Yesterday, a publication called the Washington Reporter released a bombshell story saying that Kamala Harris was “likely to nominate Gary Gensler as Treasury Secretary if elected.” Based on unnamed sources, the lede confidently ran: “While publicly, Securities and Exchange Commission (SEC) chairman Gary Gensler hasn’t expressed desire to leave his current role, multiple senior Senate staffers are telling the Washington Reporter that if Vice President Kamala Harris wins in November, she plans to nominate Gensler as her Treasury Secretary.”
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If true, this would certainly be a big deal for the crypto industry and beyond.
Gary Gensler is (let’s just say it) universally disliked in crypto for the SEC’s frequent aggressive “enforcement actions” and for his unwillingness to be clear about what is and what isn’t legally permissible when it comes to digital assets. But is the story true? Let’s take a look at the evidence, and how this “story” may have come about. It may be true that “multiple senior Senate staffers” believe Gensler could be Treasury Secretary in a Harris administration. Gensler is long believed to have coveted that job and he would certainly be well-qualified: he worked on Wall Street (Goldman Sachs), he’s led both of the country's primary markets regulators (the SEC and Commodity Futures Trading Commission), and he was a professor at MIT. He’s a well-rounded, experienced economic public servant; why wouldn’t he be considered as a Treasury Secretary candidate? Putting aside that Harris needs to win the presidency, a Senate majority and persuade both Democratic and Republican Senators to support his nomination … it’s certainly possible Gensler could get the job next year, though, according to most experts, that is unlikely. But the story is filled with red flags that any decent editor would immediately mark up with red ink. For example: “Those rumors corroborate what top Republicans have also told the Reporter on the record.” Rumors don’t corroborate anything. And there’s nothing close to a quote from someone close to the Harris camp; the “likely” in the headline all comes from those Senate staffers.
CoinDesk ignored the “story” because it didn’t meet our standards. It contained no on-the-record reporting and nothing from the people who were said to be doing the thing it said they were doing (nominating Gensler). Moreover, many well-placed folks were immediately suspicious and dismissive:
I’ve heard this is false from multiple Rs as well. https://t.co/p7ix3CV36o
— Sheila Warren (@sheila_warren) August 19, 2024
So, what is this Washington Reporter? It looks and appears like a venerable publication. But read the website a little and you find that it was started by Republican political operatives and its stated objective is this: “We cover stories pushed by interested parties – including lobbyists or operatives with clients – as long as the content is true, fair, and insightful,” the site says. Whatever that means in plain English, it’s clear that the Washington Reporter isn’t journalism. (Axios described its origins here.)
The Gensler-for-Treasury story was certainly compelling, though. And the thing about compelling stories is that they have a way of becoming true even when there’s no truth to them. For instance, The Block, which does solid work daily, picked up the thread and ran a straight “Gensler is being considered for Treasury Secretary” headline. Other well-known reporters tweeted about it (including Unchained’s Laura Shin). Whatever the merits, the story was rapidly becoming true in the retelling.
So, who benefits from all this? Well, last week, crypto-friendly Democrats made a concerted push to say they could be trusted on crypto policy. Senate leader Chuck Schumer (D-N.Y.) promised to pass a crypto bill through the Senate before the end of the year. It looked like Democrats who support crypto might have a home in November. But what’s the one thing that might stop these crypto people from voting Democrat? Nominating Gary Gensler as Treasury Secretary – just the sort of rumor a political operative might want to spread.
Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.
