By NORMAN EISEN
In his State of the Union address, President Biden called on Congress to urgently address the economy, adding, “and while you’re at it, confirm my nominees to the Federal Reserve.” But the Republicans on the Senate Banking Committee, led by Pennsylvania’s Sen. Pat Toomey, are illegitimately blockading Biden’s entire slate of federal picks due to baseless ethics allegations against one of the nominees, Sarah Bloom Raskin.
For the sake of our economy in a time of inflation, war and other crises, this must end.
Nominations for the Fed can no longer be blocked by filibuster once they are voted out of committee. But in order to have a committee vote, there must be a quorum – a minimum number of senators present – and that requires Republican participation.
So the obstructionists are moving their blockades from the Senate floor to the committee rooms. Without a committee vote, the only way to liberate a nominee is to file a discharge petition on the floor – but that can still be filibustered.
On Feb. 15, not a single Republican member of the banking committee showed up for an executive session to confirm Biden’s Fed nominees. Their target was the eminently qualified Raskin, Biden’s nominee to be the Fed’s vice chair for supervision. She previously served on the Fed’s board of governors and as deputy secretary of the Treasury and has earned unanimous Senate support in the past.
But she wants the Fed to grapple with how climate change could create trouble in the financial system, which the current Fed chair – initially appointed by Donald Trump – also supports. Toomey and the other Republicans on the banking committee have made no secret of the fact that they don’t want a regulator in Raskin’s role who will continue this work. But instead of being straightforward about the reason for blocking her, they are pushing unfounded ethics concerns.
Supposedly at issue is Raskin’s tenure on the board of Reserve Trust, a state-chartered trust company based in Colorado. While Raskin served on the board of the company, Reserve Trust obtained a Fed master account, which gave the firm access to the Fed’s payment infrastructure.
During Raskin’s confirmation hearing before the committee, Sen. Cynthia Lummis, R-Wyo., questioned whether Raskin had called the Federal Reserve Bank in Kansas City before Reserve Trust got the account. Raskin does not recall the contact. Toomey claims the Kansas City Fed has confirmed Raskin’s call – but they have also said that the 2018 decision was unrelated.
As someone who has spent decades working on ethics issues, including as President Barack Obama’s ethics czar, I say this is not a sufficient issue to justify a blockade – not even close.
The ethics rules do require a cooling-off period during which ex-officials like Raskin may not contact their former agency. But Raskin had last worked at the Fed in 2014, and the blackout period had long expired by the time of the 2017 call. There is not a scintilla of evidence that Raskin ran afoul of the ethics laws governing the post-employment period for departing government officials.
If Toomey and his Republican colleagues are genuinely concerned, they should vote against the nomination – not blockade Raskin.
In fact, the evidence suggests this is all a ruse. Toomey repeatedly voted to confirm Trump nominees subject to equal or greater ethics concerns. For instance, he supported Randal Quarles for Fed vice chairman for supervision despite Mr. Quarles’ previous position as partner at a private equity firm and founder of his own private investment firm. Those were industry roles he obtained after serving in the Treasury, leading to public-private revolving-door allegations. Toomey also voted to confirm Andrew Wheeler as EPA administrator despite Mr. Wheeler’s previous energy-industry lobbying.
If Toomey and his colleagues were truly concerned about the revolving door, then they would praise Raskin and the other Biden nominees for having agreed to a new strong voluntary pledge not to ride the revolving door going forward. Indeed, if the senator really cares about special interest influence by former officials, he might himself agree to make such a commitment as he prepares to leave Congress and receive the inevitable offers from the financial industry. (Don’t hold your breath.)
While Republican senators kvetch about inflation and other economic issues, they are simultaneously abusing technicalities to prevent the Senate from confirming the very people whose job it is to fight rising prices and to maximize employment. These senators are harming good people and the country. The obstruction must end, starting with a prompt committee vote on all the Fed nominees – including Raskin.
Norman Eisen served as White House ethics czar from 2009 to 2011 and as U.S. ambassador to the Czech Republic from 2011 to 2014.