By Jake Rossen
By Jesse Marx
By Michelle LeBow
By Alleen Brown
By Maggie LaMaack
By CP Staff
By Jesse Marx
The Friends of Tim are right when they claim that their actions are garden-variety stuff. The real outrage is the political culture in which they are garden-variety stuff. Friends-gate is one of the better glimpses we have had of the workaday connections between business and politics--the fruits of what Pawlenty calls "networking"--since former Senator Bob Packwood's diaries were pried loose by congressional subpoena in 1995.
Everywhere you look in this saga you see friends helping friends--which is to say, insiders helping themselves, and with nothing resembling the openness and probity they expect commoners to display in their daily affairs. The Pawlenty crowd, after all, consists of legendarily tough-minded, fiscally responsible, pay-as-you- go people, avatars of the philosophy of government that says a man never stands so tall as when he stoops to collect co-payments from a single mother. There are no safety nets in Pawlenty's ideal world, except for the ones that people of goodwill and means construct for each other on an informal and largely surreptitious basis.
And while we are on the subject of rectitude and hypocrisy, a few words about the FOT's chosen industry. Elam Baer, the telecom entrepreneur at the center of it all, told reporters that he entered the field because it represented a "great business opportunity." What sort of opportunity, exactly?
Small outfits like the NewTel companies are purely marketing operations. They buy long-distance capacity (time on phone lines, that is) from large carriers and scramble to resell it to consumers, the theory being that their low overhead costs then allow them to undercut the big guys' rates and thrive through the open market. In practice, though, the telecom business is full of small-time, often transient operators with the same idea. The resulting competitive climate is one in which the surest way to get ahead fast is to hustle customers through some version of the technique known as slamming, which involves the use of telemarketers to switch consumer accounts to your service with deceptively obtained consent or none at all. Originally it was the big companies, not the little ones, that pioneered the practice, but now it is most notoriously the province of the minor players. As Pawlenty partisans have pointed out, a great many small telecoms have complaint records as bad or worse.
This is the business culture into which Pawlenty and his circle happily waded, and in a certain sense they did thrive there. Carlene Hughes, a Washington state utilities investigator, told the Pi-Press: "New Access seems to be good at slamming and seems to be good at doing it for a long time--and then moving on when the states catch up with them." Another company that Baer co-founded with Vicki Grunseth, QAI, was the subject of similar claims. Following the early 1997 raid by Wisconsin officials of a firm connected to QAI, state investigators wrote, "Clearly, a pattern of misrepresentations and deception is being used by QAI Inc. to induce prospective customers into ordering their service." Later that year Baer and Grunseth sold out their interest in QAI, and subsequently launched NewTel.
Fast forward. The brightest star in this little constellation runs for governor in 2002 with financial assistance from one of the others. This seeming campaign contribution--and why not think of it as such? the governor reasserted through a flack in last Saturday's Pi-Press that he would not release evidence of any actual work he did for the money--goes undisclosed until other details surface regarding Tim Pawlenty's connections to Elam Baer.
Pawlenty wins the election and appoints a man recommended by Baer, a US Bank mortgage executive named Glenn Wilson, to head the Commerce Department. Wilson in turn hires another FOT, gubernatorial campaign manager Tim Commers, whose résumé includes marketing directorship of the oft-criticized QAI and an episode in which he was sued for allegedly running a telemarketing operation that misrepresented his anti-abortion group as another, better known one. When this old news comes to light, Commers resigns, adding that he has never done a single improper thing. "Why should I put myself through this when I can go back to the private sector?" he demands. Indeed.
But mostly the Friends of Tim prosper. Pat Awada, who owned the verifications company charged with making sure New Access didn't engage in slamming, moves on to greater things as well. Her membership in the Pawlenty circle helps her gain the Republican nomination for state auditor. She sells her company to one of NewTel's co-founders, David Buss, and gets paid partly in NewTel stock. Because she now occupies the auditor post and is charged with keeping an eye on state finances, she is the most shrill of the FOT after the story breaks, even going so far as to claim a success rate of 99.9 percent in her New Access endeavors.
I think it's fairly safe to call this ridiculous on its face. In consumer affairs, especially those involving the murky world of telemarketing, typically only a small fraction of the wronged even know where to turn to complain, and a smaller fraction still actually bothers. If the ranks of the offended were as minuscule as Awada contends, then in all likelihood there would have been few, if any, complaints against NewTel. Second, since the telecom industry regularly depends on predatory marketing that, at best, plays fast and loose with the law, what do you suppose would become of a small-time verifications company that actually did its job that well? Please.
There is no facet of all this that doesn't stink. Also none that really violates the evolving norms of Banana Republican governance--a phenomenon hardly restricted to Republicans, we should note, though they do own most of the playing field now.