Max Moran

The tattered insider histories of our possible future ambassadors

On April 20, President Joe Biden remarked that the police murder of George Floyd "ripped the blinders off for the whole world to see the systemic racism" in American policing, and he called for action at all levels of government "to ensure that Black and brown people or anyone… [doesn't] fear the interactions with law enforcement."

One week later, the Washington Post reported that Biden will likely nominate former Chicago Mayor Rahm Emanuel, who personally helped cover up the police murder of 17-year-old Laquan McDonald in 2014, as ambassador to Japan.

It's a particularly egregious example of the longstanding practice of presidents doling out cushy ambassadorships to old friends, high-dollar donors, or political allies, especially those deemed too toxic for more powerful posts in the Cabinet (as Emanuel has been) or executive branch agencies. Being the ambassador to a wealthy nation allied with the U.S., while still carrying some responsibilities, is often more or less a multiyear vacation on the government's dime.

Most presidents reserve about 50 ambassadorships for this "political selection" process, with the rest going to career foreign service officers. Donald Trump, unsurprisingly, upped the corruption factor. During his last days in office in January, 83 ambassadors, or 43.5 percent of all U.S. ambassadors, were his handpicked allies.

But Biden has been slower than most presidents to dole out the diplomatic goodies, which has bred consternation among the donor class: a Daily Beast report in February quoted an anonymous Democratic donor, fuming, "It's bullshit. The number of asks over the course of the campaign… and they can't even remember to make a phone call to the people who kept the lights on."

Now, according to the Washington Post, Biden is finally getting around to scratching the backs of his friends and allies. This carries weight in D.C. gossip circles, given how well-connected Biden is there. So who made the cut?

Emanuel, as mentioned earlier, will likely attract the most interest, and for good reason. I've written previously about how his persona of a hard-edged political shark is mostly built on bluster and failed strategies. He's done favors at every turn for both Wall Street and the police state, actors whom Biden and his party are belatedly recognizing are rightly despised by their voter base.

One of the least-known names on the list is Mark Gitenstein, one of Biden's former Senate aides whom he once called "my best personal friend." In 2008, Gitenstein had been favored to lead the powerful Office of Legal Policy at the Department of Justice, but the nonprofit consumer advocacy organization Public Citizen successfully shot him down for his long history of corporate lobbying on the very judicial issues that the office oversees.

Instead, Gitenstein was made ambassador to Romania, where he was a loyal ally of Traian Băsescu, the anti-democratic and fervently pro-capitalist president of Romania at the time. As Romanian historian Florin Abraham wrote, Băsescu rewarded Gitenstein with a lucrative seat on the "Property Fund," which holds stock in Romania's most profitable companies. Gitenstein then swung into the corporate law offices of Mayer Brown, where the company website quoted him as saying, "Commercial opportunities abound in Romania and throughout Central and Eastern Europe, and my experience and contacts in the region can help clients capitalize on them." He'll be able to further flesh out his European Rolodex as the likely ambassador to the European Union.

There's also David Cohen, a Comcast lobbyist who hosted Biden's very first fundraiser of the 2020 election cycle. Cohen has wielded power on behalf of the telecommunications monopolist since 2002, mostly in Pennsylvania, which is how he grew close with the Scrantonian Biden. Biden is sending Cohen to Canada at the same time as his administration is bringing in anti-monopolists like Tim Wu and Lina Khan, who (like most Americans) have few kind things to say about Comcast.

Mexico, meanwhile, will welcome Ken Salazar as the ambassador to the country, a well-liked former Colorado senator who was Obama's interior secretary. While Salazar was overseeing the calamitous BP oil spill into the gulf that the U.S. and Mexico share, he was also approving new offshore oil drilling permits. He's currently a Big Oil lawyer through the offices of WilmerHale, which is the law firm representing BP in the gulf spill lawsuits.

Then there's Tom Nides, the current front-runner to be ambassador to Israel. A career investment banker, Nides personally switched the pay structure for Fannie Mae executives to incentivize short-term earnings. By 2008, Nides was a lobbyist for Morgan Stanley and the Securities Industry and Financial Markets Association, the main lobbying consortium for Wall Street traders. His team "successfully resisted calls to break up the banks or impose caps on their size," in the words of the New Yorker, in part thanks to Nides' personal connections with powerful centrist Democrats—he was Joe Lieberman's chief of staff during the 2000 presidential campaign.

Morgan Stanley paid Nides $9 million for his services killing financial reform in 2010, but the next year he took a new job: the third-in-command in Hillary Clinton's State Department. His role focused on "economic statecraft," a euphemism for promoting American companies around the globe. Nides was also "Clinton's informal link to the Israeli government and to the pro-Israel lobby in Washington," according to the New Yorker. Consider that link formal now.

What can we take away from these names? For one, that Biden rewards those who have served him loyally, like most politicians. For another, that he doesn't want to alienate core constituencies or powerful voices in his party.

But what might be most interesting isn't the names, but the jobs for which they're being nominated. These are men—exclusively men—who have served as presidential chiefs of staff, Cabinet secretaries, and high-ranking world diplomats. They're used to being in the room when real decisions are made. Yet here they are, shunted off to the embassies of allied nations whose leaders will probably just call Biden directly if they need something. In a certain light, it looks like Biden is embarrassed by them, desperate to appease them in exchange for keeping them quiet.

Emanuel, Nides, and the rest likely aren't complaining about their new roles. But the fact that this is what they got—and not, say, a Cabinet secretary position, as Emanuel, in particular, hoped for—perhaps speaks to a change in how the old Washington wheeling and dealing is perceived. Biden may be a swamp creature, but his White House knows that the public is angry and that the policies and preferences of men like these are to blame for it. To hold on to his own power, Biden appears to be shedding those who came up around him. It just turns out that the price of that is the public paying for years of sake and sushi for someone who helped cover up the murder of a teenager.

Max Moran is a research director for the personnel team at the Center for Economic and Policy Research (CEPR)'s Revolving Door Project, which aims to increase scrutiny on executive branch appointments.

This article was produced in partnership by the Center for Economic and Policy Research and Economy for All, a project of the Independent Media Institute.

How BlackRock is on track to infiltrate a Biden administration

The Democratic base, still scarred from the 2016 election, is frantic not to count its chickens before they hatch. But Wall Street and corporate America have no such qualms. As Joe Biden leads in national polls and swing states, the most powerful firms in the country are seeking assurances that his administration won't crack down on their crimes.

For many, that means tapping the Obama-era alumni and other well-connected Democrats whom they've strategically hired to see who's ready to take a trip through the revolving door. This is why prominent House progressives like Alexandria Ocasio-Cortez and Katie Porter have called on Biden to ban corporate appointees from his administration.

The bellwether for corporate infiltration of a Democratic administration is BlackRock, the world's largest asset manager in charge of $7.32 trillion across the global economy. Hillary Clinton's campaign actively courted BlackRock CEO Larry Fink in 2016, and he quietly built out a full Treasury Department-in-waiting of well-established Democrats ready to keep oversight of mischievous financiers light. In the years since, BlackRock has only gotten larger, which means it only has more to lose from a muscular Biden administration. So what does BlackRock care about from the next administration, and whom might they seed in a Biden administration to get it?

BlackRock is the world's largest investor in fossil fuels, an industry (ironically) gasping for air during the pandemic. Yet BlackRock is currently trying to close a massive new stake in Saudi Aramco, the mostly state-owned oil company of Saudi Arabia. Saudi Arabia's atrocities in Yemen and the brutal murder of Jamal Khashoggi did nothing to slow Fink's business with the Kingdom—he personally attended a confab with the Saudi finance minister in Riyadh six months after Khashoggi's death, and one day after Mohammed bin Salman's government executed 37 people, including one via crucifixion.

Biden's promises on environmental and foreign policy run counter to protecting a Saudi oil pipeline just because an American investment titan has a stake in it. Yet BlackRock Investment Institute Chairman Tom Donilon is reportedly in the running to be Biden's secretary of state. Donilon was Obama's national security adviser, and his brother Mike is a longtime confidante of Biden's. Why might a top investment firm hire someone with no apparent prior money-management experience to run a major division? Perhaps it is the possibility of political influence.

Donilon isn't the only prominent Democrat at BlackRock who is talking to the Biden campaign. It was reported in August that BlackRock's Brian Deese has "been working with" Biden's campaign. Before he came to BlackRock, Deese helped negotiate the Paris climate accord for Obama. As global head of sustainable investing at BlackRock, Deese analyzes "climate risk." That company phrase doesn't necessarily mean steering clients away from investments that destroy the planet. It means, in the words of the New Republic's John Patrick Leary, "making sure that your investment portfolio earns the highest returns despite climate change or even from climate change."

Then there's Mike Pyle, the chief investment strategist at the BlackRock Investment Institute and a former Obama economic aide. He advised Senator Kamala Harris during her primary run for the presidency, giving him an insider connection to the would-be vice president.

Pyle was an adviser to Peter Orszag, a prominent austerity advocate of the early Obama years. BlackRock's CEO is big on balancing the budget; Fink was on the billionaire-backed Campaign to Fix the Debt from day one, and while he seems to have accepted deficit spending to deal with the immediate pandemic, "in the next 10-15 years, it [deficit spending] could be a problem," he said in September. Those of us who recognize massive public investment is indispensable to preventing irreversible climate change over the next 10 years will be sad to hear that, in BlackRock's eyes, we just can't afford to stop a climate apocalypse.

But it isn't just the Orszag connection that could make Pyle valuable to BlackRock—he was also a senior adviser in Obama's Treasury Department to Lael Brainard, who's now the likeliest candidate for Treasury Secretary. Among other duties, the treasury secretary chairs the board of regulators who designate firms "systemically important," aka too big to fail. BlackRock waged a multiyear lobbying war under Obama to avoid that designation, despite managing more than twice the total assets of JPMorgan Chase. These days, people are paying more attention to what happens at obscure (but important) regulatory meetings, but insider figures like Pyle could help BlackRock maintain that lack of accountability under Biden.

BlackRock has also done plenty of business with the federal government itself during the pandemic. The Federal Reserve has pushed billions of dollars out the door to prop up corporate stocks, and it hired BlackRock to help do it. In fact, the Fed has been buying up BlackRock's own investment products in its effort to save American big business—unsurprisingly, this has been very good for BlackRock's bottom line. Expect plenty of backroom lobbying from BlackRock over any potential appointees who would ask questions about the conflicts of interest baked into this business model.

Some might say that Donilon, Deese, and Pyle are merely giving advice to Biden and Harris on a handful of policy issues. But advice isn't often offered out of the kindness of one's heart in Washington or on Wall Street.

And for a presidential front-runner, Biden's campaign has remained remarkably obscure on any number of policy issues, making it hard for those outside of the back rooms to tell what the candidate actually wants to do besides win. Take, for example, campaign adviser Jake Sullivan telling Bloomberg that Biden will retain a "laser focus on the long-term fiscal health of the United States" in August, and then telling Politico that "we are going to need a significant magnitude of investment" in September. Is Biden a deficit hawk or a big spender? The answer seems to shift with the wind.

All of this means it's even more important for Biden to lock the revolving door and commit to public-minded appointees across his executive-branch-to-be. Every nominee will be a signal of where the candidate ultimately stands, which is perhaps why his personnel deliberations have attracted unusually high attention from the press for a campaign that hasn't even won yet. BlackRock is among those likely to be closely watching those deliberations, which means the enemies of BlackRock's regressive policy preferences need to keep their eyes peeled on personnel.

Max Moran is a research assistant at the Center for Economic and Policy Research (CEPR)'s Revolving Door Project, which aims to increase scrutiny on executive branch appointments.

This article was produced in partnership by the Center for Economic and Policy Research and Economy for All, a project of the Independent Media Institute.

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