Is The Government In Charge, Or Is It The Shadow Elite?

There was a time when Americans could have more confidence in the objectivity of the experts who advised government and pronounced on issues of vital importance.
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Arriving at my home airport after the holidays, I noticed that the zipper on the side of my bulging luggage had broken, and boxes of decorated cookies had fallen out. I enlisted the help of an employee who promised to check whether baggage handlers had found stray belongings on the conveyor belt. It would take her some time, but she vowed to call later that evening. There would be no way to reach her (only a maddening 800 number). Yet I felt sure she'd contact me, whatever the outcome.

The cookies were never found. But she did call, thus confirming my instinctive trust.

Can we have the same faith in public experts to speak and operate in our interest as I had in the airline employee? There was a time when Americans could have more confidence in the objectivity of the experts who advised government and pronounced on issues of vital importance. Roles of influencers and powerbrokers were better defined and more stable, not unlike the airline employee whose unambiguous job, as part of a well-organized structure, was to help me and other passengers.

In today's messy world, trust is elusive. People we once held up as experts for their credentials can no longer be trusted to be impartial. Many public figures and "experts" of all stripes -- left, right, or center -- perform overlapping roles without fully disclosing them. While they purport to operate in the public interest, these "flexians" structure their roles and involvements to serve their own agendas. Their true loyalties and agendas are not fully revealed or easily detected. Practicing what has been called an "evolving door," they move beyond the revolving door of the past.

These players are a logical product of the way that governing and society have been reconstituted in recent decades (eased by such trends as the explosion of consulting and other private entities performing government functions, the boom of government advisory boards, the global fragmentation of authority wrought by the end of the Cold War, and the embrace of what Stephen Colbert has dubbed "truthiness"). Meanwhile, other parts of society and culture, like our monitoring and accountability systems, have not kept up. Thus, while ostensibly serving the public interest, these players can also serve their own. And how would we even know?

Take, for instance, Tom Daschle, former Senator. He's a consultant to a private equity firm as well as medical insurance and pharmaceutical companies. He's a client-developer for a major law firm, he's a think-tanker, lecture-circuiter, and policy advisor to President Obama and congressional leaders. Prevented by tax evasion allegations from assuming the leadership of the Department of Health and Human Services, Daschle today has a much less visible profile in health care reform. Yet he is an important player in helping to shape policy. He has advised the White House -- he met with the president as recently as August, and with Vice President Biden and as well as Senate majority leader Harry Reid in November to strategize on health care reform. And, as the Huffington Post Investigative Fund has found, within the period of a few months, he served as a principal advisor to President Obama and to the health-care industry on the application of new information technologies in health care. In addition, a prominent Washington law firm where he was on the payroll until last month recruited him to help create a health information technology unit charged with assisting clients in taking advantage of stimulus funds, according to the firm.

What is Tom Daschle's agenda? Who does he represent? More fundamentally, how can we, the public, know? We do not have the benefit of face-to-face contact as I did meeting the airline employee and sensing that she can be trusted. We are not privy to closed-door meetings in which Daschle is clearly a player.

We also cannot look to the legal system, since his activities are not illegal. He is not subject to ethics regulations because he is not a registered lobbyist. The disclosure required in this process seems to be reserved for lesser power brokers. It is not imposed on the high fliers who move seamlessly among roles.

Daschle is hardly alone. A host of flexians (and almost-flexians) operating along similar lines routinely articulate and shape policy on crucial issues in realms from health care and the economy to defense and foreign policy. Former Homeland Security chief Michael Chertoff is another case in point. He has appeared ubiquitously in the media weighing in on national security since the Christmas Day bombing attempt, pushing for full body scanners as a cure-all for lax airport security. Unknown until a week ago to the viewing and reading public, Chertoff serves as managing director of an eponymous consulting firm that represents the only company to have initially qualified for the government contract to manufacture the full-body scanners.

Further, in the past year in the military sphere alone, we have seen several powerful examples of flex activity. Last fall the New York Times exposed the doings of some 50 retired generals who were offering "independent" opinions either through the media or public appearances on the conduct of the Iraq war. What the public did not know was that these supposedly unbiased experts were receiving undisclosed perks and briefings on Iraq from a Pentagon that was ostensibly hoping to shape their opinions. Barry McCaffrey, retired four-star general, military analyst for the media, defense industry consultant, president of his own consulting firm, and part-time professor, is one of these generals. Crucial to McCaffrey's success in these roles was special access, including trips to war zones arranged specifically for him by the Pentagon and his associates still in the military. McCaffrey returned with information from these trips that was useful in other roles. He appeared frequently as a commentator on the television news, nearly a thousand times on NBC and its affiliates, at a time when the Bush administration was trying to convince the American people of the efficacy of U.S. intervention in Iraq. He was receiving regular Pentagon briefings while appearing frequently in the media. He was introduced in many guises -- as a Gulf War hero, a professor, and a decorated veteran -- but not as an unofficial spokesperson for the Pentagon and its positions. In another role, McCaffrey signed a consulting contract with one of many defense companies he had relationships with. According to the The New York Times, he did the firm's bidding through his personal recommendations to General Petraeus, the commanding general in Iraq, to Congress, and to the media, a venue in which he also praised Petraeus. When McCaffrey criticized the conduct of the war on the "Today" show, Secretary of Defense Rumsfeld quickly cut off his invitations to Pentagon special briefings. Tellingly, McCaffrey went back on the air, spouted the Pentagon's line, and regained entry into those briefings.

In the past two months we also learned about a Pentagon program in which retired military officers serving as "senior mentors" to the armed forces also draw pensions and work for defense contractors. While contributing their invaluable experience, these officers also glean invaluable inside information. It's hard to imagine that they erase what they learn as mentors when they conduct their work as defense industry executives or consultants, and vice-versa. Meanwhile, the selection of these mentors, the identity of their defense clients, and their levels of pay are locked in a black box largely beyond governmental and congressional scrutiny. The problems posed by the mentors' case are hardly unusual; such opaque practices infuse all too much of governance today. And, short of a systemic change, suggested remedies will leave the black box virtually secure.

The pattern these players' overlapping roles follow is not simply the modus operandi of such influencers, it is the wellspring of their influence. What is more, they are virtually immune to accountability to government overseers or voters and run little risk even of after-the-fact sanctions. Take, for example, the lack of fallout from the Pulitzer Prize-winning "New York Times" expose that revealed the machinations of McCaffrey and the other retired generals. Both Pentagon cases represent journalism at its best -- we know about the retired military officers' multiplicity of roles because the Times and USA Today underwrote investigations. But facts about McCaffrey et al. were not unearthed until long after American public opinion had been swayed and the damage had been done.

As I argue in "Shadow Elite", this is a fundamental problem of our era. At its core is waning loyalty to institutions. Flexians use the organizations with which they are affiliated -- governmental, NGO, corporate, or think tank -- but their chief allegiance is to themselves and their associates. This lack of loyalty infuses the modus operandi of the players who brought on the financial crisis in America -- and the world. From those who ruined Enron to those who wrought more recent Wall Street wreckage, the disdain for shareholders and ordinary people is almost palpable. Inside information and power is largely confined to a very few actors who trust each other. Because the players retain a stranglehold on information, they can brand it for everyone else's consumption. Their maneuverings are largely beyond the reach of traditional monitors. Gone are the messy disagreements and competing interests of the democratic process. You can hardly get more efficient, for example, than having two former Goldman Sachs executives like Treasury Secretary Henry Paulson and assistant Neel Kashkari hand out $700 billion in taxpayer money to errant financial firms, including a hefty chunk to Goldman Sachs.

Crucial to flexians' ability to get away with shenanigans is their slippery presentation of their own track records and the media's focus on the dazzle of the moment. Take Robert Rubin, a former co-chairman of Goldman Sachs. In the current "Newsweek", Rubin counsels the public on economic recovery. His featured article "Getting the Economy Back on Track" lists him as a former secretary of the Treasury, co-chairman of the Council on Foreign Relations, and a fellow of the Harvard Corporation. But as Arianna pointed out in her blog yesterday, this tag line omits so much that is essential to sorting out whether we can trust him. To name just a few relevant facts: As Treasury Secretary under Clinton, Rubin bears responsibility for repealing regulatory laws that allowed Citigroup to become "too big to fail" and invest heavily in the derivatives market. Rubin did both of these things over the next decade as Citigroup's director, earning $126 million in his time there and departing with $33 million in stocks. Rubin was named to Obama's Economic Transition Team and has continued serving as an unofficial advisor to the White House. President Obama named Rubin's proteges, Timothy Geithner and Larry Summers, to the top two economic positions in the administration. (Many members of Obama's economic team have done stints at Citigroup or Goldman Sachs.)

The rearranging of governing and global authority has rendered the track records of many players less visible and eased the way for these players to represent themselves as acting on behalf of the public while in fact promoting their own agendas. Many an arms trader and transnational organized crime figure has made compelling self-presentations that convinced the public of their civic-mindedness. Many a financial guru endowed with boundless legitimacy has done exactly the same.

Truthiness enables today's influencers -- at the pinnacle flexians -- to exercise power with new consequences. Flexians thrive on ambiguous identities, appearances, loyalties, and borders of practically all kinds. They thrive in an environment of improvised reality, in which the facade counts for a great deal and fiction can virtually become reality if enough people believe it; in which appearances, self-presentations, and professed motivation are accepted pretty much at face value; in which a "company man" loyal to his institution is in vogue only if the man owns his own company; in which reinvention of self is common, even admired, and where track records often do not track. As Harry Lewis, a former Harvard Dean, stated Rubin "remains on the Harvard board, in spite of the financial meltdowns at both Citigroup and Harvard and his poor oversight of the problematic president [Larry Summers] he persuaded Harvard to hire."

The erosion of the public sphere and spirit is potentially much more damaging to the public and national interest than the mere abuse of taxpayer dollars. And nothing less than the ability of citizens to understand and act in their own interest -- the survival of our democracy -- is at stake.

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