President Obama’s newly named Economic Recovery Advisory Board, the real-world Americans being asked to help solve the nation’s financial crisis, includes a union executive who took the Fifth in a federal probe, a billionaire whose failed bank pioneered the subprime mortgage market, and deep-pocket donors who gave or gathered nearly $1.2 million for the president’s campaign.
In all, 11 of the 16 board members donated or raised money for Democrats in the last election, according to a Washington Times review of campaign finance records. They include the president and chief operating officer of the American arm of UBS Investment Bank, the Swiss-based bank now at the center of a widening tax evasion probe by the Justice Department and the Internal Revenue Service.
In announcing the board’s creation, Mr. Obama described its members as “distinguished citizens outside the government” who were qualified on the basis of achievement, experience, independence and integrity to “bring a diverse set of perspectives and voices from different parts of the country and different sectors of the economy to bear in the formulation and evaluation of economic policy.”
The board is headed by former Federal Reserve Chairman Paul Volcker, whose only political contribution last year was $2,300 to Mr. Obama.
“It is distressing to see the president turning to his heavy finance hitters as consultants,” said Craig Holman, legislative director for Public Citizen, a nonpartisan watchdog group that tracks political fundraising and its influence on government policy.
“These appointments do resemble the type of political practices we’ve seen running Capitol Hill and the federal government for a long time,” he said. “Advisory committees often pretend to be heavy hitters, but the real question here is how much influence this board will have. My hope would be that this is an advisory board largely in name only, bringing in the fundraisers to participate without having that much of a role.”
White House spokeswoman Jennifer R. Psaki described members of the Economic Recovery Advisory Board as “outside advisers with decades of experience in government and the financial industry.”
“They were selected for their expertise on many of the economic challenges we are facing and their ability to provide recommendations from outside the walls of the White House on the appropriate steps for the administration,” she said.
One board member, Richard L. Trumka, secretary-treasurer of the AFL-CIO, surfaced during a Clinton-era federal investigation into a money-laundering scheme involving the Democratic Party and Teamster’s President Ron Carey. Court documents and a congressional report claimed that Mr. Trumka helped divert $150,000 in union funds to Mr. Carey’s 1996 re-election campaign through a liberal consumer-advocacy group known as Citizen Action.
Mr. Trumka, former head of the United Mine Workers, invoked his Fifth Amendment right against self-incrimination in refusing to testify on three occasions before a federal grand jury in New York, the House education and the workforce subcommittee on oversight and investigations, and a federal elections appeal master called in to investigate the Carey campaign. He was never charged, however, by the Clinton Justice Department.
A spokesman for the AFL-CIO did not returns calls seeking comment on behalf of Mr. Trumka, who has denied any wrongdoing.
Asked about Mr. Trumka’s ties to the probe, the White House’s Ms. Psaki said, “As the president of the United Mine Workers and later as the secretary-treasurer of the AFL, Richard Trumka has been a tireless advocate on behalf of working people for more than 20 years.”
According to federal records, investigators who targeted suspected campaign fraud in Mr. Carey’s re-election bid against James P. Hoffa focused on Mr. Trumka’s ties to a Washington consulting firm headed by Martin Davis, a top campaign consultant. In pleading guilty to conspiracy, wire fraud and embezzlement charges, Mr. Davis told a federal judge that Mr. Trumka agreed to launder Teamsters funds through Citizen Action.
A separate indictment against William N. Hamilton, the Teamsters’ former political director who was convicted on charges of embezzlement, fraud and perjury in the diversion of $885,000 in union funds to the Democratic Party, said Mr. Trumka agreed with Mr. Davis to transfer $150,000 to Citizen Action, which then routed $100,000 to Mr. Davis and the Carey campaign.