The Infamous Revolving Door: Seedbed of Corruption
By Rawlein G. Soberano, Ph.D.
Germantown, MD (Feb. 9, 2010) – The “revolving door” is something most Americans know as a system by which government employees move into the private sector and vice versa. Instances range from the normal move as when people change careers to when they choose a shamefully corrupt one that rewards those who serve loyally private enterprise during their public career. DOD employees took jobs with the private contractors at an alarming rate of 491%, according to a study done on this subject between 1975 and 1985. What was shocking about it was that it was not shocking anymore. The law to keep a record of DOD’s employees who left to work for the defense industry was repealed in 1996. Cut off the flow of information in this area because it is embarrassing.
Efficiency and competition were sacrificed on the altar of friendship among individuals responsible for taxpayer race, failed weapons systems, unnecessary overbuilding for which the Pentagon became notorious, e.g., V-22, F-22, war in Iraq (second most expensive war in American history). The American military was sufficiently capable of keeping us safe long before the age of the revolving door and the embarrassing waste revelations of the 1980’s (Reagan administration) through the first decade of the 21st century (GWB administration). Cutting back on the waste in the military is enough to solve our national deficit.
Who could forget the deal that Darlene Druyun made for herself before she joined Boeing in 2003 after approving a deal to lease tanker planes from Boeing instead of buying them which would have been cheaper. She herself referred to the deal as “her parting gift to Boeing,” worth $20 billion. Or the case of Steven Griles who did great favors for the oil and coal industries while a public official during the Reagan & Bush years and passed his time between tours of duty in the payroll of oil and coal industries. The government-to-lobbyists revolving door is another atrocity that is destructive to the interest of the American people, as shown by the LA congressman Billy Tauzin who took a job for $2 million a year with PhRMA less than 2 months after the prescription drug benefit passed. If it was not a pay-off, the convenient timing was surely suspect.
DHS is the worst. Built from scratch in 2003 by GWB administration, according to principles of market-band government, its career employees were initially stripped of bargaining rights, its top political appointees were allowed to wheel and deal freely, award humungous contracts at their discretion. By 2006, two-thirds of them left for private sector jobs in the ultra-lucrative homeland security industry which depends solely on government contracts. A deputy administrator, making $155k a year in the government; one month later after going to the private sector, she was making $930k.
Forty-three percent of senators and representatives who left Congress since 1998 have become lobbyists, up from 9% in the 1970’s. It is the financial math that overwhelms all other considerations. Congressmen who earn $170k a year often make that much from a single client, whether a public university or utility company whose interests they are supposed to be representing as public officials. Rep. Bob Ney sold his votes for little bites of sushi & sashimi, a luxurious golf trip to Europe and other benefits that surround the good life. When his activities were exposed, he was told by the GOP leadership not to seek reelection in 2006 because if he lost, he would embarrass the party and could not expect a lucrative job as a lobbyist. The arrangement did not save him from jail.
Over $100 billion was spent for the reconstruction of New Orleans after it was ravaged by Hurricane Katrina, but part of the city remained empty. Repairing public housing was at the bottom of their priority, while the rebuilding of casinos was an urgent one. The clueless and merciless hand of the GOP was clearly visible in all this mess. The unavoidable result of its recovery plan consisted of tax cuts for entrepreneurs, fat handouts to chosen and favorite contractors (big contributors to the GOP) and toxic trailers for those who can’t afford large donations to the GOP.
Putting federal operations under people who are hostile to the operations’ existence is the second main tactic of conservative governance. When some aspect of the state is of no use to the conservative movement, the standard method of dealing with it is to put the department in question under the control of someone who is either ill-suited for the job or vocally opposed to the department’s mission. This strategy is no different from repealing or abolishing agencies while achieving the same results, e.g., John Bolton at UN, Andrew Biggs (the evangelist of privatization) as the #2 man in the SSA, William Bennett, secretary of Education under Reagan, wanted public schools to fail so that he could replace them with vouchers, charter schools, religious schools & other forms of private education; James Watts, DOI secretary under Reagan directed a legal foundation dedicated to fighting DOI’s conservative policies with donations from wealthy ranchers, oil companies and tribal interests; a rancher (Robert Burford) ran the Bureau of Land Mgmt, a former coal executive (James Harris) ran the strip-mining office, a lumber industry lawyer (John Crowell) ran the Forest Service; a CO state legislator (Anne Gorsuch) to run EPA; she concentrated power in a handful of cronies from the ranks of industry lobbies. Each was picked to show the administration’s hostility or indifference to the agency in question.
The Reagan administration was afraid of appointing competent people to run “suspect” agencies for fear that its actions might be misinterpreted as sanctioning the regulatory enterprise. Congress can regulate all it wants but without enforcement it is meaningless. When Gorsuch took over the EPA, the first thing she did was abolish the Office of Enforcement. When Cheney was VP, he crafted the nation’s energy policy with the help of coal, oil and electricity companies, undermining the Clean Air Act. Gale Norton (under GWB) used the same modus operandi of James Watts.
Mine Safety Health Administration reduced fines charged mine owners for safety violations. Consumer Product Safety Commission paid no attention to lead paint in the toy market; HHS sided with the baby formula industry by diluting the ad campaign promoting breast-feeding. FDA became an arm of the pharmaceutical industry. Political appointees at EPA, FDA and DOL focused on business as the primary customer. Damn the public! GOP has always treated DOL as a spoils vehicle, rewarding loyalists with jobs. The GOP moved the agency in reverse, e.g., person in charge of Employment Standards Administration was the same author of “How to Close Down the Department of Labor” in a 1995 report; members of government workers’ union did not get the $100 monthly transportation subsidy that other federal employees automatically got.
After decades of hard-fought right-to-work, careful bureaucratic sabotage and infusion of lobbyist money, only people from the top benefited from this scheme. The rest of America became potential victims of food poisoning, train derailments, deadly mine accidents, tap water unfit to drink, mysterious workplace plagues became their philosophy that regards business as its only constituent.
Even as we’re talking, Pimco just hired Neal Kaskhari, another example of how crony Capitalism is corrupting our financial system. Pimco is a unit of Allianz, the insurance conglomerate and largest asset manager specializing in bonds, having $940 billion under its management. Kaskhari is a former Goldman Sachs banker who was brought to the Treasury Department by former Secretary Henry Paulson, another Goldman Sachs alumnus and was deputized by Paulson to run the TARP program in 2008. Strictly business, but it’s all in the family.
Rawlein G. Soberano, Ph.D. is the President of the Asian American Business Roundtable.