Monday, December 5, 2016

General Mattis and Jeb Bush Make News

Two prominent political names, General James Mattis and former Governor Jeb Bush made the news with their respective appointments.  President elect Donald Trump announced he would nominate General Mattis for Pentagon Chief/head of the Department of Defense.

The Orlando Sentinel reported on Jeb's new gig with a Florida lobbying firm:

Former Florida governor Jeb Bush will act as a consultant for the lobbying firm Buchanan Ingersoll & Rooney, the firm announced Monday. 

The firm, which has offices in Tallahassee, Fort Lauderdale and four other Florida cities as well as in New York, Washington and Philadelphia, lobbies governments on behalf of industries including finance, health care, energy and education.

 "There are very few people who have the breadth of experience that Governor Bush has both in the public and private sector."
Both General Mattis and Jeb Bush share the embarrassment of serving as board members for questionable companies.  WSJ reported

Retired Marine Corps Gen. James Mattis, President-elect Donald Trump’s nominee for secretary of defense, has a four-year-long connection with Theranos Inc., the embattled blood-testing startup.

Gen. Mattis joined Theranos’s board in July 2013, a couple of months after his retirement. 

Theranos is the subject of criminal and civil investigations by the U.S. attorney’s office in San Francisco and the Securities and Exchange Commission, which are trying to determine if the company misled investors and regulators about its technology and operations. 
Fortune reported why some potential investors avoided the company.  Bill Maris talked about why Theranos did not meet his investing criteria:

"It had no experienced life science investors involved.  It had no experienced life science investors or scientists on board.  It did not have an experienced CEO that had worked in life sciences...  It had no peer reviewed articles, no data at all.'

'Science works on openness and transparency.  So if it's a science based company you want to at least see the data."
The interview also mentioned the need for experts in the field to serve on the board of directors.  Those are the reasons seasoned healthcare investors stayed away from Theranos.  Whistle-blowers eventually revealed the extent to which Theranos did not live up to their image.

President elect Trump appointed General Mattis for his ability to read situations.  Handsome board pay can blind objectivity.

Governor Bush knows this from his experience on the board of InnoVida,  Jeb refunded $270,000 of his pay from the company which was convicted of fraud.  It took businessman Jeb Bush nearly three years to realize he'd been had.

“When someone as prominent as Jeb Bush lends his name to a company, it gives the creditors a level of false security.”

Read more here:
Jeb never shared what he knew as a board member of InnoVida.  I expect General Mattis to remain quiet as well.

Both men got jobs because of their expertise.  Both provided their name and connections for years to companies that were questionable, even outright criminal in the case of InnoVida.  That raises questions as to their judgment. 

Update 12-8-16:  General Mattis is not in the first wave of politically influential board members fleeing Theranos.