Eroding Public Trust: Obama and General Electric’s “Appearance of Impropriety”

The fact that an official act appears to be sensible and fair does not necessarily mean that it is ethical.

Consider the EPA’s waiver of the new global warming regulations for a stalled power plant project in California. Officials reviewed EPA policies and decided it was appropriate to “grandfather” projects such as the Avenal Power Center, a proposed 600-megawatt power plant in the San Joaquin Valley, and thus exempt them from new federal limits on greenhouse gases and conventional air pollution. The Avenal Energy project, explains Environment and Energy News, is a combined-cycle generating plant consisting of two natural gas-fired General Electric 7FA Gas Turbines with Heat Recovery Steam Generators (HRSG) and one General Electric Steam Turbine.

Translation: It is a huge G.E. contract.

Hmmmm. Just last month, the White House announced that General Electric CEO Jeff Immelt had accepted the President’s appointment as chairman of the President’s Council on Jobs and Competitiveness. This was an important move for Obama politically, as the charge that the Obama administration is pursuing anti-business policies in the middle of an employment crisis had hurt Democrats in the Fall elections, and involving Immelt, already a prominent Obama supporter, gave the President an avenue to make peace with the U.S. Chamber of Commerce and other private sector foes.

Now a large G.E. project receives the first major waiver of rules that Republicans and busienss leaders had condemned.

Coincidence or pay-off? Did Immelt demand the waiver as a condition of accepting the job? Suppose he did, but the E.P.A. was preparing to grant a waiver to Avenal anyway. Should the E.P.A. not grant a waiver it thinks is wise because it would seem like a quid pro quo deal in light of the Immelt appointment? Suppose President Obama knew that the waiver is planned, but told Immelt that he’ll have the waiver issued if Immelt accepted the job. Presumably this is unethical, because it is dishonest to Immelt; if he knew the waiver would be granted anyway, then he have might asked for something else. But if someone asks for a quid pro quo in exchange for a favor, and the quid pro quo is delivered as asked, isn’t it still a pay-off whether it would have occurred anyway or not?

These are not easy questions.

This is why U.S. government employees are required to “avoid the appearance of impropriety.” If Immelt’s presence in the Administration will make any government action favoring General Electric look like favoritism and mutual back-scratching; if it appears that Immelt’s company is getting special favors, then the American public’s trust in the impartiality, objectivity and trustworthiness of its government is damaged. In addition to this, other companies will conclude that this how the Obama Administration does business…and they may be correct. This prima facie corruption, and it is what the appearance of impropriety does.

Since the government cannot avoid making policies that affect General Electric, General Electric’s CEO should not have a role in the government. Think back on all the over-heated and grossly unfair accusations that Vice President Dick Cheney was wiring government contracts for Halliburton…and Cheney was just a former Haliburton C.E.O.  His was an appearance of impropriety that only appeared that way to people who already didn’t trust Cheney and who don’t understand how conflicts of interest usually work; there was no benefit to Cheney for serving the interests of his former employer to the detriment of his current sworn duties as Vice President.  Immelt, however, is a sitting CEO; he is obligated to work for G.E.’s interests, and maybe, just maybe, that’s why Avenal got the waiver. You don’t think so, Obama Faithful?

Try to prove it.

It creates the appearance of impropriety. If Immelt wants to be in the Obama Administration, he needs to quit his day job.


2 thoughts on “Eroding Public Trust: Obama and General Electric’s “Appearance of Impropriety”

  1. Pingback: The Appearance of Impropriety: Stricter Ethics, More Shenanigans | Pug Junk

  2. We in the Berkshires of Massachusetts have been fighting for decades to get GE to get its PCBs out of the Housatonic River. Much of the fight involves a back-and-forth battle between GE and EPA. Now Jeff Immelt is part of the Obama administration. Our regional EPA doesn’t stand a chance anymore.

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