Senate Committee should investigate Hagel’s mind-boggling financial success

Senate Committee should investigate Hagel’s mind-boggling financial success

(The Senate confirmation committee should also take a long hard look at how Hagel made his fortune. Almost immediately he was made head of a new cellphone company, an industry in which he had no experience but in short order walked off with a fortune. The whole episode along with his subsequent financial career shrieks of the likelihood that Hagel was paid off for his political influence in obtaining favorable decisions, legislation, whatever, that suddenly made the cellphone company a very hot commodity. Hagel thus profited far beyond a reasonable return for legitimate expertise, action or work. How did all that happen? Should it not be completely investigated before this inept, inexperienced political hack of Obama is appointed and endangers our nation?) jsk

Redacted from an article by Gregory Korte, USA TODAY
January 14, 2013

Chuck Hagel’s background arguably makes him as qualified to be Treasury secretary as it does to be Defense secretary.

WASHINGTON — Chuck Hagel’s “worldview” — under scrutiny by the Senate as he’s considered for the next secretary of Defense — has been shaped as much by his career in business as by his time in uniform or in politics.

Hagel founded a successful cellphone company when few had heard of the technology, has run investment banks and now advises Wall Street hedge funds and serves on the board of oil giant Chevron.

“He’ll hate me for saying this, but he uses the word ‘interconnected’ more than anybody I know — and in a more informed way, probably,” said Michael McCarthy, who tapped Hagel to run his Omaha investment company and later became his campaign treasurer. “He sees the world as very interconnected and he sees humanity as dependent on one another in the most essential ways.”

Hagel’s résumé arguably makes him just as qualified to be Treasury secretary. In addition to Foreign Relations and Intelligence, he served on the Senate Banking committee — and was the ranking Republican on the Financial Institutions subcommittee.
After serving in Vietnam, Hagel worked on Capitol Hill, then became a lobbyist for the Firestone Tire Co. He served in the Veterans Administration under Ronald Reagan but left in disgust over plans to cut veterans services.

“He had a real interest in public life, but he also needed to make a living,”(you bet!) said University of Nebraska journalism professor Charlyne Berens, author of Chuck Hagel: Moving Forward.

He found some partners, sold his used Buick, cashed in a couple of insurance policies to raise $5,000 and created a cellular company in the infancy of that technology. Berens relates a story told by Hagel’s wife: While at parties, Hagel struggled to explain this new technology before finally taking off his shoe and holding it to his ear like 1960s television spy Maxwell Smart. Before it was bought out by AT&T in 1999, Vanguard Cellular was the largest independent, all-cellular company in the nation.

With an eye toward running for office, Hagel moved back to Nebraska, and joined the McCarthy Group. There, he repeated his cellular success, building up a phone company in Hungary that later got bought by a German telecommunications giant.
“The guy has a unique combination. He has the mind of an actuary. He can be very crisp when he evaluates risk, and he has the heart of an Irishman,” McCarthy said. “After trying, you do the analytics, and you know what the parameters are, you still use your instincts.”

Hagel left business for 12 years in the Senate. In his last year, 2008, Hagel disclosed a net worth of somewhere between $2.3 million to $10.9 million. The Senate Ethics Committee sometimes raised questions about Hagel’s disclosures — specifically what kinds of investments he held in the McCarthy Group — but he was never accused of wrongdoing. A month after leaving the Senate in 2009, Hagel joined the board of Corsair Capital, a boutique Wall Street investment firm that holds ownership in financial institutions across the globe — including Argentina, Bermuda, Brazil, Germany, Korea, Poland and Sweden.

Nicholas Paumgarten, a former J.P. Morgan Partner who founded Corsair and named it after Pierpont Morgan’s yacht, declined to discuss Hagel’s work for his firm. But in 2009, he boasted of being the first company to snag the recently retired senator for his board, and touted the “connections” Hagel would bring to the company. At the time, Hagel said he chose the company because it shared “a similar worldview to mine.”

He also joined the board of Wolfensohn & Company, a firm founded by James Wolfensohn. The two met when Wolfensohn was president of the World Bank and Hagel served on the Senate Banking Committee. Wolfensohn said Hagel’s involvement was a “good marriage,” but the board has since quietly dissolved.

Since 2010, Hagel has served on the board of Chevron Corp., which had $554 million in contracts with the federal government in 2011 — mostly with the Pentagon. His annual compensation is $301,199, and he owns 4,894 shares of Chevron stock, according to a disclosure last year. At Friday’s stock price, those holdings are worth more than $540,000.

Chevron did not return several calls and e-mails.

Hagel also serves on the American advisory board of the German banking giant Deutsche Bank — one of many business relationships that Hagel will now have to disentangle himself from should he be confirmed.

(Is influence peddling the primary skill required as Secretary of Defense of the United States of America?)



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