Beltway Lobbyists Are Clutching Their Pearls Over Biden’s Ethics Reforms

If the polls are any guide, then change could soon be afoot in Washington, D.C., in the form of an incoming Biden administration tasked with the challenge of rebooting an administrative state that’s been decimated under the Trump administration. It’s likely to be a uniquely daunting and time-consuming endeavor. But some concerns, when it comes to staffing up an executive branch and building a presidential inner circle, are perennial. One such worry involves the revolving door between industry influence-peddlers and the halls of power.

One of the hardest lessons of the Trump era was how quickly corruption can take root when the president of the United States refuses to lead by example. Trump’s inner circle has taken the flouting of ethical norms to gaudy new heights, culminating in a Hatch Act–violating Republican National Convention. Biden, seemingly hyperaware of the need to set a new tone, has promised that his transition team will hew to a higher ethical standard and limit the presence of lobbyists and influence-peddlers.

These are early days, of course, and the Biden team’s commitment has not yet been severely tested. But as you might imagine, as professional Washington prepares for a potential transition to a Joe Biden administration, the usual suspects are clutching their cuff links again at the thought that their fellow elites might have a harder time revolving into government in 2021 as a result of the new strictures that Biden’s transition team seems to be imposing. Locking down the revolving door is a popular cause among popular freshman House Democrats whom actual voters love. But the party’s elite aren’t nearly as affectionate toward this coterie of reformists—and they’re more likely to get an earful from their colleagues in Official Washington’s shadow government about being shut out of plum positions.

Back in August, as liberal groups began to stake out positions on Biden’s potential personnel decisions, those efforts were treated as a severe affront to Washington’s elites. “We can’t all go to think tanks, or into academia, and you wouldn’t want to fill the government entirely with people who came from ivory tower institutions that are detached from the mechanics of Washington,” complained James P. Rubin (a State Department official turned chairman of the Trump-connected lobbying firm Ballard Partners) to The New York Times, which would go on to report that Rubin had, however reluctantly, opted to “terminate his lobbying registrations for a range of clients” to better “ease potential hurdles to joining a Biden administration.”

More recently, this conflict played out on the pages of Politico as an impediment to diversity, with liberal organizations such as the Sunlight Movement cast as being “in direct conflict with the party’s overarching diversity goals” and thwarting the effort to allow “people of color, including those with ties to the financial world, from ascending to key positions long dominated by white males.” The possibility that a diverse array of talented Black candidates for a Biden administration existed beyond the usual clutch of Wall Street firms and K Street shops seemed to be not worthy of consideration.

It takes plenty of ego for someone to think they’re so uniquely brilliant that their talents should outweigh the public’s interests and wishes. But let’s leave that aside for now. The concerns of the Beltway elites is founded on a logic they presume to be unassailable: Surely it is wrong that skillful people may be unable to take jobs where they’d flourish, just because of concerns about their professional history and past obligations. Call it the Tragedy of the False Positive: What happens if locking the revolving door, while blocking plenty of corruption, might also exclude some competent people?

A simple solution suggests itself: Biden can go find other, just as competent people. There. Done. Was that so hard? But if the past is any guide, the process can prove to be difficult, and needlessly so at that.

Biden’s previous stint in the executive branch includes a fairly tawdry example of how badly things can go wrong when the revolving door spins the wrong way. Back in 2015, seven years after Wall Street greed demolished the global economy, an opportunity arose to change the rules of the economic game. The Obama administration had an opening for the number-three job at the Treasury Department—the undersecretary for domestic finance, which manages the Department’s oversight of the banking industry, among other duties. Treasury had no shortage of qualified, public-minded candidates: For instance, Heather McGhee, Nikitra Bailey, Julianne Malveaux, or Tish James. Any of these advocates for the well-being of everyday Americans could have made history as the first Black woman to fill this crucial job.

But the Obama administration had other ideas, endemic to the way Washington has operated for generations. The White House nominated Antonio Weiss, a white guy with no government experience who had spent years raking in millions on Wall Street as chairman of the boutique firm Lazard Frères. As if to remind Weiss where his loyalties lay, Lazard offered him a $21 million severance package should he receive the Treasury job.

All of this incensed Senator Elizabeth Warren. To do the job as intended, Weiss would need to penalize or even help prosecute his former friends on Wall Street, should he find them (inevitably) breaking the rules. In response, Warren led an ultimately successful charge to withhold Weiss’s confirmation in the Senate.

Warren’s intervention elicited outrage from many on Wall Street and inside the Beltway bubble. Bush’s treasury undersecretary turned banking spin doctor, Tony Fratto, fumed that Warren “cowed the Democratic Party into allowing her to be the litmus test for the staff of the president of the United States.” To H. Rodgin Cohen, the lawyer who shielded big banks from prosecutors in 2008, the whole thing smelled of reverse classism: “There are really good people in every walk of life, and I don’t believe in categorizing by profession.” Other Wall Streeters confided anonymously in Politico’s Ben White: Apparently, Weiss “had long been thinking of a career shift, especially in the years since his father passed away. He did some teaching, but became most attracted to the idea of doing policy work in Washington.”

Thousands of people, from all walks of life, are attracted to doing policy work in Washington. The ones who aren’t multimillionaires don’t get offered the Treasury undersecretary position as an entry-level job.

Nevertheless, polite society was incensed. The horror! A multimillionaire banking executive with Yale and Harvard degrees, elite think tank connections, and a former job publishing The Paris Review … and he didn’t get an even more powerful job? Someone actually said the word “no” to him? How will the poor man ever recover?

As it happened, Weiss recovered quite well. Even as his defenders sobbed into sympathetic ears, they knew they’d won the fight, at least as far as policy was concerned. Treasury Secretary Jack Lew appointed Weiss to a new advisory job with similar responsibilities to the undersecretary for domestic finance but which didn’t require Senate confirmation. Lew consoled Weiss, saying “it is a testament to Antonio’s character and commitment to public service that he is willing to serve his country in this capacity.” Yes, it takes a true patriot to wield enormous economic power over the whole planet but without the official job title.

President Trump later used the Weiss workaround as precedent to avoid his own fight with Congress two years later. Thus, the number-three job in the Treasury Department has technically sat unfilled for five years, with its duties fulfilled by democratically unaccountable corporatists who dodged confirmation fights. And all because Wall Street and the Beltway couldn’t bear the thought of an elite-credentialed but unqualified and captured multimillionaire getting told “no” for once in his life. It’s ironic: Many of the same bankers and political operatives relish calling college kids fragile and oversensitive, and spent years telling their parents who lost jobs and savings in the Great Recession to suck it up and pound the pavement.

The Biden transition team is offering some measure of change to the status quo that ran through the Obama and Trump administrations, a comparative breath of fresh air compared to the Trump administration, which is the most corrupt in our nation’s history.

As The Wall Street Journal’s Andrew Restuccia reported in September, the Biden camp pledged to bulk up its safeguards against potential conflicts of interest and other revolving door improprieties. “The rules, which take effect immediately, don’t impose a blanket ban on lobbyists,” Restuccia noted. “Instead, they mandate that individuals who are registered lobbyists, or have registered as lobbyists within the past year, must get approval from the general counsel to serve on the transition team.” But a rule is only as stringent as its enforcer, and in this case, that duty falls to transition general counsel Jessica Hertz, who once served as a BigLaw fixer for corporations in political hot water before going to run regulatory law for Facebook, a famously law-abiding and ethical firm. Does anyone trust a shadow lobbyist to hold the line against shadow lobbying?

But the Biden transition made some questionable choices even earlier. Our organizations raised concerns last month about Jeffrey Zients co-chairing the Biden transition team, despite once calling corporate CEOs the “customers” of Obama-era economic policy. Our criticisms prompted a furious response in The Hill, in which Albert Hunt melodramatically argued “establishing ideological litmus tests for appointments would be politically suicidal.”

But why, exactly? What possible horrible consequence would there be to locking the revolving door, an issue that attracts bipartisan fury and erodes faith in government, which is already at dangerously low levels?

There’s no shortage of brilliant academics, community organizers, public-interest lawyers, local and state officials, and so on who would flourish in the federal government. In fact, appointing them to top jobs over the usual slate of K Streeters, BigLaw lawyers, and corporate executives would produce an executive branch far more representative of the actual country. By definition, if one actually cares about diversity of life experience, geography, educational attainment, race, and socioeconomic class, one must look beyond the usual suspects. These appointees would apply fresh perspectives and bring the creative ideas that every candidate promises, but few ever deliver.

Likewise, the prior experiences of many corporate elites rarely have much to do with the managerial skills and institutional knowledge required to run the government. Imagine if, upon committing to a career change, Weiss had applied to be a mid-level manager at, say, the Transportation Department. He could push papers for a few years, learn the ins and outs of the federal bureaucracy, and support himself on a comfortable, middle-class salary (and his generous Wall Street nest egg). Maybe, if he had a taste and talent for it, he could then try to net a major appointment. This is the way people without Weiss’s connections are forced to enter the halls of power and earn their keep—but the revolving door lets others bypass things like experience and qualification.

Wouldn’t the best qualification for running a component of the federal government be a lifetime of experience in the federal government? Just because a CEO has experience being treated by a dentist does not make them qualified to be a dentist; why would being regulated by an agency qualify a CEO to be a regulator?

Were Biden to seal the revolving door shut, the “victims” of such a move would suffer no worse punishment than simply being consigned to a life most of their countrymen can only dream about: one of considerable influence and, often, tremendous affluence. They are corporate lawyers, lobbyists, business executives, and corporate-funded think-tankers. They will be perfectly fine. They’ll know, and be able to influence, many people in government. And they’ll surely find plenty of opportunities elsewhere in the private sector. The only burden they would carry is one with which most Americans have more than a passing familiarity: getting rejected for a job they wanted.

That is not a historic injustice. That is life.

Let’s drop the pretense: Opponents of stronger ethics rules don’t actually believe they would lead to a significantly worse government. Many even acknowledge these rules work in general but worry about specific individuals being “unjustly” denied an appointment they deem rightfully theirs. What specific right entitles them to power is a question these types never want to answer.

Strong ethics rules would make the next rung of their personal career ladders, or the career ladders of their friends and colleagues, much harder to climb. There are those, too, who oppose stricter measures for purely tactical reasons—if Biden makes it harder for corporate America to corrupt the government, then that makes life harder if you are a member of corporate America who wants to corrupt the government.

But there is no good-faith case against stronger ethics rules. Despite what some tell themselves at night, no CEO or Beltway insider is so uniquely dazzling that their personal appointment to a Cabinet post is the one thing that will save us from apocalypse. No one is entitled to run the country. If you think that you are, that’s a sure sign that you shouldn’t.