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

Soon after his departure from government in 1997, Kelman became a member of a Department of Defense (DOD) task force charged with identifying “DOD Policies and Practices that Weaken Health, Competitiveness of U.S. Defense Industry.” One of the stated concerns prompting the formation of this body, according to a DOD press release, was the “beating” that the defense industry was taking on Wall Street at the time. While the task force presented Kelman’s credentials as affiliated with Harvard and as a former OFPP administrator, he simultaneously served on the board of directors of, and held an equity interest in a company with nearly billion-dollar per year average sales, almost all in government contracts. 19

Kelman also put his punditry skills to work. He began writing a column for a trade publication, Federal Computer Week , distributed to nearly 100,000 readers, mostly government personnel involved in IT, contracting, or program management. In his column he has endorsed contractor-friendly policies for more than a decade. To his readers, Kelman is just a former OFPP administrator and Harvard professor promoting “good government”; his industry connections and consulting projects are rarely revealed. And this points to another feature of flexian performance: the tendency to hide behind one’s most appealing role. In the world of media and punditry, flexians want to appear objective and devoid of self-interest. There they generally identify themselves to the unsuspecting public in their most honorable, least partisan role, thus concealing or downplaying other agendas. This is strategic: A high-prestige imprimatur like Harvard’s enables Kelman and flexians like him to promote views for which they might not get a hearing if they had to fall back on their less neutral roles, such as those of company or industry consultant. 20

A Washington Post news report’s use of Kelman’s “expert” commentary is one of many such cases. The Post article concerned a controversial government financing scheme championed by the Bush II administration, known as Share in Savings contracting. The Post quoted Kelman as a Harvard professor and former Clinton procurement policy chief who supported the technique. But he was at the time a registered lobbyist for a government contractor that was one of the largest beneficiaries of such contracting. While the Post issued a correction after the matter came to public light, most presentations by flexians are made with impunity and go unnoticed. 21In an equally revealing incident, Kelman, in a Post op-ed, decried inspectors general reports that “generally advocate more checks and controls.” Earlier an IG had recommended that a government contractor, in which Kelman held an equity interest and served on the board of directors of, be debarred from receiving federal contracts. “Small wonder he has it in for IGs,” commented the Project On Government Oversight, a public interest organization. 22

ALL THESE PLAYERS, operating in and around diverse organizations and geographical areas, and of diverse ideological persuasions, surge beyond standard roles and responsibilities, as well as beyond standard rules and practices of Western states and international organizations. In the process, their operations swirl in and above the institutions for which they supposedly work—state, corporate, international, or other.

These players also have in common that their activities may sound like a simple litany of questionable ethics. They elicit shock from some: “Wow, did you see what he arranged/did/got away with/accomplished?” Observers are hard pressed to find comparable cases within their own institutional memories. But, just as often, the response is tolerance—and sometimes downright admiration for the flexians’ sheer nerve.

Another common response to the actions of flexians is to label them “conflict of interest” or “corruption.” Yet while parties to corrupt activities typically engage in them for profit, the same cannot be said of flexians, who seek influence and to promote their views at least as much as money. And “coincidences of interest” crafted by the players to skirt the letter of the law are often difficult, if not impossible, to pin down as conflicts of interest. When those coincidences span the globe, limited organizational reach and the limited jurisdictions of legal systems can only further empower the players, who seek to derail any mechanisms of accountability that might apply. Flexians are additionally hard to challenge because, while some of their activities are open and appear eminently respectable, others are murky or hidden, often just below the surface.

Thus, while it may be virtually impossible to determine whether flex activity today is statistically on the rise, it does appear to be widely tolerated. Tongues may click in public expression of disapproval but, in the end, passive acceptance and the entrenching system encourage recurrence. The very people who engage in these activities continue to command public respect and influence, sometimes even garnering more. Moreover, national and international governments and organizations are often attracted to, and reward, flexians because they get things done.

Journalists and public interest watchdogs have excavated and published details of activities by all these players, but to little consequence. All of them continue to operate unbridled by institutional constraint or adverse public opinion; their careers—and their likely bank balances—soar ever higher. And the public interest falls by the wayside. But merely exposing certain activities is not enough; framing them is essential.

Evolution of the Species

My longtime focus on central and eastern Europe, studying communism as it really worked and then came undone, was excellent preparation for charting this new phenomenon. For it was there that I observed the sophisticated practices of dealing under the table, reading between the lines, shifting self-presentations, and social networking for survival. These were not only art forms in a society (Poland) where the “authorities” were far removed from the will of the people; they also helped nudge formal bureaucracy and economy away from communism. And when that system unraveled and informal maneuvering was given free rein, self-enfranchising individuals and networks acquired information, resources, and influence heretofore in the hands of communist authorities. These players maneuvered the power vacuums created by crumbling command systems (made obvious by the 1989 fall of the Berlin Wall and the 1991 breakup of the Soviet Union), sometimes joining forces with outside operators as they rushed into the same vacuums.

In late-1980s/early-1990s Poland, as it was sprinting away from communism, a revealing practice attracted my attention. Many officials I was interviewing gave me multiple business cards bearing different job titles. It’s hard to count how many times I was given one, two, three, or even more cards by the same official.

This happened first in Poland, then in Hungary, Czechoslovakia, and later in Russia and Ukraine after the Soviet Union fell apart. A deputy minister of privatization, a housing and environmental official, and a key presidential adviser each gave me multiple business cards. In all these countries my interlocutors had established new roles, in fact several roles at once, each to be trotted out as the occasion arose. Typically they knew little about me. As a Western scholar with entrée in the region, they clearly reasoned, I must have potentially useful contacts among Western foundations, businessmen, or aid agencies.

When interviews with officials were winding down or turning more personal, they would hand me their official government card, followed in quick succession by other hot-off-the-press business cards—also theirs. Then they would fill me in on their activities: It seemed that, in addition to their government job, they also headed a consulting firm, a “foundation,” or an NGO (often one they or their wife had founded). Sometimes these entities even did business with the government offices these officials supervised.