The Morning Dispatch: Biden's Business-as-Usual Nepotism

Plus: The Biden administration OKs Russia's Nord Stream 2 pipeline.

Happy Thursday! The Dispatch’s softball team rides again tonight. Time to bring the thunder to the U.S. Institute of Peace.

Quick Hits: Today’s Top Stories

  • Overall life expectancy in the United States fell by one-and-a-half years in 2020 per new Centers for Disease Control data, the largest one-year decline since World War II.

  • The United States and Germany announced an agreement yesterday that will allow the Nord Stream 2 natural-gas pipeline connecting Russia and Germany to be completed. The pipeline’s completion will strengthen Russia’s grip on the European energy market, allowing double the supply of Russian natural gas to be shipped westward via a route that bypasses Ukraine, which had urged the United States to impose sanctions preventing construction on the pipeline to finish.

  • House Speaker Nancy Pelosi on Wednesday rejected two of Minority Leader Kevin McCarthy’s five recommendations to serve on the January 6 select committee, prompting McCarthy to decry the committee as a “sham process” and withdraw all five nominations. Pelosi had said the appointment of Reps. Jim Banks and Jim Jordan would impact “the integrity of the investigation.” 

  • A procedural test vote that would have allowed the Senate to begin debate on the bipartisan infrastructure framework failed as expected on Wednesday, with Majority Leader Chuck Schumer switching his vote to “no” at the last minute to retain the ability to bring up the same vote in the future.

  • The Biden administration on Wednesday extended restrictions at the U.S.-Canada border for another month—until at least August 21—in light of concerns about the Delta variant. Canada had said earlier this week it would begin allowing fully vaccinated Americans to cross the border on August 9.

The Biden White House’s Government Ethics Dilemma

Joe Biden’s victory in the 2020 presidential election can be chalked up to a variety of factors, but perhaps chief among them was his implicit pledge to bring a sense of normalcy back to the White House after the chaos of the Donald Trump years. In many ways, he’s delivered. He makes much less news, his moves are almost always choreographed days in advance, and his staff-written tweets are blander than a bowl of Cheerios.

But in Washington, “business as usual” is not necessarily commendable or praiseworthy in and of itself—and one former high-level Obama administration official is waging a lonely crusade to call attention to the Biden team’s shortcomings.

“[The White House is] taking a lawyerly approach to ethics,” said Walter Shaub, a senior fellow at the Project on Government Oversight (POGO) who led the Office of Government Ethics under former President Barack Obama from 2013 to 2017. “They’re looking to see what’s technically allowed, and then they’re doing it.”

What does he mean? Shaub—who is no Republican—clarified that the administration is doing a “pretty good job on following the existing rules,” but proceeded to run through a laundry list of concerns in a 35-minute interview with The Dispatch Wednesday evening. His most pressing? Nepotism and the exploitation of proximity to power.

In a break from his predecessor, no member of Biden’s family holds a job in his administration. But among the president’s top advisers, that’s rare. Steve Ricchetti—a longtime Biden aide who now officially serves as “counselor to the president”—has four children, and three of them are working in the administration in various low to mid-level positions. Ricchetti’s brother Jeff operates a lobbying firm in D.C. that on Wednesday reportedly quadrupled its first-half 2020 earnings during the same period this year. (Jeff maintains that he does not lobby his brother, and the White House said Steve recuses himself from all matters related to Jeff’s clients.)

The Ricchettis aren’t alone. The daughter of Biden Deputy Chief of Staff Bruce Reed works as Biden’s scheduler, and Sarah Donilon—the daughter of Office of Presidential Personnel head Cathy Russell and niece of senior Biden adviser Mike Donilon—has a job at the National Security Council. Monica Medina, the wife of Biden’s chief of staff, Ron Klain, was nominated to serve as assistant secretary of state for the Bureau of Oceans and International Environmental and Science Affairs, and press secretary Jen Psaki’s sister Stephanie has a senior position at the Department of Health and Human Services.

The White House does not see a problem. “The president has instituted the highest ethical standards of anyone to ever hold this office,” deputy White House press secretary Andrew Bates said last month. “And he’s proud to have staffed the most diverse administration in American history with well-qualified public servants who reflect his values.”

The “well-qualified” point has been a common refrain when administration officials are pressed on these issues, and in many cases it is accurate. “Can confirm my job over the last 5 months did not retroactively get my brilliant sister a masters degree from Harvard, a PhD in public health from John’s Hopkins [sic] and decades of published work and respect in the field,” Psaki tweeted a few weeks ago. Medina, Klain’s wife, has been working on environmental issues since the 1980s, including multiple stints at the National Oceanic and Atmospheric Administration.

But with familial connections making up such a significant portion of political appointees, Shaub argues it’s now on the White House to prove qualifications in each and every case. “The standard that they keep coming back with in response to questions is, ‘These people are qualified,’ but that was never the question,” he said. “The question is, were they the ones who would have gotten the job? Were they the absolute, most qualified candidate? Was there no doubt whatsoever that this is the person who would get the job if you had never heard of their relative that works in the White House?”

Axios reported last week that Shaub himself sought a job in the Biden administration, and the former ethics czar confirmed that fact to The Dispatch yesterday, saying he submitted an application as “one of many things [he] was considering” before taking his current position at POGO. But he believes someone leaked that information as a means of framing his criticism as that of a disgruntled would-be employee. When presented with this allegation yesterday, the White House press office declined to comment.

As disappointed as Shaub was with the White House’s hiring process, he was near irate discussing Hunter Biden. The president’s younger son’s business dealings in Ukraine and China played a prominent role in former President Trump’s first impeachment trial and the closing days of the 2020 campaign, but Hunter has made no effort to shy away from controversy now that his dad’s in the Oval Office. He published a memoir in the spring and launched a for-profit art career a few weeks later—planning to sell his pieces through a dealer at up to $500,000 a pop.

“People get lost in the weeds asking, ‘Well, is this good art?’ That’s not the question,” Shaub said, arguing Hunter is clearly” profiting off his dad’s presidency. “The question is, would somebody be paying half a million dollars for a piece of art if it wasn’t the president’s son? And the answer has got to be no.”

The Biden administration unveiled an arrangement earlier this month whereby Hunter would be able to sell his work through the Georges Bergès Gallery in New York, which will be responsible for rooting out any “suspicious” buyers and keeping any buyer’s identity anonymous. But a gallery spokeswoman seemed to completely contradict said agreement Wednesday when she revealed that “of course” Hunter plans to meet with prospective buyers at two upcoming art shows in Los Angeles and New York.

“Congratulations, you’ve just outsourced government ethics to a high-end art dealer,” Shaub scoffed, arguing the White House’s efforts only made things worse. “We’re just supposed to go on blind trust that not only will they comply with the agreement, but the agreement is designed perfectly to ensure any leaks will not happen.” Sens. Rob Portman and Tom Carper released a bipartisan report last summer detailing how the art industry is rife with money laundering and that Russian oligarchs have used it to evade U.S. sanctions.

Underlying any discussion of the Biden administration’s ethical failings is the reality that the Trump administration’s were significantly worse. An October 2020 Citizens for Responsibility and Ethics in Washington (CREW) investigation tracked more than 3,700 conflicts of interest that cropped up during the Trump presidency—including at least 150 distinct foreign government officials visiting a Trump property. Moreover, the Washington Post reported in September that the Trump Organization charged the U.S. government over $1.1 million for room rentals—mostly for Secret Service—over the previous four years. Trump’s daughter and son-in-law worked directly in the West Wing while failing to completely divest their business interests, raising numerous ethical concerns.

But that reality, Shaub argues, makes it more important for the current White House to hold itself to a higher standard—not less. “We’re not seeing any recognition that going back to the way things were when we got Trump is not the answer. What we really need is a new approach to ethics. And at the very minimum, squeaky-clean conduct to send a message that this stuff matters,” he said. “The lesson Biden and so many of his supporters seem to have taken from the last four years is better than Trump is good enough. And that just can’t be the standard.”

The president’s allies on the Hill seem to disagree. The Dispatch asked several Democratic senators for comment on these issues Wednesday, and only one—Sen. Tim Kaine of Virginia—provided a substantive answer. “I don’t think you can say, just because they’re related to one another there’s nepotism involved,” Kaine said. “I think the question is, are they qualified, and how’d they get hired? And I think you have to understand those things before you render any kind of conclusion.”

Sen. Cory Booker told The Dispatch that he’s “always concerned about ethics in government” but that he “know[s] nothing about what you are talking about,” and an aide to Sen. Mazie Hirono stepped in to prevent her from answering our question. The Dispatch also reached out to the offices of all seven Democrats on the Senate Homeland Security and Governmental Affairs Committee; we did not receive any responses.

White House Gives in on Nord Stream 2

Yesterday, the United States and Germany announced a deal to allow completion of the $11 billion Nord Stream 2 pipeline, a 764-mile natural gas line under the Baltic Sea running directly from Russian fields to the German coast. The U.S. has opposed construction of the pipeline for years on the grounds that it would increase Russia’s influence over the European energy market and undermine the economic position of Ukraine, which has historically earned revenue from transporting Russian gas to the rest of Europe. 

After the Trump administration implemented sanctions targeting firms constructing Nord Stream 2 back in 2019, the Biden administration’s decision to allow—if not explicitly endorse—its completion has been billed by officials as necessary to rebuilding U.S. diplomatic ties to Germany. Secretary of State Antony Blinken told the House Foreign Relations Committee earlier this week that, since more than 90 percent of Nord Stream 2 had been completed before Biden took office, “the physical completion of the pipeline was, I think, a fait accompli.”

“We have an opportunity to make something positive out of a bad hand that we inherited when we came into office,” he added.

The alleged inevitability of Nord Stream 2 has been the Biden administration’s justification for allowing construction of a pipeline senior officials themselves consider a bad deal for Europe. Just Tuesday—one day before the official agreement was announced—State Department spokesman Ned Price labeled the pipeline “a Kremlin geopolitical project that is intended to expand Russia’s influence over Europe’s energy resources and to circumvent Ukraine,” adding that it is “a bad deal for Germany, … a bad deal for Ukraine, and for Europe more broadly.”

Yet the Biden administration over the past six months has refrained from endorsing many of the sanctions already in place against companies who aided in construction of the pipeline in an act of deference to German Chancellor Angela Merkel, who has staunchly backed its construction. As we wrote back in February:

Biden himself has repeatedly called Vladimir Putin a “KGB thug” and reversed course in recent years to declare Russia the United States’ toughest geopolitical foe. White House press secretary Jen Psaki even said last month that Biden “continues to believe that Nord Stream 2 is a bad deal for Europe.” So why isn’t he doing all he can to prevent its completion?

Primarily because Europe doesn’t believe it’s a bad deal for Europe, and Biden is desperate, after four years of tensions under Trump, to rebuild the United States’ relationships on the continent—particularly with Germany.

Merkel visited Biden at the White House last week, and reporters pressed them on the issue. “My view on Nord Stream 2 has been known for some time. Good friends can disagree,” Biden said. “But by the time I became president, it was 90 percent completed. And imposing sanctions did not seem to make any sense.”

This isn’t the first time a Russian pipeline overcame U.S. opposition. In the 1960s, President John F. Kennedy tried and failed to block the Friendship (Druzhba) pipeline from Tatarstan to Europe, Kevin Book—managing director of the research group ClearView Energy—told The Dispatch. And in the early 1980s, Reagan lobbied America’s Western European allies to reject the Yamal pipeline on the grounds that it would allow the Soviets to expand their influence over Europe. Both projects were completed regardless.

“It was always going to be very difficult to stop a pipeline an ocean away,” Book said. “Particularly when an allied country wanted to build it.”

In a joint statement announcing today’s deal, U.S. and German leaders said the countries were “united in their determination to hold Russia to account for its aggression and malign activities by imposing costs via sanctions and other tools.”

“Should Russia attempt to use energy as a weapon or commit further aggressive acts against Ukraine,” the statement reads, “Germany will take action at the national level and press for effective measures at the European level, including sanctions, to limit Russian export capabilities to Europe in the energy sector, including gas, and/or in other economically relevant sectors.”

As part of the deal, the U.S. and Germany have also pledged to contribute to a new $1 billion “Green Fund for Ukraine,” which is designed to increase the country’s energy independence. Germany plans to reimburse Ukraine for lost gas transit fees through 2024.

Ukrainian leaders, however, have criticized these measures—despite Politico reporting that Biden officials have been privately urging their Ukrainian counterparts to keep their qualms quiet. (A senior State Department official denied this charge, telling reporters “there were no threats.”) 

“This decision has created political, military and energy threat for Ukraine and Central Europe, while increasing Russia’s potential to destabilize the security situation in Europe,” Ukraine and Poland’s foreign ministers said in a joint statement yesterday. “The hitherto proposals to cover the resulting security deficit cannot be considered sufficient to effectively limit the threats created by NS2.”

Many in Congress share the same concern. Republican Sen. James Lankford of Oklahoma told The Dispatch that allowing completion of Nord Stream 2 is a “terrible idea.”

“The American government, the Biden administration, is cutting the legs out from under the Ukrainians with a promise that Germany is going to stay engaged in the future,” he said. “This also cuts off American jobs because the United States would be the supplier of natural gas. This basically helps the Russian economy, hurting the American economy. I have no idea why the president would do that.”

But it wasn’t just Republicans expressing apprehension. Sen. Jeanne Shaheen, a Democratic member of the Senate Foreign Relations Committee, offered similar criticism yesterday. “I am not yet convinced that this agreement—or any bilateral agreement—can sufficiently provide assurances to our European allies and minimize the considerable economic impact and security implications of this pipeline’s completion,” she said in a statement. “While I look forward to being briefed by the administration on the final details of the agreement, I’m skeptical that it will be sufficient when the key player at the table—Russia—refuses to play by the rules.”

Still, some in Congress have defended the Biden administration’s actions, arguing the White House made the most of a difficult situation.

“Thinking America alone can stop a pipeline that is 98% complete is based in fantasy not reality. The deal Biden reached with Germany isn’t perfect, but it’s a good outcome under the circumstances,” Democratic Sen. Chris Murphy of Connecticut tweeted. “I guess we could’ve burned our relationship w/ Germany + others to the ground over Nordstream 2, but that would have come at an enormous, indefensible cost.”

For his part, Book says it would still be possible for the Biden administration to delay or possibly stop completion of Nord Stream 2, but that the diplomatic fallout from such a move could be high. “The United States could sanction the gas going through the pipeline—it could literally designate the seller or an intermediary and impose penalties on buyers who interacted with those sellers,” he said. “[But] it’s going to be very hard for Washington to argue to Berlin that they’re protecting Europe’s energy security by cutting off energy from Europe.”

Worth Your Time

  • Large numbers of Americans consistently report dissatisfaction with our two political parties, and Frank DiStefano argues in American Purpose that it’s time for a new one—not as a spoiler, but as a replacement. “If you want to build a movement that can become a major party, or overthrow one and replace it with new people and ideas, there is a method to succeed. Proven patterns have repeated again and again throughout the history of America that, if followed, can serve as a how-to manual for anyone wanting to shape the next era,” he writes. “The first rule for building a new party is that it can’t be a futile attempt to recreate a party that’s already dead. A new party has to break orthodoxy and think fresh. It must actually be new.”

  • California has traditionally seen itself as being to America what America has been to the rest of the world: a lodestar of cultural tolerance and economic freedom. In The Atlantic, Colin Friedersdorf admits he’s worried about losing that story. “If California fails to offer young people and newcomers the opportunity to improve their lot, the consequences will be catastrophic—and not only for California,” he writes. “The end of the California Dream would deal a devastating blow to the proposition that such a widely diverse polity can thrive. Indeed, blue America’s model faces its most consequential stress test in one of its safest states, where a spectacular run of almost unbroken prosperity could be killed by a miserly approach to opportunity.”

Presented Without Comment

Also Presented Without Comment

Toeing the Company Line

  • On yesterday’s Dispatch Podcast, the gang debated whether the White House’s attempt to diminish vaccine skepticism by flagging misinformation on Facebook will actually embolden anti-vaxxers. Plus, how concerned should we be about inflation? Do Republicans have any interest in uncovering what happened on January 6? And can Biden convince the Democrats to accept a bipartisan infrastructure agreement?

  • The Chinese Communist Party celebrates its 100th anniversary tomorrow, and Charlotte has a thoughtful piece on how, while the party itself has evolved over the years, one consistent has been its insistence on absolute loyalty.

  • Jonathan Chew spoke with Belarusian opposition leader Svetlana Tikhanovskaya when she was in Washington earlier this week. She discussed, among other topics, what gives her the strength to fight the Lukashenko regime: “The regime is afraid—afraid of betrayal, afraid of people, afraid of other countries, so I’m sure we will come to the point when it will be evident for everyone that [there’s] no future with Lukashenko.”

Let Us Know

Does it bother you that the Biden White House has replaced the Trump swamp with a swamp of its own? Or are you resigned to the fact that nepotism and shady wheel-greasing is always going to be a part of our governance?

Reporting by Declan Garvey (@declanpgarvey), Andrew Egger (@EggerDC), Charlotte Lawson (@charlotteUVA), Ryan Brown (@RyanP_Brown), Harvest Prude (@HarvestPrude), Tripp Grebe (@tripper_grebe), Emma Rogers (@emw_96), Price St. Clair (@PriceStClair1), Jonathan Chew (@JonathanChew19), and Steve Hayes (@stephenfhayes).