Rahm Emanuel, Corporatist for Hire: Part of the Revolving Door Between D.C. and Millions in Financial World

BUZZFLASH NEWS ANALYSIS
by Meg White

In case you missed it over the holidays, there's been a fair amount of internecine conflict over FireDogLake.com founder Jane Hamsher's decision to target White House Chief of Staff Rahm Emanuel's supposed misdeeds on the board of the troubled semi-governmental lending entity known as Freddie Mac in the early part of this fading decade.

Some of the uproar clearly comes from the way Hamsher decided to do it. Teaming up with the notoriously conservative Grover Norquist to sign a letter calling for the attorney general to investigate and for Emanuel to resign easily evokes the term "strange bedfellows," and mistrust along with it.

FiveThirtyEight.com founder Nate Silver wrote that he found the "conspiracy theory" to be "bizarre." The New York Times' Caucus Blog seemed to roll its collective eye at Hamsher's "viewing [Emanuel] as a sort of presidential puppet-master."

Personally, I can't say if Emanuel had anything to do with the stripping of Acting Inspector General Ed Kelly's authority to investigate the apparent crimes of Freddie Mac, though I find it marginally more convincing than the funnel a "trillion-dollar slush fund into corruption-riddled companies with no oversight in place." More troubling to me is Hamsher's childish and short-sighted oversimplification of the healthcare reform process as a way to further her vendetta against Emanuel.

Still -- as with most conspiracy theories -- there is an insidious nugget of truth here, of which many are vaguely aware but mostly uninterested in. In this case it is that Obama's allegiance to corporatism was confirmed well over a year ago, when he announced Emanuel would lead White House staff just days after being elected. And that corporatism stretches back not to sexy slush funds, but plodding political fundraising.

Between Emanuel's time with the Clinton White House and his stint at Freddie Mac and then in Congress, he spent two years as an investment banker, raking in the millions it would take to enter politics as a candidate. Yet, from the language in this New York Times piece from last year, it appears that Emanuel was not hired because he's good with numbers (emphasis mine):

Despite having little experience or education in finance, Mr. Emanuel became a managing director at [Wasserstein Perella]'s Chicago office in 1999, helping to bring in business and seal deals.

According to a 2003 article in The Chicago Tribune, Mr. Emanuel was brought in by one of the firm’s founders, Bruce Wasserstein, who was one of President Clinton’s most active fund-raisers on Wall Street...

Emanuel got the job because he knew politics, not because he knew banking. And "knowing politics" in this case means one knows both sides of that equation: politicians (which at the time of his hiring included the current president) and the billionaires who make their elections possible.

The main thing that distinguished Emanuel on the political scene early on was his ability to raise funds. He knew, after helping Clinton wash over the Gennifer Flowers affair with an unprecedented amount of money early on in the 1992 campaign, that he was going to need deep pockets for his own political aspirations. His brother said as much to CNN back in 2006 (emphasis mine):

"Money is not the be-all and end-all for him," says brother Zeke. "But he knew he needed money so that wouldn't be a problem while he was doing public service." Over a 2 1/2-year period he helped broker deals -- often using political connections -- for Wasserstein Perella.

According to congressional financial disclosures, he earned more than $18 million during that period. His deals included Unicom's merger with Peco Energy and venture fund GTCR Golder Rauner's purchase of SBC subsidiary SecurityLink. But friends say his compensation also benefited from two sales of the Wasserstein firm itself, first to Dresdner Bank and then to Allianz AG.

The millions he banked over that couple of years helped in his bid to represent Chicago in 2002. But it was his reputation for fundraising that won him the chair of the Democratic Congressional Campaign Committee (DCCC) for the storied 2006 midterm elections. His expansive recruitment efforts along with his impressive donor connections distinguished him from the old guard of Democratic National Committee (DNC) financing. Again, from the 2006 CNN piece (emphasis mine):

Emanuel's in-your-face money demands make him stand out in a party that has sometimes been a little prissy about big-donor fundraising. "Republicans understand power and that you need money to get power. Our guys don't," complains one of the party's leading funders. Colleagues say Emanuel has become adept at the care and feeding of big donors -- knowing their interests, asking about their families, sending them cheesecakes from Chicago's Eli's Bakery. He's expanded the DCCC's donor base, appealing both to like-minded young financiers and big-business donors with GOP ties who are hedging their bets this fall.

Emanuel is widely credited as the primary architect of the Democratic takeover of the House in 2006. But now we have to deal with the legacy of his ruthless pursuit of victory.

Most observers readily recognize that the compromises he made with conservative Democrats and moderates to win districts that had not been Democratic strongholds lead directly to the trouble the party is having in pushing its agenda in Congress.

But there is another, more damaging side to Emanuel's legacy. You see, then-DNC Chair Howard Dean wasn't just resisting Emanuel's ways to be a stodgy stalwart. I believe Dean saw the danger in going the route of Republican fundraising. The dependence upon big donors and special interest contributions rotted the GOP's ideological credibility, eventually leading to the disgusted tea party and libertarian offshoots that challenge a conservative revival to this day.

Resisting such corruption can pay the kind of ballot box dividends that money just can't buy, as evidenced by Barack Obama's supposed "small donor" credibility. Whether myth or reality, it helped his campaign triumph over that of Hillary Clinton's, which was seen as politically-entrenched and reliant upon special interests. It seems to me that we all wanted -- more than policy change, for the two candidates were remarkably similar on the issues -- was a different kind of candidate.

We were all cheered by Obama's early pledge to keep lobbyists out of the White House. But as he closed the front door, Obama opened the revolving door of the corporatist. More dangerous than your average registered lobbyist are players who are labeled as consultants or rainmakers. Or perhaps they're known as "policy advisers," as was former Senate Majority Leader Tom Daschle, also known as the Obama Administration's unsuccessful nominee for Health and Human Services Secretary. Time magazine described the situation last February (emphasis mine):

Although he never registered, Daschle, in fact, made millions of dollars after he left government doing stuff that looks, smells and tastes a lot like lobbying... it's the ethical gray area Daschle's advisory work represents that has called into question Obama's promise of changing the culture in Washington.

Daschle, for instance, was a high-paid "policy adviser" at Alston & Bird, a lobbying firm with dozens of brand-name pharmaceutical and health-services clients.

Daschle and Emanuel are just singular examples of the revolving-door, corporatist culture that will not stop with a mere anti-lobbyist proclamation, or a letter to an attorney general. That is because they are technically not lobbyists, and they likely have not done anything legally wrong.

Thankfully, there is some hope to be had in these misguided attempts at reform. Unlike in decades past, there is no one who will defend corporatism aloud on a public stage. That is why conservatives voted for Obama and how activists as disparate as Hamsher and Norquist could sign the same letter.

The fight against this insidious amalgamation of business and politics is one of the few things we can all pretty much agree upon, opening the way for a second attempt to change the culture in Washington. Let's hope it actually goes somewhere this time.

BUZZFLASH NEWS ANALYSIS