Trust Issues

‘Drain the Swamp’ Pledge May Snare Trump Pick

This former antitrust lobbyist turned Trump appointee might have trouble doing his new job as a result of Trump’s ethics pledge.

Photo Illustration by The Daily Beast

President Donald Trump’s pick to lead the Justice Department’s antitrust division could be barred from participating in significant portions of that division’s work unless Trump waives ethics rules at the center of his efforts to “drain the swamp” in Washington.

The president tapped White House lawyer Makan Delrahim to lead DOJ’s antitrust unit late last month. If confirmed by the Senate, he will oversee all DOJ enforcement of antitrust rules as a number of high-profile mergers and acquisitions vie for regulatory approval.

This would be fine—had Delrahim not spent the better part of a decade lobbying on the types of antitrust issues he will oversee at the the DOJ.

Under an January executive order signed by President Trump, Delrahim is barred by an ethics pledge from participating not just in decisions specifically affecting former clients but in more general matters related to the issues on which he’s spent years lobbying—in this case, the precise legal matters that he will now be tasked with enforcing.

A registered lobbyist since 2008, Delrahim has represented major corporations including Qualcomm, Pfizer, and Anthem in discussions with legislators and regulators regarding antitrust laws and enforcement proceedings, according to disclosure forms.

The result could be a clash with language in the ethics pledge that limits work by former lobbyists on general issue areas on which they lobbied.

Appointees who were registered to lobby within two years of their appointments may not “participate in any particular matter on which [they] lobbied within the 2 years before the date of [their] appointment or participate in the specific issue area in which that particular matter falls,” the pledge states.

According to the Office of Government Ethics, that language doesn’t just restrict work that benefits a former client; it bars covered employees from working on any aspect of the specific policies on which they lobbied.

If an appointee “lobbied her agency against a proposed regulation focused on a specific industry,” an example in recent OGE legal guidance explained, “her recusal obligation as an appointee is not limited to the section of the regulation on which she lobbied, nor is it limited to the application of the regulation to her former client.”

“Instead, she must recuse for two years from development and implementation of the entire regulation, subsequent interpretation of the regulation, and application of the regulation in individual cases,” OGE wrote.

The language of the pledge, OGE guidance, and applicable federal regulations is often murky, but the permissibility of a lobbyist-turned-federal-appointee’s work turns on the question of how broad the likely beneficiaries of his work will be, legal experts say.

While all appointees are barred from participating in matters directly affecting former clients and employers, Delrahim will be forced to recuse himself—or have provisions of the pledge waived—in matters affecting far larger portions of private industry that happen to include his former clients.

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Though less specific than the regulation mentioned in OGE’s example, the issues on which Delrahim lobbied fall squarely in the areas he will oversee if confirmed to the DOJ post.

In 2016 alone, Delrahim, formerly a lobbyist with the firm Brownstein Hyatt Farber Scheck, represented insurer Anthem in talks with the government about its proposed merger with Cigna, and drug company Pfizer regarding its failed merger with Allergen. The latter fell through after U.S. tax rules on income derived abroad made it financially unworkable.

But Anthem is still challenging a federal court ruling blocking its Cigna merger. Trump’s Justice Department remains opposed to the deal.

Delrahim’s new post will require confirmation by the full Senate, and his previous lobbying work is likely to come up as Judiciary Committee Democrats probe potential conflicts of interest.

“Barring a waiver, which hasn’t been announced yet, Mr. Delrahim should not be able to participate in any matter involving competition and antitrust issues and participate in any matters involving his former clients,” according to Scott Amey, general counsel for the Project on Oversight and Government Reform.

Other legal experts said he would not be quite so restricted, but stressed that the spirit of the pledge would seem to preclude such a blatant spin of the revolving door.

“Republican administrations naturally want to constrain the amount of enforcement,” said Richard Painter, the top attorney in George W. Bush’s White House. “But those calls shouldn’t be made by the guy who was lobbying to convince the Obama administration not to enforce those laws.”

Federal laws governing conflicts of interest are less stringent than the president’s ethics pledge, but that pledge is the centerpiece of Trump’s stated efforts to combat the revolving door between special interests and the federal agencies that oversee and regulate them.

The White House previously told The Daily Beast that all executive branch officials covered by the pledge had signed it. A spokeswoman said last month that she was not aware of any instances of the president exercising his authority to waive the provisions of the pledge.

Delrahim did not respond to questions about his previous lobbying work and his compliance with the ethics pledge. DOJ deferred to the White House, which did not respond to questions about compliance with the pledge and the existence of any waivers.

Legal experts say Delrahim would unquestionably be prohibited from participating in any DOJ decisions regarding the Anthem-Cigna merger, by both the terms of the ethics pledge and bar association rules preventing an attorney from accepting employment adverse to a former client.

They also say that prohibitions on Delrahim’s work could be far more broad due the general language of his reported work on behalf of Qualcomm. That work focused on “competition policy, including issues related to domestic and foreign antitrust enforcement,” according to disclosure filings. He also reported lobbying DOJ directly on Qualcomm’s behalf.

The general language in those disclosures regarding antitrust issues could implicate far larger portions of Delrahim’s work at DOJ, according to Painter.

“The issue area is the actual discretionary decisions about the enforcement of antitrust laws,” he noted. If Delrahim were working on approval of a specific merger, it might not bar him from participating in more general antitrust matters.

“But the guys who were previously lobbying trying to get the DOJ not to enforce shouldn’t be the ones making that judgment call.”