The Corner

Can Jeb Bush Lead the Fight Against Crony Capitalism?

This morning, Jeb Bush declared that as president, he would “end crony capitalism”:

The influence peddling industry in Washington will fight every step of the way to defend their fiefdoms and special favors. It is going to take a president with a stiff spine and a proven record of delivering conservative reforms to disrupt the old, established order.

I intend to be that president.

There’s much to cheer in Bush’s agenda, including suggestions to eliminate “subsidies to the biggest agribusiness companies, phasing out targeted tax breaks in the energy industry, a simplified tax code,” and “establishing a regulatory budget to ensure that every new dollar of regulatory cost is offset by eliminating a dollar of cost from old regulation.”

The problem is that if you define “crony capitalism” as the revolving door between public office and lucrative private-sector consulting positions, helping those powerful institutions navigate the world of government regulations and influence . . . well, Bush isn’t quite the ideal figure to lead a crusade against that world.

After leaving the Florida governorship, Bush set up a consulting firm, Jeb Bush & Associates. A review of the firm’s records revealed “a third of the firm’s $33 million in proceeds from 2007 to 2013 came from banking giants Lehman Bros. and Barclays.” One of the firm’s clients was the now-bankrupt fiber-panel manufacturer InnoVida, whose CEO pled guilty to two counts of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering.

Bush was reportedly among those who first raised questions about the company’s sketchy finances and filings. But in March 2013, Jeb Bush & Associates paid $270,000 to Soneet R. Kapila, the trustee attempting to return money to InnoVida investors who were defrauded. Bush’s firm admitted no wrongdoing, and asserted that it merely “provided services in good faith for reasonably equivalent value.” The bankruptcy filing said the firm reached the agreement “in order to avoid the expense and uncertainty of litigation, to facilitate the Trustee’s timely conclusion of the Chapter 7 proceedings, and to enhance the funds payable to creditors.”

Jeb Bush & Associates was a family operation; his youngest son, Jeb Bush Jr., worked as a management consultant, and Bush’s wife, Columba Bush, was “collecting an annual salary that averaged about $31,500 — totaling more than $220,000 over seven years.”

Bush’s anti-crony-capitalist agenda sounds terrific, but how likely is it that the grassroots conservatives angriest about crony capitalism will trust him to enact it?

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