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Newsletter | December 21, 2020

RDP TRANSITION UPDATE - 12/21/20

Larry Summers

Beginning this week, the Revolving Door Project will provide regular updates on how the Biden transition is shaping up. While we do not claim to capture the full powers and responsibilities of these positions, we will discuss the top Administration jobs Biden has yet to fill. We also discuss the individuals vying for top Administration jobs that present serious conflicts of interest. 

Interested in learning more? Our Personnel Map tracks how corporate sectors influence particular areas of the executive branch. Check out NoCorporateCabinet.com to learn more about our efforts to push the Biden Administration to seal the revolving door. 

Top Open Jobs

OIRA Administrator: OIRA is perhaps the most powerful agency that almost no one outside of the Beltway has heard of. It wields direct oversight and veto power over the American regulatory state — it can issue orders to regulators housed within Cabinet departments and has considerable informal influence over independent agencies too. It claims to conduct “cost-benefit analysis” to decide if a given regulation is worth the cost, but this necessarily requires so many subjective calls that it’s essentially up to the whims of the agency. OIRA has too often been a corporate lobbyist’s ace in the hole for fending off tough regulation of their sector, even (especially!) under Democratic presidents.

Attorney General: After four years of dysfunction and corruption, our next Attorney General should be committed to upholding the law, as well as holding those who have attempted to undermine our democracy accountable. The Attorney General does not just have the power to hold Trump officials accountable, but can and should instruct its offices to investigate police misconduct, prosecute white-collar criminals and corporations that try to cheat the system, and pursue antitrust litigation to fight corporate consolidation. 

Securities and Exchange Commissioners: In a financialized economy, the people who oversee publicly-traded companies have immense power. Aside from enforcing disclosure law and preventing stock fraud, the SEC also has oversight of the Public Company Accounting Oversight Board, or PCAOB, an independent corporation which is a sort of “watching the watchmen” overseer of the accounting industry. We live in a golden age of fraud, and if there’s one agency with the most direct power to combat fraud, it’s probably the SEC.

Labor Secretary: Biden has committed to being the strongest labor president” in history, so we can expect his pick for Labor Secretary will play a vital role in the incoming administration. Biden’s pick will not only have to undo the damage done by outgoing Labor Secretary Eugene Scalia, but use the full force of the agency’s regulatory and enforcement powers to protect workers, many of whom have been risking their lives to keep businesses running during the pandemic. The Secretary of Labor has the power to issue regulations to provide workers with necessary protection from the pandemic, make more workers eligible for overtime, protect workers’ pensions, encourage a revitalization of union membership, and enforce labor standards. 

Education Secretary: Through the Higher Education Act, the Department of Education has the ability to wipe out the student debt of over 40 million people. It also has the ability to crack down on predatory student lending and regulate the for-profit college industry. Biden should pick a strong fighter for working class families who is willing to ease the burden millions of Americans continue to shoulder throughout this crushing pandemic. And frustrating the efforts of hedge funders promoting “education reform” (i.e., union busting) would also be nice.

Commerce Secretary: A role that has been given to billionaires and industry insiders in both Republican and Democratic administrations, Commerce Secretary is a powerful position often ignored by progressives. The Department of Commerce’s U.S. Patent and Trademark Office, which has historically been lax with patent standards allowing drug companies to charge outrageous prices for life saving medicine, can enforce stricter rules. Commerce’s International Trade Administration helps set and implement trade policy priorities and provides support during trade negotiations. Commerce’s NOAA will have a major role in researching the effects of climate change. In other words, the Commerce Secretary touches several major policy areas, and we should closely watch who Biden chooses for the job. 

SBA Administrator: The SBA has become notorious during the COVID-19 crisis for mismanaging the PPP program, but its lack of capacity and status as a harbor for corporate interests long precedes the pandemic. This is a shame, since it has some truly incredible, barely utilized powers. Section 8(a) gives it broad power to provide aid to small business-owners of color, whether in federal contracting, management assistance, or almost anything else. The HUBZone program also lets it channel federal contracting resources into low income communities. Both of these programs have been plagued by corruption and graft for decades. But a driven and courageous leader could do an enormous amount of good with a well-managed, creatively-run SBA.

IRS Commissioner: Naturally, the IRS Commissioner oversees tax collection policies and priorities. Everyone, even Larry Summers, has noted that if we just collected the taxes already on the books and redirected auditing resources from harassing the desperate to cracking down on the opulent, we’d both generate enormous government revenue and (more importantly) have a far more equal society. Current IRS Commissioner Charles Rettig’s term is due to end in November 2022, but there is actually nothing preventing the President from firing the IRS Commissioner at any time — the IRS is not an independent agency. Given how Rettig has aided and abetted the Trump-era graft which Biden ran against, Biden should fire Rettig.

Undersecretary of the Treasury for Domestic Finance: This job will be a crucial, but tricky fight. It’s the Treasury advisor in charge of the Department’s financial regulation responsibilities, and of financing the federal debt — so Wall Street and the financial industry care a lot about this job, both for keeping auditors and regulators off their backs, and for pushing an austerity agenda. Also, Obama and Trump both skirted around the fact that this is supposed to be a Senate-confirmed job: In 2015, after Elizabeth Warren sunk Antonio Weiss’ candidacy for the job, Jack Lew appointed him as a “counselor” instead, and gave him similar job responsibilities. Trump, meanwhile, never sent anyone to be confirmed for the job at all. He defaulted to naming BlackRock’s Craig Phillips as a counselor, forgoing even the attempt at a Senate approved, official Undersecretary. So one of the most important jobs in financial and fiscal policy has technically gone unfilled since 2015. A Democratic Senate should make an example of doing its job here.

Assistant Treasury Secretary for Investment Security: This person runs the cross-agency team that investigates any national security concerns about foreign actors investing in or owning American companies (that team is called the Committee on Foreign Investment in the United States.) They have extremely broad leeway to look into the financials and internal documents of any megacorporation with significant foreign investment. Most especially, if a foreign company is purchasing a domestic one, this committee can force divestment. Since 2018, they’ve also had specific powers over private equity investing.

Associate Director for Performance Management, OMB: In addition to its budgetary role, OMB’s Associate Director for Performance Management is a crucial figure when it comes to personnel policy across the entire federal government. The Associate Director works closely with the Director of the Office of Personnel Management to identify personnel-related gaps that undermine government performance and to develop remedies. These two jobs are some of the only appointees whose job it is to staff the executive branch with competent and mission-driven civil servants. Appoint allies here, and you can bring in allies across the government.

RDP Watchlist

Mark Gitenstein: Mark Gitenstein is a longtime ally of Biden, serving as the President-Elect’s chief counsel when he was in the Senate. Gitenstein then revolved out of public office to lobby on behalf of corporate clients, often fighting against the passage of Democratic legislation. As a lobbyist, Gitenstein helped Arthur Andersen, the firm found guilty of committing fraud in its auditing of Enron, avoid oversight. Gitenstein also lobbied on behalf of military contractors, including Boeing, Lockheed Martin, and General Dynamics, to make it harder for civil servants to expose government fraud. Biden himself called the bill Gitensetin was lobbying for “absolutely outrageous.” In his role lobbying for asbestos companies, Gitenstein pushed for the passage of a Bush-era law making it harder for asbestos victims to sue corporations. Gitenstein’s history as a corporate lobbyist was so infamous that Public Citizen successfully convinced Obama not to appoint him to lead the Office of Legal Counsel in 2009. Instead, Obama gave Gitenstein the ambassadorship to Romania, where he continued his track record of self dealing. As ambassador, Gitenstein focused on expanding US corporate involvement in Romania and privatizing Romanian industry. A totalitarianism expert castigated Gitenstein’s tenure in Romania, claiming he supported the policies of Romania’s authoritarian leader, who later gave him a seat on a government-led fund that held shares of Romania’s most profitable companies. Gitenstein continues to cash in on his Romanian connections today at BigLaw firm Mayer Brown, where he consults corporations looking to expand or solidify their Romanian presence.

Michael Barr: Michael Barr was Barack Obama’s Assistant Secretary for Financial Institutions from 2009 – 2010, where he helped insulate the biggest banks from accountability for the 2008 financial crisis as a loyal foot soldier of then-Treasury Secretary Timothy Geithner — Barr exalted Geithner as a hero upon Geithner’s exit from the Obama administration, from which he would shortly take a job at a private equity firm. Barr specifically helped design the much-maligned HAMP program, which was intended to aid homeowners threatened by bankruptcy, but ended up part of a policy of transferring risk and debt from the banks to the government and public, largely thanks to Geithner. Since the Obama years, Barr has advised and served on the boards of many “fintech” companies (some with troubling company histories) and advises industry-funded think tanks on their advocacy for deregulating and digitizing the financial system.

Heidi Crebo-Rediker: From 1990 to 2006, Crebo-Rediker worked for some of the most infamous Wall Street banks that helped cause the greatest financial crisis since the Great Depression. Before joining Bear Stearns as Head of European Debt Capital Markets in 2005, Crebo-Rediker was the Head of Emerging Markets and Debt Capital Markets at Lehman Brothers. Crebo-Rediker left Wall Street just in time to avoid the fallout, starting a new initiative at the New America Foundation where she argued that the federal government should cede power to financial institutions and partner with the private sector to invest in infrastructure projects. In 2012, Crebo-Rediker joined the State Department where she helped implement Secretary Clinton’s “economic statecraft” agenda, pushing for pro-corporate trade agreements like TPP. After leaving the White House, Crebo-Rediker monetized her government connections, opening up her own consultancy where she advises financial firms on trade and financial policy. She also serves on the board of asset advisory firm Campbell Lutyens, where she advises on the firm’s private equity transactions.

Michael Fitzpatrick: Former deputy to OIRA Administrator and notorious industry ally Cass Sunstein, Michael Fitzpatrick left government to run General Electric’s regulatory shop, where his team lobbied hard for greater tax cuts in Trump’s 2017 Tax Bill. He left General Electric to lead Google’s massive lobbying operation in 2019, where his team pushed the government to drop antitrust lawsuits against the tech giant. During his time as Associate Administrator of OIRA, he often sided with industry, arguing that the rule making process should remain opaque  and supporting the use of cost-benefit analysis, which has been shown to be racist. Fitzpatrick has been named as a potential OIRA Administrator. 

Charles Yi: Yi revolved out of the FDIC to a lucrative role at Arnold & Porter, where he advises corporate firms that have often lobbied on the very issues he worked in while in government. On his law firm’s website, Yi advertises his insider knowledge of financial regulation and government stimulus programs to his corporate clients. During the pandemic, his practice group has helped corporations access taxpayer funded federal stimulus programs. Yi is on Biden’s Treasury Agency Review Team and may be in the running for a high level position at Treasury or SEC.

Sally Yates: Yates, who has been floated as a potential pick for Attorney General, leveraged her experience as the leader of the Department of Justice to secure a high-paying job at King & Spalding. As partner, she advises corporate clients facing federal investigation carried out by her own former department. Beyond helping corporations avoid liability, King & Spalding is also a favorite law firm of Donald Trump, recently helping him try to suppress the vote while offering risible “ethics advice” to the Trump Organization..

Gina Raimondo: Raimondo, Wall Street’s favorite Governor, has proven she will exploit her position in public office to help her wealthy friends. During the pandemic, she pushed teachers to prematurely go back to school without proper safety precautions, helped to shield health care companies from COVID-related liabilities, and stripped Rhode Island’s lowest-income areas of their typical aid during the pandemic. Beyond her botched response to the pandemic in Rhode Island, Raimondo sold out her state’s pension fund while cutting benefits for retirees, a strategy the Koch brothers lauded. Raimondo has been floated as a potential Commerce Secretary pick.

Sarah Bianchi: Bianchi is a long time Democratic operative and corporate revolver. She has used her government experience to land a number of high profile jobs in the corporate sector. First as a hedge fund investor, she worked in an industry that benefited greatly from President Clinton’s de-regulatory agenda. Then, Bianchi took a top job at BlackRock, the world’s biggest investor in fossil fuel companies. After just two years there, Bianchi was tapped to run Airbnb’s lobbying shop. Under her leadership, Airbnb quadrupled its lobbying staff and doubled its lobbying spending. Her office worked to weaken worker protection. Now, Bianchi works at Evercore and has used her position to speak about politics from Wall Street’s perspect.

Bruce Reed: Reed is a longtime ally of President-Elect Biden who was seen as a potential Chief of Staff pick before Ron Klain was given the job. Reed was a key architect of the Democratic Party’s turn toward neoliberal economic policy. He helped design the 1994 Crime Bill, legislation which has exacerbated mass incarceration. He has argued in favor of cutting social programs, even serving as staff director of the infamous Bowles-Simpson Commission, a committee tasked by Obama with balancing the federal budget in the midst of the Great Recession. He has collaborated with Betsy DeVos & Jeb Bush in fighting against teacher unions. He remains in the running for a top job in the administration.

*Have a position or individual you would like to add to our list? Email litwak@therevolvingdoorproject.org.

Larry Summers

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