As a senior official on President Obama’s transition team, Froman successfully pushed to install Tim Geithner -- the Chairman of the New York Federal Reserve and architect of the bailout -- as Treasury Secretary while Froman’s employer, Citigroup, continued to receive record-shattering cash infusions as part of the bailout to prevent it from collapsing.
The advocates noted that President Obama’s nominee for deputy USTR, Marisa Lago, is also an alumna of Citigroup, raising additional questions about the level of influence Citigroup and other Wall Street banks have over the Administration’s trade policymaking.
“It’s no surprise that the TPP – an unprecedented corporate giveaway – is being negotiated by someone as cozy with Wall Street banks as Michael Froman,” said Murshed Zaheed, Deputy Political Director at CREDO Action. Zaheed continued, “The American people deserve transparency. The Administration must make public all communications between Froman and the massive financial institutions that stand to benefit from proposed trade deals.” Zaheed added “the American people and Congress need to see what kinds of commitments Froman is making to his Wall Street cronies behind closed doors.”
President Obama has called the concern expressed by Sen. Elizabeth Warren (D-Mass.), leading economists and legal scholars, and others that the passage of TPA could threaten financial reform “absolutely wrong.” However, a recent fact check from Bloomberg News -- headlined “Why Obama is Wrong and Warren is Right on Trade Bill Quarrel” -- indicated that “Elizabeth Warren has got the law on her side” and that “a number of constitutional scholars and other legal experts say she’s right.”
In addition, the Canadian finance minister recently alleged that the Volcker Rule violates the North American Free Trade Agreement. This has intensified congressional scrutiny of the president’s assertion that trade deals can’t be used to roll back financial regulation.
“Citigroup snuck a lobbyist-written Dodd-Frank rollback into last December’s CRomnibus, so we already know they’re willing to hijack unrelated bills to weaken regulations on Wall Street,” said Kurt Walters of Rootstrikers. “Wall Street has been lobbying to include financial regulation in ongoing trade negotiations, and Americans deserve to know what Froman has been privately saying to these big banks.”
Because TPA would provide a means for trade pact legislation written exclusively by the executive branch that is not subject to committee mark-up to remove extraneous terms to be passed under expedited rules by a mere 50-vote simple majority in the Senate, future presidents could use the process to roll back U.S. financial regulatory policies that would not survive normal congressional voting procedures. In the past, presidents have used this extraordinary authority to alter non-trade policy, with a rewrite of the Pension Benefit Guarantee Corporation statute in the fast-tracked implementing legislation for the World Trade Organization just one example.