Mark Schiefelbein/AP Photo
Democratic presidential nominee Vice President Kamala Harris speaks during a rally at the Dort Financial Center in Flint, Michigan, October 4, 2024.
Kamala Harris’s campaign has attempted to thread the needle on corporate crime. She touts her record as a prosecutor going after foreclosure abuses (which she mischaracterizes as “predatory lending”), for-profit colleges, and other corporate offenders. But she is quick to couch her record as having been willing to go after “bad actors.” On corporations generally, Harris has led with charm and a willingness to partner on shared prosperity. With bad actors, she draws the line: “I believe companies need to play by the rules,” she said at the Economic Club of Pittsburgh, “respect the rights of workers and unions, and abide by fair competition. And if they don’t, I will hold them accountable.”
This dividing line is noticeable and it could certainly be read as understandable. Harris is trying to win an election that requires a lot of financial resources and counter charges that she’s some kind of radical communist. Getting support from honest businesses can build that credibility and win support.
The problem is that in this process, Harris has been courting the very same “bad actors” she claims she will be uncompromising toward when it comes to enforcing the law.
A story from the Financial Times identifies the Harris campaign’s “charm offensive” with Wall Street, working to win support from corporate America. According to the story, Harris has hosted several chief executives of large corporations at her home in Washington. Two stand out: Visa CEO Ryan McInerney and CVS CEO Karen Lynch.
Both Visa and CVS are defendants in federal antitrust lawsuits, accused of paying off rivals to maintain monopoly power and of jacking up insulin rates in particular and drug prices for consumers more generally. CVS confirmed that Lynch and several other CEOs had dinner with Harris last year (Visa did not return a request for comment about the timing).
While these FTC lawsuits were filed in the past few weeks, the Federal Trade Commission, which brought the CVS lawsuit, has been looking into CVS and other pharmacy benefit managers for years; a formal investigation into the industry began in 2022. The antitrust investigation into Visa was initiated in 2021, and a civil investigative demand—essentially a subpoena—was issued in 2023.
In many antitrust cases, CEOs like this are called to testify, so Harris was speaking to potential witnesses to these cases in her home. The Harris campaign did not answer questions about whether the ongoing investigations were talked about. But there are obvious issues of optics with having a high-ranking administration official seeking an endorsement or at least trying to smooth over differences with CEOs who are now corporate defendants in a federal lawsuit from that same administration.
The only reason for Harris to meet with these CEOs as part of a charm offensive is to make them more comfortable with her agenda as a possible president.
Unfortunately, this has not been the only instance of Harris seeking or receiving support from executives whose companies are either fighting administration policies or under investigation. Key Harris adviser Tony West (who is also her brother-in-law) runs legal affairs for Uber, a company that’s suing the Labor Department over its worker classification rule. Another aide, Karen Dunn, is a hired-gun lawyer for Google in its trial against the Justice Department over alleged antitrust violations in its advertising technology business. A host of crypto firms that the Harris campaign has sought to impress, including Coinbase, are under Securities and Exchange Commission scrutiny. And Reid Hoffman, one of Harris’s biggest funders and part of Business Leaders for Harris, a new umbrella organization, has been simultaneously calling on her to remove Lina Khan from the Federal Trade Commission while having his business interests under investigation by the FTC.
But the Visa and CVS courtship represents a new level. Harris is seeking favor from two CEOs who have active federal lawsuits against their companies. You can easily see how a new Harris administration taking over these cases would feel pressure to be lenient on companies whose leadership has expressed support for Harris. Or at least, you can see those assumptions of conflicts of interest made in ways that would be harmful to her campaign.
The Harris campaign did not respond when asked if the vice president was sensitive to the optics of a high-ranking government official speaking directly to subjects of federal lawsuits, and whether she would commit to those lawsuits moving forward regardless of the support she may receive from those CEOs.
In the Visa lawsuit, the Justice Department has accused the payment network giant of monopolizing debit card networks by penalizing merchants who route transactions to competing networks and payment systems, and paying off other rivals to become partners instead of entering the market. The strategy of co-opting its competition is not dissimilar to Google’s strategy of buying search engine default status across web browsers and devices. Customers ultimately pay the price in higher costs for products when a merchant passes these burdens on to them.
As the Prospect has reported, the FTC brought the case against CVS and two other leading pharmacy benefit managers, which collectively control 80 percent of the market for prescription drug transactions. CVS, one of America’s biggest pharmacies, also controls Caremark Rx, a top PBM. The FTC alleged that the rebate system used by PBMs creates incentives to increase list prices on insulin, which leads to patients whose co-insurance or co-payments are based on list prices, or patients who carry no insurance and must pay the list price, paying more. The practices have spiked the cost of insulin by over 1,200 percent over the past two decades.
CVS was able to merge with insurance giant Aetna during the Trump administration. Over the past couple of weeks, CVS has taken a strategic review of its business and is considering breaking itself up, according to The Wall Street Journal. Its previous ambition of a vertically integrated health care operation has not performed to expectations.
Uber, the company where Harris adviser Tony West is chief legal officer, recently won a judgment in state court in New Jersey getting out of paying damages to a couple who were seriously injured in an accident by their Uber driver in 2022, because they’d ordered dinner on Uber Eats months earlier, and embedded in that purchase was an arbitration agreement where they gave up their right to sue.
In the cases of CVS and Visa, however, the situation is different than Harris having advisers from companies with less-than-stellar track records. The only reason for Harris to meet with these CEOs as part of a charm offensive is to make them more comfortable with her agenda as a possible president. They have something she wants: an endorsement, a warm relationship, or maybe just no endorsement for her opponent. And they want something too: a more permissive regulatory environment. This kind of potential transactionalism is bad enough when there isn’t a federal lawsuit stuck in the middle of it.
That could easily taint the “bad actor” strategy. And let’s recall that one of the issues creating widespread skepticism about the Obama administration was the perception that some companies were “too big to jail,” that a separate justice system existed for the wealthy and well-connected, leading to no criminal penalties for anyone associated with the global financial crisis.
Harris, of course, can clear all of this up. She can recommit to her approach to holding any corporation accountable, no matter who they are, if they violate clear rules of conduct. She can say that her meetings with CEOs do not affect that stance whatsoever. It’s a question I asked the campaign, whether that would be the standard in her administration.
They can answer it anytime they want.
