Welcome, Businessmen, to Government Oversight


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 not.

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.





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