Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, April 25, 1993 TAG: 9304270344
SECTION: BUSINESS PAGE: D-5 EDITION: METRO
SOURCE: BRUCE NICHOLS KNIGHT-RIDDER/TRIBUNE
DATELINE: HOUSTON LENGTH: Long
The Houston-based oil and gas giant engaged former Secretary of State James A. Baker III and former Commerce Secretary Robert Mosbacher as consultants and joint-venture partners.
The company also added Wendy Gramm, one-time chairman of the Commodity Futures Trading Commission and wife of Sen. Phil Gramm, R-Texas, to its board.
The results may buoy the company, but government ethics analysts question whether such activities amount to cashing in on public service - by both the former office holder and the company hiring them.
"You have the perception they're trading on their government service. That doesn't exactly deepen and strengthen the public's trust," said Charles Lewis, executive director of the Center for Public Integrity.
Enron Chairman and Chief Executive Officer Kenneth L. Lay rejects the complaint.
"I don't think they went into government so when they got out of government they could do what they're doing with us," Lay said.
All laws and ethical guidelines are being observed, Lay said, adding that he resents the inference that going into business is somehow automatically shady or questionable.
"These people that raise these issues, what do they expect these people to do, leave government and go in a monastery or something?" Lay asked.
Enron wants the former officials for counsel on how the government works, advice on international business questions and to provide access to political and business leaders worldwide, analysts and experts said.
Corporations need people with an intimate understanding of Washington and the world, said W. Henson Moore, a former Louisiana congressman, deputy secretary of energy and deputy White House chief of staff under Bush.
Many corporate officials are "amazingly not conversant" with how the federal government works, said Moore, now a Washington-based partner with the Houston law firm of Bracewell & Patterson.
Corporations also need people whose telephone calls are likely to be returned promptly by high officials, said John Nash, president of the National Association of Corporate Directors.
"What you have . . . at that level . . . is not only U.S. contacts but world contacts at the highest level that can open doors to other governments or other businesses," Nash said.
But "access is fleeting," Moore said. When administrations change, contacts change. For example, he compared formerly powerful Republicans in a Washington now dominated by Democrats to "Bosnian Muslims, wandering in the wilderness ducking shells."
And government service alone is not enough without a reputation for competence and judgment, said Jack Baber, a Houston-based partner with Korn-Ferry International, the executive search firm that helps companies find directors and other officials.
Indeed, an annual Korn-Ferry survey of corporations found that former government officials rank seventh on a list of eight categories of people companies want as outside directors. Executives of other companies, women, minorities and even college professors outranked them in priority.
Bureaucrats who land in high corporate positions "are not trading on their government service so much as their own innate experience and ability," Baber said.
Federal law bars ex-officials from lobbying agencies where they worked for one year after leaving office. There is a two-year ban on lobbying issues that were under an ex-official's indirect authority. He or she may never lobby an issue directly under their purview as an official in Washington.
\ WHERE THEY ARE NOW\ \ CLAYTON YEUTTER: former U.S. Trade Representative, Secretary of Agriculture and Republican national chairman, named to the board of Texas Instruments Inc. of Dallas.\ \ SAMUEL SKINNER: former Transportation Secretary, hired as president and put on the board of Commonwealth Edison of Chicago.\ \ LOUIS SULLIVAN: former Health and Human Services Secretary, joined the boards of Cigna Corp., the Philadelphia insurance giant, and General Motors Corp.\ \ BRENT SCOWCROFT: former National Security Adviser, added to the boards of Pennzoil Corp. of Houston and Northrop Corp., the Los Angeles aerospace company.\ \ RICHARD DARMAN: former director of the Office of Management and Budget, along with JAMES A. BAKER III, former Secretary of State, have signed on with Carlyle Group, a merchant bank and investment firm in Washington headed by former defense secretary FRANK CARLUCCI.\ \ CARLA HILLS: former U.S. Trade Representative, has joined the board of Bechtel Group Inc. and has formed her own international consulting firm.\ \ DICK CHENEY: former Defense Secretary, has been named to consumer products giants Procter & Gamble Co. and regional Bell operating company, USWest Corp. LAURO F. CAVAZOS: former Secretary of Education, has been named to the board of Luby's Cafeteria Inc.
by CNB