9 CEOs Getting an Office at the White House
Wealth in politics has always created strange bedfellows as a way to yield more power. But President Donald Trump and his hand-picked Cabinet of billionaires appear to be more like an entourage of business pals headed to the White House.
The 2016 election broke spending records with Hillary Clinton raising $1.19 billion and Donald Trump raising $647 million. Trump’s Cabinet, as of December (barring agriculture secretary Sonny Perdue and head of veteran’s affairs, David Shulkin), was worth $4.5 billion, compared to Obama’s outgoing Cabinet valued at $2.75 billion.
The Trump administration has suggested money can buy power — six of his Cabinet appointees donated $11.6 million. The conflicts of interest surfacing from this collusion are indisputable, and this remains an issue every time a businessperson takes public office.
Not all elected officials come from modest backgrounds, but as public servants, they are expected to separate private interests from public duties with an ironclad ethics firewall. Here are some new additions to the White House (pending confirmations) who run the risk of mixing business with public service.
1. Rex Tillerson
Secretary of State
Former chairman and CEO, Exxon Mobil
Net worth: $325 million
Appointing oil tycoon Rex Tillerson as secretary of state is like making the fox guard the hen house. The Exxon Mobil chief, who owns $218 million in company stock and $70 million in pension, signed a $180 million severance deal with Exxon.
Exxon’s ties with Russian oil run deep. Between 2011 and 2013, the company signed major deals with Russia’s state-owned oil company, Rosneft, to explore the Black Sea and drill the Arctic for untapped fossil fuel resources. Following that, Tillerson received an Order of Friendship award from Russian President Vladimir Putin. Skeptics wonder how this alliance will influence relations with Russia, especially in light of the investigations to probe Russia’s influence in the U.S. elections.
2. Elaine Chao
Secretary of Transportation
Director/Board Member: Wells Fargo, NewsCorp, Ingersoll-Rand
Net worth: $24 million
Elaine Chao was born in a wealthy business family — her father James S.C. Chao founded Foremost Group, a New York-based shipping, trading, and finance company, where she worked her first job as a secretary. Chao came to be the first Asian-American woman to serve in a President’s Cabinet when she was appointed as secretary of labor in the Bush administration. She is married to Senate Majority Leader Mitch McConnell.
In her confirmation hearing, Chao was skeptical about using government funds for infrastructure projects, favoring public-private partnerships. Chao, who stepped down from the Wells Fargo board in December after six years, will receive anywhere between $1 million and $5 million from the bank as deferred stock payments, running until 2021. The bank has also taken a keen interest in Trump’s infrastructure plan supporting Chao’s public-private partnerships initiative.
Separately, a ProPublica investigation drew attention to another potential conflict of interest arising from her family’s shipping business and her prerogative to supervise and regulate the industry.
3. Jared Kushner
Senior White House Adviser
CEO/President, Kushner Companies LLC
Family net worth: $1.8 billion
Donald Trump’s conflicts of interest start at home — with his son-in-law Jared Kushner being appointed as a senior adviser to the President. Kushner’s family, like his father-in-law’s, made its fortune in real estate — most notably, the family’s flagship office tower in midtown Manhattan. Jared Kushner, until recently, was also chairman and publisher of Observer Media Group, which publishes the New York Observer.
Before taking on the position, Kushner will have to dissolve assets in 35 investments including the office building, as well as step down from his role as CEO of Kushner Companies and sell his common stock. Ethics lawyers, however, worry that handing over the financial reins to his family (brother Joshua and mother Seryl) isn’t exactly free from conflict as it isn’t a “blind trust.”
4. Steven Mnuchin
Secretary of the Treasury
Co-founder/co-CEO, Dune Capital Management
Net worth: $300 million
Treasury secretary Steven Mnuchin is a Goldman Sachs veteran and head of California-based bank OneWest, which became infamous for its unethical foreclosure practices. The 54-year-old Yale graduate didn’t wait longer than a day after being nominated to call for privatizing Fannie Mae and Freddie Mac, two agencies the government bailed out in the wake of recession.
As Treasury secretary, Mnuchin would regulate the industry that made him a millionaire. Interestingly enough, Trump and Mnuchin didn’t always get along. Trump sued Mnuchin’s hedge fund, Dune Capital, to gain favorable terms on the construction loans for the Trump International Hotel and Tower in Chicago.
5. Wilbur Ross
Secretary of Commerce
Chairman/chief strategy officer, WL Ross & Co.
Net worth: $2.5 billion
Private equity investor Wilbur Ross, who has been referred to as a “vulture investor,” is Trump’s pick for Commerce secretary. Ross’s investment firm WL Ross & Co. is known for buying distressed assets and making them profitable, often by slashing jobs and pensions.
A recent ProPublica investigation showed Ross might be taking Trump’s crony capitalism to another level with conflicts arising from his ties to the steel industry, which as Commerce secretary he would help regulate.
6. Andrew Puzder
Secretary of Labor
Former executive vice president and CEO, CKE Restaurants
Net worth: $45 million
Fast-food tycoon Andrew Puzder, who has been nominated as Labor secretary, raises potential red flags. An investigation into Puzder’s burger chains, Hardee’s and Carl’s Jr., found the establishments to be in violation of the Fair Labor Standards Act 60% of the time. Puzder has also been a staunch opponent of raising the minimum wage raise and worker protections.
7. Linda McMahon
Small Business Administration
Co-founder, World Wrestling Entertainment
Family net worth: $1.16 billion
The 68-year-old business magnate, and the new Small Business Administration chief, built the million-dollar wrestling franchise World Wrestling Entertainment along with her husband, Vince McMahon. McMahon reportedly donated $7 million to the Trump campaign. Skeptics wonder whether McMahon’s appointment to the administration would protect WWE from Congressional oversight of issues related to steroid abuse.
8. Betsy DeVos
Secretary of Education
Chairwoman, American Federation for Children
Family net worth: $5.3 billion
Education secretary Betsy DeVos’s father-in-law is Amway head Richard DeVos, and her father was Edgar Prince, an American businessman who founded auto parts maker Prince Corporation. At her Senate committee hearing, Democrats grilled DeVos, including Elizabeth Warren and Maggie Hassan, who questioned her personal experience with college financial aid and higher education management. DeVos revealed she never had taken out a federal student loan herself or for her children.
She also was questioned about donations her family made to organizations such as the Family Research Council, which is recognized as an anti-LGBTQ hate group. Her brother, Erik Prince, whose company Academi was under investigation for money laundering and brokering illegal deals with foreign governments, is said to be secretly advising Trump on intelligence matters.
The DeVos family has donated $143,000 to Republican senators on the U.S. Senate Committee on Health, Education, Labor, and Pensions, plus Democratic Senator Bernie Sanders, who received $399.
9. Donald Trump
President of the United States
Chairman/president, The Trump Organization
Net worth: $3.7 billion
Trump owns a luxury complex in Turkey’s terror-stricken capital of Istanbul. This alliance could pose both security risks and room for lobbyists to assert their power to make favorable deals. Trump’s national security advisor, Michael Flynn, whose consulting firm lobbies for the Turkish government, came out in support of the recent Turkish coup attempt.
Steps from his new home, Trump’s new luxury hotel on Pennsylvania Avenue might be in violation of the terms of its lease, since the President cannot be his own landlord. He has, however, proven that he’s a businessman first. With $650 million in debt, renting out office space to the Secret Service at Trump Tower makes for a smart business move.