Last night on my radio show I spent some time laying into Mike!™ McGavick (Joel might call it poisonous partisanship) for lending his campaign $2 million before paying back SAFECO shareholders the $1.275 million no-interest loan they gave him to lure him into the CEO’s office.
Here’s the deal for those who missed it.
Essentially, SAFECO gave Mike!™ what amounts to a free mortgage to help him buy his $4.5 million home in the gated Highlands community. According to SAFECO’s own proxy statements this free mortgage has already saved Mike!™ (and thus, cost shareholders) $541,386.25. Better yet for Mike!™, since this represents dollars saved not dollars earned, this indirect form of compensation was entirely tax free.
Loans like this became illegal in 2002, one year after Mike!™ cut his deal, under the provisions of the Sarbanes-Oxley Act that passed in the wake of the Enron, Tyco, Adelphia Cable and Worldcom scandals that rocked corporate America.
But none of this is really the point. Legal or not, we all know that Mike!™ was lavishly compensated during his years as SAFECO CEO, and we all expected a substantial portion of his $28 million golden parachute — negotiated after announcing his resignation — to be invested in his US Senate campaign. And given his obvious willingness to take as much compensation from SAFECO shareholders as humanly possible to extract, nobody really expected Mike!™ to pay back early a no interest loan.
But I think it is fair, if McGavick is going to take credit for turning SAFECO around, that voters be made aware of exactly how much money McGavick “earned” and under what circumstances. And I also think it fair that voters should hear from the employees and policyholders who were asked to tighten their belts (or who lost their jobs and policies entirely) while Mike!™ and his top executives were enriching themselves.
Last night I heard from a couple of former SAFECO employees who described how the corporate culture changed with Mike!™ at the helm… we learned of the jobs that were outsourced and the benefits that were slashed under his leadership. We learned how SAFECO’s egalitarian bonus policy — where all employees once received the same percentage bonus based on profits — was dramatically rewritten so that top executives would receive by far the lion’s share. And we learned how SAFECO’s charitable matching program shrunk from $10,000 per employee per year to a mere $1,000.
Whether or not you can justify these changes I think it says something about Mike!™’s view on wealth and class in America, and who he believes deserves the bulk of the reward from our nation’s economic growth. However much credit he may or may not deserve for SAFECO’s turnaround (he came in at the bottom of both a down cycle in the insurance industry and a crash in the stock market,) there is no doubt that during his tenure he enacted policies that favored the highly paid executives at the top over the average employee.
And there’s one other important point I want to make. Much of the collapse of public confidence in the Republican controlled Congress is due to the culture of corruption that has permeated the other Washington. Voters are simply sick and tired of the revolving door in which highly placed congressional staffers leave the Capitol to instantly become highly paid corporate lobbyists.
Which is the exact career path Mike!™ followed to obtain his riches.
Mike!™ was Sen. Slade Gorton’s campaign manager, and then his chief of staff, before cashing in on his political access to become a high priced insurance industry lobbyist. This was the path he took to SAFECO’s executive suites, and that is the undisputed truth. And now that he’s “earned” his millions, Mike!™ wants to head back to the Capitol, this time as a US Senator, so that he can write the laws that regulate his corporate benefactors.
When critics decry the revolving door of power and money that is corrupting our government, they are describing Mike!™ McGavick’s career. I know it might strike some as negative campaigning to point this out, but I think that with this knowledge in hand voters can make a more informed decision come November.