WASHINGTON -- In selecting Rep. Rahm Emanuel as chief of staff, President-elect Barack Obama turned to someone who has made a quick fortune as an investment banker, earned a six-figure fee to sit on the board of a troubled government-sponsored mortgage company and became a top recipient of Wall Street campaign cash in Congress, public records show.
"This is an ironic choice for a president-elect who has promised to change Washington," House Minority Leader John Boehner of Ohio said in a statement.
Emanuel's office said he was unavailable for comment. His spokesman, Nick Papas, said in an e-mail that the Illinois congressman "has consistently stood with taxpayers and investors and against Wall Street." An example, he said, was Emanuel's sponsorship of a law preventing hedge-fund managers from avoiding taxes by using offshore companies.
After resigning as a senior adviser to then-president Bill Clinton in 1998, Emanuel joined Wasserstein Perella Group, an investment firm run by Clinton fundraiser Bruce Wasserstein. With no finance background, Emanuel was paid $16.2 million over 2½ years, according to financial disclosure statements, after helping the firm win business from Clinton donors and others.
"I brought in business and worked on business that was very successful," Emanuel told the Chicago Tribune in 2003. "I didn't work on one deal. I didn't work on two deals. I think it was close to six or seven, of which a couple of them were over a billion dollars."
In 2000 and 2001, Emanuel served on the board of Freddie Mac, the mortgage company that was taken over by the government earlier this year after its collapsing investments rendered it insolvent. He was paid $292,774 in director's fees and realized a gain of $27,280 from stock options, according to his 2002 congressional disclosure statements.
Emanuel, 48, loaned himself $450,000 to help finance his 2002 congressional campaign.
In a statement announcing the pick, Obama noted that "Rahm spent several years in the private sector, where he worked on large and complicated financial transactions," an experience that has given him "deep insights into the challenging economic issues" facing the country.
As a Democratic leader in Congress, Emanuel became a top recipient of Wall Street campaign money, campaign finance records show.
Unlike Obama, Emanuel accepts donations from federal lobbyists and political action committees. Since January 2007, he has raised $1.2 million from PACs and $58,690 from lobbyists, according to CQ MoneyLine and the Center for Responsive Politics.
He raised $1,537,842 from the securities and investment industry since 2001, and in the 2007-08 cycle he was the single-largest recipient in Congress from PAC and employees of hedge funds and private-equity firms, according to the non-partisan center.
Last year, when Democrats proposed closing a tax loophole for private-equity managers, Emanuel wrote a memo offering a series of options that included keeping it.
House Democrats sought to eliminate a rule allowing private-equity managers to pay taxes on their income at the 15% capital gains tax rate instead of the 35% corporate income tax rate. The industry "spent a lot of money on lobbying" to defeat the measure, said Matthew Beck, spokesman for the House Ways and Means Committee.
Emanuel wrote the memo after he discussed the issue in the Chicago offices of Madison Dearborn Partners, whose employees are his largest contributors, Bloomberg News reported in July 2007. "He thought a compromise somewhere in the middle was the right answer," Madison chief executive John Canning said Thursday.
Emanuel told Bloomberg that taxes should also be raised on oil-and-gas and real-estate partnerships. "Either everybody's affected, or nobody's affected," he said.
The House passed a bill eliminating the loophole, and Emanuel voted for it, but the bill died in the Senate.
"He'll temper populist ideas that are bad," Canning said, "but he's not going to roll over for business, either."