Don Goldberg

Random thoughts

2009-03-04T10:30:00.003-05:00

Once again, I turn to Steve Perlstein of the Washington Post, my favorite business columnist, for the best macro-look at what's happening in the markets and the economy. His take on the dispute over increased spending to get us out of this mess-- it's not that much new debt in any relative sense. Definitely worth reading.

What about the flap over Rush Linbaugh? I think the Republicans are nuts to allow Rush to become their spokesman, while the Dems are doing exactly what they need to do to make Rush into their posterchild. Without a real party leader, Rush has filled the void, and while he might have 10 million loyal finge supporters, that won't get anyone elected. I am guessing that name recognition for Michael Steele (flailing at trying to actualy own his own title as RNC Chair), Mitch McConnell (Senate Minority leader), and John Boehner (House Minority leader) is non-existent. But Rush is first and foremost an entertainer, not a politician, and the sight of real party leaders cowtowing to him, apologizing on his show for daring to criticize his anti-Obama remarks, just reminds the general population why they threw the Republicans out of office. Good for D's to have a convenient target that the public actually has heard of, very bad for the R's.

Don't make the mistake of thinking this was by accident. Politico has a good insider look at how Rush was targeted by the D's as their punching bag-- a role he relished to the detriment of their party.

And that's been a real challenge for the R's-- they can't go after Obama because his approval ratings are through the roof. That doesn't leave them with any symbols of the Democratic excesses that they feel were evident in the stimulus bill, and that they hate in the budget. Speaker Pelosi is only slightly better known than McConnell and Boehner (notwithstanding her being third-in-line to the Presidency), so the mileage of going after her is limited. Newt was a much better target for the Dems a dozen years ago. Now it's Rush's turn...

2009-02-19T08:47:00.002-05:00

There are a couple of Washington Post articles today worth checking out for all you Damage Control fans. The first is a story that was all over the place yesterday, the decision by FaceBook to alter its policies on its rights to user information. Tech gadget columnist Rob Pegoraro has a good write-up of the issue, which essentially stems from a lawyer's edits to their existing fine print, but that some FaceBook fans believe will give FaceBook the rights to use their information in perpetuity.

FaceBook could have learned a little something from a former clinet of mine, DoubleClick, the on-line ad behemeth. Ten years ago, DoubleClick inadvertently stepped into a similar mess. The company, through its ad serve technology, had enormous banks of information on the activities of everyone surfing the internet-- although the identity of every surfer was limited to url's that don't include, for example, names, home addresses, credit information, and all of the other details that make us real as opposed to virtual human beings. What got DoubleClick in trouble was a little change to its privacy notice announcing it might cross-reference that on-line data with off-line data that it had purchased from the Direct Marketing Association-- the kind that does include your name, address, age, income, shopping habits, and all types of personally identifiable intelligence that marketers collect and use to target new customers.

The ensuing firestorm that the policy change set off was enormous, and resulted in investigations by the Federal Trade Commission and two state attorneys general (New York and Michigan). By the time I was called in, the company was in reputational free fall. We ended up rescinding the policy change, hired on a respected chief privacy officer and appointed an outside board of ombudsmen to review future policy issues. That ended the firestorm, but not until after DoubleClick suffered significant stress and damage to its brand, not to mention the unwanted attention it received.

There's an important lesson here-- In the on-line world, even what you might think are the smallest and most meaningless of policy changes will be scrutinized intensely, and will be assumed by a skeptical public to have sinister motives behind them. The other lesson is to pay attention to recent history so you don't repeat the mistakes of others.

The second article is by Howard Kurtz about the struggles of the print news media to figure out how to survive in an age where everything is being given away for free on the internet. Towards the end of the article, Kurtz mentions a number of alternative news collecting entitites as a source for some of the enterprise reporting that is being ignored in the wake of budget cuts at the traditionally strong papers.

He failed to mention the Center for Public Integrity here in Washington, which is dedicated to producing original investigative journalism about significant public issues to make institutional power more transparent and accountable. Two of my good friends are overseeing the reporting there, and both are among the best journalists in the business. Editorial Director Dave Kaplan, who I have known for the better part of 25 years, came from the Center for Investigative Reporting and was a top investigiatve reporter for U.S. News & world Report until its recent demise. And Managing Editor Gordon Witkin, who I have only known for about 20 years, was national editor at U.S. News. Under their leadership, I am confident that CPI will be a strong outlet for investigative articles that are no longer being written by the traditional publications.

The White House Travel Office continued...

2009-02-17T12:26:00.005-05:00

Lesson Two-- It's Okay To Pre-empt Your Adversary's Media Strategy

There was one silver lining, at least for me, in the Travel Office, and I learned a valuable Damage Control lesson that I preach to this day. After the Republicans gained the majority following the 1994 mid-term elections and began investigating in earnest (and called for all those depositions and hearings) they decided to issue an extremely partisan and one-sided investigative report on the Travel Office Affair. And they planned to do so in press conference on Capitol Hill for maximum effect.

Three days before the scheduled press conference--and two days before a required meeting of the Government Operations Committee to formally vote on and approve the report as required in the Committee rules, I got a call from a Republican staffer who thought the report was an outrage. In a scene right out of "All The President's Men," this person asked to secretly meet in the garage of the Rayburn House Office Building. In the dark recesses of underground parking lot, this Republican staffer gave me a copy of the report.

I hurriedly ran back to my desk to review it, and found myself facing a fairly perplexing challenge. (No, it wasn't guilt at having a purloined advanced copy of a leaked confidential report--Remember, I'm in the Damage Control business, not the remorse business.)

The question I faced was, Now what do I do?

There wasn't time to craft a point-by-point rebuttal to the Republican report, and even if I did, it wouldn't have the credibly with reporters to offset the damage that the report would inflict in the media. So I leaked it to my friend Glenn Simpson at the Wall Street Journal, which ran it on the back page of their front section the morning of the Committee meeting, the day prior to the planned press conference.

That might seem counter-intuitive, to give to a major national publication the very report I was charged with rebutting. But it turned out to be extremely effective, and here's why:

1) It utterly ruined the Republican's media strategy. No one was interested in their press conference after the WSJ had already done the story.

2) The Journal, as a business publication less interested in political intrigue but not wanting to pass on a scoop, ran it on the back page instead of the front page.

3) It gave the Democrats an issue at the Committee meeting that day--the Republicans had violated the rules by leaking out an unapproved report (I guess I neglected to tell my Dem members that I had given the report to the Journal, but since I had been leaked the report by a Republican staffer on the Committee, I didn't think that was my obligation. And why spoil their fun?).

4) Screaming about violations of process is a much better issue than trying to defend the facts of the Travel Office case.

5) It turned out that there was a demonstrable error in the report: The First Lady had been overseas at a time that the report alleged she was involved in a key meeting central to their findings. That mistake was pointed out in the coverage, undermining their case against Mrs. Clinton.

The lesson—When playing defense, there are two, and only two, factors that you can control:
· When the bad news comes out; and,
· Where it comes out.

These can be used effectively for Damage Control, but if you cede them to your adversaries, you will have lost them for good.

Addendum: Several years ago I had a large corporate client facing imminent indictment on a number of regulatory violations (trumped up, in my opinion, for political purposes), and they wanted to know how they should respond to the Attorney General's impending press Conference. It took me many, many hours of arguing why we should not let that happen. Instead, we should undermine the prosecutor's media strategy by announcing ourselves in one discreet media outlet that we expected an indictment. We would supplement that with a credible outside advocate lined up to argue that it was a politically-motivated investigation (the corporation's executives were large contributors to the other political party). The strategy worked brilliantly, the prosecutors were embarrassed by the media coverage, which was severely muted, and a fine was eventually agreed to after all of the initial charges were dropped.

Thoughts on How The New White House is Doing

2009-02-10T11:22:00.002-05:00

Check out my appearance today on Focus Washington discussing White House mistakes over the past several weeks.

Steve Perlstein on the stimulus package

2009-02-06T08:35:00.005-05:00

Washington Post columnist Steven Perlstein has a must-read today about the stimulus package [yes, I am veering off of damage control on this].

His basic point-- all of the items in the stimulus bills being floated will create jobs or help rebuild a failing infrastructure, that creating government jobs has just as much merit as creating private sector jobs, and that tax cuts are not nearly as effective in stimulating the economy as spending. His main message to the Congressional critics of the stimulus package-- shut up already, you don't know what you are talking about, and talk to a real economist or financial advisor if you want to sound intelligent in this debate.
Here's a sample:

My modest proposal is that lawmakers be authorized to hire personal economic trainers over the coming year to sit by their sides as they fashion the government's response to the economic crisis and prevent them from uttering the kind of nonsense that has characterized the debate over the stimulus bill during the last two weeks.

Coming from Perlstein, who is the best business columnist writing right now in my humble opinion, we should all take notice.

Damage Control Lessons for a New Administration

2009-02-03T09:47:00.004-05:00

It was exactly a decade ago in February that the impeachment trial of President Clinton ended and I left the White House Counsel's office, and with the arrival of a new President and staff, I thought this might be a good time to give my words of wisdom for any incoming Chief Executive. I am going to do this over a series of postings, and talk about the problems I faced as I was trying to protect and defend the reputation of the President in face of a wide variety of political and legal controversies.

A few caveats. First, because everything I did at the time was subject to subpoena by both the offices of the Independent Counsels and by the Republican-controlled Congressional investigating committees, I did not take notes or create any sort of diary at the time. Thus, this is my best recollection, and I welcome any comments and complaints if I get anything a little wrong.

Second, this is not intended to settle any old scores. I am not in the business of trashing colleagues or political adversaries.

Finally, political scandals are inevitable in Washington. No matter how conscientious President Obama and his team try to be in implementing ethics rules, political adversaries will attempt to exploit any opening by any of the thousands of appointees, and be willingly aided by what's left of the media. Just take that as a given.

Lesson 1. Don't Investigate Yourself-- It Just Gets You Into More Trouble

The White House Travel Office: The non scandal that just wouldn't die.

The first scandal that landed on my plate upon the arrival of the Clinton Administration was dubbed Travelgate, after the incoming team decided it needed to get rid of the existing travel office staff that had served under President's Reagan and Bush 41. These were all non-protected political appointees who served at the will of the President, so there were no restrictions on their hiring and firing.

As the chief Democratic staffer in the House charged with defending the Clinton Administration foibles (I was the Deputy Staff Director of the House Government Operations Committee, the primary oversight committee of the House of Representatives and thus the focal point for Administration scandals), I spent a total of more than three years dealing with that issue, conducted scores of depositions of hapless players large and small in the events, staffed several very public hearings, and had shouting matches with reporters-- and to this day I do not think that the White House acted inappropriately, unethically, or in any way in violation of any rules when it decided to put its own travel office staff in place.

The reason this became such an issue, to put it bluntly, was because the White House press corps had gotten to know and like these guys over the years. And why wouldn't they? The travel office staff took care of them on trips without worrying too much about budgets and expenses, they would carry their luggage, and they would happily look the other way when reporters would return from trips with imported wine and other contraband in violation of numerous rules and regulations (this is all true! We got all of the records duing the various investigations). They were nice people who treated the media well. What's not to like?

So while the travel office firings might have been allowable, the White House clearly never saw the impending train wreck that this would become in the media. And there were the inevitable twists and turns to the story. A third cousin of the President's from Arkansas wanted the job of director of the travel office and may have played a role in engineering the firings. The First Lady may or may not have played some sort of decisive part. A couple of their Hollywood friends thought the operation was out of whack and inefficient. All of these facts may have been titillating, but at the end of the day, the new White House clearly had the authority to put their own people in place.

The White House's first reaction to the blow-up that ensued was in keeping with its new approach to accountable government: Conduct its own investigation and issue a report on what happened. And that's exactly what they did. Then-staff secretary John Podesta issued a thorough and critical review that accomplished--- absolutely nothing. It simply had no credibility with the media, and it only angered insiders who felt they had been embarrassed by it.

Worse, it became a document for Republicans to tear apart, point out inconsistencies, look for contradictions, demand depositions and hearings, and otherwise use to prolong the interest of the media in this non-issue. John took on a terrible task, handled it laudably, and yet unwittingly provided more fuel for the fire.

In politics (and in the private sector, in my opinion), there is no mileage in quelling a scandal by conducting your own internal review. Bring in an outside auditor, allow the Justice Department to take a look if you have to, but don't take it on yourself. It won't buy you anything but more trouble.

What Was Madoff Thinking?

2009-01-28T23:58:00.003-05:00

Urged on by the handful of loyal readers of DamageContro101, one of my New Year's resolutions is to do a better job of updating this blog. Please feel free to hound me whenever possible. So here goes.

I have been wracking my brain trying to figure out this whole Bernie Madoff thing. Not the part about how could his investors have been so greedy, not recognized the warning signs, allowed themselves to be ruined, etc. (full disclosure—my parents invested a small sum of money with Madoff several decades ago, and their accountant, upon seeing the sparse annual statement, told them it was highly suspicious and to get out, which they did). I will leave it to the armchair psychologists for that analysis.

As a damage control specialist, what I don't understand is why Madoff didn't have an exit strategy. When asked what the person should have done in cases where guilt with criminal consequences is inescapable (think Spitzer, as another example, or read MSNBC Legal Analyst Dan Abram's assessment of the Illinois Governor's predicament on the DailyBeast.com), my advice tends toward the “leave the country” variety. In other words, when it is clear that you can't talk your way out of this one, the only sensible thing to do is to flee.

In Madoff's case, assuming he has been running his Ponzi scheme for decades, he should have had plenty of time to purchase a nice estate under an assumed name in, say, Venezuela (no extradition treaty, not exactly on good terms with the U.S. government, etc.), set up some secret contingency funds, paid off the requisite local officials, and had a hard-to-trace route to live out the remainder of his life. It worked for Marc Rich and Robert Vesco.

I have narrowed it down to two theories of why he didn't do so, neither of which involves guilt or remorse--I have seen no evidence that Madoff actually feels sorry for what he has perpetrated.

First, he may have been caught so flat-footed that he never, ever, believed his Ponzi scheme would come to an end. There is some logic there, because if the economy hadn't totally tanked last fall, requiring a critical mass of his investors to need their money back to cover other failing investments, he might very well have outlived his fraud. There seemed to be an endless supply of want-to-be Madoff investors lined up in every wealthy Jewish community across the country. The Ponzi scheme could have gone on for decades more.

Or second, his attorney may have told him, don't worry about it. It will take the government several years to unwind your adventures before they will lock you away, and who knows, maybe you will get off, or die before then.

Alternative theories are welcome.

Some Advice for the Incoming White House Staff

2008-11-24T09:12:00.008-05:00

As the Obama White House starts to take shape over the next several weeks, let me-as a veteran of the Clinton White House-offer some unsolicited advice to those coming into do their job. This isn't the type of advice about how to keep you work-life balance in check (it is impossible), or how to work effectively with Congress and the departments (good luck with those, too). Instead, let me stick to my expertise: How to keep yourself out of trouble, at least the best you can.

Yes, you might think it's a brand new day, that Democrats are in control of the Administration and of both Houses of Congress. What could possibly go wrong?

Well, a lot.

Let me assure you first and foremost, there will be mistakes, stupid decisions, glitches in process, poorly-worded statements, and other unintended and unanticipated errors that will drive you crazy-and that will likely result in investigations of which you will find yourself on the edges, if not right in the middle. It is inevitable. But you can minimize your exposure with some simple rules.

But first, a little background.

During the first two years of the Clinton Administration, the Democrats also controlled both the House and Senate. At the time, I was Deputy Staff Director of the House Government Operations Committee, the primary oversight committee in the Congress. We had almost daily requests to actually do oversight into the perceived 'scandals' of the Clinton White House-including the travel office affair, the Waco disaster, and other media-driven events. My job was essentially to make it look like we were taking these issues seriously without actually subjecting the White House to real investigations... or something like that.

The way to do this was typically to punt the issues over to the GAO, the independent auditing and investigative arm of Congress, to review the allegations. GAO typically takes several years to conduct an investigation, is frustratingly even-handed, and will operate within the (limited) parameters you set for them. In other words, they were a convenient way of claiming that we were conducting oversight ("We asked GAO to review," we would say) without actually doing much ourselves.

The only problem was, GAO did eventually conduct the investigations, and so did the Republicans when they gained the majority after the 1994 elections. Reports were issued, depositions taken, records subpoenaed, and hearings held--all to the delight of the media. And when I got to the White House as part of the Counsel's Office damage control efforts, I was on the receiving end of those investigations.

So, expect that whatever you work on or are involved with will be deeply scrutinized at one point or other. If you take these simple precautions, you will go far to protect yourself when the honeymoon is over and Congress, the media and the independent investigators collaborate to make your life miserable:

1. Email is not your friend. From the day you sign on to a White House email account, everything you send, receive, forward, delete, and reply to is a government record open to scrutiny. You can play lawyer all you want, but at the end of the day, it's an official record subject to discovery. And your Gmail or other personal account won’t save you. If anyone suspects that you have been using a personal account for government business, it becomes a government record. I can't tell you the hours I spent going through emails that had to be turned over to Ken Starr and the Republicans on Capitol Hill, and the embarrassing information that was in these (for example, the girlfriend of one Clinton White House staffer learned about his affair through an email that was leaked to the Washington Times--oops). My solution: Use email only for the most straight-forward communications, with no editorial opinion, snarky commentary, or other untoward language. Leave out as many key words as you can (the ones that get searched for when under subpoena), and save your real conversations for in-person.

2. No document is your friend. Every document you create is a government record that can be turned over under subpoena. So, same advice as above. When I left the White House, I had created exactly zero records that had to be archived under the Presidential Records Act--a post-Nixon reform to preserve all official records in the White House. My solution: Don't create any documents, and if you do, make sure they are as straight-forward as possible. I had installed on my office wall the biggest white board I could find (I think it was 12 feet wide and four feet tall), and committed all of our strategy on the white board (later immortalized by Lanny Davis in his book on his White House experience).

3. Don't take notes. It's the notes and the little scribbles in the margins that really create headaches. I've been in Committee depositions that have lasted hours over a notation in the margin in the midst of one investigation or another. If it's in your head and not on paper, it might serve you just as well. If you do take notes, make sure they are as straightforward as possible. Better yet, try not to take any.

OK, I recognize that you won't be able to get by without writing some emails, creating some documents, and taking some notes. But you can be smart about what you write. No references to controversies, scandals, court cases, or anything that might lead to questions. No snide remarks that could prove embarrassing. No off-color jokes or attachments. Use common sense.

Good luck, and try to stay under the radar. That may be the best advice you ever receive.

Video on the Recent Obama Appointments

2008-11-17T11:56:00.007-05:00

Take a look at this little session I undertook with Chuck Conconi on his video blog, Focus Washington. I talk about the announcements that Ron Klain and Rahm Emanuel will be joining the Administration and why this is a positive step.

A few thoughts on Rahm

2008-11-12T10:16:00.002-05:00

I have heard lots of snears and remarks about the selection of Rahm as White House Chief of Staff under President Obama. He's too partisan, too much of the same old Washington insider game, etc. etc. Here is my two cents worth. I worked with Rahm every day during my years in the Clinton White House handling the scandals that seemed to plague that president-- campaign finance allegations around the 1996 election; favors for China; the Travel Office fiasco; the attempted impeachment of the President, to name just a few. I have seen him up close and personal in the worst circumstances a White House could face. And at a time when everyone else in the White House was running for cover.

First, let me say that everything you have read about Rahm's temper and inter-personal skills are true. Second, let me make clear that he was the most effective member of the damage control team. He could quickly get to the heart of the day's challenge, understand what was needed to accomplish, issue assignments, and make sure it was getting done quickly and effectively. While I was never personally close to Rahm, I did come to admire his skills and instincts.

In addition, in Washington there are two types of people-- principles, meaning elected members of Congress, Senators, Cabinet Secretaries, Ambassadors, and the President and Vice President. And there are staff. Never make the mistake of confusing the two, or their relative positions in Washington. No matter how senior a top aide is, or how close that aide is to his or her prinicple-- one has a seat at the table, and one is outside the room.

Rahm, through his election to Congress and rise in the House leadership, transcends that divide. As a career staffer, he understands how to gets things done. As a principle, he will have the position and respect of the Senators, Committee Chair, and Cabinet Secretaries to implement the President's agenda.

This is what a white House chief of Staff needs to have more than anything else, in my opinion, and I think it was a very wise selection.

Keeping Their Feet To The Fire

2008-10-31T11:16:00.002-04:00

Before the Bush Administration leaves office and the new one enters town, there's one unresolved piece of business that can't go forgotten (I am sure there are more than one, but this one I know about). My friend Mary Gade, a lifelong environmental specialist and Republican, was appointed by President Bush two years ago to be EPA's Regional Administrator for the Midwest. She was relieved of duty this year because she was trying to hold Dow Chemical's feet to the fire for dioxin contamination in the town of Midland, Michigan. Her story is worth remembering, implicates both Democratic and Republican Administrations, and is troubling to say the least. Here it is in her own words, via an e-mail she sent me recently:

Dioxin Contamination From Dow Chemical, Midland Michigan

Issue: In the thirty years since the passage of the Superfund law to cleanup up the United States' legacy of hazardous waste contamination, virtually nothing has been done to address one of the country's largest and most serious dioxin sites. Through both Republican and Democratic Administrations, the Dow Chemical Company in Midland, Michigan, a U.S. Government Defense Contractor, has received a pass in meeting its legal obligations to address this contamination. This site rivals the Love Canal, Time Beach, Missouri, or the Hudson River PCB contamination in its scope and threat to human health and the environment. While all of these major sites have been identified and cleanup completed or underway, Dow Chemical has manipulated both State and Federal governments to avoid meeting its obligations while putting citizens and the environment at risk. When the first ever Superfund hotspot cleanup work was initiated under my direction in 2007 as the Regional Administrator for U.S. EPA's Midwest Office in Chicago, Dow begin a series of push backs in Washington, D.C. that ultimately led to my being forced to resign as a Presidential appointee on May 1, 2008. In that same week, Michigan Governor Jennifer Granholm took authority for dealing with Dow away from my counterpart, Michigan Department of Environmental Quality (MDEQ) Director, Steven Chester, and in a wholly unusual move gave responsibility for Dow to her Lieutenant Governor.

Background: Dow Chemical Company's Midland plant has operated since 1989 on almost 1800 acres in Midland, Michigan manufacturing a large variety of chlorinated chemicals including Agent Orange during the Vietnam War. Dioxin is a by-product of the manufacture of these chemicals. It is a known human carcinogen which is also known to suppress immune systems, cause reproductive problems and a host of other health issues. The plant is situated along the Tittibawassee River which flows into the Saginaw River and ultimately into one of the Great Lakes, Lake Huron. The contamination caused by unregulated releases of dioxin to the air through incineration or by its disposal in lagoons or directly into the Tittibawassee River covers three counties cutting a 50 mile swath through Michigan extending into Lake Huron. This area of Michigan has the highest cancer incidence rate in the State. ATSDR studies of human health effects have been "indeterminate" due to a lack of data. State Fish and Wildlife Advisories have been in place for years due to the elevated levels of dioxin which accumulates up the food chain and has a long half life. Dow is currently touting the dioxin exposure study it funded for approximately 30 million dollars at the University of Michigan as a basis of saying that dioxin in not harmful despite the fact that the study has not yet been peer-reviewed and may have flaws in its construction.

The site has a colorful and scandal-tainted past. In 1983, current Lithuanian President Valdas Adamkus was U.S. EPA's Midwest Regional Administrator. He testified before a Congressional Committee that the Region had been forced by U.S. EPA's Headquarter's to modify a report on dioxin contamination in the Midland region to delete references to Dow being responsible for the contamination. This testimony lead to the resignation of senior EPA officials in the Reagan Administration. Dow's refusal to allow inspections of its facility in the early 1980's lead to U.S.EPA's first-ever use of aerial surveillance which was ultimately upheld by the U.S. Supreme Court. A whole litany of dodges by Dow to avoid compliance over the years including threatening the cutting of the MDEQ's budget and staff are outlined in a December 7, 2007 Detroit Free Press front page story. There are also recent lawsuits including a whistle blower lawsuit from a Dow employee who says she was asked to lie about data, a class action lawsuit pending in State court over harm to property values and a Dow lawsuit challenging the State's implementation of its hazardous waste permit.

In November 2006 the first ever data collected by Dow under its hazardous waste cleanup permit (Resource Conservation and Recovery Act) revealed hotspot contamination in the Tittibawassee River of 87,000 parts per trillion (ppt).. The Federal cleanup standard for dioxin is 1,000 ppt while the Michigan standard for soil is 90 ppt. Subsequent sample results showed additional contamination at levels as high as 1.6 million ppt in the Saginaw River. Under my direction, the first ever Superfund emergency cleanup orders were issued to Dow in June 2007.

Dow complied and completed the cleanup of those 4 hotspots in December 2007. This initiated a series of actions including the attempted negotiation of a "global Superfund settlement" with Dow that failed because the proposed settlement offerwas not protective enough and would have further delayed cleanup. In addition, U.S. EPA and the State initiated the first ever sampling of residential properties along the river system. Test results, a month after my firing, demonstrated dioxin levels in yards up to 23,000 ppt with an average of 6,000 ppt and 3,000 ppt in homes themselves. As U.S.EPA increased its efforts to address the contamination, Dow turned up its efforts in D.C. which included U.S.EPA's Headquarter's yanking my ability to issue emergency Superfund orders in December, 2007. The Chicago Tribune front page story from May 2, 2008 accurately describes the site, situation, and events.

Objective: To assure that this situation receives enough attention that future Administrations will take appropriate measures under the law to protect human health and the environment.

Defense Secretaries Come and Go...

2008-10-25T08:36:00.003-04:00

I haven't seen it yet, but I'm told that Richard Dreyfuss' depiction of Dick Cheney and Scott's Glenn's of Don Rumsfeld are worth the trip to see Oliver Stone's new movie "W." It brings to mind an unlikely hero, at least in relative terms, Defense Secretary Mel Laird, who had the misfortune to serve during the troubling presidency of Richard Nixon. Say what you want about Nixon, Laird, unlike Rumsefeld, tried his best to do the right things for the American people as Defense Secretary in the face of a president and Secretary of State (Henry Kissinger) that were, well, Nixonian in their attempts to subjugate the democratic process.

My good friend Dale Van Atta has joined with Laird to author his autobiography, and I am making a shameless plug for it here because it offers such a stark contrast with the early Bush Administration.

After keeping silent for three decades, the last major player of the Nixon Administration is telling all. What Nixon's Defense Secretary, Mel Laird, has to say is new and so significant that it will alter the way historians look at that last half-century of American politics.

At a minimum, readers will see how politics were practiced by this Midwestern Machiavelli who was one of the most powerful and shrewdest behind-the-scenes players this country has ever had.

Laird chose nationally-renowned investigative reporter Dale Van Atta to reveal his story. Van Atta co-authored the world's most widely syndicated news column (50 million readers) with Jack Anderson for more than a decade (where I had the pleasre of working with him). He has written several books, including co-authorship of the best-selling biography Stormin' Norman.

The Laird book is enlivened and enriched by more than 500 interviews with nearly 300 different sources, as well as in-depth research utilizing thousands of pages of exclusive material -- some of it still highly-classified.

Here are some highlights (but buy the book-- it's a good read):

Vietnam and Defense

* That it was actually Mel Laird who brought about the end of the Vietnam war by forcing both Nixon and Kissinger to accept the first-ever withdrawals of American troops. Kissinger concedes in the book that once Laird got Nixon to agree to a couple withdrawals of 25,000 troops or more, the end of the war was speeded up so that Kissinger had to race along with peace negotiations to match the increasingly rapid and larger withdrawal increments.

* That Laird invented and executed the political strategy of "Vietnamization" which has application to the current American military presence in Iraq.

* That Kissinger couldn't keep anything secret from Laird, who controlled the National Security Agency and read decoded intercepts of practically every move Kissinger made with the North Vietnamese. Kissinger himself didn't know that the NSA intercepts of his secret talks with Hanoi even existed.

* That in one showdown with Nixon and Kissinger, Laird prevented a second Korean war which the president and his national security adviser seemed hell-bent on igniting.

* That on more than one occasion, Laird successfully refused to carry out ill-advised bombing orders given him by the Commander-in-Chief (Nixon) who may have been drunk when he issued the orders.

* That in four short years, and over the vehement objections of his own top generals, as well as tough opponents in Congress, Laird craftily ended the draft in America, and created the totally-volunteer military we have today. How he did it, step-by-step (including the creation of the temporary draft lottery system), is colorfully fleshed out in this new book.

* That the American public had little idea what Laird was doing to bring about the end of the war in which their loved ones were dying. So, even as he skillfully and studiously worked to stop the conflict, anti-war protestors demonstrated on his front lawn, urinated on his house, tossed eggs and blood at him, and threatened his life -- including the Weather Underground, who perpetrated the only attempt to destroy the Pentagon by a bomb prior to 9/11.

* That as a former Congressman who believed Americans had a right to know many of the things Nixon and Kissinger wanted to keep secret, Laird made sure Americans found out the truth. In the book, he admits to significant "leaks" of information to the press and even a secret phone call to the U.S. Solicitor General to hinder the Nixon-Kissinger effort to prosecute the Pentagon Papers case. (Laird WANTED the Pentagon Papers made public.)

* That Laird's unmatched ability to influence Congress is detailed in the book, revealing how he became the only Defense Secretary -- or probably Cabinet member, for that matter -- who never lost a vote on the Hill. The way he worked, the moves he made, the bipartisanship he was able to achieve time and again should serve as a primer for veteran and aspiring politicians today. For example, Laird jump-started the first serious arms control talks with the Soviet Union by winning the vote of a key female U.S. senator when he bestowed a generic military medal on her lover.

* That Laird won over two key foreign defense ministers who later became chiefs of state, Helmut Schmidt of Germany and Yasuhiro Nakasone of Japan. In the first case, Laird promised Schmidt that he would squash a secret plan to bury U.S. nuclear weapons along the East-West German border. In the second, Laird ignored the painful Japanese shrapnel in his own body (from a Kamikaze strike during World War II) to befriend Nakasone, and later tipped off the Japanese leader to Kissinger's secret overtures with Red China.

Watergate

* That one month into his White House job as the replacement for John Ehrlichman, Laird learned from Nixon's own (privilege-breaking) lawyer that the president was guilty of obstruction of justice. That lawyer (Fred Buzhardt) felt he owed more loyalty to Laird, who was his former boss at the Pentagon, than to his lying client, the President. Instead of resigning at once as White House Domestic Counsellor, Laird stayed on and deftly put into place the two key men who would force Nixon himself to resign.

* That it was kingmaker Laird who nearly singlehandedly picked the country's only unelected President. He did that in a way that left Nixon no choice but to abandon his personal favorite (John Connally) and go with Laird's man, Gerald Ford.

* That Laird believed it was foolhardy for his longtime friend, Ford, to pardon Nixon when he did. In one of the many "revelations" of the book, Laird reveals that prosecutor Jaworski was just about to let Nixon off without an indictment. That was going to Jaworski's recommendation to the grand jury. If Ford waited a few weeks, the pardon then would have been unnecessary. In that event, neither Jimmy Carter nor Ronald Reagan might have been successive Presidents.

Congress to the Present

* That during his 16 years as a Congressman from Wisconsin (1953-69), Laird accomplished an array of feats including the addition of "under God" to the Pledge of Allegiance; two successful coups against House leadership; re-making the Republican Party after the 1964 debacle of the Goldwater loss; founding, funding and/or guiding EVERY major conservative think tank (AEI, CSIS, Heritage Foundation, et al), which set the stage for the Reagan "revolution"; fighting Lyndon Johnson and Robert McNamara on the U.S. troop buildup in the Vietnam war; massively expanding the National Institutes of Health and Centers for Disease Control into world-class medical research institutions; and, meanwhile, saving the National Football League.

* That in his post-public service career, Laird worked behind the scenes to save New York City from bankruptcy and was the earliest of First Lady Hillary Rodham Clinton's friends to advise her to run for U.S. Senate from New York. Laird's former intern Hillary Rodham is just one of many Laird proteges profiled in the book who achieved prominence -- including former Secretary of State Colin Powell, Vice President Dick Cheney and Defense Secretary Donald Rumsfeld. The latter have regularly sought his advice over the last six years about a wide range of subjects, including the war against terrorism.

* That Laird was able to accomplish great things through civility and bipartisanship which should serve as a model for what is greatly needed on the American political scene today.

Now The Story Can Be Told - The Passing of a Hero

2008-09-11T12:59:00.004-04:00

You know you’re getting old when you realize the most interesting section in the paper each morning is the obituaries. It was no different today, but unlike the usual names and faces, I noticed an obit in The Washington Post recalled a string of memories from 25 years ago—back when I was an investigative reporter with the late muckraker Jack Anderson. The Post had a photo and very nice story about Francis “Frank” McGlade, a retired civilian with the U.S. Army who had been its top safety director, and who passed away last month at the age of 78. At one time, I knew Frank quite well—he was a friend and a source.

I don’t quite remember how he and I first met each other, but he was still with the Army and had his eyes on retirement. It wasn’t that he was feeling old—it was that the Army was trying to replace him, a civilian, with a military officer who they believed would be more compliant that he had been. The Navy and Air Force already had their civilian safety directors go, so he was the last one left.

It was his strong opinion that having a civilian replaced by someone in the chain of command would further weaken a system that was already hiding, ignoring, or worse, covering up, significant safety issues. In the military, unlike on the civilian side, the key findings of safety investigations are never made public. Frank believed this policy allowed military officers to hide real problems to meet their goals at the expense of the lives and welfare of the troops.

He felt, for example, that in contrast to the National Transportation Safety Board, which conducted all of its investigations in full view of the public, the military’s secret reviews meant that problems never were fixed. So he did what any good patriot would do, and what every young investigative reporter dreamed of: He opened his file cabinets of secret accident reports and gave them to me. Frank was not reckless; he made me promise that I would wait until his retirement papers had been signed and he was formally out of the government before I published the first story.

For a journalist, Frank’s papers were a treasure trove of materials—case after case of deadly accidents that were covered up, where known safety defects and issues were never made public or fixed. One I will never forget had to do with a parachute training exercise that was performed in California with the morning television shows in full attendance. Unfortunately, the winds were far too strong for safe landings, yet the exercise went on anyway (in Frank’s opinion because of the television coverage). The secret report showed that safety officers assigned to the exercise knew the winds were too strong, but were unable to stop the drops. As I recall, several Army troops died, and many more were seriously injured.

The files contained many reports of aviation accidents, especially those involving helicopters, where defects had been know but ignored, resulting in needless deaths to our soldiers. I think I wrote a half-dozen or more stories from those files. Then Jack Anderson allowed me to do something that only a crusading muckraker like him would take on—we filed a lawsuit against the military to try to set a legal requirement that the safety reports be made public. We eventually lost the suit (a Federal appeals court ruled that under the Freedom of Information Act, the key findings did not have to be made public); but the lawsuit brought attention to the safety issues that Frank had raised. He volunteered to give us an affidavit that we could use to prove the point, and we gave that to The Washington Post, which ran a front-page story. I would like to think the lawsuit and subsequent media coverage made a little bit of a difference in the way the military handles safety for our troops.

Though I lost touch with him years ago, I was sad to learn that he had passed away. Frank wasn’t a soldier, but he was just as much a hero.

The Real Matt Walsh

2008-05-16T16:37:00.006-04:00

I don't usually equate sports with real news--it's entertainment, like movies and rock concerts, and hardly equates to issues like war, the economy, and natural disasters. Nevertheless, we don't like learning that our pop stars are lip--synching, and we certainly don’t like finding out that our sports heroes are cheaters.

I have been deeply involved in Patriot "Spygate" affair because Matt has been my client--I was asked to help navigate the media circus by his attorney, Michael Levy, a close friend with whom I have worked on a number of issues. I have done other sports scandals--Tim Montgomery was a client--and I generally don't care for this line of work. First, they don't pay very well; and second, dealing with sports reporters is not like dealing with other journalists. For them, access is everything. So writing investigative stories about the NFL or their hometown sports team means they will be shut out of access in the future.

Perhaps more importantly, sports is big business more than anything else, and the teams and the leagues go to great lengths to protect their business. Being open and forthcoming is simply not in their interest. Hence, the NFL and Goodell really are not investigative entities--their goal is to protect their business interests.

I have watched the Matt Walsh story develop over the past six months from the inside, and sat in on the two interviews that Matt has given to the New York times and HBO, both on Wednesday of this week. So based on my front-row view of the Spygate scandal, a few points need to be made:

1) Matt is not out for vengeance, has no ill will against the Patriots, and tried his best to stay out of this scandal. He only told what he knew, with no spin, and left it to others to draw conclusions. He was asked repeatedly by Andrea Kramer of HBO if he thought the league had punished the Patriots enough, if their three Super Bowl victories should be questioned, and if their significance should be diminished. This, of course, would have been a great sound bite to close the broadcast, and Andrea skillfully tried numerous times to get him to say something definitive. He would not do it. He loves the Patriots and believes strongly in their victories.

2) Matt has only talked about what he knows personally or what was directly told to him by players and coaches. The Patriots in their statement yesterday attempted to discredit Matt by questioning how a video guy could ever understand what coaches and players know, stating: "For him to attempt to speak with any authority on the process of coaching, play calling, or the decisions made by offensive or defensive coordinators is an embarrassment." I never have heard Matt, either in the interviews to the New York Times and HBO, or to me personally, attempt to speak authoritatively on coaching or play calling. He simply was repeating what he had been told, and he did so in an honest and forthright way, never going further than what he personally was involved in.

3) Roger Goodell's performance at his press conference begged the question of whether taping and decoding the opponent's defensive signals was of any real value to the patriots. If the taping is of such little consequence, then a) Why is it against the rules in the first place? b) Why did Goodell destroy the initial tapes immediately after reviewing them (he said because of the value to other teams if they got them)? and, c) Why did the Patriots not only go to such great efforts to conceal what they were doing but also continue doing it for seven years?

4) There is a real question about whether the punishment handed down by the NFL serves as any real deterrence. A $750,000 fine and the forfeit of an inconsequential draft pick in exchange for knowing the opponents offensive plays ahead of time--and the chance to win a hat trick of Super Bowls--is a very low cost of doing business. In contrast, sprinter Marion Jones' teammates, presumably innocent bystanders, lost their Olympic Medals after she admitted to using steroids.

Yes, I recognize that any NFL defense still needs to stop the other team's offense to win the game, but anyone who doesn't think having the other team's defensive signals isn't a huge advantage needs to read the quote in today's Washington Post [Some Are Fuzzy on Taping's Benefits -- washingtonpost.com] by an unnamed current NFL coach, who contends: "Are you kidding? It's huge. If I know what the defense is going to do on every play, I'll score 35 points a game, too." I wonder if Goodell interviewed that coach as part of his "investigation?"

Matt is a good guy who got swept up in something that he never wanted to be anywhere near. Don't blame the messenger.

Politics-- Venezuela-style

2008-04-08T15:57:00.003-04:00

What happens when you are a successful financial services entrepreneur in a country with a socialist government and a well-entrenched banking oligarchy? Well, if your name is Eligio Cedeno, and you have built a successful bank in Venezuela, you are in deep trouble. Eligio has spent the past year in jail on what can only be called a trumped-up charged, his constitutional rights repeatedly ignored, and his hearing to determine his status once again delayed indefinitely. (Full disclosure Eligio's company has hired me and Qorvis to help with some U.S. issues. I have never met Eligio, but have worked with his American colleagues).

I won't bother to go into the details of his initial arrest. It has to do with charges that he somehow illegally acted to bring American dollars into Venezuela. Suffice it to say the following: Cedeno has been denied his right to an impartial trial, right to reasonable bail, right to seek medical treatment, and right to present evidence in his defense. By every measure of fairness, the charges sure seem to be politically motivated and the Venezuelan Attorney General's case against Cedeno lacks any meaningful evidence necessary to uphold the charges before an impartial court. The case has been deferred indefinitely and a new date for the hearing has yet to be set.

How did Eligio get into this mess? My guess was that he was just too successful, so the existing powers in the banking industry teamed up with the Chavez government to take him down. Now, that is rank speculation on my part, but consider that as he has been languishing in jail, he was strong-armed into selling his bank at a severe discount. I guess when you are locked up you don't have much bargaining power.lies.

Here are the thoughts of Eligio's U.S.-based attorney, Victor Cerda: "The complete disregard for due process in the Venezuelan judicial system is appalling. More appalling is the fact that the Venezuelan prosecutors continue to hide from their own judicial system and the truth surrounding the baseless charges. It is time for the Venezuelan Governnment to set a trial date that will be respected and to put an end to Mr. Cedeno's persecution. Mr. Cedeno has cooperated with the Venezuelan legal system and remains steadfast in his desire to face his accusers and prove his innocence."

And the beat goes on.

Mark Penn and the Clintons

2008-04-06T21:09:00.003-04:00

I try not to post about my former employers or talk about partisan politics in Damage Control 101-- and I will probably get myself in trouble for this one. But I have to put my two cents in with the news this evening that Mark Penn is abandoning his leadership role on the Clinton campaign (please note that his polling firm is not giving up its lucrative role).

I have never thought that Mark Penn had very good political instincts, and I think that has been proven one more time during this campaign. The hubris that he could effectively be lead campaign strategist while running a PR agency the size and scope of Burson-Marstellar is mind boggling.

I do not know him well, but we did work together during my years in the Clinton White House, and my experience with him is, I think, instructive. It was my view that he totally misread the realities of the Republican members of the House of Representatives, and as a result the political strategy employed during the Monica Lewinsky debacle was totally ineffective, resulting in the House impeachment vote.

Mark would argue almost on a daily basis that despite the movement towards impeachment in the House, his polling was showing that President Clinton's approval ratings were high and getting higher as the Republicans pressed their campaign. Thus, keep playing off the national approval ratings, and the House Republicans would never have the nerve to go ahead with impeachment.

That is good and fine on a national level, but Republican House members aren't elected or beholden to the general public on a national level. They only have to worry about their Republican-leaning districts, where support for impeachment and against the President was closer to what Gingrich, Delay, and their soldiers were pushing.

I knew from first-hand experience. As one of the main staff managers for the Democrats after the Republicans took back the House following the 1994 mid-term elections, we forced those Republican members to take awful votes on their Contract for American legislation. These included forcing them to vote on amendments that would exempt from their priorities any provisions if they threatened the health and safety of, for example, pregnant women and their unborn children. The amendments we drafted and forced them to vote on week after week were designed to push the limits of their loyalty to the Republican leadership, who would tolerate no dissension in the ranks. We wanted to set up votes that would hopefully split at least the more vulnerable members from their conference.

We were unsuccessful, no mater how ugly and indefensible the provisions we crafted. They would march down to the well in lockstep and vote against these exemptions, under threat of punishment by the House Republican leadership. Having witnessed this up close and personal, I know that Penn's strategy was destined to fail.

Instead, some of us argued, we had to go into the vulnerable districts and find allies of those Republicans who would make the case against voting to impeach. This was never done in any meaningful way, in part because the powers-that-be were listening to Penn and his polls.

This is the same sort of tone-deaf strategy that Penn has brought to the Clinton campaign. What I cannot explain, and what is more troubling to me about the campaign, is the blind loyalty that the Clintons have for Penn and other long-time loyalists that they have brought into the campaign. Isn't this the exact kind of circle-the-wagons approach that has gotten them into trouble from the beginning of their run in national politics?

The Anatomy of a Smear

2008-04-03T11:04:00.001-04:00

Solid reputations take years to be won, but they can be lost virtually overnight. The political landscape is littered with the (figurative) bodies of those who have been implicated but later exonerated in scandal. The same is true in Africa as it is here in the States. And this is precisely what happened to former Nigerian Vice President Atiku Abubakar, who is seeking his nation's presidency (full disclosure: Atiku's Washington-based attorney is a client, and I have provided counsel on his issues. Two of my colleagues have met directly with the Vice President). Mr. Abubakar was implicated in the bribery scandal that led to the indictment of Rep. William Jefferson (D-LA), but on close examination of the evidence it turns out, well, there is no evidence that he was involved at all.

I write about Atiku because he is what should be the model for the United States in choosing allies in difficult parts of the globe. Nigeria is economically vital to this country given its oil resources; yet it is struggling to balance a sizeable Islamic population with the need to be on good terms with the West. Atiku, a Muslim himself, is a friend to the United States, and wants our countries to be friends, too.

A successful businessman-turned-politician, Atiku fought recent corruption in his government, standing against attempts by former President Olusegun Obasanjo to alter Nigeria's constitutionally-mandated term-limits. Although this was an act of political self-sacrifice, putting himself in the crosshairs of President Obasanjo and his supporters, Mr. Abubakar felt it was his duty. His reputation, however, suffered. He ended up a scapegoat for allegations originally aimed at President Obasanjo and others.

According to news reports, United States Congressman William Jefferson allegedly accepted at least $100,000 in bribes to build a relationship between a company employing his former chief of staff and a firm called iGate, which supposedly had the opportunity to provide IT support to Nigeria's government-owned phone company. When Rep. Jefferson learned that Mr. Abubakar would be visiting the U.S., he began mentioning Mr. Abubakar's name to create an appearance of progress and to suggest her had more influence than he actually did.

While Rep. Jefferson's trial is forthcoming, Atiku's name has been smeared, unnecessarily, in the international press. Mr. Abubakar never solicited nor accepted bribes from Rep. Jefferson or his associates. And this is clearly demonstrated by a review of the publicly-available affidavits in the case, which reveal that Rep. Jefferson's statements about him were simply part of an attempt to get more money out of his former chief of staff's employer:

Atiku had no connection to those involved in the bribery scandal, according to affidavits related to the case.

--During a December 2004 conversation with the woman who employed Brett Pfeffer, Rep. Jefferson's chief of staff, Rep. Jefferson told her that President Obasanjo, not Vice President Abubakar, was his point of contact with the Nigerian government.

--In August 2004, Rep. Jefferson introduced Pfeffer's employer, Lori Mody, to the president of the Nigerian company that would serve as iGate's local partner. At no time during the meeting did anyone mention a link between the local partner and Atiku.

--In a March 2005 conversation arranged at the direction of the FBI, Pfeffer met with Mody to attempt to restore the deteriorating iGate deal. In a detailed conversation about how the deal would unfold, Atiku's name was never mentioned, nor were there any veiled references to him.

--In April 2005, Rep. Jefferson mentioned Atiku's name to Mody as a means of creating the notion of his own influence with the Nigerians. Rep. Jefferson told Mody that Atiku would arrive in Washington on May 1, 2005. Problem, was, that never happened. He never arrived in Washington.

--In June 2005, Rep. Jefferson had written a formal letter addressed to the Vice President through the Nigerian Embassy in Washington, DC. If Rep. Jefferson had a personal relationship with Vice President Abubakar, going to far as to discuss an illegal business deal involving millions of dollars with him, why the need for formal correspondence through the Embassy of all places?

--On May 4, 2005, after not hearing a response from Atiku to the formal letter he solicited or otherwise, Rep. Jefferson told Mody that there was no need to involve the Vice President in the deal.

--On May 12, 2005, Rep. Jefferson met Mody and discussed the need to motivate the president of iGate's Nigerian partner because "he's got a lot of folks to pay off." Atiku's name was not mentioned during the detailed conversation.

When the parties involved became aware that Nigeria was thinking of awarding the contract elsewhere, Rep. Jefferson attempted to extract some final money from Mody and used Atiku as the excuse.

--After long negotiations between Rep. Jefferson and Mody, Rep. Jefferson convinced Mody that he needed $100,000 to bribe the Vice President. The FBI, working with Mody to build a case, gave Mody $100,000 and recorded the serial numbers of the bills as part of basic procedure.

-- Rep. Jefferson received that money from Mody while Mr. Abubakar was in Washington. Rep. Jefferson knew Mr. Abubakar was leaving in a day or two and had plenty of time to deliver that money. Instead, after Mr. Abubakar had left the country, Rep. Jefferson lied, on tape, to Mody, saying he had delivered the cash.

--During an FBI raid of Rep. Jefferson's home, $90,000 of the bills given to him by Mody as the supposed "bribe" for Atiku were found in his freezer. An investigation revealed another $4,800 had been given to a female legislative aide. Eventually, all but a single $100 bill was accounted for. This is pretty compelling proof that Rep. Jefferson lied to Mody to get more money on the pretext of a bribe that he always intended on keeping for himself.

Ultimately, misperception and falsehoods have marred Atiku's reputation around the world, with very few examining the obvious facts of the case to see that there is no merit to any suggestion of his involvement. Where does someone like Atiku go to get his reputation back?

2008-03-17T14:57:00.004-04:00

Sex and Politicians

2008-03-12T10:39:00.002-04:00

It's hard to avoid writing about Spitzer (best potential New York Post headline, "Eliot-- Phone Ho", thanks to my partner Rich Masters). Having represented a president facing his own sex scandal, I can say from first-hand experience that damage control in these situations is extremely difficult. There were times that the crisis team was sitting around our offices in the White House wondering how many days before Clinton would resign-- and wondering how solid our relationship with the Vice President was-- just as Spitzer's team no doubt has been doing.

But I think there is one mistake that both Spitzer and Clinton have made once the scandal became public-- listening to their lawyers about how to protect their legal positions instead of talking to their constituents. I understand that they are both lawyers, and both were surrounded by attorneys advising them on how not to get indicted. But unlike executives in the private sector, governors and presidents have one responsibility first and forement, and that is to lead. That's why the tens of millions of voters elected them, and that has to remain their number one priority.

That means explaining their actions to their constituents, and not hiding behind legal walls. Even if the risk is of self-incrimination, in my humble opinion that is what they owe to the public. Putting their own self-interest over that of their constituents got them into trouble in the first place. Transparency, humility, compassion, and a way to move forward. That's what's called for, not legal maneuvering. Just my two cents from experience.

More thoughts on student loans

2007-12-11T08:50:00.001-05:00

I got an interesting and difficult qustion in the form of a comment on my last student loan program posting: Can the private student loan program survive a Democratic Congress and a Democrat in the White House?

This is hardly an idle question. Both Obama and Clinton have made statements announcing their intent to abolish the FFELP if elected. And because the industry has been a significant giver to Republican candidates over the past dozen of so years and a meager giver to D's (in part responding to threats from the K Street project, and in part because of legitimate policy agreements), there is not much sympathy from the majority party on the Hill right now.

I strongly believe that the FFELP is extremely important and needs to be saved (please see my full disclosure in my previous post) for several reasons. First, I do not believe that acting as a lender is either an appropriate role for government agencies, or that they are particularly good at it. Think Veterans Administration, USDA, etc. Second, I also believe that competition which can only come with private lenders has brought valuable innovation and better services to universities and students. And third, I believe that universities only have leverage to demand better services and innovation when there is a competitive market, and if that is taken away, then so is any role that the schools have in demanding better programs.

Having said that, the FFELP and its private lenders are in trouble. Their traditional way of defending their program, relying on inside-the-beltway lobbyists and their friends on the Repbulican side of the isle, failed to even slow down this year's legislative cuts. If the FFELP community (it has many non-profit members, hence the term "community" rather than "industry") cannot enlist those most affected by the recent as well as future cuts to the program-- such as students and their parents and the schools and universities-- they will be in for tough times indeed.

I have recommended to the FFELP community that they take a broad-based campaign approach, educating and recruiting those who will be really hit hard by further program cuts to speak up to members of Congress before the next president is inaugurated. They need to start the campaign now, and it needs to be aggressive. Otherwise, they may not be around too much longer.

Fun with Government Loans

2007-12-05T11:59:00.000-05:00

Whenever I hear Members of Congress arguing for larger government-run loan programs, even as a professional Democrat I choke. Federal agencies are good at some things, but lending money is not one of them. You need look no further than the massive Washington Post expose today (http://www.washingtonpost.com/wp-dyn/content/story/2007/12/04/ST2007120402047.html?hpid=topnews) on failures in the Department of Agriculture's loan program.

But there's another story out today that I am pretty sure won’t make the Post. It is about the costs to taxpayers of student loans. As perhaps only those of us with kids either already in college or nearing college age would be aware, there are two ways to get government-backed loans: From private lenders under the Family Federal Education Loan Program (FFELP), and from loans made directly by the Department of Education. (Full disclosure—I consult for a number of FFELP entities, including several trade associations, guarantors, and lenders).

FFELP organizations have had a difficult time this year, serving as a punching bag for critics and suffering crippling cuts in Congress. One of the most difficult arguments they have had to face is that direct loans are cheaper for the taxpayers, an argument which has always seemed dubious at best to me (the cost of the loans themselves to the students are set by law, so they are the same with both programs). Regardless of what you think about government contractors, the notion that government agencies can provide less expensive services than competitive companies fighting it out in the private sector defies common sense, history, and the laws the physics. Nevertheless, that has been a key argument, and the student loan industry has not been successful in fighting against this.

That’s why today’s edition of Inside Higher Ed is so interesting (http://www.insidehighered.com/news/2007/12/05/loans). Using Department of Education numbers, it reports that FFELP loans actually are in fact less expensive than direct loans from the Department. It cites a number of reasons for this, many related to the recently passed College Cost Reduction and Access Act which cut subsidies to lenders (thereby cutting costs to taxpayers). That should take this argument off the table, but specious arguments based on erroneous facts seem to take on lives of their own. Once they become part of the conventional wisdom, they can be very difficult to refute.

Bush, Iran, and the NIE

2007-12-05T10:15:00.000-05:00

Damage control 101 is back from a long hiatus, and hopefully will be much more active over the coming months, focusing on crisis management issues out there on the landscape. For example, I think the Bush White House once again blew it on how they handled the news this week that the NIE on Iran found no intent to acquire nuclear weapons. Bush was defensive from the start, arguing in favor of his tough continued tough stance towards the Iran government. It was simply not convincing and made him look even weaker, if that’s even possible. Here is what I think his key messages should have been:

· This is good news!! It means that a dangerous threat that we were extremely concerned about is off the table, at least for now.
· It is a vindication for my get-tough policy, because it backed the Iranian government off its quest for nuclear weapons.
· It demonstrates the vast improvements in intelligence collection and analysis that have resulted since 9/11 and the intelligence failure in Iraq.

No, it wouldn’t have stopped reporters from asking the “What did you know and when did you know it questions,” but it would have at least given him and Hadley something to fall back on….

Trafigura calls for greater transparency in regulations

2007-02-23T17:45:00.000-05:00

Following the payment of a $187 million settlement to the government of the Ivory Coast, executives from Trafigura, a company for which I have been a consultant for several years now, has now commented on their ordeal. In a recent article by Helen Hill on Lloyd's List, entitled: A toxic tale of bad law and sloppy business practices, Trafigura Director Eric de Turckheim discusses his concern for others who could fall victim to disparities in the Marpol and Basel conventions; he is now seeking greater clarity and a tightening of the legislation regulating the disposal of waste and slops. The article states:

Calling Marpol an "excellent convention" that ensured the seas were clean, Mr de Turckheim called for a link between Marpol and national legislation.

In a report by the City of Amsterdam into the attempt by the Probo Koala to discharge its slops in its port, he said it was evident there was a split between the various administrations on how the process was handled. There was a "slicing of responsibility" between EU and Dutch interpretation of rules and the international conventions.

This report revealed that Marpol rules had been translated into Dutch and legal terms had been changed so "the terms were not exactly the same".

As a way to improve this situation, Trafigura has commissioned Lord Fraser of Carmyllie, who oversaw the Lockerbie air disaster inquiry, to conduct an independent investigation of the regulations and how their ambiguity led to confusion among international parties. The report is set to be completed in May, and Lord Fraser will assess how different regulations can work better and how to ensure transparency in the system.

With regard to why Trafigura has waited this long to discuss their situation, the article states:

Mr de Turckheim contacted Lloyd's List and said he had only chosen to speak out because the company's employees were now freed. It was almost "impossible to have any communication which would not have had an impact on the outcome" of discussions in the Ivory Coast, he explained.

Given the perception problems Trafigura has been experiencing, would it have been worth the risk to clear their name in public before ensuring the safety of the three employees, which have been imprisoned in the Ivory Coast?

(FYI: Lloyd's List is a subscription based publication)

More Drama than Toxic Waste

2007-02-08T15:24:00.000-05:00

"More Drama than Toxic Waste"

I just came across an article entitled "The Probo Koala: a chemical odyssey", written by Diederik Boomsma, who has taken a unique look at the situation in the Ivory Coast. After reviewing the evidence in the Probo Koala case, Boomsma concludes that Trafigura BV has become the victim of irrational fears about the nature of chemicals. As I have written, Trafigura [a company for which I have been a consultant for a number of years], is currently embroiled in several lawsuits and is taking the blame for the improper disposal of slops from an oil tanker in the Ivory Coast. Although the situation initially looked dire for the company, many people are beginning get past their knee-jerk reactions.

Boomsma writes: "As soon as the word 'chemical' is used an objective representation of the facts seems to bite the dust. Who further examines the circumstances surrounding the Probo Koala and other incidents of the last decades will observe a recurring pattern: the dangers and hazardous effects of chemical substances are systematically exaggerated and blown up. Against the background of a barely concealed chemo-phobia each incident is presented as an event which should above all inspire us with fear. Thus our culture still does not seem to be released from the romantic exaltation of nature and the fear of Faustian research. But the panic which is created as a result of incorrect news coverage appears to, in many instances, lead to new victims."

In this case, that victim is Trafigura.

Focusing on the image problem of chemicals, Boomsma explains why Trafigura is in a pinch - the issue being that the improperly disposed of slops simply smelled "unnatural." As Boomsma says, "the waste provided a tremendous odour nuisance," causing people to jump to the conclusion that the smell was noxious:

"Most people associate chemistry with toxicity and consider 'natural products' as clean and pure, the opposite of chemical."

However, despite reports of score of people becoming ill from the smell, there is no concrete evidence that the slops contained anything that would induce sickness. But because of "chemo-phobia," several lawsuits have been filed and two Trafigura executives await trial in prison in the Ivory Coast.

The article asks some important questions about those who have filed undue and unfounded litigation against Trafigura - litigation based on fears - not facts - regarding the nature of what was disposed in the Ivory Coast. Boomsma asks: "Or do they hope that Trafigura, under the pressure of this kind of publicity, will need to settle for a substantial amount at a certain moment in time?"

Give the article a read and let me know what you think.

More on the Ivory Coast incident

2006-10-22T10:29:00.000-04:00

Was just alerted to a statement put on the web site of the Prime Marine Corporation responding to what they contend are mistatements in the media across Europe. [continued full disclosure-- as I have written previsouly, Trafigura is a company that I have consulted with for a number of years regardings issues in the United States]. Prime Marine is the owner of the vessel in question, the Probo Koala. Here is the link, but the site is flash one so you can't bookmark inside of it: http://www.prime-marine.net/. Again, I welcome any and all views on what's been going on with Trafigura in the Ivory Coast. Here is the statement in full for those of you too lazy to go looking for it on your own:

18th October 2006
With the departure of the PROBO KOALA from Paldiski, the managers, Prime Marine Management Inc. of Athens, are pleased that the Estonian authorities have cleared the vessel and her crew of any wrongdoing.
The vessel was never under arrest at Paldiski.
Under the directions of her timecharterers, Trafigura, the vessel was ordered to Paldiski to discharge a cargo of unleaded gasoline.
Thereafter, she was ordered to wash her tanks offshore Paldiski whilst awaiting a further cargo from that port. That is a normal ships procedure and, contrary to some recent speculation, the resulting slops were not of extraordinary nature. The Estonian authorities, having analyzed and checked those slops, permitted their discharge at a MARPOL designated facility.
In the process of seeking to explain the situation, the Prime Minister of Estonia summed up the conclusion of their investigation:
"I can assure you that there is nothing mystical in the waste from the Probo Koala - actually, it only includes oil and oil products. There is nothing to fear - it is not some extraordinary poison, but rather only normal oil compounds."
During the vessels call at Paldiski, Estonian officials boarded the vessel and carried out a number of surveys on behalf of the Ivorian and Dutch authorities. The Estonian authorities interviewed the crew in relation to cargo operations conducted by the vessel earlier in 2006 under Trafigura's orders.
Prime instructed the crew to cooperate fully with the Estonian authorities - to the extent that, no sooner had the Master and Chief Officer been interviewed, they were permitted to leave Estonia and return to their homes without conditions.
Prime provided the Estonian authorities with the vessel's papers, correspondence and computer records. The authorities had a complete picture of all cargo operations in 2006. At no time had the vessel been asked or ordered to carry toxic waste. The slops discharged at a MARPOL designated facility in Abidjan were residues from normal vessel operations.
Prime wish to state in the most emphatic terms that they remain shocked at the events in Abidjan and are deeply upset by the effect that the mishandling of the slops has had on the unfortunate residents of Abidjan.
The Managers are constantly seeking to assist in alleviating some of the distress felt by those effected. In addition, full assistance and cooperation will continue to be offered and indeed given to those still investigating the events in the Ivory Coast including those at UNEP.