The Scum at the Top
Commentary on the Rats in Washington
Secrets and Lies
By Mike Mosedale
City Pages
Cover Story
Vol. 24 #1181, pages 16-18
© July 23, 2003
Always known as a conscientious discloser of his personal ties,
legislator Pawlenty never saw fit to mention NewTel--or to
recuse himself from telecom votes.
Early last fall, in the thick of a four-way gubernatorial
race, Tim Pawlenty suffered what looked like a disastrous
setback. The state Campaign Finance and Public Disclosure
Board, the agency charged with ensuring that candidates who
accept public financing adhere to agreed-upon spending limits,
had just determined that the Pawlenty campaign and the state
Republican Party had engaged in an end run--to the tune of
about $637,000.
Both Pawlenty and the state GOP were found to have violated
the prohibition against "coordinated" campaigns, a rule put
in place to prevent the most egregious skirting of the
spending rules. Pawlenty negotiated a deal. Just three weeks
before election day, he agreed to pay a $100,000 fine and to
accept a $500,000 reduction in his war chest. It was a hefty
penalty (in fact, a state record), though less than the
crippling $1 million figure of early speculation. For good
measure, he fired a Washington, D.C.-based media consultant
implicated in the mess.
And then, savvy politician that he is, Pawlenty began spinning.
While maintaining that he disagreed with the campaign board's
findings--to do otherwise would have amounted to an admission
of cheating--Pawlenty said he accepted "full, unequivocal
responsibility" for the affair: "I am the captain of the team.
It happened on my watch. I have to take responsibility for it,
and that's what I'm doing today."
The public and the media lapped it up. Maybe that was because
Pawlenty came off like a human being and not an obfuscating
lawyer. In the legislature, he cultivated a reputation for
being a straight arrow, routinely recusing himself from votes
involving the judiciary because his wife is a judge. He even
declined to vote on some school funding packages, citing his
past work as an attorney for school districts.
Half a year later, the governor's squeaky clean reputation
is beginning to look like so much artifice. And last year's
campaign finance scandal begins to look like the first public
sign of tendencies that now begin to seem familiar.
While there is scant evidence of outright illegality (save
for improper paperwork, which can be easily amended), last
week's revelations about Pawlenty's deftly concealed involvement
in the telecom industry have cast the governor and his political
partners in a far less flattering light. (His approval rating
stood at only 50 percent prior to this episode.) For all his
fabled openness, Pawlenty actually spent much of the week
dissembling. Asked about his director role at NewTel, the
parent company of a telecom accused of cheating consumers,
Pawlenty said characteristically at one point, "The fault,
if there is a fault to be assigned to me, is people are
saying I should have known. And I guess if that's the standard
then I have to take responsibility for that and say I should
have asked questions or should have gone and done my own
investigation."
As a lawyer, Pawlenty indisputably knew that corporate
officers bear certain clear-cut oversight responsibilities.
Yet just as in the case of the campaign scandal, his words
owned up to very little. But he seemed happy to jabber on
about the board; it deflected attention from the bigger part
of the burgeoning story--the $60,000 he received while on
retainer with Access Anywhere, a pay phone company owned by
GOP activist and telecom entrepreneur Elam Baer.
What is wrong with the Pawlenty-Baer arrangement, first
disclosed by Pawlenty last week after the board story broke?
To start with, there is the fundamental issue of transparency
in government. When he was running for governor, candidate
Pawlenty professed to recognize the value of openness, telling
the Star Tribune he supported a bill expanding financial
disclosure requirements for constitutional officers. "The
issue is not a question of how much [money politicians have],"
he said, "but what an officeholder is invested in, whether it
constitutes a conflict of interest."
Yet in his statement of financial interest, Pawlenty made no
mention of his hefty earnings from Access Anywhere. Instead,
he reported it as investment income derived from a corporation
called BAMCO (an acronym for Business and Management Consulting).
BAMCO's sole function seems to have been collecting checks
from Access Anywhere. When it was pointed out that this method
of listing his earnings effectively prevented political rivals,
the media, or the public from connecting the dots to his
telecom ties, Pawlenty blamed his accountant.
Because a loophole in the state's disclosure rules excludes
income earned as an "independent contractor" from reporting
requirements, Pawlenty will likely face no significant legal
consequences as a result of the misdirection. By Wednesday,
he announced he would amend the report, which is permitted by
law.
But little that Pawlenty or his operatives said last week
served to diminish the suspicion that the lucrative Access
Anywhere retainer amounted to a campaign contribution. The
most significant question--what did Pawlenty do for his
money?--remains unanswered. Late last week, Pawlenty
spokeswoman Leslie Kupchella said the governor was negotiating
a waiver so he could release his contract with Access Anywhere.
Even if the contract materializes, it will do little to answer
the pertinent questions about what services, if any, he
rendered. And Kupchella continued to insist that Pawlenty
would not be providing any further documentation of his
labors.
So over a 14-month period, while Pawlenty was a sitting
legislator and active candidate for governor, he was paid
by a company with significant interest in legislative and
regulatory policies--and no one but his close political allies
knew about it. And he can't say with any specificity what he
did for his pay.
Pawlenty's advocates have defended his use of BAMCO to
collect consulting fees as standard business practice, not
a calculated deception. He incorporated, the logic goes, as
a hedge against personal liability. Yet, he still could have
been upfront about the business relationships whether they
were listed in public documents or not.
Until the Pioneer Press broke the story, Pawlenty apparently
took pains to avoid any mention of his involvement in the
telecom industry. As the Associated Press reported, Pawlenty
called last summer for a "telecommunications summit" to bring
together industry execs, explaining that "the telecom industry
is in meltdown mode." At the time, he was on retainer at Access
Anywhere and still an investor, though no longer a board member,
at NewTel. But despite Pawlenty's well-known habit of touting
his involvement with other business enterprises (such as the
tech company WIZMO), he made no reference to his own links to
an industry that he was openly seeking to assist. Neither did
the legislature's most scrupulous recuser ever tip his hand to
the ties by opting out of a telecom vote.
Why the tight lips? Perhaps because the telecom industry was
already mired in scandal. Admitting to extensive involvement
in it could have proven a political liability, especially
with damning news about New Access already surfacing in other
states.
Which raises another issue. Pawlenty has repeatedly asserted
he was unaware that New Access had been implicated in the
illegal practice known as slamming--the unauthorized switching
of customers' long distance service. If he had known, he
claims, he would have made inquiries.
There is probably no smoking gun to prove otherwise. But
consider for a moment the defense that has been invoked most
often by Pawlenty partisans: Sure, New Access--through its
telemarketers--"slammed" customers. But in the telecom world,
the argument goes, that's business as usual. (And it is. While
regulators in Washington state described New Access's actions
as particularly egregious, telecom companies large and small
are routinely fined for slamming.)
Pawlenty's defenders thus want it both ways: Hell, everybody
knows the industry regularly plays crooked--except Tim Pawlenty.
Like Claude Rains in Casablanca, he is shocked. Shocked!
The most striking and convoluted aspect of Telegate is the
staggering number of telecom-related ventures in which
Pawlenty and his cabal of GOP insiders were involved, from
the third-party verification business (State Auditor Pat Awada)
to telemarketing (former campaign manager Timothy Commers) to
long distance service (Pawlenty; Victoria Grunseth, Pawlenty's
appointee to head up the Metropolitan Airports Commission; and
Elam Baer).
Why the attraction? The most obvious explanation: There was
a pile of money to be made in a recently, albeit only
partially deregulated industry. And who is better situated
to understand and exploit the details of that deregulation
than a gaggle of politically connected folks with inside
knowledge of the workings of government? Second, as political
operators, Pawlenty et al. already knew a thing or two about
telemarketing. (And make no mistake, "telecom" as practiced
here is essentially one big telemarketing operation.) So the
telecom business may have seemed a particularly natural fit
to them.
For whatever reason, many Pawlentyites' first responses to
the scandal were almost nonchalant. Then, as the controversy
and headlines built, Pawlenty's defenders (particularly those
on talk radio) sought to cast suspicion on the original Pi-Press
story by insinuating that it was planted at the behest of
Attorney General Mike Hatch, who, the theory went, was seeking
an early leg up in the 2006 gubernatorial race. A less popular
theory had it that Arne Carlson, still at odds with the old
Jon Grunseth-cum-Pawlenty wing of the party, got wind up of
the arrangement and leaked it.
Hank Shaw, one of the reporters who broke the story, denies
that it came as "a tip from anyone." Neither he nor fellow
reporter Rick Linsk were willing to provide much in the way
of details. But Shaw did say the piece was "an outgrowth of
the American Bankers story." Another intriguing Pawlenty
Administration yarn, that story focused on claims that
Pawlenty's Commerce Department settled on the cheap with a
Florida credit insurance company accused of making illegal
sales as payback for a $15,000 campaign contribution.
But how the story arose in the first place is just a curious
footnote for historians. What matters about Telegate has little
to do with Mike Hatch or Arne Carlson, and a lot to do with the
incestuous relationship of the business culture to what used to
be called the public sphere. Pawlenty and friends are giving us
a glimpse of how fluid and intimate the connections between the
two really are--and how well they are usually hidden from public
view.
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©2007 DJW
Last Modified:
January 13, 2007