The Magazine

‘Just the Way Business Works’

Oct 24, 2011, Vol. 17, No. 06 • By MATTHEW CONTINETTI
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Trading access for wealth, after all, is exactly how Rahm Emanuel made a small fortune a decade back. Looking for a way out of the scandal-ridden Clinton White House, Emanuel used his connections to secure a job at the Chicago office of Wasserstein Perella & Company, an investment bank whose chairman was a major Democratic fundraiser. During Emanuel’s time there, from 1999 to 2002, he made more than $18 million working on eight deals. In 2001, for example, he helped broker the sale of home alarm company SecurityLink from SBC Communications, the former (and future) AT&T, to private equity firm GTCR for $479 million. On the other side of the deal was Bruce Rauner, a Republican banker who would later support Emanuel’s successful mayoral candidacy and is now reportedly thinking of entering politics himself. Later that year, the then-chairman of SBC (and future interim GM CEO) Ed Whitacre announced that one William Daley—brother to the mayor of Chicago, former secretary of commerce, and now the White House chief of staff—would become the telecom firm's president.

There was nothing illegal or corrupt about Emanuel’s time at Wasserstein Perella, we hasten to say. He was risking no one’s money but his clients’. But it does not take too large a conceptual leap to see how Emanuel’s short but happy private-sector career would later serve as a template for the Obama administration’s “investment” strategy. That strategy looks something like this: Connections? Check. Our friends? Check. Let’s deal. And if “some companies” don’t “work out,” well, that’s “a risk” to be borne by the taxpayers. That is “just the way business works.” And “everyone recognizes that.”

In Obama’s America, at least.

*Correction, October 17, 2011: The original version of this piece incorrectly stated that William Daley was the chairman of SBC at the time of SecurityLink's sale to GTCR.

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