The science office’s efforts to arrange for Schmidt Futures to pay the salaries of Lander’s staff sparked “significant” ethical concerns, given Schmidt’s financial interests in areas overlapping with OSTP’s responsibilities, according to the science office’s then-general counsel, Rachel Wallace, in internal emails obtained by POLITICO.
Schmidt sits on the boards of a wide variety of technology companies, particularly those focused on artificial intelligence.He maintains a 20 percent stake in the hedge fund DE Shaw that boasts over $60 billion in investments and committed capital, sits on the board of the AI-focused defense contractor Rebellion Defense, is an investor in Abacus.AI and this month invested in and became chair of Sandbox AQ – a new company that is a spin-off of an internal Google software team that says it will combine “AI + Quantum tech to solve hard problems impacting society.”
He also helped launch and is on the board of Civis Analytics , a data science company that has helped Democratic campaigns, including Biden’s 2020 effort, target consumers and voters.
Over the past year, internal emails show that Wallace and other members of the science office’s legal team regularly flagged potential conflicts of interests related to Schmidt and Schmidt Futures.
Last fall, Wallace lodged a formal complaint about Lander’s treatment of her as an employee.Landler resigned Feb.18 after POLITICO reported that the White House had found “credible evidence” that he bullied Wallace and violated workplaces standards with other staffers.
Wallace says she thinks Lander’s bullying was in response to her consistently raised ethical objections to Lander’s plans, including the office’s solicitation of funding from Schmidt-connected organizations for extra staff.
“I and others on the legal team had been noticing a large number of staff with financial connections to Schmidt Futures and were increasingly concerned about the influence this organization was able to have through these individuals,” Wallace, who is now being represented by the Government Accountability Project as a whistleblower, told POLITICO.GAP and Wallace formally filed a whistleblower complaint in early March.
A spokesperson for Lander declined to address specific issues but said: “Throughout his tenure, Dr.
Lander strictly adhered to all White House ethics policies.”
The White House said there was nothing unusual about its ties to Schmidt and that ethical issues were promptly and properly handled.
A foundation controlled by Eric Schmidt, the multi-billionaire former CEO of Google, has played an extraordinary, albeit private, role in shaping the White House Office of Science and Technology Policy over the past year.| AP Photo/Lee Jin-man
Some of the Schmidt-affiliated money came in the form of Schmidt Futures fellowships, which pay for people’s travel and expenses to science conferences.Last July, OSTP legal analyst Min Hee Kim wrote to one OSTP employee asking her to withdraw from the fellowship because her White House position and Schmidt Futures’ “strong interest in scientific discoveries and innovative technologies, [which] poses a very significant conflict of interest.” After Kim and other legal officials raised concerns, two employees withdrew from such arrangements.
Two other OSTP officials continued to work part-time at the Broad Institute of Harvard and MIT in Cambridge, Mass., a leading biotech facility that had been headed by Lander and where Schmidt chairs the board.The White House had approved the arrangement in advance, according to both the Broad Institute and OSTP.Both employees have since left OSTP.
Two more staffers also had their salaries paid through a fund with the Federation of American Scientists that Schmidt Futures pays into.
The chair of FAS, Gilman Louie, is also an associate of Schmidt’s who most recently served with him on the National Security Commission on Artificial Intelligence, which Schmidt chaired from 2018 to 2021.
Spokespeople for Schmidt said that the gift to FAS was “unrestricted” and did not direct funding for any specific fellowship at OSTP.
FAS spokesperson Dan Correa said in a statement that “Like many other scientific organizations, we offer pathways for scientists and technologists to engage in public service and deeply value their important contributions.”
Schmidt, who is estimated to be worth $23 billion , founded Schmidt Futures with his wife Wendy to support and promote emerging technologies such as a recently announced $125 million fund for artificial intelligence.
Schmidt also has very close ties to Lander, the founding director and president of the Broad Institute, whose prodigious fund-raising and scientific oversight turned the institute into a biotech behemoth.
Schmidt has served on the board of the Broad Institute since 2012 and served with Lander on the President’s Council of Advisors on Science and Technology during the Obama administration.They also served together on the Pentagon’s Defense Innovation Board, which Schmidt chaired, from 2016 to 2020.
Shortly after Biden nominated Lander to head OSTP, Broad announced that Schmidt and his wife had given a $150 million endowment gift to the Broad Institute to “catalyze a new scientific discipline at the intersection of biology and machine learning,” according to a March 2021 press release .In April 2021, before Lander’s confirmation, the Broad Institute announced that Schmidt would become chair of the board of directors of the Institute.
Through spokespeople, the Broad Institute and Schmidt said that the $150 million gift had been in the works since early 2020.
“The timing allowed us to recruit leadership for the new center and gave the new leaders time to build a research plan prior to the formal launch,” said a Broad Institute spokesperson.
A focus on AI and 5G Schmidt has made the development of 5G technology and artificial intelligence key aspects of his post-Google work and has advocated for a stronger federal role in funding both, along with biotech initiatives.
The White House science office sets strategic priorities for the nation’s more than $1.4 trillion in annual health and science spending.It has also been increasingly focused on federal policy on artificial intelligence.
A spokesperson for the science office disputed the idea that its work dovetailed with Schmidt’s priorities and pointed to its efforts to regulate the use of AI.
“You’re trying to tell a story of agency capture — that one philanthropy has influence over policy outcomes,” the spokesperson said in a statement.
“And yet, OSTP is executing on an aggressive agenda to protect the civil rights of all Americans impacted by algorithmic discrimination in the use of artificial intelligence and automated systems, is working across government to gather data that will help ensure that government delivers services more equitably, and is evaluating the mental health harms caused by social media platforms.We are proud to be defined by our work.”
As for the number of personnel connected with Schmidt Futures, the spokesperson explained: “As a small office with a $5 million annual budget that had just become cabinet level and was charged with addressing huge issues like the climate and future pandemics, OSTP senior staff, including Eric Lander, pushed to find ways to quickly bring on subject matter experts.As part of the onboarding process, OSTP’s legal counsel reviews potential ethical conflicts and directs remedial actions or recusals.”
The spokesperson added: “Furthermore, consistent with Congress’s statutory direction, OSTP works with numerous outside groups on a variety of important and critical science and technology matters, and staff come to OSTP from many different federal agencies, universities, and outside entities.”
Indeed, OSTP’s founding statute in 1976 states that the director shall “utilize the services of consultants” to help fulfill the office’s mission.OSTP ethics officials were alarmed, however, by the extent to which Schmidt Futures was involved in the hiring and use of consultants and fellows, according to their internal emails.
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Norm Eisen, who served as the White House ethics chief early in the Obama administration, said of Schmidt Futures: “You might say that the desire of a philanthropy to support government is noble, but at least the appearance question that is raised is whether government should be making its own determinations about that.
There should not be the appearance that perhaps outside actors are unduly shaping that policy.”
Of the concerns raised by internal ethics officials, Eisen added, “it’s not all appearances issues here.There are some significant challenges that were identified.I do think that those are meritorious and the White House came out in the right place in the end.The ethics sausage making isn’t always pretty.”
A foray into politics Schmidt’s relationship with powerful Democrats dates from the 1990s.
As CTO of Sun MicroSystems, he helped develop Bill Clinton’s first White House website at WhiteHouse.gov in 1994.
When Schmidt was CEO of Google, he hit the campaign trail for Obama in October of 2008 but explained he was “doing this personally” since “Google is officially neutral.”
During the Obama administration, while Schmidt served as Google CEO and later executive chair, company representatives attended White House meetings more than once a week, on average, from 2009 to 2015, according to an analysis by The Intercept and the Campaign for Accountability .
During Obama’s 2012 election reelection campaign, while he was still Google’s executive chairman, Schmidt helped recruit talent and advise on technology and was among senior staffers and volunteers in the campaign’s “boiler room” on election night.
He went all-in for Hillary Clinton in 2016.In April 2014, a year before Clinton announced her candidacy, he sent her senior aide Cheryl Mills a long memo entitled “Notes for a 2016 Democratic Campaign.” At her election night party in 2016, he was photographed wearing a “staff” badge.
After Donald Trump beat Clinton, Schmidt sought to smooth the waters with the incoming administration.He concentrated on developing ideas for artificial intelligence policy while also strengthening his relationships with Democratic officials seen as likely to join the next Democratic administration.
In 2018, Congress created the National Security Commission on Artificial Intelligence to “to consider the methods and means necessary to advance the development of artificial intelligence, machine learning, and associated technologies to comprehensively address the national security and defense needs of the United States.” Schmidt became the chair, nominated by then-chair of the House Armed Services Committee, Republican Mac Thornberry of Texas.
Schmidt told The New York Times in 2020 that “the way to understand the military is that the soldiers spend a great deal of time looking at screens.And human vision is not as good as computer vision,” he said, explaining why AI should be used for functions currently handled by humans.
“It’s insane that you have people going to service academies, and we spend an enormous amount of training, training these people, and we put them in essentially monotonous work.”
While he had left Google’s board by 2019, he still retained $5.3 billion in shares of Google’s parent, Alphabet, while chairing the NSCAI.
Schmidt Futures also set about establishing relationships with the next Democratic administration-in-waiting.When now-Secretary of State Antony Blinken co-founded the consulting firm West Exec Advisors in 2017 along with Michèle Flournoy, who was then seen as a frontrunner to be secretary of Defense, Schmidt Futures became one of their clients.
Flournoy participated in a 2020 Biden fundraiser with Schmidt that was billed : “Virtual Conversation on Technology and National Security.”
West Exec was also the professional home to several additional people who are now high-ranking officials in the Biden administration, including Director of National Intelligence Avril Haines and Deputy Attorney General Lisa Monaco, both of whom were West Exec employees.
In July of 2021, at the “Global Emerging Technology Summit” hosted by the NSCAI, which has since been disbanded by statute, Blinken thanked Schmidt and referred to him as a “friend.”
The State Department declined to comment.
Driven to shape federal policy People in the technology space say Schmidt’s efforts to cultivate leading Democrats have been motivated largely by his genuine concerns about the focus of federal science policy.Detractors portray him as an unelected billionaire favoring policies that could further enrich and empower himself and the organizations in which he’s involved.
But those more sympathetic to him say that, even if he occasionally enters ethical gray zones, Schmidt is driven by his belief that economic and military power in the 21st century will go to whichever country is the leader in technology, particularly AI.
Ylli Bajraktari — the former executive director of the NSCAI who is now the CEO of the Schmidt-backed, AI-focused Special Competitive Studies Project that launched after NSCAI wound down — explained that “Eric believes that AI sits at the center of the constellation of emerging technologies, enabling some and being enabled by others.For instance, 5G and quantum computing are poised to enable new growth in AI capabilities, while AI stands to transform the biological sciences, producing significant technological breakthroughs and turning the biotechnology sector into one of the primary drivers of overall economic competitiveness.”
Bajraktari pointed to Schmidt’s recent book, “The Age of AI,” co-written with Henry Kissinger, and added that “the competitive backdrop with China is important.Do we really want China leading the world in AI-enhanced synthetic biology? Given the central role of the government in shaping scientific innovation, of course he wants to help.
He has said many times that we need to base these technologies on our values and norms otherwise we shouldn’t develop them.”
“Eric believes that AI sits at the center of the constellation of emerging technologies, enabling some and being enabled by others.”.
