Progressive senators are objecting to Obama’s latest Wall Street nominee.
Zoë CarpenterIf Burger King has its way, the company will soon leave its Miami headquarters for Canada and enter the coffee-and-donut business. When the fast-food giant announced its intention to buy the Canadian company Tim Hortons in August, it stressed the coffee-and-donuts part of the deal—or, rather, the opportunities for “growth” and “expansion.” But the chance to move to a country with lower corporate tax rates was undoubtedly part of the appeal. Since 2003, more than thirty-five American companies have dodged taxes through similar deals, which are known as “corporate inversions.”
Now the Burger King move is implicated in a fight brewing between some Senate Democrats and President Obama, a clash that throws into relief the split between the party’s Wall Street wing and its progressives. One of the people involved in the deal was Antonio Weiss, a major Democratic fundraiser, the publisher of The Paris Review, and the global head of investment banking at Lazard Ltd, a firm that has put together several major inversion deals. As of November 12, he’s also President Obama’s pick to oversee the domestic financial system—including the implementation of the Dodd-Frank financial-reform act, and consumer protection—at the Treasury.
But a growing number of senators are objecting to Obama’s latest Wall Street nominee. Unsurprisingly, Massachusetts’s Elizabeth Warren is at the front of the insurrection. “Enough is enough,” she proclaimed in the Huffington Post last week. “It’s time for the Obama administration to loosen the hold that Wall Street banks have over economic policy making.”
Warren has a number of problems with Weiss. The first is the fact that his career has been focused on international transactions. “Neither his background nor his professional experience makes him qualified to oversee consumer protection and domestic regulatory functions at the Treasury,” she wrote. The second is that he’s tied up in the corporate-inversion trend, which, as she notes, the Obama administration has criticized and tried to stop. She issued a sharp retort to White House claims that Weiss did not have a hand in the tax portion of the Burger King deal and that he opposes inversions personally:
This was a tax deal, plain and simple. It was designed to reduce Burger King’s tax burden, and Weiss was an important and highly-paid part of the team…Did he work under protest, forced to assist this deal against his will? Did he speak out against tax inversions? Did he call out his company for profiting so handsomely from its tax loophole work? The claim of personal distaste is convenient, but irrelevant.
The third piece of Warren’s opposition to Weiss isn’t specifically about him but about the fox guarding the henhouse. She ticked off a long list of people with close ties to the financial industry who now serve in high-level economic-policy positions in the Obama administration, including Treasury Secretary Jack Lew and US Trade Representative Michael Froman. Letting former Wall Streeters roost in top government perches “tells people that one—and only one—point of view will dominate economic policymaking. It tells people that whatever goes wrong in this economy, the Wall Street banks will be protected first,” she wrote.
Warren isn’t the only one who has concerns about Weiss’s nomination. Dick Durbin, the Senate’s second-ranking Democrat, opposes Weiss’s nomination, too. Independent Senator Bernie Sanders announced on Sunday that he also will vote no. “We need an economic team at the White House which will hold Wall Street accountable and fight for the needs of working families, not more Wall Street executives,” Sanders said in a statement. Although other Democrats on the finance committee have not taken a position on Weiss, a Democratic aide told Bloomberg Businessweek that a number of other senators are privately unsupportive of the nominee. At least a few members of the Party of No will probably boost progressive opposition to Weiss; Iowa Republican Chuck Grassley, who sponsored an anti-inversion bill in 2004, has already taken the nomination as an opportunity to bash Obama’s “hypocrisy.”
A group representing community banks has also joined the campaign against Weiss. “While Mr. Weiss has impressive credentials as a top Wall Street executive specializing in international mergers and acquisitions, Wall Street is already well represented at Treasury, and the narrow focus of Mr. Weiss’s professional experience is a serious concern for ICBA and community banks nationwide,” wrote Independent Community Bankers Association of America president Camden Fine in a letter sent last week to members of the Senate Finance and Banking Committee.
Weiss is not nearly as notorious as the last Wall Street nominee to face a challenge from progressives—former Treasury Secretary Larry Summers, who withdrew his name from consideration for the top post at the Federal Reserve last year after a backlash made his confirmation unlikely. Nor is the position in question as prominent. Still, the fight over Summers’ nomination showed that populist Democrats can mount a real challenge to the assumed dominance of Big Bankers if they try. The question of whether the party sides with Wall Street or Main Street is still very much in play.
Zoë CarpenterTwitterZoë Carpenter is a contributing writer for The Nation.