Mr. Clinton was an adviser to Ronald W. Burkle's investment firm,
Yucaipa, and made at least $15 million in that position.
Mr. Clinton's job was apparently to promote Yucaipa and enhance Mr. Burkle's reputation, and as Mr. Burkle put it to BusinessWeek after the two had a falling-out, "When Clinton left the presidency, he had to make money, and there were certain limits on how he could do it." Until March of this year, Mr. Clinton also served as a paid adviser to another private equity and financial consulting firm, Teneo Capital. It is no surprise that the former president recently said that private equity was "good work." It was for him.
Private equity is a favorite of prominent former politicians because it is often less public than investment banking or other finance jobs. Private equity firms like the connections former politicians bring for deal-making. Private equity is also an equal opportunity employer across both sides of the aisle. George H.W. Bush was involved with private equity after his term as president was up, serving as an adviser to the Carlyle Group until 2003. Carlyle is a bastion of political refugees. Frank Carlucci, a former secretary of defense, served as chairman, and James A. Baker III, a former secretary of state, has also been an adviser.
And if working for the industry as a deal maker, schmoozer or adviser, or just as a name, is a problem, a former politician can always find freelance opportunities in speaking to the finance industry.
President Barack Obama's predecessor, George W. Bush, has largely stayed away from business ventures after leaving the White House. But he has taken to the speakers' circuit, where fees can run more than $100,000 a speech.
Last week, the former president gave a speech at the Ritz- Carlton on Grand Cayman Island at the Cayman Alternative Investment Summit. The speech was closed to journalists and raised some eyebrows, because the idea behind such a conference was to promote investing outside the United States. But according to the organization's Web site, Mr. Bush offered "his thoughts on eight years in the Oval Office, the challenges facing our nation in the 21st century, the power of freedom and the role of faith."
Such $100,000 speaking engagements are mostly arranged by financial organizations -- after all, they are the ones with the money. One of Sarah Palin's first speeches after her tenure as governor of Alaska was in Hong Kong, to the CLSA Asia-Pacific Markets meeting, a gathering of Asian investors that advertises itself as "Asia's premier investment conference." She was reportedly paid $100,000 for the speech. Bill Clinton and Al Gore have also addressed that conference, as has Mike Tyson.
So what does this mean for Mitt Romney? Well, it is hard to see him plunging knee-deep into Wall Street. Mr. Romney has already made his private equity money. That does not mean that he would pass up the occasional $100,000 speaking engagement.
I cannot begrudge politicians the chance to make money after years of relatively low-paid public service. But at best, this is clearly a case of not asking where the money is coming from. The wholesale involvement of politicians in finance as opposed to, say, working in industrial America or advising the country's educational and charitable institutions may be a serious misdirection of resources.
More sinister, as Simon Johnson and James Kwak contend in their book "13 Bankers: The Wall Street Takeover and the Next Financial Meltdown," a too-cozy relationship between Wall Street and Washington was a direct cause of the financial crisis.
Whether or not they are right, the ties remain surprisingly strong, making one wonder whether we are repeating the mistakes of the past.
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