Commentary: Commerce: Keep The Business, Lose The Sleaze

It was hard to miss the exquisite irony of it all: William M. Daley, scion of one of America's most political families and a lifelong resident of Chicago, the big-shouldered city where politics is a contact sport, promising during his Senate confirmation hearing on Jan. 22 that there will be "no place for politics" in his Commerce Dept.

That's like saying that from now on, there will be no place for the Chicago Bulls in basketball. The fact is, the Commerce job has always been one of the most political Cabinet appointments. Presidents Clinton, Bush, Reagan, and Nixon all chose their top fund-raisers or political pals for Commerce chiefs. Daley himself helped raise $13.5 million as co-chairman of the 1996 Democratic convention. Furthermore, the halls of the massive Commerce headquarters have been packed with up to 260 political appointees, a far higher percentage of political sinecures than any other Cabinet department.

TARGET. But the free and easy days may be over. The Republican Congress is warning Daley to watch his step. It's not just that the 32,000-person agency is under fire for harboring John Huang, central figure in the "Donorgate" foreign fund-raising scandal. Conservatives such as Senator Sam Brownback (R-Kan.), have targeted Commerce as the epicenter of "corporate welfare" because it hands out research grants to U.S. technology companies.

Republicans warn that unless Daley wants the department stripped down to a couple of weather satellites and the Census Bureau, he had better shun politics. One GOP suggestion is ridiculously partisan: deny Democratic campaign contributors a seat on any foreign trade mission led by the Commerce Secretary for at least six months after their last donation. That, of course, would shut down trade missions for all but Republican CEOs while impinging on the freedom of business to contribute.

There is a better way to build on the legacy of the late Ronald H. Brown--the Commerce chief who elevated trade missions to an art form--and minimize the explosive mixing of export promotion and political donations. Daley should limit trade missions to companies with export experience. Target countries that have been reluctant to open their markets, and load the Secretary's plane with highly competitive companies that have won significantly larger market share elsewhere. Include a variety of midsize and smaller companies to add entrepreneurial flavor, even if this violates rules one and two. And as Daley himself offered, make the selection process "as fair and transparent" as possible.

Drawing up the new rules will be Daley's first big test as Secretary. It may also be his most important challenge. Brown's infusion of money politics into export promotion created scandal. Still, the U.S. needs to stay in the game. "Marketing by government and private partnerships is now being done by everyone, and this is no time to be getting out of that business," says National Association of Manufacturers President Jerry Jasinowski.

FIRINGS. Daley has wisely moved to counter some of the GOP criticism by promising to cashier 100 political appointees and to declare a 30-day moratorium on trade junkets while the new guidelines are written. Meanwhile, he still has some backing for an activist agenda. "As we move from the cold war to the trade wars, some want to get rid of the new Pentagon, which is you," a supportive Senator Ernest F. Hollings (D-S.C.) told Daley during the confirmation hearings.

Trade missions under Presidents from both parties have been important and successful exercises in global salesmanship. Republicans might recall that George Bush took the Big Three auto makers to Tokyo in 1992--and came back with a significant agreement on the sale of U.S. car parts in Japan.

No doubt the GOP leadership will be scanning every passenger manifest for the proper political diversity. That's appropriate. But in an era when governments can contribute as much to an industry's comparative advantage as can technology, this is no time to be hamstringing business by tossing out trade policy with the politics.

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