When four power traders from Pasadena, Calif., came to the state
capital several months ago to help keep the world's eighth-largest
economy from falling into the abyss of blackouts, portfolios never
came up. Perhaps they should have.
The traders were recently fired because they held stock in one of
the power companies that the state was buying from. As the
investigation widens, it points to a new truth in American
politics: Ethics standards once applied only to elected officials
are increasingly being applied to every public servant.
This scrutiny has risen, as Americans demand a higher level of
disclosure than ever before. Government reforms root out corruption
at deeper levels, even as the Web and 24-hour news stations offer
unprecedented access to information.
To some experts, it's an example of overzealous officiating, as
rabid political watchdogs chase off qualified would-be public
officials by forcing them to become financial eunuchs. To others,
though, such sacrifice is a crucial part of making sure every
aspect of government is trustworthy.
"What is new is the focus on ... people who were not elected,"
says David King of the John F. Kennedy School of Government at
Harvard University in Cambridge, Mass. "For a long time, they've
flown under the radar."
The issue of stocks and conflict of interest has been
particularly prominent during the past year. For one, President
George W. Bush's top adviser, Karl Rove, has been criticized twice
for meeting with representatives of industries in which he has
major financial holdings. Also, Secretary of Defense Donald
Rumsfeld has had to ask for two 90-day extensions to divest himself
of his stocks.
At the state level, concerns in California surrounding the
state's energy crunch have been the most prominent example. But
there are others:
* Late last year, more than a dozen state officials and
regulators in Minnesota came under fire for holding stocks in
companies with which they did business. The commissioner of health
had stock in an HMO, a medical-equipmentmaker, and two drugmakers.
* Wisconsin's appointed lieutenant governor, Margaret Farrow, was
criticized earlier this year for refusing to put her portfolio into
a blind trust - in which a trustee makes all investment decisions.
* Even in Georgia, where ethics laws are comparatively weak,
critics have attacked the state agriculture commissioner, who holds
stock in some firms he regulates. …