Attending the National Press Club for Senator Elizabeth Warren’s impassioned speech on corruption, my mind drifted to a tequila-inspired phone call I made to Chris Matthews.
It was during the Mondale/Reagan campaign, when Matthews was chief of staff to House Speaker Tip “All politics is local” O’Neill. Matthews was phenomenally gracious, given that he didn’t know me from Adam, I woke him at midnight and my lubricated exasperation fell short of diplomatic grace. “Sorry to disturb you, Mr. Matthews, but WHY the hell aren’t the Democrats hammering Reagan on corruption, all the scandals floating about his administration?” Matthews sighed and politely accepted my frustration. He explained that while corruption abounded, voters just didn’t care that much about the issue. There’s only so much time, so the Democrats focused elsewhere. I protested that if the arguments on corruption were properly articulated the public might care. Voter response might surprise. And what did the campaign have to lose? Matthews continued to patiently wrangle his unknown assailant, explaining it just wasn’t in the cards. It had been considered but it had been decided it wouldn’t bear fruit.
In addition to this belated apology for that marauding phone call, I will forever award Matthews a point for restraint for not telling me to go to hell and slamming down the phone, one of the vanishing pleasures of now-endangered land lines. We don’t need no stink’n emojis. Perhaps that’s one of the reasons I’ve never had a cell phone. It can’t properly communicate stellar indignation. Indignation of the type we should all feel at the culture of corruption Warren ably describes.
Perhaps part of the 1984 reticence on calling the Reagan Administration out for corruption was worry over the kettle calling the pot black. Plenty of corruption to go around, as Senator Warren acknowledged when asked to name offending Democrats. Mary Jo White, President Obama’s head of the Securities and Exchange Commission, quickly came to Warren’s mind. As might have Eric Holder, Obama’s Attorney General, one of the most grievous of the Obama Administration’s many denizens of the revolving door. I’m stunned Holder’s making noises about running for President. More likely he’ll be running from pitchforks and torches with the rest of the Wall Street horde after the next financial sector debacle that White, Holder and the other enablers methodically set the world up for as they profitably whittle away bank accountability.
For the not-so-guilty pleasure of hearing Warren rattle off the public servant disgrace that is Mary Jo White, you can watch the video of the Q.&A. and the rest of the preceding speech here.
Do a search on Mary Jo White at one of my favorite sites, Wall Street on Parade. Do the same for Eric Holder. The essays are short and succinct. It won’t take many to get the gist on how both put the fix in for banks and why it’s squarely in line with the corrupt culture Warren is calling out. While there, glance about the site for insights on how the next financial debacle is coming together. For Congressional duplicity and complicity, catch David Dayen’s piece in The Intercept on bipartisan bank deregulation. His most recent takes measure of Tom Carper’s forty years as a bank-captured Delaware Congressman, Governor and now Senator, and what that has wrought, including his major contributions to the 2008 financial debacle, and the dangers his actions as a bank operative continue to expose us to. Dayen makes the excellent point that although the credit card industry is big in Delaware, the economic gains to the state fall quite short of the serious damage deregulation and sweetheart bills for the credit card companies have inflicted on many Delaware citizens, as well as the rest of the country. His Senate primary is coming down the pike. Carper is proof we have the best Congress money can buy.
And not just Congress. It would be a terrible injustice to the many public servants serious about serving the public’s best interests to imply they are all looking for an opportune moment to sell out. But the reality behind Warren’s proposals is that Washington has become a magnet for people who will say and do anything for money. There are people who entered government, even run for Congress, with the main motive of drifting to more lucrative work in the private sector. They are easily manipulated by those who can purchase the levers of influence. A sort of appendage has been spliced off the military/industrial complex. A fundraising/lobbying/legal/public relations complex has evolved. Throw in some think tanks. This complex is not interested in backing candidates who aren’t about the business of feeding it.
Warren is correct when she speaks of corruption as a culture. It’s become so normalized that for some the revolving door is now regarded as a top drawer entitlement. Their sellout begins while they are supposedly serving the public, as pleasing those for whom they really wish to work is their ticket to ride. No matter how educated or clever they are, their main skill set is devoted to tilting the playing field for the upper crust.
And what is it the upper crust want when they fuel campaigns and spin the revolving door?
They want more. Here’s a snapshot of some hearts’ desires during the 2012 campaign for President.
Nothing fuels America’s wealth gap faster than the purchase of government at all levels. Warren is right to include the Judiciary in government’s vulnerability to what she refers to as a creeping cancer. As Warren’s focus is Federal, she doesn’t include state judiciaries, but in many of them, the big players are able to put the fix in. State courts are often the farm teams for the Federal judiciary. Read about it here, and consider what it means when the little guy loses confidence in our legal system.
Whether or not Matthews was right (probably) in 1984 about corruption not being a big issue for Americans, it is now. Indignation at corruption percolates like the witches’ cauldron in Macbeth. Alas, a con artist successfully presented himself as indignation’s purest expression. After he persuaded enough people to use him as their middle finger to Washington, he pays the country back riding roughshod over it with galloping venality. I bet more people would have preferred Bernie, an authentic reformer, as their middle finger to Washington. Despite Republican roadblocks in Congress, he would have shaken things up but spared us all the time bombs El Presidente continues to set ticking.
To my mind, corruption’s gold standard is Neil Gorsuch. When Senator Sheldon Whitehouse grilled him over who was behind the seven million in dark money keeping Merrick Garland off the Supreme Court and the same crowd spending ten million more pushing to land Gorsuch on it, and what it was these masked titans of influence wanted for such a big ticket item, Gorsuch played coy. “You’d have to ask them,” replied Gorsuch, under oath, adding that if Congress wanted such transparency, they should pass a law requiring it. We’re expected to put up with the fiction that a savvy pol like Gorsuch didn’t know who his covert benefactors were or what they seek. In a sane world, bipartisan Senate outrage would have bounced Gorsuch out the window. Instead, the normalization of corruption carried the day for him. Videos of Whitehouse’s questioning can be accessed here. The mantra for every Senator questioning Gorsuch should have been, “Judge Gorsuch, are you stating under oath that you have absolutely no idea of who is giving any of the dark money backing you. Do you understand the consequences if we find out that isn’t true?”
Naysayers are dismissing Warren’s proposals. Paul Miller of the National Institute for Lobbying and Ethics, a trade group for lobbyists, told Politico “We are now entering election crazy time…most of this is going to be unconstitutional.”
So prepare to watch Washington insiders distort the constitutional right to petition the government into the right to purchase elected officials and their staffs.
I think much of Warren’s bill would pass legal muster. Meanwhile there is nothing unconstitutional about candidates for President pledging to abide by such reforms in their administrations and voters voting them in, and out if they don’t follow through. There’s nothing unconstitutional about candidates for Congress pledging likewise.
At the least, Warren’s proposals should prompt an overdue examination of what it means to be a public servant. Something short of a new priesthood or a vow of poverty. But Warren points out we could sweeten the pie for those toiling for the public. One thing is certain, it would be much cheaper than the price we pay for government actions and expenditures that happen not because they make sense but because the fix is in. Clean up government and government will better attract quality people.
There is no end of talented and ethical people in this country, from academia or wherever, we don’t need to run to the usual power players to staff top government positions. Arguments for bringing big shots from Wall Street and industry through the revolving door to run government and then allow them to return are second cousins to the argument for taxpayers needing to pay bonuses to Wall Street masters of the universe so the big banks can retain the geniuses who brought us the 2008 financial meltdown.
Cynicism is easy to come by. Almost 25 years ago I wrote an essay for the Christian Science Monitor, The Low Art of the Thinly Disguised Bribe. It was a pitch for public financing for campaigns, but most of the points I made could fit as the shadow to Senator Warren’s pitch for her bill. In Washington, the more things change the more they stay the same. Unless they get worse.
But before throwing Warren’s effort into the bin labeled Screaming Snowballs Running Through Hell, remember it took Bernie a while to knock off the rough edges and hit his stride. Bernie’s now changed the whole conversation over national priorities and what is doable. Voters who tune in are better able to voice their angst over the direction of the country, not just flail about in frustration. Bernie’s loosened the establishment death grip on the Democratic party enough that there’s real hope the most realistic shot at reform is not starting a party from scratch, but retooling the Democratic Party.
View Warren’s effort the same way. She is ably articulating the damage to the country and seeding serious discussion on solutions once dismissed by know-it-all insiders as pie in the sky. Not so much now, at least outside the vested Beltway crowd. Much of the country now understands we are up against it, from climate to health care to financial calamities to quagmires in the far flung, all to benefit those able pull levers of power the rest of us can’t until the rules change. It took time, but the NRA’s lethal tomfoolery beat the original meaning of the 2nd Amendment into nonsense. So why can’t Warren put a drumbeat to legitimate ideas that might rescue democracy from plutocracy? Thoughtful people understand that success for most measures won’t fly in with the morning sun. Choice reforms can still be taken up by progressive candidates and amplified so that the public comes to demand the most doable changes, dumping elected officials who only give lip service to reform.
The most important and biggest challenge in Warren’s proposals is dismantling the revolving door.
Warren’s common sense measures include a lifetime ban on lobbying by Presidents, Vice Presidents, Members of Congress, federal judges, and cabinet secretaries. It would impose multi-year bans on other federal employees from lobbying their former office, prohibit current lobbyists from taking government jobs for two years after lobbying, six years for corporate lobbyists. Public waivers in the national interest are allowed for non-corporate lobbyists only. The bill would ban hiring of corporate leaders whose companies broke federal law in the prior six years. It blocks federal contractor employees from working at the agency that awarded them contracts or licenses for four years.
The bill would ban golden parachutes that provide corporate bonuses to executives for federal service. Warren points out that Goldman Sachs gave Gary Cohn over a quarter of a billion as he slid into the Trump administration, after which he engineered the time bomb of the massive tax cut mostly enjoyed by the rich. Such parachutes always beg the question of which comes first, the quid or the quo.
Congressional votes on banning members of Congress from becoming lobbyists will rapidly sort which members are keepers.
However, perhaps an adjustment is in order, maybe relaxing the life-time ban to just include corporate clients or groups representing corporations, with a several year cool-off before representing non-profits. I know, slippery slope. As Warren points out, salaries and benefits for members of Congress can be increased. And one hopes we send people to Congress capable of returning to other gainful employment than lobbying.
If you get to know some whistleblowers, that revolving door often comes up. Let’s go back to the SEC. After an admirable legal career Gary Aguirre determined to become a public servant at the SEC. He was the lead investigator on an insider trading case and sought to subpoena John Mack, a Wall Street giant. The agency told him Mack, a major contributor to George W. Bush, had too much political clout. Aguirre tried to pursue it. Aguirre was canned. Eventually vindicated and years later awarded a settlement from the SEC, Aguirre now specializes in representing SEC whistleblowers.
I used to write letters from Washington explaining our dysfunction to an international legal crowd. Attempting a column on the SEC, I asked Aguirre what might be done with the agency. He wrote me the following:
Skip:
In a nutshell, the SEC as one overarching flaw that prevents it from achieving its mission: “The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.”
That flaw is the revolving door between the SEC’s leadership and Wall Street. It is the reason the SEC created the environment that delivered the financial crisis. It is the reason the SEC failed to prosecute those responsible for the financial crisis. It is the reason that the SEC has created a phony crackdown on Wall Street (the insider trading crackdown) rather than an authentic crackdown on the Wall Street elite responsible for the crisis.
After Ferdinand Pecora conducted an investigation of the causes of the 1929 crash and its aftermath, Congress enacted the Securities Exchange Act, which created the SEC. Pecora intended for the SEC to be the cop on the corner of Wall Street. That cop has been compromised for some time. It has been compromised by its leadership which look forward to the day when they leave their $200,000 year jobs with the SEC for their 5 million a year jobs with Wall Street banks or the law firms that represent them, e.g., former Enforcement Director Robert Khuzami.
The other issues with the SEC are minutiae.
Regards,
It’s worth another search at Wall Street on Parade, on Robert Khuzami, a master of the revolving door. A Deutsche Bank whistleblower I spoke with is something less than a fan and his story is quite an intrigue, but time grows short. You can read an account of Eric Ben-Artzi’s adventure with Khuzami here. In addition to being a partner in a law firm servicing Wall Street, Khuzami directed enforcement for the SEC, and became general counsel of Deutsche Bank AG. Spin and spin again, he’s now Deputy US Attorney for the Southern District of New York (Wall Street). Cue the Church Lady: How convenient!
My hat’s off to Senator Warren for any effort she makes taking on the infernal revolving door before it brings down the country. Again.
Howie’s earlier synopsis of and comment on Warren’s proposals
Prepared text of Senator Warren’s speech at the National Press Club
Text of the proposed Anti-Corruption and Public Integrity Act
A bit more on the revolving door, with a Manafort angle
Growing up in Kansas, Skip Kaltenheuser was tuned to travel by a traveling salesman father’s pedal to the metal vacations. He extended his reach with travel writing, and efforts such as supervising elections and doing special projects. When they’re willing to slum with him, Skip’s favorite travels are still with one or both kids, now young adults, neither indicted despite living in Washington, DC their entire lives.
