Harris can chart her own path with the top regulators — and Big Business hopes she's on their side

• Biden made commitments during the campaign that impacted key economic appointments.
• Should Harris become president, she'll have much more freedom, and industry leaders have high hopes.

When President Joe Biden stepped into the White House in January 2021, he was hamstrung not only by the pandemic but also by a promise he'd made to a former challenger: Sen. Elizabeth Warren of Massachusetts.

When slogging through the political thicket of a crowded Democratic primary, Biden had assured Warren that she would have significant sway over economic regulatory agency appointments.

Warren's desired appointees — namely Lina Khan and Gary Gensler, chairs of the Federal Trade Commission and Securities and Exchange Commission respectively — have drawn the praise of many economic progressives and ire of many business leaders.

But now that Vice President Kamala Harris is running for president in Biden's place after he dropped out, Khan and Gensler's future as chief regulators is in doubt.

Biden made a key commitment to Warren when he was running for president

"One of [Warren's] preferences was, 'I want Lina Khan to run the FTC,'" William Kovacic, former FTC chair and current law professor at George Washington University, previously told Business Insider. "Biden fulfilled that promise. But that was Biden's promise. That's not Harris' promise."

Adam Kovacevich, a Democratic lobbyist and the CEO of progressive tech industry coalition Chamber of Progress, doesn't think that Biden was particularly interested in regulatory economic issues.

"I think giving some picks to people like Elizabeth Warren kept Warren off his back on other issues," Kovacevich said. "Flash forward to today: Kamala Harris doesn't owe Elizabeth Warren anything."

During the 2020 cycle, various media outlets reported that Warren is singularly attuned to the power of economic regulatory agencies. A former Democratic aide told Politico that "Warren will be the most influential voice in the financial policy debate under the new administration," and the president of the Consumers Bank Association said that she "virtually hand-picked the financial and other regulatory nominations she cares deeply about."

But business and tech leaders who winced at the current appointments see an opportunity in Harris.

With deep ties to California, Harris is presenting herself as a pro-business candidate who understands the tech industry far better than her current boss. And she's garnering support among industry executives across the country — a group of powerful venture capitalists have vowed to vote for her and nearly 100 corporate leaders recently endorsed her in a joint letter.

Her supporters in the upper echelons of business and tech are particularly focused on appointments, with many saying that leaders should effectively balance regulation with innovation.

In particular, they want appointees that institute clear crypto guidelines and veer away from the current regulatory approach that Warren had championed.

Yet Aaron Levie, CEO of Box, said that there isn't consensus in the tech world about anti-trust doctrine, as big and small companies have different priorities. There are many individuals in the Biden administration, such as Arati Prabhakar of the Office of Science and Technology Policy, who are thoughtful tech leaders but aren't widely discussed, he said.

Harris could chart a different path

Still, founders and business executives seem, on the whole, dissatisfied.

Democratic donors on Wall Street are quietly encouraging Harris to oust Khan and Gensler, Bloomberg reported.

Chris Larsen, the billionaire founder of blockchain payments company Ripple who is among the execs to endorse Harris, told Business Insider he wants her to make different appointments if she wins.

Larsen said he wants regulators that are "not pre-selected by the Warren camp and can balance both consumer protection with ensuring our national champions dominate their industries."

Christian Catalini, the founder of the MIT Cryptoeconomics Lab, said that Gensler demonstrated "reluctance to engage in constructive dialogue with startups seeking regulatory clarity."

He thinks that tech entrepreneurs are particularly hung up on who Harris would choose for the SEC.

Recently, billionaire investor and owner of the Dallas Mavericks Mark Cuban offered himself up for a spot at the SEC.

Cuban is in close communication with the Harris team and said that she will likely surround herself with more individuals from the private sector than Biden.

Levie also said that engaging with the private sector is "absolutely critical" and hopes Harris invites more industry actors to join the margins of her administration.

"The way that they have already been interacting with business leaders is a compelling indication of where things could go in the future," Levie told Business Insider.

However, the vice president has been relatively quiet about her views on antitrust enforcement and who she would appoint.

Khan's tenure as chair of the FTC is up in September and she is open to staying on in her position. Gensler's term lasts until June, 2026; in February, he said he would "absolutely" stay on if Biden, who was then still the nominee, won a second term.

Kovacic previously told Business Insider that Harris' relationship to economic progressives like Warren remains unclear.

"A factor to be assessed is, what is the nature of her relationship with this wing of the Democratic Party? How much loyalty does she feel to them? How much does she believe that she has to cater to their tastes in order to maintain a harmonious political relationship? But she has a bit more freedom than Biden did," he said.

Kovacevich, who calls himself a "pro-business and pro-Harris democrat," doesn't think that Harris needs to win over Warren voters.

He suspects that the Vice President will "reset" the current environment and return to the Obama era, which was friendlier to corporations.

"I do think it's notable that she has not prioritized attacks on corporate power in her campaign rhetoric. I think she correctly sees how that's not a motivator to most voters," he said.

The Vice President's precise plans remain unclear with only 50 days until the election.

The relationship between Harris and Warren's philosophical counterparts has been testy at times. In March of last year, Warren gave a lukewarm answer when a radio host asked whether Biden should keep Harris on as his vice president.

"I really want to defer to what makes Biden comfortable on his team," she said at the time. The senator quickly issued a statement saying that she supports the Biden-Harris 2024 ticket.

She reportedly called Harris twice after the incident — without receiving a call back.

Kovacic suspects that economic progressives don't entirely trust Harris, given her ties to the business world.

"It's not as though they think she will simply be an agent of Big Tech," he previously told Business Insider. "It's a concern that she is too sympathetic to their interests, that she will not be as aggressive." He anticipates that Harris will move to the center on mergers, but maintain the Biden administration's approach to monopolization and price-gouging.

A spokesperson for the SEC declined to comment, and representatives for Harris and Warren did not respond to Business Insider's request.

Douglas Farrar, a spokesperson for the FTC, emphasized Khan's efforts to lower costs and said that "there is a lot of work yet to do to bring the benefits of fair competition to American consumers and entrepreneurs."

Should Harris win the election, the question of appointments will loom large. The leadership plays a major role in determining how successful American industries and companies are, Levie said.

"In the next four years, we'll be dealing with major policy subjects that relate to the next many decades of innovation," he told Business Insider. "And you want very smart, thoughtful, highly competent, experienced people in a stable environment that can help define where we're going to go with AI, with new energy sources, with advanced manufacturing, biotech."

Unhampered by campaign promises yet caught between opposing factions of her party, Harris may usher in a new regulatory era. But since regulatory appointments don't make a good political sound bite, it's likely we won't know her plans unless she wins in November.