Tilting at Windmills

September/ October 2013 Cashers in … Swat teams … And the new Enron

By Charles Peters

The Gilded City

For many years, Washington was a city of modest lifestyles, largely determined by the civil service salary scale. That began to change in the 1970s with the growth of lobbying into a major local industry and the considerably higher compensation enjoyed by its practitioners. Then came the great increase in defense spending under Ronald Reagan and the wealth it brought to the Washingtonians who assisted military equipment suppliers in procuring contracts. And then, in response to 9/11, came the explosion in contracting out other functions of government to firms like Booz Allen Hamilton and the immense profits made by its owners, the Carlyle Group, not to mention the real estate developers who supply the newly rich with the office buildings and very large houses they demand.

Other suppliers of luxury products have also prospered. By December of last year, the local Aston Martin dealership, established in April to sell cars costing between $130,000 and $310,000, already ranked fourth in sales for Aston Martin dealerships in the United States, according to Mike DeBonis of the Washington Post.

Aren’t former public servants supposed to live like kings?

Cashing in has become such an accepted feature of life in Washington that Mark Leibovich can write in his new book, This Town, that “[s]cores of [Obama] administration officials had by 2010 left the administration for K Street jobs, without anyone so much as pointing out that they were defying a central tenet of the Obama political enterprise.” Even Ruth Marcus, the “Ms. Common Sense” of the Washington press corps, recently wrote a column defending the revolving door. I concede that Ruth is right that learning where the bodies are buried in the private sector can help you find them as a public servant. Unfortunately, too often the friendships you have formed in the private business, or your actual participation in the burials, make you reluctant to face the consequences of digging the bodies up.

When I arrived in Washington in 1961, people became public servants because of idealism, a yen for power, or a desire for job security. Only a handful was thinking of how to cash in. As getting rich became a national obsession, their number is legion.

By George!

On the night of Obama’s speech at Knox College on the economy, ABC News led with the story of the new name for the royal baby. NBC and CBS led with the Obama speech, but NBC gave as much time to the royal baby as it did to the speech. By contrast, the CBS Evening News, which strikes me as having the best sense of priorities in evaluating the significance of the day’s developments, gave the royal baby’s name only the time it took Scott Pelley to read one short paragraph.

Candy, roses, and private interviews

For further insight into modern journalism, consider Obama’s problem in getting his economic message across to the country. The New York Times placed its account of his Knox College speech, which the White House had said was intended as a “major address,” on page A19. What could Obama do to break through? Grant a personal interview to two Times reporters. Voila! Front page of the Sunday Times.

Office of Personnel Goofs

Whether you regard Edward Snowden as a sinner or a saint, you have to concede that something went awry when he was given top-secret clearance. USIS, the private contractor that performed the most recent background check responsible for Snowden’s top-secret clearance, is itself being investigated by the Office of Personnel Management’s inspector general for the “systemic failure to adequately conduct investigations under its contract”—an investigation that was already under way when USIS was assigned the Snowden case.

This was among several disconcerting facts that emerged from the June 20 hearing of the Senate Subcommittee on Financial and Contracting Oversight chaired by Claire McCaskill. It seems that there is no standard for determining what security clearances are needed for specific federal contractor jobs and that 87 percent of the investigation files are incomplete, meaning, for example, that the background investigator decided to skip an interview with a past employer in favor of a more leisurely lunch without bothering to explain the omission.

The June hearing was televised by C-SPAN, but was largely ignored by the media until August 3, when the Wall Street Journal’s Dion Nissenbaum revealed that one reason for the sloppy investigations was pressure from USIS executives to rush investigations to meet quarterly goals, a practice insiders described as “flushing.” In my experience, numbers goals can be desirable to get employees moving, but the boss always has to take care to find out what employees are actually doing to meet those targets.

The sloppy investigations are one scandal, but there is another. Did you know that 4.9 million federal and contractor jobs require security clearances, 1.4 million of which are top secret? This does suggest the national security state has gone mad.

Morgan as Enron

Speaking of mad, remember how outraged we were to learn that Enron executives had manipulated the price of electric power? Now we’ve learned that the same kind of fooling around with prices is happening again, only this time it’s by the big banks. You probably saw the front-page story in the Times about Goldman Sachs doing it with the price of aluminum by,among other devices, controlling the warehouses that store it. But did you also see the stories, mostly confined to the business pages, about how J. P. Morgan Chase manipulated energy markets in California and the Midwest by charging “more than 80 times prevailing power prices,” according to the Post? Morgan, caught by the Federal Energy Regulatory Commission, recently agreed to pay $410 million to settle the case.

The repeal of Glass-Steagall seems ever more tragic. Not only are the banks permitted to trade in commodities, they’ve been getting away with fixing prices by fiddling with the supply.

Straight As for B school

If you want to get into business school, study the reporting of the Journal’s Melissa Korn. Her latest insight into the thinking of their admissions officers: They look for As in your undergraduate records, regardless of the courses you take, so the poor guy who chooses rigorous courses and demanding professors will lose out to the fellow who goes for the easy A. And as long as the admissions officer thinks colleges are of similar quality, he will choose the applicant with the As, even if the grading standards of the school are lower. “In other words,” observes Korn, “an applicant with a 3.6 GPA might wow the admissions office, even if the average student in that person’s graduating class finished with a 3.7.”

Keep a weather eye open

Charles Peters is the founding editor of the Washington Monthly and the author of a new book on Lyndon B. Johnson published by Times Books.

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