Now that President-elect Joe Biden has picked Tanden to run the Office of Management and Budget at the White House, her ties to some of the most powerful players in the U.S. economy are drawing scrutiny from some progressives and advocates for accountability in government.
The OMB acts as the nerve center of the federal government, executing the annual spending plan, setting fiscal and personnel policy for agencies, and overseeing the regulatory process across the executive branch. As OMB director, Tanden would have a hand in policies that touch every part of the economy after years spent courting corporate and foreign donors. These regulatory decisions will have profound implications for a range of U.S. companies, dictating how much they pay in taxes, the barriers they face and whether they benefit from new stimulus programs.
Between 2014 and 2019, CAP received at least $33 million in donations from firms in the financial sector, private foundations primarily funded by wealth earned on Wall Street and in other investment firms, and current or former executives at financial firms such as Bain Capital, Blackstone and Evercore, according to a Washington Post analysis of CAP’s donor disclosures and some of the foundations’ public tax filings. In the same time period, CAP received between $4.9 million and $13 million from Silicon Valley companies and foundations, including Facebook and founder Mark Zuckerberg’s philanthropic organization.
CAP reports its donations only in wide ranges, making an exact figure impossible to determine. Other notable corporate donors include retail giant Walmart, insurer CareFirst BlueCross BlueShield, defense contractor Northrop Grumman and for-profit college operator DeVry Education Group.
“CAP has been one of the most aggressive (think tanks) in courting corporate donors,” said Zephyr Teachout, a law professor at Fordham University in New York who has campaigned for elected office on curbing the power of special interests. Those donors, she said, “believe they can shape the worldview of the people whose voices are going to be heard and powerful with the next president.”
CAP says less than 2.5 percent of its funding last year came from corporate sources, down from 7 percent in 2011, and that corporate money does not support the think tank’s direct research. CAP’s accounting of corporate donors is limited to money that flows directly from businesses and doesn’t include money from corporate executives or foundations whose wealth comes from Wall Street.
CAP spokesman Jesse Lee said the organization “retains complete control” over its work and that all contributions come without strings attached. The organization advocates a progressive agenda that would adversely affect the bottom line for some major donors — a tax on financial transactions, upping oversight of “shadow banks” such as hedge funds and investment firms, antitrust scrutiny of big tech, a public option for health insurance, and a reversal of President Trump’s corporate tax cuts and regulatory rollbacks.
“There are many instances where the work we do cuts against the business or financial interests of our donors,” Lee said. “CAP’s policy work has always been, and will always be, independent and driven by solutions that we believe will create a more equitable and just country.”
Tanden has told staff that she will remain as CAP president through her confirmation, but Lee said she suspended her involvement in fundraising after Biden announced her nomination.
The Post reached out to all the individual and corporate donors mentioned in this story for comment. Zuckerberg’s foundation, the Chan Zuckerberg Initiative, said in a statement that its funding for CAP mainly went toward criminal justice reform efforts. A CareFirst BlueCross BlueShield representative said the insurer “engages with many partners to ensure our members have access to affordable, high-quality care.” Other donors could not be reached, did not respond or declined to comment.
As a think tank, CAP provides research and advocacy about economics, criminal justice, health care, immigration and other issues. It was a popular landing place for former Obama administration officials such as Tanden, who served in a top role at the Department of Health and Human Services during the fight over the Affordable Care Act. She became CAP’s president in 2011 and received $396,063 in compensation last year from the think tank and its political arm, according to tax filings.
If she clears a potentially arduous Senate confirmation hearing, Tanden will enter the White House at a time of dire economic crisis, facing pressure from Republicans to dramatically cut spending. At the same time, progressives are pushing the new administration to rebuild the nation’s safety net for families devastated by the coronavirus pandemic, reverse Trump’s deregulatory drive and tackle what progressives see as the monopolistic practices of Silicon Valley tech giants.
The Biden transition team declined to make Tanden available for an interview about CAP’s fundraising, referring to her comments when she was officially named to Biden’s economic team. She vowed to “help shape those budgets and programs to keep lifting Americans up, to pull families back from the brink.” Tanden’s nomination has received widespread praise from high-profile progressive Democrats, including Sens. Elizabeth Warren of Massachusetts and Sherrod Brown of Ohio.
Sen. Bernie Sanders (I-Vt.), the former presidential candidate — who, after a swipe at his personal wealth by the former media arm of CAP’s political affiliate, accused CAP last year of being beholden to corporate donors — declined to comment on Tanden’s OMB nomination. Tanden expressed regret about the attack on Sanders at the time and said she had no editorial control over the media site.
Some past OMB directors in Democratic administrations previously worked in the federal government, while others had fundraising backgrounds from serving in Congress or working at foundations and private companies. The current director, Russell Vought, served as vice president of Heritage Action for America, a conservative advocacy group.
The Biden team will take over the executive branch from an administration which, despite Trump’s pledge to “drain the swamp,” regularly and dramatically flouted ethical norms. A review last year by ProPublica found that the Trump administration had employed 281 lobbyists, quadruple the number the Obama administration had employed six years into office. And Trump’s refusal to divest himself from his hotel businesses means that he financially benefited from the presidency, with his properties receiving at least $2.5 million in taxpayer funds since he took office.
A White House spokesman, Judd Deere, said Trump “has always taken his responsibility seriously to uphold the rule of law and govern this nation ethically and soundly.”
Progressives are demanding that a Biden administration serve as the starkest possible ethical contrast to the Trump administration.
“Neera Tanden has spent the last decade raising money from the top companies and highest-net-worth individuals in the country, which is a bit at odds with what Biden pitched during the campaign,” said Matt Bruenig, president of the People’s Policy Project, a left-wing think tank that accepts only small donations.
CAP’s ties to corporate and foreign interests are not unique among Washington think tanks. Though frequently cast as independent, scholarly sources of expertise, many think tanks are backed by the same businesses and foreign governments that hire Capitol Hill influence peddlers. These think tanks essentially operate as unregistered lobbyists, reaping the benefits of tax-exempt status while disclosing limited information about their donors.
The fiercest criticism of CAP’s fundraising has targeted its acceptance of between $1.5 million and $3 million from the United Arab Emirates in recent years. The country is one of the United States’ staunchest allies in the Middle East and plays a key role in supporting Trump’s hard-line approach to Iran. But human rights advocates condemn the UAE for fighting alongside Saudi Arabia in a civil war that has ravaged Yemen, one of the world’s poorest countries, and for joining with the Saudis in a blockade of neighboring Qatar.
After Washington Post columnist Jamal Khashoggi’s 2018 murder at the hands of Saudi officials, CAP put out a statement denouncing the “heinous and reprehensible act” but stopping short of demanding specific consequences to punish the kingdom. The think tank also declined to go to bat for a bipartisan resolution in the Senate aimed at ending U.S. involvement in the war in Yemen.
In another, previously unreported example of what some in and outside CAP viewed as UAE influence on the think tank, an unsigned essay in 2017 welcomed the ascension of Mohammed bin Salman as the new Saudi crown prince, saying he would usher in a “long era of stability at the top” and “economic and social reforms.”
“That reads like something that would be distributed by a Saudi foreign agent,” said Ben Freeman, who monitors foreign influence at the Center for International Policy. “Thousands of civilians had already been killed in Yemen, and we knew that MBS was the architect of that war. It’s hard for me to understand how CAP could support someone some so oppressive and a regime with absolutely egregious human rights issues.”
Lee pointed to other policy papers and statements on CAP’s website that called for an end to the war and criticized the crown prince’s authoritarian tactics, as well as a foreign policy event in 2018 with a keynote speech by Sen. Chris Murphy of Connecticut, a Democrat who has been a leading critic of U.S. involvement in Yemen.
In early 2019, CAP said that though contributions did not influence its foreign policy positions, the think tank would no longer accept donations from the UAE and other anti-democratic governments. Lee said Tanden was not involved in arranging the UAE donations and did not meet with their representatives until after CAP stopped accepting the funding.
The UAE and Saudi embassies did not respond to requests for comment.
But it’s not just think tanks’ dependency on donations from corporate and foreign interests that is problematic, critics said. They argued that the hundreds of hours of relationship-building that goes into securing large donations from big corporations and wealthy individuals gives private interests the opportunity to subtly influence the views of Tanden and others in her position.
In 2018, CAP received a donation of between $50,000 and $99,999 directly from Blackstone, a powerhouse in private equity, as well as a separate one in the same range from Hamilton “Tony” James, Blackstone’s executive vice chairman. That year CAP hosted an event featuring James’s book, in which the billionaire lays out potential solutions to the retirement crisis facing many Americans. Tanden gave introductory remarks at the event for James, who also sits on CAP’s trustee advisory board.
Members of CAP’s board include Andrew Hauptman, chairman of investment firm Andell; Glenn Hutchins, a private equity investor; Eric Mindich, a former hedge fund manager; and Kristin Mugford, a former executive at Bain Capital.
Mindich, who along with his wife has made large donations to CAP in recent years, said the think tank has “some of the most brilliant policy thinkers in the country working to advance values that I share” and that Tanden has a record of turning those values into reality.
“CAP isn’t trying to advance my financial interests. If anything, the opposite,” he said. “They advance the kind of country I want to see.”
“Anyone who thinks Neera would put corporate interests above what she believes is best for America clearly doesn’t know Neera Tanden,” said Mugford, who left Bain in 2013 and now lectures at Harvard Business School. Mugford has made sizable donations to CAP in recent years, which she said reflected her belief in its effectiveness on issues such as economic security, jobs, and education.
“Their policy solutions often go against my personal economic interest, but they reflect my values and will help move our country forward,” she wrote in an emailed statement.
Jeff Hauser, who scrutinizes executive branch appointees at the Center for Economic and Policy Research, called the corporate money that flows into CAP “corrosive,” though he added that the think tank plays an important role in a civil society that lacks public support for policymaking institutions. Founded in 2003 by allies of Bill and Hillary Clinton, CAP is widely viewed as a Democratic administration-in-waiting, with a revolving door between the think tank and the White House.
While CAP certainly doesn’t toe the line of all of its donors, Hauser said it can serve as a moderating influence.
“It’s soft influence but it’s very powerful, and it amounts to influence laundering in terms of the money because people don’t associate CAP with big tech or Wall Street, they associate it with the Democratic Party,” he said. “Being associated with the Center for American Progress is a way to build credibility in Washington. And it’s a way for companies to navigate risk because you have an open line of communication with a government in waiting.”
Michael Ettlinger, director of the University of New Hampshire’s Carsey School of Public Policy and a former vice president for economic policy at CAP, said he did not think Tanden’s experience raising money from the corporate world would affect how she approached the OMB position.
“You don’t buy Neera,” he said. “She’s got her strong views and I don’t think she’s going to be hugely influenced.”
During his time at CAP, which he left in 2013, the money the think tank received from corporate donors “never directly affected what we were doing,” he said, though he sensed an extra level of scrutiny if their work had bearing on a donor.
“If we were going to do something that would offend a funder, we were just asked to be really careful that we were positive we were right,” he said.
Potential funders who did ask for quid pro quos in exchange for donations were rejected by the think tank, Ettlinger said. He declined to give specific examples.
Tanden’s experience leading CAP, which publishes policy recommendations for many domestic and foreign issues, has given her the policy chops needed to lead OMB, Ettlinger said. The president-elect called Tanden “a brilliant policy mind with critical practical experience across government” and noted that she was raised by a single mother on food stamps.
“She will be in charge of laying out my budget that will help us control the virus, deal with the economic crisis and build back better,” Biden said. “But above all, she believes what I believe — a budget should reflect our values.”