Obama’s Jobs Czar Questioned for Conflict of InterestsJan 27th, 2011 | By Roy Rasmussen | Category: Business and Finance
Last week President Obama appointed General Electric Chairman and CEO Jeffrey R. Immelt to be his “jobs czar,” heading a new President’s Council on Jobs and Competitiveness with a mission to reduce unemployment and strengthen the economy. Some commentators are questioning whether Immelt’s simultaneous commitments to GE and his new government position create a conflict of interests.
Immelt, a graduate of Dartmouth College and Harvard Business School, has worked for GE since 1982, taking over as Chairman and CEO in 2001. In February 2009 he joined Obama’s newly-created President’s Economic Recovery Advisory Board (PERAB). In that position he served under former Federal Reserve Chairman Paul Volcker, a top economic advisor to several Presidential administrations since the Carter administration. PERAB’s two-year mandate expires February 6, 2011, and Immelt’s new position will replace Volcker’s.
So far Immelt has indicated that he will continue with his position at GE while serving the President’s Council, an announcement that has some commentators raising conflict of interests concerns. Former US Treasury economist Martin A. Sullivan has observed that GE’s benefit from offshore tax breaks places Immelt’s commitment to promoting GE’s competitiveness in conflict with his commitment to promoting the overall American economy.
Other commentators have related such issues to foreign policy concerns. Clyde Prestowitz of the prestigious magazine Foreign Policy, who had publicly called for Immelt to be appointed to the new jobs czar position, has now called for Immelt to resign from GE for the good of the nation. To illustrate Immelt’s potential conflict of interests should he remain with GE, Prestowitz cited an example of a GE contract with China. As a condition of GE doing business in China, China is demanding that GE transfer technology and production to China. Prestowitz points out that China’s condition is in violation of Chinese commitments to the United States and the World Trade Organization, placing Immelt in a bind. Prestowitz also questions whether Immelt’s position at GE is consistent with his stated commitment to free trade agreements.
In addition to his positions at GE, Immelt sits on the boards of the Federal Reserve Bank of New York and two nonprofit organizations. He sits on the boards of directors of Catalyst, devoted to advancing women in business, and the Robin Hood Foundation, devoted to reducing poverty in New York City.
Politically, Immelt is officially a Republican, but with a bipartisan history of candidate support. Since 1989 Immelt has contributed $31,350 to Republican candidates, $20,850 to Democratic candidates, and $132,316 to special interest groups, notably the General Electric Company Political Action Committee.