With few exceptions, the Biden administration has not moved nearly as quickly to remove Trump holdovers as we had hoped he would. Most of the figures who we identified for immediate removal last November remained in office well past Biden’s day one and some are still there today (day 161). Happily, however, none of that foot-dragging was on display last week after a Supreme Court decision gave Biden the green light to remove Trump’s director of the Federal Housing Finance Agency (FHFA), Mark Calabria. Within hours, Calabria was out and a new acting Director, Sandra Thompson, was in.
That’s great news. Now it’s time for Biden to just as swiftly take the logical next step. See, the FHFA Director is not the only position that the Court’s decision implicates. This opinion also makes the case for Biden’s right to remove the Social Security Administration’s Commissioner, Andrew Saul, even stronger. We had already been arguing since last year that the Court’s decision to strike down for cause removal protections for the Director of the Consumer Financial Protection Bureau (CFPB) was all the permission Biden needed to fire the FHFA Director and the SSA Commissioner. Now that the Court has ruled on FHFA as well, Biden should not waste any time acting on what is now a firmly-rooted precedent; he must fire SSA Commissioner Andrew Saul right away. (That the doctrine underlying the Supreme Court’s analysis is cockamamie is irrelevant, Democrats failing to exercise a power the Court has granted presidents will not forestall such actions by the next GOP president. That said, it would be great to see McConnell’s Supreme Court unpacked.)
To many progressives’ frustration, Biden continues to cling to some core, some would argue outdated, beliefs from his long career in Washington, like an enduring faith in bipartisan negotiation and skepticism of executive action. There’s at least one relic of D.C. politics, however, that Biden has decisively rejected: attacking the civil service. On the campaign trail and in his early months in office, Biden has repeatedly emphasized his commitment to rebuilding the federal workforce. And unlike with some of his other bold promises, he has consistently backed up his pro-civil service words with action, including by proposing a federal budget sufficient to increase staffing at many agencies and, recently, by issuing an executive order mandating changes to federal hiring to increase diversity throughout the federal government’s ranks.
With the confirmation last week of a new Director for the Office of Personnel Management, Kiran Ahuja, progress on these fronts can and should accelerate. (While initiatives were moving forward under acting leadership, it is generally the case that leaders who are filling their positions temporarily are less likely to launch major new projects or think too far outside of the box). With permanent leadership in place, OPM is more likely to take consequential steps in the short-term (like authorizing expedited hiring at more agencies) and start the initiatives that will bear fruit over the long-term (like reorganizing OPM itself to better serve agencies’ needs).
As I argue for Talking Points Memo this week, quickly and successfully implementing these and other changes to federal hiring will be critical to the success of every aspect of Biden’s agenda. Ahuja, therefore, should bring “at least as much energy and creativity to the task of rebuilding the federal workforce as her predecessors did to their mission of destroying it.”
This week brought a major setback in the efforts to rein in the power of Big Tech: the FTC’s and states’ blockbuster lawsuit against Facebook, which seeks to break up the social media monopoly from its anticompetitive acquisitions of Instagram and WhatsApp, was dismissed by Judge James E. Boasberg. While Facebook’s stock prices spiked at the news (bringing its worth to over $1 trillion), suggesting the suits are done for, the FTC can still succeed. As Politico’s Leah Nylen pointed out on Twitter, the FTC can either replead the case to Boasberg, addressing the Judge’s reasoning for dismissing the case. Or, as Open Markets’ Sandeep Vaheesan noted, refile the case in the FTC’s administrative court. Either way — Facebook hasn’t escaped oversight yet.
In more encouraging news, the Biden administration is reportedly working on an executive order to address monopoly power across the economy, including in the banking, agriculture, shipping, and air travel sectors by directing more regulatory agencies to investigate competition issues. While the EO would compel the FTC and DOJ Antitrust to update merger guidelines, including for vertical mergers, empowering departments like the DOT, USDA and FCC to investigate consolidation and anti-competitive issues is the kind of whole government approach progressives have been pushing. Politico reported that the order could be signed as early as next week.
The New York Times published a new piece on the booming demand for BigLaw firms as Big Tech faces regulatory reckoning. The article is a testament to how often BigLaw partnerships and government service are different stops along the same road for antitrust law experts. The reporters state that the DOJ vetted around 10 lawyers from private law firms to lead investigations into Google and other tech companies, but found most of them had already worked for Big Tech clients. (In the case of the Antitrust Division’s search for outside counsel to spearhead their Google investigation, the search was necessary because both the Assistant Attorney General and his deputy recused themselves from the case seemingly due to conflicts of interest.) The uptick in demand for antitrust law also means more demand for former regulators: in 2018 Freshfields hired former director of litigation for the Antitrust Division Eric Mahr to expand the firm’s antitrust practice. Mahr proceeded to fill the practice with fellow former regulators, and now has an office in Silicon Valley for the convenience of the firm’s Big Tech clients. Other antitrust lawyers, like former FTC lawyer Amy Posner, chose to cut out the middleman and go directly work for the corporations (in Posner’s case, Amazon).
Notably, in July the Revolving Door Project will release our white paper on just how often antitrust regulators at both the leadership and employee level move between BigLaw firms and in-house positions (to the benefit of monopolies) as well as recommendations on how to close that revolving door.
Months after Axios first reported that Mark Gallogly had joined John Kerry’s climate team, his presence in the administration has finally been confirmed thanks to investigative reporting from Insider’s Justin Rood. That’s right, five months after Gallogly joined Kerry’s team, the administration still has not publicly acknowledged that he’s there. When asked, State Department officials would only confirm “on background” that Gallogly is on the payroll and did not provide details about what exactly he was doing there.
It’s appalling, but no great mystery, why the administration is being so secretive. Whether it’s his record at the private equity firm Centerbridge Partners (in which he appears to still hold a stake) or his recent foray into (mostly nonpublic) investments in climate solutions, it’s hard to imagine that Gallogly does not have a conflict of interest. Unfortunately, given that Gallogly has been exempted from public financial disclosure requirements, imagine is all the public can do.
Meanwhile, public financial disclosure reports from those appointees who are required to file keep revealing ties to fossil fuel companies. Most recently, the public learned that Elizabeth Rosenberg, Biden’s nominee to be the Assistant Secretary of the Treasury for Terrorist Financing, recently consulted for ExxonMobil. Shutting out those who have carried water for an industry that is broadly understood to be villainous, one that people rightfully tie to record heat waves, supercharged hurricanes, and devastating wildfires, should be easy. And yet, the Biden administration refuses to do so.
Shockingly, Biden has shown much more interest in excluding Wall Street than those with fossil fuel ties. But the revolving door could still prove a problem for several open financial regulatory spots, as Timi Iwayemi details for The Prospect this week. Specifically, open roles at the Commodity Futures Trading Commission and the Office of the Comptroller of the Currency will be critical to the long-term prospects for fintech and cryptocurrencies. They’ll be eager to see allies installed there. We should all hope they are not successful.
Today is the day that Federal Energy Regulatory Commissioner Neil Chatterjee’s seat expires and Biden still has not nominated a successor for the role. From here on out, every day is one that Biden could have had a Democratic majority on FERC if only he had named a new commissioner soon enough.
Speaking of belated nominations, Biden has finally named Democrats to fill two of the three seats on the Merit Systems Protection Board, which has been without a quorum for over four years. It remains to be seen if Senate Republicans will hypocritically object to the lack of Republican nominee to accompany the two Democrats after repeatedly confirming lone Republicans sans Democratic pairing under Trump.
Want more? Check out some of the pieces that we have published or contributed research or thoughts to in the last week: