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

The Gazprom-Schroeder covenant challenged previous convention among Western democracies. Even though many people found Schroeder’s behavior unacceptable, even scandalous, social pressure or cultural restraint did not deter him. More than four years after he accepted the position with Gazprom, he remained board chairman. If neither public opinion nor available mechanisms of states or international systems can hold Schroeder accountable, then who or what can? What he was able to get away with demonstrates an emerging standard of acceptability in which flexians and almost-flexians operate. 12

Schroeder’s deal with Gazprom does not seem so very different from some of the dealings exposed by the American financial crisis, which have evoked a public outcry about the collusion of high finance and government. Goldman Sachs, the vast investment bank with a wide reach of subsidiaries, investors, and friends—among them Henry Paulson, the former Sachs CEO and secretary of the Treasury who presided over the bailout of the company as the financial crisis came to a head in the fall of 2008—has been called “government Sachs.” 13

The new breed of players, who operate at the nexus of official and private power, cannot only co-opt public policy agendas, crafting policy with their own purposes in mind. They test the time-honored principles of both the canons of accountability of the modern state and the codes of competition of the free market. In so doing, they reorganize relations between bureaucracy and business to their advantage, and challenge the walls erected to separate them. As these walls erode, players are better able to use official power and resources without public oversight.

Flexians craft overlapping roles for themselves—coincidences of interest—to promote public policies (and sometimes their personal finances as well). These players, who generally work on more fronts and are more elastic in their dealings than similar operators in the past, both make the new system work and demonstrate how it does so. Consider, for example, Bruce P. Jackson, unofficial envoy, lobbyist, business professional, NGO founder and officer, and Republican Party activist. An operative with longtime ties to prominent neoconservatives Richard Perle and Paul Wolfowitz, as well as to Dick Cheney, Jackson served both in the Department of Defense and as a U.S. Army military intelligence officer from 1979 through the 1980s. After leaving government, he entered the private sector as a strategist for Lockheed Martin, today the largest federal contractor. 14

In 1996, while Jackson was employed by Lockheed as vice president for strategy and planning, he and other neoconservatives founded the U.S. Committee to Expand NATO (later renamed the U.S. Committee on NATO) to push for the entry of former Eastern Bloc nations into what had been a Cold War defense group. Members of the board included Perle and Wolfowitz. (Jackson was also a project director of the Project for the New American Century, whose signatories included Wolfowitz and Cheney.) Jackson served as president of the committee while still working for Lockheed, where, in 1997, he was made responsible for securing fresh international markets for the company after the end of the Cold War. NATO enlargement, of course, would supply that in spades. In 1996 and 2000 he served on and chaired, respectively, Republican Party platform subcommittees responsible for national security and foreign policy. According to journalist John Judis, the efforts of Jackson and the committee proved important to winning Senate approval for expanding NATO to include Poland, Hungary, and the Czech Republic. 15

With that success in hand, Jackson and his fellows worked to further enlarge NATO and set up a spinoff organization with the same principal officers in the same offices as the U.S. Committee to Expand NATO. In congressional testimony, Jackson credits himself with creating the “Big Bang” concept of NATO expansion that the would-be (second-step) NATO allies largely later adopted. This endeavor meshed nicely with another goal halfway around the world: to overthrow Saddam Hussein via American power. That effort was exemplified by Jackson’s creation in 2002 of another neoconservative-powered lobbying group, the Committee for the Liberation of Iraq, which he chaired. During that same year, in which he cut his formal ties to Lockheed, Jackson burnished his profile as a de facto representative for the George W. Bush administration in eastern Europe. Jackson was characterized by the U.S. ambassador to NATO as “an indispensable part of our efforts in reaching out to these [former Soviet bloc] governments” and by Georgia’s president as “an official with clout.” (The government of Romania also signed Jackson up to facilitate its entry into NATO, according to Le Monde and Romanian newspapers, though Jackson denies this.) Jackson’s standing as a Bush administration envoy in the eyes of American and eastern European officialdom was indispensable to his efforts to convince the NATO hopefuls to do the administration’s bidding—that is, to back the U.S.-crafted invasion of Iraq. Toward that end, Jackson helped draft a declaration supporting the invasion that was signed by the foreign ministers of ten nations then up for NATO membership—later called the Vilnius Ten. This declaration was politically significant, for it came at a time when the administration was eager to show that its “Coalition of the Willing” had substance. 16

Players like Jackson, ostensibly a private citizen, yet working stealthily for U.S. executive branch masters, peddling and helping to craft policy, are accountable only to their patrons. Such players are not confined by government diplomacy or lobbying rules, yet they routinely perform those functions in a way few diplomats or lobbyists would have the portfolio to do. The whole package that constituted Bruce Jackson—from the exact source(s) of his marching orders, to the source(s) of his funds, to the promises he supposedly made on behalf of the United States to foreign governments, to the fallout from those promises—is saturated with ambiguity.

Jackson’s type of brokering has become much more necessary in the post–Cold War world, with its expanded fragmentation of power and frequent relinquishing of information by states to all manner of private players. But such an enterprise is also much more fraught with potential ambiguity, making spies and even double agents look like the simplest of animals. The ability of brokers like Jackson to flex their overlapping roles is made easier when dealing across national, legal, and cultural contexts and in societies in political and legal flux. The reorganizing world has stimulated opportunities for flexians, without establishing balances to check these players’ activities. Obtaining reliable information about a player’s roles, sources of funds, and actual track record may be difficult, and viable monitoring systems are usually lacking. Flexians can thus continue unchecked to convert their environment into one that is friendly to them.

Now let’s turn to a flexian who has championed, mastered, and made acceptable what he calls the “evolving door”: Steven Kelman. He is a living example of how the new system has changed the profile of many of today’s most successful influencers, moving them beyond the revolving door of the past. In the grand tradition of academics trooping to Washington to put their theories into practice, Kelman was invited by President Bill Clinton in 1993 to come from Harvard’s Kennedy School of Government to assume the top contracting job in the federal government, heading the Office of Federal Procurement Policy (OFPP), part of the Office of Management and Budget. 17

Kelman would perform a lead role in the Clinton administration’s efforts at reinventing government. Known for his belief that the rules designed to prevent collusion between government contractors and public officials inhibited more efficient and innovative contracting practices, he set out to reform that system by deregulating the awarding of contracts. While Kelman’s reforms did streamline the process, they also encouraged privatization of heretofore officially available information and processes (as detailed in Chapter 4), advanced the partnership idea, and spurred more opportunities for nontransparent deal making between government and contractor officials. 18