As Washington lobbyists prepare for a new era, one expert on the influence industry spoke to MarketWatch this week about President Donald Trump’s time in office and President-elect Joe Biden’s incoming administration.
Jeff Hauser, founder and executive director of the Revolving Door Project, shared his concerns about the CARES Act, the coronavirus aid package that the federal government delivered in March, including what the law has meant for Amazon’s CEO and one vaccine developer’s intellectual property. Hauser also expressed worries about former lobbyists who are slated to work closely with Biden in the White House, such as Steve Ricchetti, who serving as a designated counselor to the president-elect.
The Revolving Door Project, part of the left-leaning Center for Economic and Policy Research, describes itself as providing scrutiny of executive-branch appointees to “ensure they use their office to serve the broad public interest, rather than to entrench corporate power or seek personal advancement.” The term “revolving door” refers to people switching between government positions such as regulatory jobs and private-sector work such as lobbying.
The Q&A below has been edited for clarity and length.
MarketWatch: OpenSecrets.org data show that spending on Washington lobbying rose to a record in 2019, and 2020’s total is likely to be high. Do you think Trump drained the swamp in any way?
Hauser: Absolutely not. He just reframed what the concept “swamp” meant, and “swamp” meant people who might get in the way of what Trump and his friends wanted to have happen. Swamp used to mean the idea that in Washington, money had excess of influence. He turned it on its head to mean that people who stood in the way of what money wanted were the swamp.
If you were an environmental scientist at the EPA, and you stood in the way of relaxing standards for emissions into drinking water, you were part of the swamp. So he fought the swamp by his definition, which bore no relationship to previous understandings.
MarketWatch: On revolving-door issues, what kind of grade would you give the Trump administration, ranging from an A+ to an F?
Hauser: I think it’s an F. I think that nothing embodies the grade that Trump deserves better than how he has empowered people like Alex Azar over people like Anthony Fauci. Alex Azar is literally a lobbyist turned cabinet secretary, and people like Azar have been empowered, while dedicated public servants, scientists like Anthony Fauci, have been sidelined.
The other paradigmatic example to me is the U.S. Postal Service, where Louis DeJoy bought his way into a senior position and has been destroying the effectiveness of the U.S. Postal Service despite the heroic efforts of the public servants who make up the ranks of the Postal Service.
MarketWatch: Looking back on the coronavirus crisis so far, how much do you think social-distancing measures have shaken up lobbying?
Hauser: Effective lobbyists can evolve. I guess the ability to put a meal on an expense account has declined in value — to the extent to which people take the science seriously. Of course, many figures don’t, especially in the Republican Party, so I suspect that diminution is less there. Lobbyists often are playing the long game with the people who they lobby, and people who are most open to being lobbied are also playing a long game.
It probably makes developing new relationships more difficult, but it’s probably largely unchanged in terms of how it goes on. And the greater fluidity in federal policy — be it at the executive level, or in the CARES Act and any potential future legislation — I think just increases the demand for lobbying.
There’s just so much government policy that’s in flux, that you might want to influence via a lobbyist. So in net, COVID-19’s probably played out well for lobbyists, even as there are challenges.
MarketWatch: As a watchdog, what have been your top concerns related to the coronavirus crisis?
Hauser: I’d say the No. 1 thing is the long-term economic implications in an economy already marked by consolidation. The nature of the pandemic and the CARES Act response empower big business over genuinely small business. And that’s going to have an enormous impact, generally, on the economy, and particularly on small businesses and people of color. The more retail and family owned restaurants go by the wayside, and eventually get replaced by Amazon and restaurant chains, that’s going to be bad for all sorts of Black, Latino, Asian-American restaurant owners and the like. There’s going to be a real disparate impact, where people like Jeff Bezos get richer and a lot of people get poorer.
I’m also worried about the fact that you’re potentially seeing Moderna able to convert R&D funding from the U.S. government into a patent monopoly, which is bad. Those are probably two of the public-policy issues that come front and center — anti-monopoly and related intellectual property issue.
MarketWatch: What do you think Biden has gotten right so far in terms of whether or not his administration includes lobbyists?
Hauser: I think the grade would be incomplete as of now. We await with real curiosity what the Biden Day One ethics order is going to look like. Obama had the best ever in 2009. Trump’s was not as good, but better than expected in 2017, and then just was never implemented in a meaningful way. So what what Biden chooses to do on his Day One lobbying and ethics executive order will be really interesting.
He is definitely not averse to lobbyists being in his midst, if you look at Steve Ricchetti, and that’s worrisome.
[Ricchetti’s brother was hired this year to lobby for pharmaceutical firms, prompting some political observers to suggest the adviser may have to recuse himself from some of Biden’s key initiatives.]
MarketWatch: Besides Ricchetti, are there other people that you and other watchdogs are concerned about? Connections to defense contractors have been one hot topic.
Hauser: We’re concerned about people who never registered as lobbyists, but who should be understood to be Washington, D.C.-based influence brokers — people who take their understanding of government and relationships with people in politics and sell them to Corporate America.
The greatest concern in that regard is Jessica Hertz, who is the general counsel for the Biden transition. She was through June the director of regulatory affairs for Facebook and bizarrely, that is not a position that comes with a lobbying registration, even as obviously her job was to lighten the touch of Washington on Big Tech generally and Facebook specifically.
MarketWatch: Could you elaborate on why you’re concerned about people like her? What would you say to people who think folks with business experience can be an asset to an administration?
Hauser: If you chose to go to Facebook in 2018, after the Cambridge Analytica scandal, after so much about the role of Facebook and misinformation was broadly understood, that means you’re OK with that company. Jessica Hertz is a brilliant lawyer with an incredible array of career options before she chose Facebook, and I think that reveals a lot about how she sees the world.
And I think it’s very hard to go from having such a positive view about Facebook, its business model and its impact on our democracy, and invert that in government. I mean if you think Facebook is a fundamentally decent institution that ought to exist in roughly the same way it exists now, you’re unlikely to support breaking Facebook up into lots of little pieces, which is honestly speaking, the mainstream Democratic Party view. And so I see a figure like Jessica Hertz as getting in the way of the consensus that the House Judiciary Antitrust Subcommittee revealed to be the Democratic Party’s position on the Big Tech companies.
MarketWatch: So it’s still early, but if you were to give Biden a grade on how he’s doing so far, what would it be? An incomplete? Maybe a C+?
Hauser: I feel like Biden’s ideology has moved to the left, but his comfort level with standard operating procedure in Washington is really high. So on issues of lobbying and corporate influence, I’d probably give him a C or C+ as of now, with room for improvement should he issue a strong ethics order on Day One.
MarketWatch: Have you seen anything from Biden so far that you think has been better than expected or that you find encouraging?
Hauser: He listens to people who are not standard Washington powerbrokers in a very meaningful and real way, and that’s good. He is listening to lobbyists, which is the concern I’ve expressed, but I also think he is listening to people who are not professional lobbyists in any way, shape or form, have not served in government before, are not associated with a powerful corporation. He is taking in the concerns of the Black Lives Matter movement, climate activists and advocates for immigrants.
He cares about what a broad array of people think, and he is trying to listen and understand their concerns. That very much includes lobbyists, but it also includes the people. So it’s genuinely big tent — from the most to the least corporate.
MarketWatch: Two years from now, what will a Biden administration look like if it’s turning out to be better than you expected on revolving-door issues?
Hauser: One of the key things to measure during a Biden administration will be what jobs are people who are leaving the administration taking. People will start leaving shockingly quickly, just always. There are 4,000 political appointee jobs in the administration.
If you start seeing people go to law firms that are known to be quasi-lobbying operations, or going to hedge funds and private equity, that would be disconcerting. If you’re seeing the types of places where people go afterwards being genuinely small business, or academia, or think tanks, or local or state government, that would be encouraging. We want to break the connection between government and the aspects of the private sector which are most parasitic on the broader economy. One of the best ways to measure that is not just where do people come from when they go into the government, but where do they go when they leave it.
MarketWatch: With the new Congress and the new administration, what particular laws or policies on revolving-door issues would you like to see? What’s on your wish list? And what are the chances for getting those laws or policies?
Hauser: Our wish list is broad. The single item we would emphasize most is the need to break out from the limits of the current definition of a lobbyist in the law. As practiced, we think far more people do something which would be broadly understood as lobbying, than is recognized in official statistics. And the result is that it’s way too easy to get around the intent of ethics laws, even while abiding by them technically. So we’d like to tighten up the definition of lobbyist as much as possible.
MarketWatch: What do you think is the No. 1 thing or the top couple of things that people misunderstand about Washington’s revolving door?
Hauser: People misunderstand how many people are the heroes in their own narrative. How many people think that their lobbying is doing a public good? And that actually relates to why I think the revolving-door concerns are so great. The idea that you know an industry, so therefore you’ll be a better police officer of that industry — that model assumes that you understand why people might find an industry problematic.
In my experience, people working on behalf of an industry tend to become sympathetic to it. It’s just very hard to be an effective advocate for an industry if you don’t sympathize with it to some extent. And that’s why I don’t think if you’ve done lobbying work for Facebook, you are going to regulate Facebook effectively.
That doesn’t mean there might not be exceptions, but as a broadly accurate rule, the extent to which people relate to and sympathize with their employers is under appreciated. People are not as cynical as you might imagine. It’s just very hard to operate as cynically as some people think people do. Instead, they think they’re doing the right thing.
MarketWatch: What else do you want people to know about Washington’s revolving door right now?
Hauser: People should think about how we can make a government with more Anthony Faucis. I don’t think he’s unique. There’s a lot of respect for that, with respect to the military. There are a lot more movies about the military than there are about government scientists, but I think talented people who make less money than they could in the private sector because they are patriotic and care about their fellow citizens — there are versions of that across the entire executive branch. The dedication of postal workers is tremendous.
Everything from the National Park Service to environmental scientists, there are a lot of really dedicated, really talented people in government. We should try to figure out a way to empower those people, rather than assuming we have a revolving door of corporate people coming in and out and telling the career people what to do. I think we have altogether too many political appointees, especially revolving-door ones, and we don’t empower dedicated public servants enough. The very people that Donald Trump calls the “deep state” are often the most committed, patriotic and passionate people in the country.