Saturday, January 6, 2007

-- Ethics in our Government

I spent the last eleven years working for a major accounting firm, and one of the things that I dealt with was independence. In accounting, independence means remaining distant from the client, as in not holding stock in the company. Independence isn't just a good idea, it's the law, and is regulated by the Securities and Exchange Commission (SEC). With the passage of the Sarbanes Oxley Act (possibly the most useless piece of legislation ever to disgrace our nation), accountants are now even more independent of their clients in that they are not allowed to work for those clients whose audits they worked on without a one year cooling off period.

Doesn't it seem that our elected officials and those people who they appoint to government jobs should be held to the same standard? If accountants in the private sector must maintain independence from their clients, why doesn't the government follow the same practice?

Why is John Ashcroft, the former Attorney General now heading up his own company that represents clients seeking to do business with the government? The following is from Wikipedia:

In May 2005, Ashcroft laid the groundwork for a strategic consulting firm which bears his name. The Ashcroft Group, LLC officially opened its doors in the Fall of 2005 and as of March 2006 had lined up 21 clients, turning down two for every one accepted.

In 2005 year-end filings, Ashcroft's firm reported collecting $269,000, including $220,000 from Oracle Corporation, which won Department of Justice approval of a multibillion-dollar acquisition less than a month after hiring Ashcroft. The income totals that Ashcroft has reported so far represent in some cases only initial payments.

According to government filings, Oracle is one of the Ashcroft Group’s five clients which seek his help in selling data or software with homeland security applications. Another client, Israel Aircraft Industries International, is competing with Chicago's Boeing Company to sell the government of South Korea a billion-dollar airborne radar system. The Ashcroft Group is also registered to represent Choicepoint, eBay, Exegy, Alanco Technologies, LTU Technologies and Trafficland, Inc.

In March 2006, the New York Times reported that Ashcroft was setting himself up as something of an "anti-Abramoff", and that in an hour long interview, Ashcroft used the word integrity scores of times. In May 2006, based on conversations with members of Congress, key aides and lobbyists, The Hill magazine listed Ashcroft as one of top 50 "hired guns" that K Street had to offer. In August 2006, the Washington Post reported that Ashcroft's firm had 30 clients, many of which made products or technology aimed at homeland security, and about a third of which the firm has not disclosed, to protect client confidentiality. The firm also had equity stakes in eight client companies. It reported receiving $1.4 million in lobbying fees in the past six months, a small fraction of its total earnings.

If an accountant must maintain independence, why not a government employee? While Ashcroft was not an elected official (he was appointed), shouldn't he be under the same standards as those in the private sector? Why don't we have legislation stating that former employees of the government are forbidden from becoming lobbyists, or otherwise representing clients to the government?

Gale Norton is another example. In 2001 she was sworn in as the first female Secretary of the Interior, a job she held for the next five years. Now she has taken a job with the largest oil company in Europe, Royal Dutch Shell. As Secretary of the Interior her responsibility was supposed to be to the land of this nation, and now she works for a company that can easily destroy that land. Doesn't that seem like a conflict of interest?

Why are people working in the private sector held to a higher standard than our elected officials and those appointed by them? It seems to me that we need fair legislation in this country that would ensure that all people follow a simple code of ethics, and one item in the code must certainly be an elimination of any conflicts of interest.



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