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Palin and McCain share a love of lobbyists

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John McCain hugs Alaska Gov. Sarah PalinYesterday I speculated that McCain picked Sarah Palin as his VP over the objections of his advisers. I thought that McCain -- who prides himself on fighting corruption in politics -- somehow saw himself in her. But both politicians have experience with the very thing they pride themselves on fighting.

In the case of McCain, his efforts to rid politics of the corrupting influence of corporate money followed his protection of Charles Keating who was securing a real estate deal for his wife, Cindy. The bankruptcy of Keating's S&L cost taxpayers $3.4 billion. More recently former McCain Finance Chair Tom Loeffler, a lobbyist for French company EADS, parent of Airbus, helped it and Northrop Grumman (NYSE: NOC) to prevail in a $35 billion competition for airborne refueling Tankers in February over Boeing Inc. (NYSE: BA) before the General Accounting Office (GAO) concluded that the process was flawed.

Alaska's governor, Sarah Palin, knows a thing or two about lobbyists. The New York Times reveals that she won that post after taking on bribery charges from the oil industry against politicians -- her attack against such corrupting influences helped her prevail over former Alaska governor, Frank Murkowski. That's why it came as a surprise to learn that as governor Palin employed a lobbyist for an energy company for which she procured $500 million in state subsidies so it could build a gas pipeline.

How so? According to the Times, Palin appointed as her chief adviser on the project to build a gas pipeline from Alaska's North Slope, a former lobbyist for TransCanada, the company that ultimately won state subsidies to build it. The adviser was Marty Rutherford, her deputy commissioner of natural resources, who in 2003 "earned about $40,000 lobbying the state government" for a subsidiary of the Canadian pipeline company. Palin is proud that the Alaska legislature this summer approved her plan to "give a $500 million subsidy to TransCanada to help build the project" according to the Times.

Like McCain who prides himself on fighting money in politics, Palin passed an increase in oil production taxes after charging that oil companies had previously bribed legislators to keep those taxes low. And she rose to power by challenging the corrupting role of oil and gas money in state politics. For example, the Times reports that she challenged Alaska's Republican Party chairman, "accusing him of abusing his role on a state oil and gas commission to do political work."

Was Rutherford's role in Palin's administration an example of the very intertwining of politics and money that she fought to gain the governor's office? And doesn't Loeffler's senior finance position in McCain's campaign while lobbying for Airbus suggest a similar abuse of power in pursuit of corporate interests?

It takes one to know one.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. Portfolio will publish his book about Boeing, You Can't Order Change: Lessons From Jim McNerney's Turnaround at Boeing, in December 2008. He has no financial interest in the securities mentioned.

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Last updated: November 10, 2009: 03:09 PM

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