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Blog Post | January 5, 2021

Biden's Shadow Transition Director Aided Corporations At Home And Abroad

2020 Election/Transition
Biden's Shadow Transition Director Aided Corporations At Home And Abroad

In late December, Politico’s Transition Playbook newsletter reported the unexpected prominence of Mark Gitenstein inside the Biden transition team. Gitenstein, a longtime Senate aide whom Biden personally thanked for passage of the 1994 crime bill, is apparently “one of the most powerful forces in crafting the Biden administration” and wields considerable sway over the President-Elect. Biden has described Gitenstein as “my best personal friend” and said “he has a direct line, as I said, to me, and he is very effective.”

Biden gave those remarks in Bucharest, Romania in 2009, the first of three years Gitenstein would spend as U.S. ambassador there. The ambassadorship was not Gitenstein’s first choice of a job in the Obama administration. He’d been heavily favored to lead DOJ’s Office of Legal Counsel, which helps vet judicial nominees, among other responsibilities. 

The problem: Gitenstein had lobbied on “legal reform” issues for the U.S. Chamber of Commerce, America’s Ur-corporate trade group. Public Citizen successfully petitioned the Obama transition team to oppose Gitenstein for the Office of Legal Counsel. After all, he had likely lobbied in favor of expanding mandatory arbitration agreements which deny consumers access to the full protections of the legal system he would have overseen. (Mandatory arbitration will be a major issue for the Biden administration as well.) 

Gitenstein had also lobbied in support of…

  • A bill to make it harder for corporations and accounting firms to be held liable for false predictions on earnings reports, which Biden himself called “absolutely outrageous”
  • A bill to make it harder for corporations to be found guilty of defrauding the government under the False Claims Act, and which would have reduced the penalties for companies found guilty (Gitenstein lobbied for this one on behalf of defense contractors Boeing, Lockheed Martin, and General Dynamics)
  • A bill which moved class-action lawsuits out of the state courts and into the business-friendlier federal court system, and which was a major Republican priority under George W. Bush. Senator Ed Markey, then-Representative Jay Inslee, and even Speaker Nancy Pelosi all opposed this bill

So reluctantly, Gitenstein was relegated to Romania — but this didn’t stop him from pursuing and achieving lucrative favors for corporate interests. Gitenstein’s time as Romanian ambassador earned him a walk-on role in Romanian historian and totalitarianism expert Florin Abraham’s post-World War II history of his country. Here is a direct quote from Romania Since The Second World War: A Political, Social, And Economic History:

“If we analyze the Polish-US relationship by comparison to the Romanian-US one, we may consider that political obedience was [Romanian President Traian] Băsescu’s initiative, in exchange for toleration of his authoritarian attitudes. US Ambassador to Romania Mark Gitenstein (August 2009 to December 2012), a former professional lobbyist, was an open supporter of all policies designed by Băsescu.”

Traian Băsescu served as president of Romania from 2004 – 2014. Throughout his political career he described himself as an enemy of corruption in the post-Soviet state, and consistently favored trade liberalization, privatization, and decentralization. The Romanian Parliament impeached Băsescu in 2007, but voters rejected the results in a national referendum (40% of the population participated). In 2009, he narrowly won reelection.

By the end of that year, at the deepest well of the financial crisis, Băsescu had enacted austerity measures which were “some of the harshest in Europe,” according to the Inter Press Service agency. As the Great Recession wound on through 2012, Băsescu attempted to privatize Romania’s healthcare system without parliamentary debate, leading to street protests and accusations of authoritarianism, again according to the Inter Press Service. By the end of 2012, Băsescu faced a second impeachment under a different set of rules — this time, the referendum results were tossed out due to poor voter participation, although a higher overall share (46% of the population) had turned out to vote. Notably, 88% of the voters and 65% of the total population, according to opinion polls, supported impeachment.

We are no experts on Romanian politics. However, we are comfortable asserting that austerity in the midst of a recession, and suddenly overhauling the national healthcare system without democratic input, are both dangerous policies. Indeed, it was Băsescu’s policies, and not his stretching of Romanian governance, which prompted the severest pushback from leftist critic Costi Rogozanu: “January [of 2012] was for the first time when in Romania we heard protests against privatisations, against large corporations like Chevron (exploring for shale gas in Romania) or Rosia Montana Gold Corporation […] The most serious threat to democracy we are seeing today in Romania is not the stretching of constitutional limits but the erosion of all social protection for our citizens.”

Yet Gitenstein championed Băsescu in spite of Romanian popular opposition. How was he rewarded? Again, here’s Abraham

“After ending his mandate as ambassador, he [Gitenstein] became a member of the board of the ‘Property Fund,’ a structure created by the government of Romania in 2005 to [provide] personal compensation to people dispossessed by the communist regime. The ‘Property Fund’ holds shares in the most profitable companies in Romania (for example, Petrom and Nuclearelectrica). Several Romanian political commentators interpreted Mark Gitenstein’s presence among the leadership of the ‘Property Fund’ as a ‘reward’ for service given to Băsescu, including during his second suspension in 2012.”

Gitenstein’s Romanian connections have proven lucrative back home too. Upon his return to the law and lobbying firm Mayer Brown, Gitenstein straightforwardly declared “Commercial opportunities abound in Romania and throughout Central and Eastern Europe, and my experience and contacts in the region can help clients capitalize on them.” In his current Mayer Brown biography, Gitenstein writes that he “actively promoted deeper development of Romania’s equity markets, as well as a fair and transparent business environment for all investors. He also encouraged greater private sector involvement in state-owned enterprises (SOEs), including the introduction of a corporate governance code for SOEs.” In other words, he takes public credit for the types of privatization which Rogozanu connected to eroding social protections for Romanian citizens. 

Gitenstein’s personal connections with Biden run deep, and Biden’s evident affection for him is not something we reasonably expect to disappear anytime soon. But if Gitenstein was deemed too unethical, too bought-and-paid-for to serve directly in the Obama DOJ, the same must be true for a Biden Administration. Gitenstein also offers a cautionary tale about the value of offering lesser appointments as “consolation prizes” to political operatives taken out of the running from their preferred venue of power. The practice of selling ambassadorships has a long and ugly history in America, as it does in much of the world. But American ambassadors can wield enormous power in the countries to which they’re dispatched, serving to enrich and empower ugly corporate forces at the expense of the public good, whether that public be American or not. At the very least, it would be grotesque to ignore Gitenstein’s most recent record of service under the banner of the United States merely because it took place somewhere else.

2020 Election/Transition

More articles by Max Moran

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