Former U.S. Sen. Larry Pressler's resume reads like a U.S. president's: Vietnam veteran, Rhodes scholar, Harvard Law School, 22 years in Congress, member of the Council on Foreign Relations. But these days, the 58-year-old Republican spends more time kick-starting his new career as a board director for b-to-b companies than dreaming about the Oval Office.
"I'm on the boards of 16 dot-coms," said Pressler, who lost his re-election bid for a fourth Senate term in 1996 and did, in fact, make a short-lived presidential run in 1979. He now serves on the boards of companies such as businessCreditUSA.com, Trade.com and Flooz.com. "I started to pretend like I was a college graduate and went into dot-com boards big-time," he said.
From D.C. to b-to-b
Call it Washington, D.C., meets b-to-b. Though Pressler is something of a poster boy for the trend, a host of other high-profile ex-politicos have joined the boards of business-to-business e-commerce companies in the last six months.
One-time Republican presidential nominee and sometime Viagra spokesman Bob Dole recently joined the board of VetExchange.com, a site aimed at veterinarians and the pharmaceutical companies that target them. His running mate in the 1996 campaign, Jack Kemp, is on the board of The Global TeleExchange Inc., a b-to-b telecommunications hubErskine Bowles, former White House chief of staff for President Clinton, is now chairman of Intelisys Electronic Commerce Inc.'s board of directors. Robert Rubin, who until last year was U.S. Treasury secretary, recently joined the advisory board of Insight Capital Partners, a b-to-b venture capital firm.
Lower political profiles
Most of the ex-Capitol Hill types contacted for this article were reluctant to grant interviews. Through spokespeople, they claimed to be unavailable due to scheduling conflicts. But presumably they also wish to downplay their reputations as behind-the-scenes operators, always a sore point for politicians.
"It's a continuation of a theme we've seen for years, and that is that companies have always had an interest in some political camp," said Peter Crist, vice chairman of Korn/Ferry International, the world's largest executive search firm. "Whether it's because of [the politicians'] direct or implicit connections, companies try to get someone on their board."
Ex-Capitol Hill bigwigs accepting posts as Fortune 500 company board members is nothing new. And more one-time politicos consult for big investment banks and law firms than sit on the boards of Internet companies.
Still, the number of ex-politicians angling for b-to-b boardrooms--and the growing camp of Web executives who want them--is striking.
The politicians' collective motivations are probably unsurprising, however. The prospect of making big Internet dollars after years of government salaries, and being at the center of today's biggest business trend, is alluring. "My juices are flowing," said Pressler. "I could be worth several million dollars in the future."
The former senator, like many b-to-b board members, is typically paid between $10,000 and $30,000, plus stock options, for his work.
Toney Anaya, New Mexico's governor from 1983 to 1986, said he became an executive adviser to The BigFNI.com to speed up the movement of Latino businesses into the Internet space. The BigFNI.com is a b-to-b and business-to-consumer Web financial services company. "I'm an advisor, telling them how to reach the Latino community," Anaya said. He is also a founder of Irving, Texas-based Valor Telecommunications L.L.C.
Company execs, meanwhile, said they tapped their Beltway insiders for their connections and implicit marketing clout.
"Jack Kemp has a lot of relationships at the boardroom level of major companies," said Andrew Romans, co-founder of The Global TeleExchange.
Nearly all the executives interviewed for this story said the ex-politicians' advice on legislation and how it might affect their businesses makes them worth the expense.
But at least one industry authority on boards of directors questioned whether a b-to-b company truly needs a former politician's help.
"Many of these companies are so small, and the likelihood that they will fail so great, it makes you wonder why their executives are so concerned with public policy," said James Heard, CEO of Proxy Monitor, a provider of proxy research and voting services to institutional investors.
B-to-b CEOs protest otherwise. They say legislative concerns are crucial to their agendas and a politician's advice is invaluable. "Bob Dole helps us navigate the environment. And he has relationships with [Viagra maker and animal drug kingpin] Pfizer Inc.," said John McCallum, co-founder of VetExchange.
Big name, high impact
Undeniably, the marketing worth of a Bob Dole to a smallish dot-com like VetExchange is significant. A pharmaceutical company sales chief who might not bother with a call from a start-up chief would probably pick up the phone if Dole were waiting on the line. (A Dole spokesman said the former senator was unavailable for comment.)
But b-to-b executives realize that few politicians have the star power of Dole or Kemp. Most pick their politicians for their specialty lobbying skills and, quite often, their cachet overseas, where government leaders are often held in higher regard than in the U.S.
Indeed, earlier this month Pressler traveled to India with Kamal Mustafa, chairman of BlueStone Capital Partners L.P., Trade.com's parent company. In Mumbai, India, Pressler gave a speech to local technology CEOs on the upcoming U.S. presidential elections and worked on Trade.com's entry into the subcontinent.
"The legislation Larry has done has made him very popular in Europe and India," Mustafa said. His voice jumped when asked about the former senator's worth to Trade.com, noting that Pressler authored the bellwether Telecommunications Act of 1996, which some non-U.S. countries, India included, have used as a model for some of their own telecom reform legislation.
There is a distinct connection between many of the ex-politicos' legislative experience and their current private sector work.
Pressler parlayed his concentration on science and telecom legislation in the Senate into a new career. And Global TeleExchange's Romans said Kemp's prior congressional experience as an advocate of global free trade helps him advise the company on its ongoing international rollout.
Other ex-politicians bring years of hardcore business experience to their dot-com board positions. Intelisys' Bowles, for example, was a high-profile investment banker for decades before running the West Wing for President Clinton.
Frank Carlucci, secretary of defense under President Reagan and now a member of Nortel Networks' board of directors, is a former CEO of Sears World Trade Inc. He is now chairman of Carlyle Group Inc., an investment firm active in b-to-b venture capital.
Meanwhile, James A. Baker III, a board member of Carlyle and secretary of state during the Bush administration, was in his first incarnation a Houston corporate lawyer.
One potential downside is that the ex-politicos simply will not be able to keep up, said Proxy Monitor's Heard. Board service is not the cushy job it used to be. Directors typically have to travel to at least several board meetings a year and need to advise on the company's strategy in minutia once they are there. Some high-profile directors are regularly accused of taking on too many spots.
"Ann McLaughlin is notorious for this," Heard said. McLaughlin, a secretary of labor during the Reagan administration, is on the board of 10 companies, including Microsoft Corp. and General Motors Corp., according to published reports.
Pressler said he manages to serve on 16 boards by employing two full-time assistants who help him keep up with his companies' particulars. Still, his time crunch must be very real--in addition to his board spots, Pressler is a senior partner with the Washington law firm O'Connor & Hannan, L.L.P.
Indeed, b-to-b CEOs need only observe the travails of drkoop.com Inc. before deciding that a high-flying ex-politico can make a big difference to their company. drkoop.com, headed up by President Reagan's U.S. Surgeon General Dr. C. Everett Koop, has famously gone from being an Internet darling to a much-derided penny stock (trading around $17/8 last week, off its 52-week high of $351/8 ).
Nevertheless, executives in all cases claimed their ex-politicos are providing a real service beyond the value of their monikers. The dot-com chiefs' contentions ring true. The panache of an ad campaign featuring a Shaquille O'Neal, after all, would probably carry more marketing clout than the names of all but a small handful of politicians.
What remains to be seen is whether b-to-b's newest proponents can make a difference in whether their companies' survive the ongoing market shakeout.