Janine Wedel - Shadow Elite - How the World's New Power Brokers Undermine Democracy, Government, and the Free Market

For research assistance, I am grateful to Kanishka Balasuriya, Maya Ellis Brown, Joseph Sany, and especially to Emily Gallagher, Ben Katcher, Jeff Meyer, Faith Smith, Mandy Smithberger, and Sarah Willyard. I thank Karen Coats, Nan Dunne, and Caroline Taylor for editorial comments.

I am especially indebted to independent editor Sarah Flynn, who worked with me tirelessly to shape the book. Her unflagging commitment to the project, her enthusiasm for finding the best way to express my ideas, and her effectiveness as both sounding board and wordsmith have seen me through every draft of the manuscript, from its beginnings as a proposal. I am also grateful to Sarah for introducing me to my agent, Michael Carlisle. Michael “got” the book right away, and I am grateful to him not only for his confidence in me but also for his insights into the nature of the topic. Insights were also provided by Bill Frucht, who acquired the book for Basic Books, and Tim Sullivan, who saw it through to publication and provided keen suggestions that helped focus parts of the manuscript. I thank Irina Kuzes, a graphic artist, for her original creations, steadfast commitment to the project, and willingness to make changes as it developed.

The New America Foundation has generously provided me a research home and numerous resources that aided this project. For that and for research assistance and collegiality with a dynamic group of policy writers, analysts, and scholars, I am deeply indebted. My permanent base, the School of Public Policy at George Mason University, and my dean, Kingsley Haynes, have been extraordinarily supportive and generous, and for that I am grateful. I also thank the Ford Foundation, which funded some of my research related to the project.

Finally, I thank friends who both put me up (when on the road) and put up with the project, in particular Antonina Dachów, Ted Kinnaman, Aśka Mikoszewka, Terry Redding, and the Occasional University of Lewes. As always, I am especially and profoundly indebted to Adam and Basia Pomorscy for their generous and abiding help.

Many people provided input about the phenomenon that today’s shadow elite represents, the conditions that give rise to the new players and networks, and the implications of both for democracy, government, and society. But while this project might not have come to fruition without the generous assistance of so many, I alone am responsible for the final product.

JANINE R. WEDEL

Washington, D.C.

July 2009

CHAPTER ONE

Confidence Men and Their Flex Lives

WE LIVE IN A WORLD OF FLEXIBILITY. WE HAVE FLEX TIME, FLEX workers, flex spending, flex enrollment, flex cars, flex technology, flex perks, mind flex—even flex identities. “Flex” has become an integral part not only of how we live, but of how power and influence are wielded. While influencers flex their roles and representations, organizations, institutions, and states, too, must be flexible in ways they haven’t been before. The mover and shaker who serves at one and the same time as business consultant, think-tanker, TV pundit, and government adviser glides in and around the organizations that enlist his services. It is not just his time that is divided. His loyalties, too, are often flexible. Even the short-term consultant doing one project at a time cannot afford to owe too much allegiance to the company or government agency. Such individuals are in these organizations (some of the time anyway), but they are seldom of them. 1

Being in, but not of, an organization enables these players to pursue a “coincidence of interests,” that is, to interweave and perform overlapping roles that serve their own goals or those of their associates. Because these “nonstate” actors working for companies, quasi-governmental organizations, and nongovernmental organizations (NGOs) frequently do work that officials once did, they have privileged access to official information—information that they can deploy to their own ends. And they have more opportunities to use this information for purposes that are neither in the public interest nor easily detected, all the while controlling the message to keep their game going. 2

Take, for instance, Barry R. McCaffrey, retired four-star army general, military analyst for the media, defense industry consultant, president of his own consulting firm, part-time professor, and expert, whose advice on the conduct of the post-9/11 U.S. wars was sought by the George W. Bush administration and Congress. Crucial to McCaffrey’s success in these roles was the special access afforded him by the Pentagon and associates still in the military. This included special trips to war zones arranged specifically for him, according to a November 2008 exposé in the New York Times . McCaffrey gleaned information from these trips that proved useful in other roles—and not only his part-time professorship at the U.S. Military Academy, which the Pentagon claimed is the umbrella under which his outsider’s perspective was sought.

At a time when the administration was trying to convince the American people of the efficacy of U.S. intervention in Iraq, the general appeared frequently as a commentator on the television news—nearly a thousand times on NBC and its affiliates. He was variously introduced as a Gulf War hero, a professor, and a decorated veteran, but not as an unofficial spokesperson for the Pentagon and its positions. He also was oft-quoted in the New York Times , the Wall Street Journal , and other leading newspapers. Further, in June 2007, according to the Times , he signed a consulting contract with one of many defense companies he had relationships with, which sought his services to win a lucrative government contract. Four days later, McCaffrey did the firm’s bidding by personally recommending to General David Petraeus, the commanding general in Iraq, that the company supply Iraq with armored vehicles, never mentioning his relationship to it. Nor did he reveal these ties when he appeared on CNBC that same week, during which he praised Petraeus, nor to Congress, where he not only lobbied to have the company supply Iraq with armored vehicles but directly criticized the company’s competitor. 3

Using information and access to link institutions and to leverage influence is what General McCaffrey and other such players were expected to do by an administration seeking public support, media in need of high ratings, industry pursuing profits, and academia in search of superstars. But because only the individual player bridges all these institutions and venues—by, for instance, enlisting access and information available in one to open doors or enhance cachet in another—only he can connect all the dots. Such a game involves a complex, although subtle, system of incentives that must reinforce its players’ influential positions and access to knowledge and power. And the players must uphold their end of the bargain. When McCaffrey criticized the conduct of the war on the Today show, Secretary of Defense Donald Rumsfeld quickly cut off his invitations to Pentagon special briefings. Tellingly, McCaffrey went back on the air, reiterated the Pentagon’s line, and regained entry into those briefings. 4

McCaffrey owes some of his access to a Pentagon public relations campaign that enrolled retired, high-status military personnel as “message force multipliers” in the media, according to an earlier piece in the Times . McCaffrey was among the most high-profile members of the campaign, during which, from 2002 to 2008, the Pentagon provided the seventy-five analysts access to military campaigns and initiatives through private briefings, talking points, and escorted tours. Following the exposé and congressional calls for an investigation, government auditors looked into whether the Pentagon effort “constituted an illegal campaign of propaganda directed at the American public,” as the Times put it. The Pentagon’s inspector general found that Pentagon funds were not used inappropriately and that the retired military officers didn’t profit unfairly from the arrangement. President Obama’s Pentagon later rescinded the inspector general’s report, but no new one was issued. Even when they are not whitewashed, such government audits are not designed to capture the reality of today’s influencers and the environment in which they operate—a reality that poses potentially much greater harm to a democratic society than a mere drain on taxpayer dollars. While millions of viewers, Congress, and General Petraeus were led to believe that McCaffrey was offering his expert, unbiased opinions, McCaffrey’s interlocking roles created incentives for him (and others of his profile) to be a less-than-impartial expert. The Times understatedly remarked, “It can be difficult for policy makers and the public to fully understand their interests.” 5