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Progressives Slam Biden’s Choice for Chief of Staff as Health Care “Profiteer”

Jeff Zients built a fortune investing in health care companies accused of fraud.

Jeff Zients arrives at a COVID-19 Response Team meeting in the South Court Auditorium at the White House on January 13, 2022.

Reports Sunday that President Joe Biden has chosen Jeff Zients to replace outgoing White House Chief of Staff Ron Klain were met with alarm among progressive watchdogs, who pointed to Zients’ disastrous tenure as the administration’s coronavirus czar as well as his history in the corporate world — where he built a fortune investing in healthcare companies accused of fraud.

Klain, who developed a solid working relationship with progressives in Congress, is expected to depart shortly after Biden’s State of the Union address on February 7.

Revolving Door Project executive director Jeff Hauser called the elevation of Zients to White House chief of staff a “catastrophic decision,” saying in a statement that “the Biden administration has been at its best when it has been on the attack against corporate excesses that wide majorities of Americans find abhorrent.”

“Americans are appalled by profiteering in healthcare — Jeff Zients has become astonishingly rich by profiteering in healthcare,” said Hauser. “Americans are aghast at how social media companies have built monopolies and violated privacy laws — Zients served on the Board of Directors of Facebook as it was defending itself against growing attacks from both political parties.”

The Revolving Door Project’s Daniel Boguslaw and Max Moran wrote for The American Prospect last year that Zients — who was replaced as Covid-19 response coordinator back in April — has “controlled, invested in, and helped oversee” healthcare companies that “were forced to pay tens of millions of dollars to settle allegations of Medicare and Medicaid fraud.”

“They have also been accused of surprise-billing practices and even medical malpractice,” Boguslaw and Moran noted. “Taken together, an examination of the companies that made Zients rich paints a picture of a man who seized on medical providers as a way to capitalize on the suffering of sick Americans. In the end, it seems to have all paid off.”

“The most egregious violation is documented in a 2015 Justice Department settlement announcement,” they added. “Portfolio Logic — the investment firm Zients founded with his own money —agreed to pay almost $7 million to resolve allegations of fraudulent Medicare and Medicaid billing, involving a subsidiary (Pediatric Services of America Healthcare, or PSA) that it purchased in 2007.”

Progressives have also been highly critical of Zients’ performance in government.

In early 2022, Boguslaw urged the Biden administration to fire Zients over his failure to “provide the materials necessary to improve the U.S. response” to Covid-19 “or the guidance necessary to keep the pandemic under control.”

Following news that he would be leaving the coronavirus response post, Public Citizen’s Robert Weissman lamented that Zients “refused to pay appropriate attention to global solutions to the global pandemic, because of political concerns or otherwise.”

“And the Zients-led Covid response refused to challenge Big Pharma’s monopoly control, in the U.S. and globally, over technologies that relied crucially on public support,” Weissman continued. “As a result, the United States and other rich countries failed to expand vaccine supply sufficiently to meet global need. Without adequate supply, efforts to bolster low-income country distribution and delivery systems consequently have lagged and been similarly under-resourced.”

During his time as pandemic response coordinator, Zients was far and away the wealthiest member of Biden’s cabinet, disclosing assets worth at least $89.3 million and as much as $442.8 million.

Citing the Revolving Door Project’s work, progressive strategist Murshed Zaheed said Sunday that “Zients as a businessman embodies much of the corporate misconduct the executive branch led by a Democratic Party ought to be cracking down on.”

But the Biden White House doesn’t appear remotely concerned about Zients’ corporate past.

With Biden expected to launch a bid for reelection in the coming weeks, The New York Times reported that “the president could lean on” Zients to “help run the government while other advisers focus on the politics of winning a second term.”

Hauser said Sunday that “hopefully Zients will prove us wrong — but unless that unlikely and fortuitous surprise occurs, Biden will need a quick hook.”