Military Veterans, on the Orszag Situation

I won't belabor this much longer, but there are several clean-up points to make after these two previous posts.

1) Yesterday I "gently chided" Ezra Klein of the Washington Post for the Post's failure to publish a single word about the Orszag/Citigroup amakudari deal. Apart from Klein's blog, it still has not done so. This morning Klein has added his thoughts on the rights and wrongs of the situation, which differ from mine but which I encourage you to read.

2) A number of people who read only my second item on the topic have written in, often huffily, to ask (a) how dare I say that Orszag himself was corrupt or rule-breaking? and (b) well, what else could he have done? I tried in this first post to address both those questions directly. Summary: the revolving-door problem is a "structural rather than personal" phenomenon; and conceivably there are places to work, for good pay, other than a firm the Administration is being criticized for having bailed out.

3) In the previous post, I quoted a law student who criticized my criticism, on grounds such as "If someone can make five times more money, especially in our uncertain economic climate, how can you fault them?" Many, many readers disagreed. Let me start with a few replies from people in the military world, which has its own revolving-door problems. First, from a current Defense Department employee:

>>I'm not sure whether your law student defending Orszag's move is utterly naïve or duplicitous. I have no doubt Mr. Orszag is a very bright fellow, but would he be worth nearly so much to Citibank if he had the same smarts but lacked friends in the White House and senior leadership in Congress? As someone in the defense establishment, I'm quite familiar with how this works in the military-industrial sector. Trust me, when a defense contractor or consulting firm hires a retired General at a very high salary, most of that salary is for access and contacts, not for raw talent and technical knowledge.

Does this have any corrupting influence? At a small scale, I've seen military educational institutions spend half a million dollars on half-baked curriculum ideas or technologies pitched by senior retired officers and sold entirely on the basis of their friendship with current institutional leaders, where well-developed initiatives by PhD faculty costing 1/10th that get nowhere. At a large scale, how about the case of Darleen Druyun, the USAF procurement official who illegally assisted Boeing's bid to sell a tanker to the Air Force, explicitly in exchange for a high-paying Boeing job when she left the Pentagon right after the bid. Your law student "can't see any evidence" that future job prospects influence public employee behavior? The Druyun case didn't just smell corrupt, it was go-to-prison corrupt! For every Druyun who gets caught when Congress investigates a high-profile case, several others go uncaught. Many more avoid direct quid-pro-quos but know full well that if they "take good care" of contractor X, that X will offer them a very cushy job post-retirement.

Certainly that logic affects Congressional staffers too; I've heard it's becoming increasingly common for people to seek Congressional staff jobs precisely because they see such jobs as a stepping stone to high-paid work with lobbying firms. If we look at what K-street law firms pay their staff, I'm willing to predict salaries bear a much stronger correlation to the importance of someone's former boss on the Hill than to LSAT scores or law school grades.<<

Now, from a naval veteran:

>>I know that you disagree with the student but allow me to point out the most depressing part of his argument "If someone can make five times more money, especially in our uncertain economic climate, how can you fault them? ". It would seem that our student somehow has the impression that the money involved is the most important consideration. There is no thought as to the honorable course of action.

Early in my naval career (and I've got to hope even before) we were taught to avoid even the appearance of impropriety. The standard to review your actions was how was this going to look in the papers, how would the average person view this. The writer mentions retired military personnel sitting on boards. That is just as wrong in my view. Again we're up against the pack mentality that says everyone is doing it so it must be okay, or it's legal so it must be alright (or even my lawyer has advised me as to its legality). When we have to split hairs to see if an action is correct we've started down a slippery slope and unfortunately it would seem that many (or even most) don't even recognize that they are on an incline.<<

A few more after the jump.

From a current Congressional staff member:

>>What depresses me, working here on the Hill and in govt, is you get paid millions to advocate for corporate interests. Want to advocate on behalf of child abuse victims? Poor immigrants? Getting toxic chemicals out of our water? Cracking down on Wall Street OTC derivatives? In general, doing ANYTHING that benefits the public interest, but doesn't generate profits? You are screwed into making peanuts. THAT is what is wrong with the free enterprise system.

I am in government to help the people. I don't expect to earn millions and frankly don't want to, by lobbying for Goldman or Citibank once I'm out of here. But I know then my salary will forever be limited.

THAT is what is upsetting.... Being here, the public has no idea just how shut out of the debate they are vs. these lobbyists. No wonder our approval rating here is 13%! It's more corrupt than they even imagine...<<

From a lawyer:

>>I wanted to respond to the impassioned defense of Peter Orszag from your post last night. As someone who was once a current law student (and eventually graduated), I appreciate the vigor of his or her arguments, and this person looks like they have a bright future. But, they also do what any person who would want to defend Peter Orszag would do: ignore the facts that most concretely disprove their point.

Orszag was directly involved in saving a financial institution and shortly thereafter took a position in that same institution. The situation is not "Government employee leaves for private sector employment" but instead "Government employee who works in direct contact with a large private organization and assists with keeping that organization afloat, then shortly thereafter takes high paying job with that same organization."

The Judge Luttig comparison doesn't necessarily have merit. There's obviously nothing inherently wrong with a judge leaving the federal bench to become general counsel of Boeing. But if he did it a few months after a ruling he made saved Boeing hundreds of millions of dollars, some eyebrows may have been raised. It doesn't prove a quid pro quo, but it doesn't look good either.

And that's what the problem should be for the administration. As someone who considers themselves a disappointed Barack Obama voter, this is exactly the kind of thing I thought we would be getting away from in an Obama presidency. For years, people on the left railed agains Bush administration appointees leaving government and joining the very companies they had just been regulating, or vice versa. This is essentially the same thing, and the same level of disapproval should be voiced.<<

And one more:

>>"There is no evidence that the private riches a former government official can earn are directly related to any influence or otherwise corrupt sway a former federal employee may have over the government."

I'm pretty sure that's completely inaccurate. I think if you look at the actual credentials and the actual employment track records of former government officials in lucrative positions with private industry, you would find overwhelming evidence that in most cases the only real value they add is their presumed ability to influence their former government employer.<<

And why not yet another:

I agree it is sad that Orszag's move didn't provoke more discussion.

But I think that focusing on just the move, the salary, and the yin-yang aspect of the two jobs misses the real point.

I think it is okay for regulators to move to industry, and vice-versa. It is probably the best way to maintain competence and avoid gridlocked adversity on both sides of the public/private divide. The Founder's notion that every educated person should tithe some years of life to public service has not become unworkable in the modern age.

What HAS become unworkable is that the notion of "public service", with the emphasis on *public*, has become... quaint. So have ideas like "promote the general welfare", "benefit of society at large", and "greatest good for the greatest number". Public service has devolved into interest-group nest feathering. Venal behavior has become the norm. It is the silence on this moral question that is lethal to our democratic ideals in the long run.

We, especially the press, fail to demand probity from our public servants, especially during their time in government. What is toxic is not that Orszag was so facile in returning to a job in finance, but that he failed to set aside his parochial interests while entrusted with the general welfare of the nation -- using "nation" in its broadest and most historical sense....

Enough for now. More as justified.