2020 (and Potentially 2021)

If you have been following this newsletter for any length of time, you are familiar with our frequent laments that moderators and commentators so rarely ask presidential candidates about the thing presidents actually do: appoint personnel. But earlier this month, something strange happened; CNN commentator Angela Rye broke with the norm. Specifically, she pressed Senator Elizabeth Warren to name three black leaders who she “ha[s] to have” in her Cabinet. Pinch us, we must be dreaming! 

Of course, ultimately, we want to hear from candidates about more than just specific names for cabinet appointments. The president is tasked with filling thousands of roles and to do so effectively must articulate a set a criteria by which potential appointees will be assessed. (They can look to this piece by Demand Progress’ David Segal on the current independent agency nomination fight for some ideas of what those criteria could be.) Nonetheless, Rye’s question was a good start for a media environment that otherwise ignores the importance of executive branch personnel altogether. Hopefully, this is a sign of more to come. 

We were less than impressed, however, with Elizabeth Warren’s response to the question. Among those she named was former Massachusetts Governor Deval Patrick, who was working at Bain Capital until just a few days ago. Commentators and Twitter users were quick to jump on Patrick’s ties to Bain, but incredibly, his time at Bain may be the least offensive private sector stint on his resume. Patrick embodies the exact type of transactional relationship to public service that the Revolving Door Project exists to combat. From Texaco to Coca-Cola to subprime mortgage lender Ameriquest, Patrick has routinely lent his credibility — earned through his work at the head of the Department of Justice’s Civil Rights division — to bad actors, thereby shielding them from consequences for their actions. Needless to say, we don’t believe that Patrick should have a place in the next administration. Warren’s inclusion of him on her list of names was at odds with her broader, commendable commitments.

Her response, however, highlights why questions like these are so important. Knowing this now, voters can express their disapproval and push her and other candidates to formulate their personnel plans more thoughtfully. Voters are better off when informed about how the next president would actually wield power. Questions like these should feature prominently across the presidential campaign discourse. Candidates leaning on high dollar donors who are less transparent about their associations — like Joe Biden and Pete Buttigieg, neither of whom is disclosing his campaign’s bundlers — should face particular scrutiny. 

Indeed, we just learned that one of Buttigieg’s advisers on climate issues takes fossil fuel funding and was a Trump Administration witness defending climate inaction just last year. 

We are grateful, though, that we’re not the only ones insisting that personnel be a bigger part of the conversation. Last week, 15 organizations, including Americans for Financial Reform, Demand Progress, Center for Popular Democracy, Open Markets Institute, Progressive Change Campaign Committee, and Public Citizen, joined us to call on tonight’s debate moderators to ask candidates about personnel. You can find that letter here. 

We will be watching closely to see if moderators heed our calls. Follow along @revolvingdoorDC for our live analysis!

Congressional Oversight of the Executive Branch

We’ve consistently argued, here and elsewhere, for a broader impeachment inquiry. In our view, House lawmakers must not only target Trump for Ukraine-gate but also investigate his many assaults on Americans’ kitchen table concerns. 

This is not, however, the only sense in which lawmakers should view their impeachment mandate more broadly. In addition to expanding the universe of issues they consider, lawmakers should also broaden their investigations to include more members of the administration. By now it should be clear that Trump is not the only one who should face impeachment. 

The House should start with Attorney General William Barr. In early October, the Project’s Jeff Hauser and Max Moran laid out the case for Barr’s impeachment. It has only grown stronger in the interim. At every step of the way, Barr has exhibited no qualms about breaking the rules to protect this President. Nor is he coy about his intentions. At a Federalist Society convention late last week he laid out his philosophy of total executive branch power in all of its horrifying detail. Congress cannot let Barr’s project to subvert the system of checks and balances proceed unchallenged. 

While Barr is the most obvious case, his is decidedly not the only one. Lawmakers should also open an investigation into Mick Mulvaney’s misconduct. His wrongdoing goes well beyond the Ukraine affair. Last week, for example, we learned that his defense that OMB delays aid for political reasons “all the time” was not mere hyperbole. In 2017, Mulvaney held up anti-tank missiles that were destined for Ukraine because he was worried about the Russian government’s reaction. Needless to say, his actions overstepped the bounds of his authority and are worthy of further investigation.  

There are doubtless others, from Pompeo to Pence and more. Trump’s rot extends well beyond his person. Lawmakers cannot hope to fight back against it without targeting the president’s accomplices as well. 

Hall of Shame:  Over the course of the last few months we have been treated to one story after another detailing how opportunity zones, supposedly designed to bring investment to struggling communities, have been benefiting friends of the Trump administration. Concerns about opportunity zones are not new, but these stories have thrust them into the spotlight. With this new attention comes a question: why isn’t the Ways and Means committee investigating? Earlier this month Chair Richard Neal joined Senator Ron Wyden in requesting documents from Steven Mnuchin about one case, but he could be doing so much more. The public is demanding answers, and the Ways and Means committee is the only body not controlled by the president’s steadfast allies at present that can oblige. It must investigate opportunity zones using all of the weapons in its arsenal, including but not ending with subpoenas.

Spotlight: Maxine Waters continues to use her committee to pursue some of the country’s worst corporate actors. This week, it was private equity’s turn under the microscope. Yesterday, HFSC members questioned experts (including the Center for Economic and Policy Research’s own Eileen Appelbaum) to better understand private equity’s business model. Questioning from Representatives Alexandria Ocasio-Cortez and Katie Porter stood out, as usual. Hopefully Waters will follow up on this successful effort by calling executives of the largest private equity firms to give testimony. 

This Week in Tech

It's almost getting old to beat up on Facebook — sorry, FACEBOOK — at this point, but we highly recommend you check out this analysis from Sludge showing Mark Zuckerberg's lobbying shop is stacked with revolving-door figures connected to House Democratic leadership. Meanwhile, reporting from Popular Information showed that the actual chiefs of Facebook's lobbying operation are all lifelong Republicans, and that the Federalist Society's well-protested dinner for Brett Kavanaugh this week was subsidized by Facebook. 

No one should be surprised that Facebook plays the influence game in a bipartisan manner, but even this reporting understates the extent to which it's throwing money around Washington. A Politico analysis found Facebook spent more money on K Street ($4.1 million) than any other single company this year, with Amazon a close second ($4 million). Our own analysis finds that of the 51 lobbyists who performed registered lobbying for Facebook in 2018, all but two were former employees in Congress or the White House. One of those two was a high-ranking navy officer, and the other de-registered as a lobbyist this year.

Of course, registered lobbying is just one branch of the influence game. We've been digging into Big Tech's donations to think tanks around town, and were glad to see Bloomberg Law do some similar muckraking this week. They write about the Center for Democracy and Technology, whose heavy corporate donations (including from Facebook and the Chan Zuckerberg Initiative) we and others have covered. CDT sponsored an event on Friday titled "The Future of Speech Online" alongside the Charles Koch Institute and Freedom Forum Institute.

Naturally, the Koch-funded forum discussed the myriad ways governments censor or surveil our online lives (which is an extremely worthy topic to explore), but failed to even acknowledge that the private sector does the same. An early panel on the “technology of censorship” featured, as its sole U.S. politics expert, an analyst from the Koch organization Americans for Prosperity. A later presentation on the “technology of empowerment” included a Pinterest lobbyist who oh-so-conveniently kept circling back to the importance of Section 230, the legal code which protects websites from being held liable for their user-generated content. Koch has risen to Big Tech’s defense on Section 230 and other issues. Other speakers like Jason Feifer of Entrepreneur Magazine promised to “defang the worries of today and prime the successes of tomorrow.” If CDT, Koch, and the Freedom Forum Institute truly want an open internet where debate and dissent can thrive, why control the message so vigorously? 

Independent Agencies

Last week, we took our independent agency argument straight to the Senate. In a memo shared with all Senate offices we, along with the Demand Progress Education Fund, sought to make clear the severity of the crisis in independent agency appointments and encouraged lawmakers to respond. In past newsletters, and in our monthly blog posts, we have highlighted the imbalance between Republicans and Democrats in vacancies. As of the date we sent the memo, 22 percent of Republican seats were vacant versus 32 percent of Democratic seats. 

For the memo, we expanded on that observation to determine the relative lengths of time a seat is vacant or expired without a nomination depending on its party affiliation. Our findings are striking. On average, seats that are destined for Republicans will sit for 331 days without a nomination versus 440 days for Democratic seats. Similarly, according to our findings, Democratic independent agency officials serve an average of 521 days in expired seats without a pending nomination for a successor, while Republicans serve an average of 433 days, or about three months fewer. 

These disparities are not mere coincidence but the result of a concerted effort on the part of President Trump, Mitch McConnell, and others to undermine partisan balance at independent agencies. It is our contention that these attacks should not be costless, now or in the future. For our full analysis, read the memo here.  

Want more?

Check out some of the pieces that we have published or contributed research or thoughts to in the last couple of weeks:

Big Tech’s Yes Men Reassure Each Other at Harvard Law Conference

Dems Must Confront GOP Attacks On Independent Agencies; also in Politico Morning Money (11/13/2019)

Committee on Ways and Means Must Investigate Opportunity Zones

Washington Post Daily 202 (11/13/2019)

We Went on a Bus Tour of Trump’s D.C. Swamp

Freshman Democrats Seek to Make Corporate Oversight Routine Again

Calls for AG Barr’s Impeachment Intensify After ‘Lunatic Authoritarian’ Federalist Society Speech

Biden Accuses Warren of 'Elitism' While Wooing Rich Donors at Big-Money Fundraiser

2020 (and Potentially 2021)

It is not often that we tell you to take cues from analysts at Barclays. Yet today we are making a rare exception because, unlike most others tracking presidential politics, it appears Barclays’ analysts are giving careful consideration to executive power. Last week, a leaked “Warren administration policy heatmap” from the Barclays research department showed which flanks of her platform a President Elizabeth Warren could achieve via presidential authority and which would require legislation. It is nearly evenly divided. 

Of course, we don’t endorse the motivation behind such an analysis; Barclays is undoubtedly gearing up to oppose all of these actions, both on the campaign trail and after the next president’s inauguration. There is still, however, something to learn from their orientation. For too long, only proponents of narrow, corporate interests like Barclays have been attentive to executive branch power. It is time that that changed, and that advocates for the public interest gave careful consideration to the potential for presidential authority to advance progress. Most importantly, it is time that we started assessing presidential candidates on their explicit commitment to that goal.  

No candidate has been as forthcoming on this front as we would like and, unfortunately, Barclays “heatmaps” for other candidates have not leaked. Without explicit commitment, we continue to look elsewhere, to candidates’ donors, for hints about their intentions. And the last week has provided a wealth of new clues. 

Following lackluster fundraising in the third quarter and facing a cash crisis, the Biden campaign threw open the doors to an outside super PAC late last month. Although we do not yet know who is contributing to the new Unite the Country PAC, we have learned who is leading the effort. It is not encouraging. The PAC’s leadership includes numerous corporate lobbyists who have advocated on behalf of the healthcare, weapons, and finance industries. What sort of rewards await these deep-pocketed, well-connected individuals if they are able to save Biden’s floundering effort?

Super PAC organizers and contributors are not the only ones we should be worried about, however. In particular, we remain concerned about the overall lack of transparency around bundlers. Those who fundraise for a campaign are far more likely to earn posts in the next administration. Candidates should follow the precedents of Barack Obama, Hillary Clinton, John McCain, and yes, even Rudy Giuliani and release information about their bundlers. We made that case here last week. 

Congressional Oversight of the Executive Branch

As you surely know, House Democrats voted last week to affirm their ongoing impeachment inquiry. Although the vote received a tremendous amount of attention, it has changed very little, other than to clarify the procedures lawmakers will follow from here on out. That is both good and bad. 

On the one hand, the resolution did not seek to narrow the scope of the inquiry, despite hints that several key lawmakers were leaning in that direction. Instead, it acknowledged and endorsed the ongoing non-Ukraine-related investigative work of numerous committees, including Financial Services, Oversight and Reform, and Ways and Means.

On the other hand, House Democrats did not elect to expand the inquiry along the lines that we have suggested by, for example, endorsing an Energy and Commerce Committee investigation into Trump’s efforts to undermine the Affordable Care Act. We made the case for such a line of inquiry in Talking Points Memo last week and continue to believe that such “kitchen table” offenses must be incorporated into the House’s impeachment effort. We hope that, upon their return from recess, House Democrats will change their stance. 

Fears that impeachment would force all other congressional activity to a halt have proven (foreseeably) unfounded. Last week, Rep. Peter DeFazio held a belated hearing with the CEO of Boeing, Dennis Muilenberg, on the anniversary of the Lion Air crash. More than anything, the hours of testimony demonstrated clearly why corporations cannot be allowed to regulate themselves. At every step of the process, Boeing prioritized profit over safety, with ultimately fatal consequences. Yet, despite overwhelming evidence to the contrary, Muilenberg continued to insist that stricter regulation was not necessary and that Boeing remained qualified to inspect its own planes. In other words, even following two fatal accidents, Boeing continues to prioritize its profits above all else. If that doesn’t convince you that they need more oversight, we’re not sure what will. 

Last week, Rep. DeFazio took tentative steps towards more aggressive oversight when he issued his first subpoena to the General Services Administration for information about the Trump Hotel. In light of Muilenberg’s defiance and Boeing’s obvious willingness to withhold information from the committee, we believe it is more important than ever that DeFazio subpoena Boeing as well. 

Hall of Shame: Throughout this year, we have urged lawmakers to take a more adversarial stance against some of this country’s largest corporations and force them to answer for their reprehensible actions. Several members of the Ways and Means Committee have not only failed to heed that advice, but are running in exactly the opposite direction into the arms of some of the worst corporate actors. Last week, several Ways and Means members, including chair Richard Neal, joined insurance giant AIG for its 100th anniversary celebration held, inexplicably, in the committee’s hearing room. Lawmakers in attendance reportedly heaped praise on the company, seemingly forgetting its not-too-distant role in crashing the economy. It seems, then, that we shouldn’t expect any efforts by Ways and Means to hold AIG and others accountable.

Spotlight: Elsewhere, however, some lawmakers are heeding our calls for greater corporate oversight. Last week, Rep. Ayanna Pressley (D-MA) introduced “The Greater Supervision in Banking Act,” which would require that the CEOs of the Globally Systemically Important Banks (G-SIBs) testify before the House Financial Services Committee and the Senate Banking Committee at least once per year. This hardly seems a radical proposal, but given the fact that these CEOs had not been asked to testify for over a decade before being called for an HFSC hearing earlier this year, it is a big departure from the status quo. 

This Week in Tech

Reps. Anna Eshoo and Zoe Lofgren introduced a new national data privacy bill yesterday. We’d need some more time to review the bill to form a full opinion, but its lack of preemption language already makes it better than the New Democrat-endorsed bill we wrote about in The American Prospect.

The Eshoo-Lofgren bill would create a brand-new Digital Privacy Agency with explicit power over online spaces and the same fine-inducing and legal injunction powers as the Federal Trade Commission. Considering the massive, and warranted, flop of the FTC’s messaging about its historically large Facebook fine (which was just a drop in the bucket against the company’s overall funds), one wonders if a new internet regulator would need a bit more oomph to its powers. But if Congress creates a new agency to address data privacy, then the executive branch will need appointees to fill it.

Which brings us to the Knight Foundation’s latest round of funding for academics and think tankers studying technology’s impact on democracy. Knight deliberately funded groups and individuals who run the gamut ideologically, but several owe some sort of past favor to the tech industry and its corporate allies. There’s an AEIer who lobbied for Paypal and worked for a cryptocurrency trade group, and a past board chair of the notoriously industry-friendly (and industry-funded) think tank Center for Democracy and Technology. If these are to be the bright new thinkers in a post-techlash world, how many would be willing to bite the hand that fed them, should they wind up in a top job? 

Independent Agencies

President Trump’s remarkable failure to nominate replacements for vacancies on the Federal Reserve and Federal Deposit Insurance Corporation’s boards received some unusual attention this week. But those seats are far from the only ones that are languishing vacant or expired.  In fact, as we highlight in our October Independent Agency Update, there are a total of 80 seats that are either vacant or expired out of the 182 seats that we track (48 are vacant and 32 are expired). Meanwhile, Trump has only put forward 30 nominations for those seats. 

Nor are these vacancies, expired seats, and nominations evenly distributed across partisan lines. In all, 40 percent of Republican seats are either vacant or expired versus 52 percent of Democratic seats. And 16 of the nominations that Trump has advanced are for Republican seats versus 6 nominations for Democratic seats. For more details, check out the blog post. 

Despite the fact that these numbers tell a story of crisis, it can be hard to get people to care about these agencies, especially since their relevance to our everyday lives is not always clear or direct. It is, therefore, important to seize on cases where their importance is clear. Take, for example, the Federal Communication Commission’s Lifeline program which subsidizes phone plans for people with low incomes. New rules to prevent fraud appear to be pushing many eligible people out of the program altogether. As the Center for Public Integrity’s reporting on this effectively underlines, having access to a phone is not merely a luxury but a necessity today. Losing it can have wide ripple effects on everything from health to employment and more. The FCC, however, is refusing to acknowledge that there may be a problem and has been rejecting requests to delay the new rules’ implementation while issues are worked out. 

This sort of callousness should be getting more attention from members of Congress (who could conduct oversight of the commission generally and the Lifeline program specifically) and from presidential candidates (who could use it as an opportunity to talk about how their administration would do things differently). 

Want more?

Check out some of the pieces that we have published or contributed research or thoughts to in the last couple of weeks:

The Impeachable Offense That Democrats Should Stop Ignoring; also in Washington Post Happy Hour Roundup (11/1/2019)

Joe Biden is desperate for campaign cash — but he’s staying quiet about who will be raising it for him

Trump’s Hidden Attention to Detail in Avoiding Accountability

Rick Smith Show 11/2/2019

Trump Irks Agency Behind the Jobs Report. Now Researchers Are Ready to Walk

October Update on the State of Independent Federal Agencies

2020 (and Potentially 2021)

As we predicted, last week’s debates failed to broach the subject of candidates’ campaign finance strategies. That’s too bad. Instead of round four of the same healthcare funding debate, for example, moderators could have asked candidates who have received donations from executives at Big Pharma, hospitals, and insurance companies if they planned to contravene their benefactors interests once in office. As president they would have wide latitude to do so, including by using “march-in rights” to lower drug prices--voters ought to be informed about who can be trusted to do so.  

Meanwhile, interested parties are severely constrained in their ability to get relevant fundraising information themselves because the majority of campaigns are still not disclosing their bundlers. These individuals, who mine their networks to deliver thousands, if not millions, of dollars for their candidates are particularly likely to get influential spots in the next administration, or at least get a say in who fills prime positions. While there is no federal requirement that candidates release this essential information, many past candidates have chosen to do so. That includes Barack Obama, Hillary Clinton, and John McCain. 

This time around, however, only one of the candidates relying on bundlers, Kamala Harris, is releasing bundler information in a timely manner. Her campaign is posting the name of any individual who raises more than $25,000, although it does not specify how much each has raised. Buttigieg released a list of bundlers in April but has not updated it, despite the fact that he has almost certainly brought more fundraisers on board since then as his fundraising has exploded. (neither Bernie Sanders nor Elizabeth Warren is relying on classical bundlers)

Congressional Oversight of the Executive Branch

Although the voices frantically urging Democrats not to impeach Trump have largely faded away after having definitively lost their cause, a new strain of naysayer has emerged. They warn Democrats that they must rush impeachment or face the political consequences. According to this view, investigating any of the newly emerging aspects of this or other scandals will turn public opinion against Democrats. 

It is unclear, however, what if any evidence supports this conclusion. From our vantage point, it sure seems like House lawmakers’ decision to finally scratch the surface of Trump’s corruption is yielding abundant results. As we predicted, public support for the impeachment inquiry jumped after Democratic leadership embraced a real impeachment investigation last month (and support for Trump’s actual removal appears to be on the rise). The administration can hardly be said to be holding up well under the pressure and the president’s Senate firewall is showing distinct signs of weakness. In the meantime, Trump’s fear of defections is giving Republican lawmakers unusual leverage to rein him in. Trump has refused to remedy any of thousands of illegal emoluments, but with impeachment hanging over his head, he quickly reversed his decision to hold the G7 summit at his Doral resort after receiving Republican pushback. 

Just because House Democrats are moving in the right direction doesn’t mean that they couldn’t be doing even better. While we recognize that all impeachment related testimony cannot yet be taken publicly, House lawmakers could seek must-see TV opportunities to educate the public about the breadth and real world impact of the President’s offenses. That’s why we believe that impeachment should consider a broad swathe of Trump’s abuses of power, including his unconstitutional attacks on the Affordable Care Act, instrumentalization of executive power to punish California’s lawmakers and voters, and knowingly illegal infliction of pain upon the American citizens of Puerto Rico. 

If impeachment is treated as a conveyor belt that extends from the House to the Senate for as long as there is ample supply of high crimes, one could imagine partisan loyalties which are showing some fissures now beginning to actually fracture for good.

Hall of Shame: Even as we call on lawmakers to consider a wide range of Trump’s offenses within the impeachment rubric, we recognize that it could never encompass all of the wrongdoing that this administration has facilitated and perpetrated. That is why we continue to insist that other committees must perform vigorous oversight of the personnel, agencies, and corporations under their jurisdiction. In Washington Monthly last weekend we made our case that the Agriculture Committee must perform oversight of Secretary of Agriculture Sonny Perdue, his Department, and Big Ag. In rural America, as elsewhere, oversight constitutes good politics as well as good policy.  

Spotlight: Representative Katie Porter is the poster child for this assertion. Her star has risen in no small part thanks to her incisive, fiery interrogation of some of this administration and corporate America’s worst actors. And it is paying off. For the second quarter in a row, the freshman lawmaker has pulled in over $1 million to defend the seat that she flipped in 2018.  

This Week in Tech

He better watch out, he better not cry: Zuckerberg is coming to town. Ostensibly to defend his shipwreck of a cryptocurrency before the House Financial Services Committee today, it's possible that the Facebook CEO will try to distance himself from the project altogether, as Menlo Park sees the writing on the wall. Libra, after all, isn't "the Facebook cryptocurrency" since its Association recently elected a non-Facebook board...even if that board is mostly companies with strong connections to Facebook. 

Assuming that Libra fails, we're more interested in two side-stories: first, how a who's who of FinTech CEOs and financial regulators attending the "FinTech Week" schmoozing event in Washington this week will react to the concurrent high-profile scrutiny of their industry from the House committee. Maxine Waters spoke to the executives yesterday, the day before she undoubtedly eviscerates Zuckerberg, so will her critiques be limited to Facebook itself, or broaden to cryptocurrency and FinTech writ large? 

Then there’s the fact that Zuckerberg himself has faced two unflattering stories about his political glad-handing: first, that he hosted private dinners with conservative outrage-peddlers (note how Facebook bends over backwards to appease conservatives' unfounded bias allegations, but swears to "go to the mat" against progressive antitrust proponents), and more recently, that he personally recommended several members of Pete Buttigieg's staff. As Buttigieg rises in the polls, his web of ties to the tech industry in particular becomes all the more relevant. There’s a credible argument that Zuckerberg is now as big of a progressive villain as Charles Koch, so time will tell if these hires end up biting Mayor Pete.

Independent Agencies

This week we’re bringing you a couple even-more-obscure-than-usual stories from the land of independent agencies. The first concerns the Federal Service Impasses Panel (FSIP), a board housed within the Federal Labor Relations Authority (FLRA), which is responsible for settling disputes between federal workers and management in cases concerning the right of federal workers to organize and rules around schedules and hours. Since federal workers do not have the right to strike, this is an important body through which federal unions may gain some concessions. Or, at least, it was. Earlier this month, Trump appointed Maxford Nelsen, an outspoken opponent of federal unions to FSIP. There he will join a whole host of anti-worker appointees. The federal government is the largest single employer in the United States, so while this further attack on federal workers’ rights may not have been front page news, it is inarguably an important story. 

Our second piece of overlooked news concerns the Public Company Accounting Oversight Board (PCAOB), a federal watchdog set up in the wake of the Enron scandal to audit the auditors. The PCAOB sits within the Securities and Exchange Commission (SEC) and SEC commissioners select its board members. Tradition has held that SEC commissioners in the majority party choose three of the PCAOB’s members, while the minority party commissioners choose the remaining two. That practice, however, appears to be defunct. Earlier this month, the SEC passed over sitting Democratically-aligned board member Kathleen Hamm — who had expressed interest in serving a second term — for former White House aide Rebekah Jurata. This move is a consequential violation of bipartisan norms that could weaken one of the watchdogs responsible for safeguarding economic stability.

We continue to urge Senate Democrats to fight back against the independent agency stealth nuclear option of McConnell, Trump, and their allies.  

Want more?

Check out some of the pieces that we have published or contributed research or thoughts to in the last couple of weeks:

Moderate Democrats Back a Privacy Bill, Minus the Privacy

Update: We Found a “Staggering” 281 Lobbyists Who’ve Worked in the Trump Administration

As Trump sinks, Democrats may face a tough choice

House Democrats Are Failing to Protect Farmers from Trump

Trump Seems to Have No Problem Undermining Independent Unions

Rick Smith Show 10/11/19

A Progressive Congressman’s Oversight Of Donald Trump Inspires Challenge From The Left

Oregon Democrat Steps Up Oversight Of Trump Official Amid Criticism He’s Too Lax

Swamp Tour Clips Thus to Far (more to come!):

GOP Voters Learn Ins and Outs of Trump 'Corruption' on Swamp Bus Inaugural Tour

On D.C. “swamp tour,” a handful of Republican voters look to replace Trump

Republicans HORRIFIED By Trump's Corruption - Video from The Young Turks

This Thursday, we’re taking our corruption analysis to the people via DC’s first ever Swamp Tour. A what? That’s right, in partnership with the Progressive Change Institute, we are packing swing voters and reporters onto a bus and treating them to a sampling of this city’s most vile swamp creatures. We’ll pass by well-known landmarks, executive offices, and a few lavish homes in a whirlwind tour of Trump era corruption.

It’s no secret that Donald Trump has failed to “drain the swamp” - in fact, it is so often highlighted as to have become a bit tired. Periodically, however, it is important that we shake off the cloud of corruption fatigue and give some thought to what that betrayed promise really means. It’s not “mere” lawlessness, but lawlessness with real life consequences. That’s what this tour is all about. 

In this oversaturated news environment, Trump’s unhinged tweets too often eclipse stories about what his administration is actually doing to hurt regular people. It’s a lot. From Secretary of Education Betsy DeVos’ efforts to enrich for profit colleges and student loan servicers at borrowers’ expense, to the Administrator of the Environmental Protection Agency, Andrew Wheeler’s decision to repeal protections on drinking water — selling out regular people at the behest of the coal lobby (his former, and likely future, employer) — the DC swamp is looking swampier than ever. 

If you are a member of the press interested in learning more, please feel free to reach out at oversight@cepr.net . And check out swamptourdc.com to see more information on some of the featured swamp creatures (including, eventually, a video with tour highlights to be shared widely)!

Congressional Oversight of the Executive Branch

In the context of impeachment, we think that it is more, not less, important to draw the public’s attention to the full scope of this administration’s corruption. The Swamp Tour is our case for why oversight should not be limited to the impeachment process, and why the impeachment inquiry should not be limited to the Ukraine scandal. House Democrats can, and should, do it all! 

Of course, Democrats are quite adept at erecting barriers to their own success. Last week, in a conversation with The Nation, the Project’s Jeff Hauser argued that the choice between a narrow and a broad impeachment inquiry is just such a self-imposed obstacle. House Democrats can simultaneously move quickly to draw up articles of impeachment based on the Ukraine scandal while continuing to investigate other impeachable offenses on a less-accelerated timeline. 

Choosing to only pursue the narrow inquiry, as House Democrats seem to be favoring, might not only weaken their case for impeachment, but also undermine other worthy investigations. As the Washington Post’s Greg Sargent writes, throwing the weight of impeachment behind the Ukraine investigation alone could undercut the case the House Judiciary Committee has been making in court that it requires expedited access to materials and testimony because it is in the midst of an impeachment inquiry. 

With reports of at least one new whistleblower coming forward to provide information on the Ukraine affair, it is also important that Democrats consider how a narrow inquiry might chill other civil servants’ willingness to report wrongdoing. As we’re seeing now, when committees’ fight on whistleblowers’ behalf, more people with damaging information are, unsurprisingly, spurred to speak. By the same token, however, if lawmakers make clear that they are uninterested in any case other than Ukraine, they send the message that they will not fight for other whistleblowers, thereby disincentivizing others from taking the risk of coming forward. That could mean that important information needlessly remains hidden. 

2020 (and Potentially 2021)

We’re fast approaching another debate and this time twelve candidates will share a single stage. That will likely mean more time devoted to quibbling and overly-rehearsed one-liners and, amazingly, even less time for substantive discussions of how the candidates would wield presidential power. Moderators who are pressed for time, for example, will likely pass up the opportunity to, e.g., use Elizabeth Warren’s executive branch heavy labor platform to spur a robust debate on government policy with respect to workers’ rights.

Overcrowding is not, however, the only problem we have with the DNC’s decision to only hold one October debate, on October 15th, instead of splitting the field into two debates on the 15th and 16th. That decision means that the only debate will occur hours before the Federal Election Committee’s (FEC) third quarter filing deadline, significantly reducing the likelihood that moderators abandon the right wing talking points in favor of questions about candidates’ donors. That’s a real loss. We wrote all about it for the American Prospect last week, check it out! 

Independent Agencies

Trump’s repeated, flagrant violations of election law serve as a near constant reminder of why the FEC’s incapacitation is a matter of urgent concern. This latest violation is no different. 

Last week, Georgetown Law professors Neal Katyal and Joshua Geltzer drew attention to the fact that the Department of Justice (DOJ) seems to have failed to refer the whistleblower’s complaint to the FEC, something it is required to do under a standing Memorandum of Understanding between the two agencies. Had DOJ referred the complaint, the FEC could have opened an investigation and made the whole affair public. 

Except that it couldn’t have because it currently lacks a quorum and is, therefore, unable to take any action. That, of course, did not occur by chance. Trump has been exceedingly slow to nominate people to fill the FEC’s vacant and expired seats.

Unable to ensure the loyalty of independent commissions, Trump seems to favor their incapacitation. Disturbingly, however, he is getting away with these quiet attacks almost unchallenged. We are keeping a close eye on this situation via our Independent Federal Agency Monitor and publish a summary of our findings each month. Check out the update for the month of September!

Want more?

Check out some of the pieces that we have published or contributed research or thoughts to since last week’s Technology-focused newsletter:

The DNC’s Debate Gambit Prevents Donor Accountability

Proposals for Reform Volume II: National Task Force on Rule of Law & Democracy

Freddie Mac Using Shady AI Company for Mortgage Loans

Revolving Door Project Joins Partners to Tell Trump: Rescind Executive Order Cutting Federal Advisory Committees

Politico Morning Transportation, 10/8/19

'Partisan': White House refuses cooperation in impeachment probe

Big Tobacco Lobbied to Save Vaping. Now It Controls the Leading E-Cigarette Company

Don’t tell the press, but there are other things happening in Washington besides the House impeachment inquiry. Regardless of whether a long-overdue inquiry “breaks down” the legislative process (because this Congress was so very productive before), the executive branch agencies will continue setting and enforcing rules that affect our everyday lives — and there aren’t many enforcement stories as dynamic or consequential right now as Washington’s square-off with the tech industry. 

The Revolving Door Project has traditionally focused on financialization and Wall Street’s capture of our elected officials. But expanding our focus to Silicon Valley is a logical extension of our revulsion at ever increasing concentrations of wealth via plutocrats exercising domination of the inner workings of the executive branch. Both tech and banking exert outsize influence on the Democratic party establishment, veering it away from its economic populist roots to leave the wealthy and well-connected without credible opposition in Washington. Both are hyper-concentrated industries central to the working of our political economy. Tech and banking are both faux antagonists of a Trump administration that talks a populist path it rarely walks. And both industries demand real regulation from public-minded civil servants instead of assistance from revolving-door opportunists in positions of governmental power. There is one fascinating difference: waking Democrats up to the dangers of Wall Street influence is often about reminding the party of what it once accomplished, vis a vis the New Deal. With Silicon Valley, it’s about getting the party to institute new controls where none existed before. 

Most of that narrative has focused on the DOJ, FTC, and state-level antitrust inquiries into the so-called Big Four (Google, Amazon, Facebook, and Apple). To a lesser extent, there’s been coverage of Washington’s breakdown in passing a national privacy bill — which we’d argue is a good thing at the moment, since the only reason Big Tech wants such a bill right now is to preempt a California law that could finally let consumers meaningfully control the data which giant corporations collect about them. 

But there are plenty of other parts of the existing bureaucracy with sway over Silicon Valley. Had these regulators been less trusting of 20-something Bros With Big Ideas over the last decade, we might be looking at a very different political economy — which means that the next administration will have to think long and hard about staffing jobs that often slide under the radar.

Congressional Oversight of the Executive Branch

We’ve sung the praises of House Financial Services Committee chair Maxine Waters plenty of times. Sadly, though, not all of her committee is as committed to justice as its chairwoman. Its artificial intelligence (AI) and FinTech Task Forces in particular seem loaded with the sort of double-dealing Democrats who only want to use Financial Services as a “money committee.” 

This is dangerous, since both FinTech — a catch-all term for any online financial service, including payments apps, e-lenders and cryptocurrency — and AI have significant allies in the Trump administration. These officials are using their offices to build institutional infrastructure that will keep a few start-ups profitable at the cost of American financial stability.

Across the financial regulators, a slew of so-called “offices of innovation” have sprung up with the stated goal of helping commissions figure out how to regulate FinTech services. The answer, generally, is “lightly.” Unsurprising, given the backgrounds of the appointees trailblazing each agency’s new “Chief Innovation Officer” position (as an aside, if you structure a job from the get-go around promoting innovation, it’s already institutionally biased against scrutinizing new ideas). 

• The CFPB is struggling with Paul Watkins, a homophobe who’s so-called “regulatory sandbox” practically exempts companies from any pro-consumer oversight if they just say the word “innovation” at some point in a pitch. Watkins got his start setting up a similar program in Arizona, to glowing reviews from the Federalist Society. 

• At the OCC, you have Beth Knickerbocker, a former American Bankers’ Association lawyer who helped defang the Dodd-Frank Act. 

• The SEC’s Valerie Szczepanik told cryptocurrency enthusiasts at SXSW this year that “if we hope to smell the crypto spring in the air, it will take people walking with the regulators.” The SEC issued its first No-Action Letters (immunity from regulation) to cryptocurrency start-ups this year, after Szczepanik signalled openness last year. 

• While the CFTC’s leadership has changed, the former top dogs were heavily bullish on Bitcoin. The ex-Chief Innovation Officer Daniel Gorfine got his start at the pro-market Milken Institute, named for “junk bond king” Michael Milken who was imprisoned for securities fraud. The CFTC’s ex-chairman J. Christopher Giancarlo made crypto miners’ lives so easy that they nicknamed him “Crypto Dad.” And he just joined...wait for it...the blockchain trade group.

These are just the Chief Innovation Officers who’ve sprung up ad hoc. Democrat David Scott of Atlanta — a city with a flourishing FinTech sector — proposed a bill this year to require each agency to set up one of these “innovation” offices. The bill would also designate one or more specific regulators for each FinTech company, meaning the CFPB could have no jurisdiction over consumer abuses perpetrated by a company regulated by the SEC. The bill has gotten no traction, but is a warning of the direction legislation might take down the road. Scott’s colleague Gregory Meeks actually gave the FinTech industry direct lobbying advice in this address a few years ago. And of course, there’s a “FinTech And Payments Caucus” of swingy moderates, who schmoozed with an industry trade group on September 12th at Google’s DC office.

Perhaps while they were there, the lobbyists and politicians tuned in to the AI Task Force hearing the same day. The Wall Street Journal reported last week that ZestFinance, an AI company which previously testified to the Task Force, is now partnering with Freddie Mac. ZestFinance has faced multiple lawsuits over the years for dodging payday lending caps. Just who we want with power over our home loans! 

Moreover, ZestFinance’s backers include Peter Thiel, the same man who installed Trump’s Chief Technology Officer, Michael Kratsios. We’re FOIA’ing Kratsios’ emails with Thiel’s network of companies and nonprofits, but Congressional oversight hearings and subpoenas can dig deeper much faster. How many individual companies in which Thiel has invested are profiting from Kratsios’ big project, the American AI Initiative? How many of those companies have shady backgrounds themselves, like ZestFinance’s rent-a-tribe allegations?

There’s plenty to dig into, and plenty of opportunities for progressive leaders like Waters to play into two popular narratives: Democrats taking on the Trump administration’s corruption, and Democrats challenging the tech industry’s dominance. Make no mistake; Republican grumblings about tech are mostly self-serving, like Senator Josh Hawley (himself funded by Peter Thiel) calling algorithms biased against conservatives despite ample investigations turning up zero evidence to support that. This gives Democrats a key opening to contrast self-serving faux economic populism with the real deal, while taking on a rare universal enemy. They’d be fools to miss this chance.

Hall of Shame

Who is kept up at night worrying about intellectual property law? Jeff Bezos is — maybe that’s why he snapped up Obama’s U.S. Patent and Trademark Office Director, Michelle Lee, to run a subsidiary of AWS, Amazon’s web services division which accounts for more than half of its operating income.

Like far too many members of the Obama White House, Lee came from Google. She was the search titan’s deputy general counsel for nine years before revolving into the patent office. Inside, she worked to reduce the number of patent lawsuits Google and other big platforms faced from smaller players. This made her popular enough for 61 companies and trade groups to plead with the Trump administration to keep her on in 2017. 

Lee’s new job is running a section of AWS focused on AI and machine-learning, neither of which are likely areas of expertise for a patents lawyer. But small online sellers have plenty to say about Amazon’s tolerance of fraudulent and counterfeit materials on the Amazon Marketplace. Keeping Obama’s top patent official floating around the C-Suite is a savvy move by Bezos, and another case of the corrupt impact of the revolving door.

 2020 (And Potentially 2021):

Much as it’s inconvenient for some candidates’ fundraising strategies, the Democratic base is firmly behind a crackdown on Big Tech. Like almost every other issue, Elizabeth Warren and Bernie Sanders have been out front on this, with the former calling for a direct break-up of Big Tech and the latter planning to raise its tax bill and implicating Silicon Valley in his plan to save local journalism. At a company meeting in July, Zuckerberg called the threat from Warren in particular “existential,” saying he would “go to the mat and fight.” Notably, this combativeness isn’t how Facebook responds to less substantiated criticisms from the right. 

Even Pete Buttigieg, whose bevy of tech donors we’ve criticized at length, is at least publicly backing gig economy drivers as they push for unionization. But even if the candidates now want to be seen as critical of Big Tech, you have to ask: How many of them will actually follow through on the posturing?

Here, again, Warren and Sanders come out looking the strongest while Buttigieg remains the most worrying. All of the candidates have received plenty of donations from Silicon Valley, but the two progressives’ funding bases are mostly low-level coders. That scans. Plenty of tech industry workers have become critical of the industry themselves in the last few years, from Google’s employee protests against Project Maven to the growing push toward unionization — with Googlers again leading the charge. Even as some tech executives have gradually warmed to Warren, she’s made a point of not reciprocating.

Buttigieg, however, has earned a reputation as the darling of Silicon Valley’s elite. Cyan Banister, an outspoken libertarian and ally of Peter Thiel, built a friendship with Buttigieg years before his presidential bid and appears to have a recurring $1,000 donation each month (we too are unsure how this is legal). Banister also co-hosted a fundraiser for Buttigieg with fellow right-winger Keith Rabois. Then there’s the campaign staff: his national political director, national policy director, and chief innovation officer (yes, even political campaigns have innovation officers!) are all ex-Google executives and higher-ups.

We always say that personnel is policy, but we should also say that past is prologue. Buttigieg’s sole qualification for office (aside from talking like a debate club champion) is the supposed revitalization of South Bend, Indiana under his leadership. A peek under the hood shows that this was much the same as any other post-industrial city’s revamp in the 2010s: app start-ups and hipsters come in, low-wage workers and families of color go out. Given Buttigieg’s many other problems with racial issues in South Bend, don’t be surprised if tech-driven gentrification gets more air time, should he receive another polling boomlet.

The Influence Game

Much of our research and writing so far on Big Tech has been about soft money and soft power — the vectors of influencing Congress that are subtler than direct lobbying or campaign contributions, but which limit the scope of policy ambition and set industry-friendly parameters of debate. If you want to set the terms of a conversation in this town, you turn to a think tank, and the think tank establishment over the last decade has been all too happy to soak up cash from the West Coast’s nouveau-riche. 

Just look at three of the biggest names in center-left thought leadership: New America, the Brookings Institution, and the Center for American Progress. In 2018 alone, the Big Four gave at least $160,000 to CAP, and that’s being generous and assuming that each corporation gave the minimum possible total for its donor class. Under the same generous assumption, Brookings took home at least $400,000 from the companies in FY2018, and at its tech-focused Open Technology Institute alone, New America received at least $730,000.  

The real money, though, comes from the charitable foundations set up by tech billionaires. In 2018, CAP received $600,000+ from just the Hewlett Foundation and Chan Zuckerberg Initiative. They gave a combined $1,250,000+ to New America. And the Gates Foundation gave an astounding $1,000,000+ each to CAP and New America, and $2,000,000+ to Brookings. 

The Gates Foundation principally does international development work — noble, but not much in common with funding white papers. Then again, as Anand Giridharadas writes, Bill Gates might not be in a position to heroically swoop in and rescue millions from poverty if it weren’t for actual world governments largely staying dormant and waiting endlessly for market forces to sort out the world’s problems. Each of these think tanks produces work that is often amiable to market forces and against structural change. 

Then there’s the small but influential subset of technology-focused think tanks. We wrote about one, the Technology Policy Institute, here. But any conversation of that ilk would be incomplete without mentioning the Center for Democracy and Technology, whose funders page is practically a list of all the largest players in Silicon Valley right now. 

Leave aside that CDT has separate “top donors” entries for Amazon and AWS ($200,000+ and $50,000+ respectively), or that the Chan Zuckerberg Initiative’s entry specifies that it’s contributing through a donor-advised fund, meaning Chan and Zuckerberg are likely taking a major tax break on their contributions to a think tank which helps quell Facebook’s regulatory problems. (New America also specifies that its donations come through the Initiative’s donor-advised fund.)

What we want to note about CDT is that the first thing one sees upon logging onto its homepage is a big banner headline promoting its draft of a federal privacy bill. This bill, by CDT’s own proud admission, does not grant the right to opt out of data selling, and seriously limits the right to data deletion, which are the centerpieces of the California law. 

Want more?

Check out some of the pieces that we have published or contributed research or thoughts to since Newsletter 19 on Thursday, September 26.:

Don’t Stop With Donald Trump, Democrats: Impeach Attorney General William Barr

Now That The Impeachment Probe Is Official, House Dems Must Ramp Up Other Oversight

KPFA Sunday Show – September 29, 2019

Democrats Must Reject False Choices As They Pursue Impeachment

September Update on the State of Independent Federal Agencies