Conflict of Interest

One of the problems in modern-day Washington is trying to decide who works for whom and on what basis.

So as not bury the lead, Mark Penn has been relieved of his duties as the Chief Strategist and More of the Presidential campaign of Hillary R.(!) Clinton.

Here's the background.

Penn was not paid by the campaign. His polling firm, Penn Schoen & Berland, is paid by the campaign. His polling firm is owned by the mega-PR firm of Burson-Marsteller. Burson-Marsteller is a unit of Young & Rubicam which, in turn, is owned by the WPP Group.

Penn is the CEO of Burson in addition to having been the Chief Guru of the Clinton campaign.

According to a long backgrounder in the Washington Post by Anne Kornblut last year, Penn

"receives no compensation directly from the Clinton campaign and that his salary from Burson-Marsteller, which he declined to reveal, is contingent upon his management performance for the corporation overall, rather on than specific fees from the campaign."

It is one of the many oddities of the campaign finance laws that campaigns have to disclose to which vendors, and for how much, they write checks; but vendors are under no obligation to disclose who is on their payroll or how much they are paid.

According to the FEC, Penn's firm was paid $3.1 million in March and is owed $2.4 million bringing the grand total for this campaign to over $10 million.

Why is this important?

Because the work of Mark Penn and the work of Burson-Marsteller got tangled up last week when Penn met with the Ambassador to the US from Columbia

One of Burson's clients, it turns out, has been the country of Columbia which is in serious negotiations for a Free-Trade Agreement with the United States. I have been involved in this sort of thing and it is the PR firm's job to convince people that this is not only a good idea, but the passage of this agreement is the most important issue facing the Congress this year!

Susan Davis, writing in the Wall Street Journal,

"Hillary Clinton has been railing against free-trade agreements.

Clinton pointedly told the Pennsylvania AFL-CIO: 'We've got to have new trade policies before we have new trade deals. That includes no trade deal with Colombia while violence against trade unionists continues in that country."

Oops.

This business of having clients on both sides of the same issue is known in most places (not counting, of course, Your Nation's Capital) as a conflict of interest. Some conflicts are easy to avoid. But being paid by Clinton to advise her on how best to oppose the Columbian Free Trade Agreement and being paid by Burson-Marsteller for advising the Columbians on how to minimize opposition (like Clinton's) to the same pact is - even INSIDE the District of Columbia - a serious conflict.

The Clinton campaign stated that Penn was meeting with the Ambassador in his role as the CEO of Burson. But a spokesman for the government of Columbia, according to the Wall Street Journal, appeared to disagree, saying:

"The ambassador met with Mr. Penn to discuss the bilateral agenda. There have also been meetings with the advisers to the campaigns of Sen. Barack Obama and Sen. John McCain. It's the embassy's job to explain Colombia's reality."

Well, that certainly sounds like the Ambassador thought he was meeting with Penn, at least partially, as a representative of the Clinton campaign.

On Saturday the country of Columbia fired the PR firm of Burson-Marsteller. According to the WSJ's Jackie Calmes, after Penn called the meeting "an error in judgment," the Columbians canned B-M saying:

"The Colombian government considers this a lack of respect to Colombians, and finds this response unacceptable."

By Sunday night the pressure - internally and externally - became too much and Penn was out as the Senior Strategist and More of the Clinton campaign.

It didn't take long for the Clinton insiders to begin dancing on Penn's professional grave. Again, according to Jackie Calmes in the WSJ:

Mr. Penn has been blamed by Clinton advisers and supporters for a flawed strategy that has left the New York senator, once seen as the inevitable nominee, instead struggling against Sen. Obama for the Democrats' nomination.

As the old saying goes: In Washington, ya want a friend? Buy a dog.

As the new saying goes: Wanna wear two hats? Buy a second head.

On a the Secret Decoder Ring page today: Links to the Kornblut backgrounder and the WashPost coverage of Penn's departure. Also a cool link to the FEC page on Presidential campaign spending, a Mullfoto showing the highlights of the in-seat entertainment on my Delta flight last week and a Catchy Caption of the Day.