Dunn isn’t done yet! And Other DC Tales
Newsletter 97: Corporate America sees no trade off between engaging in legislative battles and administrative law hardball
Jonathan Kanter is set to appear before the Senate Judiciary committee this morning. If the overwhelmingly bipartisan support that Federal Trade Commission Chairwoman Lina Khan received is any indication, he shouldn’t face major headwinds today or on his remaining path to confirmation. It may be another story, however, once he gets to the Department of Justice. As we’ve explored previously, it seems likely that Google will mount a (legally baseless) campaign for Kanter’s recusal from the DOJ’s case against the search engine giant. Interference could also come from inside the house. Senior DOJ officials like Lisa Monaco worked until very recently for tech monopolists and are in a strong position to quietly undermine the Antitrust division’s work. For that reason, we led 10 other groups in sending a letter last week to Attorney General Merrick Garland asking that he “provide [Kanter] with all available resources to ensure that Big Tech monopolists are held accountable” which includes “providing him and the Antitrust Division with sufficient independence and discretion.”
Personnel:
With so many positions to fill in a new administration, it’s easy to be tempted by the path of least resistance when choosing nominees. That is especially true for many independent regulatory commissions, where partisan balance rules mean that qualified co-partisans are already in place and need only be renominated. There’s not necessarily anything wrong with this. In fact, allowing the party out of power to build a bench of experts ready to redirect policy when the White House changes hands is one of the distinct advantages of this structure. But due diligence is still necessary to ensure that these figures are aligned with the President’s agenda and have a track record of effectiveness.
This does not appear to be the case for Biden’s nominee to the board of the Export-Import Bank, Judith Pryor. Climate groups are raising concerns about Pryor’s record supporting financing for new fossil fuel projects while on the board. In a brief released last month, Friends of the Earth gave her an F-grade for her actions which include voting “in favor of every fossil fuel project during her time as director, totaling $5.4 billion of loans and guarantees that comprised 63 percent of the total value of all board-approved projects.” At a time when we need to rapidly be phasing out support for new oil and gas projects, the Ex-Im Bank’s exposure to them has been rising, “from 15 percent in 2018 to 26 percent in 2020.” With a record like hers, Pryor seems unlikely to be the one to help reverse this trend.
Until recently, it seemed all but certain that the path of least resistance would lead Biden straight to renominating Jerome Powell to another term as Chair of the Federal Reserve. Suddenly, however, Powell’s road to another four years is looking bumpier. Ethics scandals, first at the regional banks and now at the Board in D.C., are shaking confidence in the Fed as an institution and casting doubt on Powell’s leadership. Now reappointing Powell will mean contending with accusations that the administration does not take these ethical breaches seriously. The scandals have also contributed to growing congressional roadblocks. In the last week, Senator Elizabeth Warren has announced her opposition to Powell’s renomination and taken to the Senate floor to denounce the “culture of corruption” at the Fed and Powell’s hand in it. When this is taken together with the other factors weighing against Powell, it may seem that elevating Fed Governor Lael Brainard starts to seem the more painless choice.
While we’re on the subject of ethical breaches...Politico reported last week that Anita Dunn remains a “central figure” in the White House despite her official departure this summer. That leaves Dunn in the remarkable position of having a direct line to the White House, and immense influence over it’s agenda, even as she advises SKDK’s corporate clients how to influence the very same administration. In theory, Biden’s ethics pledge would bar her from advising influence campaigns aimed at the administration on a client’s behalf. But, because Dunn was a special government employee, she was not required to sign and remains unencumbered to leverage her brief stint in government for profit.
Governance:
No matter what particular policy goal you’re discussing, it is always the case that having a workforce with the capacity to achieve it will be essential to its success. The most recent example? The U.S. Forest Service is reportedly struggling to retain and recruit firefighters to battle wildfires that are growing increasingly intense and demanding attention for a growing share of the year. In testimony to Congress late last month, USFS Chief Randy Moore argued that the agency needs to be able to offer higher pay and benefits to build and maintain a workforce that is ready for the challenges ahead.
At the Department of Housing and Urban Development, an ambitious agenda is not only running up against limited staff capacity, but protracted vacancies at the top. In a new blog, my colleague Vishal Shankar catalogues over 100 roles within the Department that are empty or being filled in an acting capacity. As Vishal writes, “if Secretary Fudge and the Biden Administration hope to implement their housing agenda, they will need to fill these vacancies with innovative and knowledgeable officials who are dedicated to carrying out HUD’s mission of creating ‘strong, sustainable, inclusive communities and quality affordable homes for all.’”
Anti-monopoly:
At the Federal Trade Commission, staffing changes and institutional redesign are shaping up to be key components of Chair Lina Khan’s effort to revitalize antitrust enforcement. In a memo to staff last week, Khan laid out numerous changes including a de-emphasis on issue silos between consumer protection and antitrust, the infusion of new expertise, and new hires. The sea change is driving some of the old guard out and straight into the arms of the monopolists. Between these inflows and outflows, major transformation appears to be coming quickly to the FTC.
Independent Agencies:
While these internal changes are likely to keep chugging along, external action from the FTC is seemingly about to slow. Commissioner Rohit Chopra’s confirmation to lead the Consumer Financial Protection Bureau is about to leave the FTC without a Democratic majority. Although Biden has nominated Alvaro Bedoya to Chopra’s spot, the Senate confirmation backlog makes it all but certain that it will be months before the majority is restored.
Elsewhere, at the Federal Communications Commission, Biden still has not nominated a Democrat to fill a spot that has been open since his inauguration. That has left the commission gridlocked between Democrats and Republicans since the start of the year. Bloomberg columnist Tara LaChappelle laid out the implications of that long-running vacancy last week. Unfortunately, the situation is set to get worse soon. Acting chair Jessica Rosenworcel’s term is set to expire in January which would leave the Commission with a Republican majority. Lawmakers seem finally to be taking notice of this impending disaster and are now urging Biden to renominate Rosenworcel. With the way that the confirmation process is currently going, however, it may already be too late unless the Senate makes changes to make things move faster soon.
Want more? Check out some of the pieces that we have published or contributed research or thoughts to in the last week:
Federal Reserve Chair Jerome Powell Faces Reappointment Amid Tumult
Powell, Vice Chairs, And Regional Bank Presidents' Trading Demands Congressional Oversight
Powell Misled Reporters About His Finances While Admitting To Lax Ethics Practices
As Biden Promises Sweeping Housing Action, Nearly 100 Personnel Vacancies Plague HUD
Coalition Calls on DOJ to Give Kanter "Sufficient Independence and Discretion"
Powell And Vice Chairs Transacted Millions In 2020, While Brainard Made No Trades
Fed Ethics Questions Spread to Barkin on McKinsey’s Opioid Role
Senators vs. Facebook, Round 2
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