Are Democrats Worried About Appointments Now?

The brewing battle over Ruth Bader Ginsburg's seat makes it clearer than ever that personnel is policy.

It would be nice to live in a time when the nation could mourn the death of Ruth Bader Ginsburg without immediately needing to mobilize for war over her vacant seat. Sadly, we do not live in such times. Mitch McConnell is not the sort of man to respectfully hold off on an opportunity to fulfill his lifelong ambition of securing rule-by-conservative-minority through the courts.

Our Eleanor Eagan and Jeff Hauser laid out the arrows in Congressional Democrats’ quivers for stopping McConnell in the New Republic on Tuesday. As they make clear, there’s no guarantee that any procedural tactics — from withholding the unanimous consent needed to speed action along on the Senate floor, to barraging McConnell with impeachment articles that he’s Constitutionally forced to prioritize — will work. But for one thing, the stakes are so high that any sort of restraint is unacceptable. For another, an impeachment barrage is the right thing to do anyway. We’ve been laying out cases for re-impeaching Trump and his associates like Bill Barr since 2019.

But as always, House Democrats’ biggest barrier is their own leader, Nancy Pelosi. While she hasn’t ruled out an impeachment barrage, she waved the white flag on one of her biggest points of leverage before the Supreme Court fight even began, by haggling with Steven Mnuchin over a budget deal to...give the public nothing, and just keep the dysfunctional government afloat for a few more months. On Monday, in a turn unsurprising to anyone who knows how the Overton Window works, McConnell announced opposition to Pelosi’s continuing resolution deal, shifting the terms of debate for an eventual budget deal even further to the right.

As Paul Waldmann wrote at the American Prospect, “power is something Democrats in Washington think far too little about.” Or, as comedian Kylie Brakeman put it in response to Pelosi’s latest effort to lead by tweet, “That’s right, pass it on to people in power! Not to me, though, I’m just a lil’ Speaker of the House!”

Still, hopelessness accomplishes nothing. Alexandria Ocasio-Cortez, ever fearless and clear-eyed, has made herself the new face of the fight over the Supreme Court. Her Green New Deal co-sponsor Ed Markey seconded progressive non-profit Demand Progress’ terms for the court fight — if McConnell jams a nominee through, Democrats will unpack the courts McConnell has been packing since Obama’s presidency. Even Senator Chuck Schumer, perhaps fearful of a primary challenge in 2022, is getting on board with actually meeting the moment, “norms” be damned. Remember that early polling shows strong majorities of the population, including about a third of Republicans, agree that whoever wins on Nov. 3 should fill the vacancy. It’s just one of many appointments the next President will have to make, as we always remind you (Politico’s Alex Thompson reminded readers of our personnel work in this piece today!) But if the Supreme Court fight finally motivates Democrats to think seriously about power, it is long and tragically overdue.

2020 (And Potentially 2021)

As the United Nations celebrates a subdued 75th anniversary in the midst of a global pandemic, we are reminded of the current US administration’s continued commitment to isolationist rhetoric including unilaterally issuing sanctions on Iran and vaccine nationalism. 

This past Monday, the Trump administration imposed sanctions on Iran’s defense ministry, with Secretary Pompeo stating

“Rather than wait for the day that Iran threatens the world with a nuclear weapon, the United States is again fulfilling the best traditions of American global leadership and taking responsible action”

It is quite ridiculous that despite pulling out of the multilateral nuclear accord in 2018, Trump and his henchmen, Pompeo and Mnuchin, believe they can dictate global policy to other nations. Unsurprisingly, their latest efforts have been quickly dismissed by European counterparts. Yet Biden’s main foreign policy advisors, Tony Blinken and Michele Flournoy, have both indicated that the candidate will keep these measures in place if he wins the race. That is not welcome news. 

The Iran deal, formally known as the Joint Comprehensive Plan of Action, is one of the more successful diplomatic agreements of the past decade and we need executive leadership that recognizes the importance and benefits of fostering good foreign policy decisions through multinational cooperation. Also, as Democrats mull over a replacement for Eliot Engel as House Foreign Affairs Committee chair, economic sanctions relief must be prioritized as an essential promise from all candidates. 

A few months ago, President Trump made the irresponsible decision of formally withdrawing from the World Health Organization even as the novel coronavirus ravaged through millions of lives at home and abroad. Keeping up with this spirit of casting international cooperation as the enemy, Trump, as well as China and Russia, has refused to participate in COVAX, the WHO sponsored vaccine distribution program. The program hopes to pool money from member states and ensure volume guarantees from vaccine candidates to discourage global hoarding. While Trump’s decision to focus only on providing vaccines domestically with Operation Warp Speed may lead to an availability of doses for Americans, we’ve clearly seen in the past year or so that the virus is not confined by borders. As CEPR’s Dean Baker puts it, “It’s not vaccine nationalism, it’s vaccine idiocy.” Thus, we cannot fully move past it and return to normal without a coordinated international response.  

Congressional Oversight

Before this week, only a handful of suspicious activity reports — the forms banks send the federal government when they think a client is laundering money — had ever been publicly disclosed. That all changed when Buzzfeed News and the International Consortium of Investigative Journalists began publishing a wave of bombshell stories they’re calling “the FinCEN Files,” based on a leaked trove of thousands of SARs.

The reports mostly confirm in eye-popping detail what everyone has always suspected: the global financial system is riddled with crime; name-brand Wall Street banks facilitate funds for terrorist financiers, drug smugglers, and sex traffickers; and the regulatory cops on the beat are too overwhelmed, under-resourced, and disrespected by the banks and their own bosses to do anything about it. Most SARs go unread, and fewer still are acted upon. “Enforcement” usually means deferred prosecution agreements — the government agrees not to press charges if the bank promises to clean up its act, which the bank never does. It’s cheaper for the overwhelmed regulators (as SARs have doubled over the last decade, FinCEN cut its staff by more than 10 percent), but leaves the system rotting in place. Meanwhile, the banks treat SARs as get-out-of-jail-free cards. Wall Streeters often continue lucrative business with global criminals simply because they file SARs afterwards; once the government has been informed, it’s the Feds’ problem, not the banks.

This should be an overdue wake-up call to any Biden Treasury Secretary (FinCEN is a bureau of the Treasury.) As Robert Kuttner reports at the American Prospect, the current odds-on favorite for that job is Lael Brainard, who’s inched toward progressive affect over the years, but is fundamentally an institutionalist who represents the non-populist wing of the Democratic Party ascendant in the early Obama years. The FinCEN files throw the failures of those institutions into stark relief. They truly were never sufficient, even before Trump and Mnuchin dynamited most of them. If Brainard wants to prove that she isn’t just making friendly with progressives for short-term political gain, she can start by listening to lefties’ recommended reforms in light of these documents.

Senators Elizabeth Warren and Bernie Sanders, unsurprisingly, have led the response. Warren called for a new Treasury unit independent of FinCEN, while Sanders said simply “break them up.” That, after all, is perhaps the only ultimate solution to a system of banks Too Big To Manage, Too Big To Prosecute, and Too Big To Fail. If you’ve been understandably distracted by the other dozen crises right now, here are a few of the lowlights Congress ought to investigate:

  •  After whistleblowers showed the FBI that British bank Standard Chartered was laundering Iranian money, the bureau did only a cursory investigation, tipped the bank off to one of the whistleblowers’ names, and let the crime continue for six years.

  • The Department of Justice extended Standard Chartered’s deferred prosecution agreement on the Iranian money laundering six times over seven years.

  • The Department of the Treasury refused to freeze Kaloti Jewellery Group out of the global financial system despite a strong case that it was laundering drug trafficking cash, out of fear of angering the United Arab Emirates.

  • JPMorgan Chase facilitated $89.2 million of business in just two years between individuals linked to North Korea, including smuggling arms into the country. The bank reported the transactions to FinCEN, then continued taking the smugglers’ money. Overwhelmed FinCEN regulators didn’t follow up.

  • After the DOJ fined it $1.9 billion for doing business with El Chapo, HSBC continued laundering money around the world for Ponzi schemers and others. The bank’s compliance staff threatened regulators with slashing jobs in the Rust Belt if they didn’t back off from investigations. HSBC is now in the middle of three deferred prosecution agreements.

Governance

While the Justice Department’s lawsuit against Google appears imminent, the New York Times decided to take another look at the 2007 Google-DoubleClick merger, a $3.1 billion deal that today exemplifies why “lawmakers need to broadly rethink how mergers are regulated” in the tech industry. But the Times glosses over one secret of how the deal was approved in the first place — they quote an anonymous former FTC commissioner, who wouldn’t go on the record due to “potential conflicts with clients of his firm.” Maybe the regularity with which former officials end up working for tech industry giants is a contributing factor to the merger-approval rubber-stamp factory at the enforcement agencies? And perhaps it’s not actually true that, as the anonymous former commissioner suggests, “no one foresaw the power that tech platforms like Google, Facebook and Amazon would amass.” 

We’ve written on one of the revolving door lawyers who pushed for the Google-DoubleClick deal before. In our investigation of the FTC and BigLaw figures who approved the Covidien-Newport merger, (which forestalled medical officials’ plans to build a ventilator stockpile), we looked at the career of Michael McFalls, a former FTC official turned BigLaw counsel who uses his expertise to gain merger approval for his pharma and med-tech clients, including Covidien. Turns out, McFalls advised DoubleClick when it was bought up by Google in 2007. He’s also a Democratic donor who maxed out donations to the 2012 Obama and 2016 Clinton campaigns. McFalls represents the type of opportunistic former official who might seek out power in a future Biden administration — and as we wrote back then, Biden shouldn’t let such figures back into the agencies to continue the endless cycle of harmful merger approvals, even if ostensibly Democratic-aligned. 

Amidst Americans’ growing concerns about the overwhelming economic and political power of Big Tech, antitrust enforcement is being recognized as a vital tool to rein in these giants. This fact, of course, is not lost on tech executives — we recently wrote in the American Prospect on the tech industry’s attempts to infiltrate the Biden transition and sway future policy. These attempts take the form of would-be appointees with similar trajectories of leaving government service for cushy gigs at the corporations they once oversaw. Now, more than ever, Biden has an opportunity to stand up to the tech industry by barring individuals with corporate conflicts of interest from a future administration, and set the stage for ending the revolving door culture at the antitrust enforcement agencies for good. 

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

The Battle To Define The Biden Economic Team, Explained

Democratic Donors Push Biden For A Cabinet Free Of Fossil Fuel Connections

What A Defiant Democratic Party Looks Like

Left Collects Wins On Biden Transition

Liberalish: The Complex Odyssey of Lael Brainard