Why draining the swamp in Washington is easier said than done

Posted at 9:42 PM, Jan 25, 2017
and last updated 2017-01-25 21:42:24-05

A protester wears a Donald Trump mask during a demonstration outside of a Goldman Sachs office on January 18, 2017 in Los Angeles, California. (Photo by Justin Sullivan/Getty Images)

By Avi Asher-Schapiro in New York

Isaiah Mackenzie was too young to cast his ballot for Donald Trump on election day, but the 17-year-old high school senior from Michigan was so excited about the prospect of a Trump presidency that he raised over $500 by starting his own lawn mowing business and donated it to the campaign.

On Tuesday, Isaiah’s father Steve, a Baptist pastor, took him to New York City to visit Trump Tower.  On the rainy afternoon in late January, they parked themselves in front of buildings’ reflective golden elevators, hoping to catch a glimpse of a Trump family member.  

“Trump doesn’t have to worry about special interests,”  Steve said. “It’s simple,” his son added. “He’ll drain the swamp—that’s what the country needs.” Both agreed that a sizable chunk of former president Barack Obama’s administration deserved to be jailed for corruption.

Perhaps more than any theme, it was Trump’s repeated promise to “drain the swamp” and short-circuit the revolving door of Washington insiders who pull on the levers of government that resonated with voters.  And while the Mackenzies couldn’t name a specific act of corruption, they were sure that the Obama administration’s cozy relationship with Wall Street, big donors, and Washington, D.C. elites had crossed some sort of legal line.

This comes as no surprise to Jeff Hauser, the director of the Revolving Door Project at the left-leaning Center for Economic and Policy Research — he’s been tracking Obama administration officials who cycle between Wall Street, the lobbying hub of K Street, and government jobs for the past two years.  “There’s clearly a sense in the country that there’s no accountability for these very rich and well connected people—but there is for everyone else,” Hauser explained. “This perception of a double-standard, it breeds distrust in the government.”  

The Obama administration, Hauser says, bears some responsibility for making “drain the swamp” such a resonant slogan. Over the past 8 years, a stream of Obama administration officials—prosecutors tasked with pursuing Wall Street crimes, financial regulators, and even cabinet level officials—left for lucrative jobs in the private sector, many in the very industries they were supposed to be overseeing. And despite a campaign promise to bar registered lobbyists from his administration, a review by Politico found more than 70 were eventually hired by Obama.

A database hosted by the bipartisan Center for Responsive Politics spotlights over 800 prominent administration officials who’ve made the journey through the revolving door. Former Attorney General Eric Holder and his top deputy Lanny Breuer—the administration lawyers who decided not to file criminal charges against a single Wall Street executive involved in the 2008 financial crisis— are included. Both came into the Obama administration from law firm Covington & Burling — and both rejoined the firm, which represents many firms at the center of the crash, after their stints at the Department of Justice (DOJ).  

A similar dynamic unfolded at the Security and Exchange Commission (SEC), the primary regulator tasked with overseeing Wall Street. Back in 2013, a report by the nonpartisan good government group the Project on Government Oversight (POGO) found 419 former SEC regulators who’d left the agency only to go work for clients the agency regulates.

In the home stretch of the 2016 campaign, Obama officials accelerated their move through the revolving door. In September Stuart Delery, the third ranking official at the DOJ, joined the white-collar law firm Gibson Dunn, the firm hired by Wells Fargo as the DOJ began investigating the firm for opening 2 million fraudulent accounts to artificially boost sales numbers.  Although  Wells Fargo’s CEO has resigned in disgrace, the DOJ has yet to officially charge anyone.

Meanwhile, a steady stream of top DOJ officials all joined firms that represent Wall Street banks.  “Firms were probably expecting to be dealing with a Clinton White House,” Hauser said. “ And they were eager to build up their outreach with friendly former Obama staffers.”

None of this is new. Officials from the Clinton and George W. Bush administration also maintained close ties to the industries they were supposed to oversee — and while presidents promise to eschew Washington’s insider culture in , that’s  easier said than done.  “We of course recognize that, especially for government lawyers, there aren’t many career choices outside of these big firms,” explains Neil Gordon, an investigator at POGO. “A person has a right to make a living.”

Firms also follow strict conflicts checks requiring former government lawyers to technically wall themselves off from cases they handled while working for the government.  But it’s the informal networks that often matter most.

“These people know the personnel inside of government because they are former colleagues,”  says former banking regulator William K. Black. “So when you cycle back into the private sector, you can give superb advice—that’s not technically illegal, but that helps your new clients avoid prosecutions.”

“These are smart and savvy people.” adds Robert Weissman, the president of Public Citizen, the left-leaning consumer advocacy group founded by Ralph Nader. “ But they tend to get unmoored from broader public interest considerations.”

To many Trump voters, that’s the swamp. Sitting in front of the elevators in Trump tower, Steve Mackenzie, put things starker terms: “Everyone could see that the Obama administration was corrupt,” he said. “But the media, all the Washington people, they didn’t do anything about it.” That’s why Trump’s vague but forceful promise to “drain the swamp” sounded so refreshing to him. “In the end, our whole family went for Trump,” he said.

Yet as President Trump staffs his administration, there’s no indication he’s taking any steps to wall-off the special interest groups the Mackenzies are worried about. Although he claimed on the campaign trail that his rivals were “totally controlled” by the Wall Street investment bank Goldman Sachs, he’s appointed four former Goldman executives to high-profile positions, notably his treasury secretary pick, Steve Mnuchin.

Hauser, with the Revolving Door Project, worries that Trump will take things even further, and allow his wealthy supporters to literally make a profit from their relationships with him. He points to the billionaire Carl Icahn, an early Trump supporter, who the president recently tasked with overhauling federal regulations—even though Icahn’s business empire stands to gain from regulatory tweaks.

Trump has yet to staff the rank and file of the major regulatory agencies, including the DOJ and the SEC. But he has nominated Walter Clayton, a partner at the firm  Sullivan & Cromwell, who specialized in helping Wall Street firm structure mergers and acquisition, to run the SEC.   

The Mackenzies aren’t bothered by any of this. Steve says that Trump’s tendency to appoint wealthy individuals to high level posts, is smart, if counterintuitive way of “draining the swamp.”

“They don’t need anything from anyone,” he says. Both father and son were especially impressed when Betsy DeVos, Trump’s billionaire nominee for the Secretary of Education, announced she’d be willing to do the job for no pay.  

“Trump said he’ll drain the swamp,” Isaiah says. “That means he’ll do it.”