Jeff Zients: Difference between revisions

Jeff Zients
10th Director of the National Economic Council
In office March 5, 2014 – January 20, 2017
President	Barack Obama
Preceded by	Gene Sperling
Succeeded by	Gary Cohn
Acting Director of the Office of Management and Budget
In office January 27, 2012 – April 24, 2013
President	Barack Obama
Deputy	Heather Higginbottom
Preceded by	Jack Lew
Succeeded by	Sylvia Mathews Burwell
In office July 30, 2010 – November 18, 2010
President	Barack Obama
Deputy	Jeffrey Liebman
Preceded by	Peter R. Orszag
Succeeded by	Jack Lew
1st Chief Performance Officer of the United States
In office June 19, 2009 – October 16, 2013
President	Barack Obama
Preceded by	Position established
Succeeded by	Beth Cobert
Deputy Director of the Office of Management and Budget for Management
In office June 19, 2009 – October 16, 2013
President	Barack Obama
Preceded by	Clay Johnson III
Succeeded by	Beth Cobert
Personal details
Born	(1966-11-12) November 12, 1966 (age 57) Kensington, Maryland, U.S.
Political party	Democratic
Spouse	Mary Menell
Children	4
Education	Duke University (BS)

Jeffrey D. Zients (born November 12, 1966) is an American chief executive officer, management consultant, and entrepreneur. Zients is currently the President of The Cranemere Group.^[1] From February 2014 to January 2017, he served as Director of the United States National Economic Council and President Obama's Economic Advisor. Zients previously served as the acting director of the Office of Management and Budget.^[2]

Zients's assumption of the role of Director of the National Economic Council was delayed by his acceptance of an assignment from President Barack Obama to fix the problems of HealthCare.gov. According to Time's March 2014 cover story "Obama's Trauma Team", Zients is widely credited with salvaging HealthCare.gov.^[3] As a result, he was often referred to as "Mr. Fix-It" within the Obama Administration.^[4][5]

Zients was raised in a Jewish family,^[6] is a native of Kensington, Maryland,^[7] and lives in the Washington, D.C. area.^[8] He graduated in 1984 from St. Albans School, and earned a Bachelor of Science degree, summa cum laude^[9] from Duke University. Zients worked in management consulting for Mercer Management Consulting (now Oliver Wyman) and Bain & Company, until his appointment as chief operating officer of DGB Enterprises, a holding company for the Advisory Board Company, Corporate Executive Board, and Atlantic Media Company.^[9]

Zients was the chairman (2001–2004), chief executive officer (1998–2000), and chief operating officer (1996–1998) of the Advisory Board Company and former chairman (2000–2001) of the Corporate Executive Board.^[10] Both companies were founded by David G. Bradley, and provide research and advice to corporations around the globe on best practices in management, strategy, and operations. Zients and Bradley took each of the companies public through successful initial public offerings that made both men multimillionaires.^[8][11] At age 35, Zients was named to Fortune Magazine's "40 under 40", with an estimated wealth of $149 million.^[12]

Zients founded^[13] and was the managing partner of privately held Portfolio Logic LLC, an investment firm primarily focused on health care services and business services companies,^[14] that included Pediatrics Services of America (home health care for pediatric patients), Best Practices (Emergency Services management), and Timbuk2 Designs (a retailer of backpacks, apparel and messenger bags). He was a member of the board of directors of XM Satellite Radio until its 2008 merger, and^[10][15] a board member at Sirius XM Radio until his Senate confirmation.^[16][17] Zients had also served on the boards of Revolution Health Group, Best Practices and Timbuk2 Designs.^{[11][13][15][18]}

In 2005, he worked to bring Major League Baseball back to Washington with venture capitalist Fred Malek forming the Washington Baseball Club, one of eight^[19] or nine groups vying to buy the Washington Nationals.^[20] The Malek/Zients team included General Colin Powell, AOL founding CEO Jim Kimsey, attorney Vernon Jordan, Darrell Green formerly of the Washington Redskins, Fannie Mae chairman Franklin Raines^[7][20] and others.^[7] Malek was going to be the managing partner for the first three years when Zients would take over.^[19] They came close to owning the team^[19] but lost to another group led by the Lerner family.^[10]

In 2018 Zients joined the Audit and Risk Oversight Committee at Facebook.^[21] Though Zients joined after the Cambridge Analytica scandal already broke, Commissioner Rohit Chopra of the FTC called out this board’s failure to do due diligence and police Facebook lawbreaking in his 2019 dissent: “Based on my observations, Facebook is a strong candidate for changes to its governance structure, a subject that is already of intense shareholder interest. As detailed in the complaint, the company flagrantly broke the law even after it was ordered to stop – and that lawbreaking continued for years. Where was the company’s board, and in particular its Audit Committee (now its Audit and Risk Oversight Committee), when these violations took place?”^[22]

As a financier, Zients is also the CEO of Cranemere Group, a self-defined private holding company. Cranemere acquires its holdings through private equity acquisitions and leverage buyouts -- a method that often saddles companies with debt.^[23] According to Pitchbook.com^[24] Cranemere’s current holdings are:

• Acquabella (designer of shower spaces in Spain)
• Timbuk2 Designs (designer handbags)
• Redgate Partners (a tech company)
• Velocity Vehicle Group (distributor of trucks, RVs, school buses, etc.)
• Symmetry Office (makes ergonomic office furniture)
• Marmite (makes wash basins, showers, etc. from mineral composites)
• Exemplis (makes custom chairs from recycled materials)
• NorthStar Anesthesia (provider of anesthesia services)

Zients was the lead partner for Cranemere’s leveraged buy out of NorthStar Anesthesia, a provider of anesthesia services.^[25] Customer reviews  of NorthStar Anasthesia frequently complain of high fees, and double charging insurance.^[26] It’s Better Business Bureau grades NorthStar the company as a C- and lists 9 complaints in the last three years.^[27]

In 2009, President Barack Obama appointed him to the new position of United States Chief Performance Officer and Deputy Director for Management of the Office of Management and Budget in the federal government of the United States.^[28] According to Obama, his assignment was to help "streamline processes, cut costs, and find best practices throughout" the U.S. government.^[28] Zients replaced Nancy Killefer who withdrew from her nomination to this position in February 2009 to avoid controversy about her personal income taxes.^[29] His nomination was approved by the full Senate after a hearing on June 10, 2009, by the Senate Homeland Security and Governmental Affairs Committee who voted unanimously to approve him.^[30][31]

As the Chief Performance Officer, Zients led the Obama Administration's "Accountable Government Initiative". Zients outlined the Initiative in a memo to the government's Senior Executive Service in the fall of 2010.^[32] One primary area of focus was to reform how the government buys and manages information technology. To bring outside expertise into government, Zients organized a Forum on Modernizing Government at the White House in January 2010 that brought 50 private sector CEOs together with senior government managers and CIOs to discuss best practices in large-scale IT project management.^[33] This session informed subsequent actions, including ordering a halt on all major government financial system projects until a review was completed to eliminate long-standing problems, reduce costs and accelerate the delivery of functionality to end users.^[34] In November 2010, Zients announced an execution plan for overcoming the long-standing structural challenges that plague government IT.^[35]

In his role as DDM, Zients established and chaired the President's Management Council^[36] and oversaw the "Management" side of the Office of Management and Budget.

Zients served as the Acting Director of OMB from July 2010 to November 2010, and again from January 2012 to April 2013. In 2011 President Obama tasked Zeints with reorganizing the Commerce Department to make it a hub for export-import policy.^[37] A year later the White House changed direction to shutter the Commerce Department completely.^[38] Journalists suggest the move was likely meant to demonstrate that Obama was not a ‘big government liberal” ahead of the election.^[39] By 2013 Zeints's major concerns for the budget became economic recovery and putting the country on a “fiscally sustainable path”.^[40] He also led the Administration's preparations for dealing with the "fiscal cliff" in 2012, and "oversaw the administration's budget content and message, which are central to the president's argument that he has a balanced plan for the economy, while Republicans would rip the country's social fabric and undermine the education and infrastructure needed to succeed economically... [Zients] is Obama's ambassador liaison with the CEOs on the President's Jobs Council. One CEO thought he was a Republican. Others have said they want him to run their companies one day."^[16]

Following the error-plagued launch of healthcare.gov on October 1, 2013, Zients was recruited by President Obama and his Chief of Staff Denis McDonough to lead a "tech surge" to fix the website. McDonough referred to Zients as a "force multiplier" who [delivers] what he promises. He said the president had given Mr. Zients the same instructions he had given White House staff: "Get this fixed."^[41] While leading the "tech surge" to fix healthcare.gov, Zients's private equity firm Portfolio Logic had holdings in the healthcare sector.^[42] The position of the White House was that Mr. Zients’s stake in PSA Healthcare, a pediatric home health business, was not a conflict of interest.^[42]

On October 25, Zients promised, in a conference call to the media, that the site would be working well "for the vast majority of users" by the end of November.

Zients worked with Silicon Valley experts, and Obama Chief Technology Officer Todd Park to create an ad hoc technology "dream team" of trouble-shooters and coders. Zients overhauled the project's management structure by insisting that one contractor by appointed the "general contractor" or systems integrator with clear accountability for managing the needed fixes. HHS appointed Quality Software Services, Inc (QSSI) to that role. Zients accelerated the pace of the website fixes, established clear metrics for tracking website performance (which he reported out publicly on weekly press calls), prioritized a "punch list" of bugs and enhancements, and instituted morning and evening "stand up meetings" to work through emerging issues in real-time.^[3]

On December 1, 2013, HHS released a report on the site's performance improvements, and held a press call to announce that the team had met Zients's goal, with Zients reporting: "The bottom line is that HealthCare.gov is night and day from where it was on Oct. 1."

During the press call, Zients listed some of the root causes of the site's earlier failure, such as the "unacceptable user experience, very slow response time, inexplicable user error messages and frequent website crashes and system outages". Root causes of the problems, he said, included hundreds of software bugs, inadequate hardware infrastructure and a general lack of system monitoring. Zients identified weaknesses in how the site was being managed, and he also cited slow decision-making among the root causes of the site's troubles. "HealthCare.gov was fixable", Zients said, "We needed to get the team working with the speed and urgency of a high-performing private sector tech company."^[43]

From 2014 to 2017, Zients served as Assistant to the President for Economic Policy and Director of the National Economic Council (NEC).^[2] As President Obama's principal economic policy advisor, Zients was responsible for coordinating the development and execution of policy regarding all domestic and international economic issues.

In December 2015, Zients played a key role representing the White House in negotiations with Congress on a tax and budget agreement, which permanently extend the American Recovery and Reinvestment Act (ARRA) tax credits, including the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) for working families, and American Opportunity Tax Credit (AOTC) for college tuition expenses, as well as a number of tax "extenders" that had traditionally been extended together for a year or two at a time. Permanently extending the EITC and CTC resulted in providing about 16 million working families a year with an average tax cut of about $900, together lifting about 16 million people – including about 8 million children – out of poverty or closer to the poverty line.^[44][45] The agreement also made the Research and Experimentation Tax Credit (R&D Tax Credit) permanent for the first time since its enactment in 1981, providing certainty to companies investing in innovation.^[46] It also made permanent tax cuts for small businesses, including enhanced expensing for small businesses making new investments and a zero percent capital gains rate for investments in small businesses.^[46] The agreement extended the Production Tax Credit (PTC) and the Investment Tax Credit (ITC) – two important incentives for clean energy – for five years.^[47] As NEC Director Zients also spearheaded efforts to lower corporate taxes. Zients himself said, “the proposal for overhauling the corporate code put forward by President Obama is ‘remarkably similar’ to the one put forward last year by Rep. Dave Camp (Mich.), the Republican chairman of the House Ways and Means Committee.”^[48] The Hill reports that President Obama proposed “lowering the corporate statutory rate from 35 precent to the high-20s while eliminating many deductions. Camp also proposed to lower the rate, but down to the mid-20s.”^[49]

In June 2015, President Obama signed the Bipartisan Congressional Trade Priorities and Accountability Act, also known as Trade Promotion Authority (TPA). The legislation gave the Administration the authority to expedite negotiations for the Trans-Pacific Partnership (TPP). While the authors of the TPP described the legislation as a trade deal that included enforceable standards to advance workers' rights, protect the environment, promote a free and open Internet, and address unfair currency practices others saw its a controversial giveaway to multinational corporations.^[50][51] As director of the National Economic Council, Zients led one of the main bodies responsible for advising the president on this economic policy. In this role he led negotiations for the Trade Promotion Authority (TPA), which streamlined the process for signing the TPP and centralized that power in the White House. The Brookings Institution reports that the trade promotion authority was “conceived as a procedural mechanism to enhance the president’s credibility in negotiating complex multilateral trade agreements by streamlining the congressional approval process in return for enhanced congressional oversight.”^[52] Functionally, the TPA consolidates trade negotiating power in the executive branch while legislators give up the power to amend trade agreements, and instead provide non-enforceable objectives for the president to follow.^[53] Democrats critiqued the objectives as being “just gentle suggestions that the president can freely ignore.”^[54]

In conjunction with TPA, President Obama signed the Trade Preferences Extension Act of 2015, securing a six-year extension and expansion of Trade Adjustment Assistance (TAA), which provided over 750,000 American workers displaced by globalization with job training, income support, and other benefits. "Here's the bottom line", Zients said, "... 95 percent of the world's consumers live outside of our borders. We can't afford to close ourselves off from those opportunities. A 21st century TPA is America's chance to modernize our trade policy by locking in our progressive value and putting American workers first."^[55]

Senators like Elizabeth Warren critiqued another key provision of the TPP, the Investor State Dispute Settlement (ISDS), as “tilt[ing] the playing field in favor of multinational corporations versus citizens in the US and globally”.^[56] This provision allows multinational corporations to sue governments for unlimited amounts of money while nations and citizens have no such right to sue multinational corporations.^[57]

Under Zients' leadership, the Obama Administration also took action to strengthen trade enforcement, signing the Trade Facilitation and Trade Enforcement Act (also referred to as "Customs" legislation) and the American Trade Enforcement Effectiveness Act (also referred to as the "Level the Playing Field Act") into law. The legislation strengthened tools to ensure that the United States' trading partners and foreign industries were complying with trade laws.

Zients led the Obama Administration's work to strengthen job training – working with employers, community colleges and training providers to help Americans develop the skills necessary to compete in the 21st century economy. As part of this effort, the Administration launched the TechHire Initiative, a campaign to work with communities to get more Americans rapidly trained for well-paying technology jobs. On a conference call announcing the initiative, Zients said: "There are IT jobs in every corner of America, from big cities to small towns, from big businesses to small businesses, in every sector of the economy... Getting Americans trained to fill these well-paying jobs is not only the right thing to do, it's also an economic imperative for the U.S."^[58]

Zients worked with the Department of Labor to finalize the Fiduciary Rule, also known as the Conflict of Interest Rule, to protect American's hard-earned savings by ensuring retirement advisers provide advice in their clients' best interest.^[59] In remarks at the Bipartisan Policy Center in May 2015, Zients said: "Just as we all expect our doctors to give us the advice that's best for our health and lawyers are duty-bound to represent their clients faithfully, families saving for retirement should be able to rest assured their financial advisers are always putting their best interest first…The conflict of interest rule is an important step forward in ensuring we have an economy that works for everyone. And that everyone who works hard and plays by the rules can get ahead. That's central to middle-class economics, and it's central to who we are as a Country."^[60]

Under Zients' leadership, President Obama launched a new initiative in April 2016 to stoke competition across the economy.^[61] "Stronger competition matters because it can deliver lower prices, higher quality, and better customer service for consumers", Zients said. "It gives workers more of a voice, and can help strengthen wage growth. And it's what entrepreneurs need to get a fair shot at growing their businesses and creating jobs."^[61]

Zients also worked to further the Administration's efforts on long-term investing, including working with the Labor Department to issue new guidance clarifying that pension plan fiduciaries can consider environmental, social, and governance or "ESG" factors – in assessing the economic merits of competing investment choices.^[62]

Across his roles in the Administration, Zients served as a key liaison to the business community, including by managing execution of recommendations from the President's Council on Jobs and Competitiveness,^[63] and by establishing the President's Management Advisory Board to bring Fortune 500 executive expertise to bear against the federal government's biggest management challenges.^[64]The Wall Street Journal dubbed Zients “a kind of ambassador to the business community.”^[65]

In 2017, Zients became the President of the Cranemere Group, a Berkshire Hathaway-style holding company focused on the acquisition and long-term ownership of mid-sized companies in the United States and Europe.^[1] Cranemere was founded in 2014 by former AEA Chairman and CEO Vincent Mai.^[1] In 2018, he joined the board of Facebook.^[66]

While working at Bain, Zients reported to South African Mary Menell; they later were married in South Africa with Menell's parents' family friend Nelson Mandela in attendance.^[67] They have four children Sasha, Matt, Josh and Jonny.^{[citation needed]} Along with his wife Mary, Zients co-founded the Urban Alliance Foundation, a non-profit organization that partners with corporations to provide economically disadvantaged youth with year-round paid internships, adult mentors, and job training.^[68]

Wikimedia Commons has media related to Jeffrey Zients.

• Appearances on C-SPAN