior leadership stint at Treasury, in addition to the litigation filed by Hispanic agents at U.S. Customs, the department also faced class-action discrimination lawsuits filed by minority agents of both the Secret Service and the Bureau of Alcohol, Firearms and Tobacco — both under Treasury at the time.

In addition, the infamous "Good O' Boy Roundup' gatherings came to light while Summers was at Treasury. Here's how a 1996 Department of Justice Office of Inspector General report on that racist gathering described the setting of that festive gathering in the woods of Tennessee:

In July 1995, national attention focused suddenly on an annual private gathering in southeastern Tennessee known as the "Good O' Boy Roundup" (Roundup). News stories reported that the Roundup was a "whites-only" gathering of Bureau of Alcohol, Tobacco and Firearms (ATF) and other federal law enforcement officers that resembled a "Klan rally" and at which these agents discriminated against blacks by posting racist signs, wearing racist T-shirts, performing racist skits, and playing racist music.

Granted, Summers' name does not show up among those enforcing, or otherwise encouraging, these racially charged policies within Treasury. However, Summers, as the No. 2 and later top man at Treasury during the Clinton years, cannot be absolved of all responsiblity for allowing this atmosphere of discrimination to breed within the law enforcement agencies then overseen by Treasury. The dysfunction created by this racially charged environment within Treasury, and within the law enforcement units under its charge (subsequently spun off into the Department of Homeland Security, and Justice in the case of ATF) still haunts the federal bureaucracy, since the Bush Administration arguably only helped to advance this culture of retaliation and discrimination.

So it seems only fair to question whether Summers, should he get another shot at the leadership of a major federal department (Treasury) under the Obama administration, will, in fact, further advance that dysfunction even if he might be a master of global economics.

And is that really a chance we, as a nation, want to take, given the new direction the people of this country are looking for in the wake of an historic election?

Time will tell, soon.


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