If you want to see what bare-knuckled political power by special interests looks like, look no further than the derailment of Sarah Bloom Raskin’s nomination to a high position at the Federal Reserve.
On Tuesday, Raskin resigned from President Biden’s nomination to be the Fed’s vice chair for supervision.
Her decision was not motivated by concerns about her qualifications or experience. That couldn’t be true: Raskin received unanimous Senate approval when she was appointed to the Fed’s board of governors in 2010, and again when President Obama named her deputy Treasury secretary in 2014. All U.S. regulators can — and should — examine their existing powers and consider how they can be applied to efforts to mitigate climate risk.
No, Raskin’s nomination was stymied by the fossil fuel industry and its Senate caucus.
Sen. Joe Manchin III (D-W.Va.) delivered the decisive blow on Monday, saying she had “failed to satisfactorily address my concerns about the critical importance of financing an all-of-the-above energy policy to meet our nation’s critical energy needs.”
For those who don’t speak English, Manchin’s goal was to preserve the role of fossil fuels in U.S. energy policy. That’s significant because, when it comes to energy policy and the need to combat global warming, Manchin is the definition of a walking conflict of interest.
Manchin founded Enersystems, a coal brokerage that is now run by his son. According to his most recent Senate disclosure statement, his Enersystems stock holdings total up to $5 million, and his income from the company in 2020, the most recent year reported, was at least $500,000 and up to $1 million.
Manchin has long been a staunch supporter of the fossil fuel industry. That may not seem unusual for a senator from a coal-producing state like West Virginia, but his political positions haven’t always reflected the interests of the coal miners who are his constituents.
When Manchin’s opposition doomed a version of Biden’s Build Back Better program in December, the head of the United Mine Workers urged him to reconsider because the program included provisions that “will help keep coal miners working, and have a meaningful impact on our members, their families, and their communities.” It was ineffective.
Manchin, on the other hand, is a favorite of fossil fuel executives. He is the leading recipient of oil and gas industry contributions in the Senate, having received nearly $743,000 in the current election cycle, nearly five times more than the runner-up, James Lankford (R-Okla.).
Remember that Heather Bresch is Manchin’s daughter, and her decision as CEO of the drug company Mylan to raise the price of its EpiPen, a life-saving anti-allergy medical device, by nearly 500 percent earned her and the company notoriety.
Raskin is disliked by the fossil fuel industry because she believes that financial regulators must include global warming costs in their calculations of the safety and soundness of the institutions under their jurisdiction.
Raskin noted that assessing the risks of extreme weather caused by global warming has become routine — if not mandatory — for banks and insurers, farmers and businesses, and central banks all over the world. “Any vice chair for supervision who ignores these realities would be guilty of a gross dereliction of duty,” she wrote.
Raskin claimed that instead of engaging in an informed debate about the issues, Senate Republicans boycotted committee votes to advance not only her nomination, but those of four other Fed nominees, including Fed Chair Jerome Powell’s reappointment and board of governors member Lael Brainard’s reappointment.
One might have some respect for industry’s campaign if it addressed its real issues candidly. It didn’t work. Instead, Raskin’s detractors concocted a scandal by alleging that she used her influence as a former Fed official on behalf of a financial company on which she served as a director. The Fed disproved the assertion.