Politics

Biden’s Pick For Chief Of Staff Lobbied Against Asbestos Lawsuit Payouts And For Scandal-Plagued Mortgage Giant

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Chuck Ross Investigative Reporter
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  •  Joe Biden’s pick for White House chief of staff lobbied on behalf of a trade coalition in the 2000s that sought to limit payouts in asbestos-related lawsuits. 
  • Ron Klain also lobbied on regulatory issues for home lender Fannie Mae, which paid $400 million in fines due to its accounting practices and excessive bonuses to executives. 
  • Despite his seeming anti-progressive lobbying career, Klain’s selection to serve as White House chief was hailed by Democrats across the ideological spectrum. 

President-elect Joe Biden’s pick for his chief of staff lobbied in the 2000s on behalf of a business coalition that sought to limit payouts for asbestos lawsuits, as well as for Fannie Mae, the mortgage loan company that was accused at the time of inflating its earnings and overpaying executives.

Ron Klain, the chief of staff pick, has been a longtime adviser to Biden. He began working for Biden’s U.S. Senate office in 1989 and served as Biden’s chief of staff when he was vice president.

Democrats across the ideological spectrum hailed the selection of Klain, citing his work in the Clinton and Obama administrations. He has cemented his progressive bona fides due to his role in the Clinton White House helping Ruth Bader Ginsburg through the Supreme Court confirmation process.

Massachusetts Sen. Elizabeth Warren, a leading figure in the progressive wing of the party, called Klain a “superb choice” to serve as Biden’s top adviser.

Klain’s position as the so-called Ebola czar during the Obama administration was also seen as an asset as the incoming Biden administration will have to deal with the coronavirus pandemic. (RELATED: Ebola Czar’s Lobbying Work Appears At Odds With New Role)

But Klain’s work as a lobbyist nearly two decades ago is largely omitted from his resume, possibly due to his work for major corporations and trade groups supported by big business.

As a lobbyist at the firm O’Melveny & Myers, Klain represented a trade group backed by a New Jersey roofing company that sought to limit payouts in asbestos lawsuits.

He was also part of a lobbying team that represented Fannie Mae while it faced a series of accounting and regulatory scandals.

Senate lobbying records also show he represented drugmaker ImClone Systems, Time Warner and U.S. Airways.

Klain’s work for a front group that sought to limit asbestos payouts is mostly likely to call into question his progressive pedigree.

Senate lobbying records show that Klain and two associates registered in January 2000 to lobby for the Coalition for Asbestos Resolution, which was formed by a New Jersey-based roofing company called GAF Corporation.

The Washington Post reported in April 2000 that GAF Corporation spent $7 million to back the coalition, which also had support from the U.S. Chamber of Commerce.

The Senate records show that Klain and Walter Dellinger, an acting solicitor general during the Clinton administration, lobbied Congress, the White House and Justice Department in support of H.R. 1283, a bill that would cap attorneys fees in asbestos lawsuits and limit liability payouts to people harmed by the carcinogen.

O’Melveny & Myers received $80,000 for the contract, according to Senate records.

The disclosure reports do not provide additional detail into the work performed by O’Melveny & Myers or Klain, though Dellinger was identified in news reports from 2002 as the primary lawyer for ExxonMobil, Honeywell and other companies that fought against asbestos class-action lawsuits.

Klain represented another front group back by big business, the Coalition for Truth in Environmental Marketing Information, according to the Senate records.

The coalition, which was backed by major trade groups like the Grocery Manufacturers of America and corporations like Procter & Gamble, fought against the World Trade Organization’s efforts to require “eco-labels” on consumer products.

Environmental groups supported eco-labeling to inform consumers about the safety of various products. Manufacturers claimed that the labels were cumbersome and overly subjective.

O’Melveny & Myers filed lobbying disclosure reports related to the coalition from August 2000 to January 2003, but the documents do not disclose any payments.

The Senate records also show that Klain lobbied for Fannie Mae on “regulatory issues” from August 2002 to August 2006.

Fannie Mae faced a series of scandals while O’Melveny & Myers represented the firm. The mortgage lender was ordered to pay $400 million in fines in May 2006 to settle claims that it inflated earnings and overpaid executives.

Fannie Mae opposed efforts in 2003 to form an agency within the Treasury Department to oversee the housing lender.

Klain was listed as a Fannie Mae lobbyist along with Arthur Culvahouse, a former ambassador to Australia who advised John McCain’s presidential campaign in 2008.

Democrats assailed Culvahouse during the campaign over his lobbying record, according to reports at the time.

The Biden campaign did not respond to a request for comment.

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