“Biden’s Vision” requires attention to detail in order to be implemented effectively by the post-Trump, post-austerity executive branch
The Biden administration is continuing to ramp up economic pressure on Russia through a far-reaching sanctions regime. However, even as many experts praise the United States’ measures, particularly those aimed at Russian oligarchs’ overseas wealth, they are also questioning how effective they will be in the face of loopholes and implementation challenges.
One of those loopholes is cryptocurrency, as my colleague Timi Iwayemi explored for our blog Monday. The Office of Foreign Assets Control (which administers sanctions) has recognized the risk that cryptocurrency be used to evade sanctions and issued guidance to try to stop it. But as Timi writes, that must only be the start. “OFAC must be ready to fully utilize the full range of its enforcement powers to guarantee full compliance.” That tool chest includes subpoena power “to request on demand reports of information related to transactions subject to OFAC’s regulations from businesses in the industry” and the ability to apply heavy civil and criminal penalties on crypto firms and exchanges that do not comply.
That brings us to another obstacle to effective implementation: a lack of resources at enforcement agencies. The Financial Crimes Enforcement Network (FinCEN), for example, has long struggled to keep track of illicit financial flows due to insufficient staffing. As BuzzFeed noted recently, FinCEN often fails to “read, let alone investigat[e]” the vast majority of Suspicious Activity Reports (SARs) that it receives from banks. Experts agree that FinCEN, OFAC, and the new task forces will need sufficient resources to track down oligarchs’ assets.
Last week, the White House submitted a supplemental budget request to Congress that included new infusions of cash for these offices, alongside additional Ukraine aid money, and COVID relief funds. As of Wednesday morning, lawmakers appeared set to meet or exceed that request. As Politico highlighted this week, funding for sanctions enforcers should be an easy sell; by putting new funds towards seizing “ill-begotten” assets, these agencies can help pay for themselves.
We’ve made no secret of our belief that Attorney General Merrick Garland has been slow to change direction at the Department of Justice. That has been reflected not only in his treatment of holdover cases and positions from the Trump administration but in the lackluster corporate enforcement numbers throughout 2021. In a speech last week, however, Garland reaffirmed the DOJ’s commitment to amping up prosecution of corporate crime and gave specific examples of what it intends to do. That includes pursuing criminal monopolization cases and bringing dozens of criminal environmental cases. This is encouraging, and we look forward to seeing further evidence that these efforts are moving forward.
Unfortunately, obstacles to renewed corporate enforcement remain within the department, as my colleague Toni Aguilar-Rosenthal detailed for our blog last week. U.S. Attorneys are critical partners in white collar enforcement across the country. Unfortunately, some of Biden’s appointees to these offices seem unlikely to be enthusiastic partners in the sea change that Main Justice appears to be leading. Toni profiled one such pick, Michael Easley Jr., who Biden selected in consultation with Senators Richard Burr and Thom Tillis to serve in the Eastern District of North Carolina. Why would Biden work with an insider trader and a shameless Trump defender to install an attorney who has defended Wells Fargo, DuPont, Dominion Energy, Boeing, and Smithfield, (among others) to this important post? The blue slip process, an unwritten “rule” which gives senators effective veto power over the U.S. Attorney nominations for their state. As Toni writes, “Adherence to a racist (and already broken) bit of Senate decorum, however, is a poor excuse for entrenching a corrosive status quo. President Biden must immediately revisit this selection and consider whether Easley will advance or undermine his promises to the American people.”
Where appointees are working hard to bring accountability to corporate wrongdoers, President Biden needs to do more to draw attention to that popular agenda. As I wrote for the American Prospect last week, “In a crowded information environment, simply adopting populist policies is not enough….To drive media coverage and get his agenda in front of even the most disengaged voters, Biden should start picking fights with specific corporate villains.” I suggest some first targets, including Blackstone’s Stephen Schwarzman, but there is no shortage of others who would serve as popular (and deserving) punching bags.
Last week, the Senate finally confirmed two of Biden’s nominees to the Merit Systems Protection Board (MSPB), giving the agency a quorum for the first time in over five years. While the nominee to serve as chair is still awaiting confirmation, the two confirmed board members have vowed to move quickly to begin digging into the agency’s formidable backlog of cases. Still, no matter how determined these new leaders are, it’s clear that the effects of five years’ of dysfunction will linger, likely for years to come. Cases like these should underscore that Senate Republicans’ obstruction of the confirmation process is both long-running and deeply harmful. It’s past time for action to disarm these attacks and restore basic functionality.
Want more? Check out some of the pieces that we have published or contributed research or thoughts to in the last week: