'Revolving door' spins fast as ever for ex-Clintonites Ethics rules more nuisance than obstacle for many leaving administration

THE BALTIMORE SUN

WASHINGTON -- As the exodus from the White House accelerates, with more and more Cabinet and senior White House officials announcing their departures, administration appointees are coming face to face with the "revolving door" ethics rules that President Clinton set forth in 1992.

Such rules, issued by executive order and hailed by Clinton as the most rigid ever imposed on government employees, were intended to bar officials from cashing in on their connections through cushy and lucrative lobbying positions in the private sector.

Some say the rules unduly limit the career options for departing officials -- especially those with a narrow field of expertise. But many who have left the administration recently have found the rules more a nuisance than a real obstacle, and their value in the marketplace as prized as ever.

"I knew what the rules were [upon entering government], and I made a decision I could live with them," says Leslie Samuels, a former assistant treasury secretary who recently returned to the New York law firm of Cleary, Gottlieb, Steen & Hamilton. "It's a small burden, not a huge burden."

The rules bar top administration appointees from lobbying the agencies for which they worked for five years after they leave -- four years longer than previously required. The rules were designed to prevent former government employees from influencing policy decisions they could profit from.

Samuels, for instance, is barred from appearing at the Treasury Department or Internal Revenue Service for five years. If a client needs representation there, another lawyer at the firm steps in.

Knew difficulties going in

"It's made people's lives a little more difficult, but people were aware of what the difficulties would be going in," says Carol C. Darr, a former Commerce Department official who left the administration this year to become vice president for government relations for a trade association.

For her part, Darr cannot lobby the office for which she worked in Commerce, although she is allowed to lobby the far-flung agencies under the department's jurisdiction. If the need arises to contact her former colleagues, someone else makes the call.

The rules haven't prevented former officials from landing gold-plated jobs in the private sector -- even in the lobbying arena.

Thomas R. Nides, a former Capitol Hill aide and chief of staff to the U.S. trade representative, left this year for the investment world and a home in a New York suburb. At Morgan Stanley, he heads all lobbying and public relations activities.

Because of the ethics rules, he cannot call the trade representative's office. He is even skittish about picking up the check when he and his old Washington buddies meet for dinner.

"I can't even say to someone, 'Call X and Y agency and tell them I said to call,' " Nides says. "There is law, and there is perception, and you better be concerned about both issues in this environment."

Effectiveness doubted

But the reality of post-government employment, Nides says, is that many jobs carry some element of lobbying or connections. Many observers, in fact, are dubious about how effective the rules are at stopping the revolving door between government and lobbying.

"I doubt they're really terribly restrictive," says Sheila Tate, a former press secretary to Nancy Reagan who runs a Washington public relations firm.

Bill Hogan, a director at the Center for Public Integrity, notes, "Washington is a city of lawyers, and any administration is an administration of lawyers who are experts at how to get around or through these types of laws."

In fact, two White House aides who left in 1993 raised eyebrows when they were hired as lobbying executives at between $500,000 and $1 million a year.

Roy Neel, a deputy White House chief of staff, became president the U.S. Telephone Association, the lobbying arm of local phone companies. Howard Paster, the congressional liaison, signed on as chairman of the Hill & Knowlton public relations firm.

Both men, who were making $125,000 in the administration, got around the ethics rules because they were hired to supervise lobbyists, rather than engage in lobbying themselves.

And former administration officials are not barred from lobbying lawmakers on Capitol Hill.

What's more, many in the Washington loop say they can read between the phone lines. Tom Korologos, a veteran lobbyist who worked on the Dole campaign this year, says a top lobbyist need not place a call directly to exert influence. When an underling calls government officials, "they know who's calling," Korologos says.

In fact, government officials, whether lobbyists or not, have long TC been valuable commodities to employers. Departing Clintonites such as George Stephanopoulos, who has said one option for him is a perch at a university, will likely be able to command handsome salaries in the private sector.

5 times government salary

Joshua Steiner, the under-30 treasury chief of staff who left somewhat tainted after having disavowed his diary entries before a Senate committee on Whitewater, was scooped up by the Wall Street firm Lazard Freres. Forbes magazine speculated that he could make five times his $98,000 government salary after a few years.

Lisa Caputo, 32, press secretary to Hillary Rodham Clinton, left her $65,000-a-year job to hop onto the lucrative ladder at CBS, where she was named vice president of corporate communications.

Recently, Housing Secretary Henry G. Cisneros -- who has mounting legal bills from an independent counsel investigation -- said money was his chief reason for quitting his $148,400-a-year post. In 1992, he earned almost $400,000 from lecture fees and corporate directorships and will now likely command even higher fees. On the day he told Clinton of his resignation plans, he also called his agent to discuss his post-government business options.

Few have been as open as Cisneros about their motives. And many former Clintonites have returned to academia -- such as William Galston, a professor at the University of Maryland -- or to their law firms, though often in exalted positions.

Some believe that, although the revolving door between business and government is spinning fast as ever, there has been less bald-faced ticket-punching in the past two administrations.

"The last thing you want to do when you leave is end up in the newspaper looking like some greedy guy trying to cash in," said a former Bush official.

And some say the rules are, in fact, limiting.

"Take your Rolodex, put it in a box in your garage for five years," says Lonnie Taylor, vice president of the U.S. Chamber of Commerce. "Then go back after five years. A number of people will not be taking your calls."

'Discouraging effect'

Taylor says some of his colleagues have chosen to opt out of government because they don't want to be subject to the rules.

And a wave of midlevel government employees -- who would have had to sign the ethics pledge after receiving pay raises early this year -- decided to leave rather than agree to the restrictions.

In fact, some say, the greatest effect of the rules is evident not as people leave the administration but as they consider whether to enter public service at all.

"Combined with all the other requirements -- and the lack of any room for privacy -- it could have a discouraging effect on people coming to government," says Arnie Miller, a former Carter official who runs a recruiting firm for nonprofit outfits.

Pub Date: 12/01/96

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