WASHINGTON ― Seven Democratic senators sent a letter to President-elect Donald Trump this week asking him to require his nominees and appointees to disclose more details about their compensation history, including any bonuses they may get for leaving their jobs to work in government.
Many large companies, particularly on Wall Street, give executives special exit bonuses, known as “golden parachutes,” when they leave their corporate roles to join the government.
Nominees are already required to fill out financial disclosure forms. But the letter, spearheaded by Sen. Tammy Baldwin (D-Wis.), calls for incoming government officials to go further by releasing all information related to compensation or preferential treatment from an outside organization. The senators also asked for documentation detailing “how they will recuse themselves from taking any actions relating to their former employers.”
The senators asked that this information be provided before Congress holds hearings on Trump’s nominees.
“Given your nominees’ experiences leading some of the world’s largest companies, we anticipate it will be difficult to mitigate conflicts of interest,” the letter states. “We believe that expanded recusal requirements will be necessary and we ask that you explicitly detail how your nominees will recuse themselves from matters relating to their former employers or even industries.”
Sens. Elizabeth Warren (D-Mass.), Richard Blumenthal (D-Conn.), Kirsten Gillibrand (D-N.Y.), Chris Van Hollen (D-Md.), Sheldon Whitehouse (D-R.I.) and Patrick Leahy (D-Vt.) also signed onto Baldwin’s letter. Baldwin previously sent a letter to Trump asking him not to appoint revolving-door nominees to oversee industries where they made their wealth. Trump has not done that with his several appointments, including that of Steve Mnuchin for Treasury secretary.
The signees point to the $180 million that Rex Tillerson, Trump’s pick for secretary of state, received when left his CEO post at Exxon Mobil Corp. This, they say, illustrates why greater disclosure is needed. The Office of Government Ethics, however, has pointed to Tillerson’s ethics plan as a model for Trump ― who has failed to meet the same standards ― and other nominees. Many nominees are leaving major corporations and haven’t reached agreements with OGE on their conflict of interest plans.
Baldwin has been an outspoken opponent of golden parachutes for government service since winning a Senate seat in 2012. She introduced legislation to ban such bonuses for government service and to make government employees recuse themselves from any cases involving their former employers for two years. Then-Democratic presidential candidate Hillary Clinton endorsed the bill in 2015.
Several officials within President Barack Obama’s administration came from Wall Street and received special compensation when they moved to the public sector. Treasury Secretary Jacob Lew was granted an accelerated vesting of stock options from Citigroup when he left the bank to enter the administration. And two of Clinton’s top aides, Tom Nides and Robert Hormats, received accelerated stock vesting from Morgan Stanley and Goldman Sachs, respectively, when they went to work at the State Department.
This also became an issue when Obama nominated Antonio Weiss to be undersecretary for domestic finance. Weiss’ employer, Lazard, had promised to pay out $20 million in preferential stock and deferential payment when he went into office. Warren and other Democrats opposed his nomination, and Weiss was later appointed to a position that did not require Senate confirmation.
Sheila Bair, the former head of the Federal Deposit Insurance Commission, denounced the practice at the time.
“Only in the Wonderland of Wall Street logic could one argue that this looks like anything other than a bribe,” Bair wrote. “Once upon a time, part of the nobility of joining public service was the willingness to make the financial sacrifice. We want people entering public service because they want to serve the public. Frankly, if they need a $20 million incentive, I’d rather they stay away.”
The Trump transition team did not respond to a request for comment.