Bill Clinton reportedly is stepping down as a senior advisor to Yucaipa Cos., the private investment firm run by buddy Ron Burkle. Or perhaps former buddy, as the two reportedly had a falling out after The Wall Street Journal reported on some “messy” Yucaipa business that a Clinton aide helped facilitate.
The goal of Clinton’s departure from Yucaipa, of course, is to insulate wife Hillary from being tainted by association to any future Yucaipa stories. But the specifics obscure the larger point: Politicians should avoid private equity, if they plan to run for future office (or if they expect their spouses to do so).
For example, it hasn’t helped John Edwards’ left-wing cred that he was drawing a paycheck from Fortress Investment Group, and Bill Weld’s private equity activities completely derailed his attempt to become governor of New York. Mitt Romney may look like the exception that proves the rule, although it’s hard to say, given that he has so many other negatives on which to pick.
This advice may not sound fair, but what in politics is? There are plenty of other ways that pols can make money between jobs, including paid speeches, lobbying or joining a corporate board. And if you’ve really got an investment jones, go for venture capital, where there are fewer opportunities to get ensnared in the types of scandals that make page one of The Wall Street Journal.