Kenneth Chenault As Secretary of Treasury: Could He Replace Tim Geithner?
We jumped the cliff (maybe), hit the debt ceiling (again), and soon we will find a hole in our Treasury leadership. But, not until the debt ceiling fight is settled. That gives Americans at least two months to discuss Treasury Secretary Geithner’s replacement.
As we wait for the House to convene and vote on the fiscal deal that was passed by the Senate on New Year’s Eve, the list of potential replacements continues to grow, along with the economic uncertainty that continues to unnecessarily loom over our nation. On a weekly basis, a new name, and face, is presented to the public by people who spoke, “on the condition of anonymity.” One of the latest is American Express’ own CEO, Kenneth Chenault.
After graduating from Harvard, Chenault first worked for the law firm Rogers & Wells then moved onto consulting firm Bain & Company. It was his work at Bain & Company that caught the eye of the leadership at American Express. In 1981, American Express hired Chenault to work full time in the Strategic Planning Group.
Between 1981 and 1993, Chenault held several senior management positions within American Express before being named president of the U.S. division of American Express Travel Related Services Company, Inc. During this time period, he also weathered the internal company storm that lead to the departure of his former co-worker, JPMorgan Chase CEO, James “Jamie” Dimon.
In 1995, Chenault was appointed vice chairman of American Express Co. In 1997 he was named president and named chief operating officer. By this time, it was clear that Chenault was on track to be the next chief executive officer, and chairman of the board, of American Express Co., an accomplishment he earned in 2001.
During his tenure at the helm of American Express Company, Chenault weathered two major storms.
The first storm hit when the World Trade Center was attacked on September 11, 2001, which took the lives of 11 American Express employees (the company headquarters was across the street of the World Trade center). Not only did Chenault have to mitigate the sudden down turn of the travel business, he also had to shepherd his employees through the loss of friends, family members, and co-workers while mourning the many human losses himself.
The next headwind hit in 2007 and carried through to 2008 as the financial crisis took a toll on the world’s financial markets. In December 2008, American Express reluctantly received $3.4 billion from the TARP program. By May 2009, the company had demonstrated financial stability and was one of the first financial companies allowed to repay all monies provided under TARP.
Chenault is also active in his community, both business and financial. He services on numerous philanthropic and for profit boards. A few of the non-profits Chenault has been, or is currently involved in, include: co-chair of the Partnership for New York City; vice chair of the National Academy Foundation; trustee of Mount Sinai NYU Medical Center and Health System; a director of the National Center on Addiction and Substance Abuse; and a director of the 9/11 Memorial. For-profit boards Chenualt has served, or is currently serving on, include IBM and Procter & Gamble.
In addition to his public and private service, Chenault is an at large member of the Business Roundtable (along with Walmart’s CEO, Michael Duke) and one of many CEO members who signed the letter to the president in December 2012 urging compromise to avoid the fiscal cliff we now find ourselves on.
He’s been an active participant on the President’s Council on Jobs and Competiveness, and a trusted outside advisor for the president. In a recent interview with Bloomberg, former White House economist Austin Goolsbee stated, “From the beginning, Chenault was an important outside voice from the business world that the President always liked hearing from. On matters of financial markets or consumer behavior, Chenault always seemed able to identify trends 6-12 months ahead of time.”
American Express, however, has not avoided the radar of the Consumer Financial Protection Bureau. In October 2012, several American Express subsidiaries were ordered to pay $85 million in refunds to consumers harmed by illegal credit card practices. Many of the laws American Express subsidiaries violated have been on the books for decades.
Should Obama chose to nominate Chenault, the process could be extremely heated and lengthy as members of both sides of the aisle voice concerns that Chenault is too close to the financial sector. Additionally, though Chenault has extensive corporate leadership, there is a tremendous unknown that he will be able to moderate the increasingly polarized legislative hurdles he will encounter on day 1.