The first time he worked for a Clinton, Goldman Sachs veteran Gary Gensler helped royally screw up the US financial system, pushing from his perch at the Treasury Department to deregulate the derivatives market during Bill Clinton’s presidency.
Now, Bloomberg is reporting that Gensler will join former Secretary of State Hillary Clinton’s budding presidential campaign as chief financial officer. The assertion is based on a source identified only as “a Democrat familiar with the decision.” The Clinton campaign has not confirmed Gensler’s potential role.
More than just managing the $1 billion her campaign is expected to raise, Gensler’s role would be to allay criticisms that Clinton is too close to Wall Street. And that’s because in his second stint in public service, when he led the Commodity Futures Trading Commission in the aftermath of the financial crisis, Gensler attempted to correct his earlier mistakes. He pushed for tougher rules on Wall Street alongside Elizabeth Warren, who was then a Harvard Law professor, and he publicly criticized other members of the administration, like Treasury secretary Tim Geithner, when he viewed their proposals as too lax.
As he exerted more muscle than the financial industry was perhaps used to seeing from the CFTC, and brought lawmakers around to the idea of having banks back their derivatives positions with more capital to reduce risk, one unhappy bank lobbyist told a reporter that “this guy is the guy with the schwag.”
This Gensler confounded the expectations of many progressive critics who thought Obama shouldn’t have hired him, winning over the same crowd that wants now-senator Warren to take a shot at the presidency—and Clinton. His hiring will be taken as a signal that Clinton hears their concerns that she has been listening too closely to Wall Street.
But it’s not clear how much a campaign CFO will influence Clinton’s policy agenda when it comes to the banks, or why Gensler —who hasn’t worked in the private sector since he retired in 1997 as a partner at Goldman after 18 years with the firm—would return to an operational role after working as a policy advisor for so long. (In 2013, he described his technical knowledge as “somewhat rusty.”)
In any case, there’s a real danger to overthinking the symbolism. Clinton will need to raise a good deal of money, including from the financial sector. If Gensler is her campaign’s CFO, then he can be expected to play a role in that effort to woo the banks, dancing on the fine line between politics and policy. But if the hard-working Gensler can strike a balance that brings Clinton’s campaign some populist credibility, as well as his financial industry expertise, it will be a boon to the candidate. As for his willingness to pick fights with colleagues, well—he may just fit right in.