What the Former Obama Lawyer's Defection for Goldman Sachs Says About 'Transparency' in Washington
The investment bank, under fire from the Securities and Exchange Commission for allegedly defrauding its investors, has hired former White House counsel Greg Craig to aide its cause. Craig's new gig confirms what many government ethics observers predicted: despite the president's initial efforts to reform
As his first presidential act, Obama issued an executive order detailing how
Craig provides an important test case for the path Obama appointees could take after leaving office. An early Obama supporter, Craig was mentioned as a candidate for Secretary of State before he landed in the counsel's office. During the first year of Obama's presidency, Craig worked to close the prison at
Now, instead of advising the president, Craig will advise a company that helped create another one of the dark clouds hanging over the country. Technically, Craig is not violating President Obama's ethics order. He is barred for two years from appearing before or lobbying the White House and its executive offices. In Craig’s case, Obama's order doesn't cover work with the SEC, which as an independent agency was not part of the former counsel’s official responsibilities. So far the White House has not had much to say about Craig’s new client; the press office did not respond to requests for comment from AlterNet.
When it comes to exercising influence, Goldman knows what it's doing. The Center for Responsive Politics, which monitors money in politics, last week called the company "one of the largest wielders of political clout." In the last election cycle, the firm's financial footprint totaled about $6 million, according to CRP, which analyzed contributions from "people and political action committees associated with Goldman Sachs." CRP also found that Goldman’s employees contributed more to Barack Obama’s war chest than did any other group in the private sector.
So Goldman probably isn't terribly worried about the fact that Craig can't parlay with the White House for a while: the company has plenty of other lobbyists listing it as a client—49 at last count—including former majority leader Dick Gephardt and Kenneth Duberstein, who served as chief of staff to Ronald Reagan.
Several Goldman alums also have infiltrated the Treasury Department. Treasury Secretary Timothy Geithner's chief of staff, Mark Patterson, worked for a few months as chief of Goldman's lobby shop. Another top aide, Gene Sperling, is a former Goldman consultant. And the bank has doled out hundreds of thousands of dollars to officials like Larry Summers for speeches and other advice. Patterson had to sign an extensive ethics agreement with the White House before joining the department, but the work Sperling did for Goldman was not covered by the president's ethics order.
"I am a lawyer, not a lobbyist," Craig told The New York Times yesterday. But just as it's no coincidence that the SEC went after Goldman Sachs in its first big case targeting the financial meltdown, it's unlikely that Goldman just happened to recruit Craig for its legal team.
Craig's career path resembles that of another Obama ally who did not find a place in the administration: Tom Daschle.Like Craig, as a former public official, Daschle faced some limitations on the lobbying he could do during his first year in the private sector. So although he spent his time assisting moneyed clients further their agenda in
Whether or not Daschle or Craig must register as a lobbyist, both of them owe their current positions at least in some part to the stature and influence they attained through their public offices, and both can use those assets to benefit their clients. But as lawyers or policy advisers, they can keep those clients secret. The Huffington Post has labeled this practice "influence laundering," and it could become more common as officials start trickling out of the administration.
Many lobbyists have deregistered in hopes of clearing their records and skirting around Obama's ethics order, and former administration officials will likely be able to circumvent the ethics restrictions as well. Even if they're not allowed to lobby, their experience in executive branch will still be valuable, and plenty of law and lobbying firms will be interested in offering up "clean" jobs that bank on their knowledge and connections without requiring them to dirty their hands with lobbying.
It's starting to look like, rather than bringing sunlight to