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Empires of the sons (and the friends, and the mistresses...).

Not every political appointee's a Dean Acheson--or even a John Dean. Here's where the White House buries the bad ones

If George Bush is famous for his thank-you notes to valuable campaigners, House Minority Leader Robert Michel is better known for thank-you jobs. He can arrange a political appointment in the Bush administration for anyone he wants, and most of the time it's in the General Services Administration (GSA), where his friend Dick Austin has worked as a high-level executive for years. Thus it was business as usual one day in 1987, when Michel asked Austin to help out his longtime campaign manager, Paul Cation.

Cation, a lawyer, was recovering from mental problems aggravated by alcoholism, but favors are favors, Austin hired him as a $35,000-a-year "confidential assistant." Favors still being favors, Austin kept him on the payroll the next year, although the FBI had notified GSA that Cation was under investigation for bank fraud. Even after he was disbarred and arrested, Cation was allowed to keep his job, and even had if after he was convicted on 15 counts of lying about his indebtedness to obtain large loans, thereby defrauding five banks of more than $500,000. It wasn't until Cation was actually sentenced to six years in prison in January 1989 that Austin forced his assistant to give up his political plum.

The Cation affair wasn't brought to light until March 1990, when Austin's nomination to become administrator of GSA came before the Senate. The nomination hearings also revealed that during Austin's year and a half as acting administrator, the number of political appointees at GSA had increased 40 percent. Among the appointees were several persons GSA considered security risks because of severe personal financial problems, but who were hired nonetheless. Austin eventually forced one of these appointees, Chief of Staff David Godfrey, to resign after more than $1.5 million in judgments accumulated against him. But it probably wasn't a painless decision; Godfrey's patron was another one-man job corps: Senator Phil Gramm.

That Dick Austin was confirmed anyway, and that he still holds his post, tells us more about Washington political appointments than it does about him. It wasn't that Austin wanted a bunch of ne'er-do-wells on his staff. He was simply holding the bag for the Bush administration and Republican Party leaders who had favors to repay. And as White House personnel understands, those favored have to be put somewhere, even if they're mental cases, rabid ideologues, callow children of big donors, or simply incompetent. So where can administration officials best bury this political garbage? For decades, GSA has been one of the federal government's preferred landfills, with 17 administrators in 22 years and a breakneck parade of lesser officials spinning through the revolving door of one of Washington's worst administered and most wasteful agencies.

Political connections breeding political jobs is no scandal in itself. Sometimes it's government's saving grace. When strong presidents, cabinet or department heads, and congressional leaders inspire smart loyalists to take up public service, government benefits enormously from fresh blood, dedication, and new ideas. Unfortunately, not every political appointee is a Dean Acheson--or even, for that matter, a John Dean. "Within any administration, there's always a certain number of 'must-hires,' sponsored by political clout," explains Pendleton James, one of Reagan's personnel chiefs. "The must-hires are typically not the cream of the crop, or else they'd have gotten jobs on their own.... Any administration will have a certain amount we'll have to dump, and it's terribly frustrating."

Toss a whole bunch of those "must-hires" into one agency, and it can also be terribly frustrating for the taxpayer. Today, in addition to GSA, the Small Business Administration (SBA), the Agency for International Development (AID), the Department of Agriculture, the Office of Personnel Management, and certain divisions within the departments of Commerce and Justice are the most expensive dumping grounds for marginal Republicans who want to cash in their campaign chits for one of Washington's 3,000 political jobs. "You always have to take some turkeys, and Washington can afford to carry them," says a former top official in both the Reagan and Bush administrations--that is, if you put them where they can't do much harm. No one's going to let a fringe fundamentalist from Idaho set trade policy. But some garbage isn't buried deep enough to prevent serious human and economic damage.

How serious? Let's look at the HUD scandal for starters. As Deputy Assistant Secretary Dubois Gilliam explained to Congress several years back, Sam Pierce's agency was a legendary landfill. "Pierce got loaded up on him a group of Young Turks who were very political and a [White House personnel] must-hire list, and we had no housing skills whatsoever," he complained. One of those Turks was Pierce's executive assistant and top aide, Debra Gore Dean, a former bartender and waitress. She became something of a household name when she was charged with steering funding for projects to prominent Republicans and other friends. And then there was the handsomely paid Deputy Assistant Secretary Janice Golec, whose previous work had included a secretarial stint in the White House and a job as an airline stewardess. She was given her post as a favor to Lee Atwater. Still, she was slightly more qualified than 24-year-old Reagan campaigner Joseph Strauss, who was shunted off on Pierce as a special assistant. Not that Strauss was stupid. He stuck around just long enough to make contacts and then split to set up a consulting firm that pulled in $1.7 million in fees from developers interested in HUD.

But let's not forget Gilliam himself, who was sent to prison for taking between $100,000 and $1 million from a developer. He'd been sponsored by a wealthy Nebraska Republican after heading an organization for young black conservatives. He arrived at HUD fresh from being fired from his post at the Department of Justice.

Dumping of this sort reflects, more than anything, White House contempt for the agency it dumps on--a contempt that has one of two sources. In some cases, like SBA and GSA, the agency hasn't been much good at fulfilling its mission for decades, and personnel staffers are rightly cynical about its necessity to the republic. In other cases, like AID and HUD, the hostility is primarily ideological: We shouldn't be throwing money at the Bangladeshis or subsidizing housing in the first place, so who cares who we put in charge of the program. (Under Reagan, that hostility extended to the whole government--except the military.)

Of course, in either case, loading up an agency with bad apples only exacerbates its root problems instead of addressing them. Let's say the White House's distaste for the agency is on target. Then that agency should be abolished, saving taxpayers millions, even billions. But if the White House is wrong, the agency's important purpose is being perverted. Whichever the case, when the White House unloads, Americans lose--either as recipients of government services or as taxpayers who make those services possible. And a trek through the federal government's primary political landfills suggests that America may be losing a lot more, and a lot more often, than you think.

New hack city

While every presidency has its own idiosyncratic criteria for deciding where to dump the marginally qualified, there are two central questions members of White House personnel usually ponder. First, is the given agency's mission peripheral to the president's program? (Bush isn't going to be asked a lot of questions about efficiency at GSA.) Second, is the agency head personally outside the White House power loop? (In other words, if we dump on this cabinet member, can he complain directly to the president?) As Pendleton James explains, when White House personnel comes knocking with its dreaded list of must-hires, "the agency heads with clout say, 'No way.'" The ones without that clout? Well, look at what happened to U.S. Information Agency (USIA) head Charlie Wick, who proved in the eighties that even being a pal of Reagan's wasn't enough if White House personnel had your number.

As USIA's number of political appointees grew from two under Carter to more than 60 by the mid-eighties, congressional investigators began to call the trend Kiddiegate. For among those appointees were Caspar Weinberger Jr.; Barbara Haig; a daughter and two nieces of Robert McFarlane; Monica Clark, daughter of Deputy National Security Advisor Bill Clark; Laurette Conkling, daughter of the Voice of America director at the time; and Daniel Wattenberg, son of the popular conservative, Ben. But who was Wick to complain about the unqualified? His previous work experience had included running a bunch of nursing homes and arranging scores for orchestra leader Tommy Dorsey.

In addition to the kids, there were the zealots who helped Reagan win the fundamentalist vote. USIA's grants program, for instance, was run by a right-winger named Bob Reilly, who made sure USIA money served his causes. For instance, he awarded $100,000 to Young Americans for Freedom to introduce young European journalists to political figures ranging from Jesse Helms (on the left) to then-Rep. Larry McDonald, a member of the John Birch Society from Georgia. The students got a weekend of moral guidance at Liberty Baptist College from Jerry Falwell. Even The Washington Times poked fun at it.

With the White House setting that sort of standard, it's no wonder that USIA Deputy Director Gil Robertson felt justified in bringing in Jody Ann Zolinski, a cashier in a deli he frequented, as the cultural affairs officer for Haiti.

The Bush administration had its opportunity in 1988 to change the tone at USIA. Instead it chose to repay a campaign favor by appointing to the agency's top spot a pharamaceutical executive and Bush fundraiser, Bruce Gelb, who was at Andover and Yale with George.

Of course, dumping isn't the sole province of White House personnel. In every federal agency there's a "turkey farm" (or two, or ten) chock-full of incompetent civil servants--folks who can't be fired because of civil service rules. Unburdened by those rules, White House personnel doesn't have that excuse for hiring and keeping the unqualified or incompetent. But they do have a few other excuses.

As Bush's people argue, if a guy is good in the campaign, he should be good in government. And indeed, that's often true. Unfortunately, many political appointments go not to the star campaigner (who may have better offers), but to the star campaigner's brother/son/friend/girlfriend. And if that person turns out to be lousy in the position? Well, say cynics, that's an inevitable consequence of the declining appeal of the public service job. Nobody good wants to work in government, anyway--so why not make Cap Weinberger's kid happy?

One reason, of course, is that Weinberger's kid might turn out to be a disaster. A USIA public affairs liaison making $45,000, young Cap was eventually forced to resign after receiving a $4,800 merit pay raise without the knowledge of his supervisor, missing an appointment to meet a foreign dignitary at the airport, charging the government $200 a month in taxi bills, and telling the The Atlanta Constitution that he represented the CIA and the National Security Council at USIA.

The real scandal is that the White House agreed to give Cap Jr. a government job at all, especially when applications for political jobs are soaring. Dan Fenn, JFK's personnel assistant, received 500 letters a month from people seeking high-level government jobs. Constance Horner, who held a similar position under Bush, received 600 a day. Still, the White House whines, those applicants include few people with real-world experience. "The impression out there is that these are high-risk jobs, ethically speaking," says one former administration official. "If you have a government appointment, for instance, you have to sell your stocks and sever all your business relationships for what might be a short-term career. The way Dean Acheson went back and forth between government and private sector would be prosecutable today. Not everyone wants to put themselves on the line here, and the middle-aged group is at risk."

That argument is a little disingenuous, especially in a recession. Even on purely economic grounds, political appointments are attractive. First, they offer good salaries--better than those of their civil servant counterparts, because the jobs don't have the advantage of career security. And second, there's often a heap of cash to be made on the private side of that revolving door.

"Some [appointees] view these posts as stopping grounds, their first job in public service, and a start at building their resumes," says Pat Ingraham, a political scientist at Syracuse University. Because of this, she notes, many political appointees take whatever post is offered them, regardless of their experience or interest in the agency's field. But some political appointees don't come in to rocket-fuel their careers; they come in to resuscitate them after a crash. Consider Ronald Roskens, director of AID, who arrived there in 1990 after being fired as president of the University of Nebraska.

If he couldn't run a university, why should he be entrusted with a $7.5 billion government agency? Probably because his sponsor was Dick Herman, a Republican National Committeeman from Nebraska whose South Bay Beer Distributors company in Los Angeles, one of the largest Anheuser Busch distributors in the country, has listed James Baker and Bob Strauss as shareholders.

Unfortunately, failure didn't exactly chasten Roskens. At AID, he promptly ushered in friends like Katherine Morgan, his new head of the foreign aid policy office, whose resume included no work in government or international development, but stints as a nun, patent lawyer, and dean of college admissions. And then there was "consultant" Kermit Hansen, a regent at the University of Nebraska.

But the director has also had some help from the White House. To White House personnel staffer Tom Kranz, AID was a safe and profitable place to dump Sally Montgomery, a friend and former stewardess; there, she earns $90,000 a year as a deputy assistant administrator.

While there's not always direct correlation between bad appointees and bad governance, under Roskens' leadership AID seemed to specialize less in international development than in the development of personal wealth. Since Rosken's appointment, an impressive number of AID contractors and administrators have been sent to prison for rigging contracts, accepting bribes, and padding expense accounts. Roskens himself was forced to pay back more than $3,000 from an AID subcontractor for violation of ethical standards. And on three recent occasions, the federal government has required Roskens to reimburse private organizations, two of which are AID contractors, for honoraria or travel expenses he accepted illegally.

Baker and Bush now bypass AID on all significant foreign aid activities. Dick Armitage at the State Department is in charge of aid to the Soviet Union, while Lawrence Eagleburger runs assistance programs for Eastern Europe. Other agencies, from the Peace Corps to the Department of Agriculture, are picking up the rest of AID's slack. Unfortunately, taxpayers are still paying AID to keep out of the way.

Spoils of lore

Federal trashologists know that one of the best places to look for political garbage is in an agency the president has promised to abolish. That's the utilimate depository for losers--unless, of course, the president doesn't follow through. Take the SBA, which Ronald Reagan twice sought to eliminate altogether, but not before loading it up with appointees--a tradition that his successor continues to honor.

The agency's last three administrators represent a category of must-hires distinct from campaign rainmakers and kids-of. They're all failed Republican candidates whose fall the Republican Party wanted to soften. Former SBA head James Abner began his stint in 1986 after losing a Senate race to Tom Daschle. In January 1989, he was succeeded by Susan Engleleiter, a friend of President Bush who lost a Senate run in Wisconsin. SBA's current head, Pat Saiki, a former congresswoman from Hawaii, was recently defeated in a Senate bid.

That SBA has held its landfill status so long raises the question of whether Reagan and Bush are right. Perhaps America doesn't need a separate agency to help small business; perhaps small businesses might receive more help through programs under other, more serious auspices. Unhappily, the only question White House personnel seems to be asking lately is, "Can you take a friend of...?" To Engleleiter, who, like Saiki, had never run a small business, the answer was usually yes.

Engleleiter apparently didn't relish dealing with rank-and-file civil servants, so she created a new layer of "associate deputy administrators" to serve as a buffer zone between herself and her program managers. One of these appointees was Mitch Crusto, a former general counsel at the St. Louis investment house Stifel, Nicolaus, whose CEO is George Bush's cousin Bert Walker. Crusto was then given his own deputy--another political appointee, Mitch Stanley. With the administrator and deputy administrators above this level always political, and the associate administrators below often political appointees as well, today's SBA is hack heaven. "Sometimes, you have to go five levels down before you get to a real office," says a House staffer who works with the SBA.

So few real people can sometimes mean real trouble--as in the Wedtech scandal, which had several of SBA's political appointees at its nexus. The SBA administrator for the New York region, Peter Negria, who was convicted of taking bribes from Wedtech, boasted no work experience in small business, but did come from an old family of New York Republicans. (His father, the one-time head of the Republican Party in Brooklyn, asked a friend to ask Lyn Nofziger to set up young Peter.) After his involvement in the Wedtech affair, but before the scandal had come to light, the younger Negria had moved his way up the SBA ladder to a post in Washington as an assistant to Administrator Jim Sanders. Perhaps Sanders was sympathetic to the youngster. Insurance man Saunders, who preceded Abner at the agency's top post, had earned his own appointment by being an old friend of Michael Deaver's.

Patron taint

Certain "prestige" departments--State, Defense, Justice, and Treasury--tend to have more success than SBA and GSA at keeping the dumpees away. But probe a bit and you're sure to hit a vein of lesser appointees: some farflung office like congressional relations, or most any department's "special assistant" posts, reserved for must-hires. Under Bush, perhaps the most famous of these is Justice's Office of Justice Programs (OJP).

As assistant attorney general in charge of OJP, Jimmy Gurule, a Utah prosecutor and associate of Orrin Hatch, has consolidated all contract-making to his office, which is now responsible for $80 million in discretionary grants and 10 times that in block grants. OJP is responsible for awarding discretionary funds to local jurisdictions and nonprofit organizations for things like additional police training programs, prosecutors, and policemen. Throughout Gurule's time at OJP, its grant guidelines and application forms for discretionary funding have been published so late that two weeks before the deadline, they weren't available. Most interested groups--at least those without personal OJP contacts--were unable to get their act together in time, and there wasn't a single applicant for many programs.

The problems besetting OJP aren't much different from those facing GSA, HUD, and other agencies whose main function is to dole out money. After all, where there is a trough, there is pork. And low-level political types are most likely to end up doing the feeding--a situation ripe for influence peddling a la HUD.

That's what seems to have happened to the federal government's landlord, GSA, when it implemented a massive program to standardize telecommunications services for all government agencies in the first year of Austin's reign. To spread its $25 billion in contracts around, GSA arranged to do 60 percent of its business with one phone company and 40 percent with another, the greater share of the deal going to the company with the lower bid, which happened to be AT&T.

The arrangement made some fiscal sense. But it was promptly overturned, largely because it fell into the hands of GSA's deputy administrator, Rebecca Johnson, a young Bush fundraiser. Johnson was handed her GSA post after working as a special assistant in White House personnel--a job she'd gotten through now-RNC Chairman Rich Bond. Bond's firm, Bond and Donatelli, was lobbying GSA on Sprint's behalf. By the time the deal was sealed, the larger share of the contract had been turned over to Sprint.

Of course, someone could have stopped that wasteful contract--someone like Tom Bucholz, an associate administrator at GSA and another political appointee. (A point man on the phone project, he is now paid more than $100,000 a year to oversee the agency's Information Resource Management System program and its staff of 1,600. His work at Pacific Power and Light, he wrote upon Senate confirmation to the GSA post, included the supervision of "zero" people.) Instead, appointee deferred to appointee, and the deal went through. Fortunately, Congress got wind of the decision at the last minute and forced GSA to reverse it--but not until the wrong system had been installed for the entire U.S. Navy; it had to be dismantled and done over.

Still, influence peddling isn't the worst thing bad political appointees can do. The lasting harm from dumping comes when civil servants see how little interest the White House has in their agency's public service role. While bureaucrats may be naturally inclined to dislike the political appointees who strut in every few years and upend their working lives, they're also able to distinguish the committed and competent from the ticket- punchers. Load up an office with incompetent appointees, and discontent radiates from the GS-15s to the clerk-typists.

Gurule's appointment to head the OJP in Thornburgh's Justice Department marked the conversion of that office from a career-run enterprise into a political one, although its chief responsibilities--monitoring statistics and grants--should have no political importance. The OJP, with only 325 employees, has seen its political appointments jump from six to thirty in the past four years, including the key positions of general counsel and director of legislative affairs. It is probably no coincidence that union members on the OJP staff, who filed no unfair labor practice charges with the Federal Labor Relations Authority between 1975 and 1988, have filed 14 such complaints since Gurule took over in 1988.

Happy Kempers

Clearly, a political appointee can set the tone for thousands of workers beneath him. And that's not always bad news. A charismatic agency captain can actually transform a dump into a plum. In 1988, Jack Kemp's convictions about tenant management and enterprise zones, among other things, attracted scores of qualified and devoted conservatives to HUD. That gives Kemp a measure of leverage. Silent Sam Pierce had to take on all the Debra Gore Deans the White House shoved his way, says a former Bush administration official. "The difference with Kemp is that he can say, "Okay, I'll take these five [appointees] you're giving me, but I also want these two of my own.'"

A similar transformation is in the works at one of Reagan's favorite dumps, the Department of Education. In the eighties, some top posts were held by conservatives who didn't even believe in public schools--"homeschooling" by concerned Christian parents was preferred. But Lamar Alexander, something of a favorite of the "education president," has been able to woo former Xerox CEO David Kearns, respected academician Diane Ravitch, and other credible education experts to his office. "All the bright ones want to work in Education now," says a member of White House personnel.

The effect of the agency's new cachet isn't limited to the quality of the folks coming in. Career bureaucrats say department morale is higher than it's been in a decade. It remains to be seen whether this reinvigorated Education Department will actually do anything to solve the nation's grim education problems, but one thing's certain: Now, at least, it's got some brainpower to work with.

Kemp and Alexander's crews have a lesson to teach the winner of the 1992 campaign. While bad political appointments can destroy agency morale, foster scandal, and cost taxpayers millions, good appointments are potent weapons, capable of infusing new life into even the most jaded bureaucracy. For Clinton, Perot, and Bush, the implications of that lesson should be fairly clear. If you want government to run as well as you've promised, send a thank-you note to that great campaigner. Throw a party. Send flowers. Spend an hour hand-holding his friend or cousin or splendid son. But don't give away the job. In doing so, you may also be giving up the chance for government to do some good.
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Title Annotation:includes related article on President Bush's campaign strategies; political appointees
Author:Konigsberg, Eric
Publication:Washington Monthly
Date:Jun 1, 1992
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