CEOs Questioning Obama Policies Put on Boards in `Co-Optation'

Last month, Verizon Communications Inc. Chairman Ivan Seidenberg accused the federal government of “injecting uncertainty into the marketplace.” Last week, he was named to a presidential panel on U.S. exports.

President Barack Obama is trying to embrace corporate executives, even while tension between the White House and business community rises, as he seeks to get companies to step up investment and spur the economy. For executives, joining White House panels offers an inside track to influence policy.

“Obama is employing an age-old strategy used by presidents that’s known as co-optation,” said Ross Baker, a political scientist at Rutgers University in New Brunswick, New Jersey. “You bring into the bosom of your administration outsiders who are either hostile or might become hostile and lock them in.”

White House councils include executives such as Jim Owens of Caterpillar Inc., Glenn Tilton of UAL Corp. and Alan Mulally of Ford Motor Co. While not hostile, all have raised concerns about policies ranging from taxes to trade to health care.

“Part of the president’s leadership style is not to simply surround himself with people who agree with him 100 percent,” senior adviser Valerie Jarrett said in an interview.

Obama last week announced the appointment of 18 members of the President’s Export Council to help reach a goal of doubling exports during the next five years to $3.1 trillion.

‘Host of Laws’

Among those chosen were Walt Disney Co. Chief Executive Officer Robert Iger, Pfizer Inc. Chairman and CEO Jeffrey Kindler, Mulally and Tilton. Boeing Co. CEO Jim McNerney was picked in March to be chairman.

The announcements came amid complaints from some U.S. executives about everything from new federal regulations to Obama’s criticism of banks and other industries.

“It is without question, the most hostile administration to business and to the role of business that we’ve had in decades,” Mort Zuckerman, chairman of Boston Properties Inc., said July 9 on MSNBC. Zuckerman, also publisher of the New York Daily News, was among a group of CEOs who had lunch with the president in January.

Obama rejected the idea he’s anti-business, saying in a speech that same day in Las Vegas that part of the government’s job is “to give an impetus to businesses to grow and expand.”

The Obama administration has asked business leaders to identify government regulations that leaders see as obstacles to investment in private job creation. It’s part of a continuing review of federal regulations that began during Obama’s transition to the White House, a spokeswoman said today.

White House ‘Open’

“We are open to the input from everyone including the business community as we continue to work together to balance our goal of providing rules of the road to protect the American people while fostering an environment that will stimulate growth and job creation,” said Jennifer Psaki, the spokeswoman. “We have also been clear that there are issues we will continue to disagree with some in the business community on, including the need for a set of new regulations for the financial industry.”

Obama has reached out to business executives in hosting frequent luncheons at the White House.

Seidenberg’s appointment was announced after a June 22 speech to the Economic Club of Washington in which he said “a host of laws, regulations and other policies” were hurting corporate innovation and investment.

“By reaching into virtually every sector of economic life, government is injecting uncertainty into the marketplace and making it harder to raise capital and create new businesses,” said Seidenberg, who’s also CEO of New York-based Verizon and heads the Business Roundtable, an executives’ group in Washington.

Business Support

Seidenberg said in a statement last week he’s “delighted to help in any way I can” in serving on the panel. “The president should be commended on his leadership, and we unconditionally support his effort on the export issue.”

Jarrett said the administration recognizes “the importance of certainty to the business community.”

She called Seidenberg and invited him and Business Roundtable President John Castellani to the White House for a June 30 meeting to discuss issues such as the tax code.

“Ivan said what he thought and the stakes are too high to allow a comment here or there to interfere with what’s best for the American people,” she said.

White House spokeswoman Jen Psaki said Seidenberg was first asked to join the export panel several months ago.

Memo to Orszag

Owens, chairman of Peoria, Illinois-based Caterpillar and a member of the president’s Economic Recovery Advisory Board, last month joined Seidenberg in sending a 49-page memo to White House Budget Director Peter Orszag listing legislation that has “a dampening effect on economic growth and job creation.”

Topping the list of topics were financial rules, including new rights for shareholders to nominate directors, trade and the health-care overhaul, according to the letter, written for the Business Roundtable and the Business Council, which Owens heads.

UAL Chairman and CEO Tilton, who the president named to his export council, has voiced opposition to a proposed cap on carbon emissions that Obama supports, telling the UK Aviation Club earlier this year “taxes rob the industry of the money needed to invest in new, cleaner technology.”

‘Critical Role’

In an e-mailed statement July 7, Tilton said he is participating in the export council because the industry will “play a critical role” in expanding exports.

Ford CEO and President Mulally backs the effort to forge a free-trade agreement with South Korea that Obama supports, although the executive is pressing to include provisions to help open the country’s market to automotive imports.

“We hope to use this perch to work closely with the government to expand the export of manufactured goods,” Steve Biegun, vice president for international government affairs at the Dearborn, Michigan-based automaker, said of Mulally’s membership on the panel.

Douglas Holtz-Eakin, a former adviser to Republican presidential candidate John McCain, said while Obama has brought executives “inside the tent,” he “goes right out demagoguing against CEOs and corporations and enacting a policy agenda with which they wholeheartedly disagree.”

To contact the reporters on this story: Kate Andersen Brower in Washington at kandersen7@bloomberg.net.

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