Reason #29: The Well-Oiled Revolving Door

As a reward for his work for the drug industry, former congressman Billy Tauzin slid from the public to the private sector for $2 million a year. But many government officials go the other direction, from corporate boardrooms to government posts, and still do quite nicely for themselves - and their former employers.

Dick Cheney is probably the worst example. He went from government to industry and back to government again, but no matter where he hung his hat, he kept making money for his benefactors in the business world. As defense secretary during the first Bush Administration, Cheney helped a company called Halliburton get a massive contract to feed and house American soldiers deployed overseas. (The company still retains that contract and is making a killing thanks to the Iraq War.) Halliburton was so thrilled with Cheney’s gift, they named him CEO in 1995.

When he departed Halliburton to become Vice President in 2001, the company gave Cheney a tidy severance package, including generous stock options. At the time, the company’s stock was trading at around 13 bucks. But thanks to Cheney’s push for the invasion of Iraq and the billions in tax dollars Halliburton has earned because of it, the company’s stock has gone through the roof. One share now costs about $50. All told, Cheney has “earned” many millions of dollars during his time in the White House. Not bad for a government gig!

Unfortunately, Cheney is far from the only corporate mole in the halls of government. In 2007, Senator Diane Feinstein stepped down as chairwoman of the powerful Military Construction Appropriations Subcommittee after news came out that she’d been steering government contracts to her husband’s companies. And while Donald Rumsfeld was serving as Defense Secretary, the Pentagon stockpiled millions of doses of a flu treatment patented by Gilead Sciences, a biotech company he used to run. Like Cheney, Rumsfeld held onto stock from his former employer after he went back into government. And like Cheney, the shares for his old firm shot up while Rumsfeld was in public office - thanks to huge orders for Gilead products from the very agency he controlled.

Not-So-Blind Trusts

Many politicians take out so-called blind trusts to avoid the appearance of conflicts of interest like Rumsfeld’s flu treatment. Theoretically, these funds keep them from knowing how their money is invested. But there’s a huge loophole in the arrangement: they know their so-called “original holdings” - that is, the assets that went into the trust when it was first opened. Moreover, the trustees of the accounts inform them if they make any major transactions.

Think about it: if politicians know they own a certain stock when they open their trusts and their accountants never tell them it’s been sold, then they know they still own it. There’s nothing blind about that! Dick Cheney’s Halliburton stock options were in a supposedly blind trust. But they were part of his “original holdings” so he had to know the shares were still in his portfolio. That means every time Halliburton’s stock shot up thanks to his actions in office, he knew he was making himself a fortune.

NEXT: Reason #30: Presidential Payola - The (Brown and) Root of Halliburton’s Power