The Revolving Door and the Appearance of Impropriety
Biden nominees Janet Yellen, Tony Blinken, and Avril Haines are under scrutiny for their financial disclosures.
The POLITICO headline “Janet Yellen made millions in Wall Street, corporate speeches” makes too specific a story that is all too generic. Indeed, the report itself points to that, although not until several paragraphs in.
In the past two years, President-elect Joe Biden’s pick to be Treasury secretary, Janet Yellen, has raked in more than $7.2 million in speaking fees from Wall Street and large corporations including Citi, Goldman Sachs, Google, City National Bank, UBS, Citadel LLC, Barclays, Credit Suisse, Salesforce and more.
Yellen’s financial disclosure is one of three filed by the Biden team at the end of 2020 that could become politically problematic with the left wing of the Democratic Party when confirmation hearings begin in January. A Biden transition official said they filed the forms “mid-week” before the Office of Government Ethics posted the forms late Thursday, New Year’s Eve.
Yellen, the former chair of the Federal Reserve, brought in nearly $1 million giving nine speeches to Citi alone. She earned more than $800,000 speaking to Citadel, a hedge fund founded by the Republican megadonor Ken Griffin. She also spoke to the law and lobbying firm Pillsbury Winthrop Shaw Pittman.
In addition to Yellen, Antony Blinken, Biden’s nominee to be secretary of State, disclosed the clients he advised through WestExec Advisors, the consulting firm he co-founded with other Obama administration alumni. Those clients included the investment giant Blackstone, Bank of America, Facebook, Uber, McKinsey & Company, the Japanese conglomerate SoftBank, the pharmaceutical company Gilead, the investment bank Lazard, Boeing, AT&T, the Royal Bank of Canada, LinkedIn and the venerable Sotheby’s auction house.
The disclosures cracked open WestExec’s closely held client list, which the firm had previously refused to divulge. WestExec has paid Blinken nearly $1.2 million over the past two years, according to the filing, with another estimated $250,000 to $500,000 owed for his work this year.
Blinken has entered into a term sheet to sell his stake in WestExec, which is valued at between $500,000 and $1 million, according to the disclosure. He also plans to divest his stake in WestExec Ventures, a sister venture capital firm, according to the filing. His stake in WestExec Ventures is valued at between $1 million and $5 million.
Biden’s pick to be director of national intelligence, Avril Haines, was also a principal and consultant at WestExec. Haines reported $180,000 in “consulting fees” from Palantir, a data-mining company that has had government contracts with agencies like U.S. Immigration and Customs Enforcement. The Silicon Valley-based company was founded by Peter Thiel, a prominent pro-Trump conservative in the tech world.
Haines’ biography at the Brookings Institute, where she was a non-resident senior fellow, boasted of her Palantir work until this summer, when she began advising the Biden campaign, The Intercept first reported.
Those are the most prominent examples but there are almost certainly more to be had. The bottom line, though, is that officials often cash in—sometimes big—on the connections and influence they gained in relatively low-paying government jobs, which then creates potential conflicts of interest if and when they go back into government.
Indeed, identifying potential conflicts is the whole point of the financial disclosure process and why so many of us were outraged when Trump administration officials failed to fully disclose their conflicts. To say nothing of the larger outrage of Trump and his family members cashing in while they were still holding offices of public trust.
While Yellen is highlighted here—for perfectly understandable reasons given the nature of running Treasury—she’s in one way the least objectionable case. She was 72 when her term as Fed Chair ended two years ago and almost surely never expected to be back in government—both because of her age and because that post is almost always the culmination of a career. Regardless, she’ll be in a position where she’ll likely have to recuse herself from a whole lot of important decisions.
I’m not fully sure what to do about any of this. While I support measures such as those being proposed by Senator Elizabeth Warren to further limit financial transactions by serving officials that may trade on their insider knowledge or create conflicts of interest, it’s trickier to limit how former officials can earn money. I don’t love when the likes of Henry Kissinger or Condi Rice or Tony Blinken set up “consulting” businesses but it’s already challenging enough to get our best and brightest into government service, given the relatively low pay, public scrutiny, and existing limitations. Should we really demand that they refrain from giving speeches? Or go into business in ways that leverage their expertise?
We should ask these people to be honest. Why does Janet Yellen need 7 million? What is she doing with it? Blowing it on a fancy life and huge yachts and the chance to meet someone who is actually interesting? Doubtful. People want a ton of money because they don’t want to play by the rules, and they don’t want their descendants to be forced to play by the rules. And who can blame them? The rules basically suck. So even if you’re worth around 2 or 3 million you can still feel the rules creeping around your feet, which is why people in government need to cash in so quickly no matter how obviously bullshit it is to charge 100K for a speech.
OK, individuals, when out of government, earned a nice living. Though in a world where college football coaches earn incomes in the mid 7 figures and 7 figure annual incomes in many industries is considered chump change, the earnings of Yellen and others is nearly middle class.
The purpose of the disclosures shouldn’t be to eliminate a candidate, but to provide knowledge of potential conflicts of interest. As you point out James, getting talented people to work in government is a challenge when the brightest can likely make 10x as much in the private sector.
NYT has basically the same story up. As James notes, as an exploration of how the system works this is a completely legit story, although perhaps unfair to the named individuals, who were playing the game by the existing rules. James notes that the POLITICO story says the problem is generic, but several paragraphs in. I was complaining yesterday about the inverted pyramid format, in which the marginally interested reader, i.e. most of us, will read that Yellen made a lot of money but never go deep enough to see the exculpation.
The media have column inches to fill and they’ll fill them with whatever “scandals” fall their way. I hope they’ll soon be reduced to whining that Biden wore a tan suit. But it does give the appearance of bothsides. Mnuchin is Wall Street and Yellen gave speeches to Wall Street. Bothsides. (Although I don’t actually recall Mnuchin’s Wall St history getting much coverage. Perhaps an un-newsworthy potential for corruption in the Trump administration.)
I fear the way the world works, the money was laying there to be picked up. They likely had speakers’ bureau and publishers reps at their doors before they left government. It’s unrealistic to expect them to pass it up.
When I hear citizens whine about how professional athletes are not worth the money they are paid I tell the grouches to complain to the team owners who pay out the salaries.
Is this a comparable situation?
What the heck are you talking about? People want money because having money is amazing. It has nothing to do with breaking rules, it has to do with having whatever you want, whenever you want it. I grew up poor slash working class and remained poor and in menial jobs until my mid-thirties. Then I made money. Unless you’ve been poor and then made money, you have no clue just how great it is. It’s like heroin but without the hepatitis.
BTW, in my criming days I probably brought in a total of 30 grand in 1980’s dollars. That was a case of, don’t want to play by the rules. I’ve made a whole hell of a lot more playing by the rules. Playing by the rules has been great for me.
@Modulo Myself: if I could clear $100k for flying first class, expenses paid, to a nice big city, eating at a fine restaurant, expenses paid, staying at the Waldorf, expenses paid, jabbering for an hour, and flying home first class, expenses paid, do you know how many times I’d tell my agent No? Take a guess.
@Michael Reynolds: “Money can’t buy happiness but poverty can’t buy anything.”
Or as my grandpa used to say, “Money can’t buy happiness but it can buy you a nice big boat to park right next to it.”
Also, Yellen cannot demand 100K for a speech, she can only ask. (Actually her speaker’s bureau sets the price, but whatever.) No one is holding a gun to anyone’s head extorting speaking money. In fact, the sponsoring organization sees it as profitable – a big speaker fills more seats. It’s rather like professional sports in that way: the stars make bank for the organization.
What is the thought process behind these complaints? What are these people supposed to do when not in government? Spend four years in the bureaucracy, then go live under an overpass and eat at the soup kitchen?
Look, if people want to be mad at rich people, start where the problem is: CEOs essentially deciding their own salary, perks and options. You’ve got people packing boards of directors with cronies and looting their business. That’s a problem. Janet Yellen giving a speech? That’s way down the list of wealthy people we should be mad at.
To me the most important thing that money buys is absence of fear. When you’re poor you live in fear. It’s not envy that gets you, it’s fear. Lose a muffler and you can’t drive and you lose your job. Get a bad tooth and try to work out how you’re going to get it fixed before it abscesses. Grovel to some scumbag boss because your shitty minimum wage is all you’ve got. And Christ, the fear of parents who are poor is just crushing.
Money doesn’t buy happiness, but it drastically reduces the level of fear.
@Mister Bluster: I don’t see how. In pro sports, there’s a ton of money from both in-person viewing but, especially, media rights. Somebody is going to get it. It may as well be the players.
@Michael Reynolds: I don’t think many people are made at Yellen and company for cashing in so much as concerned about the systemic incentives. If you’ve got a prestige gig making $174k a year, do you really want to piss off the people who will pay you $100k for a one-hour speech? And, if somebody has already given you $100k for a speech, won’t you be more likely to be nice to them?
But it’s probably not reasonable to expect a Janet Yellen to go off to the Brookings Institution or Harvard and continue making a mere upper middle class salary when she can get filthy, stinking rich in the private sector for simply being Janet Yellen.
“Yellen’s financial disclosure is one of three filed by the Biden team at the end of 2020 that could become politically problematic with the left wing of the Democratic Party when confirmation hearings begin in January.”
Possibly, and this is a good thing. My feelings are that Yellen is great pick. For those of us that are skeptical, if they turn up something unknown, and disqualifying, great, but let it be facts, and not political grandstanding. Up to this moment, her accomplishments demonstrate the wisdom of Biden’s choice.
As far as the paid speaking engagements go, I personally wouldn’t feel more confident if investment banks would of only been willing to pay her a couple hundred bucks.
100K is not filthy, stinking rich. Figure 20% minimum to agents and bookers. Of the 80K remaining, she’ll lose at least a third to taxes. So 100 gross = 50 net.
How many speeches can she give at that rate? One a month? More likely half a dozen per year, for a gross of 480K and a net of 300K. Which is very nice, especially if you don’t live in Boston, NYC, Silicon Valley, LA or DC – where 90% of people giving such speeches live – but it’s not rich. Rich is when you don’t have to give speeches. Nor is rich a place you get to by giving speeches.
@James Joyner:..Somebody is going to get it. It may as well be the players.
@Michael Reynolds: You ask “how many speeches can she give…”
Apparently about 3 a month. Reading. It is fundamental–as the saying goes.
Occasionally, I’ll get asked why do I continue to read and comment on this site. This post is an example why. It’s another post by James that filters the right wing message of the day without the blatant racism and misogyny. He makes it more palatable for us rubes.
Reich-wing message of the day
The Biden administration will be the moist corrupt administration evahhhh. Oh yeah, lets focus on the woman as representative of the corruption.
” It’s another post by James that filters the right wing message of the day without the blatant racism and misogyny.”
Just to add on, his message filter also removed baselessly vilifiing perceived enemies, emotional manipulation, or the need for absolute control. Maybe a dunking chair is in order, to find out is if it is really in the spirit that one actually reading it would reasonably conclude.
How do you perceive James Joyner?
I perceive him as a Republican. No different than any other Republican.
It probably depends on the circumstances.
The original condemnations of a “revolving door” were that large numbers of officials, especially in the defence area, moved back and forth between governments posts and defence contactors, with occasional layovers in lobbying firms, “think-tanks”, and congressional staff positions.
The issue being that someone is unlikely to oppose the XF-200 “Flying Sinecure” if that’s where their bread is buttered.
The answer is probably a combination of restrictions on employment, more career posts, closer congressional oversight.
But as to the wider picture of alignment of the governmental elite with other elites: this is inevitable.
I am not aware of any society, anywhere, ever, where the “ruling class” has not endeavored to make itself reasonably comfortable, and therefore to align rather more with the richer than the poorer members of society. At least in the longer run (which, as e.g. the Bolsheviks and Jacobins discovered, can be a remarkably short longer run).
And assuming the rulers are not busy trying to nakedly rob the (richer?) ruled.
Correctives against this are: the law, to restrain egregious self-dealing; democratic politics; division of power; good old hypocrisy. Among others.
The focus should be on outcomes; not the inevitable operation of human nature in the process.
As a frequent reader of OTB, I would perceive
James just as he presents himself, an EX Republican that politically has nothing in common with the party of Trump.
I would go farther, and say that he appears to be a man of admirable integrity, is not hiding a secret agenda, and wouldn’t lie about his political leanings.
Hence no real need for a dunking chair. ;•)
One of the frustrating things I’m going to have to deal with over the next few years are comments like this, a furtherance of the good German theory -Republican variance.
Try a little historical reading. Down Syndrome Teen Stripped of Varsity Letter Jacket
As always with James, he doesn’t have a problem with the policy, just with the methods. Tell me, whats admirable about that.
Don’t forget to read the comments
If you want the entire world to adhere your own standards of righteousness, you may be in for a long wait.
In the meantime, allies are where you find them.
I read your link, then skipped through and focused on James’ comments, and will stick to my earlier assessment.
PS, I hope your allusion of me being a “good German” was in the same spirit as mine, and the dunking chair.
I don’t understand how pointing out that I believe James Joyner is a Republican makes me self-righteous. I know many here seem to forget or ignore that fact, so I just occasionally remind them.
James Joyner is a Republican.
A slight correction.
James is an ally of convenience. You don’t find allies of convenience, they find you, and they use you, as long as its convenient for them. As with most anti-Trumpers, James doesn’t have a problem with the policies and the judges, they have gotten from a Trump presidency. Their problem is with the methods and the impression it has created of the Republican party. They are upset that the genial Reagan face of Republican cruelty has been replaced with the leering Trump smirk of Republican cruelty. Its harder to hide cruelty when its accompanied with a leer.
Caring about the less fortunate, no matter how passionate, is at best. not bad. Now denying ones self to do something about it, is perhaps the very beginning of righteousness, and from my experience, not the goal of the latter
No, I wasn’t calling you a good German. I was saying you were describing James in terms used to describe the German people during the NAZI era. As somehow as if they were separate and not responsible for the horrors done by their government.
It does not make you self righteous.
Just someone, who, like most of us, is a good person in their own opinion.
Which is, generally, a good thing.
More like was, IYAM, but I’m sure Mr Joyner can speak for himself in that regard.
Or for you.
You may need to betray them, for reasons pragmatic, idealistic, or sordid, according to various perspectives.
Can you be so assured that their motives, or reasonings, are so much inferior to yours?
Descriptions like mine are also used quite frequently to describe good Americans with admirable integrity.
No. I think in this case you need to reassess your standards. Good Americans with admirable integrity would not standby while children are locked in cages. None of us are good Americans.
No, I’m not a good person. I’m a kind person, but I’m not a nice person and I’m sure the hell not a good person. However, I do prefer what I am over others who profess to niceness without the covalent kindness.
In this case being called a Republican is more of a descriptive. Here are some questions I ask myself when I label James or others Republicans
– Did they play a part in the rise of the current iteration of the Republican party? yes
– Are they comfortable with the policies implemented by Trump? yes
– Are they comfortable with the judges appointed by Trump? yes
– Have they reassessed their support of Republican policies? no
– Do I believe they will they go back to calling themselves Republicans once it becomes socially acceptable again? yes
If I believe the person I’m discussing meets these criteria, then I believe they are a Republican.
Please no projection, the party more likely to betray an ally is suing to overturn a presidential election. Who hasn’t the Republican party betrayed in their lust for power, they are currently betraying America and our democracy and I fully expect them to be marching in the streets within a generation.
Why, good for you.
May you always be so fortunate.
Good. Kind. Nice.
Adjectives are such ineffable things, are they not?
Well I haven’t advocated for or supported putting children in cages, so yeah I think my motives, and reasonings are superior. And it also probably makes me a kinder, nicer and better person.
– support putting children in cages = bad person
– not support putting children in cages = better person
Its as simple as that.
You’re factually wrong on those two at least, and you’re simply making assumptions about other points.
You can make a case that Joyner was a Republican. But of course he acknowledges that. Joyner now describes himself as an ex-Republican, and you have no basis for challenging that. And since you are in effect calling Joyner a liar, I’d say you need something quite a bit more substantial than what you’ve proposed which is basically bupkis.
Please tell me when has James Joyner disagreed with a Republican policy implemented by Trump, not the method of implementation, not the messaging, but the actual policy?
– Was it any of the tax policies?
– Was it the immigration policies?
– Was it the climate change policies?
– Was it the Interior department policies?
Please point to where he disagrees with any Republican policies so I can apologize.
Sorry, Michael, gotta disagree here. James is clearly horrified by how ugly Republicanism has been revealed to be… but he’s still fine with almost all of its policies. Kids in cages? Maybe not. But essentially every other outcome of Republican governance? Yeah, he’s mostly fine with those. His objections to Trumpism are procedural, not substantive. Or, at least, that has been my take.
I agree with you on this issue, James definitely doesn’t agree this action. However, realize kids in cages is a procedure on the path to implementing Republican immigration policy. So once again, James Joyner disagrees with the method/procedures, but I haven’t seen him disagree with the policy.
Ironically, I left out James Joyner’s specialties.
– Defense policy
– Foreign policy
You think it would be front-of-mind, however since he hasn’t had substantial disagreement with Republican policies it slipped my mind.
“Good Americans with admirable integrity would not standby while children are locked in cages.”
Nor attempt to sow division among people who work with others to bring about tangible change.
Apparently, Yellen was more energetic and in demand than that. From the linked story:
That’s not Jeff Bezos money but it’s pretty damned good. Even in New York, LA, or DC, $3.6 million is a nice living. And one imagines she sat on some corporate boards to help her make ends meet.
Gee, I just realized that I’m old enough to remember when, back when in 2015-16 or so, Hillary was pilloried (so sorry for that) for accepting hundreds of thousands of dollars per speech for giving speeches to folks at Goldman Sachs? Of course Republicans were horrified – Wall Street influence!
Then about a year later Republicans took control of the federal government, and Trump put the usual cadre of Goldman Sachs and other Wall Street types (Mnuchin, Gary Cohn, etc) in Treasury and as economic advisors, etc. Shockingly, a few months later Congress passed a big tax cut give away bill of which 84% of the benefits went to the top 1%.
Republicans just countenanced and enabled the 2017-2020 open sewer of endless corruption, financial conflicts of interest, and burning of the ethics books, so forgive me if I’m not inclined to pretend to be horrified that Janet Yellen DISCLOSED that she made a lot of money giving speeches (that is, unless we find out that she extorted the money from interested parties.)
What policies? Has someone seen an actual policy coming out of the Trump administration?
Off the top of my head Joyner has denounced Trump’s embrace of Proud Boys et al, rejected his border policies, rejected the idea of killing Obamacare, denounced Trump’s handling of Covid, his groveling to the Russians and his refusal to acknowledge that he lost the election. He’s also embraced gender diversity. I don’t recall if he’s taken a stand on higher-flow shower heads.
Republican 2021 is not Republican 2000. Both parties have migrated, the GOP more dramatically. In fact, you’d be doing a public service if you could explain just what the hell Republican means in 2021, because it does not mean what it did even 5 years ago. I’ll be the first to say that GOP circa 1968 onward led us here, (in fact I’ve beaten that drum quite a bit) but I don’t think that means GOP 1968 = GOP 1980 = GOP 2000 = GOP 2021.
We have to allow people to evolve and grow. If in 2020 you voted for Biden, after saying you’ve left the GOP, and that you oppose police thuggery, oppose kids in cages, oppose random destruction of Obamacare, oppose the hollowing out of government, support women’s rights, gay rights, trans rights, voting rights and oppose the current attempt to overthrow American democracy, you don’t look like a Republican to me, or to Donald Trump.
Well, damn, I am in the wrong line of work. Should have stayed in school and studied economics. Who knew?
From what I gather, most of the noise about Janet Yellen’s nomination is coming from the political left. The extent of which, I have no idea. As far as the right goes, I would expect them to oppose Jesus of Nazareth, If he were to make his foretold return, and was nominated by a Democrat to any position.
No. But what I have seen are policies coming out of the Republican Congress that Trump has signed and his administration has implemented.
not a policy
not a policy, a procedure that was used to implement the broader immigration policy
no he didn’t, at first James rejected the idea of killing the ACA (Obamacare) without a replacement plan available. once he realized the Republicans had no plan he rejected the idea of killing the ACA because of the chaos it would create. he never rejected the idea of killing the ACA as a policy. big difference, huuuuge difference
not a policy
almost a policy
not a policy
no he didn’t, he admitted that American society had moved to accepting gender diversity. he still defended certain comments and actions for historical reasons (similar to what he does when it comes to racial issues).
true I haven’t seen his position on this policy, we’ll have to ask him
A lot of wishful projection there Michael. Why don’t you ask James directly what his positions are on the Republican policies implemented since Trump became president?
I’ve never said the Republican party hasn’t changed, in fact I’ve argued the opposite. I’ve argued its changed so much since Bush the lessor got elected (2000) I didn’t understand why the “moderate Republicans” stuck with the crazies. As I said last night, I no longer have patience for the good German -Republican variant– argument, if by this time you call yourself a Republican or in any way support their aberrant actions and policies, you’re not a good person.
Until James Joyner or any recent former Republican comes out and loudly denounces the Republican party, Republican policies and Republican actions I’ll continue to consider them Republicans. Otherwise there really is no difference between James and current Republicans.
It has to be policies and actions, not just procedures and messaging.
You’re accepting as evidence only things which can be defined as policy in an era where no one is making policy as such because we are deep into an essentially emotional reaction to loss of status by whites/males/Christians. So, what policies are you talking about? We covered the border issues. How about the subversion of NATO? Joyner is opposed. How about the trade war with China? Joyner is at very least a skeptic. Are we just down to tax cuts?
The GOP is not in the policy business anymore. Aside from tax cuts, what is Republican policy? I think you’re in the position of fighting the last war. You can make a case (and I’d agree) that Joyner is a pre-Trump Republican, but there is no pre-Trump Republican Party. The party is not what it was, so correctly pointing out that Joyner was a Republican does not mean that label still applies.
As for denouncing: you don’t consider, ‘I quit the party and I’m voting D,’ to be a denunciation? I do. In fact I’d suggest it is the dictionary definition of rejecting party affiliation. I don’t need Joyner to sing kumbaya and call for raising taxes on the rich to accept that he is no longer a Republican. It is pretty clear that the GOP left Joyner, and he left them as a consequence. Ergo: nope, he’s not a Republican. At this point I’d define him as un-partied.
Incidentally, I’ve gone the other way in that the present emergency has driven me deeper into the arms of the Democratic Party. I look forward to a day when I can safely be un-partied.
You have your point of view on this issue and I have mine, I don’t think either of us is going to convince the other to change his mind. We’ll revisit it when the circumstances demand.
I’ll leave you with this thought.
We’re in the midst of a civil war. I think you’re one of the few commenters on this site that truly gets that, however you have a blindspot. We all do. When we respect and like someone we tend to give them the unearned benefit of the doubt, sometimes to our detriment.