WASHINGTON – Washington is dotted with couples who pair a lawmaker and a lobbyist or a lawmaker and a board member.
For instance, Jackie Clegg, wife of Sen. Chris Dodd, D-Conn., is on the boards of Blockbuster, the Chicago Board of Trade and two pharmaceutical firms. Ruth Raduenez, wife of Sen. Tom Harkin, D-Iowa, serves on the boards of Conoco Phillips, United Technologies and Bowater. Joan Levy, wife of Sen. Arlen Specter, R-Pa., serves on Bancorp’s board. Sharon Percy Rockefeller, wife of Sen. Jay Rockefeller, D-W.Va., is on the board of PepsiCo.
“People put people on boards for a lot of different purposes,” said Diane Denis, senior associate dean at Purdue University’s business school. “Certainly one such thing would be connections.”
The spouse of a senator “could be a very valuable contact” for a corporate board, said Warran Batts, a University of Chicago adjunct professor of business and a retired corporate executive who has served on the boards of several major businesses.
But “there’s almost an inherent conflict of interest there, so the board and the individual need to police that relationship very carefully,” he said. “A lot of spouses are just as bright; one is just as competent as the other. They shouldn’t be penalized. But on the other hand, their position shouldn’t have the appearance of opening up doors that shouldn’t be opened up.”
The Senate does not prohibit lawmakers’ spouses from sitting on corporate boards, but its ethics manual cautions, “A senator’s spouse’s lobbying on behalf of a corporation on whose board the spouse served, might, under certain circumstances, reflect adversely upon the Senate as an institution.”
The wife of a senator resigned from a corporate board in 2005 to avoid potential conflicts with her husband’s assignment in the Senate.
Susan Allen, wife of Sen. George Allen, R-Va., resigned from the board of Virginia’s biggest utility after her husband was appointed to the Committee on Energy and Natural Resources, which oversees the energy industry.
George Allen told the Richmond (Va.) Times-Dispatch that his wife had maintained “from the very beginning” that if he was appointed to the energy panel, she would resign from the board of Dominion Resources Inc.
The Senate’s rules changed as the roles of women evolved.
“In the past, the major issue with spouses was nepotism,” said Don Ritchie, associate historian of the Senate. “Back in the days when Harry Truman was a senator and John Nance Garner was speaker of the House, their wives often worked in their offices, to supplement their incomes and keep an eye on their husbands. Sons also clerked for committees chaired by their fathers.
“After World War II, nepotism rules prohibited this kind of employment, so those spouses who wanted to work looked outside the Senate. For many years this kind of work was usually back in the home state or selling real estate or organizing functions and tours in the capital. Slowly, spouses began lobbying, and that prompted revision of the ethics rules,” he said.
In a 2003 update of the manual, the Senate Ethics Committee reminded lawmakers (whom it refers to as “Members”) that “given the heightened public interest in the professional activities of spouses of Members, the committee hopes that spouses, as well as Members, will conduct their professional and business activities so as not to reflect adversely upon the Senate as an institution.”
Congress has adopted legislation to prohibit Senate staff members from having any contact with any senator’s lobbyist-spouse. The bill makes no reference to lawmaker’s spouses who serve on corporate boards.
Sen. Evan Bayh, D-Ind., said he adopted even stricter rules that prohibit contact between his staff and representatives of his wife’s business interests. He said the couple observe that wall in their domestic conversations, which mostly revolve around their family and – sometimes – politics.
None of the corporations that added Susan Bayh to their boards has informed its stockholders that she is married to a senator who deals with issues that would affect the business’s bottom line.
For instance, when Dyax named Bayh to the board in 2003, it issued a statement describing her as “a Washington, D.C. based attorney with significant experience in legal and regulatory affairs” but did not identify her husband as the two-term senator from Indiana.
In proxy statements that are sent to shareholders before annual meetings, corporations must provide some background on nominees and current board members. Corporations do not typically list the family connections of a person nominated to be a director.
The one-paragraph WellPoint description of Bayh’s qualifications in its April mailing to shareholders is almost identical to the background information all the boards she sits on provide to their shareholders:
“Susan B. Bayh, age 47, has been a director of the Company since 2001 and a director of Anthem Insurance from 1998 to May 2003. Ms. Bayh was a Distinguished Visiting Professor in the College of Business Administration at Butler University from 1994 until 2004. She was a member of the International Joint Commission between the United States and Canada from 1994 to 2001. Ms. Bayh is a director of Dendreon Corporation (biotechnology), Curis, Inc. (biomedical), Emmis Communications Corporation (telecommunications), Nastech Pharmaceutical Company Inc. (biopharmaceutical company) and Dyax Corporation (biopharmaceutical company).”
But the fact that the brief bio on WellPoint’s mailed information to shareholders doesn’t mention Bayh’s husband’s job should not ring alarm bells, said Peter Gleason, chief operating officer and director of research at the National Association of Boards of Directors.
“It’s not an issue if that’s not why she’s there,” he said.
Gleason said non-profit agencies often seek directors with connections – particularly to money – but for publicly traded corporations, “it tends to be the skills set and background you bring.”
Bayh said his wife is an accomplished lawyer, having worked for prestigious law firms in California and Indianapolis. Susan Bayh declined to be interviewed about her corporate work.
Bayh described his wife’s professional career has having sometimes been thwarted by his political activities. For instance, he said, Susan Bayh had to change her practice area of corporate and security law when he became Indiana’s secretary of state and oversaw the state’s private securities industry. He said his wife then switched her specialty to utility law, which she had to give up when Bayh became governor.
Asked why the couple didn’t decide to ensure that questions of possible conflicts could never be raised, Bayh said, “The only way to avoid that would be to ask my wife to have no career.”
No matter what kind of law Susan Bayh would practice, he said, it would raise the same kind of questions.
“It’s sort of an avoidable part of being in the year 2007 with two-career couples. In my case, I just don’t think it would be fair to ask her to give up her career,” he said. “We tried to set up a system that can answer those questions, and I think that it does.”