President Obama has chosen his next chief of staff, and the winner is Bill Daley, the former Commerce Secretary under Bill Clinton who has worked for J.P. Morgan Chase since 2004.
Daley has two notable things in common with his predecessor, Rahm Emanuel: Chicago roots and a career in finance.
Criticism of Daley's background has been swift. Blogger Michelle Malkin, who never has anything nice to say about the Obama administration anyway, took the Chicago-machine angle, charging that this staff move "looks, smells, and tastes like a rotten Chicago deep-dish pizza."
True, both Daley and Rahm have their origins in Chicago machine politics. Daley is the son of America's exemplary political machine. His father was the legendary Chicago Mayor Richard J. Daley; his brother is the current Mayor, Richard M. Daley. Emanuel worked for the current mayor, building a political network in Chicago before winning a congressional seat there.
But the finance ties are perhaps more interesting.
Daley took the job of Midwest chairman at J.P. Morgan Chase in 2004, having served as president of SBC Communications and a director of Merck & Co. after the end of the Clinton administration. He landed the job at SBC with his Rolodex, not with telecom experience, and made $2.7 million. Connections seemed to play a role in his J.P. Morgan job: Though he didn't handle Chicago business according to Jamie Dimon, the J.P. Morgan chairman and CEO who hired him, the bank underwrote Chicago's development of Millenium Park early in Daley's tenure. Chicago Magazine outlined the transition to J.P. Morgan in a profile of Daley in a February 2005 profile. Daley later became head of corporate responsibility, the position he holds now.
Rahm, meanwhile, made $18 million in just two and a half years at the investment banking firm Wasserstein Perella & Company, after leaving the Clinton administration in 1999. He also made $320,000 during his 14 months as a board member of Freddie Mac (during which time the mortgage lender suffered an accounting scandal). After his stint in finance, Rahm tapped the industry as a major source of political funds at the helm of the Democratic Congressional Campaign Committee, as noted by The New York Times in its story in Rahm's finance experience as he transitioned back into the White House in 2008.
The left has already taken issue with Daley's finance connections.
"With Wall Street reporting record profits while middle class Americans continue to struggle in a deep recession, the announcement that William Daley, who has close ties to the Big Banks and Big Business, will now lead the White House staff is troubling and sends the wrong message to the American people," MoveOn.org Executive Director Justin Ruben said in a statement just blasted out to press via e-mail.
Emanuel's tenure, one might think, would alleviate those concerns. It did not seem that the Obama administration was unduly influenced by the financial industry with Rahm as chief of staff -- or, at least, not because Rahm was chief of staff. Louder complaints were heard over Treasury Secretary Tim Geithner's past relationships with Goldman Sachs figures, as the administration executed the TARP bailout and rolled out its "stress tests," bailout restrictions, and various thin regulatory strings attached to the bailout money. On the legislative front, the administration passed a financial regulation bill over Republican objections, placing as tight of a clamp on Wall Street as was politically feasible.
But the government-transparency advocates at the Sunlight Foundation have a different take. Daley is more prone to make another trip through the revolving door, argues senior writer Paul Blumenthal, meaning influence-peddling may be in his post-White House future:
People criticized Rahm Emanuel for being in too close contact with lobbyists and corporate leaders, but Rahm's future considerations always appeared to be in the political realm. (Yes, I'm aware that Rahm was on the board of Freddie Mac, but what Democrat didn't get some plum seat on Fannie or Freddie back then. Fannie and Freddie were like the Woodstock of the nineties, everyone was there.) What is more disconcerting is that Daley's future prospects likely lie back in the world of finance.
Daley's business resume has already pleased the Chamber of Commerce and angered the left. But with financial reform over and done with, it's unlikely his relationships will influence any legislation, at least.
The resumes of Daley and Rahm share another commonality, when it comes to finance: Neither holds an advanced degree in it.
So, managerial acumen aside, connections and influence seem to have played a significant role in the journeys Daley and Rahm made from the Clinton White House to the financial world. That may go a long way toward explaining the skepticism of groups like MoveOn and Sunlight.
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