While acting as a government-appointed bailout watchdog, Elizabeth Warren, whom President Obama appointed this month to lead the creation of the Consumer Financial Protection Bureau, served as an expert witness in cases against some of the big banks receiving aid from the Troubled Asset Relief Program, Bloomberg News reports.
Warren was paid $90,000 to be an expert witness in a class-action lawsuit at the same time she was head of the Congressional Oversight Panel, which oversees the $700 billion government bailout of the financial sector. Bank of America, Citigroup and JPMorgan Chase, all of which received TARP assistance, were among the defendants in the suit, according to Bloomberg.
Warren told Bloomberg that her work as a witness constituted no ethical violations, saying she had prior approval from the ethics lawyer for the Congressional Oversight Panel. A Harvard professor and an expert on the financial sector particularly as it relates to middle-class consumers, Warren said she was allowed to continue doing side jobs even as she held this government role.
Warren is famously tough as advocate for the middle class, and a former student described her teaching style at Harvard as "Socratic with a machine gun." As head of the panel overseeing TARP, she remained more skeptical than Treasury secretary Tim Geithner about whether the program had actually succeeded in ensuring that certain banks could function without government support.
In appointing Warren to set up the CFPB, which she is credited with devising, the president effectively made her head of the agency, at least for now, and sidestepped what could have been a contentious confirmation hearing.