Patrick Semansky/AP Photo
At the swearing-in ceremony for Treasury Secretary Janet Yellen last week
The Revolving Door Project, a Prospect partner, scrutinizes the executive branch and presidential power. Follow them at therevolvingdoorproject.org.
Recent nominations and appointments by President Biden have given progressives enough reason to feel cautiously hopeful about the shape of the administration. Some high-profile losses aside (We meet again, Tom Vilsack), most of Biden’s early picks for senior cabinet jobs and top advisers are to the left of their predecessors under President Obama. This is a clear reflection of the power of organized progressive agitation that has shifted the winds of Democratic politics over the last decade.
But let’s emphasize the word “cautiously” in cautiously optimistic. As grinding as the cabinet fights have been, they’re only the first wave of the Biden administration’s personnel. Now comes a new stage of the transition, in which the newly-named secretaries choose their own undersecretaries and senior advisers. Although occupants of these positions typically operate outside the national spotlight, they still wield enormous power.
For now, we want to focus on two institutions: the Departments of Treasury and Justice. They’re perhaps the two departments with the most power to shape Americans’ lives, especially on issues of economic inequality. The Biden team also needs to fill their ranks with climate warriors and use existing powers for climate action if we want any chance of actually keeping global temperature increases below 1.5 degrees Celsius.
Progressives (including us at the Revolving Door Project) have mostly welcomed Janet Yellen’s appointment as treasury secretary, despite some reasonable questions about her highly-paid speeches on Wall Street in the last few years. Merrick Garland’s nomination for attorney general, on the other hand, has been met with deflation at best and outrage at worst. Yet the people below them, advising the bosses and handling the day-to-day activity on matters from financial regulation to taxation to corporate crime enforcement, will play a huge role in Biden administration policy.
Read more from the Revolving Door Project
The Treasury’s comptroller of the currency, for example, has an enormous impact on the financial system as the chief federal bank regulator. Comptroller handbooks can set rules and advisories for Wall Street, including on individual industries like fossil fuels. If Biden wants to hold true to his promises to address the overlapping climate and inequality crises, he should make it his legacy to utilize regulatory bodies such as the Office of the Comptroller of the Currency (OCC) for the public good.
The Prospect’s Alexander Sammon and we at Revolving Door Project have both raised concerns about fintech ally Michael Barr eyeing the OCC. But there are other concerning potential appointees within the agency. Take Amy Friend, a serial revolver who has cycled between working inside the federal government, including the OCC, and selling her regulatory knowledge to FinTech and other financial services companies. Currently a senior adviser to fintech lobbying and consulting firm FS Vector and on the board of the Alliance for Innovative Regulation, which seeks to replace the current financial regulatory system with a Silicon Valley-like regulation-free market system, Friend is an example of someone who should absolutely not have a role in regulating the industry she is loyal to.
While cabinet names have garnered media attention at an almost dizzying speed, the next round of sub-cabinet appointees are arguably just as, if not more, important
OCC’s power over banks gives it tremendous sway over the real economy. The fossil fuel industry, for example, would fight tooth and nail to keep the OCC from incorporating climate risk into its assessments of banks’ risks and exposure, or forcing banks to measure climate risks in their own internal stress tests. It is imperative that those within the ranks of the OCC are willing to stand up to the fossil fuel industry, to advance and defend strong climate action.
As we’ve previously written, Yellen already promised during her confirmation hearing to hire someone at a “very high level” to prioritize the climate impacts of all of Treasury’s work. This person should organize policy across Treasury’s many powers to shift capital away from climate-damaging industries, liaise with other regulatory agencies nationally and globally, and generally be relentless in the pursuit of climate action.
Many environmental advocates support climate finance expert Sarah Bloom Raskin for this role, for good reason. She has experience both in the Treasury Department and Federal Reserve, has been unapologetic in urging the financial system to “reimagine capital as a tool for accelerating and smoothing the transition to a world of net-zero carbon emissions,” and has shown time and again that she is an “unconventionally progressive [thinker] on regulatory and monetary issues.” Raskin exemplifies the attitude needed to complement Yellen’s leadership: ability and willingness to address the climate emergency creatively and immediately.
This whole-of-government approach should also extend to international-facing positions at the Treasury Department, where anonymous sources floated Heidi Crebo-Rediker to Bloomberg for an undersecretary position. Crebo-Rediker, who came into government from a career at Bear Stearns, Lehman Brothers, and Merrill Lynch, served as chief economist in Hillary Clinton’s State Department before forming her own global investment firm. She advocated for Clinton’s “economic statecraft” agenda, most notably the Trans-Pacific Partnership. Plenty of ink has been spilled on that deal’s anti-environmental and inequality-exacerbating implications. This agenda, which prioritized private sector interests when addressing foreign policy issues, also led to political and economic upheaval, especially in Latin American countries. As Biden commits to placing diplomacy at the forefront of his foreign policy, corporate interests must take a backseat.
Even if Yellen’s Treasury leads the charge on new climate regulations, brings independent skepticism to fintech, and prioritizes the global good over the corporate bottom line, it can’t singlehandedly end the Golden Age of White-Collar Crime. Regulations are only as good as their enforcement, and most enforcement powers flow through the Department of Justice.
Here, the enemies of private power have their work cut out for them. Garland’s centrist, pro-corporate record was one of the reasons Obama thought he could net a Supreme Court confirmation in 2016. In 2021, Garland surely played a role in picking BigLaw revolver Nicholas McQuaid as the current acting head of DOJ’s criminal division and fellow revolver Brian Boynton as the acting head of the civil division. McQuaid comes directly from Latham & Watkins’ white-collar defense practice, and now directs the very sorts of white-collar investigations from which he was defending firms.
As the Prospect and the Intercept reported, Garland’s favorite for the hotly-watched assistant attorney general for antitrust job is Susan Davies, who has literally defended Facebook and currently works at the right-wing firm Kirkland & Ellis.
Garland’s background helps elucidate his pro-corporate bent. His first job at DOJ was as an aide to the Clinton administration’s Deputy Attorney General Jamie Gorelick, a friend of his from law school. Gorelick remains close with Garland, singing his praises on Lawfare’s podcast last month. Gorelick is also the lawyer who defended BP from paying for economic damages incurred by the Gulf of Mexico oil spill; defended the Chicago police department from federal scrutiny for the murder of Laquan McDonald; and became Jared Kushner and Ivanka Trump’s ethics lawyer. (She says that last gig gave her an “interesting opportunity” to “opine on the anti-nepotism law” and teared up at the notion of people “insist[ing] on a kind of political purity.”)
Gorelick is likely (hopefully) unconfirmable for another stint as deputy attorney general, but she almost certainly will remain a major informal adviser to Garland. She will surely urge Garland toward his natural DOJ institutionalism, and push him away from scrutinizing whether that defensiveness toward the Department itself actually leads to overlooking injustices.
Case in point: Garland still hasn’t committed to firing Trump’s U.S. attorneys. Obama failed to remove all Bush attorneys, who then undermined many of his DOJ priorities. Consider who Trump’s appointees still at the Justice Department are: the people he and his Attorney General Bill Barr hand-selected for Trump’s effort to turn the DOJ into his personal law office-cum-mob enforcers.
We know that Trump fired U.S. attorneys who displayed any hint of independence. The only way for Garland to even start creating an independent DOJ will be to clean house of Trump appointees from top to bottom. This will inevitably appear like a partisan attack to the right-wing media ecosystem. Tough. Democracy demands it.
The fact is that even as attention moves to congressional fights (and not unfairly so), the presidential transition process is far from over. While cabinet names have garnered media attention at an almost dizzying speed, the next round of sub-cabinet appointees are arguably just as, if not more, important—especially since decreased media scrutiny means increased opportunity for unsavory actors to plant their allies in the administration. These sub-cabinet appointees will write and implement policy, take meetings (or not) with industry lobbyists, form teams and priorities within their departments, and generally do the work that impacts the public on a daily basis.
Particularly within the Treasury and Justice Departments, now is the time not to blindly hope all goes well but to keep holding pressure on Biden and his new cabinet. They should not be allowed to forget that those who prioritize corporate profits over the public good have no role in a small-d democratic government.
