Giant Speaking Fees-Fi-Fo-Fum

So, back on December 18th, Palash Ghosh published an article over on the International Business Times entitled, Talk Is Not Cheap: Why Do Ex-Politicians Earn Huge Money From Making Speeches? And as you might have guessed, I'm bringing this up here on my blog of record because I'm quoted therein.

Here's how the piece begins:

Former Secretary of State, Senator, first lady (and potential 2016 Democratic presidential candidate) Hillary Clinton may currently be “unemployed,” but that doesn't mean she isn't raking in big bucks. Following a long tradition of ex-lawmakers, Clinton earns hundreds of thousands, perhaps millions, of dollars annually by the simple act of delivering speeches in front of adoring audiences across the nation and the world. As a high-profile global figure and a potentially history-making first female president of the U.S., Clinton commands handsome fees on the speaker circuit.

The Washington Post reported that she has received as much as $200,000 for lecturing a group of real estate developers in Dallas, adding another lucrative check from a crowd of deep-pocketed private equity managers in Los Angeles. The New York Times (usually a big supporter of liberal Democrats) slammed Hilary not only for taking big money for her speaking engagements but also for the lame quality of her canned deliveries. “For about $200,000, Mrs. Clinton will offer pithy reflections and Mitch Albom-style lessons from her time as the nation’s top diplomat,” the Times scoffed, adding examples of her bon mots: “leadership is a team sport,” “you can’t win if you don’t show up,” and the immortal “a whisper can be louder than a shout.”

But Hillary Clinton is a minor-leaguer compared to her husband–ex-President Bill Clinton has received as much as $750,000 for one speech (before an audience of executives and employees of telecom firm Ericsson in Hong Kong) and has raked in at least $89 million (and perhaps more than $100 million) from similar appearances around the world since he left the White House 12 years ago. The New York Daily News recently reported that Clinton snagged a cool half-a-million dollars for a 45-minute speech at a 90th birthday party for Israeli President Shimon Peres. That comes out to about $11,000 per minute–a princely sum paid out by Keren Kayemeth LeIsrael, the Jewish National Fund in Israel.

In addition, a newspaper publishing firm in impoverished Nigeria even coughed up $700,000 for the privilege of listening to the former president’s dulcet tones. Moreover, Clinton pocketed $550,000 for a speech given at a business conference in Shanghai. To be fair, it is unclear how much of this cash goes directly into his hands – since some of these earnings are transferred to his William J. Clinton Foundation and are subject to complex tax and income-reporting rules and laws.

At this point, I just want to note that this practice first became controversial when Ronald Reagan received $2 million for a speaking gig in Japan less than a year after leaving the presidency, so it's not exactly a Clintonian phenomenon. Anyway, not that there's anything wrong with it...  Or is there?

It is important to remember that ex-politicians who earn money from speeches are not violating any laws–although questions of ethics and integrity may abound. In addition, post-career politicians making speeches is nothing new–what has changed is the amount of money being paid out, and their relative lack of scruples about whom they accept fees from, said Dr. Lance Strate, professor of communication and media studies and associate chair for undergraduate studies at Fordham University in New York, in an interview. “Many believe that stricter regulation is needed to rein in such activities, and there is no question that the potential for conflict of interest exists,” said Strate.

So, there I go again. Ethics, you know? And maybe, propriety? The dignity and respect of the office? I know, I know, silly of me. Anyway, let's hear more about Clinton:

In any case, CNN reported that Bill Clinton averages about $189,000 per speech–somewhat less than his annual salary as president in the 1990s. In 2011 alone, the 42nd president took home about $13.4 million from 54 speeches (averaging out to almost a quarter-million dollars per event). His earning capacity has been escalating ever upwards–he made $10.7 million in 2010, and $7.5 million in 2009. The magnitude of Clinton’s enormous wealth came to light only because his wife’s status as a federal official required her to disclose her family's income statements.

Bill Clinton himself addressed his sudden newfound riches. "I never had any money until I got out of the White House, you know, but I've done reasonably well since then," he said in 2010 during a forum in Cape Town, South Africa. “Reasonably well” means tens of millions of dollars in earnings (and counting).

And hey, we all love a rags-to-riches story here in the USA, but many of us think that the presidential salary alone is pretty darn nice. And anyway, the question suggested by the article is a good one, what exactly is reasonable, when it comes to speaking fees, and more generally to earnings?

A Canadian-based communication executive defended Clinton’s huge income. "The work [Clinton] does around the world has given him a very unique perspective. Not just a former president's perspective, but also the very unique perspective from his philanthropic work," Norman Stowe, who arranged an economic conference with both Clinton and his successor George W. Bush, told CNN. "[Clinton is] really a gifted speaker. He speaks in a language that everyone can understand."

No question about it, Bill Clinton is good. A regular rock star of public speaking. But is there a difference between being a rock star or movie star or TV star, and being an ex-president or public official?

Even political luminaries who failed in their presidential bids ride this very green gravy train for all it’s worth. Rudolph Giuliani, the former mayor of New York City, who ascended to global fame in the wake of the 9-11 terrorist attacks, attracts fees of up to $270,000 per speech. In 2007, during his failed run for the Republican presidential nomination, Giuliani revealed that he had earned $9.2 million over the past 13 months in speaking fees alone, or about $700,000 per month. Former Vice President Al Gore has also maintained an extremely busy and profitable “retirement” from politics. Among his many endeavors, the ultra-environmentalist makes as much as $156,000 per speaking engagement.

Former President George W. Bush is no slouch either. Generating as much as $110,000 per talk, Bush has reeled in at least $15 million from making speeches since he left office, according to the Center for Public Integrity. In some instances, Clinton and Bush–despite their different politics–have even made joint appearances, including dual speeches in New York before the wealth management subsidiary of Swiss bank UBS.

And now, another question: Is it at all reasonable to expect that if a former president or public official is making big bucks from public speaking, that their remarks be made, well, public? After all, after leaving office, they continue to be paid and subsidized by the American people.

CPI reported that most of Bush's speeches are closed to the media–as such, he has been criticized for undertaking such projects. “I find it puzzling,” Stanford University presidential historian Robert Dallek told iWatch News. “[Bush] says he wants to keep a low profile. What is he doing except enriching himself? It sounds like it’s self-serving. It’s following the good old American adage to make as much as you can.”

Another presidential historian, Julian Zelizer at Princeton University, also blasted Bush. “It’s one thing to stay out of the public realm, which George Bush has said he wants to do,” he said. “But then he goes on the speaking circuit and makes enormous amounts of money giving lectures mostly to corporate groups and other select audiences. Some Americans can find this distasteful.” Zelizer added that the mixture of political influence and big money presents some dangers. “We’re in an era where there are countless fears about money and politics,” he said. “I think former presidents have to be careful about what they’re doing with their speeches. For some people it’s another version of the revolving door between Capitol Hill and K Street," the hive of Washington's lobbyists.

And as previously noted in the article, this phenomenon is not limited to ex-presidents alone. Here are some more examples:

As you go down the hierarchy of former political bigwigs, you will find even more people eager to make speeches with their hands out–although the income they demand is typically proportional to how much power and influence they once enjoyed.

Bush's former second-in-command, Dick Cheney–who, ironically, was once represented by the same speakers’ agency as his predecessor, Gore–gets $75,000 a pop, according to Politico. Other former big-time politicians, including billionaire (and failed Republican presidential candidate) Mitt Romney and his ideological opposite, Democrat Howard Dean, also score big bucks on the speakers circuit. Even a relative nobody like former White House press secretary Robert Gibbs has made $2 million from speeches since he quit Barack Obama's administration in 2011.

But what's the real significance of all this? Well, here's my take on it:

But why would anyone pay such huge amounts of money for what is typically a canned speech written by others? Strate explained that a variety of institutions and organizations, both foreign and domestic, are willing and able to pay the very high speaking fees of leading American politicians and former officeholders. “For some, there is the basic interest in being associated with a celebrity, the prestige that comes with the presence and participation of a famous and influential individual,” Strate said. “This is the case for universities, for example.”

For other groups, those with political or commercial agendas, or those outside of the United States, the mere presence of a well-known political leader amounts to a tacit endorsement of the organization or nation, a sign of approval, Strate added. “And while there may not be any quid pro quo, there is a certain reciprocity that may be gained when a political figure is paid a large amount of money for giving a talk,” he noted.

Certain ethics rules bar officeholders in various parts of government from accepting speaking fees, but nothing prevents them becoming walking cash registers after they return to private life. Bill Clinton, despite his various personal deficiencies and scandals, remains a highly popular and admired global figure – thus, many corporations and other organizations eagerly seek him out. Strate suggests that any links to Clinton might impart to organizations “some benefit from connections that are made” as well as gaining the ability “to make other connections through introductions–this is the ultimate in networking.”

Another attraction of inviting former presidents to speak at major events is that the people who pay premiums, say, via sponsorship, get VIP access to the former politicians. “And that offers a range of mutually beneficial opportunities where both parties make contacts to advance their agendas,” said Jamie Chandler, a political scientist at Hunter College in New York.

With respect to Hillary Clinton, she must make a sharp separation between personal income drawn from making speeches and funds raised for her (likely) 2016 presidential run. “Wealthy candidates may use their personal finances for their campaigns, but right now Hilary is campaigning without actually being a candidate, while separate exploratory committees would be doing the fund-raising,” Strate explained. Chandler further noted that for potential 2016 candidates like Hillary Clinton and New Jersey Gov. Chris Christie, speaking events build their name recognition even higher and also help connect them to big donors.

There are more issues that come up for anyone who might consider running for office or other subsequent public service:

However, in the event Clinton takes money from lobbyists during her time as a "private citizen"–and then enters the White House in 2017, questions could be raised if she subsequently were to push for any legislation favorable to said lobby groups.

Dr. Jeanne Zaino, professor of political science at Iona College in New Rochelle, N.Y., noted that there have been cases in which former officials have gone on to earn lucrative speaking fees only to find later that such activities posed difficulties when they hoped to re-enter public life. Case in point – in 2009 it was reported Obama’s choice for secretary of health and human services was former Sen. Tom Daschle, D-S.D. But Daschle eventually withdrew his name from consideration as a result of controversy regarding his payment of taxes. “But in the context of that appointment it was also revealed that he had received almost $400,000 in speaking fees from health-related groups,” Zaino stated. “The revelation raised questions regarding a potential conflict of interest for someone who might be in charge of the president’s efforts regarding health care reform.”

Look, there is no question that ex-presidents and other former public officials are free to seek new forms of employment after leaving office, to make money, earn a living, etc. It's just that, having served as a public official, which is a privilege after all, there is some responsibility to uphold the dignity of that office even once it is vacated, and some responsibility to be mindful of the person's public image.

Meanwhile, Bill Clinton and George W. Bush, both of whom are 67, have many years left to keep fattening their already overstuffed bank accounts–not only from making speeches, but from a pension, income from consulting, book deals, being associated with a law firm, corporation, or university, and in many other ways, Strate noted.

Barack Obama presents an interesting case–wildly popular with a segment of the U.S. (and foreign) population, the first non-white U.S. president has already ascended to the lofty status of super-celebrity and historical figure. Thus, potentially, he could earn untold millions from speaking fees for the next two or three decades. But Strate doesn't think Obama will embark on that route to guaranteed riches. “Given his own self-consciousness about his place in history, and what he means to so many people, he may show more restraint than others have, and that may limit his earnings,” Strate proposed.

Of course, not everyone agrees, and only time will tell:

But Chandler thinks Obama could potentially break the bank after he departs the Oval Office. “I expect given the historical nature of his elections, many will clamor for his appearances,” he said. “But ultimately this depends on how much speaking [Obama] wants to do. George W. Bush, for example, is not as active as Clinton in this area because he chose to take a lower profile in his post-presidency."

And putting things into a historical context is always helpful:

Speaking of past presidents, Chandler explained that Harry Truman gave speeches after his term in office, but he did not accept money for such efforts. “He wouldn’t endorse any products or accept positions on boards,” Chandler noted. “He did take fees for consulting, but not lobbying.”

The interesting thing is that Truman left office without the benefit of the lucrative pensions that current former presidents pull in, Chandler added. Dwight D. Eisenhower signed into law the Past Presidents Act in 1958, which established the presidential pensions system. Eisenhower himself made some money from speaking fees, and he also spoke at major political events, including the 1964 Republican National Convention.

What remains clear is that big-name politicians will continue to draw huge fees from speaking engagements.

That's how the article concludes, and it's probably true. It seems that the big speaking fees have gone hand-in-hand with the rise of television. Perhaps this is a response to electronic mediation, so that the value of actual physical presence increases dramatically once we become so inundated with parasocial interaction? No doubt, it is a facet of television's culture of celebrity, as it has been extended into realms previously off limits to it, like politics and religion. And at least so far, the further evolution of the electronic media environment via the internet, mobile technologies, cable and satellite, seems to have only intensified the trend.

Now, to get a better sense of what I had to say on the topic and the larger context out of which my comments were taken, as well as to get some insight on how journalists pick out a few quotes from a larger interview, here is the original Q & A conducted by email with Ghosh's questions and the answers I provided:

Ghosh: Prominent former US politicians, including Bill Clinton, Hilary Clinton, George W. Bush, Al Gore, and others, are raking in huge amounts of cash in speaking fees. Generally speaking, who is paying out this money and why? What do they get in exchange for these people making their canned speeches?

Me: A variety of institutions and organizations, both foreign and domestic, are willing and able to pay the very high speaking fees of leading American politicians and former office holders. For some, there is the basic interest in being associated with a celebrity, the prestige that comes with the presence and participation of a famous and influential individual. This is the case for universities, for example. For other groups, those with political or commercial agendas, or those outside of the United States, the mere presence of a well known political leader amounts to a tacit endorsement of the organization or nation, a sign of approval. And while there may not be any quid pro quo, there is a certain reciprocity that may be gained when a political figure is paid a large amount of money for giving a talk.

Ghosh: Are US politicians banned from making money from outside sources while they’re in office?

Me: There are ethics rules for office holders in various parts of government that do not allow them to accept speaking fees, and even private citizens who are running for office tend to avoid earning personal income in this way because of the potential harm to the candidate's image. Of course, fundraising for campaign contributions is another story altogether.

Ghosh: Bill Clinton has reportedly made at least $89 million in speaking fees since he left office in 1999. When he talks in front of a corporation, is he working behind the scenes to make deals with foreign companies through his international business contacts?

Me: Probably not, because as he learned all too well, there are no secrets in our contemporary media environment, at least none that can be kept for very long. But it may be enough for the corporation to obtain the prestige of association, the implicit approval that comes with his presence, and perhaps some benefit from connections that are made, and the ability to make other connections through introductions—this is the ultimate in networking.

Ghosh: With respect to Hilary Clinton – if she runs for president in 2016 (which many are saying she will), is the money she’s making now from speeches tantamount to “future campaign contributions”?

Me: There is a clear separation between personal income and campaign monies, in some way similar to the distinction between personal and corporate assets. Wealthy candidates may use their personal finances for their campaigns, but right now Hilary is campaigning without actually being a candidate, while separate exploratory committees would be doing the fundraising.

Ghosh: Can an ex-politician or future politician take money from lobbyist groups?

Me: There are all sorts of ways that lobbyist groups can provide funding and benefits for politicians, former, present, and future, and it is not unheard of for someone leaving government to work on behalf of an interest group or lobby.

Ghosh: Are these former (or future) politicians breaking any ethics rules or even laws by taking money for making speeches?

Me: Not necessarily, but there are ethical questions that can, have, and should be raised, for former politicians about the harm done to the dignity of the office they once held, for future ones about the harm done to their chances of being elected.

Ghosh: Are these lucrative speeches immune from any regulation or campaign finance laws? How about the possibility of potential conflict of interest?

Me: Many believe that stricter regulation is needed to reign in such activities, and there is no question that the potential for conflict of interest exists.

Ghosh: Do these politicians list their speaking fees on their tax statements as income – or do they find some clever way of hiding their true earnings?

Me: Only the IRS knows for sure, I imagine. If the individual has a foundation, trust, nonprofit organization, or business where the funds can be channeled, they might avoid having the fees listed on their returns, yes.

Ghosh: For people like Clinton and Bush, are speeches their sole source of income in “retirement” or do they generate additional dollars from elsewhere?

Me: The pension that former presidents receive would be more than adequate for the vast majority of Americans, they can receive income for consulting, being associated with a law firm, corporation, or university, and in many other ways.

Ghosh: Even lower profile political figures like former White House press secretary Robert Gibbs make millions from speeches. What influence or importance can such marginal figures like him possibly have?

Me: It's all a matter of degrees of separation. Unlike the six degrees most of us have on average, someone like Gibbs has direct contact with many high profile figures, and at one degree of separation with many more. Networking yields access.

Ghosh: Given that Barack Obama is a historic figure, once he leaves office, do you expect him to break Bill Clinton’s record of huge earnings on the lecture circuit? Will companies and other clamor for his appearances?

Me: He certainly has the potential to do so, because of his symbolic value as the first African-American president, beyond his status having held the highest office in the nation. But given his own self-consciousness about his place in history, and what he means to so many people, he may show more restraint than others have, and that may limit his earnings.

Ghosh: Did old-time politicians like Harry Truman and Dwight Eisenhower also make money from speeches after their terms were over? Or is this a relatively recent development?

Me: Speeches and lectures are nothing new, and in the 19th century were a major form of entertainment. What is new is the amount of money being paid, and the relative lack of restraint on the part of former politicians about whom they accept fees from. A variety of institutions and organizations, both foreign and domestic, are willing and able to pay the very high speaking fees of leading American politicians and former office holders. For some, there is the basic interest in being associated with a celebrity, the prestige that comes with the presence and participation of a famous and influential individual. This is the case for universities, for example. For other groups, those with political or commercial agendas, or those outside of the United States, the mere presence of a well known political leader amounts to a tacit endorsement of the organization or nation, a sign of approval. And while there may not be any quid pro quo, there is a certain reciprocity that may be gained when a political figure is paid a large amount of money for giving a talk.

Ghosh: Are US politicians banned from making money from outside sources while they’re in office?

Me: There are ethics rules for office holders in various parts of government that do not allow them to accept speaking fees, and even private citizens who are running for office tend to avoid earning personal income in this way because of the potential harm to the candidate's image. Of course, fundraising for campaign contributions is another story altogether.

Ghosh: Bill Clinton has reportedly made at least $89 million in speaking fees since he left office in 1999. When he talks in front of a corporation, is he working behind the scenes to make deals with foreign companies through his international business contacts?

Me: Probably not, because as he learned all too well, there are no secrets in our contemporary media environment, at least none that can be kept for very long. But it may be enough for the corporation to obtain the prestige of association, the implicit approval that comes with his presence, and perhaps some benefit from connections that are made, and the ability to make other connections through introductions—this is the ultimate in networking.

Ghosh: With respect to Hilary Clinton – if she runs for president in 2016 (which many are saying she will), is the money she’s making now from speeches tantamount to “future campaign contributions”?

Me: There is a clear separation between personal income and campaign monies, in some way similar to the distinction between personal and corporate assets. Wealthy candidates may use their personal finances for their campaigns, but right now Hilary is campaigning without actually being a candidate, while separate exploratory committees would be doing the fundraising.

Ghosh: Can an ex-politician or future politician take money from lobbyist groups?

Me: There are all sorts of ways that lobbyist groups can provide funding and benefits for politicians, former, present, and future, and it is not unheard of for someone leaving government to work on behalf of an interest group or lobby.

Ghosh: Are these former (or future) politicians breaking any ethics rules or even laws by taking money for making speeches?

Me: Not necessarily, but there are ethical questions that can, have, and should be raised, for former politicians about the harm done to the dignity of the office they once held, for future ones about the harm done to their chances of being elected.

Ghosh: Are these lucrative speeches immune from any regulation or campaign finance laws? How about the possibility of potential conflict of interest?

Me: Many believe that stricter regulation is needed to reign in such activities, and there is no question that the potential for conflict of interest exists.

Ghosh: Do these politicians list their speaking fees on their tax statements as income – or do they find some clever way of hiding their true earnings?

Me: Only the IRS knows for sure, I imagine. If the individual has a foundation, trust, nonprofit organization, or business where the funds can be channeled, they might avoid having the fees listed on their returns, yes.

Ghosh: For people like Clinton and Bush, are speeches their sole source of income in “retirement” or do they generate additional dollars from elsewhere?

Me: The pension that former presidents receive would be more than adequate for the vast majority of Americans, they can receive income for consulting, being associated with a law firm, corporation, or university, and in many other ways.

Ghosh: Even lower profile political figures like former White House press secretary Robert Gibbs make millions from speeches. What influence or importance can such marginal figures like him possibly have?

Me: It's all a matter of degrees of separation. Unlike the six degrees most of us have on average, someone like Gibbs has direct contact with many high profile figures, and at one degree of separation with many more. Networking yields access.

Ghosh: Given that Barack Obama is a historic figure, once he leaves office, do you expect him to break Bill Clinton’s record of huge earnings on the lecture circuit? Will companies and other clamor for his appearances?

Me: He certainly has the potential to do so, because of his symbolic value as the first African-American president, beyond his status having held the highest office in the nation. But given his own self-consciousness about his place in history, and what he means to so many people, he may show more restraint than others have, and that may limit his earnings.

Ghosh: Did old-time politicians like Harry Truman and Dwight Eisenhower also make money from speeches after their terms were over? Or is this a relatively recent development?

Me: Speeches and lectures are nothing new, and in the 19th century were a major form of entertainment. What is new is the amount of money being paid, and the relative lack of restraint on the part of former politicians about whom they accept fees from.

As you can see, it was quite an extended exchange that we had, and something significantly different from the article that was eventually published. What both underscore is that this is an issue worthy of our attention, and in many ways, our concern, and that's not all hot air...