He’s the last person one would have expected to benefit from the corporate scandals that have rocked the nation this year. But it’s true: Scott Harshbarger, the former Massachusetts attorney general who made a national name for himself by suing tobacco companies and railing against special interests as president of the public-interest lobby Common Cause, will soon be billing his hours to corporate America.
After spending most of the last three years belittling corporate chieftains at rallies, in press releases, and in op-eds, Harshbarger is now hoping to make big bucks preaching to them in their own offices and boardrooms. He started in mid-October as a partner in the corporate governance group at Mercer Delta, a management consulting firm.
Scott Harshbarger: “After the 1998 election, people told me
there was no way any corporate board would want me.”
It will certainly be a change of venue for Harshbarger, who at Common Cause hasn’t minced words in his condemnations of corporate ethics. In January, for example, he blamed the airlines for “watering down safety and consumer protections.” In the midst of the corporate scandals, he attacked the accounting industry for “vigorously lobbying to prevent institutional reforms from taking hold.”
Now, Harshbarger will be selling integrity, and he’s got reason to believe business leaders might be buying. What’s happened in corporate America over the last year “amounts to a total ethical breakdown,” he charges. “Investors, government regulators, [and] the public all have lost confidence, and corporate America needs to win it back.” In this climate, Harshbarger’s name may lend some credence to the numbers in a company’s annual report.
But even Harshbarger, who was the Democratic nominee for governor of Massachusetts four years ago, sees the irony in his new vocation. “After the 1998 election, people told me there was no way any corporate board would want me,” he recalls with a laugh. “They said, ‘You think regulation is a good idea. You’re honest and have integrity.’ I guess we’re now seeing a rare confluence.”
Corporate America, apparently, is ready to get religion.
“Given his background in law and public service, Scott understands what corporate accountability is all about,” says David Nygren, the head of the Mercer Delta corporate governance group. Nygren expects that companies will see a benefit in “having an outside third-party referee to assess the board and … guide it towards the sort of accountability now required by law.”
At 60, Harshbarger is still lean, fit, and intense, but he’s happy to be coming home after three years of commuting to Washington, DC, from his home in Westwood, where he lives with his wife, Judith Stephenson. San Francisco-based Mercer Delta has agreed to let him work from Boston.
Harshbarger spent most of his time at Common Cause fighting for campaign finance reform, a battle that was once considered quixotic but ended in triumph when President Bush signed legislation in March banning large “soft money” contributions to political parties from corporations, unions, and individuals.
“Inside the Beltway, it was viewed as an incredible victory because most of the people in Washington thought you could never alter these power relationships,” Harshbarger says.
Advocates led by US Rep. Marty Meehan of Massachusetts and Sen. John McCain of Arizona had fought for the bill for seven years. Meehan says Harshbarger’s team was the driving force behind the bill, organizing “countless town meetings” and energizing “scores of volunteers.”
Ultimately, the Enron debacle gave the activists an edge. Members of Congress from both parties had taken large campaign contributions from the company and desperately wanted to distance themselves from the scandal. Harshbarger and his cohorts took full advantage, playing up the Enron angle, and the tide turned.
Allies in the fight credit Harshbarger for expanding the coalition behind campaign-finance reform–and mediating differences between its cantankerous members.
“Scott wasn’t burdened by a history of being personally involved with these wars,” says Paul Taylor, director of the pro-reform Alliance for Better Campaigns. “He was skillful in keeping everyone on board. He was the right person at the right time for Common Cause.”
In more ways than one. By the time Harshbarger took over, an aging membership and shrinking donor base had left the citizen lobby on the verge of bankruptcy. He took steps to cut costs, eliminating several state offices, and tried to lessen the group’s dependence on individual contributions, launching an education fund that can solicit donations from foundations.
“Scott set about, with our help, to make a lot of changes in the culture of Common Cause,” says former Harvard University president Derek Bok, a member of the group’s national board. He credits Harshbarger with “widening its agenda, redefining the relationship of the national office to the state offices, and adding an educational arm. It’s proved essential to our financial well-being.”
“I hope that in two years people can look back and say Scott Harshbarger was the guy who made Common Cause relevant again,” says Ed Caffaso, his former press secretary in Massachusetts.
But another ambitious Harshbarger plan, to recruit younger members by tapping the movement for national service, he leaves to his successor. During the past year, Harshbarger launched civic education programs in inner-city neighborhoods in Chicago, New York, and Los Angeles, and teamed up with the Boston-based service group City Year on a conference to promote volunteerism. Whether such efforts will revitalize Common Cause at a time of declining civic activism is an open question.
“You are fighting unprecedented apathy on part of young people, and it’s not something you’re going to turn around in three years,” says Bok. “Scott made a good beginning.”
It was another Harshbarger-inspired Common Cause campaign that led him to his new job. In May, Harshbarger was one of the first to call for the resignation of Securities and Exchange Commission Chairman Harvey Pitt, the onetime lawyer to the accounting industry now in charge of regulating his former clients. He backed accounting reforms sponsored by Sen. Paul Sarbanes, a Maryland Democrat, which ultimately became law. And he urged President Bush to convene a blue ribbon commission on corporate accountability to recommend further reforms.
Mercer Delta thinks that the push for corporate responsibility can be good for its consulting practice, and that Harshbarger can help. “People look at these accounting scandals, and they say, ‘Where was the board? Were they asleep at the switch?’ The answer seems to be yes,” says Nygren. “These boards ought to be accountable.”
Harshbarger expects that his experience overseeing nonprofit boards as Massachusetts attorney general will guide him in his new post. In the early 1990s, he says, “We saw numerous boards at major universities, health care systems, and smaller charities that had huge conflicts of interest. They’d forgotten about accountability and were operating the charities for their own self-interest. Now we’re facing the same issues in the private sector.”
Despite the angry anti-corporate rhetoric he churned out at Common Cause, Harshbarger says he’s ready to meet his new clients with an open mind: “I’ve always believed most CEOs want to do the right thing.”
Shawn Zeller is assistant editor of The National Journal.