Agent McConnell Has Infiltrated the Bureaucracy

(Article image by Roman Genn)

By Daniel Foster | National Review: Mitch McConnell had a problem. He needed to give President Obama, the man he had publicly vowed to make a one-term president, a nominee for the Legal Services Corporation. By law, the LSC, a Nixon-era 501(c)(3) tasked with providing legal aid to low-income Americans, had to be bipartisan; no more than six of its eleven members could belong to one party. By tradition, it fell on McConnell, as the senior member of the opposition in the Senate, to provide the president with a list of Republican names.

The trouble was that, as is often the case with putatively bipartisan bodies, the posts required nominees to meet certain ostensibly nonpolitical criteria that by their nature all but rendered the posts partisan carve-outs. In this case, McConnell needed to find a Republican who was “income eligible” for the available seat, meaning someone who earned less than 130 percent of the federal poverty line, which came out to a little over $14,000 a year.

So where on the fruited plain did Mitch McConnell find a competent, dedicated conservative lawyer without two nickels to rub together? As it turns out, in a rectory. Enter Father Pius Pietrzyk, a Dominican parish priest who happened to be a University of Chicago Law School graduate and a stalwart member of the Federalist Society. After practicing corporate and securities law at a big Chicago firm for three years, Pietrzyk left in 2002 to pursue a calling he found more meaningful. He was ordained a priest in the Catholic Church in 2008.

As a Dominican, he took a vow of poverty. And in 2010, President Obama nominated him, and the Democratic Senate confirmed him, to the LSC board of directors. There he sits next to board chairman John G. Levi, another Chicago lawyer (albeit with a significantly higher net worth), whose greatest claim to fame might be that he hired young Michelle LaVaughn Robinson and Barry Obama in the late 1980s.

Now, placing a ringer on an out-of-the-way board might not be the equivalent of repealing Obamacare or flipping the Senate, but in McConnell’s world it was a real win in the war of attrition that Republicans are quietly fighting inside what you might call the Other Government: namely, the bureaucratic state comprising more than 100 bipartisan boards and commissions created by Congress to regulate everything from Wall Street to farm credit, the post office to nuclear safety, Social Security to federal elections.

Many of these bodies are exactly as obscure as you are thinking. (Wikipedia helpfully tells me that the Commission on Key National Indicators, for instance, works with the National Academy of Sciences to “review research on the selection of a set of key national indicators [and] determine how to implement and establish a key national indicator system.”) But others are big-deal, big-government bureaucracies with familiar abbreviations such as SEC, FTC, FCC, FDIC, and NLRB. And because there isn’t a Republican in the White House, it falls on McConnell to fill their Republican slots.

President Obama tends to make his appointments to these boards the way they have usually been made: willy-nilly. Some will be well-known policy experts or academics politically aligned with the president. Others will be patronage picks of bundlers and allies. And others will be “friends of friends.”

Usually, it’s the same way with Senate leaders who do not belong to the president’s party. In the Senates of Bob Dole and George Mitchell, during the administrations of Clinton and George H. W. Bush, appointments were commonly viewed as so many caucus carrots, intended to keep members happy. (The attitude continues today. One GOP Senate staffer said of the relatively rare cases in which the Senate Democratic leader makes personnel choices instead of the White House, “Anytime Harry Reid gets to appoint two people, you can guarantee that one of those two people will be from Nevada.”)

Not so with McConnell. According to a number of sources inside the Senate Republican shop, McConnell saw Obama’s comfortable victory in 2008, and the Democrats’ daunting majority in the upper chamber, and knew he had to find creative ways to conduct asymmetric political warfare. On the legislative side, that meant first and foremost keeping Republicans unified against the president’s agenda, especially by ensuring that they kept their hands off Obamacare — a strategy whose overall success was marked by four years of liberals’ complaints about Republican intransigence. On the regulatory side, it meant scrapping the view that appointments are opportunities to do favors for your colleagues, and instead searching every nook and cranny of the country for sharp conservatives to take little-heralded but critical regulatory jobs.

“The way I like to think of it is, as leader, McConnell’s primary job is to unite 45 Republicans on as much legislation as possible,” McConnell speechwriter Brian McGuire told me on the Hill. “He has to be concerned about everybody in the conference and weighing all the equities that implies. [Appointments are] the one aspect of his job that he can act on unilaterally, and so to me this really reflects his conservative instincts.”

To translate his instincts into names, he brought in GOP veteran Dan Schneider. To look at Schneider’s government rap sheet — stints at the Department of Health and Human Services, the National Endowment for the Humanities, the Labor Department — you’d think he was a die-cast liberal. But when I spoke with him for this story, he said he likes to think of himself as a loyal conservative sent behind enemy lines “to monitor the radicals.”

Schneider came onto McConnell’s radar via the senator’s wife, Elaine Chao. When George W. Bush appointed Chao to head his Department of Labor, Schneider became her first White House liaison, and she gave him free rein to find conservatives to fill more than 200 slots inside the department. He impressed, and, after the Obama transition, migrated into McConnell’s office, where he oversees a sort of national conservative talent search with the title “Policy Advisor and Counsel for Nominations.”

Schneider operates according to a set of five criteria for screening potential nominees first developed by E. Pendleton “Pen” James, Ronald Reagan’s director of personnel management. First, were the nominees competent in the subject matter? Second, were they philosophically compatible with Senator McConnell? Third, did they possess high character and integrity? Fourth, were they tough? Fifth, were they team players?

The result, two or three hundred appointees later, is measurable.

Take the LSC, where not just Father Pius but four other McConnell-Schneider picks were confirmed and are serving. Among them is Sharon L. Browne. Browne was principal attorney for California’s Pacific Legal Foundation (PLF), one of the oldest conservative/libertarian public-interest law firms in the country, formed in part by veterans of Reagan’s gubernatorial administration. As president, Reagan had tried and failed to get a PLF lawyer on the LSC. But McConnell succeeded in seeing Browne through, even though her nomination was hotly opposed by the American Bar Association, no doubt in part because she successfully sued the California Bar in 1995, forcing them to settle on a claim that they had taken funds reserved for poverty programs and used them for political operations.

She brought that fight to the national level, and together with McConnell’s other picks, she got enough Democrats on board to promulgate a regulation making legal-service grantees financially liable for spending grant money on political advocacy instead of what it was intended for.

On the Federal Deposit Insurance Corporation, which went from sleepy New Deal installation to big-time regulator after Dodd-Frank, McConnell installed Tom Hoenig, the former president of the Kansas City Fed and a famed inflation hawk. In the lead-up to the financial crisis, Hoenig voiced concerns about the banking system. In its aftermath, he urged the government not to bail out equity holders. He later opposed Henry Paulson’s interventions, the Bush and Obama bailouts, and Dodd-Frank.

On the Federal Trade Commission, McConnell handed Obama the name of Josh Wright, a holder of both a Ph.D. in economics and a J.D. and widely considered his generation’s greatest mind on antitrust law. Before his confirmation, Wright had been highly critical of the FTC’s exceedingly thin two-year antitrust investigation of Google’s search-engine practices. Seventy-two hours after his confirmation to the FTC board, the investigation was dropped with minimal consequence for Google.

Then there is Chris Beall, an infrastructure expert whose first job was building natural-gas pipelines for the Koch brothers and who had spent most of the rest of his career in finance, privatizing dozens of public utilities. On McConnell’s recommendation (and, one assumes, to Joe Biden’s lament), Obama nominated Beall — the man who built climate-change conduits for the Co-Princes of Darkness — to the board of directors of Amtrak.

The list goes on. It is populated by individuals with both expertise and conservative pedigrees, in many cases already known for advocating the sorts of causes that annoy the White House — and who nevertheless were formally nominated by the White House. McConnell values this list not just because it stocks bureaucratic Washington with Obama opponents, but also because it constitutes a farm team for the next Republican administration, credentialing conservatives, many of whom have not had government experience, to take more senior roles once the GOP returns to Pennsylvania Avenue.

Of course, nomination negotiations between the Senate and the White House have always been a little like Cold War spy exchanges — you give us our two NLRB guys and we’ll give you a judge; two under secretaries for an FCC commissioner and a player to be named later; and so on — but McConnell’s innovation has been to stack his side of the trades with as many Jason Bournes and James Bondses as he can, where his predecessors might have stacked them with congressmen’s nephews and senators’ golf buddies.

And while a few appointments to commissions with Democratic majorities aren’t going to undo the progressive agenda all by themselves, they can prevail in the right spots, and gum up the works in others. Daniel Gallagher, a longtime SEC staffer and regulatory expert whom McConnell tapped to return as one of five SEC commissioners after a stint in the private sector, is a good example. In at least two instances, Gallagher convinced Democratic SEC commissioners to flip their votes on major regulations, ensuring their defeat in favor of Republican alternatives. In other cases Gallagher merely stymied former Democratic SEC chairwoman Mary Schapiro, capturing more ink in the financial pages and industry tip sheets and coordinating dissenting opinions on regulations that courts later relied on in overturning them. According to one source familiar with the dynamics of the SEC, Gallagher was generally “running circles around” the Democratic commissioners.

I asked Schneider, whose office is tucked into one of the fractal corners of the leadership suite on the Senate side of the Capitol, how much of a difference he thinks all of this makes at the macro level. How would Washington and America be different if McConnell were appointing good ol’ boys from Kentucky to all these slots? Standing next to a wall unit dominated by hunting maps — he is an outdoorsman — and a binder of dossiers, Schneider takes a minute to think. Then he responds in his affable Kansas cadence: “My boss’s goal is to make sure that our people, collectively, beat their people day in and day out, that our people are smarter and sharper and better than theirs.”

And while that is not measurable in every instance, he asks me to consider a counterexample. “There is not a bipartisan health-care board,” he says. “Consequently, we have 20,000 pages of regulations on the implementation of Obamacare. This matters.” Indeed, the eight-foot-high paper stack, printed out and wheeled around the Capitol on a hand truck as a clever, if unwieldy, political prop, was at that moment standing just a few rooms over in McConnell’s reception area.

I spoke to several individuals who are part of Schneider’s kitchen cabinet — think-tankers and public-policy professionals whom he regularly consults when headhunting nominees. They agreed that the biggest effects of McConnell’s appointment strategy are likely “ecological” and “cumulative.” The Hudson Institute’s Tevi Troy, who frequently huddles with Schneider on picks, even joked that he regretted this story was being written, since he thought McConnell was doing “brilliant” work; he didn’t want the other side to take notice.

When I asked McConnell himself to comment for the story, he was characteristically matter-of-fact, and hardly bashful. “We’ve had a very aggressive effort to do what we could on the regulatory side,” he told me over the phone, in his monotone drawl. “The core question was, ‘Can you have an impact on public policy at a time when you’re outnumbered?’ I think after almost five years of doing this, we have.”

McConnell has expressed himself on the subject even more succinctly than that. Schneider tells me that after he had located, recruited, and shepherded a “rock star” nominee through confirmation, the boss popped his head into the office to deliver a simple command: “Keep ’em coming.”

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