Prospect Illustration/MSC/Mueller Photo
Burns held several corporate roles while advising the Biden campaign last year.
China will affect every aspect of President Biden’s approach to the world. He is expected to nominate diplomat R. Nicholas Burns as ambassador to help him navigate the administration’s biggest global challenge. Burns is respected by Democrats and Republicans alike, and in contrast to some of the other strange names floated as ambassadors, like Rahm Emanuel for Japan and Morgan Stanley vice chairman Tom Nides for Israel. But even this widely admired career civil servant fits the pattern of Biden hiring diplomats turned business consultants.
News reports have described Burns as a statesman and professor, overlooking his senior role with the diplomat-for-hire firm the Cohen Group, which advises defense contractors in Asia, and U.S. corporations seeking opportunities in China. More pertinent is Burns’s work for a chemicals company named Entegris, whose products are essential to the production of microchips. As a board member, he earns a six-figure salary and holds millions of dollars in stock. The implications of these well-paid gigs won’t dent Burns’s reputation for integrity, because it’s a fact of Washington that corporate money often informs policymaking.
But the potential for future earnings means that someone like Burns has incentives to not upset corporations. “It is a structural problem,” said Luigi Zingales, a professor of entrepreneurship and finance at the University of Chicago. “It’s not because they are corrupt, bad people; it’s because the incentives are there. The real problem is that they don’t understand they are captured in a more subtle way.”
Burns declined an interview request, but there’s enough in his recent media appearances to make observers worry that he will steer foreign policy toward corporate interests. For example, he told CNN earlier this year, “We certainly want to protect American companies from mistreatment by the Chinese companies on subsidies, on dumping, on patent law, on intellectual property.” The White House, the Cohen Group, and Entegris also declined to answer the Prospect’s detailed questions.
Burns’s senior position with the Cohen Group consultancy blurs public service and private-sector work.
Burns climbed to the number three job at the State Department in his 27 years in the Foreign Service. Since retiring, he has taught at Harvard’s Kennedy School of Government. Each year, Harvard professors disclose their outside professional activities and potential conflicts of interest to university administrators. Faculty then publish “certain related outside professional activities” on their profiles. Transparency alone, however, is not enough to deter payouts. Burns shares on his Harvard page that he consults for Goldman Sachs, and has given dozens of paid speeches to corporate groups.
“Academics have a special privilege in society,” said Karthik Ramanna, a professor of business and public policy at the University of Oxford. “We’re expected to be exemplars of integrity in society, and quite frankly we’re not.”
Then there’s the board seat at Entegris, the multibillion-dollar company that produces materials needed to create microchips, the components powering so much everyday technology. Burns briefly mentions it in his Harvard bio, but that doesn’t reveal how deeply entangled he is in the company and the broader industry.
Burns holds almost $5 million in the company’s stock. Entegris brought him on in 2011 and draws on his expertise “in navigating complex regulatory environments throughout the world.” Burns earned about $230,000 in fees and stock options last year, at the same time that he served as an unpaid adviser to the Biden campaign. He also sold 7,590 shares for about $450,000. That’s twice the money he had earned from selling Entegris stock any other year over the past decade, perhaps in anticipation of a high-level appointment.
The work Entegris does has geopolitical reverberations that could present conflicts of interest for Burns as ambassador. Entegris recently committed $200 million to build a microchip factory in Taiwan, and it has other facilities in China and across Asia. In the meantime, a global shortage of microchips is slowing down the production of cars and other items that require the technology. Burns’s financial stake in the very bones of what makes digital products operate could undermine his role as Biden’s envoy in addressing this significant arena of competition with China.
Burns’s senior position with the Cohen Group consultancy also blurs public service and private-sector work. Burns joined the firm just a year after leaving government, and its founder William Cohen, former senator and defense secretary under Bill Clinton, divulged the exciting new hire at a dinner feting the Indian ambassador to Washington. “Nick Burns has a worldwide reputation for intelligence and integrity,” Cohen said in 2009. When the Cohen Group promotes Burns’s services, his name is always accompanied by his previous titles—“former Under Secretary of State for Political Affairs and U.S. Ambassador to NATO and Greece”—solidifying the fact that the firm trades on his experience. A photo of Biden meeting with a Cohen Group consultant is displayed prominently on the firm’s website.
Most relevant to Burns’s next job is that the Cohen Group has two offices in China, to help “companies succeed in the Chinese market.” The firm has assisted biotechnology, agriculture, and nuclear energy companies break into the country. In neighboring India, where Burns has met with senior officials on behalf of the Cohen Group, the firm has advised “top U.S. aerospace and defense primes with their entry into the Indian market.” That means, according to one report, aiding the American weapons maker Lockheed Martin in selling the advanced fighter jet F-35 to India.
“More and more business is going to be done at the intersection of government and business, and so questions of geopolitics, questions of government, questions of how to get things done, are things that we try to focus on at the Cohen Group,” former diplomat Marc Grossman, a vice chairman of the firm, said in a recent webinar.
Economists note that when academics participate in outside corporate work that pays better than their academic posts, it has the knock-on effect of cheapening research endeavors. The problem, experts told me, is deeper and more nefarious than most scholars realize. Last year, Burns co-authored with Grossman a major Harvard study that proposed reforms to the State Department’s Foreign Service. The report catalogued an exhaustive list to update the Foreign Service for the 21st century. Nowhere in the report was there any mention of issues related to public servants profiting in the private sector.
