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Newsletter | Revolving Door Project Newsletter | April 6, 2022

Separating Biden World Wheat from Chaff

2020 Election/TransitionAnti-MonopolyConfirmation CrisisDe-Trumpification

Nuance, and engaging with the nitty gritty of what is and isn’t possible, is critical to assessing Biden World

This edition of the Revolving Door Project newsletter was originally published on our Substack. View and subscribe here.

Measured in positions still awaiting permanent appointments, the first presidential transition is still far from over. Of the 799 positions that the Partnership for Public Service included in its political appointee tracker, 117 still lack a nominee. An additional 161 are empty or being filled in an acting capacity as the nominees for them work their way through an ever more dysfunctional Senate confirmation process. 

And yet, despite this unfinished business, we’re already rapidly approaching Transition 2.0, i.e. the turnover that typically occurs at around the halfway mark of a President’s term. Granted, this churn won’t be as all-encompassing, but it does seem likely to reach many key positions. Its impact, therefore, on the direction of the whole administration could be ground shaking. Case in point: rumors about Chief of Staff Ron Klain’s departure are already bouncing around the beltway and speculation about his potential replacement is quickly gaining steam. 

My colleagues Daniel Boguslaw and Max Moran wrote for The American Prospect on Monday about one man whose name has consistently appeared on speculative short lists: Jeffrey Zients. We’ve never made any secret of our disdain for Zients’ supposedly unmatched (private sector) qualifications nor, subsequently, for his failure as the COVID-19 Response Coordinator to make vaccines available worldwide and to take the necessary steps to avoid disaster here at home through multiple virus waves. Now, Daniel and Max have uncovered shocking, previously unreported details about Zients’ record as a healthcare investor and executive (experience that some insisted qualified him for his role): 

Over the span of two decades, the health care companies that Zients controlled, invested in, and helped oversee were forced to pay tens of millions of dollars to settle allegations of Medicare and Medicaid fraud. They have also been accused of surprise-billing practices and even medical malpractice. Taken together, an examination of the companies that made Zients rich paints a picture of a man who seized on medical providers as a way to capitalize on the suffering of sick Americans.

These tactics, which management in these companies was allegedly aware of and even encouraged, helped balloon Zients’ wealth. They should not earn him a promotion. 

Anti-Monopoly

Almost no matter where you look, progress on key policy goals appears to be stalled thanks to certain lawmakers’ intransigence, insufficient political will, or plain cowardice. There is, however, at least one exception that stands out: anti-monopoly policy. From appointments to messaging and enforcement to funding, things are not only moving but moving in a remarkably ambitious direction in the anti-monopoly space. This week, Assistant Attorney General for Antitrust Jonathan Kanter affirmed that his division is “not just bringing a few big cases, we’re changing the way it’s done.” Last month, Deputy Assistant Attorney General Richard Powers indicated that the Justice Department was “absolutely” prepared to bring criminal monopolization charges, a practice that was once routine but has become virtually unheard of over the past several decades. And just last week, shipping equipment giants Cargotec and Konecranes announced that they would not move forward with a proposed merger after the Justice Department threatened to sue. 

Funding for the antitrust agencies was also a lonely bright spot in what was otherwise a mostly underwhelming FY 2023 federal budget request. In a new blog, my colleagues Andrea Beaty and Dylan Gyauch-Lewis dive deep into the details of the antitrust agencies’ funding over the past decade, showing how it has consistently lagged every relevant measure of their responsibilities, whether that’s inflation, economic growth, the number of mergers annually or the average size of deals. While both agencies did see a funding increase under the terms of the FY 2022 omnibus passed last month, it was only enough to bring their budgets approximately in line with what they would have been had they grown at the rate of inflation since 2010 (which, mind you, was not a high point in American antitrust enforcement history). 

Biden’s budget request, in contrast, represents a genuine increase that will help the agencies tackle their ballooning responsibilities. Legislators should seek to match this ambition (or even go beyond it) as they appropriate funds for countless other agencies that have been forced to manage a growing portfolio with a shrinking budget. 

Despite all of this good news, we can’t afford to lose sight of the threats that continue to menace strong anti-monopoly action. There are the straightforward obstacles, like getting ambitious funding proposals passed. Then, there are the more insidious ones, like getting agency action through courts that monopolies’ have thoroughly ensnared in their web of soft power influence. In a new letter to the Center for Judicial Ethics, Revolving Door Project and five other groups called attention to one node in that web – judges’ reliance on experts and expertise that Tech monopolies have underwritten – and called for action. Specifically, we asked the Center to “assist judges to avoid citing to experts and academics with obvious conflicts of interest as they adjudicate the many cases regarding the Big Tech platforms” and to “encourage judges to require comprehensive disclosure by experts hired by Big Tech platforms.” These steps, we argued, are critical to safeguarding trust in the legal system. 

Governance

Many recognized that the transition from Trump to Biden would be unusually difficult. Just how difficult, however, turned out to be shocking for some. Last week, ProPublica published a deep dive into one office that is continuing to contend with the aftereffects of the prior administration’s leadership (which were, in turn, layered on top of decades of corporate capture and funding neglect). In careful detail, the article lays out how the Office of Chemical Safety and Pollution Prevention within the EPA is attempting to clear a backlog leftover from Trump and implement new measures, all with staffing levels near historic lows. What’s worse, despite the stakes of the office’s work and the severity of its capacity deficit, the FY 2023 omnibus included only a slight increase to its budget. 

To fully reverse the damage and – forgive me – build the office back better, it’s clear that Congress will need to be more ambitious. But the ProPublica piece also suggests that that alone may not be enough. Even accounting for capacity constraints, the Office’s actions under the Biden administration have been disappointing in many regards. The Office has seemingly wasted time on unnecessary tasks, failed to take action to deal with managers who had “warped their work” to accommodate industry under Trump, and refused to take opportunities to lend support to local communities in their fights against chemical companies. It’s emblematic of what my colleague Dorothy Slater described to ProPublica as “a lack of creativity and willingness to just throw up their hands when they get to the first barrier.” Sadly, that sluggishness is evident across many parts of the administration. 

It is not, however, completely universal. In The American Prospect last week, Harold Meyerson profiled National Labor Relations Board (NLRB) General Counsel Jennifer Abruzzo. Abruzzo is taking a decidedly different approach. Through a series of memos to the NLRB’s team of attorneys, Abruzzo is charting a path to not only undo the damage from the Trump administration, but chip away at the decades of anti-labor precedent that preceded it. Her approach is ambitious, or as one union official described it, “pushing the envelope beyond what unions themselves have been pushing for.”

Of course, this bold path is not without risks. Many of the NLRB’s actions could be overturned by this Supreme Court, which is exceptionally hostile to labor. But it will likely take some time for any cases to come before it. In the meantime, workers will have a better chance of forming unions that could help them win and maintain gains even after some of these decisions are potentially struck down. The possibility of achieving these sorts of lasting wins, even in defeat, is not exclusive to the NLRB. More agencies could stand to take a page out of Abruzzo’s book. 

Want more? Check out some of the pieces that we have published or contributed research or thoughts to in the last week:

The Corporate Past of Jeffrey Zients 

Putting Biden’s Antitrust Budget Increases In Context

Letter to the Center for Judicial Ethics on Big Tech Creating Expert Conflicts of Interest 

It remains TBD on KJP

The world according to Jamie Dimon

She’s Supposed to Protect Americans From Toxic Chemicals. First, She Just Has to Fix Trump’s Mess and Decades of Neglect. 

An Activist Investor Goes Quiet

Biden’s New Antitrust Cop Threatens to Slam Brakes on Mergers 

New Gilded Age, New Corporate Monopoly Prosecutions?

2020 Election/TransitionAnti-MonopolyConfirmation CrisisDe-Trumpification

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