Craig Phillips, the Man behind Trump’s Deregulation

After filling out a form to participate initially as a volunteer for Donald Trump’s transition team, former BlackRock Inc. retiree Craig Phillips emerged as a central figure in Mr. Trump’s understaffed Treasury Department, giving input on how best to deregulate the financial sector while serving as a conduit between the White House and the many brilliant minds that populate the financial industry.

Mr. Phillips is but one of the many millionaires Trump has employed for a first-time government role, and while the fresh face might potentially prove advantageous for the first time president, it can bring possible pitfalls as well. Former colleagues familiar with Mr. Phillips describe him as a brilliant but volatile financier who was prone to dressing down subordinates with expletive-laced language. Though this type of persona is often exemplified in stereotypical portrayal of Wall Street executives, such charisma might not be as welcomed in government as traditional minded public servants look to composure as a sign of proper etiquette.

As it stands, Mr. Phillips currently serves as a counselor to Treasury Secretary Steven Mnuchin, where he employs his “forty years of domestic and global capital markets experience” as noted by his spokeswoman, who then proceeded to add that Mr. Philips “is dedicated to lending his expertise to public service,” in order to better assist President Trump in accomplishing his economic agenda for the nation. As of now, Mr. Phillips primary job at the Treasury Department entails revising financial regulations under the directive of Trump’s executive order to identify whether the regulations are necessary and consistent with Trump’s goal of growing the economy. However, unlike the President, Mr. Phillips view on regulation isn’t quite clear.

During his time at BlackRock, Mr. Phillips didn’t speak much publicly about his stance on regulation, only hinting that the Obama administration’s approach had been too aggressive. Yet unlike some of his conservative colleagues, he disagrees that the government should have little if any role in backstopping financial markets, leading many to believe that Mr. Phillips supports “smart regulation.” Nonetheless, while Mr. Phillips may be currently occupied with the monumental task of reviewing hundreds if not thousands of regulations, he also appears primed to play a role in other Treasury initiatives, alongside Mnuchin who he’s known for decades as a fellow banker in the mortgage finance business.

However, while Democrats might look to Mr. Phillips as an extension of the Wall Street engine, Republicans are equally concerned with Mr. Phillips past donations to the Democratic Party. Most recently, Mr. Phillips gave about $130,000 to support Mrs. Clinton’s presidential bid as well as $33,400 to the Democratic Senatorial Campaign Committee. This unleveraged support for Democrats has irked Republicans on Capitol Hill who see his support for the opposition as potentially hazardous to the political process by creating a roadblock that serves to impede a broader conservative agenda. Hopefully, however, Mr. Phillips will assist in rolling back some key provisions of Dodd-Frank, and enable banks to operate more efficiently whilst cutting unnecessary regulatory costs.

Background History:

Mr. Phillips grew up in Orlando, Fla., but settled on Wall Street in 1976 with Kuhn Loeb & Co. In the 1980s, Mr. Phillips worked at the Credit Suisse First Boston investment bank alongside Laurence Fink,  the current CEO of Blackrock, creating complex new bonds made up of mortgages. He then shifted to working at Morgan Stanley from 1994 through 2006, making a name for himself by selling mortgage securities backed by commercial real estate. Mr. Phillips’ group provided billions of dollars in financing for mortgages it could bundle and resell, working closely with subprime lender New Century Financial Corp., which later went bankrupt amid accusations of fraud. Mr. Phillips would depart Morgan Stanley in 2006 prior to the unraveling of the housing market and by 2008, he landed arrived at BlackRock, where he was tasked with evaluating toxic assets of American International Group Inc. Though the business was profitable, some former colleagues said Mr. Phillips was rather unpopular amid his harsh tongue for words. His blunt criticism was often perceived as bullying that often erupted in expletive-filled rants. However, due to the Blackrock job, Mr. Philips often spent a significant portion of his time in Washington, up until most recently where he has assumed his current position and economic counselor to the treasury department.

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