President Joe Biden may have been saving his most progressive nominees for last, but they aren’t without potential baggage, either.
With less than a week before his inauguration, the Biden transition team announced the appointments of Rohit Chopra and Gary Gensler to head the Consumer Financial Protection Bureau and the Securities and Exchange Commission, respectively.
Chopra currently serves as a commissioner of the Federal Trade Commission and is the former student loan ombudsman for the CFPB, an agency that he helped build from the ground up. Gensler most recently served as head of the Commodities Futures Trading Commission under President Barack Obama, where he was widely seen as one of the early administration’s toughest regulators.
Both appointments were met with near-universal praise from progressives, including liberal organizations like Revolving Door Project and Public Citizen, from economist and former secretary of labor Robert Reich, and from Sen. Elizabeth Warren, who reportedly has warm relationships with both nominees.
"We really just had four years of an administration just thoroughly siding with corporate America, Wall Street, and corporate executives across the board," said Dennis Kelleher, the president and CEO of Better Markets, a nonprofit Wall Street and government watchdog. "Normally, the change is not as dramatic as it’s going to be."
Given reactions by progressives, it may come as a surprise to some casual observers that Gensler and Chopra were previously employed by two of the left’s most hated private companies.
Gensler: Goldman Sachs executive turned Wall Street pariah
Gensler earned his MBA from the prestigious (and notorious) Wharton School at the University of Pennsylvania and then found work at investment bank Goldman Sachs, where he had a long and lucrative career (he was considered the wealthiest member of the Obama cabinet in 2009, according to Washingtonian magazine). When Gensler finally left the bank after 18 years, it was to follow many of his Goldman colleagues into the Clinton administration. Gensler joined Robert Rubin, another Goldman alum, in the U.S. Department of the Treasury under President Bill Clinton, where he was a part of the “Government Sachs” team that helped to advocate for many of the deregulatory policies responsible for the 2008 financial collapse.
Nearly a decade after leaving the Clinton administration, Gensler was nominated to run the CFTC, conceding at his confirmation hearings that he and others at Treasury had made big mistakes in the 1990s. A number of senators, including Sen. Bernie Sanders, held up Gensler’s nomination for months.
During his tenure at the CFTC, Gensler became an object of scorn on Wall Street due to his “sharp elbows” and aggressive regulatory work. Even several years before his time in the Obama administration, Gensler was making a name for himself as a serious big-business watchdog, helping Maryland Sen. Paul Sarbanes pass legislation reining in accounting practices in the wake of the Enron scandal.
"I'm confident no one else could have possibly been more successful at not only regulating derivatives and implementing the Dodd-Frank law, but also doing it in an effective way that industry simply could not evade," said Kelleher, speaking of Gensler's time at the CFTC. "Nobody else could have done that unless they had the experience and expertise that Gary had in the financial markets."
But between his Clinton- and Obama-era stints, Gensler racked up more possible private sector baggage, serving for several years on the board of Strayer University, a controversial for-profit college. According to the Brookings Institution, only a few schools are responsible for a larger share of Americans’ student debt than Strayer, and like many for-profit colleges, the school’s graduation rates are dismal. Depending on the campus, Strayer’s eight-year graduation rate tops out at around 27%, with some campuses graduating as few as 3% of their students within eight years.
Neither the White House nor the Biden transition team responded to questions about Gensler’s role at Strayer, or if he retains any stock in the company.
For Chopra, a shorter record, but unanswered questions
Chopra’s private sector career is much briefer, but not without its uncertainties.
After college, he worked briefly as a consultant for Booz Allen Hamilton, the consulting giant made famous for employing Edward Snowden and racking up massive government contracts. He worked there for two years, according to the résumé he provided to the Senate Commerce Committee upon his appointment as an FTC commissioner in 2018, but does not list any projects, related publications or areas of focus.
After obtaining his MBA, Chopra worked from 2008 to 2010 at the mega-consultancy McKinsey & Company, which has been involved in a laundry list of scandals and controversies, including price-fixing, international corruption and mass layoffs, among others. During Chopra’s period of employment, court documents show that McKinsey was advising Purdue Pharmaceutical about supercharging the sale of OxyContin, a highly addictive opioid, as well as in public relations strategies regarding overdose deaths from their drugs.
According to his biography on the FTC website, Chopra worked in McKinsey’s financial services, consumer technology, and healthcare sectors. While Chopra or the FTC included work for McKinsey’s healthcare consultancy on his online biography, in the résumé he provided to the Senate Commerce Committee, Chopra only includes financial services and consumer technology under his work for the firm.
In 2020, former South Bend Mayor Pete Buttigieg faced scrutiny for his time at McKinsey and cited a nondisclosure agreement that prevented him from discussing his work. McKinsey eventually granted Buttigieg permission to release a list of his clients.
Neither the White House nor the Biden transition team responded to questions regarding Chopra’s work at McKinsey or Booz Allen, including questions about whether Chopra signed a nondisclosure agreement.
The end of “purity” politics?
While there are open questions about both Chopra and Gensler, neither nominee’s previous work experience has been considered disqualifying by prominent progressives. After anxiety over unattainable demands for “purity” or requirements to pass “litmus tests” in Democratic politics in recent years, it appears those fears may have been overblown.
Kelleher told Blue Tent that agencies should not banish those with private sector backgrounds, as they can provide unique insights and advantages to regulators. "The challenge is to hire people with private sector experience and expertise and prevent them from selling out their public service and being an influence peddler for the highest bidder," Kelleher said.
Writing for Revolving Door Project, researchers Dorothy Slater and Max Moran echoed Kelleher, framing Gensler’s appointment and acceptance by progressives as an example of a more realistic and reasonable vision of who is and is not acceptable when staffing an administration.
“The issue is whether one’s private sector experience centers on selling political influence, or whether one is intellectually (or financially) invested in exploitative business models which one will seek to defend or insulate from accountability within government,” Slater and Moran wrote. “Gensler was and is neither.”
