In the US political context, the concept of the "revolving door" refers to the practice of elected government officials and bureaucrats leaving public service and immediately going to work for a lobbying firm or a private-sector company with activities somehow related to their prior official role. The instances of this happening in the US at the federal and state levels of government are numerous, in spite of the "cooling-off period" guidelines that exist for some officials and require them to wait some period of time after their government service before doing this.Likewise, private-sector top managers who are politically well-connected often receive appointments to work in government departments which regulate or otherwise deal with the industry in which they have made their careers. Hence, the "revolving door" metaphor, which also implies that it's the same people coming and going, a dynamic promoted by the two-party system in the US. If you're an expert on topic X and are affiliated with the Democratic Party, for example, right now you're probably working (if not on the staff of a Democratic Member of Congress) at a think tank or, if your area of expertise is in demand in the private sector, with a corporation. And when the party in power eventually changes (thank goodness it always has in this country, at least in the past), you will be in line to be appointed to an appropriate government department. The most frequently cited example of this is Dick Cheney, who was Secretary of Defense in the first Bush Administration, went to work for the defense contractor Halliburton while Clinton was in the White House, and then essentially nominated himself to be W's running mate.
In some cases, it makes sense - the individual was an official dealing with some technical field and is qualified to consult on the same issues for a private-sector company, or, in the case of a legislator, the individual's legislative activities corresponded with their areas of interest and they want to continue to work on the same issues after they leave office because they are not re-elected or are not eligible to be re-elected (because of term limits). By the same token, it is easy to see why the government might in some cases want to hire experts in certain fields from the private sector.
Often, however, ex-government officials and legislators are hired on the basis of who they know rather than what they know, and they are expected to use their connections in government in the service of their new employer's (or their new employer's clients') economic interests. And individuals moving from the private sector into government service sometimes have opportinuties to influence their former employers' business which look very much like a conflict of interest.
Perhaps there isn't anything inherently wrong even with this, but in general the process tends to have an unsavory air about it and is often decried by media commentators (see the next-to-last paragraph of the second piece linked). At its most egregious, the "revolving door" involves jobs being promised to public officials while they are still in office (although this is, at least in some cases, illegal), with at least an implication that before leaving office they need to perform some sort of favor for the company that intends to hire them. It seems that nowadays, the potential opportunity to "cash in" on one's public service is viewed almost as an entitlement by a growing number of so-called "public servants." But perhaps this has always been the nature of the game in Washington. [LA: Think this is enough background? --Editor: I thought this was supposed to be about Russia - ?]
In any event, money does make the world go round, and former officials do need to make a living doing something, so these incestuous relationships are more or less an accepted practice in the US. The Washington Post, for example, even titles its periodic updates on people's comings and goings to and from various jobs "Revolving Door."Being a native of Washington and therefore accustomed to such behavior, I wasn't surprised to hear that Gerhard Schroeder has taken a position with the new Gazprom-controlled North European gas pipeline - a massive infrastructure project with important geopolitical implications for Russia to which Schroeder and his good friend Vladimir committed their countries just over 3 months ago. I guess this just goes to show that when the Russians and the Germans collaborate - instead of going to war with each other, which was more commonly the case in the 20th century - they can accomplish remarkable feats. Through cooperation, Schroeder and Putin, with the help of Putin's
I heard about this story first on the BBC's World Today news program, which is broadcast after midnight by our local public radio station in DC. At 12:30am, the same station broadcasts Deutsche Welle's Newslink. Not surprisingly, DW didn't have a word to say about this story.
Davids Medienkritik caught the scent of this story quickly - it does smell rather bad - and his post on this has some initial reactions and discussion in the comments. The Times of London doesn't like the way this looks, either:
The move was announced yesterday by Alexei Miller, the Gazprom chairman, as he opened a new Russian-German gas pipeline, but has yet to be confirmed by Herr Schröder.Really, though, who can live on a mere $500+k a year nowadays?
His reticence is understandable. Gazprom’s pressure on East European states has been growing and the EU is becoming deeply dependent on the company’s gas supplies.
The management of Gazprom is very close to Mr Putin, whom the former Chancellor befriended during his seven years in office.
Herr Schröder, 61, is determined to boost his pension with business contracts. He is already signed up as a consultant to Ringier, a Swiss company. Reports suggest that he will earn about £300,000 a year from them, but the Gazprom position is likely to pay more.
And the Financial Times quotes an anti-corruption activist:
Hansjörg Elshorst, head of the German section of the Transparency International corruption lobby group, said: “Is Schröder giving his elder-statesman backing because he believes in the political significance of the venture? Or is he being rewarded for supporting the deal earlier? The latter would be unacceptable, but either way he has to come forward and explain.”Reuters reported the following on November 18:
Shortly after he lost the September 18 election, there were reports from Moscow that the chancellor, who is a good friend of Russian President Vladimir Putin, would become an adviser to Russian gas giant Gazprom. The stories were quickly denied.
Just as in DC, denials - especially hasty ones - don't always mean the story's not true. It looks like for this massive pipeline project an equally massive conflict-of-interest scandal may become a part of the deal that no one bargained for. Or perhaps this is just business as usual anywhere in the world, and no one will raise a fuss.
7 comments:
Interesting. The last I heard Schroeder was in rural Wales taking an intensive course in English language (while Chancellor, he had to rely on interpreters in all international discussions).
I'd assumed he was doing this in order to up his chances of being appointed to some international body, but clearly he's looking in the private (OK, Gazprom's owned by the state - but you know what I mean) sector for the money he needs to flesh out his pension fund.
It does raise some pretty serious concerns about how Russo-German relations were conducted over the past couple of years, and whether Gerhard's friendliness to Russia was partly because he had an inklink that something like this was in the pipeline (sorry - couldn't resist).
But I think, for Gazprom, it's a smart move. The EU is a vitally important customer, and to have a board member who is hugely influential will be of huge benefit.
As you stated, this sort of thing has been happening for years in the US, although it seems to have grown to new heights with the Cheney / Halliburton connection and the war in Iraq. Billions of dollars of contracts awarded to Cheney's old company ... to offer unprecedented civilian services in support of US Forces in a war. All of this money borrowed against the US future, in a debatable action. It is basically as if Cheney borrowed billions in someone else's name and used it to line his and his cronies pockets. And somehow this borrowed debt leaves the future of the US more secure?
So Russia and Germany have learned by example .. from the very best. At least in this case, it seems to serve a strategic purpose for both nations. If they become incredibly wealthy in the process ... well, someone had to benefit.
Shedd, please...
I know you're trying to be, well, whatever it is "progressives" try to be by suggesting it's far worse than it's ever been and that the current administration is spreading its bad behavior around the world, but come on. This is much higher profile because it involves a former head of government taking up a position with another government's project, but these kinds of things--your provincialism and short view of history--have been going on in both Europe (*gasp!*) and the US in pretty monumental ways for a loooong time.
Not all that is wrong with the world flows from the Bush administration. Though hyperbole and foolishness certainly have been on the rise...
Andy, I agree that this was definitely a smart move for Gazprom. In their position, I would do the same thing. At the end of the day, the Washington Post will write editorials criticizing the whole thing (as it did today), bloggers will bitch and moan, but you've advanced you're business interests and, as a supplier of natural gas in this day and age you can afford the negative press.
Nathan, wow, someone ate their Wheaties today. I do agree with you that it's a stretch to say this behavior was somehow learned from the US - there was cronyism in "Old Europe" before the US even existed. And I also agree that just about every US presidential administration has its officials whose prior or future ties with one industry or another look bad and cause much consternation in the punditry, but I think it's an inevitable part of the system. I do find the preferential treatment given Halliburton to be pretty questionable, but my questions stem more from the underlying issue - why are we seeking to privatize or outsource military support functions? Whether the decisions to try to "streamline" our fighting forces were made in a fit of thinking government should be run "like a business" or because some former SecDef thought he would get a job with a company that stood to profit from the policy change, I'm more concerned with the result. But we're not here to talk about Iraq, are we?
Lyndon, I'm not responding to what you said about Halliburton and the Bush administration, but what Shedd said suggesting that the relationship is the genesis of cronyism in Europe. I've not got a single problem with your questions.
And you're right, we're not here to talk about Iraq. I only chimed in because Shedd's kind of comment inspires me to get pissy at times.
Halliburton has been working with the US govt. and supporting the military since about 1915. They therefore are a trusted service provider and have a good track record of performing...the recent overcharging scandal notwithstanding. Also, the type of contracts Halliburton get preferential treatment for are those which could not possibly be put out to tender, i.e. rebuilding Iraq's oil infrastructure. Tendering a job like this would take, in my experience, about 4-5 years. In terms of companies who could provide this kind of service, Halliburton is one of probably only two in the world, the other being Schlumberger (who are part French so that's a non starter).
My point is that the US giving prefential treatment to a company they have relied on for nearly a century in circumstances where they have little alternative (Halliburton's critics rarely provide the govt. with a sensible alternative) is nowhere near on the same scale as a former head of state taking top job in a brand new consortium, owned by a dodgy foreign country, which will have a major impact on his own country just weeks after leaving office. The two cannot possibly be compared in terms of scale or potential for corruption.
nafta form Iraq and diamonds from SierraLeone... consortiums apart, when are we to talk about the people?...
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