The Fifth Risk

by Michael Lewis

  Not long after the people on TV announced that Trump had won Pennsylvania, Jared Kushner grabbed Christie anxiously and said, “We have to have a transition meeting tomorrow morning!” Even before that meeting, Christie had made sure that Trump knew the protocol for his discussions with foreign leaders. The transition team had prepared a document to let him know how these were meant to go. The first few calls were easy—the very first was always with the prime minister of Great Britain—but two dozen calls in you were talking to some kleptocrat and tiptoeing around sensitive security issues. Before any of the calls could be made, however, the president of Egypt called in to the switchboard at Trump Tower and somehow got the operator to put him straight through to Trump. “Trump was like . . . I love the Bangles! You know that song ‘Walk Like an Egyptian’?” recalled one of his advisers on the scene.

  That had been the first hint Christie had of trouble. He’d asked Jared Kushner what that was about, and Jared had simply said, Donald ran a very unconventional campaign, and he’s not going to follow any of the protocols. The next hint that the transition might not go as planned came from Mike Pence. Now, incredibly, Vice President-elect Mike Pence. Christie met with Pence the day after the election, to discuss the previous lists of people who had been vetted for jobs. The meeting began with a prayer, followed by Pence’s first, ominous question: Why isn’t Puzder on the list for Labor? Andrew Puzder, the head of CKE Restaurants, the holding company for Hardee’s and Carl’s Jr., wanted to be the secretary of labor. Christie explained that Puzder’s ex-wife had accused him of abuse, and his fast-food restaurant employees had complained of mistreatment. Even if he was somehow the ideal candidate to become the next secretary of labor, he wouldn’t survive his Senate confirmation hearings. (Trump ignored the advice and nominated Puzder. In the controversy that followed, Puzder not only failed to be confirmed but stepped down from his job at the fast-food company.)

  After meeting with Pence, Christie was scheduled to brief the Trump children and Jared and the other members of Trump’s inner circle. He was surprised to find, suddenly included in this group, retired army lieutenant general Michael Flynn. Flynn was a job seeker the transition team had found reasons to be extremely wary of. Now he wanted to be named Trump’s national security adviser, which was maybe the most important job in the entire national security apparatus. The national security team inside the Trump transition—staffed with senior former military and intelligence officials—had thought that an especially bad idea. Flynn’s name wasn’t on the list. But here he was, in the meeting to decide who would do what in the Trump administration, and Ivanka was asking him which job he’d like to have.

  Before Christie could intercede, Steve Bannon grabbed him and asked to see him privately. Christie followed Bannon to his office impatiently. Hey, this is going to have to be quick, said Christie.

  It’s really quick, said Bannon. You’re out.

  Why? asked Christie, stunned.

  We’re making a change.

  Okay, what are we changing?

  You.

  Why?

  It’s really not important.

  The method of his execution was unsurprising: Trump always avoided firing people himself. The man who played Mr. You’re Fired on TV avoided personal confrontation in real life. The surprise was that it was being done now, just when the work of the transition team was most critical. Only when Christie threatened to go down and tell reporters that Steve Bannon had fired him did Bannon concede, “It was Jared.”

  In the days after the election, the people in the building on Seventeenth and Pennsylvania were meant to move to another building in downtown Washington, a kind of White House-in-waiting. They soon discovered that the lists that they had created of people to staff the Trump administration were not the lists that mattered. There was now this other list, of people allowed into the new building, and most of their names weren’t on it. “People would show up to the new building and say, ‘Let me in,’ and the Secret Service would say,” Sorry, you’re not on the list,’” said a civil servant who worked in the new building. It wasn’t just Chris Christie who’d been fired. It was the entire transition team—though no one ever told them so directly. As Nancy Cook later reported in Politico, Bannon visited the transition headquarters a few days after he’d given Christie the news, and made a show of tossing the work the people there had done for Donald Trump into the garbage can. Trump was going to handle the transition more or less by himself. Not even Steve Bannon thought this was a good idea. “I was fucking nervous as shit,” Bannon later told friends. “I go,” Holy fuck, this guy [Trump] doesn’t know anything. And he doesn’t give a shit.’”

  I

  TAIL RISK

  ON THE MORNING after the election, November 9, 2016, the people who ran the U.S. Department of Energy turned up in their offices and waited. They had cleared thirty desks and freed up thirty parking spaces. They didn’t know exactly how many people they’d host that day, but whoever won the election would surely be sending a small army into the Department of Energy, and to every other federal agency. The morning after he was elected president, eight years earlier, Barack Obama had sent between thirty and forty people into the Department of Energy. The Department of Energy staff planned to deliver to Trump’s people the same talks, from the same five-inch-thick three-ring binders with the Department of Energy seal on them, that they would have given to the Clinton people. “Nothing had to be changed,” said one former Department of Energy staffer. “They’d be done always with the intention that, either party wins, nothing changes.”

  By afternoon the silence was deafening. “Day 1, we’re ready to go,” says a former senior White House official. “Day 2 it was,” Maybe they’ll call us?’”

  “Teams were going around,‘Have you heard from them?’” recalls another staffer who had prepared for the transition. “‘Have you gotten anything? I haven’t got anything.’”

  “The election happened,” remembers Elizabeth Sherwood-Randall, then deputy secretary of the DOE. “And he won. And then there was radio silence. We were prepared for the next day. And nothing happened.” Across the federal government the Trump people weren’t anywhere to be found. The few places they did turn up, they appeared confused and unprepared. A small group attended a briefing at the State Department, for instance, only to learn that the briefings they needed to hear were classified. None of the Trump people had security clearance—or, for that matter, any experience in foreign policy—and so they weren’t allowed to receive an education. On his visits to the White House soon after the election, Jared Kushner expressed surprise that so much of its staff seemed to be leaving. “It was like he thought it was a corporate acquisition or something,” says an Obama White House staffer. “He thought everyone just stayed.”

  Even in normal times the people who take over the United States government can be surprisingly ignorant about it. As a longtime career civil servant in the Department of Energy who has watched four different administrations show up to try to run the place put it, “You always have the issue of maybe they don’t understand what the department does.” To address that problem, a year before he left office, Barack Obama had instructed a lot of knowledgeable people across his administration, including fifty or so inside the DOE, to gather the knowledge that his successor would need in order to understand the government he or she was taking charge of. The Bush administration had done the same for Obama, and Obama had been grateful for their efforts. He told his staff that their goal should be to ensure an even smoother transfer of power than the Bush people had achieved.

  That had proved to be a huge undertaking. Thousands of people inside the federal government had spent the better part of a year drawing a vivid picture of it for the benefit of the new administration. The United States government might be the most complicated organization on the face of the earth. Its two million federal employees take orders from four thousand political appointees. Dysfunction is baked into the structure of the thing: the su
bordinates know that their bosses will be replaced every four or eight years, and that the direction of their enterprises might change overnight—with an election or a war or some other political event. Still, many of the problems our government grapples with aren’t particularly ideological, and the Obama people tried to keep their political ideology out of the briefings. “You don’t have to agree with our politics,” as the former senior White House official put it. “You just have to understand how we got here. Zika, for instance. You might disagree with how we approached it. You don’t have to agree. You just have to understand why we approached it that way.”

  How to stop a virus, how to take a census, how to determine if some foreign country is seeking to obtain a nuclear weapon or if North Korean missiles can reach Kansas City: these are enduring technical problems. The people appointed by a newly elected president to solve these problems have roughly seventy-five days to learn from their predecessors. After the inauguration, a lot of deeply knowledgeable people will scatter to the four winds and be forbidden, by federal law, from initiating any contact with their replacements. The period between the election and the inauguration has the feel of an AP chemistry class to which half the students have turned up late and are forced to scramble to grab the notes taken by the other half, before the final.

  Two weeks after the election, the Obama people inside the DOE read in the newspapers that Trump had created a small “Landing Team.” It was led by, and mostly consisted of, a man named Thomas Pyle, president of the American Energy Alliance, which, upon inspection, proved to be a Washington, DC, propaganda machine funded with millions of dollars from ExxonMobil and Koch Industries. Pyle himself had served as a Koch Industries lobbyist and ran a business on the side writing editorials attacking the DOE’s attempts to reduce the dependence of the American economy on carbon. Pyle said that his role on the Landing Team was “voluntary” and added that he could not disclose who appointed him, due to a confidentiality agreement. The people running the DOE were by then seriously alarmed. “We first learned of Pyle’s appointment on the Monday of Thanksgiving week,” recalls Kevin Knobloch, then DOE chief of staff. “We sent word to him that the secretary and his deputy would meet with him as soon as possible. He said he would like that but could not do it until after Thanksgiving.”

  A month after the election, Pyle arrived for a meeting with Energy Secretary Ernest Moniz, Deputy Secretary Sherwood-Randall, and Knobloch. Moniz, a nuclear physicist who was then on leave from MIT and who had served as deputy secretary during the Clinton administration, is widely viewed, even by many Republicans, as understanding and loving the DOE better than any person on earth. Pyle appeared to have no interest in anything he had to say. “He did not seem motivated to spend a lot of time understanding the place,” says Sherwood-Randall. “He didn’t bring a pencil or a piece of paper. He didn’t ask questions. He spent an hour. That was it. He never asked to meet with us again.” Afterward, Knobloch says, he suggested that Pyle visit one day each week until the inauguration, and that Pyle agreed to do it—but then he never showed up. “It’s a head-scratcher,” says Knobloch. “It’s a thirty-billion-dollar-a-year organization with about a hundred ten thousand employees. Industrial sites across the country. Very serious stuff. If you’re going to run it, why wouldn’t you want to know something about it?”

  There was a reason Obama had appointed nuclear physicists to run the place: it, like the problems it grappled with, was technical and complicated. Moniz had helped lead the U.S. negotiations with Iran precisely because he knew which parts of their nuclear energy program they must surrender if they were to be prevented from obtaining a nuclear weapon. For a decade before Knobloch joined the DOE, in June 2013, he had served as president of the Union of Concerned Scientists. “I had worked closely with DOE throughout my career,” he says. “I thought I knew and understood the agency. But when I came in I thought, Holy cow.”

  Deputy Secretary Elizabeth Sherwood-Randall has spent her thirty-year career working on reducing the world’s supply of weapons of mass destruction—she led the U.S. mission to remove chemical weapons from Syria. But like everyone else who came to work at the DOE, she’d grown accustomed to no one knowing what the department actually did. When she’d called home, back in 2013, to tell them that President Obama had nominated her to be second-in-command of the place, her mother said, “Well, darling, I have no idea what the Department of Energy does, but you’ve always had a lot of energy, so I’m sure you’ll be perfect for the role.”

  The Trump administration had no clearer idea what she did with her day than her mother. And yet, according to Sherwood-Randall, they were certain they didn’t need to hear anything she had to say before they took over her job. Pyle eventually sent over a list of seventy-four questions he wanted answers to. His list addressed some of the subjects covered in the briefing materials, but also a few not:

  Can you provide a list of all Department of Energy employees or contractors who have attended any Interagency Working Group on the Social Cost of Carbon meetings?

  Can you provide a list of Department employees or contractors who attended any of the Conference of the Parties (under the United Nations Framework Convention on Climate Change) in the last five years?

  That, in a nutshell, was the spirit of the Trump enterprise. “It reminded me of McCarthyism,” says Sherwood- Randall.

  It says a great deal about the mind-set of career civil servants that the DOE employee in charge of overseeing the transition set out to answer even the most offensive questions. Her attitude, like the attitude of the permanent staff, was, We are meant to serve our elected masters, however odious they might be. “When the questions got leaked to the press, she was really upset,” says the former DOE staffer. The only reason that the DOE did not serve up the names of people who had educated themselves about climate change, and thus exposed themselves to the wrath of the new administration, was that the old administration was still in charge: “We aren’t answering these questions,” Secretary Moniz had said simply.

  After Pyle’s list of questions wound up on Bloomberg News, the Trump administration disavowed them, but a signal had been sent: We don’t want you to help us understand; we want to find out who you are and punish you. Pyle vanished from the scene. According to a former Obama official, he was replaced by a handful of young ideologues who called themselves “the Beachhead Team.” “They mainly ran around the building insulting people,” says a former Obama official. “There was a mentality that everything that government does is stupid and bad and the people in it are stupid and bad,” says another. They demanded to know the names and salaries of the twenty highest-paid people in the national science labs overseen by the DOE. They’d eventually delete the contact list with the email addresses of all DOE-funded scientists—apparently to make it more difficult for them to communicate with one another. “These people were insane,” says the former DOE staffer. “They weren’t prepared. They didn’t know what they were doing.”

  “We had tried desperately to prepare them,” said Tarak Shah, chief of staff for the DOE’s $6 billion basic-science program. “But that required them to show up. And bring qualified people. But they didn’t. They didn’t ask for even an introductory briefing. Like,‘What do you do?’” The Obama people did what they could to preserve the institution’s understanding of itself. “We were prepared for them to start wiping out documents,” said Shah. “So we prepared a public website to transfer the stuff onto it—if needed.”

  The one concrete action the Trump transition team took before Inauguration Day was to attempt to clear the DOE and other federal agencies of people appointed by Obama. But there was actually a long history of even the appointees of one administration hanging around to help the new appointees of the next. The man who had served as the Department of Energy’s chief financial officer during the Bush administration, for instance, stayed a year and a half into the Obama administration—simply because he had a detailed understanding of the money end of things
that was hard to replicate quickly. The CFO of the department at the end of the Obama administration was a mild-mannered civil-servant type named Joe Hezir. He had no particular political identity and was widely thought to have done a good job—and so he half-expected a call from the Trump people asking him to stay on, just to keep the money side of things running smoothly. The call never came. No one even let him know his services were no longer required. Not knowing what else to do, but without anyone to replace him, the CFO of a $30 billion operation just up and left.

  This was a loss. A lunch or two with the chief financial officer might have alerted the new administration to some of the terrifying risks they were leaving essentially unmanaged. Roughly half of the DOE’s annual $30 billion budget is spent on maintaining and guarding our nuclear arsenal. Two billion of that goes to hunting down weapons-grade plutonium and uranium at loose in the world so that it doesn’t fall into the hands of terrorists. In eight years alone—2010–2018—the DOE’s National Nuclear Security Administration collected enough material to make 160 nuclear bombs. The department trains every international atomic-energy inspector; if nuclear power plants around the world are not producing weapons-grade material on the sly by reprocessing spent fuel rods and recovering plutonium, it’s because of these people. The DOE also supplies radiation-detection equipment to enable other countries to detect bomb material making its way across national borders. To maintain the U.S. nuclear arsenal, it conducts endless expensive experiments on tiny amounts of nuclear material to try to understand what is happening to plutonium when it fissions, which, amazingly, no one really does. To study the process, it is funding what promises to be the next generation of supercomputers, which will in turn lead God knows where.