The Bridge: Nothing but Blue Skies Do I See

Sep 01, 2022

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NOTHING BUT BLUE SKIES DO I SEE

The Biden administration has touted its commitment to dealing with the climate crisis. But there’s a saying in Washington: “Personnel is policy.” Who does the work affects the outcome. That’s why I thought it was time to take a look at the financial disclosures of several administration officials working on climate change policy. I’m sorry to report some disappointing findings.

Climate Advisor John Rhodes

The most notable case is Special Assistant to the President for Climate Policy John Rhodes, who joined the White House in August 2021. His background shows he cares about the environment. But an annual disclosure filed this April for 2021 reveals numerous investments in companies that would be significantly impacted by climate policy decisions. According to a recent transaction disclosure, Rhodes increased his investments in some of these companies and added others to his portfolio in April. He also divested some shares in May, but he didn’t terminate his investments in many companies.

A lack of public information about Rhodes’s duties makes it difficult to assess the degree to which these companies intersect with his work, but there’s cause for concern.

Rhodes’s disclosures show investments in companies that have been known for significant greenhouse emissions, have announced emissions reduction goals, or both, including Lowe’s, Microsoft, Tyler Technologies, TJX Companies Inc., Unilever, Waste Management, and others. He disclosed stock in Apple, which reports that it released 23.2 million metric tons of carbon in 2021, and Berkshire Hathaway, which reports that just one of its subsidiaries released 62 million metric tons of carbon dioxide that year. He disclosed shares of Eaton Corporation, a major player in the oil and gas pipeline automation market, as well as aerospace, automotive, and rail power and emissions systems. Some of the companies in which he has invested paid fines for environmental violations.

One of Rhodes’s biggest investments is Amazon. According to the three available disclosures that the White House released to POGO, Rhodes and his spouse hold at least $700,000 in Amazon stock and, depending on whether he’s a beneficiary of any of several trusts that he disclosed, as much as two million dollars in Amazon stock. (The disclosure reports values in ranges, so the exact amount is impossible to pin down.) As of the time he filed his annual disclosure — April 2022 — he was also still serving as trustee of several trusts for family members that had similarly large investments in Amazon.

Amazon is a troubling investment for a presidential climate advisor because the company is a major producer of greenhouse gases. In August, Amazon said it produced more than 71 million metric tons of carbon dioxide during 2021 — an amount equivalent to the greenhouse emissions released by producing electricity for more than 13.9 million homes for an entire year. And, earlier this year, Reveal News accused Amazon of “drastically” underreporting its carbon footprint in past years.

Other Climate Change Staff

While Rhodes’s disclosures stand out, disclosures by others on the White House’s climate staff and Climate Task Force also caught my attention, as they overlap with industries affected by climate policy.

Energy: When she joined the administration, Susan Rice, director of the president’s Domestic Policy Counsel, and her spouse divested millions of dollars’ worth of stock in Enbridge, an oil and gas pipeline company. Now her work includes, among other things, climate change issues. Former Secretary of State John Kerry, who serves as the Special Presidential Envoy for Climate, similarly divested hundreds of thousands of dollars’ worth of energy investments. While these divestitures are commendable, it’s hard to ignore how much these two appointees previously invested in an industry that the International Energy Agency blames for “more than two-thirds of global greenhouse gas emissions.”
Carbon: Before becoming Deputy White House National Climate Advisor, Ali Zaidi practiced law for clients that included Mission Coal Company (coal), Murray Energy (more coal), Callon Petroleum Company (oil and gas), Midstates Petroleum Company (oil and gas exploration), Energy Capital Partners (private equity energy fund), and the Electric Reliability Council of Texas (which operates the electric grid for Texas, the state that leads the nation in carbon emissions).
Methane: Secretary of Agriculture Tom Vilsack, a member of the Climate Task Force, was the head of a dairy industry trade group before joining the Biden administration. The industry is a major contributor to greenhouse gases, including methane (from cow belches and flatulence).
Land: National Security Advisor Jake Sullivan, another task force member, owns an interest in a golf course. It’s a modest investment (no Grande Oaks Country Club), but golf courses are environmental disaster zones — and their use of pesticides and fertilizers contributes to greenhouse gases. So he’s got that going for him. He also disclosed undeveloped land “held for development” and land that’s leased to an oil company. Construction of buildings and houses is a major contributor to global carbon emissions.
Aviation: John Kerry and his spouse have a private jet through a family company. (Ask Kylie Jenner what the public thinks of private jet pollution.) Robin Carnahan, administrator of the General Services Administration, owns an aging four-seat plane. And NASA Administrator Bill Nelson came to the government from advisory boards to Lockheed Martin, which makes fighter jets, and Relativity Space Inc., which builds rockets. Pollution galore!

Of all these individuals, Rhodes is the one who risks violating the conflict-of-interest law. Technically, the law would allow him to work on broad policy matters that don’t affect a specific industry. But it’s bad ethics program management to expect an appointee to discern, in the frenzied course of work, the precise moment when a project’s focus narrows enough to trigger a conflict-of-interest prohibition. That’s why his investments and trades are unusual for a White House appointee.

Others, like Rice, divested their conflicting interest or, like Zaidi, left their clients behind. But the fact remains that some members of the administration’s climate team have profited from, worked for, or are currently invested in climate-destroying industries.