Correction appended.
Timothy Geithner '83 has emerged as a likely contender for Treasury secretary in the Cabinet of President-elect Barack Obama. Geithner, who is currently the president of the New York Federal Reserve, has been a key player in attempts to resolve the financial crisis and has a close working relationship with Federal Reserve Chairman Ben Bernanke and current Treasury Secretary Henry Paulson '68. The short-list also includes Lawrence Summers, who served as Treasury secretary for the Clinton administration and has advised Obama over the past several months.
A recent Reuters poll of 48 economists selected Geithner as the front-runner for the post; 26 of those surveyed picked Geithner and 14 voted for Summers, who is widely considered the other major contender.
During the Clinton administration, Geithner occupied several positions in the Treasury Department, working closely with Summers and former Treasury Secretary Robert Rubin, Summers' predecessor.
Summers' experience -- considered a double-edged sword by many, due to the sometimes controversial nature of his views -- includes a stint as president of Harvard University, before he was forced to resign over public controversy surrounding comments he made suggesting that men may be inherently better suited than women to study mathematics and the sciences.
Former Federal Reserve Chairman Paul Volcker and New Jersey Governor Jon Corzine are also rumored to be on the list of potential candidates for the position, although both are considered outside chances, The Wall Street Journal reported.
Geithner, who double majored in government and Asian studies at Dartmouth, has a track record of dealing with financial crises since his early days at the Treasury Department. As undersecretary for international affairs, he managed much of the Treasury's involvement in the Asian financial crises during his tenure.
More recently, his public profile increased with his involvement in Wall Street's financial crisis. As early as 2005, Geithner sought to reign in trading of complex debt securities that have beleaguered financial institutions and markets, according to Politico. That year, the New York Federal Reserve under Geithner pushed for the transparency of credit default swaps. The move resulted in the creation of the Depository Trust and Clearing Corporation, which monitors CDS trades, along with other derivatives and securities.
Geithner is also credited with brokering JP Morgan Chase's purchase of the failed investment bank Bear Stearns in March. The New York Fed insured many of Bear Stearns' biggest liabilities, making it a more attractive option for JP Morgan without insulating shareholders from the fallout of the company's demise.
Geithner's role in managing Wall Street's rescues and failures, though probably his greatest asset, may also dampen support for his appointment in the eyes of some observers.
In September, when American International Group appeared close to bankruptcy because it could not find private investors to cover the company's losses from credit default swaps, Geithner was central in orchestrating a bailout plan for the insurance giant.
Although observers generally agree that federal assistance was necessary, given the company's size and prominence, the government's original investment of $85 billion has since ballooned to $150 billion, as AIG has needed more funding to repay creditors and free itself of obligations.
At the same time, the public, including politicians and regulators, denounced the company for offering bonuses to company executives and continuing lavish spending, such as a nearly $500,000 sales retreat at an Arizona resort.
Critics also question Geithner's qualifications for the position in light of Lehman Brothers' bankruptcy, The Journal reported. The company failed in a large part because the Fed declined to give aid to the financial-services firm, denying access to an emergency fund for troubled banks and refusing to ease restrictions on collateral for loans from the Federal Reserve, according to The New York Times.
The Fed later helped Morgan Stanley and Goldman Sachs using those very tools, The Times reported, allowing them to transition from independent investment houses to conventional banking companies.
Moving Geithner into the Treasury could also upset the status of the New York Fed, according to Politico, as the Federal Reserve Board -- not the Obama administration -- would appoint Geithner's replacement.
Geithner is one of several Dartmouth alumni who could play a role in the Obama administration. Rand Beers '64, who served on the National Security Council during the early days of the Bush administration, is currently advising the Obama transition team on the Department of Homeland Security and could be tapped for an office in that department, or another national security agency, according to The Times.
Mark Brzezinski '87, former director of Russian affairs for the NSC, has also served as an Obama adviser, along with Robert Reich '68, a secretary of labor in the Clinton administration who has counseled Obama on economic issues. Reverend Leah Daughtry '84 was associated with Obama's presidential campaign, serving as chief executive officer of the 2008 Democratic National Convention and chief of staff for the Democratic National Committee.
The original version of this article incorrectly referred to Robert Rubin as Richard Rubin.