Fed Governor Lael Brainard has donated to Clinton’s campaign and is widely viewed as a potential Clinton pick for Treasury secretary. Yellen hesitated and then demurred when Representative Scott Garrett of New Jersey asked whether Brainard would have a conflict of interest if she were indeed in talks with Democratic nominee Hillary Clinton’s campaign about a position. The election takes place Nov. 8.
“I would have to consult my counsel, I’m not aware that that’s a conflict,” Yellen said in testimony to the House Financial Services Committee in Washington, while rejecting Garrett’s suggestion that the U.S. central bank has a political bias.
Imagine how higher management would feel about you reacting in the same situation. Goldman has been known to lay off its employees for even donating to the Trump campaign. So a similar situation would be you, an employee of a firm, donating to a political campaign, and later getting a promotion as a result of that donation.
Of course, Lael Brainard herself has a long history of working in the executive branch to begin with. She initially served in Bill Clinton’s administration, and was appointed Undersecretary of the Treasury for International Affairs early in Barack Obama’s presidency. In 2014, she was nominated to the Federal Reserve Board of Governers, and it appears the majority of “conflicts of interest” and connections with her past employers were largely ignored during her confirmation.
Again, this should only surprise you so much. Brainard is married to Kurt Campbell, CEO of The Asia Group, and previously founded and was CEO of many other think tanks and businesses. After a distinguished military career, he also has made a career of working in politics, serving as Deputy Assistant Secretary of Defense, and the Assistant Secretary of State for East Asian and Pacific Affairs. It would make sense to look at his trading statements, to see how his portfolio could have benefited from inside information from within the government and Federal Reserve itself. If Campbell is appointed to a position within the government, it will just be another example of the government / lobby “revolving door” hard at work.
Then again, it would be fair to say that about a Brainard appointment to Treasury secretary in and of itself. And while you can expect the argument to be put forward of her “vast qualifications” at a confirmation hearing, it seems the one thing that she has done remarkably well during her career was to grease the right wheels and make sure that high-level government employment is in the cards.
So, when Yellen is queried by a Congressman about a potential conflict of interest, of course she is unaware that it could be a possible conflict. “Revolving door” and “conflict of interest” in regards to government appointments translates to “business as usual” for government officials.