When looking at the influence of corporate money in politics, we tend to focus on the billions of dollars spent on lobbying efforts and campaign contributions, but there’s another way that big business influences legislators — by promising them cushy positions on their boards of directors after they leave office. 24/7 Wall Street did a study of the 100 largest public companies and the former politicians who sit on their boards:
Just recently, following the scandal at Chesapeake Energy (NYSE: CHK) when CEO Aubrey McClendon made investments in drilling projects in which the company was involved, the issue was in the limelight again. Chesapeake, based in Oklahoma, has two powerful politicians on its board – former member of the Senate from Oklahoma, Don Nickles, and former Oklahoma Gov. Frank Keating. The company’s board members used the firm’s private planes for travel – a perk most governance experts frown upon. Perhaps the more salient question is why the two have stayed on the board under the current circumstances. It is equally reasonable to ask why politicians, with their backgrounds unrelated to running big companies, were even appointed to the board.
Many other politicians sit on the boards of America’s largest public companies, and some aspects of their services raise troubling questions. Some are successful lobbyists because of their Washington connections. These firms could work for causes or companies that do not have identical interests to those of the corporations of the boards on which they sit. There are questions about the past ethical behavior of others among these board members. In most cases, the former politicians have no obvious backgrounds that qualify them to be on public companies’ boards. A final problem is that some have done very well financially because they sit on several boards – another practice many corporate governance experts oppose.
The common thread among the directors on this list is that they have been paid very well in their roles. Most make more than a quarter of a million dollars a year. Most also have stock ownerships or grants that add substantially to those payments and usually amount to millions of dollars.
Even if it isn’t an actual quid pro quo, everyone knows what is going on here. If you play ball while you’re in Congress or a governor’s mansion, you can be assured of such positions. If you don’t, you’ll get locked out. And it doesn’t stop with politicians, it also extends to their staffers. Be a good little lapdog and you will have your pick of lobbying jobs for the companies you helped while you were working on Capitol Hill.