The head of a consulting firm with deep ties to the Obama White House is flexing his political muscle heading into 2016 as the firm opens a new practice likely to rely in large measure on access to Democrats.
The firm, 32 Advisors, is headed by the former UBS executive Robert Wolf—a friend, adviser, fundraiser, and golfing buddy of President Barack Obama. The relationship is a key component of 32 Advisors’ main selling point: it employs and has access to power brokers in Washington.
"We help companies navigate the intricacies of government regulations and develop strategies to build strong relationships," its website boasts. "We advise governments in their economic development, public policy, and strategic projects."
The firm is now rolling out a new infrastructure practice that could benefit from its wealth of political connections. It proudly employs individuals with experience in or ties to key federal policymakers and regulatory bodies. Chief among them is Wolf himself.
Wolf, the former chairman of UBS’ operations in the Americas, founded 32 Advisors in 2012. He was already a prolific fundraiser for the president, bundling at least $500,000 for Obama’s re-election campaign. He donated more than $37,000 to congressional candidates, all of them Democrats, during the 2014 election cycle.
Wolf met Obama in 2006 at a meeting organized by the liberal billionaire George Soros. They stayed in touch, and are frequently seen on the links with other high-profile businessmen, politicians, athletes, and philanthropists.
"The relationship [with Obama] goes way back," Wolf told the New Republic last year. "Obviously, we’re very friendly. We remain close friends."
Those and other political connections are selling points for 32 Advisors, which can help clients secure subsidies or other federal support for private companies.
Its areas of operation—international trade, regulatory compliance, and commerce involving unmanned aerial drones—are inextricably linked with federal and international policy.
The firm’s new infrastructure practice aligns with its politics-centric approach, and it occurs as the firm signals support for a Democratic presidential candidate heading into the 2016 election cycle.
Wolf is a co-chair of the 2016 Democratic National Convention, and both he and 32 Advisors are listed as 2014 donors to the Bill, Hillary, and Chelsea Clinton Foundation. The foundation has come under scrutiny following revelations suggesting that Hillary Clinton, as secretary of state, may have given favorable treatment to foundation donors.
That type of treatment will serve 32 Advisors well if it adopts the proposals of the official appointed to head its new infrastructure practice, experts say.
At the helm of the effort is Michael Likosky, an expert on infrastructure finance and government planning whose past policy proposals have entailed massive federal support for the types of companies that might seek out 32 Advisors’ services.
"32 Advisors was built to address the challenges encountered where the public and private sector intersect," it said in a news release announcing Likosky’s hiring. The firm is "positioned at the nexus of business, government and finance."
In an interview, Likosky said the new practice will work to connect three often disparate interests: governments looking to build additional infrastructure, financiers seeking projects to underwrite, and design and construction firms to do the actual building.
"In order to spark the U.S. market, there has to be some catalytic role that the federal government plays and it would be most effective if it were something like a national infrastructure bank," he said.
Likosky’s 2010 book Obama’s Bank: Financing a Durable New Deal calls for unprecedented federal spending on infrastructure and green energy projects. It details a political and economic philosophy that Likosky calls "free market statism."
"This book advocates for a single mega-bank combining traditional infrastructure sectors along with clean energy in far greater depth than currently envisaged," Likosky wrote.
The book heaps praise on Obama’s efforts, primarily through his 2009 stimulus spending bill, to revamp American infrastructure. Likosky shares Obama’s vision, under which "the government acts in partnership with market actors to produce public goods … using private companies as policy organs."
The objectives of "Obama’s Bank" would be explicitly ideological. "Infrastructure is a foundational right," Likosky wrote. "As a foundational right, infrastructure both solves immediate problems and promotes longer-term progressive values."
However, such a project would likely redound to the financial benefit of companies that receive federal financing or subsidies from the government. It proposes the creation of a number of "public-private partnerships," a vehicle that Wolf has recently endorsed while calling for the creation of a federal infrastructure bank.
Likosky proposed modeling the bank on existing federal programs that finance infrastructure projects overseas such as the U.S. Export-Import Bank and the Overseas Private Investment Corporation.
Like those entities, Likosky writes, the proposed bank would "use companies as policy organs" to coordinate infrastructure-building efforts across multiple agencies—and even multiple governments—with an eye toward a "public purpose."
Likosky’s focus on Ex-Im dovetails with 32 Advisors’ existing work, which includes a practice devoted to export financing. Wolf has been a prominent Ex-Im supporter as the agency has faced criticism that it rewards politically connected companies at other firms’ expense.
As a member of the President’s Export Council, Wolf has personally lobbied Obama to support Ex-Im reauthorization while "help[ing] clients to structure key projects and access international financing for their growth."
Wolf’s ties to policymakers that can direct financing to 32 Advisors’ clients underscores a central critique of Ex-Im and other federal subsidy programs, according to Veronique de Rugy, a senior research fellow at the Mercatus Center at George Mason University.
"Across the board, we see that the people with [political] access tend to get projects even where it violates the charter of a political institution," she said in an interview. "This is how it works in Washington."
Likosky acknowledged the role that firms such as 32 Advisors can play in securing deals for its clients, but he said other factors are more important for policymakers and private finacniers backing the projects.
"Anybody can be loaded up with advisers with all sorts of connections," he said, but firms that actually land the contracts are likely to be those with the economies of scale and internal research and development capabilities to deliver the most competitive bids.
"What’s the most important characteristic or quality of the firms that makes them competitive and potentially win these bids?" Likosky asked. "I’d say it’s not the consultants that they hire, although if they hire a firm like ours they get some value added, otherwise we wouldn’t be in business, people wouldn’t pay for our services. But I would say that the successful firms tend to be the largest firms."
However, de Rugy suggested 32 Advisors’ export finance work is emblematic of the importance of political connections, regardless of a firm’s size.
"We are 100 percent sure to see the same trend as with any other crony programs in government," she said. "The spending will go to large and well-connected firms, independently of the merits of the projects, and at the expense of everyone else."
Since 2013, 32 Advisors hired a number of senior Ex-Im officials to lead its trade practice. It brought on Kevin Varney, the agency’s former senior vice president and chief of staff, to lead its international trade shop. Varney left in April. He is now a director at Boeing, the top beneficiary of Ex-Im financing.
The firm later hired John Schuster, a former vice president at Ex-Im, and Carter Lawson, Ex-Im’s former deputy general counsel, to supplement its ties to the agency.
De Rugy sees the same political factors at work in infrastructure spending. Likosky’s proposal would entail the disbursement of "a massive amount of money. The question is, what is the process to allocate the money?" she said. "Access and political connections matter a great deal."
Wolf has that access. In addition to his position on the Export Council, he is a member of two key White House advisory panels, the president’s Economic Recovery Advisory Board and his Council on Jobs and Competitiveness, and the Department of Homeland Security’s Border Infrastructure Task Force.
32 Advisors also enjoys the political clout of Austan Goolsbee, the former chairman of the White House Council of Economic Advisors, a "strategic partner" at the firm.
With its deep ties to the current administration, Wolf’s increasing involvement in the 2016 contest, and his frequent calls of late for more federal infrastructure spending, de Rugy expects the firm to maintain its reliance on federal policymakers.
"Both Wolf and 32 Advisors are obviously very well-connected and we can expect them to have serious access to lawmakers and a Clinton White House," she said. "The question is what will they be demanding for their support and how will they use their access."
32 Advisors did not respond to a request for comment by press time.
Published under: 2016 Election , Barack Obama , Ex-Im Bank