Corporate America isn’t welcoming
former Trump Cabinet officials with
open arms, headhunters say.
The toxicity of the former president’s brand is choking off traditional money-making opportunities for members of his inner circle.
But now Chao is encountering a fraught reentry into the private sector.
Headhunters who have sought similarly prominent work for Chao have found little interest, according to two headhunters she’s consulted personally. The headhunters, speaking on the condition of anonymity because of the sensitive nature of the discussions, said top executives wary of backlash from associating with former Trump officials are boiling down Chao’s four-decade Washington résumé to its most recent entry: long-standing ally of Donald Trump, despite her resignation the day after the Jan. 6 attack on the Capitol.
One of the headhunters said his team surveyed some companies about their interest in Chao and didn’t find any takers. “The feedback was, ‘It’s too soon,’ ” this person said.
But while it is clear that Chao’s reentry is more difficult than in the past, a person close to her says she has not been entirely shut out of the corporate world.
"She’s evaluating a number of invitations to join various corporate boards while helping former colleagues land as well,” this person said. “She’s interested in new economy companies, has already accepted board positions and is currently in various stages of finalizing agreements with them and others.”
Chao declined to comment herself.
While the small numbers make comparisons difficult, corporations don’t seem to have an immediate interest in other top Trump administration alums either. Roughly half of the S&P 500 companies have filed their 2021 investor disclosure reports, listing a total of 108 new or prospective board members, according to data from Insightia, which provides information to shareholders. No Trump Cabinet officials who served in the final quarter of his term are among those nominated.
By this point in 2009, four major companies had lined up alums of George W. Bush’s Cabinet to serve as directors: global power company AES, oil and gas company Hess, chemical maker FMC, and United Technologies, the industrial conglomerate that has since merged with Raytheon.
Headhunters and other corporate advisers say the calculus for executives at most large, publicly-traded companies is simple. Trump — the only president to be impeached twice, the second time on a charge he incited the mob that assaulted the Capitol in an attempt to overturn the presidential election results — left office with a majority of Americans strongly disapproving of his job performance. He remains a lightning rod for controversy and faces ongoing legal exposure from civil lawsuits and criminal investigations. Offering a board seat to anyone in his inner orbit risks inviting a revolt from customers, employees or shareholders.
“Boards don’t need trouble or criticism,” one headhunter said. “If you want to stay away from all that potential tarnish, that’s easy: You just don’t go near it.”
With Democrats in control of the White House and both chambers of Congress, companies are on the hunt in Washington for help with the new party in power. That is depressing demand for Republicans broadly, including those coming off Capitol Hill, top lobbyists say.
For example, Wells Fargo is still operating under a federal cap on its growth in the wake of its consumer abuses. Chao joined its board in 2011 and earned handsome pay for her work there until she resigned the seat in early 2017: In 2016 alone, she pulled in $312,000 in cash and stock, and she collected between $1 million and $5 million in deferred stock options that paid out through this year, federal filings show.
The bank did not include Chao among the nominees for its board that shareholders will approve at its spring meeting. “The last thing Wells Fargo wants is somebody at the Fed or the OCC to say, ‘I woke up, saw this and now I’m pissed off,’ ” Peter Crist, chairman of the headhunting firm Crist Kolder Associates, said, using the acronym for the Office of the Comptroller of the Currency, a banking regulator. Wells Fargo declined to comment. The three other companies on whose boards Chao sat most recently — Ingersoll-Rand, News Corp, and Vulcan Materials — all declined to comment on whether she would be welcome back.
Chao may not be alone. William P. Barr was a fixture on elite corporate boards before a tumultuous two-year stint as the second U.S. attorney general to serve during the Trump era. Critics say he used the post to act as the president’s personal counsel rather than the nation’s top law enforcement officer. Thousands of former Justice Department officials called on him to resign in open letters, a step he took in December after his relationship with Trump soured. Barr defended his moves on Trump’s behalf in high-profile cases, arguing his interventions were justified on the merits.
What he wants to do next with his career is unclear. Barr declined to comment. But he’s unlikely to return to at least one of his former employers. Kirkland & Ellis, the firm where Barr practiced before joining the administration, has no plans to rehire him, said a person familiar with the firm, requesting anonymity to discuss private deliberations.
And the three companies for whom he served as a director before joining the administration — Dominion Energy; Sculptor Capital, the hedge fund formerly known as Ochs-Ziff; and Time Warner, which has since merged with AT&T — declined to comment. Barr, who earned a $10.4 million retirement payout from Verizon after stepping down as the telecom giant’s general counsel in 2010, collected $877,000 in cash and stock for board work in 2017 alone, corporate filings show.
The path for other longtime Trump loyalists remains similarly murky. Former secretary of state Mike Pompeo, now eyeing a 2024 presidential bid, leveraged his post as the nation’s top diplomat to court luminaries from the corporate world and beyond through a series of private dinners at the State Department’s Foggy Bottom headquarters, an NBC News investigation found. The events, known as “Madison Dinners,” gave him an audience with moguls including Raytheon CEO Thomas Kennedy, Home Depot founder Ken Langone and hedge fund billionaire Paul Singer.
Pompeo, who also served as Trump’s first CIA director, has yet to take on any name-brand corporate work. Instead, he joined the Hudson Institute and is working as the “senior counsel for global affairs” at the American Center for Law and Justice, an evangelical Christian rights organization founded by Pat Roberston. He did not respond to a request for comment.
Pompeo’s predecessors have translated prestige they earned in office into profitable roles advising blue-chip companies. Colin Powell, President George W. Bush’s first secretary of state, works as a “strategic adviser” to Silicon Valley venture capital firm Kleiner Perkins and serves on the boards of Salesforce and Bloom Energy. Condoleezza Rice is a principal at Rice, Hadley, Gates & Manuel, a consulting firm she co-founded, and has served on a number of corporate boards, including those of Chevron, Charles Schwab and Dropbox.
It will be “extremely difficult” for long-standing Trump administration officials to repeat that trick, at least in the immediate term, according to Michael Useem, director of the Center for Leadership and Change Management at the University of Pennsylvania’s Wharton School. For S&P 500 companies evaluating those officials who remained in their posts for most of Trump’s term, “the downside risk far outweighs any upside gain,” he said. “It’s not even a close call.”
The finance and defense industries have proven notable exceptions.
Former treasury secretary Steven Mnuchin is launching a Washington-based investment fund that will seek money from sovereign wealth funds in the Persian Gulf, among other investors.
Jay Clayton, the former chairman of the Securities and Exchange Commission, has returned to the law firm, Sullivan & Cromwell, and will chair the board of private equity giant Apollo Global Management. Heath Tarbert, who stepped down in January as chair of the Commodity Futures Trading Commission, has joined Citadel Securities as its chief legal officer. All three had established themselves to varying degrees in their corporate spheres before entering public life.
Three established military leaders who joined the Trump administration early and left before the halfway point in his term have since navigated back into the private sector.
John Kelly, who served as secretary of homeland security, then Trump’s chief of staff, in 2019 joined the board of Caliburn International, the parent company of a contractor running the largest facility housing migrant children in the nation. H.R. McMaster, Trump’s first national security adviser, last year joined the board of Zoom, whose teleconferencing software has made it a household name during the coronavirus pandemic. And Jim Mattis, Trump’s first secretary of defense, rejoined the General Dynamics board, on which he served for four years before taking the helm at the Pentagon.
All three — and former Exxon CEO Rex Tillerson, whom Trump fired as secretary of state after little more than a year on the job — spoke out against Trump’s conduct after leaving office. Thanks to the credentials they established before joining the administration, and the distance they’ve put between themselves and the president they served since exiting, those officials remain in demand for some corporations, according to Dennis Carey, vice chair of the executive recruitment firm Korn Ferry.
“They’re viewed as leaders who went in to serve the country and did their best,” Carey said. “I don’t think anyone would question their motives.”
Yet former Republican policymakers angling for plum corporate work face other head winds. C-suites are in the midst of their own politically fraught transition. Workers, consumers and activist investors are demanding executives take bolder action on progressive priorities, from improving workforce diversity to addressing climate change. And business leaders are rebalancing their Washington lobbying teams to reflect a government now under full Democratic control.
Taken together, the changes have depressed the demand for the latest batch of former Republican lawmakers and staff hitting the private-sector job market.
Of the 43 Republican lawmakers who left office or lost their reelection bids, nine of them — or 21 percent — have secured lobbying jobs. That’s down from 36 percent in the previous Congress, and 42 percent in the one before that, according to data from the Center for Responsive Politics. While fewer Republicans this year than in the past have become lobbyists, they still out number Democrats. But that’s partly because Democrats generally become lobbyists less frequently than Republicans. Just one of the 25 in the latest outgoing class has landed there so far, down from 12 percent in the previous class and 18 percent in the class before that.
Still, some Republicans with particular expertise have found landing spots. As a member of the tax-writing Ways and Means Committee, former representative George Holding (R-N.C.) worked to preserve the so-called carried interest break for private equity executives. Now he is working for the Blackstone Group, the private equity powerhouse, heading its government relations in Europe, a firm spokesman said.
“Tight margins in the House and Senate are making Republicans as relevant as ever, and substantive, policy-oriented people with experience are always going to have value,” Steve Stombres, a partner at lobbying firm Harbinger Strategies, said. "I don’t think the market has changed that much.”
Another Republican partner at a top lobbying shop, requesting anonymity to discuss a sensitive topic, said demand for Republicans has dropped across the board. “Right now, it’s a Democratic town, and there’s a rush to get Democratic help,” this lobbyist said. “If you’re a former Republican House member, your connections are to the least meaningful part of the Congress. And if I hire one, I have to worry about what I’m hiring and the risk it poses to the brand.”
Harry Stevens contributed to this story"
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