Obama Administration's Revolving Door

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Politico

Obama Administration's Revolving Door

by
Kenneth P. Vogel

Candidate Barack Obama repeatedly pledged on the campaign trail that working in his administration would not be “about serving your former employer, your future employer or your bank account.”

But with his administration at its midpoint, a traditional time for personnel turnover, it’s clear that despite Obama’s avowals, a longtime truism of Washington life — that a prestigious-sounding administration post can be a lucrative career enhancer — remains unchanged.

In recent months, officials have quietly left the White House, the Federal Communications Commission, the Federal Highway Administration and the Departments of the Treasury, Commerce and Homeland Security for high-paying gigs on K Street and Wall Street, for top PR firms including the Glover Park Group and VOX Global and to work or lobby for powerful media and telecom companies including Facebook, Comcast, Bloomberg L.P., DirecTV, Sprint Nextel and T-Mobile.

“You haven’t seen this revolving door turning much until recently,” said Chris Jones, a headhunter who runs a company called CapitolWorks that recruits employees for lobbying, public relations, financial services and health care firms from the administration and Capitol Hill.

And with the flow of departures likely to increase, the president’s commitment to halting the revolving door between government and those seeking to influence it is likely to come under scrutiny, as it did early in the Obama administration with the hiring of a slew of lobbyists  and more recently with the departure of Budget Director Peter Orszag for a high-paying job at Citigroup.

On his first day in the White House, Obama announced that all his appointees would be required to sign an ethics pledge barring those who become lobbyists from “lobby[ing] my administration for as long as I am president” and — more broadly, for all former employees, not just lobbyists — “from any attempt to influence your former government colleagues for two years after you leave.”

The pledge, he boasted, “represents a clean break from business as usual” and will “help restore that faith in government” by “clos[ing] the revolving door that lets lobbyists come into government freely and lets them use their time in public service as a way to promote their own interests over the interests of the American people when they leave.”

But, Jones said, lobbying firms and companies with an interest in what happens in Washington haven’t been dissuaded by either the pledge or Obama’s anti-special-interest rhetoric from trying to hire away his aides.

The pledge doesn’t bar outgoing Obama aides from lobbying Congress or from helping employers or clients influence the administration by charting strategy or even supervising lobbyists.

And the fact remains that “the private sector is hungry for senior-level Obama staffers and staffers with specific legislative or policy experience,” particularly in health care, financial services, telecommunications, energy or new media, Jones said.

When Siemens was looking for a new vice president for corporate affairs, for example, a headhunter who competes against Jones targeted Camille Johnston, a veteran Democratic operative and staffer who was working as communications director for first lady Michelle Obama.

Johnston told POLITICO the company, which moved its headquarters to Washington last year, was looking for someone with “Washington experience, not just Obama administration experience.”

But Marc Langendorf, a spokesman for the German company, based in Munich, made clear the Obama experience was important.

“She really did a good job within the White House — that’s why we hired her,” he said in an e-mail. “Camille is doing PR for Siemens — she is not a political adviser nor doing lobbying for us,” he said.

For her job search, Sarah Feinberg— a 33-year-old career congressional and campaign staffer who was leaving her job as an aide to then-Obama chief of staff Rahm Emanuel — retained pricey Washington power lawyer Robert Barnett, who has negotiated book and job deals for the likes of Hillary and Bill Clinton and Sarah Palin.

Feinberg, whose husband is White House communications director Dan Pfeiffer, joined Bloomberg in June, charged with boosting the company’s Washington profile. She wouldn’t comment on her salary.

Colin Crowell, who in June stepped aside as a top aide to Obama FCC Chairman Julius Genachowski, entertained offers with salaries as high as $1 million a year from leading telecommunications companies and lobbying firms seeking to tap the connections and expertise he developed at the FCC and, before that, in 21 years as a congressional staffer.

Though Crowell turned down those offers and, instead, started his own consulting and lobbying shop, he’s still likely to earn substantially more money than he did in his years in government, while leaning on the expertise he developed there.

Since December, he’s registered to lobby for T-Mobile, Cablevision, DirecTV, Earthlink, the Consumer Electronics Association and modem-maker Zoom Telephonics.

“I decided I’d rather be in the position of advancing the policy goals I worked on for over 20 years by choosing issues that I found compelling, being selective about prospective clients and by also including less lucrative work for nonprofits or smaller firms,” he said.

For some Obama appointees who came from the private sector, a return there is natural given the stress of working for the government and the financial hit they took in joining it.

Early last year, for example, Damon Munchus left his post as one of Treasury Secretary Timothy Geithner’s top liaisons to Congress and in March joined the Cypress Group, a financial services lobbying and consulting firm, as an executive.

“It’s unfortunate that the government is not able to pay people the same amount of compensation that they could make in the private sector,” said Munchus, a former investment banker whose young family continued living in New York while he commuted to Washington.

“And what that usually means is that the only people that can afford [to work in the administration] are guys who’ve made just millions and millions of dollars, and they don’t have those concerns. They can live in a hotel, or they can rent a furnished place,” he said.

At Cypress, he registered to lobby Congress on behalf of firms affected by the financial regulatory overhaul on which he worked at Treasury. Lobbying disclosure forms show he’s been part of teams paid at least $470,000 to lobby the Treasury, the White House, Congress and the Securities and Exchange Commission by clients including Citigroup, PricewaterhouseCoopers, Advantage Capital Partners, offshore credit derivative company Primus Guaranty Ltd. and the International Swaps and Derivatives Association.

 

Munchus said when he first decided he was leaving Treasury to return to the financial sector, “I notified our general counsel internally so I was recused from working on certain things, which is how they generally do it.”

Nonetheless, Rep. Brad Miller (D-N.C.), a member of the Financial Services Committee, told The Huffington Post at the time, “This is not a midseason trade in the NBA, where players just change jerseys and play the same way. … There should be at least some kind of cooling-off period.”

No former official’s new job has generated as much controversy as former Office of Management and Budget Director Orszag’s move to Citigroup, which The New York Times Dealbook reported could pay him as much as $3 million a year to “draw on his deep knowledge of public-sector financial issues and his experience overseeing the federal budget to counsel Citi’s clients on various policy actions” and “be something of a corporate rainmaker.”

The move was attacked across the political spectrum, with libertarian commentator Will Wilkinson suggesting that “the revolving door between Washington and Wall Street [is] unseemly” and that “corruption is built right into the interface between our government and our great profit-seeking institutions,” while Washington Post liberal blogger Ezra Klein asserted that moves like Orszag’s “make people trust the government less.”

Though Orszag’s OMB did not play a substantial role in administering the bailouts or crafting the financial regulatory changes that have deeply affected Citi and other big investment banks, several administration officials grumbled privately that Orszag’s Citi gig made the administration look bad.

But Anita Dunn, who served in Obama’s White House as communications directoruntil November 2009, pointed out that Orszag, a respected economics Ph.D. who previously headed the Congressional Budget Office, “wasn’t hired by Citi to influence the federal government — they have scores of lobbyists.”

And she said Orszag’s signing of the ethics pledge means he “actually can’t pick up the phone and call OMB or Treasury about an issue.”

Similarly, Dunn, who left the White House to return to a political consulting firm in which she is a partner, said she doesn’t “contact anyone in the administration on behalf of my clients, period.”

Generally, she said, “the public trust is harmed when a former government official appears to be selling access or influence and leaves the impression that they saw public service as a marketing tool to be used to private-sector advantage. That just isn’t the case with most of the folks I know in this administration.”

Munchus thinks the ethics pledge did deter people who may have considered taking an Obama administration appointment to boost their earning power.

“People who are willing to commit to that pledge probably are not looking to immediately leverage those relationships or that experience into dollars once they leave, so they kind of self-select,” he said, explaining that he’s not making more money now than he did before he joined the administration. 

And, in fact, many Obama appointees have returned to jobs similar or identical to their pre-administration employment (including Dunn and a host of elite academics and prominent Washington lawyers).

 

But others have landed at higher-paying jobs with employers that openly advertise the advantage of having a former Obama official on board.

When lobbyist Kevin Joseph in September hired Chani Wiggins, formerly Homeland Security Secretary Janet Napolitano’s top liaison to Congress, he declared that Wiggins’s “experience as head of congressional affairs at one of the largest departments in the federal government has given her the breadth and depth that few in Washington ever achieve.”

At Joseph’s boutique firm, which focuses on telecommunications, Wiggins, who worked on the Hill on telecomm issues before joining DHS, has been part of teams that have been paid nearly $500,000 to lobby for Comcast, Sprint Nextel, a Time Warner division and other clients.

Then there are others who left prominent jobs in the Obama administration for big-time consulting, public relations or law firms that advise clients on how to navigate Washington and its press corps, without necessarily directly lobbying the government on their behalf.

Corey Ealons and Christina Reynolds, longtime Democratic strategists who handled communications both on the Obama campaign and in the White House, left last year for executive positions with PR firms VOX Global and Glover Park Group (which also lobbies), respectively.

Cliff Rothenstein, a veteran government environmental staffer who took over as the Federal Highway Administration’s top congressional liaison in the early days of the Obama administration, stepped down in October to become a “government affairs adviser” focusing on environmental issues at the massive K & L Gates law and lobbying firm.

Mark Seifert, who last year was a senior adviser at the Department of Commerce, in November left to become a partner in the Washington office of the consulting firm Brunswick Group.

Seifert and Rothenstein were career employees, not political appointees. But Seifert, who was detailed to Commerce from the FCC, crafted the Obama administration’s plan for dispensing $4.7 billion in stimulus money for broadband projects across the country, and he advises Brunswick’s clients on telecomm issues, including broadband.

Seifert, a 16-year government employee, conceded that “having overseen that program was a selling point” for Brunswick that “certainly increased my profile.” But he pointed out that Brunswick doesn’t lobby.

His value to the firm’s clients — a group that includes at least one company that lobbied him at Commerce — is his insight, he said, explaining, “We operate at the intersection of government and business. Any business will tell you that the government has an effect on their business, so understanding how government works is important.”

Overall, the Obama administration has seen “far fewer” officials migrate to Washington’s influence industry than the Bush administration had at a comparable point, said Doug Richardson, a former lobbyist who in the 1990s helped run the Democratic Governors Association.

“We’re Democrats. We don’t have as many places to go,” quipped Richardson, who stepped down late last year as director of public affairs at the White House Office of National Drug Control Policy and accepted an executive post at R&R Partners, a lobbying and public relations firm.

Amie Parnes contributed to this report.

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