When Public Officials Get Rented Out by Corporate Power, the People Lose
Vivek Murthy, President Biden’s nominee for surgeon general, joined the likes of Amazon and AstraZeneca to take advantage of the pandemic to become noticeably richer. Murthy, who previously served as surgeon general in the Obama administration, has made over $2.6 million selling his public health expertise to embattled corporations desperate to resume business as if there weren’t an ongoing pandemic. He’s taken money from Carnival cruises, Airbnb, Netflix, and other big corporations to, seemingly, launder their inherently high-COVID-risk operations as safe, manageable, and essential. This is despite the fact that Carnival cruise ships were some of the first COVID hotspots, that Airbnb’s home rentals promote needless virus-spreading travel, and that the film workers’ union has already called for a halt on Netflix’s movie and TV production due to high transmission rates.
Murthy’s reputation peddling is part of a long history of legalized corruption deemed publicly acceptable to the American elite. It is an open secret in Washington that the real value of powerful regulatory positions in government (which already come with six-figure salaries most couldn’t dream of) is a post-government career on influential corporate boards, C-suite executive positions, and active recruitment by industries eager for knowledge of the inner-workings of government. Most deleterious, however, is how former public servants’ public reputations are used to launder corporate misdeeds and appeal to regulators.
Take, for example, the voracious head-hunting of former government officials by the dodgily-regulated emerging fintech industry. Max Moran and Timi Iwayemi recently revealed how they are slowly “building an echo chamber of industry voices and former regulators to ease oversight and permit [fintech’s] predatory practices.” Varo Bank was emblematic of this push when it was seeking the first-ever fintech national banking charter from the Office of the Comptroller of the Currency, which would exempt it from consumer-protection banking regulation. They were in the “last leg of the race” when they added top OCC official Amy Friend to their board. In Bank Automation News’ words, Varo hired Friend to “raise the company’s appeal to regulators.” Their gambit worked. Only months later, Friend’s regulatory credentials helped them secure the charter.
This blatant reputation-selling should be unacceptable. Companies like Varo use the presence of former government officials on their boards to suggest to regulators that they are socially responsible. In reality, the influence of corporate boards over companies is usually nil. Board positions and corporate social responsibility initiatives are often extremely symbolic public relations initiatives.
Look at Brian Deese’s recruitment by BlackRock to be their global head of sustainable investing after serving as Obama’s energy adviser. It was supposedly a win-win situation: Deese could make a massive salary working for an asset manager that controls funds larger than most countries, while working to make their investments more “environmentally friendly.” The reality, as shown by Jeff Hauser and Eleanor Eagan, is that BlackRock is “[o]ne of America’s leading greenwashing companies” who “combined greenwashing public-relations efforts with revolving-door hiring practices to present themselves as fighting climate change even as their company’s practices are making it even less likely our society will respond to the climate crisis.” Independent reports showed that 97 percent of BlackRock’s investment funds were not sustainable and that they voted against 88 percent of all climate change resolutions in their portfolio. Even worse, Deese’s hiring was part of a plan to assemble well-connected government alumni to form a “shadow government” to influence Biden’s administration and prevent the needed regulatory designation of Blackrock as a systemically important financial institution.
Corporate defenders justify these practices by talking about the “sharing of human capital” between government and the private sector. However, it is questionable what people like Murthy bring to the table that’s worth so much in the first place. Surely his clients don’t need to spend hundreds of thousands of dollars for a fraction of his time to be told to social distance, advice nonprofit and government institutions were providing for free? Murthy’s “unique selling proposition” is the public-minded branding of an Obama administration alum. Companies like Netflix have already taken advantage of this by hiring Murthy to peddle his Obama affiliation to blue-state officials in California where the former Democratic Party president’s reputation still holds sway.
That’s why Murthy’s pandemic consulting cannot go unremarked. Yes, people who were never highly paid consultants before public service often become highly paid consultants after. Yes, many former officials sell their insider understanding of government to the highest bidder. And yes, Murthy is far from the only Obama alumnus who profited from a connection to the former president. But the very routine nature of the transactions is no defense.
We at Revolving Door Project have long been concerned about public officials who take positions in business seemingly at odds with the missions of agencies they aspire to work for again. Indeed, the records of all future appointees must be subjected to ruthless criticism to ensure that the reputations of public office are not put up for sale later. Such deep betrayals of public trust should not be rewarded with plum executive branch jobs.