How Rahm got rich

Incoming White House chief of staff Rahm Emanuel’s career as an investment banker was short but, oh, so sweet. Emanuel left the Clinton White House in 1998 as a senior adviser on a government salary. By the time he won election to the House in 2002, he had earned an astonishing $16 million.

How did he do it?

Partly, it was simple luck: Emanuel dipped quickly into the world of investment banking in time to catch the tail end of the 1990s boom economy as a Chicago-based managing director at Wasserstein Perella & Co., where he worked from 1999 to 2002. While he was there, the firm was sold to the German Dresdner Bank for $1.37 billion in stock, netting Emanuel much of his Wall Street windfall.

Returning to Chicago in 1998 after his White House stint, Emanuel soon ran Wasserstein’s small Midwestern office, developing a reputation as a deal guy who focused on mergers and acquisitions among companies that were subject to heavy government regulation. There, he deployed his skills as a born negotiator who knew the inner workings of government bureaucracies.

Frequently, Emanuel turned big Democratic donors and others he’d met during his White House years into clients for Wasserstein Perella, a firm that was led by Bruce Wasserstein, a hefty financial supporter of Clinton.

Emanuel is “tireless,” said John Canning, a managing director of Chicago-based Madison Dearborn Partners, a multibillion-dollar private equity firm.

Canning became friendly with Emanuel while he was setting himself up in Chicago business circles and has remained close to him through his congressional career. “He’s got a nose for a transaction, a sense for what each party’s looking for and where each party can concede,” Canning said.

Emanuel was unavailable for comment. But in 2003, he described his investment banking career to the Chicago Tribune.

“Fundamentally, I brought in business and worked on business that was very successful,” Emanuel said then. “I didn’t work on one deal. I didn’t work on two deals. I think it was close to six or seven, of which a couple of them were over $1 billion.”

The Democratic congressman from Illinois will be starting out as White House chief of staff for President Barack Obama during a severe global economic crisis. And as a former investment banker himself, Emanuel may be well-positioned to understand the problems and priorities of the nation’s struggling financial system.

While Emanuel lucked into the timing of the Wasserstein sale, the deals he worked on contributed in a significant way to the firm’s bottom line, generating hefty bonuses for him along the way.

One signature transaction was the $16 billion merger of Unicom Corp. and PECO Energy Co. into Exelon Corp., now one of the nation’s largest electric utilities, with nearly $19 billion in annual revenue. The company owns 17 nuclear reactors, which produce about 20 percent of the nation’s nuclear power.

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‘Rahmbonics’ making a comeback

Colleagues coined a phrase during the Clinton years to fit Emanuel's ability to mangle the English language. AP

Newly coined Obama chief of staff Rahm Emanuel was on his best behavior during his Sunday show debut this weekend – measured, calm, bi-partisan.

But when it came to the notorious ability of the Illinois political street fighter to mangle the English language – well, let’s just say Rahm hit a touchdown.

Friends and colleagues – particularly in the Clinton White House – have dubbed this phenomenon “Rahmbonics” over the years and on “Face the Nation” and “This Week,” Emanuel engaged in a veritable festival of mixed metaphors.

The jumbling began during a discussion of how Washington leaders have put off dealing with energy issues since the oil crisis in 1974 and health care for nearly just as long.

“We had a crisis, we kicked it down the can,” Emanuel explained to “Face the Nation” host Bob Schieffer.

“These are – just taking those two examples, these are crises you can no longer afford to kick down the can,” he continued. “The crisis we have here, the American people know we have one and they are ready and willing to start to tackle those problems. You cannot afford now to kick those down the can any longer.”

To which Schieffer simply replied, “All right,” and moved on.

“Kicking the can down the road” has been a favorite metaphor politicians have used to describe someone who is postponing a decision or avoiding an issue.

But Emanuel’s Yogi Berra-style translation of the phrase should come as no surprise to those who know him well. Speechwriters in the Clinton White House, where he was an aide, used to collect choice examples of “Rahmbonics” and post them on a bulletin board. Oftentimes they involved sports.

“He’d say something like you can’t kick a field goal in the ninth inning,” recalled Jake Siewert, a longtime friend as well as a former Clinton press secretary and longtime admirer of Emanuel’s verbal skills.

Shutting a revolving door was another Emanuel classic. He used the phrase in 1998 to explain a Clinton plan to require states to report illegal drug use among inmates before receiving federal money for prisons.

“We have to slam shut the revolving door between drugs and crime,” he told The New York Times.

“We kept tabs on them,” said a former Clinton speechwriter who asked not to be named. “There was a certain kind of admiration in involved in this.”

The mix-ups that made it into newspapers, as opposed to those he blurted out in staff meetings, were the ones that intrigued Emanuel’s White House colleagues the most.

Quoting Emanuel-style metaphors even became a game among some members of the Washington press corps.

“You figure if he’s quoted in the newspaper he’d given it more thought,” said Siewert, adding that Emanuel has a sense of humor about his way with words. “He’s pretty well aware of it. I mean he thinks fast and talks fast.”

Emanuel’s appearances last Sunday made clear his metaphor mixing is a treat the public will get more of in coming months.

Despite the disorienting image of “This Week” host George Stephanopoulos addressing his longtime friend and former Clinton White House colleague with the formal “Congressman Emanuel,” Emanuel kept familiar when he attempted the “kicking the can down the road” line again in reference to energy, health care and economic crises.

“So this provides an opportunity to finally tackle the issues that for too long have been postponed, kicked down the road – kicked down the road, basically,” he said.

He also suggested bridging the auto industry, when discussing government’s role in helping country’s struggling car manufacturers.

“President elect Obama has asked his economic team to look at different options of what it takes to help bridge the auto industry,” he said. “So they are part of not only a revived economy but part of an energy policy going forward.”

So, to sum Emanuel up: don’t expect an Obama administration to let the clock run out in the final quarter when the bases are loaded – even if the blitz of crises facing the country makes them want to kick the road down the can.

Biden’s new role: Good cop

A few days before the election, a Democratic strategist privately worried that a Vice-President Joe Biden was destined for a White House career of dissatisfaction and idle-hands mischief.

“You can’t just have a guy like him at loose ends, he’d go crazy,” said a Democratic consultant who knows the affable, bright and mercilessly quotable soon-to-be ex-chairman of the Foreign Relations Committee. “They need to keep him busy. Nobody over there wants him getting into the Secretary of State’s [business].”

Harnessing Biden’s considerable talents and containing his flaws will be an ongoing challenge for Obama. But Democratic insiders say the appointment of tough-guy Rahm Emanuel as chief of staff—and the administration’s need to forge a governing coalition that includes some Republicans—has brought Biden’s upcoming role more clearly into focus: He’ll play the good cop.

The Democrats’ apparent failure to win the 60 Senate seats necessary to halt a GOP filibuster has created the need for inter-party ambassadors like Biden who are practiced at the art of aisle crossing. In his 36-year Senate career, Biden was never considered a bomb-throwing ideologue, and he still has plenty of chits to cash in with Republicans on the Hill.

“He’s probably got more friends among Senate Republicans than John McCain does, and that’s a huge plus for Barack Obama, who is committed to breaking the partisan roadblock of recent years,” said Biden spokesman David Wade shortly before Election Day.

And while Emanuel’s bad-cop reputation may be overstated, all those F-bombs and threats to pulverize GOP incumbents during his tenure of the Democratic Congressional Campaign Committee boss create an opening for Biden, who maxes out on the Mr. Nice Guy scale.

“I really have genuine relationships with Republican leaders in the House and the Senate. I mean, I—I hope this is not self serving, but I’ve gained the respect,” Biden told an Ohio campaign rally in late October. “I’ve been able to literally work with the Republican leaders, of the committees as well as, as well as the Senate,” he added. “And Barack knows that, Barack has served there and sees that… I’m confident that I’ll be spending a fair amount of time [in Congress].”

In an interview with the New Yorker last month, Biden selected a lofty, if somewhat dubious role model: Lyndon Johnson, who plunged into a deep depression when John F. Kennedy assigned him the role as emissary to a Senate he had bullied, cajoled and utterly dominated as majority leader in the 1950s.

Former Nebraska Sen. Bob Kerrey, a Democrat who’s fond of Biden, painted a different picture: “I can see Joe in his room [just off the Senate chamber], smiling, slapping people on the back, making his points, working the members.”

Indeed, Biden told the New Yorker that his style would be more honey than sting: “I have never ever, ever screwed another senator,” he said.

On top of that, Biden could not be more different than the outgoing vice president, who never visited the weekly Democratic caucus lunches in the Senate and had virtually no relationships with the other side of the aisle. It’s unlikely that Biden will ever be caught telling another senator to “Go [expletive] yourself” as Dick Cheney famously said to Sen. Patrick J. Leahy. Unless he’s kidding.

Biden’s best Republican friends in the Senate are centrists, including retiring Nebraska Sen. Chuck Hagel and the top Republican on the Foreign Relations committee, Indiana Sen. Dick Lugar, with whom he’s forged a close working partnership.

Biden is equally popular with some GOP staffers, drawing top-level Republican aides into free-ranging discussion on nettlesome policy problems, even setting up secure computer forums where aides can swap ideas without partisan recrimination, according to a person who participated in one of the chat groups.

The veep in waiting is not a favorite with Republicans hard-liners, though, who still hold grudges over his tough questioning of former Bush Attorney General Alberto Gonzales. The conservative bloc in the Senate remains unified, and could still engineer a filibuster of Obama priorities.

“Joe’s really well liked—and he can be a real stand-up guy—but it’s going to be tough for him,” said an aide to a top Senate Republican, who spoke on condition of anonymity.

“We’re not in the mood to make deals. People like him, sure, but people are going to change their votes on defense or health care or taxes just because Joe Biden’s a great guy?”

Biden may find it even tougher with Democratic senators—thrilled to have one of their own in the White House again—who may want to simply bypass the vice president and forge a relationship directly with Obama.

“He will carve out a role for himself, the problem is that he’s going to have a lot of competition—and it’s competition that won’t be willing to step aside for him,” says Jennifer Duffy, who covers the Senate for the non-partisan Cook Political Report.

Obama hasn’t served a full term in the Senate but he’s got plenty of friends in the Democratic caucus: Illinois Sen. Dick Durbin, the number two Democrat in the Senate, up-and-coming Missouri freshman Claire McCaskill and an ailing but still powerful Ted Kennedy. Obama also has a unique relationship with one of the most conservative senators, Tom Coburn of Oklahoma, with whom he shares a passion for government reform.

Then there’s former Majority Leader Tom Daschle—a well-connected kitchen-cabinet Obama adviser who is likely to play some kind of role in the administration.

But Biden’s biggest competition may come from the president-elect himself.

“Obama already has his own relationships in the Senate so, in a sense, he doesn’t need an emissary,” Duffy adds. “He’s his own go-to guy.”

Obama has gone to great lengths to establish personal relationships with legislators, creating direct lines of communication that will be handy even if he runs into problems with House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid.

“Barack’s been seriously keeping touch with the [fiscally conservative Democratic] Blue Dogs and all the other foot soldiers—he’s intent on not making the same mistakes we did,” said a former aide to Bill Clinton, who worked his congressional transition team in the early 1990s. “We thought all we had to do was to keep in touch with the leaders and we left the members and committee chairs alone. That was a huge mistake and it killed us on the health care… Barack’s not making that mistake.”

He’s a wild one! Ex-chiefs of staff praise Emanuel (Video)

Two former White House chiefs of staff praised President-elect Barack Obama’s choice of Rep. Rahm Emanuel (D-Ill.) to assume that job during a Brookings Institution panel on Friday.

Ken Duberstein, the former chief of staff to President Ronald Reagan, and Leon Panetta, the former California congressman who held the post in the Clinton White House, said Emanuel’s appointment suggested that Obama was serious about getting results from his administration.

“Rahm is exceptionally well-qualified for that job,” Duberstein said, lauding Obama for choosing a chief of staff so early in the transition process. “It sends a message here and abroad that this president-elect is all about governing and not campaigning.”

Panetta, who worked closely with Emanuel in the Clinton administration, shared that assessment, saying Emanuel “knows the White House inside out, and obviously now knows Capitol Hill.”

Panetta recognized Emanuel’s reputation for abrasiveness, but presented it as a potential asset to the nascent Obama administration.

“As I told the president-elect — and have told others — part of the job description is that you have to be an SOB as chief of staff. You’ve got to have somebody who makes the tough decisions,” Panetta said. “He’s the guy to do that in the administration.”

Emanuel’s appointment drew fire from Republicans Thursday, with some of the Chicago congressman’s GOP colleagues painting him as a partisan gunslinger.

“This is an ironic choice for a president-elect who has promised to change Washington, make politics more civil and govern from the center,” House Minority Leader John A. Boehner (R-Ohio) said in a statement.

Panetta dismissed the suggestion that Emanuel was too partisan to serve effectively in the White House.

“Of course he’s going to be partisan on Capitol Hill,” Panetta said. But he argued that “Rahm Emanuel is basically a centrist.”

Duberstein even suggested Emanuel’s toughest task might be restraining fellow Democrats, rather than fighting with Republicans.

“His challenge will be, with the president, reaching out and building coalitions on the Hill, saying no to some of the president-elect’s most important constituencies,” Duberstein said. “As partisan as Rahm may have been on the Hill, he’s all about governing.”

“There was at least one TV ad during the primaries about, ‘Who do you trust more to answer the phone at 3 o’clock in the morning?’” Duberstein said. “The reality is, the president doesn’t answer the phone at 3 o’clock in the morning. It’s the chief of staff. So the question is, Do you trust Rahm to answer the phone at 3 o’clock in the morning?”

Both men reflected on their White House experiences to offer advice to the president-elect, emphasizing the importance of focusing his agenda and not trying to accomplish too much at once.

Duberstein, for instance, said the mentality of the Reagan’s 1980 transition — “Everything we do is going to be about economic recovery” — was focused on the country’s most immediate challenge.

“You can walk and chew gum at the same time,” he said. “But you have to walk first.”

Panetta, too, suggested that Obama’s first task should be addressing the economic crisis, though he offered the war in Iraq and energy legislation as other top issues. And he foreshadowed the competition for space on Obama’s agenda.

“Health care, a lot of other issues, immigration, et cetera, those kind of have to line up out there,” he said.

Harsh Words About Obama? Never Mind Now

That whole anti-American, friend-to-the-terrorists thing about President-elect Barack Obama? Never mind.

Just a few weeks ago, at the height of the campaign, Representative Michele Bachmann of Minnesota told Chris Matthews of MSNBC that, when it came to Mr. Obama, “I’m very concerned that he may have anti-American views.”

But there she was on Wednesday, after narrowly escaping defeat because of those comments, saying she was “extremely grateful that we have an African-American who has won this year.” Ms. Bachmann, a Republican, called Mr. Obama’s victory, which included her state, “a tremendous signal we sent.”

And it was not too long ago that Senator John McCain’s running mate, Gov. Sarah Palin of Alaska, accused Mr. Obama of “palling around with terrorists.”

But she took an entirely different tone on Thursday, when she chastised reporters for asking her questions about her war with some staff members in the McCain campaign at such a heady time. “Barack Obama has been elected president,” Ms. Palin said. “Let us, let us — let him — be able to kind of savor this moment, one, and not let the pettiness of maybe internal workings of the campaign erode any of the recognition of this historic moment that we’re in. And God bless Barack Obama and his beautiful family.”

There is a great tradition of paint-peeling political hyperbole during presidential campaign years. And there is an equally great tradition of backing off from it all afterward, though with varying degrees of deftness.

But given the intensity of some of the charges that have been made in the past few months, and the historic nature of Mr. Obama’s election, the exercise this year has been particularly whiplash-inducing, with its extreme before-and-after contrasts.

The shift in tone follows the magnanimous concession speech from Mr. McCain, of Arizona, who referred to Mr. Obama’s victory Tuesday night as “a historic election” and hailed the “special pride” it held for African-Americans. That led the vice president-elect, Senator Joseph R. Biden Jr., to get into the act. During the campaign, Mr. Biden said he no longer recognized Mr. McCain, an old friend. Now, he says, “We’re still friends.” President Bush, in turn, also hailed Mr. Obama’s victory, saying his arrival at the White House would be “a stirring sight.”

Whether it all heralds a new era of cooperation in Washington remains to be seen, and it may be downright doubtful. But for now, at least, it would seem to be part of an apparent rush to join what has emerged as a real moment in American history.

The presidential historian Doris Kearns Goodwin said she was hard-pressed to find a similar moment when the tone had changed so drastically, and so quickly, among so many people of such prominence.

“I don’t think that’s happened very often,” Ms. Goodwin said. “The best answer I can give you is they don’t want to be on the wrong side of history, and they recognize how the country saw this election, and how people feel that they’re living in a time of great historic moment.”

Others in the professional political class were not so sure. Some wondered whether simple pragmatism was the explanation.

“My experience is, it’s less an epiphany and more a political reality,” said Chris Lehane, a former Democratic strategist who worked on the presidential campaign of Al Gore. “I’m thinking they will continue in this direction so long as the polls indicate it’s a smart place to be.”

There are notable exceptions: Rush Limbaugh has given no quarter. And while his fellow conservative radio hosts Sean Hannity and Laura Ingraham have noted the significance of his victory — on Wednesday, Ms. Ingraham said “Obama did make history” and “It’s not the time to vilify him” — they seem to be in line with Bill O’Reilly of Fox News. Relishing his new role in the opposition camp, Mr. O’Reilly said, “The guy is still a mystery, so our oversight will be intense.”

Some lawmakers also do not appear inclined to give up the fight. Representative John A. Boehner, the House minority leader, has already criticized Mr. Obama’s choice of Representative Rahm Emanuel, Democrat of Illinois, as his chief of staff.

But other people who opposed Mr. Obama, like Senator Joseph I. Lieberman of Connecticut, have good reason to try to make up with the winning ticket. As an ardent backer of Mr. McCain, Mr. Lieberman angered the Democrats, who in 2000 nominated him as their vice-presidential candidate. After losing a Democratic primary challenge in 2006 and then winning as an independent, he still continued to caucus with the Democrats.

Attending an event with Mr. McCain in York, Pa., in August, Mr. Lieberman said the race was “between one candidate, John McCain, who has always put the country first, worked across party lines to get things done, and one candidate who has not.”

As a speaker at the Republican National Convention, Mr. Lieberman went further than Democrats expected by criticizing Mr. Obama for “voting to cut off funding for our troops on the ground.” (Mr. Obama voted for bills that included plans for withdrawal from Iraq and against others that did not.)

This week Mr. Lieberman, who has been asked by the Democratic Senate leadership to consider giving up his position as the chairman of the Committee on Homeland Security and Governmental Affairs, released a statement congratulating Mr. Obama for “his historic and impressive victory.” It continued, “The American people are a people of extraordinary fairness.”

Marshall Wittmann, a spokesman for Mr. Lieberman, said that as far as the senator was concerned, “It’s over, and it’s genuinely time to find unity and move forward behind the new president.”

And what about that whole bit about Mr. Obama not always putting his country first? “He believes that President-elect Obama — and, then, Senator Obama — is a genuine patriot and loves his country,” Mr. Wittmann said. “The only point he was making in his campaign was about partisanship.”

Mr. Obama is apparently ready to bury the hatchet with his new fans. “President-elect Obama has made it clear that he wants to put partisanship behind and work together to solve the many challenges confronting the country,” said Stephanie Cutter, a spokeswoman for the Obama transition team. “We’re pleased that others do as well.”

The Senate majority leader, Harry Reid of Nevada, who will help decide Mr. Lieberman’s committee assignment, sounded less ready to forgive, at least when it came Mr. Lieberman’s support for Mr. McCain. “Joe Lieberman has done something that I think was improper, wrong, and I’d like — if we weren’t on television, I’d use a stronger word of describing what he did,” he said on CNN Friday.

Rep. Rahm Emanuel to be Obama’s Chief of Staff (Video)

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