Magazine

The Washington Power Grid


Washington's power grid extends deep into agencies and offices that most outside the Beltway have never heard of. It includes people whose titles would give you only the slightest sense of their status. Here are profiles of several of the Obama Administration's low-profile, highly influential players.

Diana Farrell: NEC aide to Larry Summers

One of three deputy directors under Larry Summers, head of the National Economic Council, Diana Farrell has been the White House's point person on the auto industry rescue, financial regulatory reform, and the housing crisis. She's also the economic team's lead staffer on climate change and competition policy. Farrell, 44, wrote the policy paper that laid the groundwork for the Obama Administration's "hands off" approach toward running companies it partly owns as a result of bailouts. Before she joined the Administration she led the McKinsey Global Institute, the economic research arm of the consulting firm. She once provoked the ire of protectionists, including former CNN commentator Lou Dobbs, with a 2003 paper arguing that every dollar spent "outsourcing" jobs created a net benefit to the U.S. economy of $1.13. Farrell grew up in Bogota; her father worked overseas for General Electric (GE) and her mother is Colombian. Farrell, who moved to the U.S. to attend Wesleyan University and earn a Harvard MBA, is married and has two children.

Lee Sachs: Counselor to Geithner

From Timothy Geithner's first day at the Treasury, longtime colleague and tennis partner Lee Sachs has been at his side. Sachs, 46, bird-dogged the Administration's effort to devise a financial stability plan and reshape the $700 billion bank bailout it inherited. He's now figuring out what to do with Fannie Mae and Freddie Mac, the troubled housing-finance giants. It's his second Treasury tour: In the Clinton Administration, he rose to the Senate-confirmed post of Assistant Secretary for financial markets. He and Geithner, then in the international affairs shop at Treasury, bonded over late-night pizza while grappling with the Asian financial crisis. This time around—with some Democratic lawmakers making clear they wouldn't vote for officials with strong ties to Wall Street—Sachs was not tapped for a job that required a Senate vote. He worked at now-defunct investment bank Bear Stearns from 1985-98, rising to senior managing director at 27 and later joining the board. Besides tennis, Sachs relaxes by fly-fishing, but he doesn't tie his own flies.

Michelle Smith: Federal Reserve spokeswoman

Michelle Smith had resigned from the Federal Reserve in 2006 and was preparing to join the just-retired Alan Greenspan at his consulting firm when she changed her mind. Instead, she chose to stay on with Ben Bernanke as a strategic adviser and spokeswoman. Lucky Bernanke. Throughout the financial crisis, the Fed chairman has trusted the 41-year-old to help make the central bank more transparent and to explain its extraordinary actions to a skeptical public. It was Smith's recommendation that Bernanke court audiences beyond Congress and Wall Street; traditionally the Fed chief sticks to scripted remarks lest a slip of the tongue send markets spinning. The glasnost strategy worked: He cooperated with CBS's 60 Minutes for what turned out to be a sympathetic profile, and Time named him "Person of the Year." Smith, a Dallas native, began as a mail clerk for then-Texas Democratic Senator Lloyd Bentsen in 1992. She moved to the Treasury Dept. when Bentsen became Secretary and worked for his successors, Robert E. Rubin and Lawrence H. Summers. Now President Obama's chief economic adviser, Summers unsuccessfully tried to bring Smith with him when he became president of Harvard University in 2001.

Cass Sunstein: Regulation Czar

As a law professor at the University of Chicago and Harvard, Cass R. Sunstein wrote hundreds of articles on issues ranging from workplace regulations to the legal rights of animals. When Barack Obama nominated his friend to head the Office of Information & Regulatory Affairs (OIRA), which wields enormous power as the White House's arbiter of regulations, Sunstein's writings got him into trouble. The left feared his belief in cost-benefit analysis would lead him to quash environmental and labor rules they wanted. Conservatives painted him as a radical anti-gun, animal rights wacko. He lowered his profile and was confirmed by the Senate in a 57-40 vote. He's still plenty ambitious, taking on such issues as climate change and chemical regulation. Government officials say his demands for rigorous science have helped make some of their rulings, such as the EPA's finding that greenhouse gases endanger the public health, more defensible. He's half of a Washington power couple: His wife is Samantha Power, a Harvard professor who serves on Obama's National Security Council. They met during the Obama campaign and had their first child, Declan Power-Sunstein, in April.

Amy Friend: Chief Counsel, Senate Banking Committee

When Amy Friend is spinning her wheels, that's a good thing. Teaching a spinning class at a Washington gym one day a week offers Friend a welcome diversion from her day job on the Senate Banking Committee, where the workload includes such day-at-the-beach tasks as remaking the financial system. Friend, 51, leads a team of Democratic staffers in drafting legislation to overhaul U.S. financial rules—and searching for compromise with Republicans. She arrived at the committee to work for its chairman, Senator Chris Dodd of Connecticut, in February 2008, a month before the near collapse of Bear Stearns. What helped clinch the job: a decade-long stint at the Office of the Comptroller of the Currency, the national bank regulator. The New York City native grew up in northern New Jersey and has a law degree from Georgetown University. Besides spinning, she has another guilty pleasure: playing the guitar in a basement band called The Brown-Eyed Girls.

Pete Rouse: White House Senior Adviser

In Washington's peacock culture, Pete Rouse is a rare bird: a power player who happily works behind the scenes and perhaps more than any White House insider embodies the No-Drama Obama culture. Rouse, who spent 19 years as Tom Daschle's chief of staff, shares the same title of senior adviser as Valerie Jarrett and David Axelrod, but not their high profile. He knows more about the Senate's machinations than any West Winger. Tasked with shoring up Senator Ben Nelson's support for health reform, Rouse spent 13 hours in a room with the Nebraska Democrat to help cut the controversial deal that won him over. He is also overseeing the closure of the Guantanamo Bay detention facility. When Rouse, 63, was mentioned last year to occasionally be traveling chief of staff, Obama quipped: "Pete won't even walk down the hall to come to my office, let alone get on a plane to travel with me."

Denis McDonough, National Security Adviser

When you see Denis McDonough spending a lot of time with President Obama, something bad is probably happening. They've been together a lot lately. Over Christmas, McDonough was at Obama's side in Hawaii, helping draft the President's first public remarks on the attempted bombing of a Northwest flight over Detroit. The 40-year-old father of three, who keeps fit by commuting from suburban Maryland by bicycle, has been with Obama since joining up as a global issues adviser to the Presidential campaign. He coordinated candidate Obama's fact-finding trips to Iraq and Afghanistan as well as his "people of the world" address to 200,000 people in Berlin. In the White House, McDonough played a central role in the troop draw-down in Iraq, the surge in Afghanistan, and now the response to the Haiti earthquake. In the process, he has eclipsed many others on the national security team, a testament to the self-effacing manner that accompanies his sometimes sharp elbows.

Michael Froman, Deputy Assistant to the President; Deputy National Security Advisor for International Economic Affairs

Michael Froman's official moniker is a tongue-tripper, but you can call him President Obama's sherpa. He will be guiding the President to summits in Canada, South Korea, and Japan this year, plotting the U.S. approach to issues ranging from capital standards for banks to carbon emissions. In Copenhagen in December, Froman was a broker in the high-stakes climate change negotiations, helping Obama win concessions on transparency from Brazil, China, India, and South Africa. Froman, 47, wears two hats in the White House, serving on the National Economic Council staff under Larry Summers, and on the staff of the National Security Council under General James L. Jones. He's no stranger to personal diplomacy, joining Obama's team after a long tenure as Robert Rubin's aide-de-camp in the Clinton White House, at the Treasury, and at Citigroup. "It didn't take any arm-twisting" to persuade him to return to Washington, Froman says. "It's a privilege to serve your country—and a friend—in a time of great need."

Jeanne Roslanowick, Staff Director (Democratic) and General Counsel, House Financial Services Committee

Jeanne Roslanowick vividly remembers the Capitol Hill meetings in the fall of 2008, stoked by cold pizza and crisis fever, as the financial system verged on collapse. She was directing staff working with House Financial Services Committee Chairman Barney Frank to draft legislation in what would become a $700 billion bank rescue package. Roslanowick, 61, who has worked for Frank since 2003, was charged with negotiating the details of the emergency measure with the Bush administration, House leaders and Republicans. Her boss wanted foreclosure relief, executive compensation restrictions and some assurance taxpayers wouldn't get left with the tab. She succeeded, and with good reason. In 27 years on Capitol Hill, Roslanowick has helped shape every major banking bill, including the financial regulatory overhaul the House passed in December. When things aren't too hectic, Roslanowick likes to escape to her cabin in the Shenandoah Valley Mountains. She calls it "a great way to gain perspective."

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