Michele Flournoy, a leading candidate for the role who served in senior posts at the Pentagon during the Clinton and Obama administrations, has faced criticism from progressives and left-leaning activists for her ties to defense contractors and a strategic advisory firm that has faced questions about its clients.
She's not the only one. Several of Biden's Cabinet selections and initial White House hires, along with members of his transition efforts, have also come under scrutiny for their work in corporate America or lobbying history.
The wrangling over the composition of Biden's administration is one of the earliest flashpoints between the activist and establishment wings of the Democratic Party after their cooperation and collaboration to elect Biden and deny President Donald Trump a second term.
"It's a mixed bag so far, but it's extremely early," Jeff Hauser, the founder and director of the Revolving Door Project, a liberal advocacy group, said of Biden's incoming administration.
Progressive groups have also put forward their own suggested list of 400-plus senior administration appointees, a group that doesn't include individuals with corporate or lobbying histories.
ABC News reached out to the Biden transition team for comment Wednesday, but did not receive a response to questions.
The Biden administration
Steve Ricchetti, a longtime Biden aide who will serve as counselor in the White House, is a former lobbyist who spent a dozen years working for health care and pharmaceutical companies in between stints in the Clinton and Obama White Houses.
Biden named Rep. Cedric Richmond, D-La., a senior adviser and director of the Office of Public Engagement. It's a move the Sunrise Movement, a leading group of young climate activists, called a "betrayal," pointing to Richmond's ties to the energy industry, which has contributed tens of thousands of dollars to his congressional campaigns, according to the Center for Responsive Politics.
"That's a mistake and it's an affront to young people who made President-Elect Biden's victory possible. President-Elect Biden assured our movement he understands the urgency of this crisis; now, it's time for him to act like it," Varshini Prakash, the group's executive director, said in a statement.
While Biden is expected to name former Federal Reserve chair Janet Yellen his nominee for treasury secretary -- a pick praised by prominent Democrats across the party spectrum -- he has yet to fill out the rest of his economic team -- including critical positions leading the White House budget office and the National Economic Council.
On Monday, Biden announced his selection of Antony Blinken, another close adviser since his time in the Senate, as nominee for secretary of state.
Blinken, together with Flournoy, founded WestExec Advisors, a "strategic advisory firm" that doesn't disclose its clients, after leaving the Obama administration and ahead of Biden's 2020 campaign.
Good government advocates who have raised questions about the structure of the organization -- which, unlike lobbying shops, does not have to register with the government -- expect Blinken's work with the firm to be a point of contention in his confirmation hearings.
"It's important to get clarification on what the work was and if any of it would be in conflict with what their work is going to be in public service," Mandy Smithberger of the Project on Government Oversight told ABC News.
Flournoy's work for Booz Allen Hamilton, a consulting firm that contracts with the Pentagon, could also be a roadblock on Capitol Hill, should she be nominated by Biden. Prominent progressive lawmakers have already called on Biden to select a Pentagon chief without ties to defense contractors.
The transition effort
Biden's 500-person transition team, which began communicating with government agencies to facilitate the transfer of power as of Monday evening, includes at least 40 people who are current and former registered lobbyists, according to an ABC News' analysis of federal lobbying records.
Several of them are representatives of various labor unions, environmental groups or other nonprofit civic organizations, while some others have lobbied on behalf of corporate and business interests, like pharmaceutical companies or energy groups.
Hauser, the director of the Revolving Door Project, has been calling on Biden's team to avoid enlisting both lobbyists and what he refers to as "shadow lobbyists," or people who work in corporate jobs to influence policy, but don't meet the threshold to formally register as lobbyists.
He pointed to Jessica Hertz, a senior Facebook attorney who worked on regulatory issues, who now serves as the Biden transition's general counsel, along with several members of the agency review team for the Office of Management and Budget who have worked for Lyft, Amazon, AirBnb and WestExec Advisors.
Lobbyists, including any who have registered within the past year -- must be approved by the transition's legal team. Members of the team must also seek approval if they have represented or advised any foreign governments or political parties within the past year -- and are prohibited from working with any foreign parties or governments for an additional year after the transition.
Over the last four years, Trump has come under fire for flouting his own ethics rule after having promised to "drain the swamp" in Washington.
During his first week in office, Trump issued an executive order requiring all administration appointees to sign an ethics pledge that they will not participate in any matter related to their former employer or former clients, and to not lobby the agencies that they had worked in for five years after leaving the government, a stricter set of rules put in place by President Barack Obama in 2008.
But within the first two months of taking office, the Trump administration issued at least 16 ethics waivers to allow staff members to work in the White House while going around the ethics rules -- reportedly more than five times the number granted in the first four months of the Obama administration. And over the years, several other former members of the Trump administration have been found lobbying or representing private interests that they pledged not to represent for at least five years.
While the Biden administration's ethics rules won't be released until January, when he takes office, Hauser and other transparency advocates are hoping to see guidelines in place that both prevent registered lobbyists from working in the administration and provide clearer guidelines to limit the cycling of shadow lobbyists in and out of the administration.
"Part of building back better is having a government that is ethical in its conduct," Smithberger said. "If this administration skirts these rules, I don't think that they are fulfilling their promise to the American people."