It’s perhaps the most ubiquitous image of Trump’s administration to date: the president at his desk, preening for the cameras as he affixes his jagged signature to yet another executive order. Since his first day in office, when he signed an order to roll back the Affordable Care Act, Trump has issued a flurry of commands on everything from education and the environment to immigration and sanctuary cities. Not since Franklin Roosevelt has a president relied so heavily on administrative proclamations in his first 100 days—in Trump’s case, to create the appearance of forward motion amid legislative gridlock.
Trump’s executive orders serve another purpose: They enable him to pursue a doctrinaire conservative agenda outside the legislative arena. In a direct contradiction of his campaign pledges, Trump has sought to enrich private corporations at the expense of his blue-collar base. He has called for reorganizing or eliminating all federal agencies—a move that will create lucrative opportunities for private contractors. He has ordered government employees to lift “regulatory burdens” on American businesses. He has signed decrees that would open up millions of acres of federally protected land to private development, promote oil and gas drilling, fast-track infrastructure projects, and roll back regulations designed to protect consumers against Wall Street scams.
For the most part, Trump’s orders are merely aspirational: While they may require federal agencies to start drawing up plans or reviewing procedures, they’re largely powerless to set policy. But in one recent memo, Trump took his pro-business agenda a step further. On April 21, the president issued an executive memorandum that could directly benefit one of his generous corporate backers: the insurance giant MetLife.
At issue is the Financial Stability Oversight Council, an unheralded panel of top banking regulators. The FSOC was established in 2010, after Wall Street cratered the global economy, to monitor the financial system for undue risk and the threat posed by financial institutions that are “too big to fail.” One of the FSOC’s most important functions is to decide which financial giants should be designated as “systemically important”—large enough to threaten the overall economy. Megabanks already fall under this category, but the FSOC must decide which other institutions also deserve such a designation. So far, the FSOC has singled out three insurance companies: AIG, Prudential, and MetLife. Given how important these firms are to the country’s financial health, they are required to raise more capital to safeguard against an unforeseen catastrophe, and are subject to more stringent supervision from the Federal Reserve.
MetLife, however, has been fighting back against the increased oversight. In 2015, it sued the FSOC, claiming it had been improperly designated. The insurance giant was represented by the notorious bank lawyer Eugene Scalia—son of the former Supreme Court justice. Last year, U.S. District Judge Rosemary Collyer, a George W. Bush appointee, sided with MetLife, overturning the designation on two grounds. First, she ruled, the FSOC should have assessed the likelihood that MetLife would experience financial distress and projected specific losses. Second, it should have considered the cost of the designation to MetLife’s business.
The FSOC appealed the ruling, and a federal appeals court was on the verge of issuing its decision in the case. But then, in what looks like a blatant attempt to protect MetLife, Trump stepped in with his memo to Treasury Secretary Steven Mnuchin. In the order, Trump instructs Mnuchin, as chair of the FSOC, to review the process used to designate financial corporations as systemically important and to recommend improvements. What’s more, Trump ordered the Treasury Department to analyze the same criteria that Judge Collyer cited in her ruling: whether the FSOC should assess the likelihood of financial distress, include specific loss projections, and consider the financial costs to companies.
Trump’s memo was issued on a Friday. The following Monday, MetLife asked the appeals court to delay its ruling until the Treasury Department completes its 180-day review. In its motion—large parts of which consist of quotes from Trump’s memo—MetLife suggests that a delay “will enable the new administration to determine whether any of the FSOC’s positions in this case should be reconsidered and whether it is appropriate for the government to continue pressing this appeal.” Translation: Trump’s memo could kill the entire case against MetLife. The Justice Department, which is representing the FSOC in the case, quickly agreed to delay the ruling by 60 days while it reconsiders its position. The court will take no further action until July.
At the very least, Trump’s order bought additional time for MetLife, which contributed $100,000 to his inaugural committee. Trump also has direct ties to Scalia’s law firm, Gibson, Dunn & Crutcher, which had two associates working on the president’s transition team. In addition to blocking an immediate ruling against MetLife, Trump’s order is saving the company lots of money in compliance costs, while weakening the FSOC’s ability to protect the public. “In modern history, this is the only executive order that’s custom-designed to help a single company in litigation against the government,” says Dennis Kelleher, the president of Better Markets, a nonpartisan Wall Street watchdog group.
Trump is hardly the first president to use executive actions to get his way. The suspension of habeas corpus during the Civil War, the internment of Japanese-Americans during World War II, and the use of federal troops to enforce school desegregation in Little Rock all took place through executive orders. But Trump is already averaging more executive orders than any president since Truman, according to data from the University of California, Santa Barbara. More important, the nature of Trump’s FSOC memo appears to be unique: According to Better Markets, the order represents “a carefully choreographed dance between the Trump administration and Wall Street’s lawyers and lobbyists”—an effort by MetLife to secure an official-sounding pretext to tilt a court case in its favor.
There’s no guarantee that Trump’s memo will succeed at weakening the FSOC, or alter the MetLife ruling. Although Mnuchin chairs the FSOC, he must get support for any rule changes from the ten-member panel, which includes several Obama appointees. And the federal appeals court could still rule against MetLife and uphold the company’s designation. But Trump’s memo has effectively lowered the standard for executive orders. They’re supposed to ensure that the nation’s laws are faithfully executed—not that a rich corporate ally gets bailed out.