Welcome, Businessmen, to
March 30, 2009
The Wall Street Journal
"But I couldn't eat the meat. It was
rainbow-colored," I protested to the Department of Justice clerk in charge
of travel expense reimbursements.
The government rules allowed no flexibility. If you
traveled on a plane that served food en route, as was the case on my late
afternoon flight from D.C. to New Orleans, you could not get reimbursed for
eating after you landed. It mattered not that the food looked spoiled, and
that you really did spend money on a restaurant meal. There would be no,
albeit meager, $20 reimbursement for that dinner.
Welcome AIG, Citicorp, GM and other stimulees to
the financial controls of the stimulator, the federal government. But wait,
it is now not just the recipients of Troubled Asset Relief Program (TARP)
money and other taxpayer funds who are to be regulated. According to
"sources," the White House is considering salary controls for "all financial
institutions" and "publicly traded companies," not just those receiving
"federal bailout money."
What's more, the feds intend to impose this by
fiat, meaning regulations not legislation. When the government controls your
salary, control over your financial compensation is not far behind. The
government will apply "zero tolerance" and "avoid the appearance of"
criteria to you just as it has done to government employees for decades. I
worked under those rules during my 13-year government tenure. Trust me,
business types, your new "no-nos" will take some getting used to.
When I first arrived at the Reagan Justice
Department as deputy assistant attorney general, I was presented with a
document for signature declaring that I would take "nothing of value" from
someone other than my spouse, relatives or longtime friends during my
tenure. I refused to sign.
Having spent the previous four years in the Senate
as chief counsel to Intelligence Committee Chairman Barry Goldwater when
Congress had not yet adopted the executive branch's gift rules, I was
accustomed to a different financial culture. For example, sometimes foreign
dignitaries would bring a nominal gift such as a pen or calendar to an
initial meeting. I was told it was rude to reject the polite gesture.
Faced with this new zero-acceptance gift rule, the
lawyer in me warned I could not say a calendar had no value. Yet why would I
want to offend a person with whom I needed, and was expected to have, a
professional relationship? Before signing the Justice Department document, I
amended it to reflect that I would accept nothing over $25.
Early on I was invited to speak to an organization
in my official capacity, and offered a $2,500 fee and a car to drive me from
my home in Chevy Chase, Md., to the Baltimore forum. I knew to turn down the
fee for myself but asked the Justice Department ethics attorney whether I
could donate it to charity. "No," was the curt reply, because there was "a
value" to me for giving money away. And the limo to get me there? That, too,
was prohibited because it had "value."
I observed that the previous weekend the attorney
general had appeared on "Face the Nation" and a CBS-supplied limo had taken
him there. "Well, some things we just have to overlook" was the response. So
the government's financial rules are cased in cement, except when they are
In the mid-1990s, the new Republican Congress
decided to adopt the ban on gifts that had applied to the executive branch.
That change led to the same silliness I had encountered with the Justice
Department proffered pledge to take nothing of value.
For example, I was in a congressional office -- at
that time out of government and representing a client -- when I overheard a
young staffer's telephone call. Looking down at a pastry box on the table,
she said sweetly, "I'm sorry we can't accept the cherry pie you left this
morning. We can't take any gifts. If you can't come get it, we'll have to
throw it out."
As we all know, those new rules kept us safe from
the Jack Abramoff transgressions. Financial institutions, take note: You may
still give but never receive a toaster.
I must admit to a twinge of sympathy for those who
have never been subjected to the government's strictures, not just over
spending and gift receiving but also over use of support personnel. You will
now face a bare new world.
For years you have flourished in an atmosphere
where the office was an extended support family. Some might even say office
staff was treated like another "wife." No one ever blinked if private
business secretaries were asked to perform personal tasks, such as picking
up clothes from the cleaners, grocery shopping, or taking charge of personal
bill paying. I would never have thought of asking my government secretary to
make a dental appointment.
So, business world, prepare yourself for the new
frugalities and pray they are short-lived. Perhaps one day, the taxpayers
will have been repaid and the government will loosen the oversight because
you are doing business on business money again. You can then recall the
government control era and feel a rush, like I do now, when you no longer
have to choose between rainbow-colored meat and paying for your own meal on
a business trip.
Ms. Toensing is a lawyer in Washington.