Wealthiest Cabinet in U.S. History

A barrage of Senate confirmation hearings is set to begin Tuesday for what could be the wealthiest Cabinet in modern American history. This comes despite concerns that ethics clearances and background checks are incomplete for several of President-elect Donald Trump’s Cabinet picks. Senator Jeff Sessions faces questions Tuesday for his nomination as attorney general, along with Trump’s pick to head Homeland Security, retired Marine General John Kelly. On Wednesday, hearings are set for former Exxon CEO Rex Tillerson as secretary of state, along with education secretary [nominee] Betsy DeVos, Transportation Secretary nominee Elaine Chao and CIA director nominee Mike Pompeo.

Tillerson’s net worth is at least $300 million, and several other nominees hold assets of more than a billion dollars, including Commerce Secretary Wilbur Ross, whose confirmation hearing is on Thursday. As Cabinet appointees, the nominees are required to submit a financial disclosure report that’s used by the agencies they’re to take over, along with the Office of Government Ethics. The New York Times reports some of the nominees have so many assets, there are not enough boxes on the standard form for them.

The head of the Office of Government Ethics, Walter Shaub, wrote in a letter to Senators Chuck Schumer of New York and Elizabeth Warren of Massachusetts that, quote, “This schedule has created undue pressure on [the Office of Government Ethics’] staff and agency ethics officials to rush through these important reviews.” Senator Warren later tweeted, quote, “Cabinet officials must put our country’s interests before their own. No conference hearings should be held until we’re certain that’s the case,” she tweeted. Trump’s transition team responded with a statement: quote, “In the midst of a historic election where Americans voted to drain the swamp, it is disappointing some have chosen to politicize the process,” unquote. This comes as NBC reports it requested emails between the Office of Government Ethics and Trump’s transition team and found Shaub had emailed Trump aides in November to say, quote, “We seem to have lost contact with the Trump-Pence transition since the election.”

Richard Painter talking:

we have historic elections for the office of president of the United States every four years and a transition from one president to another at least every eight years. So we’ve all been through this process before, and so has the Office of Government Ethics. The Office of Government Ethics has been spending at least a year preparing for the transition that is taking place right now. But it’s critically important for the nominees to have finished their Form 278, which is the financial disclosure form that lays out what their assets are and what their sources of income are, and then also to have entered into an ethics agreement with the agency that they’re going to go into that specifies what assets are going to be sold in order to avoid conflicts of interest and what matters, government matters, they are going to have to recuse from in order to avoid financial conflicts of interest with respect to the remaining assets.

This is critically important because there is a criminal conflict of interest statute that prohibits any executive branch official from participating in a matter in which that person has a financial interest. So they either need to sell assets or recuse. We cannot have people who are going to be having leadership positions, with respect to national security, with substantial investments or any investments in Turkey, Russia, Indonesia—countries that are strategically very sensitive for the United States. We can’t have a secretary of education who’s invested in the for-profit education business. These are investments that are going to have to be divested in order for the person to do their job.

And the job of the Office of Government Ethics is to make absolutely sure that happens and to work with the nominees and their lawyers before the Senate confirmation hearings begin, so the senators see exactly what the assets are, what the sources of income are and what the plan is with respect to addressing conflicts of interest. And that’s what they’ve done with Rex Tillerson, and I believe they have a plan ready to go. The assets are fully disclosed. So I think the Senate can have that hearing.

But I understand that with respect to some of the others, that they do not have a complete Form 278. They do not have an ethics agreement in place. And those hearings will have to wait. This is exactly the point that Senator Mitch McConnell made in 2009 when he wrote a letter to Senator Harry Reid about it. We can’t have the hearings until we have the financial disclosure forms and the ethics agreement. And Senator McConnell was exactly right on that. So that’s what they need to do now, is make sure they have those agreements and those financial disclosure forms in place before they have the hearings.

Robert Weissman talking:

I think what we’re seeing with the failure to comply with these ethics rules is a reiteration of what we knew early on after the election, which is we’re going to see the most corrupt administration in the history of the United States. And we’re going to see now two kinds of corruption, one that is extremely likely because of the failure to take ethics rules seriously, which is scandals and violation of the law. I mean, the reason you do this stuff in advance is to avoid breaking the criminal statutes that Professor Painter is referring to. It’s actually to help the Cabinet officials themselves. And it’s also to give the Senate its only opportunity to actually enforce these rules.

The second kind of corruption, which is guaranteed—100 percent guaranteed—is the revolving door kind of corruption. So we have all kinds of people coming in from corporate America—billionaires, huge contributors—and they’re going to rule on matters that directly relate to corporate interests, their own personal interests, whether or not they have—are going to be transgressing the conflict of interest rules. So we have the amazing spectacle of the former CEO of Exxon nominated to be secretary of state. You know, Exxon runs its own foreign policy; now Exxon is effectively taking over the foreign policy of the United States.

At the Department of Labor, not up this week, I think, we have Andy Puzder, fast-food chain mogul, about the worst possible place to look for someone to enforce labor laws, now proposed to enforce national labor laws. At the Environmental Protection Agency, we have Scott Pruitt, the attorney general from Oklahoma, who has sued the agency, who has written letters on behalf of oil companies, drafted by oil companies, attacking EPA regulations, now proposed to run the agency. And you go on down the list, and it’s kind of endless. Each one of these people, by themselves, would be an outrage in any other administration. But the totality of what we’re seeing from the Trump administration has no precedent in American history.

Tom Price is a member of Congress. He has been nominated to run the Department of Health and Human Services. It turns out he’s been an active trader in pharmaceutical stocks. Thanks to a recently passed law, members of Congress are required to disclose what they trade and when. And we’ve seen that his stock trades seem to correlate very closely with another member of Congress, Representative Collins. Representative Collins sits on the board and owns a one-sixth share in a small Australian biotech company called Innate Immuno. And Representative Price has also traded in this penny stock from Australia, that very few people ever would have heard of, at moments that correlate closely with the trades by Representative Price—by Representative Collins.

So we don’t know for sure that something is wrong here, but it doesn’t look good, and it certainly merits an investigation. We’ve actually—Public Citizen has called on the Office of Congressional Ethics, the thing that was being attacked last week, to undertake that investigation. And we think that investigation ought to take place before Mr. Price is confirmed for the Department of Health and Human Services. You just don’t want people who are transgressing ethics rules as a matter of course in charge of these vitally important agencies.

I think there’s a few things happening, but I think the biggest one is that President Trump—President-elect Trump has shown his utter disregard and lack of concern for ethics rules as regards himself. And, you know, just like Meryl Streep was saying in those remarks last night, what the president-elect does and the president-to-be does, that filters down. So members of Congress figure, “Ethics rules don’t matter for him. Why should they matter for—why should we be bothered with them? Let’s get rid of this pesky agency that actually enforces them.” And the Senate Republicans figure, “Why should we bother with having these tough ethics reviews from the Office of Government Ethics, if this kind of standard doesn’t apply to the president-elect and maybe he’s able to get away with it?” Now, I think, actually, that’s a miscalculation. They’re not going to be able to get away with it, as we saw last week. And even if they do momentarily, it’s going to come back to bite them, because we’re guaranteed to see multiple scandals because of their casual disregard for ethics standards.

Richard Painter talking:

This is critical to the integrity of our government and avoiding violation of a criminal conflict of interest statute that prohibits a government official from participating in any matter that has a direct or predictable effect on that government official’s financial position. And so, Senator McConnell was absolutely right in 2009 when he wrote that letter to Senator Reid. This is not just some procedural posturing. This is all about conflicts of interest. And we need to make absolutely sure that we don’t have them in this administration, just like we did in the last administration and in the Bush administration. There needs to be proper vetting of the nominees for financial conflicts of interest before they go in.

And that’s happened with some of them. Rex Tillerson has disclosed his assets, and he has disclosed that he’s going to sell the oil company stock. And so far as I’m concerned, from the financial conflicts of interest perspective, that clears him to go into the hearing and then discuss his views on such critically important issues as global warming, which I understand he actually believes in the fact that there is global warming, which anybody but an idiot, of course, would believe by 2017. But that may put him in the top half of the class at the Trump University there. So, let’s give him a chance, now that he’s made his disclosures and divestment decisions.

But every one of these nominees has to do the same. And the president of the United States himself should set the right example by divesting himself of his own assets that create conflicts of interest. We’re looking forward to an announcement on that this week. And I will give President Trump—President-elect Trump credit for last week having blasted the United States House of Representatives for that absurd plan to abolish the Office of Congressional Ethics. They didn’t get that idea from him. They’ve been planning that for a long time, because they don’t like being investigated. And I think the voters ought to find out whether their congressmen voted for that. I know my congressman voted for getting rid of the Office of Congressional Ethics, and we’re going to hold them accountable in 2018, because that’s unacceptable.

Carl Icahn—the position the transition is taking right now with respect to Carl Icahn is that he is not going to be a government employee. Well, that’s just wrong. If he is going to be advising the president and be given a title and advising the president as to who the next chairman of the Securities and Exchange Commission is going to be, who the top regulators are going to be, he needs to disclose his assets and divest from the assets that create conflicts of interest. And you can’t just get around a criminal statute by saying, “Well, he’s not a government employee, because he doesn’t want to get paid.” He’d rather go in there and influence government policy with respect to his billions of dollars’ worth of assets. That doesn’t get around the criminal conflict of interest statute. So Carl Icahn needs to either be a government employee, subject to the same rules as everyone else, or he needs to butt out.

And I would ask every single person who is put up for a position, who has had communications with Carl Icahn, including the new nominee for the Securities and Exchange Commission—the senators need to ask specifically what conversations took place with Carl Icahn. He has no business helping choose these nominees and performing United States government functions, when he’s not going to be a United States government employee. And the senators need to know exactly what’s going on and should refuse to confirm those nominees.

he’s a well-known corporate raider and skirts very close to the edge of rules with respect to the securities laws that are enforced by the Securities and Exchange Commission. I don’t understand why a president would put Carl Icahn in charge of choosing who the next SEC chair is going to be. And I want to know exactly what was said between the nominee, Mr. Clayton, and Mr. Icahn, before I even think about a confirmation vote on that one. Same with the energy sector and everything else. He owns a lot of energy companies that would like to see everything get deregulated over there, so he can make more money. Well, that may or may not be in the public interest.

Once again, if he is going to get involved in the United States government decision-making and advising the White House, he needs to be a United States government employee. He needs to file a financial disclosure form like everybody else and divest of the conflict-creating assets, or he’s going to end up violating criminal statute. And they’re not going to get around that simply by saying he’s not a United States government employee. They can say that all they want, but if he’s functioning as a U.S. government employee, he has to follow the rules.

Robert Weissman talking:

it’s going to be a test for the Republicans to see if they’re willing to say, “Look, they’re not following the rules. We’re not going to let this thing proceed.” And so far, it looks pretty bad.

it’s during the committee process that you have a chance to really hold them accountable. And, you know, this Carl Icahn example shows why the rules are so important and why Mitch McConnell is so wrong. These are not just procedural technicalities. Carl Icahn is not just making—giving advice on matters that relate to enriching him personally, although he is doing that, because he’s got huge stakes in the oil and gas industry, and he wants to get that regulated. And as Richard Painter was saying, he plays fast and loose with the SEC rules, and he wants to make sure those aren’t too toughly enforced either. But he is giving advice on broad matters of policy that will materially affect all Americans, including by worsening the prospect of climate change. So these are not just technical matters, that, you know—picayune rules that are kind of a pain to follow. They go to broad policy questions. And that’s why it’s so important that they be enforced. That’s why it’s so important that the traditions be respected. It’s why it’s so important that the committees have a chance to delve into these matters before they take votes. And it’s why we’re on course for the most scandal-prone and corrupt administration in American history.

folks can go to CorporpateCabinet.org and get a quick look at some of these worst nominees and their conflicts. Of course, we’re trying, with many others, to mobilize opposition across the board, including to many of the worst, most conflicted and corrupt picks.
____

Richard Painter
professor of corporate law at the University of Minnesota. He was the chief White House ethics lawyer for President George W. Bush from February 2005 to July 2007.

Robert Weissman
president of Public Citizen, which has just launched the CorporateCabinet.org website, tracking the corporate connections and conflicts of interest of Trump Cabinet appointees.

— source democracynow.org

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