Secrets and lies

Why Telegate matters

So over a 14-month period, while Pawlenty was a sitting legislator and active candidate for governor, he was paid by a company with significant interest in legislative and regulatory policies--and no one but his close political allies knew about it. And he can't say with any specificity what he did for his pay.

Pawlenty's advocates have defended his use of BAMCO to collect consulting fees as standard business practice, not a calculated deception. He incorporated, the logic goes, as a hedge against personal liability. Yet, he still could have been upfront about the business relationships whether they were listed in public documents or not.

Until the Pioneer Press broke the story, Pawlenty apparently took pains to avoid any mention of his involvement in the telecom industry. As the Associated Press reported, Pawlenty called last summer for a "telecommunications summit" to bring together industry execs, explaining that "the telecom industry is in meltdown mode." At the time, he was on retainer at Access Anywhere and still an investor, though no longer a board member, at NewTel. But despite Pawlenty's well-known habit of touting his involvement with other business enterprises (such as the tech company WIZMO), he made no reference to his own links to an industry that he was openly seeking to assist. Neither did the legislature's most scrupulous recuser ever tip his hand to the ties by opting out of a telecom vote.

Always known as a conscientious discloser of his personal ties, legislator Pawlenty never saw fit to mention NewTel--or to recuse himself from telecom votes.
Always known as a conscientious discloser of his personal ties, legislator Pawlenty never saw fit to mention NewTel--or to recuse himself from telecom votes.

Why the tight lips? Perhaps because the telecom industry was already mired in scandal. Admitting to extensive involvement in it could have proven a political liability, especially with damning news about New Access already surfacing in other states.

Which raises another issue. Pawlenty has repeatedly asserted he was unaware that New Access had been implicated in the illegal practice known as slamming--the unauthorized switching of customers' long distance service. If he had known, he claims, he would have made inquiries.

There is probably no smoking gun to prove otherwise. But consider for a moment the defense that has been invoked most often by Pawlenty partisans: Sure, New Access--through its telemarketers--"slammed" customers. But in the telecom world, the argument goes, that's business as usual. (And it is. While regulators in Washington state described New Access's actions as particularly egregious, telecom companies large and small are routinely fined for slamming.)

Pawlenty's defenders thus want it both ways: Hell, everybody knows the industry regularly plays crooked--except Tim Pawlenty. Like Claude Rains in Casablanca, he is shocked. Shocked!

 

The most striking and convoluted aspect of Telegate is the staggering number of telecom-related ventures in which Pawlenty and his cabal of GOP insiders were involved, from the third-party verification business (State Auditor Pat Awada) to telemarketing (former campaign manager Timothy Commers) to long distance service (Pawlenty; Victoria Grunseth, Pawlenty's appointee to head up the Metropolitan Airports Commission; and Elam Baer).

Why the attraction? The most obvious explanation: There was a pile of money to be made in a recently, albeit only partially deregulated industry. And who is better situated to understand and exploit the details of that deregulation than a gaggle of politically connected folks with inside knowledge of the workings of government? Second, as political operators, Pawlenty et al. already knew a thing or two about telemarketing. (And make no mistake, "telecom" as practiced here is essentially one big telemarketing operation.) So the telecom business may have seemed a particularly natural fit to them.

For whatever reason, many Pawlentyites' first responses to the scandal were almost nonchalant. Then, as the controversy and headlines built, Pawlenty's defenders (particularly those on talk radio) sought to cast suspicion on the original Pi-Press story by insinuating that it was planted at the behest of Attorney General Mike Hatch, who, the theory went, was seeking an early leg up in the 2006 gubernatorial race. A less popular theory had it that Arne Carlson, still at odds with the old Jon Grunseth-cum-Pawlenty wing of the party, got wind up of the arrangement and leaked it.

Hank Shaw, one of the reporters who broke the story, denies that it came as "a tip from anyone." Neither he nor fellow reporter Rick Linsk were willing to provide much in the way of details. But Shaw did say the piece was "an outgrowth of the American Bankers story." Another intriguing Pawlenty Administration yarn, that story focused on claims that Pawlenty's Commerce Department settled on the cheap with a Florida credit insurance company accused of making illegal sales as payback for a $15,000 campaign contribution.

But how the story arose in the first place is just a curious footnote for historians. What matters about Telegate has little to do with Mike Hatch or Arne Carlson, and a lot to do with the incestuous relationship of the business culture to what used to be called the public sphere. Pawlenty and friends are giving us a glimpse of how fluid and intimate the connections between the two really are--and how well they are usually hidden from public view.

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