The Summers of Our Discontent Came Early
Newsletter 36: Contradictory messages (Summers, Kaufman) from Team Biden as RDP digs deeper into antitrust
2020 (and Potentially 2021)
Weeks after Joe Biden assumed the mantle of presumptive nominee, most questions about his transition planning effort remain unanswered. Who’s involved? How much say will the Sanders camp’s task forces have? What criteria will be used to assess potential nominees? For now, mostly crickets.
Despite this lack of official announcements, the public did get some important (and contradictory) hints about the shape of a Biden transition this week. First, late last week, Bloomberg News confirmed a rumor that had been circulating for some time: Larry Summers is among those advising Biden on the economic recovery.
Needless to say, this is a disaster. Over his career in politics, Summers has left nothing but a trail of ruin. In addition to his better known roles deregulating finance and mishandling the response to the crisis that deregulation wrought, Summers has also been a catastrophe for environmental policy, as we highlighted in a blog last week. During the last recession, he stood in the way of green stimulus plans that would have helped set the country on a more sustainable path while jumpstarting growth. Out of office, he expressed support for the Obama administration’s decision to lift the oil export ban. And just last week, he said that he “support[s] developing [the oil industry] as long as we can do it in an environmentally sound way” because “we have more influence and power in the world because we have a strong oil industry.” Yikes!
And this is all not to mention his history of sexism, his relationship with Jeffrey Epstein, or his troublesome ties to fintech and hedge funds.
So, unsurprisingly, news that Biden is seeking Summers’ advice elicited a forceful response from progressives, with many calling for Biden to cutties with him altogether. The Biden camp should take note that, this time around, progressives are paying attention to personnel. Its tentative appeals to the left will be met with skepticism so long as it maintains relationships with those like Summers who have spent their careers undermining progressive goals.
There is, however, reason to hope that such troubling figures wouldn’t run a potential Biden Administration. Earlier this week, Biden told a virtual room full of donors that his former advisor, Ted Kaufman, will be leading the campaign’s transition effort. Kaufman, who served for two years in the Senate seat Biden vacated to become Vice President, earned a reputation as an anti-Wall Street crusader, no small feat for a Senator from Delaware. He has also been a staunch opponent of the revolving door, both in Congress and in the executive branch. Kaufman did not shy away from publicly criticizing the Obama-Biden administration’s heavy reliance on industry figures for financial regulatory roles. Hopefully, he’ll use his position in this transition to prevent a repeat of history.
One final note: early knowledge about a presidential candidate’s transition team should not be reserved for those able to pay thousands of dollars for access. That’s why we joined many other groups last week to ask the Biden campaign to publicly disclose the details of its transition process.
Congressional Oversight
Another week has passed and the House is still not governing. For a brief moment, it looked like it would be back in session starting next week and would be holding a vote to allow proxy voting (not perfect, and NOT oversight, but at least a step after over a month of inaction). Democratic leadership, however, quickly reversed course on the plan to return to Washington following backlash from members over the health risks. With that option out, it’s not really clear what comes next. There is, it appears, no real plan.
Rank and file members finally seem to be getting fed up with this state of affairs. Lawmakers representing red-to-blue districts, in particular, are concerned that they will be seen sitting idle amidst the crisis. This week, the New Democrat coalition took their complaints to House Leadership, demanding “the implementation of remote voting by proxy and the authorization of virtual committee hearings no later than the week of May 4.” On Twitter, Rep. Katie Porter made the case for remote hearings by pointing to her experience with CDC Director Robert Redfield; when she sent him a letter requesting that coronavirus testing be made free she got no response, but when she pressed him on it face to face she was able to secure that commitment. With members across the ideological breadth of the caucus chafing at these artificial limitations, it would seem that the clock on the one woman Congress is ticking.
Nancy Pelosi’s choice of Donna Shalala for the bailout oversight commission surely is not helping her case. Set to be one of the most prominent faces for bailout accountability, Shalala is already mired in scandal. First, we learned that she failed to file mandatory transaction reports as she sold stocks over the last year. Then, we found out that her “half a dozen” previously undisclosed disclosures contained 556 transactions.
In an interview with Politico, Shalala brushed aside these concerns, insisting that they were nothing “sinister.” She then proceeded to make clear that she was not going to take her oversight role seriously, characterizing misuse of funds as inevitable “mischief,” and careful scrutiny of the bailout programs as “nitpick[ing].” She also waved away worries that the panel lacks subpoena power because she’s known the Fed Chair, Jerome Powell, for years and is confident in his good intentions and cooperation. And of her qualifications? Well, she’s known many a Treasury Secretary and Fed Chair so she’ll be well-prepared to manage the intricacies of financial regulatory oversight. Here’s a tip for Pelosi: when choosing someone to strike a contrast with a fabulously corrupt administration (especially when you are making it impossible for other members of your caucus to work), it’s best that they not boast that many of the administration’s members are close friends.
Antitrust
The Revolving Door Project has expanded! Back in December, we received funding from the Economic Security Project to monitor the revolving door between the antitrust enforcement agencies and the corporate entities those agencies oversee. We hope to elucidate the influence corporate law firms and proto-monopolies have over enforcement actions, or lack thereof.
Since the beginning of the year, we have tracked all the FTC Bureau of Competition and DOJ Antitrust Division civil cases active in 2020, and charted out the professional backgrounds of the lawyers, officials, and consultants on either side of the aisle. Eventually, we will make this research public and create a website to spur further investigation into the revolving door between corporate entities and the antitrust agencies and provide helpful context for ongoing mergers.
One advantage revolving door lawyers have in private practice is the presumption that they will respect the government enough to, well, be more honest than standard corporate lawyers. Andrea Beaty recently tracked down one such revolving door individual, a former DOJ Antitrust who blows up any presumption of credibility. Amazon dispatched said lawyer, Nate Sutton, to Congress to wrongly deny the company’s use of proprietary data it collected on third party sellers to develop rival products, along with other anti-competitive practices. We will be showing all year how little a presumption of credibility ought to be accorded former government officials when they are serving as corporate hired guns.
Another piece on the merger behind the coronavirus ventilator shortage highlights how, by charting professional moves through the revolving door, we can understand the dynamics of a particular antitrust enforcement case. As the FTC begins to investigate mergers that Facebook, Amazon, Google, Apple and Microsoft were not previously required to report under the Hart-Scott-Rodino Act, the tech giants have commenced a hiring spree. That’s why we wrote a piece on a former FTC official whose defection to Facebook suggests big tech companies’ efforts to escape regulatory scrutiny by poaching former antitrust enforcers is on the rise.
The Revolving Door Project is also sending out plenty of FOIA requests to paint a picture of the work culture at FTC and DOJ Antitrust. Max Moran’s article on officials leaving the FTC for corporate BigLaw jobs illustrates how private sector interests permeate the division even in the staff-level ranks. We’ll be expanding on that work and tracking where recently departed FTC and DOJ antitrust lawyers and economists end up as the year progresses. We’ve also sent out FOIA requests for the FTC’s post-employment clearance request process for former employees working on FTC cases from the private sector side, as well as requests probing FOIA restrictions to see how much information we can get on the non-government personnel involved in cases.
Our investigatory work will allow us to understand the reforms the FTC and DOJ could undertake to restore public interest to the heart of any antitrust action by establishing a culture of career government service for their employees. As we track ongoing cases and personnel moves, we will investigate and give recommendations on potential legislation, agency procedures, and guidelines that progressives and future presidents could enact.
If you have questions about any of this work or simply want to know more about what we’re working on, please reach out to beaty@cepr.net!
Independent Agencies
With the Senate out of session, there has, unsurprisingly, not been any movement on nominations. But the Senate will be back next week and Mitch McConnell has made clear that he is eager to begin confirming judges then. Something tells us, however, that pending nominations to incapacitated agencies like the Merit Systems Protection Board (MSPB) and the Federal Election Commission (FEC) will not be a priority.
Want more?Check out some of the pieces that we have published or contributed research or thoughts to in the last couple of weeks:
In Interview, Donna Shalala Does Nothing to Alleviate Progressives' Concerns
Ted Kaufman Hates The Revolving Door. Now He Must Do Something About It.
The SBA Was Never Prepared to Handle This
Joe Biden Under Pressure From Progressives To Cut Out Larry Summers
Groups Ask Biden to Disclose Details of White House Transition
Biden’s Path to Party Unity Begins With Concessions
CAMPAIGN 2020: Greens urge Biden to ditch adviser Larry Summers
Unsanitized: The Fight to Learn Who the Fed Will Bail Out
Unsanitized: Mortgage Servicers Trying to Steal Homes, Again
Politico Morning Money April 24t
Democrat Rep Put in Charge of $500B Oversight by Pelosi Failed to Disclose Stock Sales