An obscure White House program that President Bush once likened to "a hallmark of democracy" may also be a hallmark of government sleight of hand.
The President's Executive Exchange Commission recruits corporate hotshots to work in top federal posts for a year, and government bureaucrats are placed in temporary jobs with private companies. The goal is mutual understanding, but the result has sometimes been to place corporate representatives in government agencies when their companies do business with those agencies. Many of the participating corporations over the past two decades have been big campaign contributors to the party in power.The executives' temporary duty with the government sometimes allows them to infiltrate agencies that regulate their industries and dole out contracts to their own companies. The loaned executives enjoy perks, like last year's three-week, all-expenses-paid trip to Europe. Their mission was to talk to foreign trade and government officials. This is the government revolving door at its most blatant.
Our associate Scott Sleek looked into the executive exchange program and found that some of the job placements have pushed the limits of ethics.
An executive with a major defense contractor even got a sensitive job at the Pentagon. Andrew Phelps of Bechtel Corp., an engineering and construction firm, joined the exchange in 1989. He got a senior post in the Pentagon and his job was to carry out studies and confidential projects involving research and technology in engineering - Bechtel's bread and butter. Bechtel did about $136 million worth of business for the Pentagon that year. Government lawyers check each assignment for conflicts of interest, and they cleared Phelps for the job.
Last year the federal Office of Personnel Management reviewed the exchange program and recommended that the commission pay closer attention to the ethics question. OPM cited one questionable case: John Healy, a Chicago public relations executive, was initially assigned to the Energy Department, but when that job didn't work out, he was given another post. The salary was $12,000 lower, but Healy got the higher salary and did some extra duties to earn it, like setting up photos on the European trip. While on the government payroll, Healy was responsible for producing a brochure for the exchange commission, and he recommended that the contract go to a Chicago firm that he knew. OPM warned that the case could be interpreted as favoritism.
The commission made the mistake of thinking that it didn't have to obey all federal spending rules because some of its money was private. But OPM set the record straight, saying the commission got bad legal advice.
The OPM review is not the last the commission will see. The General Accounting Office is also looking at the commission, and so is a congressional committee headed by Rep. Tom Lantos, D-Calif. Lantos is interested in a whistle-blower on the commission staff, Gordon Hamel. He is the commission's director of placement, and the director tried to fire him after he complained to investigators about the way the agency was being managed.