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Bill Daley's Seediest Exploit

[Guest post by James Downie]

Most of the media attention on Bill Daley’s corporate ties has focused on his time as a JP Morgan executive, but his record at his prior job, as president of SBC Communications, is perhaps more worrisome. Hired as the company’s president in late 2001, after chairing Al Gore’s presidential campaign, Daley told The New York Times, “[P]olitics is not something I will be involved in other than as a citizen voting.” But as the trade journal Telephony wrote:

The Bell company has lousy relationships with many state regulators and little Democratic support in Congress. Hiring former Commerce Secretary William Daley as its new president is expected to solve both problems. ... A political heavyweight, Daley is expected to wield his considerable influence on both state and national levels to garner the long-distance and broadband relief SBC has been seeking. ...
According to Scott Cleland, president of The Precursor Group, SBC has scored a coup by hiring Daley. ... “SBC has a regulatory minefield to traverse, and they need the best around to do it,” Cleland said. “They got him.” ...
Daley is well respected on both sides of Capitol Hill, said Simon Reeves, analyst for Pacific Crest Securities. “Because of his stature, SBC will be able to get access to people they might not otherwise,” Reeves said. “He will hold more sway than SBC’s existing lobbyists. Daley is another arrow in their quiver.” Being a Democrat doesn’t hurt, either. SBC is considered a Republican company led by a CEO who is close to President Bush, according to [former Illinois Commerce Commission chairman Terry] Barnich. “They need to shore up Democratic support in Congress, and Daley will help them do that.”

In Daley, SBC got the political clout it was looking for. Daley’s first assignment was to lobby Capitol Hill to pass the Tauzin-Dingell bill, which would have strengthened local phone companies’ monopolies. His biggest victory, not surprisingly, came in Illinois, where, according to Crain’s Chicago Business, Daley was SBC’s “chief lobbyist” on a bill that would let the company “start charging its rivals nearly twice as much” for using its network. (Daley has long maintained that he’s never been a lobbyist.) The measure was opposed by Democratic politicians locally (including the Democratic lieutenant governor and attorney general) and nationally: John Conyers labeled the bill “a national embarrassment. The Democratic Party is supposed to stand for consumers.” Yet SBC’s Daley-led lobbying, which included $200,000 in contributions to then-governor Rod Blagojevich’s campaign and inauguration committees, led to Blagojevich signing the bill into law just four days after it was first introduced in the state legislature. Crain’s called the speed “unheard of for non-emergency legislation. … Illinois consumers and small businesses will again be at the mercy of a local phone service monopoly.”

In fact, the bill was so anti-consumer that a federal judge blocked the rate-hike less than a month later. Many Democrats in the state legislature had gone along with Blagojevich, thoroughly cowed by Daley’s power. One of the few Dems to oppose Daley’s lobbying publicly was a young state senator, who explained his opposition by saying, “Ramrodding bills through because you’ve got the clout to do so—rather than because you’ve got arguments on your side—is not a good way to do the people’s business.” The state senator’s name? Barack Obama.