Barack Obama, Corporate Shill

In an interview with Vice, Barack Obama struck his favorite pose — that of disinterested, objective observer on the passing political scene. Asked about congressional resistance to cap and trade, our social-critic-in-chief responded:

Well, some of it is economic. If you poll folks, they’re concerned about climate change. But they’re even more concerned about gas prices. You can’t fault somebody for being concerned about paying the bills or being about to fill up your (sic) tank to get to your job. In some cases, though, you have elected officials who are shills for the oil companies or the fossil fuel industry. And there’s a lot of money involved. Typically in Congress, the committees of jurisdiction, like the energy committees are populated by folks from places that pump a lot of oil and pump a lot of gas.

It is true that some in Congress are basically shills for the oil industry, although let’s not kid ourselves: cap and trade would provide a very lucrative rent for others industries, and plenty of members take money from them, too. Moreover, there are lots of reasons to oppose cap and trade that aren’t reducible to pay-to-play.

But I’m with the president 100 percent on his concern that too many Beltway pols are corporate shills. And I’d like to add one more name to his list: Barack Obama. The president is a corporate shill, too.

Obama merits several mentions in my new book, A Republic No More: Big Government and the Rise of American Political Corruption, and never as a crusader for good government. Let’s run down the greatest hits.

This is from ABC News in 2007:

Away from the bright lights and high-minded rhetoric of the campaign trail, Democratic presidential hopeful Sen. Barack Obama, D-Ill., has quietly worked with corporate lobbyists to help pass breaks worth $12 million….

last year, at the request of a hired representative for an Australian-owned chemical corporation Nufarm, Obama introduced nine separate bills exempting the company from import fees on a range of chemical ingredients it uses in the manufacture of pesticides and herbicides. Nufarm’s U.S. subsidiary is based in Illinois….

Nufarm wasn’t the only beneficiary of Obama’s efforts to reduce customs fees and duties. In early May of 2006, two Washington lobbyists registered to work on behalf of Astellas Pharma, a Japanese-owned drug company which also has offices in Illinois. The lobbyists’ task? “Introduce legislation to temporarily suspend customs duties for the importation of a pharmaceutical ingredient,” they wrote on their lobbying forms. Less than three weeks later, the men had earned their $20,000 fee, thanks to Obama. On May 26, he introduced S. 3155, a bill specifically exempting Astellas’ key ingredient from tariff payments. The bill cost the federal government more than $1 million in lost revenue, according to government estimates.

That’s not the only instance of Obama’s corporate shilling. While campaigning for president in 2008, he ran a television ad blasting the pharmaceutical industry for cutting a deal with Republicans on Medicare Part D. In it, Obama correctly notes that Republican Billy Tauzin, “the chairman of the committee who pushed the law through, went to work for the pharmaceutical industry making $2 million per year.”

The very next year, in a bid to win support for Obamacare, the president’s advisors cut a deal with the pharmaceutical industry. In exchange for industry support, the administration abandoned a proposal to allow the re-importation of drugs from Canada. Who was in charge of the pharmaceutical lobby at the time of the deal? Why, Billy Tauzin, of course!

The administration cut a similar deal with the American Association of Retired Persons (AARP). Somehow, it induced the massive senior lobby to endorse a bill that cuts Medicare by hundreds of billions of dollars. No mean feat! How did they manage it? By exempting AARP-endorsed “Medigap” plans from Obamacare’s reforms. Moreover, the cuts Obamacare imposes on Medicare Advantage will drive seniors out of that program, and into AARP-backed Medigap plans. A report from Jim DeMint (back when he was a senator from South Carolina) estimated that the total windfall to AARP was about $3 billion.

How about Wall Street reform? Obama likes to pose as a people-versus-the-powerful crusader, but he staffed his administration with friends of the big banks. Unsurprisingly, that has enormously influenced policy.

David Skeel, a professor at the University of Pennsylvania Law School, writes about the framework “that would eventually become the Dodd-Frank legislation,” in particular the resolution rules that enables Treasury to intervene when too-big-to-fail institutions fall into distress.  He explains:

Both the resolution rules and the overall framework read as if they had been written by Timothy Geithner in consultation with the large banks he had worked with as head of the New York Fed. Geithner would get all of the powers that he and former Treasury Secretary Henry Paulson wished they had when they intervened with Bear Stearns, Lehman Brothers, and AIG. But the framework also did not overly ruffle the feathers of the largest financial institutions. There was no call to break them up…While systemically important status might subject the biggest institutions to greater oversight, it also would bring benefits in the marketplace. They could borrow money more cheaply than could smaller competitors, because lenders would assume they would be protected in the event of a collapse, as the creditors of Bear Stearns and AIG were.

The suspicion that the legislation might be a little too accommodating to the largest banks was further aroused by the discovery that David, Polk & Wardell, “a law firm that represents many banks and the financial industry’s lobbying group,” as the New York Times put it…had been deeply involved in the early drafting of the legislation. Treasury had worked from a draft first written by Davis Polk, and the legislation literally had the law firm’s name on it when Treasury submitted it to Congress, thanks to a computer watermark that Treasury had neglected to delete. (Emphasis Mine)

That’s not all. In Confidence Men, Ron Suskind reports that Obama instructed Geithner to develop a plan to break up Citi — as a warning to the other banks and a signal to the broader marketplace that the government was in charge, not the banks. But, per Suskind, Geithner disobeyed Obama, and never put together the plan. He suffered no consequences.

The best that can be said about this president and Wall Street is that, when it mattered most, he was a passive observer in his own administration. He allowed shills to write a bill enormously favorable to the biggest interests.

So, to borrow one of the president’s favorite phrases: yep — some folks are shills. And those folks include President Barack Obama.

Jay Cost is a staff writer at the Weekly Standard. His new book, A Republic No More: Big Government and the Rise of American Political Corruption, is now available. He can be reached at Republic.No.More@gmail.com.

© 2015 Weekly Standard LLC. Reprinted with permission.

• By Jay Cost inThe Weekly Standard, March 19, 2015

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