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December 7, 2003
David Warsh, Proprietor


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Reality Check

Like nearly everybody else I know, I read New York Times columnist Paul Krugman twice a week. He is overbearing. He needs to be the center of attention in whatever game he plays. But he’s also unusually brilliant – he possesses the ability to see things fresh, often before anybody else. He has done it again and again.

Is he right about the overall ethical environment in Washington? Week after week, he ascribes only the most base, cynical motives to those in the upper reaches of the administration. Nobody in the Republican Party ever gets the least benefit of the slightest doubt.

The political atmosphere in Washington has become so overheated that one yearns for an experiment, however modest, that might demonstrate something absolutely unequivocal about ethical standards in the Bush administration.

Such a demonstration unfolded last week. It involved the case of Richard Perle, a civilian foreign policy counselor to the administration.

Some background: As a long-time aide to Sen. Henry “Scoop” Jackson (D-Wash.) during the 1970s, Perle was instrumental in using trade agreements to pressure the Soviet Union to allow emigration, mostly of Jews. The trickle became a flow, and the flow in became a source of internal debate in Russia which in due course contributed to the collapse of the communist regime. For six years during the Reagan administration, he was Assistant Secretary of Defense for International Security Policy, involved in much Cold War maneuvering.

Out of office in the1990s, Perle became a corporate consultant, in the manner of Henry Kissinger, mixing high-level business and political contact. Then, after the election of George W. Bush in 2000, he returned to power as unpaid chairman of the Defense Policy Board.

As head of this semi-official Pentagon advisory group, which is composed of 30 influential business leaders, scientists and retired military experts who meet regularly for give-and-take with the Secretary of Defense, Perle was among the most vocal advocates of the war in Iraq. After 9/11, he also raised a venture capital fund, to invest in “homeland security” issues.

When journalist Seymour Hersh disclosed in The New Yorker last March the extent to which the firm, Trireme Partners, might benefit from the war, Perle resigned his chairmanship of the advisory group while remaining a member.

And last week, there was more news.

First The Financial Times reported that Boeing Corp. was among those who, 16 months before, had made an early commitment to the fund that Perle had raised for Trireme — $20 million, or (as The Wall Street Journal reported Friday), around 10 percent of the total of $250 million in venture funding that the aerospace giant had scattered around 29 similar start-up companies and funds.

The next day the FT and The Washington Post both reported that Perle had penned last summer (with another American Enterprise Institute fellow, Thomas Donnelly), an op-ed piece about Boeing in the Wall Street Journal – without disclosing his relationship with the company.

Perle and Donnelly endorsed Boeing’s bid for a controversial contract for the lease of 100 refueling tankers – a deal who generous terms were thought to be important the company’s long-term financial prosperity. “It takes a special government green-eyeshade mentality to miss the urgency of the tanker requirement,” they wrote.

It will take time to decide whether Perle broke any law by lobbying for Boeing. Probably not, for he held no decision-making position. It doesn’t take more than an instant to decide that, in failing to disclose his relationship to Wall Street Journal readers, he damaged the credibility of the editorial page and shattered his own, even though he was nearly certain to be exposed.

People do this sometimes. They go haywire, one way or another, often from some subconscious self-destructive urge. When caught, they ordinarily suffer the condemnation of the community of which they’re part.

Already Philip Condit has resigned as chairman of Boeing, having had to fire two senior executives accused of irregularities in the pursuit of the tanker deal (Boeing hired the Air Force official who negotiated the contract, which the Pentagon has put on hold) and force out a third. Condit’s departure, while was entirely appropriate, was also admirable. This was one of America’s premier companies, acknowledging that something had gone seriously wrong, vowing to change its conduct.

Perhaps next week the editorialists at The Wall Street Journal will explain to readers what happened and apologize to them as well; Perle will resign from the Defense Policy Board; the Pentagon will take in another symbolic tuck in the contract (which already has been scaled back to an $18 billion lease-buy deal from a $22 billion straight lease) and life will go on. The experiment is on-going. We will see what happens next.

(So painful apparently is the topic of the embarrassment of their editorial page to the editors of the newspaper that an otherwise excellent story Friday, “Boeing Investments Win Potent Friends,” following and extending the disclosures of The Financial Times, devoted a meaty final paragraph to the August op-ed piece, but didn’t mention the crucial omission of Perle’s business relationship with the company. Readers learned of it instead on the front page of that day’s FT and in the business section of the Washington Post!)

But even if he is swiftly dismissed, Perle’s conduct has the potential to become a metaphor of sorts for what the Democrats assert is going on in Washington. Granted, it is just one instance; but that instance is now nailed down. Big companies don’t disrupt their succession lightly. America’s leading aerospace firm has been seriously damaged by a corrupt Air Force official and a predatory influence peddler.

Perhaps in George W. Bush’s Washington, things are seriously out of control. At least in this case, a fundamental respect for truth has gone by the board.

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