Joshua Gotbaum was nominated by President Barack Obama to be Director of the Pension Benefit Guarantee Corporation (PBGC) in November 2009. He was approved by two Senate committees, but his confirmation was blocked by Sen. Sherrod Brown, (D-Ohio) who wanted the Obama administration to pressure General Motors to improve the pensions to retirees of the Delphi Corporation. On July 7, 2010, Obama gave Gotbaum a recess appointment. However, he was confirmed by the Senate anyway on September 16.

 

The PBGC is a non-profit, federal corporation in the Department of Labor. The agency protects the retirement incomes of the more than 44 million American workers who are covered by private-sector defined pension plans. When a company goes out of business, PBGC essentially guarantees the corporate pension obligations. Although PBGC was intended to be self-sustaining, the flood of bankruptcies caused by the Great Recession of 2007 to 2009 opened up a $33 billion gap between the agency’s corporate liabilities and PBGC’s actual assets.

 

Born September 18, 1951, in New York City, Gotbaum spent his childhood in Evanston, Illinois, moving to Westchester, N.Y., as a teenager where his father relocated after his parents divorced. Gotbaum’s father, Victor, served as president of the largest municipal union in New York City and his mother, Sarah, was a sociologist.

 

Gotbaum graduated from Scarsdale High School in 1969, earned his A.B. at Stanford in 1973, a J.D. from Harvard Law School in 1978, and an M.A. in Public Policy from Harvard’s Kennedy School of Government, also in 1978.

 

After graduation from Stanford, Gotbaum served as a consultant to the Ford administration for a short time at the National Highway Traffic Safety Administration. While still at Harvard Law, he joined the Carter administration as a policy analyst at the Department of Energy. After earning his law degree, he was an executive assistant in the Office of the Advisor to the President on Inflation and as an associate director for economics on the White House Domestic Policy Staff.

 

In 1981, he joined Sen. Gary Hart (D-Colorado) for a short time as a legislative assistant for economic and budget issues. But in the wake of Republican Ronald Reagan’s successful campaign for the White House, Gotbaum in 1981 decided to take a shot at private sector success, joining the investment bank Lazard Frères & Co. He worked Lazard’s London and New York offices, becoming a general partner in 1990. While with Lazard, Gotbaum was involved in the leveraged sale of RJR Nabisco, representation of both unions and management in the steel and airline industries, the leveraged acquisition of Avis Europe, and the privatization of Conrail.

 

 In 1994, Gotbaum left Lazard to join the Clinton administration, serving as Assistant Secretary of Defense for Economic Security from 1994 to 1995; Assistant Secretary of the Treasury for Economic Policy from 1996 to 1997; and Executive Associate Director and Controller in the Office of Management and Budget from 1997 to 2000.

 

His party out of power after the Republican victory in the 2000 elections, Gotbaum returned to the private sector, working from 2001 to 2003 as the first CEO of the September 11th Fund, a charity that collected $534 million from more than two million donors and distributed a total of 559 grants totaling $528 million. Grants from the Fund provided cash assistance, counseling and other services to the families of those killed, injured, or displaced in the 9/11 attacks. The Fund also provided grants to affected small businesses and community organizations. From 2003 to 2005, he was Chapter 11 bankruptcy trustee for Hawaiian Airlines, which emerged successfully from bankruptcy owing in part to his efforts. From 2006 to 2009, Gotbaum worked as an operating partner at Blue Wolf Capital, a New York-based private equity firm. He was chairman and chief restructuring officer of Platform Learning, an educational services provider specializing in tutoring that had gone into bankruptcy.

 

Gotbaum was no stranger to controversy during this period. In 2001, the 9/11 Fund was criticized for giving some of its funds to nonprofits, and Gotbaum went on TV to explain the fund’s workings. In 2005, as Hawaiian Airlines came out of bankruptcy, Gotbaum was criticized for requesting an $8 million bonus for his work, and for allegedly lavish expenses, such as the $276,562 rental of a luxurious beachfront home at Black Point, an exclusive beachfront neighborhood on Oahu Island. In the end, the bankruptcy court granted Gotbaum a bonus of $250,000 to supplement his $1.7 million compensation.

 

After Barack Obama was elected president of the United States, Gotbaum was one of the leaders of his Treasury Department transition team.

 

Gotbaum married Joyce Thornhill, a vice-president at J.P. Morgan and Company, in 1989, and they have three children, Emma, Adam and Jordan. A Democrat, Gotbaum has donated $48,000 to Democratic candidates and causes, including $28,000 to the Democratic National Committee and $1,000 to Barack Obama’s 2008 presidential campaign.

- Matt Bewig, David Wallechinsky

 

Official Biography (PBGC)

Biographical Information (Senate Committee on Homeland Security and Governmental Affairs)

Statement before the Senate Committee on Health, Education, Labor and Pensions (pdf)

Statement before the Senate Finance Committee (pdf)

Help for America’s Healing (by Mary Tamer, Kennedy School Bulletin)

Josh Gotbaum, One-Time Hawaiian Airlines Trustee, Named to Obama team (by Randi Petrello, Pacific Business News)

Using a Gift for Giving to Help 9/11 Victims (by Robin Finn, New York Times)

Joshua Gotbaum, Executive Director and CEO, September 11th Fund: Assessing Immediate and Longer-Term Needs (by Mitch Nauffts, Philanthropy News Digest)

Which Defense Firms Will Survive — Meet the Man Who Helps the Pentagon Decide (by Gibson LeBoeuf, Program Manager Magazine)