Tag: lobbyist
Trump’s Watered-Down Ethics Rules Allow Lobbyists To Run The Swamp

Trump’s Watered-Down Ethics Rules Allow Lobbyists To Run The Swamp

Reprinted with permission from ProPublica.

Geoff Burr spent much of the last decade as the chief lobbyist for a powerful construction industry trade group. Burr sought to influence a host of regulations of the Department of Labor, opposing wage standards for federal construction contracts, and working against an effort to limit workers’ exposure to dangerous silica dust.

In the Obama administration, someone like Burr would have been barred by ethics rules from taking a job at an agency that he had lobbied.

In the Trump administration, Burr now has a top job at the Labor Department.

Burr is the first publicly known example of a former lobbyist who was able to take a job in the government as a result of President Donald Trump’s watering down of ethics rules in place during the Obama administration.

As a candidate, Trump regularly railed against lobbyists and led crowds in chants of “Drain the swamp!” But as president, Trump last month signed an executive order that weakened significant aspects of the Obama ethics policy, including scrapping a ban on lobbyists joining agencies they had recently lobbied.

Ethics experts say Burr’s hiring is a troubling example of how the new administration has greased the revolving door.

“A lobbyist like Burr may de-register on Monday and enter the Trump Administration on Tuesday,” said Craig Holman of the watchdog group Public Citizen. “The very same agency Burr has been lobbying as a hired gun is now Burr’s to help run. This is a grave problem for the public because the agency may well represent the special interest rather than the public interest.”

It also raises questions about ambiguous language in the Trump executive order.

Instead of banning lobbyists from working at agencies they lobbied, the Trump pledge, which has to be signed by all executive appointees, imposes restrictions on what such officials can work on. Specifically, it says they cannot “participate in any particular matter on which I lobbied … or participate in the specific issue area in which that particular matter falls.”

Ethics lawyers are now puzzling over what exactly that language means.

That task is made more confusing because of an apparent error in the Trump executive order: It says the phrase “particular matter” has the “same meaning as set forth in section 207 of title 28, United States Code.”

That part of the U.S. code does not exist.

There is a definition for that term in section 207 of title 18. (The error is doubly strange because much of the Trump executive order was copied word for word from an earlier Obama order. The White House didn’t respond to a request for comment.)

While it was cited incorrectly, the phrase “particular matter” does have a clear legal meaning, which has been detailed by the Office of Government Ethics.

Another phrase in the Trump order, “specific issue area,” was also used in the Obama order but its meaning is unclear.

“It is not defined in the Trump pledge. There’s uncertainty within the government and outside the government about what that particular term means,” said Robert Walker, an ethics lawyer at Wiley Rein in Washington. “The same lack of clarity was a problem with the Obama pledge in this area.”

Because the Obama pledge included a blanket ban on lobbyists joining agencies they recently lobbied, the ambiguity of the restrictions on what lobbyists could do was less urgent.

The Obama administration was criticized for issuing a handful of waivers to allow former lobbyists to join the administration, thus skirting its own lobbyist ban. Out of thousands of appointees, there were five such waivers over the course of the Obama administration. None were at the Department of Labor.

Because Trump weakened the Obama rules, he won’t have to issue waivers in such situations. But if Trump issues a waiver allowing, say, a former lobbyist to work directly on issues that he lobbied on, we may not even find out about it: The executive order removed the mechanism for public disclosure of such waivers.

In the case of a former lobbyist like Burr, who worked at the Associated Builders and Contractors, there was a consultation with a Labor Department ethics lawyer. “If recusals were deemed to be necessary, it’s likely that there would be some documentation of the contours of those recusals,” Walker said.

Department of Labor spokeswoman Jillian Rogers declined to detail how Burr will comply with the ethics order. She offered the following statement:

“Mr. Burr has signed the Ethics Pledge and received a full ethics briefing on his first full day at the Department. He has been in frequent consultation with the DOL Ethics officer to ensure he is fully compliant with all ethical obligations in his role at the Department.”

Enforcement of the Trump’s ethics rules will also be at the discretion of the administration, as it was with the Obama order.

Whether Burr’s work at the Labor Department will be significantly limited by the president’s ethics rules depends on how the administration interprets the order.

Burr is now a member of the so-called beachhead team at the agency and is reportedly in line to be chief of staff to Labor Secretary nominee Andrew Puzder.

That role is shaped by each labor secretary’s needs, according to Seema Nanda, who was chief of staff through January 20 of this year.

Under Obama Labor Secretary Tom Perez “anything significant that is happening in the department or anything that is a change in policy you are discussing as chief of staff,” Nanda told ProPublica.

That includes reviewing documents that need the secretary’s signature, such as new regulations, reports to Congress, or letters.

The chief of staff and his or her deputies “regularly meet with the agency heads to see what they’re thinking about. You are really going over in depth what each agency is working on.”

IMAGE: Alex Proimos / Flickr

Swamp-Dweller: Trump’s Financial Policy Advisor A Longtime Lobbyist

Swamp-Dweller: Trump’s Financial Policy Advisor A Longtime Lobbyist

Reprinted with permission from ProPublica.

President-elect Donald Trump’s transition-team adviser on financial policies and appointments, Paul Atkins, has been depicted as an ideological advocate of small government. But the ways that the Trump administration and Congressional Republicans are likely to approach financial deregulation could serve Atkins’ wallet as well as his political agenda. Like Trump himself, Atkins himself faces potential conflicts between his business dealings and his public role.

In 2009, a year after he finished his term as a Republican member of the Securities and Exchange Commission, Atkins formed Patomak Global Partners, a consulting firm headquartered on 17th Street, nestled blocks from the Hay-Adams Hotel and the south lawn of the White House. While Trump promised to “drain the swamp” of Washington, Atkins’ environs could not get any swampier. Patomak’s president is Daniel Gallagher, also a right-leaning former SEC commissioner who might be a candidate for SEC chairman under Trump. Former high-level government officials populate Patomak’s ranks.

Patomak has thrived as financial firms tried to navigate the new world of post-crisis regulations. Patomak and its counterparts, like Promontory Financial Group, are not technically lobbyists, but they exploit their connections to regulators to help their clients — banks and other financial institutions — navigate the rules. (Such consulting firms say they help clients comply with, not circumvent, the rules. A Patomak spokeswoman did not respond to a request for comment.)

The firms stand as emblems of the Washington revolving door. Banks pay a premium to former high-level regulators, valuing them for their contacts at the regulatory agencies. Stacked with Republicans, Patomak is well positioned to benefit from the new power structure in Washington. “They have better lines of communications with those in power. They are better able to see and understand what is coming down the pike,” says one former high-ranking regulator who now works for a hedge fund.

Under a court order last month, Atkins and his firm are now monitoring Deutsche Bank’s agreement with the Commodities Futures Trading Commission to properly oversee and disclose its derivatives trading. Separately, Deutsche Bank is negotiating with the Department of Justice over the size of its fine to settle mortgage related misdeeds. Donald Trump has outstanding loans from Deutsche Bank. These inter-connections raise a host of conflict of interest issues. Will Patomak monitor Deutsche Bank vigilantly? Will financial regulators, perhaps appointed by Trump on Atkins’ recommendation, be inclined to soften their regulatory stance on Deutsche Bank in exchange for business favors to the Trump empire?

Wall Street is thrilled about the incoming Trump administration. Bank stocks are soaring. Atkins, who is overseeing the appointees to the independent financial regulators like the SEC and the Federal Deposit Insurance Corporation, will be able to help shape the Trump Administration approach to financial regulation. But just what does that vision entail? Or, among the disparate groups vying for influence, whose ideas will win out?

There seem to be three tribes in the Trump financial regulatory coalition: ideologues, Wall Streeters and populists.

Atkins belongs to the first tribe. “I think of him as more libertarian than conservative,” says Simon Lorne, the former general counsel for the SEC, who worked with Atkins in the Clinton Administration.

In testimony last year to the House Financial Services Committee, Atkins opened by approvingly quoting Friedrich Hayek, the Austrian economist and philosopher beloved by libertarians. Hayek, Atkins explained, identified the “fatal conceit”: the idea that “man is able to shape the world around him according to his wishes.”

Governments, in Atkins’ view, share this hubristic notion. When they try to corral capital markets to prevent exploitative or risky behavior, they end up hurting the economy. Since the financial crisis, Atkins has been a part of the steady assault on Dodd Frank.

“The real tragedy — or inconvenient truth — behind Dodd-Frank and the hundreds of other rules flowing from Washington every year is that consumers, investors, and small business are harmed the most,” he told Congress in May.

But as the existence of Patomak demonstrates, even ideologues find the regulatory state lucrative.

Meanwhile, the Wall Street crowd appears to have a seat at the table. Steve Mnuchin, the former Goldman Sachs partner who was the Trump campaign’s national finance chairman, is a possible Treasury secretary.

The third tribe, in theory, is the populists. Trump campaigned with a populist message but they have no representatives on regulatory transition team or among the rumored appointees. Steve Bannon, Trump’s chief political strategist and a former Goldman Sachs partner, has criticized the 2008 bank bail-out, and the Republican platform called for breaking up the big banks. But few expect anything resembling that.

Experts say the GOP isn’t likely to repeal Dodd Frank wholesale. Instead, they will likely chip away at it, opening up loopholes. Some changes will come from Congress, others from inside the regulatory bodies themselves. Many “elements can be dismantled in back rooms,” says Marcus Stanley, policy director of the consumer group Americans for Financial Reform.

Instead of shuttering the Consumer Financial Protection Bureau, the GOP-controlled Congress may change its leadership structure, shift its source of funding, and shave its budget. Instead of repealing the Volcker Rule, which prohibits banks from trading for their own account, regulators may widen the number of trades that fall outside the definition. Legislators have floated proposals to loosen derivatives trading rules. They aspire to weaken the Financial Stability Oversight Council. Congress will likely continue to trim the budgets for the SEC and the CFTC and reverse rules extending fiduciary standards to new classes of financial advisors.

Such moves diminish Republican vulnerability to Democratic attacks that a repeal of Dodd Frank is a gift to Wall Street. Maintaining a sprawling kudzu of arcane rules and regulations preserves the necessity of specialists in the art of navigating the bramble of the swamp. Including firms like Patomak.

IMAGE: U.S. Securities and Exchange Commissioner Paul Atkins speaks during an interview with Reuters at the U.S. Embassy in central London March 10, 2008. REUTERS/Alessia Pierdomenico/File Photo