Nunn Advisory Role Raises Ethical Questions
Politico reports a small-scale controversy has erupted over the Obama-Biden transition team’s announcement that former Sen. Sam Nunn (D-Ga.) will serve as an “informal senior adviser” for the new administration’s move into the Pentagon.
Critics say that Nunn’s position as chairman of “public responsibilities” at General Electric, a major defense contractor, poses a potential conflict of interest in his role as an adviser. Of particular concern to these critics are the corporation’s business dealings with the Iranian government.
Nunn, who has staked out a reputation as one of the world’s preeminent experts on nuclear non-proliferation, joined the board of General Electric in 1997, shortly after stepping down from his four terms representing Georgia in the Senate.
From 2000 to 2007, the company won 281 contracts from the Defense Department worth a total of $8.8 billion. And, in 2006, the Securities and Exchange Commission singled out the company’s nonmilitary business in Iran, inquiring in a letter why GE didn’t reveal sales to the country in its corporate filings.
“The issue of whether to conduct business in certain countries is complex,” GE wrote back in July 2006. “We must take into account not only the views of the U.S. government but all relevant stakeholders.”
According to Politico, transition spokeswoman Stephanie Cutter emphasized the “informal” aspect of Nunn’s advisory role but did not respond to whether the transition team’s strict rules on lobbyists would apply “to either corporate directors or informal advisers” working in their area of expertise.
The transition’s ethics rules were designed to deal with registered federal lobbyists, which Nunn is not. Yet the critics seem to have a point.
The issue illustrates the dilemma facing a new administration that appears genuinely concerned about possible ethical problems.
In Washington, it’s commonplace for government officials to retire to lucrative positions in the private sector. That makes it hard to assemble the best network of advisers possible without creating situations in which conflicts of interest could arise.
But what about corporate executives informally advising a new administration’s transition to power? Do their companies stand to benefit in proposed government solutions to, say, the economic crisis?
Executives abound on Obama’s transition economic advisory board. One of them is William Daley, Midwest chairman for JPMorgan Chase, which collaborated with the Federal Reserve to bail out Bear Stearns.
I don’t know the answers to these questions. But it’s worth considering the real-world policy consequences of an overly incestuous public-private talent pool.