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Bair has deep experience with financial markets and bailouts.
Sheila Bair, the former chair of the Federal Deposit Insurance Corporation who earned high marks for her crusading work during the last large bailout, is under strong consideration to chair the Congressional Oversight Commission, which is charged with monitoring the current bailout, the Prospect has learned.
The developments were first reported by Vice. Bair, a lifelong Republican who worked for Sen. Bob Dole (R-KS) and in several roles at the banking regulators, last served in government when her FDIC term expired in 2011. She did not respond to a request for comment.
Senate Majority Leader Mitch McConnell and House Speaker Nancy Pelosi have to agree on a chair for the five-member panel, after each party leader in each chamber appointed one member. The decision on Bair is in no way final, the Prospect has been told, and the reaction to the trial balloon in Washington and the greater public will be critical to whether the appointment is made.
If chosen, Bair would lead a commission focused on numerous Federal Reserve lending facilities, which use public money appropriated through the CARES Act. The Fed’s facilities, backed by $454 billion in CARES Act funds, can be leveraged up at 10-1, creating a $4.5 trillion money cannon aimed at the largest corporations in America. Already the Fed has announced lending programs totaling about half this much.
No other names have been publicly released for the chair position, though they are circulating between Pelosi and McConnell.
Progressive leaders who have focused on the key hire praised the idea of Bair leading the panel, citing her experience in the 2008 financial crisis as a champion for homeowners and a thorn in the side of big banks, particularly Citigroup. Bair repeatedly tussled with then-Treasury Secretary Timothy Geithner over foreclosure-prevention efforts and conditions that she felt should have been attached to the bailout funds thrown at the financial system. She has also been vocal about the CARES Act, saying that private equity firms should “be pretty low on the priority list of where this money goes” and championing small business.
While a Republican, Bair did not vote for Donald Trump in 2016 and in the 2020 primaries supported Sen. Elizabeth Warren.
“Bair is respected across party lines, with good reasons, as the rare prominent actor who was prescient about the last crisis and actually tried to prevent it,” said David Segal of the Demand Progress Education Fund in a statement. “She's a solid pick for the cross-partisan, cross-chamber seat on the Oversight Commission.”
To the extent that Bair might have trouble gaining consensus, it may be on the conservative side. Last week, the far-right outlet World Net Daily posted a story highlighting Bair’s position as a non-executive director on the board of the state-owned Industrial and Commercial Bank of China. She has also served on the board of Santander, a Spanish commercial bank, since 2014. She joined ICBC’s board in 2017. (UPDATE: Bair's term on the ICBC board ended last month.)
Liberal groups wary of politicians that spin through the revolving door suggested that Bair had proven herself as a public advocate during the financial crisis. “If I were Steven Mnuchin or any other pedigreed banker with an instinct toward mischief, the last cop on the oversight beat I'd want to see is someone who made their bones sniffing out which high profile bankers were actually grifters,” said Jeff Hauser of the Revolving Door Project, maybe the most aggressive opponent of public officials moving back and forth to the private sector. “I hope Sheila Bair gets this position.”
While a Republican, Bair did not vote for Donald Trump in 2016 and in the 2020 primaries supported Sen. Elizabeth Warren (D-MA), with whom she worked on bank oversight during the financial crisis. Warren’s office did not respond to a request for comment.
Trump is not involved in the personnel decision on this panel, which originates from Congress.
The Congressional Oversight Commission, while not fully assembled, has had some success and some controversy. For a couple weeks, Bharat Ramamurti, a former aide to Warren, was chosen by Senate Minority Leader Chuck Schumer as the panel’s only member, operating from a Twitter feed. Despite that limitation, he was able to pressure the Federal Reserve into agreeing to disclose the names of the companies it will give bailout funds.
On the other hand, Pelosi’s choice, Rep. Donna Shalala (D-FL), has been dogged by the revelation of 556 unreported stock transactions, in violation of federal law. Shalala, who has no background in oversight or financial services, suggested in an interview with Politico on Tuesday that the commission should not engage in “nitpicking” the Fed on how they issue the funds, preferring to react after the money is out the door. She added that “This is a commission, it’s not an individual assignment … we should not be rogue in this role,” possibly a shot at Ramamurti, and said that she had the relevant experience for the commission because “I’ve known almost all of the Fed chairs as well as the governors.”
Bair, in contrast to Shalala, has deep experience with financial markets and bailouts, having served at the FDIC, the Treasury Department, and the Commodity Futures Trading Commission in her career.
The two other Republicans named to the panel are Sen. Pat Toomey (R-PA) and Rep. French Hill (R-AR). Both were bankers before entering Congress, and have expressed relatively orthodox business-friendly conservative beliefs.
The commission has a scant formal role, other than issuing reports every 30 days (the first is due in a couple weeks). But a high-profile figure like Bair could give the commission teeth, the way Warren did with the Congressional Oversight Panel looking at the financial crisis bailout in 2008.
