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With Trump’s appointees, many potential conflicts

By Eric Lipton, Ben Protess and Andrew W. Lehren

WASHINGTON – President Trump is populating the White House and federal agencies with former lobbyists, lawyers and consultants who in many cases are helping to craft new policies for the same industries in which they recently earned a paycheck.

The potential conflicts are arising across the executive branch, according to an analysis of recently released financial disclosures, lobbying records and interviews with current and former ethics officials by the New York Times in collaboration with ProPublica.

In at least two cases, the appointments may have already led to violations of the administration’s own ethics rules. But evaluating if and when such violations have occurred has become almost impossible because the Trump administration is secretly issuing waivers to the rules.

One such case involves Michael Catanzaro, who serves as the top White House energy adviser. Until late last year, he was working as a lobbyist for major industry clients such as Devon Energy of Oklahoma, an oil and gas company, and Talen Energy of Pennsylvania, a coal-burning electric utility, as they fought Obama-era environmental regulations, including the landmark Clean Power Plan. Now, he is handling some of the same matters on behalf of the federal government.

Another case involves Chad Wolf, who spent the past several years lobbying to secure funding for the Transportation Security Administration to spend hundreds of millions of dollars on a new carry-on luggage screening device. He is now chief of staff at that agency – at the same time as the device is being tested and evaluated for possible purchase by agency staff.

There are other examples. At the Labor Department, two officials joined the agency from the K Street lobbying corridor, leaving behind jobs where they fought some of the Obama administration’s signature labor rules, including a policy requiring financial advisers to act in a client’s best interest when providing retirement advice.

This revolving door of lobbyists and government officials is not new in Washington. Both parties make a habit of it.

But the Trump administration is more vulnerable to conflicts than the prior administration, particularly after the president eliminated an ethics provision that prohibits lobbyists from joining agencies they lobbied in the prior two years. The White House also announced Friday that it would keep its visitors’ logs secret, discontinuing the release of information on corporate executives, lobbyists and others who enter the complex, often to try to influence federal policy. The changes have drawn intense criticism from government ethics advocates across the city.

Trump’s appointees are also far wealthier and have more complex financial holdings and private-sector ties than officials hired at the start of the Obama administration, according to an Office of Government Ethics analysis that the White House has made public. This creates a greater chance that they might have conflicts related to investments or former clients, which could force them to sell off assets, recuse themselves or seek a waiver.

A White House spokeswoman, Sarah H. Sanders, declined repeated requests by the Times to speak with Stefan C. Passantino, the White House lawyer in charge of the ethics policy. Instead, the White House provided a written statement that did not address any of the specific questions about potential violations the Times had identified.

“The White House takes its ethics pledge and federal conflict of interest rules very seriously,” the statement said. “The White House requires all of its employees to work closely with ethics counsel to ensure compliance and has aggressively required employees to recuse or divest where the law requires.”

The Trump administration’s overhaul of personnel lays the groundwork for sweeping policy changes. The president has vowed to unwind some of the Obama administration’s signature regulatory initiatives, from Wall Street rules to environmental regulations, and he has installed a class of former corporate influencers to lead the push.

Administration supporters argue that appointees with corporate ties can inject a new level of sophistication into the federal bureaucracy and help the economy grow. And efforts to trim regulations in some areas have attracted bipartisan support.

But in several cases, officials in the Trump administration now hold the exact jobs they targeted as lobbyists or lawyers in the past two years.

Trump White House officials had over 300 recent corporate clients and employers, including Apple, the giant hedge fund Citadel and the insurance titan Anthem, according to a Times analysis of financial disclosures. (The White House has released disclosures for only about half its roughly 180 current senior political employees.) And there are more than 40 former lobbyists in the White House and the broader federal government.

Exceptions made in secret

Walter M. Shaub Jr. is director of the Office of Government Ethics, which advises federal agencies to help them and their employees – including the White House – comply with federal ethics laws, such as a prohibition on using a government post to personally profit.

He said that Trump’s own ethics executive order in late January eliminated a requirement, first adopted by President Barack Obama, that executive branch appointees not accept jobs in agencies they recently lobbied. That weakened standards applying to approximately 4,000 executive branch hires.

Trump also made it easier for former lobbyists in the government to get waivers that would let them take up matters that could benefit former clients. The granting of such waivers, Shaub said, has become “a political decision, which means career government ethics officials should not get involved in waivers under the new executive order.”

After recent negotiations, Shaub and the White House Counsel’s Office did agree on how to define the requirements and scope of recusal obligations. A lobbyist, for example, who pushed the Obama administration to approve or block a particular provision in a proposed federal regulation affecting a specific industry – like coal or telecommunications – would be subject to a broad ban under this agreement. “She must recuse for two years from development and implementation of the entire regulation,” the legal advisory said.

Rolling back clean power

But some cases the Times examined could be violating this requirement or working around it using waivers. Catanzaro was registered for Talen Energy on the Clean Power Plan in 2015, yet he has worked in recent months as a senior member of the White House’s National Economic Council trying to roll back that rule, adopted by the Obama administration.

Catanzaro’s former clients, such as Talen and Devon Energy, have an enormous amount at stake in the regulations the White House is preparing to reverse – with his help. Talen, for example, helps operate the Colstrip power plant in Montana, the second-largest coal-burning plant west of the Mississippi. Federal officials have estimated that the plant could face a $1.2 billion bill as it makes updates to meet the new environmental standards, assuming it is not just closed.

Three industry lobbyists interviewed by the Times said that they recently had confidential conversations with Catanzaro about some of the same regulatory matters on which he was lobbying the federal government. And Catanzaro gave a briefing to reporters in March at the White House in which he discussed energy topics at length, including the details related to the executive order Trump signed on March 28 to weaken the Clean Power Plan.

Catanzaro did not respond to emails and phone calls requesting comment. And White House officials would not say whether he had been granted a waiver allowing him to be involved in the same matter he handled as a lobbyist.

Same desk, new seat

Catanzaro is not the only senior adviser facing potential conflicts on the National Economic Council, the White House office, run by the former Goldman Sachs executive Gary D. Cohn, that helps steer the president’s financial and economic policy. D.J. Gribbin, the council’s infrastructure specialist, previously worked for Macquarie, a bank that specializes in infrastructure deals and that stands to gain from whatever infrastructure proposal the president gets Congress to fund.

Shahira Knight, on the council as well, is a special assistant to the president for tax and retirement policy. Her previous job also involved retirement policy – but as a lobbyist for Fidelity, one of the nation’s largest fund managers and providers of retirement products.

At Fidelity, lobbying records show, she was registered to work on retirement issues, including the so-called fiduciary rule, which has broad support from consumer groups. It requires financial firms to act in a client’s best interest when dispensing retirement advice.

Fidelity has said it supports the “best interest” standard but, like other firms, has raised concerns that the rule will prevent investors from accessing products they currently rely on for retirement savings.

Knight directed some of her appeals to the National Economic Council, her current employer. White House visitor logs show she met with the person whose job she essentially holds now.
The White House did not respond to a request for comment about Gribbin or Knight.

Where lobbyists go

Such potential conflicts are showing up across the federal government.

Executives at Analogic Corp. had tried to sell its carry-on baggage security equipment to the TSA with Wolf’s help when he was a lobbyist. They were pressing the agency to conduct formal tests of its computed tomography devices, known as CT scans, which are already used broadly in the medical field and on checked baggage.

The company now wants the TSA to use them in the nation’s 2,400 airport checkpoint security lanes, a move that could be worth at least $500 million in equipment sales.

Danielle Brian, executive director of the Project on Government Oversight, said the sheer number of potential conflicts – which will require recusals, necessitate waivers or result in violations of the ethics rule – is disturbing, particularly given the secretive approach the administration is taking on the issue.

“This is not a matter of just checking a box – this is about protecting the integrity of the operation of federal government,” Brian said. “But our worst fears are coming true: We know people coming in who have conflicts, and we cannot see what restrictions they are under, if any.”

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