Senate Banking Committee GOP Moves Forward with Promotion of Trump Administration Official Tied to Barbaric Family Separation Immigration Policy
WASHINGTON, D.C. – Today, Republicans on the Senate Banking Committee advanced the nomination of Kathy Kraninger for Director of the Consumer Financial Protection Bureau. Lacking any experience with consumer protection or financial/banking regulatory issues, Kraninger has been tied to major Trump administration blunders including the family separation immigration policy and the disastrous response to the crisis in Puerto Rico following Hurricane Maria. Though she has largely refused to answer questions about her record or what she would do if confirmed, Kraninger has said she doesn’t disagree with anything Mick Mulvaney has done as “Acting Director.” Most recently, Mulvaney has taken heat for pulling back on the Bureau’s work to protect military servicemembers and their families from financial scammers and predatory lenders.
“We deserve a consumer champion at the CFPB, not Kathy Kraninger. She has no record of consumer protection or holding powerful big banks, predatory lenders, and other financial scammers accountable — key traits the American people expect in the nation’s chief consumer advocate,” said Karl Frisch, executive director of Allied Progress.
He continued, “The truth is, Kathy Kraninger’s career has been marked by too many examples of mismanagement for her nomination to warrant serious consideration let alone advancement with so many unanswered questions. Whether it was bungling the terrorist watch list during the Bush administration or her ties to Trump’s family separation immigration policy and his disastrous response to the crisis in Puerto Rico following Hurricane Maria, Kraninger’s abysmal record should not be rewarded with a promotion.”
“Since the day President Trump announced her nomination, Kraninger has refused to come clean about her role in a number of his controversial policies. She showed during her confirmation hearing that she lacks not only the experience but also the candor to be an effective CFPB Director. When a nominee does little more than repeat word-for-word their refusal to answer basic questions about their record and views and the White House stonewalls the release of documents about their work, we should all be worried,” he concluded.
Allied Progress has run extensive television and digital ads opposing the Kraninger confirmation. It also ran a full-page ad in The New York Times and sent direct mail to thousands of influencers and officials encouraging them to oppose her confirmation. The television ads can be viewed here while the other elements can be viewed here.
In July, the organization, represented by American Oversight, filed a Freedom of Information Act (FOIA) lawsuit against the Office of Management and Budget (OMB) and the Consumer Financial Protection Bureau (CFPB), seeking information that would shed light on Kraninger’s record. The FOIA requests sought employment documentation, travel and reimbursement information, calendars, and a variety of electronic communications for Ms. Kraninger. OMB and CFPB failed to provide the requested documents, forcing Allied Progress to ask a federal court to step in.
Kraninger Record Highlights
NO RELEVANT EXPERIENCE
- Kraninger has no relevant experience working on consumer protection issues. Kathy Kraninger only began working as an associate director at OMB last year, after Mulvaney took over. Kraninger “previously worked for the Department of Homeland Security and the Senate Appropriations Committee,” on the Homeland Security Subcommittee. Her nomination to lead the CFPB raised “concerns among Democrats, especially because of the lack of financial policy expertise in her background.” [Elizabeth Dexheimer, Robert Schmidt, and Jennifer Jacobs, “Trump Favors Little-Known Official to Be Next CFPB Chief,” Bloomberg, 06/15/18]
FAMILY SEPARATION IMMIGRATION POLICY
- Kraninger’s fingerprints are likely all over the Trump Administration’s family separation policy. Kathy Kraninger was likely involved in implementing the Trump Administration’s policy of separating children from their parents at the border. This involvement would have been in her official capacity at OMB. Kraninger has budgetary oversight of the Department of Homeland Security and Department of Justice, and OMB has oversight of the policy change that prompted families to be separated at the border. [Kate Berry, “CFPB nominee likely connected to Trump’s ‘zero-tolerance’ immigration policy,“American Banker, 06/19/18]
- At OMB, Kraninger worked on President Trump’s 2019 budget, which increased funding for immigrant detention facilities. Kathy Kraninger contributed to the White House’s FY 2019 DHS Budget, which supported “expansion of ICE enforcement activities” and requested $2.8 billion for “detention beds” to be used for “non-US citizens who are apprehended and determined to need custodial supervision.” [EFFICIENT, EFFECTIVE, ACCOUNTABLE AN AMERICAN BUDGET, Office of Management and Budget, FY 2019; “How Trump’s FY 2019 Budget Hurts Communities of Color,” Center for American Progress, 02/16/18 and “Budget-in-Brief: Fiscal Year 2019 – Homeland Security,” gov, accessed 06/21/18]
- Earlier this year, Kraninger appears to have met with one of the largest operators of private ICE detention facilities in the country. In February 2018, Kathy Kraninger appears to have met with Adam Hasner, Vice President for Public Policy for GEO Group. The company takes “in millions of dollars from ICE to detain people awaiting immigration or asylum hearings.” In 2017, GEO Group was linked to an effort in Texas to “allow immigration detention centers to obtain child care licenses” and the company “has said it expects to benefit from the Trump administration’s crackdown on illegal immigration.” [US Office of Management and Budget WAVES Records Release, US Office of Management and Budget, February 2018; Madison Pauly, “Trump’s Immigration Crackdown Is a Boom Time for Private Prisons,” Mother Jones, May/June 2018; Mirren Gidda, “PRIVATE PRISON COMPANY GEO GROUP GAVE GENEROUSLY TO TRUMP AND NOW HAS LUCRATIVE CONTRACT,” Newsweek, 05/11/17 and Marcia Heroux Pounds, “Boca-based prison operator Geo’s 2017 revenues up 4 percent, earnings dip,” Sun-Sentinel, 02/14/18]
DISASTROUS RESPONSE TO CRISIS IN PUERTO RICO AFTER HURRICANE MARIA
- Kraninger oversees the federal agencies criticized for their inadequate responses to Hurricane Maria in Puerto Rico. In fact, Congressional Democrats recently accused FEMA and HUD—agencies that Kraninger oversees at OMB—for abandoning the needs of displaced evacuees. [“Profile of Kathy Kraninger,” Armed Forces Communications and Electronics Association (AFCEA) Conference, 2017 and Bianca Padró Ocasio, “Democrats say FEMA, HUD have ‘abandoned’ Puerto Rican evacuees in last-minute aid push,” Orlando Sentinel, 06/28/18]
BOTCHED HANDLING OF TERRORIST “NO FLY” WATCHLIST ACCURACY
- Kraninger defended the terrorist watchlist even after DHS received 16,000 complaints about incorrect information on the list. In 2007, Kathy Kraninger defended the terrorist watchlist at a Congressional hearing, despite acknowledging that the list had “errors,” that sometimes “waste [Department of Homeland Security] resources.” At the time, the Department of Homeland Security had only resolved half of the 16,000 complaints it received from individuals who believed they were mistakenly placed on the list. [“House Panel Weighs Terrorist Watch-List Problems [Audio],” NPR News, 11/08/07]
- During a 2007 Congressional hearing, Kraninger was unable to confirm if Rep. John Lewis could ever get his name fully removed from the terrorist watch list databases. Despite Congressman Lewis raising concerns as early as 2004, Kraninger was unable to confirm if anything could be done for him saying, “we cannot promise that his issue is indeed […] fixed” and instead blamed airlines for how they use the list. As of 2004, Lewis had already been stopped 35-40 times at airport security. [Testimony of Kathleen Kraninger, “The Progress and Pitfalls of the Terrorist Watchlist,” Hearing of the House Committee on Homeland Security, 11/08/07; Ted Barrett, “Kennedy has company on airline watch list,” com, 08/20/04]
ABYSMAL RECORD ON DATA SECURITY
- Kraninger advocated for biometric data collection practices for foreign nationals that the GAO criticized for “significant information security control weaknesses.” While at DHS, Kathy Kraninger advocated for the use of biometric data from foreign nationals entering the United States. She said that US-VISIT biometrics collection “provides a significant layer of security.” However, the Department of Homeland Security’s widespread adoption of biometric data has been deeply controversial. It has been called “the most elaborate system of identification in the United States” by privacy advocates and criticized for “significant information security control weaknesses” by the Government Accountability Office. [Testimony of Kathleen Kraninger, “The Progress and Pitfalls of the Terrorist Watchlist,” Hearing of the House Committee on Homeland Security, 11/08/07; “United States Visitor and Immigrant Status Indicator Technology (US-Visit),” Electronic Privacy Information Center, accessed 06/28/18; Stephanie Condon, “DHS wants green card holders’ fingerprints,” CNET, 12/18/08; “Homeland Security Needs to Immediately Address Significant Weaknesses in Systems Supporting the US-VISIT Program,” United States Government Accountability Office, July 2007 and Paul Willis, “Fully biometric airports becoming a reality,” CNN, 08/11/09]
- Kraninger pushed for use of RFID chips in government-issued identification cards despite concerns over personal data security and DHS concerns over its effectiveness. Kathy Kraninger pushed for federal and state issuers to adopt RFID chips in identification cards and documents, despite being aware of the vulnerabilities they created. Researchers found that protective measures for RFID chips are easily made ineffective, and unique codes have the potential to expose sensitive personal data or be hacked. Kraninger pushed for the adoption of RFID despite an official recommendation to DHS arguing that the technology “may not be best suited for identifying individuals” and urging that “other solutions should be considered.” [Prepared Statement of Kathleen Kraninger, “Technology for Secure Identity Documents,” Hearing of the House Committee on Oversight and Government Reform Subcommittee on Government Management, Organization, and Procurement, 10/18/07; Testimony of Kathleen Kraninger, “Technology for Secure Identity Documents,” Hearing of the House Committee on Oversight and Government Reform Subcommittee on Government Management, Organization, and Procurement, 10/18/07; Todd Lewan, “Special alloy sleeves urged to block hackers?,” The Associated Press, 07/11/09; Press Release, American Civil Liberties Union, 12/12/07; “Data Privacy and Integrity Advisory Committee,” United States Department of Homeland Security, accessed 06/21/18; “The Use of RFID for Human Identity Verification,” The Data Privacy & Integrity Advisory Committee, 12/06/06]
HER SPIN ON THE REVOLVING DOOR OF INFLUENCE
- In 2010, the consulting firm Kraninger worked for got a controversial contract from U.S. Customs and Border Protection – a government agency she previously had purview over at Department of Homeland Security. That year, Sentinel HS Group won a $481,000 “strategic consulting” contract from U.S. Customs and Border Protection (CPB) to “facilitate discussions among senior Border Patrol leaders.” Sentinel’s Senior Principal and another three figures at the firm had previously worked for CBP and the contract faced scrutiny because the firm was “stocked with former insiders.” [Press Release, “Kathy Kraninger Joins The Sentinel HS Group as Senior Director,” com, accessed 06/15/18; and Ken Dilanian, “Border Patrol gives contract to firm stocked with former insiders,” Los Angeles Times, 09/21/10]
STAGGERING CUTS TO IMPORTANT HOUSING PROGRAMS
- At OMB Kraninger developed a budget which cut over $8 billion from HUD programs including rental assistance. While at OMB, Kraninger developed the administration’s 2019 budget for the Department of Housing and Urban Development, one which would have cut funding by $8.8 billion, including cuts in rental assistance and community development block grants. [Katy O’Donnell and Ben White, “Trump’s little-known pick to lead consumer bureau sets up fight with Congress,” Politico, 06/16/18; Fiscal Year 2019 Budget,” Whitehouse.gov, accessed 06/18/18; and Brakkton Booker, “White House Budget Calls For Deep Cuts To HUD,” National Public Radio, 02/13/18]
GIVEAWAY TO AT&T DISGUISED AS HELP FOR FIRST RESPONDERS
- Kraninger voted to give AT&T a multi-billion-dollar federal contract supposedly to provide a network for First Responders, but AT&T admitted they’d leverage the contract to expand their own commercial 5G service. On March 28, 2017, Kathy Kraninger voted to give AT&T a 25-year contract to build and operate the Nationwide Public Safety Broadband Network. The deal would require substantial investment from AT&T but also provided the company with $6.5 billion in federal funds as well as 20 MHz of “valuable telecommunications spectrum.” One analyst even speculated that just 1% of the spectrum would be used for first responders while the rest would boost the company’s spectrum holdings. The company admitted that it planned to leverage its FirstNet contract to expand its own 5G capabilities for their commercial network. [“FirstNet Special Board Meeting, March 28, 2017 [Audio],” First Responder Network Authority, 03/28/17 (15:52); FY 2017: Annual Report to Congress,”First Responder Network Authority, February 2018; Trefis Team, “How Much Does AT&T Stand To Gain From FirstNet?,” Forbes, 12/12/17; Wells Fargo 2018 Telecom Forum [Audio],” Wells Fargo Securities, 06/21/18 (23:38); (24:16); Edmund Lee and Cecilia Kang, “AT&T Closes Acquisition of Time Warner,” The New York Times, 06/14/18]
BROTHERLY CONFLICT OF INTEREST
- Kraninger’s brother is President & CEO of an SEC-registered investment advisor with $1.8 billion in assets under management, including holdings in several large CFPB-regulated financial institutions including Wells Fargo, Bank of America, Santander, Discover Financial, JP Morgan, among others. The company’s assets under management include large holdings in several prominent financial institutions. [“Wells, Kraninger couples receive Walsh Jesuit High School’s Manresa Award,” My Town NEO, 12/08/15; “Daniel J. Kraninger,” NorthCoast Asset Management, accessed 06/27/28; “NorthCoast Asset Management Brochure,” SEC Investment Adviser Public Disclosure, June 2018 and “NorthCoast Asset Management, LLC – Institutional Portfolio,” NASDAQ, 03/31/18, accessed 06/27/18]
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