Greg Palast examines the recently released emails between Harvard University’s Larry Summers and Jeffrey Epstein, the late convicted sex trafficker of minors — emails in which Summers, who is married, seeks advice from the convicted predator on how to seduce a young economist he was mentoring at Harvard.
Palast is the New York Times best-selling author of The Best Democracy Money Can Buy.
SCOTT HARRIS: And right now I am very happy to welcome back to our program, our good friend Greg Palast, known for his investigative reports for the Guardian and best-selling books, including The Best Democracy Money Can Buy. Greg’s new film about the latest attacks on the right to vote that bent the 2024 election is titled, “Vigilantes Incorporated: America’s New Vote Suppression Hitmen” that was narrated by Rosario Dawson and produced by Martin Sheen. And Leonardo DeCaprio helped out on the film as well and released the film free for streaming that you can find at Greg Palast’s website, gregpalast.com. Greg, thank you so much for making time to come on our program again this evening. Appreciate it.
GREG PALAST: Thrilled to be back with you, Scott.
SCOTT HARRIS: Thank you. So we’re very happy that you can make it here this evening to discuss your investigation of some critical economic policies from recent American history that intersects with Jeffrey Epstein and some recently released email correspondence between Jeffrey Epstein, the late convicted sex trafficker of minors, and Larry Summers, President Clinton’s Treasury secretary. He was also a director of the National Economic Council for President Obama and vice president at the World Bank. Summers has also got a lot of titles—that guy Summers also is past president at Harvard University—and as far as I know, he’s still a professor there, although that may be in doubt.
With this investigation Greg, first tell us about the investigation you conducted into the plan for international banking deregulation back in 2013 and how these Epstein emails and his relationship with Larry Summers brought this important story back into focus.
GREG PALAST: Okay, well, first, if you follow the soap opera of Epstein—and it’s serious stuff—is that Larry Summers the most influential, powerful economist in the United States by far. Again, former U.S. Secretary of the Treasury, etc., World Bank, president of Harvard University was hanging out— not only was using flying in Air Epstein, but Epstein was what he called his “wing man” in trying to seduce his protege. A young woman. Now I understand Larry Summers is married to another Harvard professor, but he was spending time in emails and God knows what else with Epstein, coming up with a strategy to use his influence and power over this young economist basically to get her in the sack. It’s vile, it’s evil and by the way, it’s a crime anyone else doing that would be arrested and certainly lose their job. And Harvard was very reluctant to even remove him as a professor. This was a big—so that’s what the scandal story is.
But it is about power and money and influence and back and this is the game that Larry Summers has played in the 30 years I’ve been investigating him. Thirty years as an economist. In 1997, Larry Summers was actually at that time, deputy Treasury secretary and under Robert Rubin, who was the co-chairman just before Clinton made him secretary of Goldman Sachs. And Larry Summers was his associate. Timmy Geitner, who also became U.S. Treasury secretary. All three became Treasury secretary.
Timmy Geitner was Summers’ flunky and he was sent to the World Trade Organization. Why? Because Summers, Rubin and Geitner had this plan under Clinton that not only would they deregulate the banks—and that’s important, remember it was under Bill Clinton that banks were deregulated. And of course George Bush took that opening and ran with it—and Trump even more. But it started with Bill Clinton deregulating the banking system, which led by the way, directly—directly to the crash of 2007 to 2010 of the housing market. Also directly caused the collapse of the Eurozone finances because deregulation allowed the sale of derivatives, which are basically gambling.So what happened is, is that I got my hands on a memo when I was at The Guardian and BBC, and then I also wrote this up for Vice magazine. A memo called the “End Game” Memo, which became quite famous in Europe. What it is is a memo from Timmy Geitner, who was at the World Trade Organization as economic ambassador, from the Treasury to Summers saying to Summers, “Listen, here’s a list of five bank and finance CEOs.” These are the personal numbers for John Reed at Citibank. You also had John Corzine who had taken over at Goldman Sachs. You had Merrill Lynch, you had Bank of America, so you had five of the big giants of finance. This is a conspiracy nuts’ dream because these five bankers with Summers, Rubin and Geitner came up with a plan that would force all 156 nations within the World Trade Organization to deregulate their banks.
I mean, there’s no point, Scott, in deregulating American banks if smart people are going to say, “Why don’t we go to England where they have, or Germany, where they have stronger, stronger protection laws for our money?” And so what they did was they said, here’s our plan. If someone doesn’t want to let Citibank buy your banks or you won’t accept our derivatives, you won’t accept our—and let’s not forget that Europe bought hundreds of billions of dollars in derivatives, which exploded and became nearly worthless, destroying those economies.
I can tell you right now, one of my relatives in the Swiss Army in the Swiss National Pension System lost a big hunk of their pension because of their pension system buying into Goldman Sachs’ phony derivatives. That was the collapse. And so Summers came up with this plan with Geitner that in the “End Game” Memo—what they were going to do is use the what’s called the Financial Services Agreement of the World Trade Organization.
A little complex, but you can figure this one out. And they said to Ecuador, for example, and this is exactly what they said, “You are a banana republic. If you don’t accept our banks into your system, if you don’t buy our derivatives and junk bonds, we will not buy your bananas. And then you and the monkeys can share the bananas while you go bankrupt.” Ecuador signed. Same with all 156 members of the WTO except for Brazil, which survived the great market crash of 2008 because they did not allow American banks or their toxic assets into their nation. That was under Lula (Luiz Inácio Lula da Silva), the current president. Just said, “I’m not sorry, I’m not doing it.” So that’s what happened. That’s the “End Game” Memo and we are all feeling the consequences even today.
SCOTT HARRIS: Right. Well, that’s what I’d like to get to because we’re short on time, but I wanted to ask about this “End Game” Memo. When it contributed to the deregulation that brought down the economy in 2007 to 2010, as you said, how does that still impact us today? And I should note that you might want to also mention that during the Obama administration, many millions of people lost their homes, while no bankers were brought up on charges under Eric Holder, Obama’s attorney general, there was a Wall Street crime spree without parallel. And President Obama, who’s lauded as some kind of progressive, he oversaw millions of people lose their homes, but the bankers went scot-free.
GREG PALAST: Well, a couple things. Number one, when you talk about the bankers, remember one of the big backers of Obama was Robert Rubin. And now that was again the guy who was in charge of the whole “End Game” scenario. And one of the things he did in bank deregulation was to destroy the Glass-Steagall Act, which was the great gift of Franklin Roosevelt to protect us from banking predators. What Glass-Steagall did, and this is important to understand, it said, “Okay, there’s investment banking.” That’s a fancy word for financial speculation, going to Vegas to gamble on derivatives. And then there’s commercial banking, which is, “that’s where you put your savings.” That’s where you get a guaranteed quarter-million dollars, half-million dollar guarantee for your bank account, backed by the U.S. government and the Federal Reserve.
SCOTT HARRIS: Now FDIC, right? Yeah.
GREG PALAST: FDIC. And then what happened is is that under Clinton and Rubin, they smashed the barrier between these two and said, “Okay, Goldman Sachs, you can become a bank now and you can take Citibank merged with American Express to create something called Citigroup” and they took trillions of dollars. I’m not talking billions, I’m talking trillions of dollars and they gambled it. This is our government-guaranteed money. They gambled the government-guaranteed money in the derivatives market and got destroyed. They blew it all away. We ended up giving a bailout, which included $77.7 billion in guarantees for these banksters, at least $5 billion in direct payments to them.
So if you are going to arrest anyone for the crime, you’d be arresting Rubin, who by the way, Rubin… So what Rubin did, just so you know, after he smashed Glass-Steagall, allowing the creation of Citigroup, he was hired as the chairman of Citigroup, left the Treasury, went to Citigroup and was paid a starting salary of $126 million and then proceeded to blow a trillion dollars, which we had to pay off so he could get his $126 million payday.
So the reason why these guys are not in jail is that they are Obama’s good friends. In fact, Larry Summers came back in. He could not, believe me—he could not get confirmed as secretary of the Treasury. So they made his flunky, Timmy Geitner, secretary of the Treasury, but put Summers over him in a job that did not have to be confirmed by the Senate, simply called the “economic czar,” “chief economic advisor” to the White House. So that’s why you didn’t get these guys arrested. That’s why the banksters weren’t arrested because it would include the top Democrats who put Obama back in office. It’s real simple.
SCOTT HARRIS: We’re speaking with Greg Palast, our good friend and a longtime investigative reporter. He is also an economist, right? You used to lecture on economic issues at some of the most prestigious universities in the world.
GREG PALAST: Harvard, Cambridge, Oxford. Yeah. That was in the days when I used to have a real job before I was a journalist.
SCOTT HARRIS: That’s when you started being friends with low-lifes like us. Thank you for that, Greg. I did want to ask you a final question. We are running out of time very quickly here. There’s a lot of talk on Wall Street these days in terms of an artificial intelligence bubble. I’ve been hearing it increasingly over recent weeks and I’m wondering in terms of deregulation and things that should have been fixed that weren’t fixed, replete with loopholes and all that, that is part of the government dysfunction. What do you foresee with this so-called AI bubble? Is it real and should we be concerned about it?
GREG PALAST: Well, we should be concerned about it. I don’t know if it’s a bubble or a miracle. The Internet changed productivity and was wonderful, but it also led to massive implosion of some big corporations, especially because they decided—if you remember that we needed massive fiber optics throughout the world that led to the bankruptcy of giant corporations and had a tremendously negative effect on the market. I’m very concerned, for example, under Moore’s Law, you have a new chip—comes out about every 18 months. What’s going to happen to the trillion dollars that are being spent on Nvidia chips when 18 months from now someone might come out with something which is a heck of a lot cheaper and doesn’t require so much energy or so many chips. What are we going to do with all those billions of dollars in monster megalith plants out there? So yeah, there’s a danger.I can’t predict where it will go, but anyone who doesn’t see that danger is operating blind. And the problem is we still have not fully restored the Glass-Steagall Act and this all backs up into the finance system. These guys are gambling heavily. Once again, it’s not as, AI is real. Derivatives were never real. Hey, JP Morgan had $88 trillion. I’m not making this up. $88 trillion on their balance sheets for derivatives as assets, $88 trillion. That’s more than the entire gross world production. So yeah. Yes. I think that if we’re not concerned and we don’t go back to some type of tighter financial regulations, get ready. Get ready.
GREG PALAST: Go to gregpalast.com. That’s G-R-E-G-P-A-L-A-S-T, gregpalast.com. You can get my films. You can get these reports. Or go to my Substack writing Substack Greg Palast.
SCOTT HARRIS: All right, Greg, thanks for this report. Thanks for spending time with us and all you do. Appreciate your friendship and your reporting. Thank you.
GREG PALAST: And I appreciate all the people that are supporting this wonderful program.
SCOTT HARRIS: Alright, thanks for that, Greg. Talk soon again, I hope. Take care.
GREG PALAST: Yes.
SCOTT HARRIS: Bye-bye. That’s Greg Palast and you can find his work, his investigative reporting work, including the Larry Summers article we were talking about at gregpalast.com.
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