By Dawn Lim and Gregory Zuckerman
Wall Street bankers, and in particular those from Goldman Sachs
Group Inc., have long held senior positions in the White House.
Under President-elect Joe Biden, such roles are going to executives
of BlackRock Inc.
A former Goldman executive held the Treasury secretary post in
three of the last four administrations, but the firm is absent so
far from the White House this time. Instead, two executives who
have worked at asset-management giant BlackRock will be the senior
Wall Street representatives.
Mr. Biden is expected this week to name BlackRock's head of
sustainable investing, Brian Deese, to run the National Economic
Council, said people familiar with the matter. Adewale "Wally"
Adeyemo, a former chief of staff to BlackRock's chief executive, is
expected to be named Tuesday as the No. 2 at the Treasury
"By picking folks with deep ties to large asset managers, the
administration can help assuage financial executives' concerns. 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," said Tyler Gellasch, executive director of investor
trade group Healthy Markets Association.
Some progressives and investor advocates worry that the naming
of any finance executives could result in looser regulatory
scrutiny on big money managers.
But broadly, BlackRock may not draw the kind of anger that
traditional Wall Street banks like Goldman tend to generate.
BlackRock is in the business of investing money for individuals and
institutions like endowments, and much of its growth comes from
funds that track market indexes.
Asset managers like BlackRock don't arrange mergers and
acquisitions, they don't earn big profits from trading and their
employees, while well paid, often aren't seen within the finance
industry as swaggering bankers. The firm has faced criticism for
investing in companies that contribute to climate change, and for
failing to live up to its own rhetoric on the subject,
environmental activists say. It pledged this year to take a tougher
The role of BlackRock alumni in the Biden administration is the
latest chapter in a decadelong rise in both Washington and on Wall
Street. BlackRock is the largest asset manager in the world with
$7.8 trillion under management as of September. As it has grown, it
has both boosted its operations in Washington and hired government
officials. Messrs. Deese and Adeyemo worked in the Obama
BlackRock's global footprint and experience with markets "will
be invaluable as the president-elect navigates a slowing economy
and turbulent markets in the wake of the pandemic," said Stefan
Selig, an investment banker who runs BridgePark Advisors LLC and
was undersecretary of Commerce during the Obama administration.
The Biden administration economic team will be filled with
economists and policy makers who focus on areas such as income
inequality and labor markets. That is a contrast to the Trump
administration, which named former Goldman Sachs executive Steven
Mnuchin as Treasury secretary, former Goldman President Gary Cohn
as an economic adviser and other firm alumni to senior roles.
Goldman veteran Robert Rubin served as President Bill Clinton's
Treasury secretary, while Henry Paulson Jr. occupied the position
in President George W. Bush's second term. The Obama administration
had few Wall Street executives.
Mr. Adeyemo, a former senior international economic adviser
during the Obama administration, is expected to serve as Janet
Yellen's top deputy at the Treasury Department. The former
BlackRock executive worked as a senior adviser for the company from
2017 to 2019, including as interim chief of staff to BlackRock CEO
Mr. Fink was on the shortlist to be Treasury secretary on
Hillary Clinton's cabinet, said people familiar with the matter. He
has told board members and senior executives this year that he
wasn't going to Washington and was committed to staying at the firm
Mr. Deese was a key member of the White House Task Force
overseeing the bailout of General Motors Corp. and Chrysler LLC in
2009 and advised the government in negotiating the 2015 Paris
He joined BlackRock in 2017 and focused on integrating
environmental and social considerations into how BlackRock invests.
That role got a boost after Mr. Fink announced measures in early
2020 aimed to "place sustainability at the center of our investment
approach." That included taking a harder line against companies
that aren't disclosing climate risks and paring back some coal
BlackRock expanded its sustainable business over the first three
quarters of 2020, growing assets in such strategies by some 40% to
Tom Donilon, chairman of BlackRock think tank arm BlackRock
Investment Institute -- and brother of Mr. Biden's chief political
strategist on the campaign trail, Mike Donilon -- had been in the
running for the position as Central Intelligence Agency director,
people familiar with the matter said. But the BlackRock executive
recently said he wanted to stay in the private sector, according to
other people familiar with the matter.
BlackRock has drawn scrutiny for its role in advising the
Federal Reserve on purchases of exchange-traded funds and bonds to
support credit markets as part of the central bank's emergency
measures to calm markets. The firm has said it would seek to avoid
potential conflicts of interest between its fund investing and the
bond buying it is doing for the Fed.
Its investment reach has made it a target from activists and
academics who raise questions about whether its funds could
destabilize markets and whether it has done enough as a shareholder
to push for better behavior from companies on environmental and
"Any BlackRock executives that move into the Biden
administration need to prove that they are willing to take bold,
proactive action to stop climate change and protect the communities
most impacted by the crisis," said Moira Birss, climate and finance
director at Amazon Watch.
But the picks reflect Mr. Biden's pragmatism during an
unprecedented health crisis, others say. "This crisis is unlike any
we've seen since the Great Depression, so it's unsurprising that
President-elect Biden is seeking people with experience in both
government and markets to lead the recovery," said Milan Dalal,
managing partner at Tiger Hill Partners, a government relations
Sabrina Siddiqui contributed to this article.
Write to Dawn Lim at firstname.lastname@example.org and Gregory Zuckerman at
(END) Dow Jones Newswires
December 01, 2020 12:01 ET (17:01 GMT)
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