A former Goldman Sachs Group executive has been appointed Treasury secretary in three of the last four White House administrations, but so far, team Joe Biden has gone a different route, instead choosing executives from asset-management giant BlackRock to be the senior Wall Street representatives.
President-elect Biden named Adewale “Wally” Adeyemo, a former chief of staff to BlackRock’s CEO, as Deputy Secretary of the Treasury. BlackRock’s head of sustainable investing, Brian Deese, has been chosen to run the National Economic Council, the Wall Street Journal reported.
A Nigerian American, Adeyemo will be part of a history-making duo at Treasury: the first Black deputy serving with the first woman secretary, Janet Yellen.
Adeyemo served as President Barack Obama’s international economics adviser. After the Trump administration took over, he went to work for BlackRock, the world’s largest asset manager, as a senior adviser and interim chief of staff to CEO Larry Fink. He left in 2019 to become president of the Obama Foundation, where he managed day-to-day operations.
Deese also worked for the Obama administration. His appointment will make him the president’s top economic adviser.
BlackRock has $7.8 trillion under management as of September. A lifelong supporter of the Democratic party, BlackRock CEO Fink wields enormous power over the global financial system, thanks in part to Trump’s tax laws. His name came up when top donors to the Biden campaign privately discussed candidates to serve as policy advisors in the White House, CNBC reported in April.
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One of the world’s largest managers of fossil fuel shares, BlackRock this year promised more transparency over how it uses its large stakes in the world’s biggest companies. But in the last few years, it has used its loud voice in corporate boardrooms to kill shareholder resolutions aimed at making companies more sustainable, New Republic reported. “After joining the investor coalition Climate Action 100+, (BlackRock) this year voted down 10 of the 12 climate-related shareholder resolutions that group flagged as important, and voted more often with management than other asset managers.”
The role of BlackRock alumni in the Biden administration is the latest chapter in a decade-long rise in both Washington and on Wall Street, Dawn Lim and Gregory Zuckerman wrote for the Wall Street Journal.
“Blackrock has over $7 trillion (w/ a T) under management, of course, they are going to replace Goldman Sachs on running the government with the rest of the corporate confederacy,” The Moguldom Nation CEO Jamarlin Martin tweeted.
During the coronavirus pandemic, the Fed has turned to BlackRock to help it purchase distressed securities. Fink is a longtime donor and supporter of the New York City Police Foundation, which provides financial support to the NYPD. The nonprofit Color of Change asked Fink to divest from the foundation in the wake of George Floyd’s killing and subsequent protests.
Some investor advocates and progressives worry that naming finance executives to top Biden posts could lead to looser regulatory scrutiny on big money managers.
“By picking folks with deep ties to large asset managers, the administration can help assuage financial executives’ concerns,” said Tyler Gellasch, executive director of investor trade group Healthy Markets Association. “It sends a clear signal to the industry to breathe easier: They can plan for stability without likely facing massive new regulatory or tax risks.”
Some groups argue that Deese’s work with BlackRock and its big holdings in fossil fuel should disqualify him despite the company’s increased focus on climate. Activists with groups including the Sunrise Movement’s New York chapter staged a demonstration several weeks ago outside BlackRock offices.