Time to pick sides.
| Why we need to support Warren. Her first outing and they are slinging arrows!
By Jessica MeyersGlobe Staff December 03, 2014
WASHINGTON — Massachusetts Senator Elizabeth Warren anticipated backlash when she launched an effort to defeat President Obama’s nominee for a top Treasury post.
She got it.
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The Democrat is facing a barrage of sharp criticism from editorial boards and financial industry observers for her opposition to Antonio Weiss, an investment banker nominated for Treasury undersecretary for domestic finance. They have called her opposition not only politically motivated, but wrong.
And while she has amassed support from some liberals and community bankers, the first-term senator is gambling on a move that elevates her agenda for economic populism just as she enters the Senate leadership. Senate Democrats named her to a strategic policy adviser position on Nov. 13, and Warren’s office confirmed the following day she would buck the president in opposing Weiss.
This represents the first real test for Warren as she seeks to carve her influence into the party’s priorities.
“All of my objections to Weiss’s nomination are substantive, including the concern about his Wall Street background,” Warren said in an interview, offering one of her strongest defenses yet. “The administration already has plenty of Wall Street executives to make sure that their views are represented in economic policy discussions . . . that is what this is all about. It’s trying to get some balance.”
Weiss, in some ways, is a surprising target.
An Obama fund-raiser, the 48-year-old Harvard Business School graduate has worked in global positions with the investment bank and asset manager Lazard. He’s a trustee of the French-American Foundation and The Frick Collection, a Manhattan museum filled with European masterpieces, and is publisher of the Paris Review.
While he comes from a middle-class New York household, his most recent financial disclosures show assets valued between $54 million and $203 million. Weiss has also coauthored a report advocating more taxes on the wealthy.
“He didn’t grow up privileged, and believes we should have economic policies for people who don’t grow up privileged to succeed,” said Neera Tanden, president of the liberal think tank Center for American Progress, who worked with Weiss on the tax report.
Weiss started working for Lazard in 1993, including eight years in Paris, and now is based in New York as the global head for investment banking. He and Lazard officials declined to comment.
Warren questioned Weiss’s regulatory experience and his role in what are known as tax inversions, under which companies move their headquarters abroad to reduce their taxes.
Lazard, a 2,500-employee global partnership that is headquartered in Bermuda, acknowledges that it works on inversions for some clients, but said recently that they represented less than 5 percent of its deal volume this year.
Warren’s criticism has focused particularly on Weiss’s involvement in a merger between Burger King and Canadian restaurant chain Tim Hortons, in which the combined company will reside in Canada. The two companies joined in August in an $11.4 billion deal.
Businesses in British Columbia face a 26 percent corporate income tax, compared with 35 percent in the United States. Burger King has said its tax rate prior to the move lies closer to the mid- to upper-20s — although it could still benefit from other Canadian tax policies.
“Critics need to address the fact he doesn’t have the right experience and that he has worked substantially in an area of tax inversions, something the administration is trying to fight back against,” Warren said in the interview.
She also questioned his background for the Treasury role, where he would assist in policies related to financial institutions, the federal debt, and capital markets. “Most of his career was spent on international transactions, not domestic finance,” she said. “These are different from each other.”
Weiss supporters dispute Warren’s assertions that the Burger King merger fit the kind of tax inversions the administration hopes to end.
“It was a cultural decision, not a tax decision, and the tax savings, if there are any, are minimal,” said Tony Fratto, a former assistant Treasury secretary and a spokesman for former president George W. Bush. “Warren “is wrong about him and his experience and judgment, and she is wrong about the job itself. The idea that the undersecretary of domestic finance wouldn’t benefit from a deep knowledge of financial markets is absurd.”
The Obama administration also disagreed with Warren.
“Antonio Weiss is a highly qualified nominee and we look forward to the Senate’s consideration of his nomination and swift confirmation,” said White House spokeswoman Jennifer Friedman.
Several prominent media voices also have pilloried Warren’s charges. New York Times columnist Andrew Ross Sorkin wrote last week that her opposition was “misdirected” and her understanding of the merger “misinformed.” A Washington Post editorial said Warren’s case against Weiss amounts to a “grab-bag of symbolism and epithets, not a rationale.”
Others said Weiss has varied experience working with Fortune 500 companies and understanding the global economy, issues that are vital for the role.
“Weiss’s background is sufficient to do the job and be successful in that post,” said Isaac Boltansky, a policy analyst at Washington financial services firm Compass Point Research & Trading, and former Warren staffer on the Congressional Oversight Panel. “But Warren’s opposition is partly driven by bigger issues than just Weiss. She is playing a bit of a long game with this one.”
This is not the first time that Warren has sought to influence nominations, although this marks her most overt attempt.
She challenged Federal Reserve vice chairman Stanley Fischer, a former Citigroup vice chairman and governor of the Bank of Israel, during his March nomination hearing in front of the Senate Banking Committee, although she did vote for him. She also worked last summer to help ensure Lawrence Summers, a former Treasury secretary, did not make the final list for Federal Reserve chairman.
Warren may have allies in her fight against Weiss. The second highest-ranking Democrat, Senator Dick Durbin of Illinois, has expressed concerns about Lazard’s work in tax inversions, and Senator Bernie Sanders, an independent from Vermont, has criticized the choice. The Independent Community Bankers of America also opposes the nomination.
Several Democrats on the Senate Finance Committee say they are waiting to meet with Weiss before making a decision.
But Senator Orrin Hatch, a Utah Republican who will lead the Senate Finance Committee when Republicans gain power next month, said he leans heavily toward him.
“If the man is competent, capable, and honest, to me, Wall Street experience is not an inhibition,” he said. “Wall Street experience should be an advantage.” |
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