In his current job as head of Texas A&M University, Robert Gates spent significant time working in his other role as Chair of the Fidelity Funds. He also found the energy to serve on several other corporate boards. As a public servant, he will have to give up his over $1 million a year combined compensation. In addition his stock ownership from SEC filing amounts to another cool million. Something will happen to his significant financial holdings. Let’s hope they are handled more ethically than our recent spate of “rolled models”.
While the Aggies allowed Mr. Gates to work less than full time, the Bush administration likely will not. How will his corporate loyalties follow him into his new job? How might Fidelity, NACCO Industries, Parker Drilling, Brinker International, TRW Inc., LucasVarsity PLC and Draper Labs benefit from their ex-director’s new position?
NACCO is the largest provider of small appliances in North America. Their divisions include Hamilton Beach/Proctor-Silex and The Kitchen Collection. Under Mr. Gates term as board member they shifted virtually all of their manufacturing to China. Their last remaining U.S. plant in North Carolina is slated for closure this year. Will soldiers be decorated with medals and a ToastStation? Will he contract out portions of our military to China?
Brinker International owns a number of well known restaurant chains, Chili’s, On the Border and Macaroni Grill. As the Pentagon allows popular franchises in Afghanistan, Iraq and Kuwait, will Chili’s famous fajitas, On the Borders’ Magaritas and Macaroni Grill’s Tuscan bread soon be served in our current theaters of operation?
Where do Parker Drilling’s clients wish to explore next? Is some banana republic leader preventing their capitalistic right to drill, take most of the country’s oil and gas, and expatriate the booty back to the United States? Their website states “Parker’s expertise extends to every region of the world—from the U.S. Gulf of Mexico to the jungles of Papua New Guinea and the mountains, seas and deserts in between.” Does anyone with large amounts of oil and gas need to be pushed aside for America to get “its oil”?
NACCO Industries also owns North American Coal. They operate six lignite coal mines in the U.S. Their vision is “to be the leading low cost miner of lignite coal used in power generation and coal gasification and liquefaction plants.” Does the Pentagon operate any power plants for its domestic and foreign military bases? Will any of these shift over to lignite coal, coal gasification or liquefaction? If so, what will be Mr. Gates role and how might NACCO benefit thus increasing the value of Robert’s holdings in the company, now worth $475,000?
How might The Fidelity Funds benefit? Will more soldiers pick Fidelity investments for the self funded portion of their retirement? Will they hear of good investments from their ex-Board Chair, now Pentagon Chief (as Fidelity owns 6.6 million shares of Parker Drilling)? Will Robert pull a Tom Frist, Jr. suggesting “a smart man would buy this stock” before a significant event or contract award?
So far no elected officials have asked these questions. Democrats and Republicans are falling over themselves to endorse Mr. Gates. I'm not suggesting his confirmation be scuttled, but a greater depth of inquiry seems warranted. The proof will be seen over time as Mr. Gates chooses to help our country or help his friends. Doing both simultaneously seems to be mutually exclusive. From Medicare Part D to the Iraq Coalition Provisional Authority to the Hurricane Katrina recovery, President Bush has shown this to be true.
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