Dan Quayle’s Legacy: Crony Capitalism

By Joel D. Joseph

Remember Dan Quayle? He is the third-worst Republican vice presidential nominee in recent history. The worst two choices are Sarah Palin and Dick Cheney. Palin has even less experience and gravitas than Quayle did when he was anointed by George Bush the elder. Cheney may have experience, but he is corrupt and pushed for the ill-fated Iraq war.

Dan Quayle, the 44th vice president of the US, is chairman of Cerberus Global Investments and sits on the boards of four other companies: Aozora Bank, K-2, Bell Automotive and IAP. They sound like legitimate companies, but actually they specialize in two major nefarious activities: war profiteering and moving US companies overseas.

How proud Dan Quayle must be, moving from public servant to public enemy.

K-2 Skis

I first encountered Quayle’s board relationship with K-2 Inc after I sued K-2 for falsely implying that its skis were made in the USA, when they were in fact made in China. K-2 used to be an American company, the largest ski manufacturer in the US. Back then, and as late as 2002, K-2 proudly engraved its skis with a “Made in the USA” designation, and promoted their skis with red, white and blue advertising. Several years ago K-2 decided to move production to China. They did not engrave their skis “Made in China” as they are required to do by federal law. K-2 put a flimsy sticker on the bottom of the skis with “made in China” in small print. Most of these stickers fell off the skis long before consumers had a chance to read them. K-2 kept up its advertising campaign that implied its skis were made in the USA.

K-2 is doing same thing to snowshoe maker Tubbs. Tubbs snowshoes were made in Vermont for 102 years. That didn’t stop K-2 and Dan Quayle from moving the company to China. Tubbs was the number-one snowshoe manufacturer in the world. Number two is Atlas, also acquired by K2 and made in China. I wonder why the Federal Trade Commission and the Justice Department allowed the two largest manufacturers of a single product to merge? Did Danny Boy lobby his Republican buddies, or was it just a wink and a nod?

Walter Reed Army Medical Center

Perhaps the most un-American and unpatriotic activities of Dan Quayle’s little businesses is IAP, whose contract at the Walter Reed Army Medical Center began September 2006. IAP was not the lowest bidder for the contract. It was a sweetheart, insider, all-Republican deal. The only competition that was involved with the IAP contract was between those who wanted to uphold the law and IAP, which wanted to ignore the law. The truly competitive part of the IAP contracting review was the initial part in which the federal workers won and IAP lost. The rest of the “competition” was about overturning the competitive result by any means necessary, whether legal or not.

The Senate voted 50-48 against an appropriations bill that would have prohibited the US Army from outsourcing 350 federal jobs at Walter Reed Army Medical Center. Republicans voted to defeat the measure.

Walter Reed Garrison Commander Peter Garibaldi penned a memo about conditions at the veterans’ hospital. The memo “describes how the Army’s decision to privatize support services at Walter Reed Army Medical Center was causing an exodus of ‘highly skilled and experienced personnel,’” Garibaldi said, “according to multiple sources, the decision to privatize support services at Walter Reed led to a precipitous drop in support personnel at Walter Reed.”

Two weeks later, Anne Hull and Dana Priest of the Washington Post wrote an exposé of the mistreatment of veterans at housing on the grounds of Walter Reed Army Medical Center. The article detailed a list of horrors at the facility, ranging from bureaucratic mistreatment of wounded veterans to headline-grabbing accounts of rodent and cockroach infestations. The Post reporters won the 2008 Pulitzer Prize for public service for coverage of the mistreatment of veterans at Walter Reed.

The Defense Department tried to replace federal workers at Walter Reed with private companies for facilities management, patient care and guard duty—a process that began after George W. Bush was elected in 2000. The push to privatize support services at Walter Reed accelerated under Bush’s privatization initiative, launched in 2002.

I thought that Republicans believed in competitive bidding, but I was wrong. Quayle and Cheney prove that Republicans stand for Crony Capitalism. And Crony Capitalism is what is practiced in China, where friends of the communist leaders get all the good deals. Crony Capitalism means cronies of the leaders get the capital and the contracts. This also explains why Republicans love China.

Under Quayle’s watchful eye, an IAP press release claimed, “IAP Worldwide Services is a leading government contractor providing a broad spectrum of services focused on global mission support for the Department of Defense and other US government agencies with a history of support for more than 50 years.” Actually, the company was founded in 1990. Why should facts get in the way of a good press release?

Congressman Waxman, coincidentally my representative in Congress, said we learned that Walter Reed awarded a five-year multi-million dollar contract to a company called IAP Worldwide Services for base operations support services, including facilities management. Waxman protested, “IAP is one of the companies that experienced problems delivering ice during the response to Hurricane Katrina” and should not be rewarded for incompetence.

Waxman said that “the conditions that have been described are disgraceful,” and that the Oversight Committee will “investigate what led to the breakdown in services.” “It would be reprehensible if the deplorable conditions were caused or aggravated by an ideological commitment to privatized government services regardless of the costs to taxpayers and the consequences for wounded soldier.”

During the year between awarding the contract to IAP and when the company started, “skilled government workers apparently began leaving Walter Reed in droves,” Garibaldi reported. “Officials at the highest levels of Walter Reed and the US Army Medical Command were informed about the dangers of privatization, but appeared to do little to prevent them.”

The memo signed by Garrison Commander Garibaldi requested more federal employees because the hospital mission had grown “significantly” during the wars in Iraq and Afghanistan. “Without favorable consideration of these requests,” Garibaldi wrote, “[Walter Reed Army Medical Center] Base Operations and patient care services are at risk of mission failure.” I thought that we listened to commanders on the ground.


IAP’s majority owner is New York-based Cerberus Capital Management LP. Cerberus’s chairman is former Republican Treasury Secretary John Snow. Dan Quayle runs the international operation called Cerberus Global.

Most of Quayle’s business interests are interrelated. The Aozora Bank lends to both IAP and Cerberus. K-2 and Bell Automotive appear to be independent. The common threads for all of these businesses are war profiteering and moving established US manufacturing businesses to China. This is the enduring legacy of Dan Quayle.

Joel D. Joseph is chairman of the Made in the USA Foundation, a non-profit organization dedicated to promoting American-made products.

From The Progressive Populist, October 15, 2008

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