Businessweek Archives

Ron Brown Made Commerce. Now He May Break It


News: Analysis & Commentary: INVESTIGATIONS

RON BROWN MADE COMMERCE. NOW HE MAY BREAK IT

Ask any CEO. Ronald H. Brown will go down in history as one of the best Commerce Secretaries ever. He may also be the last--owing partly to a mushrooming probe of his finances. Almost single-handedly, the Commerce chief has transformed his agency from a backwater into a turbocharged export-promotion machine. But on May 17, Attorney General Janet Reno announced she would ask for an independent counsel to investigate Brown's tangled personal business dealings.

The news couldn't come at a worse time for Commerce, which is the target of a concerted attack by Republican budget hawks who want to kill the $4.2 billion-a-year agency outright. GOP motives don't end there. Republicans are envious of Brown's success in wooing business support for the Administration's policies on trade and technology investment. And Brown is a tempting target because he is a savvy Democratic operator--and close to Clinton.

DYNAMO. Brown's troubles, meanwhile, go beyond the Justice inquiry. On May 16, conservative and legal watchdog groups won a battle in U.S. District Court in Washington forcing the release of 30,000 documents relating to Brown's export-promotion efforts. The activists accuse Brown of using Commerce largesse to spur financial contributions to Democratic coffers from U.S. companies.

At Commerce, aides say they see the independent probe as a far better option than GOP-orchestrated hearings on Capitol Hill. Even so, it will be tough for the Commerce chief to defend his agency against mounting attacks.

Senior White House officials insist they want Brown to stick around. And President Clinton says he backs his Commerce Secretary. That's not surprising: A dynamo in a post that has long been a sinecure for party hacks, Brown has championed policies that have won accolades for Clinton from Big Business, traditionally a Republican stronghold. "They have done more for trade than any prior Administration," says Jerry R. Junkins, CEO of Texas Instruments Inc.

Brown's chief legacy has been beefed-up export promotion and support for advanced-technology development. He fought successfully to lift cold-war-era export controls on high-tech goods. And Brown created a high-powered advocacy team at Commerce to track juicy infrastructure and aerospace contracts in spots from Brazil to China. A seat aboard the Ron Brown Express, as his trade missions are called, has become the hottest ticket in Corporate America. And with persistence and charm, he has helped clinch multibillion-dollar deals for American business.

KEEN ON CUTS. Even so, executives are not rushing to Commerce's defense. They have bigger fish to fry. Their No.1 goal is cutting government spending so as to balance the federal budget by 2002. "The trade piece is dwarfed by the economic benefits of a balanced budget over the next seven years," says Willard A. Workman, head of international affairs at the U.S. Chamber of Commerce.

Besides, many execs, particularly those who have survived corporate downsizings, think a shakeup is just what the bloated Commerce Dept. needs. "Business reinvents itself every day. There's no reason why the U.S. government shouldn't do the same," says a manager at an American equipment maker. Ultimately, business hopes that out of the GOP gambit to gut Commerce, a leaner Trade & Industry Dept. will emerge.

As for Brown, the issue is whether he violated any federal criminal laws in accepting questionable payments from business associate Nolanda Hill while at Commerce. The counsel also will investigate whether Brown filed a false mortgage application in the purchase of a Washington townhouse and whether he intentionally misled government ethics watchdogs by filing inaccurate financial disclosure reports.

In a statement, Brown buttressed his assertions of innocence with a long list of accomplishments as Secretary. Impressive, yes. But irrelevant to the case against him. He might save the list for a eulogy at Commerce's funeral.By Amy Borrus in Washington


American Apparel's Future
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus