The Real Matt Walsh

I don't usually equate sports with real news--it's entertainment, like movies and rock concerts, and hardly equates to issues like war, the economy, and natural disasters. Nevertheless, we don't like learning that our pop stars are lip--synching, and we certainly don’t like finding out that our sports heroes are cheaters.

I have been deeply involved in Patriot "Spygate" affair because Matt has been my client--I was asked to help navigate the media circus by his attorney, Michael Levy, a close friend with whom I have worked on a number of issues. I have done other sports scandals--Tim Montgomery was a client--and I generally don't care for this line of work. First, they don't pay very well; and second, dealing with sports reporters is not like dealing with other journalists. For them, access is everything. So writing investigative stories about the NFL or their hometown sports team means they will be shut out of access in the future.

Perhaps more importantly, sports is big business more than anything else, and the teams and the leagues go to great lengths to protect their business. Being open and forthcoming is simply not in their interest. Hence, the NFL and Goodell really are not investigative entities--their goal is to protect their business interests.

I have watched the Matt Walsh story develop over the past six months from the inside, and sat in on the two interviews that Matt has given to the New York times and HBO, both on Wednesday of this week. So based on my front-row view of the Spygate scandal, a few points need to be made:

1) Matt is not out for vengeance, has no ill will against the Patriots, and tried his best to stay out of this scandal. He only told what he knew, with no spin, and left it to others to draw conclusions. He was asked repeatedly by Andrea Kramer of HBO if he thought the league had punished the Patriots enough, if their three Super Bowl victories should be questioned, and if their significance should be diminished. This, of course, would have been a great sound bite to close the broadcast, and Andrea skillfully tried numerous times to get him to say something definitive. He would not do it. He loves the Patriots and believes strongly in their victories.

2) Matt has only talked about what he knows personally or what was directly told to him by players and coaches. The Patriots in their statement yesterday attempted to discredit Matt by questioning how a video guy could ever understand what coaches and players know, stating: "For him to attempt to speak with any authority on the process of coaching, play calling, or the decisions made by offensive or defensive coordinators is an embarrassment." I never have heard Matt, either in the interviews to the New York Times and HBO, or to me personally, attempt to speak authoritatively on coaching or play calling. He simply was repeating what he had been told, and he did so in an honest and forthright way, never going further than what he personally was involved in.

3) Roger Goodell's performance at his press conference begged the question of whether taping and decoding the opponent's defensive signals was of any real value to the patriots. If the taping is of such little consequence, then a) Why is it against the rules in the first place? b) Why did Goodell destroy the initial tapes immediately after reviewing them (he said because of the value to other teams if they got them)? and, c) Why did the Patriots not only go to such great efforts to conceal what they were doing but also continue doing it for seven years?

4) There is a real question about whether the punishment handed down by the NFL serves as any real deterrence. A $750,000 fine and the forfeit of an inconsequential draft pick in exchange for knowing the opponents offensive plays ahead of time--and the chance to win a hat trick of Super Bowls--is a very low cost of doing business. In contrast, sprinter Marion Jones' teammates, presumably innocent bystanders, lost their Olympic Medals after she admitted to using steroids.

Yes, I recognize that any NFL defense still needs to stop the other team's offense to win the game, but anyone who doesn't think having the other team's defensive signals isn't a huge advantage needs to read the quote in today's Washington Post [Some Are Fuzzy on Taping's Benefits -- washingtonpost.com] by an unnamed current NFL coach, who contends: "Are you kidding? It's huge. If I know what the defense is going to do on every play, I'll score 35 points a game, too." I wonder if Goodell interviewed that coach as part of his "investigation?"

Matt is a good guy who got swept up in something that he never wanted to be anywhere near. Don't blame the messenger.

Politics-- Venezuela-style

What happens when you are a successful financial services entrepreneur in a country with a socialist government and a well-entrenched banking oligarchy? Well, if your name is Eligio Cedeno, and you have built a successful bank in Venezuela, you are in deep trouble. Eligio has spent the past year in jail on what can only be called a trumped-up charged, his constitutional rights repeatedly ignored, and his hearing to determine his status once again delayed indefinitely. (Full disclosure Eligio's company has hired me and Qorvis to help with some U.S. issues. I have never met Eligio, but have worked with his American colleagues).

I won't bother to go into the details of his initial arrest. It has to do with charges that he somehow illegally acted to bring American dollars into Venezuela. Suffice it to say the following: Cedeno has been denied his right to an impartial trial, right to reasonable bail, right to seek medical treatment, and right to present evidence in his defense. By every measure of fairness, the charges sure seem to be politically motivated and the Venezuelan Attorney General's case against Cedeno lacks any meaningful evidence necessary to uphold the charges before an impartial court. The case has been deferred indefinitely and a new date for the hearing has yet to be set.

How did Eligio get into this mess? My guess was that he was just too successful, so the existing powers in the banking industry teamed up with the Chavez government to take him down. Now, that is rank speculation on my part, but consider that as he has been languishing in jail, he was strong-armed into selling his bank at a severe discount. I guess when you are locked up you don't have much bargaining power.lies.

Here are the thoughts of Eligio's U.S.-based attorney, Victor Cerda: "The complete disregard for due process in the Venezuelan judicial system is appalling. More appalling is the fact that the Venezuelan prosecutors continue to hide from their own judicial system and the truth surrounding the baseless charges. It is time for the Venezuelan Governnment to set a trial date that will be respected and to put an end to Mr. Cedeno's persecution. Mr. Cedeno has cooperated with the Venezuelan legal system and remains steadfast in his desire to face his accusers and prove his innocence."

And the beat goes on.

Mark Penn and the Clintons

I try not to post about my former employers or talk about partisan politics in Damage Control 101-- and I will probably get myself in trouble for this one. But I have to put my two cents in with the news this evening that Mark Penn is abandoning his leadership role on the Clinton campaign (please note that his polling firm is not giving up its lucrative role).

I have never thought that Mark Penn had very good political instincts, and I think that has been proven one more time during this campaign. The hubris that he could effectively be lead campaign strategist while running a PR agency the size and scope of Burson-Marstellar is mind boggling.

I do not know him well, but we did work together during my years in the Clinton White House, and my experience with him is, I think, instructive. It was my view that he totally misread the realities of the Republican members of the House of Representatives, and as a result the political strategy employed during the Monica Lewinsky debacle was totally ineffective, resulting in the House impeachment vote.

Mark would argue almost on a daily basis that despite the movement towards impeachment in the House, his polling was showing that President Clinton's approval ratings were high and getting higher as the Republicans pressed their campaign. Thus, keep playing off the national approval ratings, and the House Republicans would never have the nerve to go ahead with impeachment.

That is good and fine on a national level, but Republican House members aren't elected or beholden to the general public on a national level. They only have to worry about their Republican-leaning districts, where support for impeachment and against the President was closer to what Gingrich, Delay, and their soldiers were pushing.

I knew from first-hand experience. As one of the main staff managers for the Democrats after the Republicans took back the House following the 1994 mid-term elections, we forced those Republican members to take awful votes on their Contract for American legislation. These included forcing them to vote on amendments that would exempt from their priorities any provisions if they threatened the health and safety of, for example, pregnant women and their unborn children. The amendments we drafted and forced them to vote on week after week were designed to push the limits of their loyalty to the Republican leadership, who would tolerate no dissension in the ranks. We wanted to set up votes that would hopefully split at least the more vulnerable members from their conference.

We were unsuccessful, no mater how ugly and indefensible the provisions we crafted. They would march down to the well in lockstep and vote against these exemptions, under threat of punishment by the House Republican leadership. Having witnessed this up close and personal, I know that Penn's strategy was destined to fail.

Instead, some of us argued, we had to go into the vulnerable districts and find allies of those Republicans who would make the case against voting to impeach. This was never done in any meaningful way, in part because the powers-that-be were listening to Penn and his polls.

This is the same sort of tone-deaf strategy that Penn has brought to the Clinton campaign. What I cannot explain, and what is more troubling to me about the campaign, is the blind loyalty that the Clintons have for Penn and other long-time loyalists that they have brought into the campaign. Isn't this the exact kind of circle-the-wagons approach that has gotten them into trouble from the beginning of their run in national politics?

The Anatomy of a Smear

Solid reputations take years to be won, but they can be lost virtually overnight. The political landscape is littered with the (figurative) bodies of those who have been implicated but later exonerated in scandal. The same is true in Africa as it is here in the States. And this is precisely what happened to former Nigerian Vice President Atiku Abubakar, who is seeking his nation's presidency (full disclosure: Atiku's Washington-based attorney is a client, and I have provided counsel on his issues. Two of my colleagues have met directly with the Vice President). Mr. Abubakar was implicated in the bribery scandal that led to the indictment of Rep. William Jefferson (D-LA), but on close examination of the evidence it turns out, well, there is no evidence that he was involved at all.

I write about Atiku because he is what should be the model for the United States in choosing allies in difficult parts of the globe. Nigeria is economically vital to this country given its oil resources; yet it is struggling to balance a sizeable Islamic population with the need to be on good terms with the West. Atiku, a Muslim himself, is a friend to the United States, and wants our countries to be friends, too.

A successful businessman-turned-politician, Atiku fought recent corruption in his government, standing against attempts by former President Olusegun Obasanjo to alter Nigeria's constitutionally-mandated term-limits. Although this was an act of political self-sacrifice, putting himself in the crosshairs of President Obasanjo and his supporters, Mr. Abubakar felt it was his duty. His reputation, however, suffered. He ended up a scapegoat for allegations originally aimed at President Obasanjo and others.

According to news reports, United States Congressman William Jefferson allegedly accepted at least $100,000 in bribes to build a relationship between a company employing his former chief of staff and a firm called iGate, which supposedly had the opportunity to provide IT support to Nigeria's government-owned phone company. When Rep. Jefferson learned that Mr. Abubakar would be visiting the U.S., he began mentioning Mr. Abubakar's name to create an appearance of progress and to suggest her had more influence than he actually did.

While Rep. Jefferson's trial is forthcoming, Atiku's name has been smeared, unnecessarily, in the international press. Mr. Abubakar never solicited nor accepted bribes from Rep. Jefferson or his associates. And this is clearly demonstrated by a review of the publicly-available affidavits in the case, which reveal that Rep. Jefferson's statements about him were simply part of an attempt to get more money out of his former chief of staff's employer:

Atiku had no connection to those involved in the bribery scandal, according to affidavits related to the case.

--During a December 2004 conversation with the woman who employed Brett Pfeffer, Rep. Jefferson's chief of staff, Rep. Jefferson told her that President Obasanjo, not Vice President Abubakar, was his point of contact with the Nigerian government.

--In August 2004, Rep. Jefferson introduced Pfeffer's employer, Lori Mody, to the president of the Nigerian company that would serve as iGate's local partner. At no time during the meeting did anyone mention a link between the local partner and Atiku.

--In a March 2005 conversation arranged at the direction of the FBI, Pfeffer met with Mody to attempt to restore the deteriorating iGate deal. In a detailed conversation about how the deal would unfold, Atiku's name was never mentioned, nor were there any veiled references to him.

--In April 2005, Rep. Jefferson mentioned Atiku's name to Mody as a means of creating the notion of his own influence with the Nigerians. Rep. Jefferson told Mody that Atiku would arrive in Washington on May 1, 2005. Problem, was, that never happened. He never arrived in Washington.

--In June 2005, Rep. Jefferson had written a formal letter addressed to the Vice President through the Nigerian Embassy in Washington, DC. If Rep. Jefferson had a personal relationship with Vice President Abubakar, going to far as to discuss an illegal business deal involving millions of dollars with him, why the need for formal correspondence through the Embassy of all places?

--On May 4, 2005, after not hearing a response from Atiku to the formal letter he solicited or otherwise, Rep. Jefferson told Mody that there was no need to involve the Vice President in the deal.

--On May 12, 2005, Rep. Jefferson met Mody and discussed the need to motivate the president of iGate's Nigerian partner because "he's got a lot of folks to pay off." Atiku's name was not mentioned during the detailed conversation.

When the parties involved became aware that Nigeria was thinking of awarding the contract elsewhere, Rep. Jefferson attempted to extract some final money from Mody and used Atiku as the excuse.

--After long negotiations between Rep. Jefferson and Mody, Rep. Jefferson convinced Mody that he needed $100,000 to bribe the Vice President. The FBI, working with Mody to build a case, gave Mody $100,000 and recorded the serial numbers of the bills as part of basic procedure.

-- Rep. Jefferson received that money from Mody while Mr. Abubakar was in Washington. Rep. Jefferson knew Mr. Abubakar was leaving in a day or two and had plenty of time to deliver that money. Instead, after Mr. Abubakar had left the country, Rep. Jefferson lied, on tape, to Mody, saying he had delivered the cash.

--During an FBI raid of Rep. Jefferson's home, $90,000 of the bills given to him by Mody as the supposed "bribe" for Atiku were found in his freezer. An investigation revealed another $4,800 had been given to a female legislative aide. Eventually, all but a single $100 bill was accounted for. This is pretty compelling proof that Rep. Jefferson lied to Mody to get more money on the pretext of a bribe that he always intended on keeping for himself.

Ultimately, misperception and falsehoods have marred Atiku's reputation around the world, with very few examining the obvious facts of the case to see that there is no merit to any suggestion of his involvement. Where does someone like Atiku go to get his reputation back?

Sex and Politicians

It's hard to avoid writing about Spitzer (best potential New York Post headline, "Eliot-- Phone Ho", thanks to my partner Rich Masters). Having represented a president facing his own sex scandal, I can say from first-hand experience that damage control in these situations is extremely difficult. There were times that the crisis team was sitting around our offices in the White House wondering how many days before Clinton would resign-- and wondering how solid our relationship with the Vice President was-- just as Spitzer's team no doubt has been doing.

But I think there is one mistake that both Spitzer and Clinton have made once the scandal became public-- listening to their lawyers about how to protect their legal positions instead of talking to their constituents. I understand that they are both lawyers, and both were surrounded by attorneys advising them on how not to get indicted. But unlike executives in the private sector, governors and presidents have one responsibility first and forement, and that is to lead. That's why the tens of millions of voters elected them, and that has to remain their number one priority.

That means explaining their actions to their constituents, and not hiding behind legal walls. Even if the risk is of self-incrimination, in my humble opinion that is what they owe to the public. Putting their own self-interest over that of their constituents got them into trouble in the first place. Transparency, humility, compassion, and a way to move forward. That's what's called for, not legal maneuvering. Just my two cents from experience.

More thoughts on student loans

I got an interesting and difficult qustion in the form of a comment on my last student loan program posting: Can the private student loan program survive a Democratic Congress and a Democrat in the White House?

This is hardly an idle question. Both Obama and Clinton have made statements announcing their intent to abolish the FFELP if elected. And because the industry has been a significant giver to Republican candidates over the past dozen of so years and a meager giver to D's (in part responding to threats from the K Street project, and in part because of legitimate policy agreements), there is not much sympathy from the majority party on the Hill right now.

I strongly believe that the FFELP is extremely important and needs to be saved (please see my full disclosure in my previous post) for several reasons. First, I do not believe that acting as a lender is either an appropriate role for government agencies, or that they are particularly good at it. Think Veterans Administration, USDA, etc. Second, I also believe that competition which can only come with private lenders has brought valuable innovation and better services to universities and students. And third, I believe that universities only have leverage to demand better services and innovation when there is a competitive market, and if that is taken away, then so is any role that the schools have in demanding better programs.

Having said that, the FFELP and its private lenders are in trouble. Their traditional way of defending their program, relying on inside-the-beltway lobbyists and their friends on the Repbulican side of the isle, failed to even slow down this year's legislative cuts. If the FFELP community (it has many non-profit members, hence the term "community" rather than "industry") cannot enlist those most affected by the recent as well as future cuts to the program-- such as students and their parents and the schools and universities-- they will be in for tough times indeed.

I have recommended to the FFELP community that they take a broad-based campaign approach, educating and recruiting those who will be really hit hard by further program cuts to speak up to members of Congress before the next president is inaugurated. They need to start the campaign now, and it needs to be aggressive. Otherwise, they may not be around too much longer.