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July 28, 2009

Mrs. Evan Bayh Does the Board Walk

Ralph Alter
Despite the faltering economy, the job market for spouses of Democrat Senators continues to blossom. Daniel Lee, in an Indianapolis Star investigative report, details how Mrs. Evan Bayh appears to be following the example of Michelle Obama's remunerative affiliation with the University of Chicago Hospital that was the beneficiary of proposed earmarks initiated by her husband.

The lovely Susan Bayh, formerly a mid-level attorney for the Eli Lilly Corporation headquartered in Indianapolis, has seen her income skyrocket since Evan joined the auspicious upper chamber of Congress in 1998.

The Bayhs are embroiled in a controversy over the inordinate number of corporate boards on which Mrs. Bayh serves.  She is described by the liberal advocacy group Public Citizen as a "professional board member."  The controversy will be certain to generate a closer examination of the couple's finances.  Formerly overlooked tidbits like Susan Bayh's Wellpoint stock dumping profit should raise a few eyebrows as well:

On January 7, 2007, Susan Bayh exercised her options to acquire 3,333 shares of Wellpoint for an estimated cost of $147,000 and sold them the same day for an estimated price of $260,000, netting a tidy sum of $113,000. She repeated the process on May 17, 2007 for a net profit of $136,000. On December 11, 2007 she dumped an additional 1,430 shares of Wellpoint for $123,000. Why not? The entire Wellpoint board of directors was doing the same thing.

Bayh's total profits from stock dumping were $372,000. How much health care could the state of Indiana purchase for $372,000?

It appears that since Evan Bayh was elected to the Senate in 1998,

... numerous companies recruited her, and she eventually served on the boards of eight companies. At least one of them asked her to reduce the number of boards she served on, apparently because she was spread too thin to be effective.

And Susan is really hauling in the dough while strolling the medical corporation Board walk. Daniel Lee writes in the Indianapolis Star:

Susan Bayh served on these five boards from 2006 through 2008. All have a stake in health-care reform...

...Bayh's compensation during those years:
  • WellPoint $976,000: Indianapolis-based health insurer, includes Anthem Blue Cross and Blue Shield.
  • Dendreon $370,391: Seattle-based biotech company focused on cancer treatments.
  • MDRNA* $388,169: Bothell, Wash., biotech company developing therapeutics to treat liver diseases.
  • Curis $184,001: Cambridge, Mass., drug-development company focused on cancer treatments.
  • Dyax $221,692: Cambridge, Mass., biopharmaceuticals company developing treatments for use in oncology and inflammation.

Total $2,140,253

Until 2008, Susan Bayh served on 8 corporate boards.  Now that Mrs. Bayh's number of board memberships has been reduced to 6, one would think the wife of a U.S. Senator would have the time to discuss her positions and how she and Evan avoid conflicts of interest when health-care legislation comes up for a Senate vote.  Not this senator's wife: requests by journalists and watch-dog agencies have been met thus far with stonewalling. As Lee reports,

Adding to speculation about a connection between her board memberships and her husband's office is Susan Bayh's unwillingness to discuss the matter, including for this story. She has declined several requests for comment on her corporate interests, making it difficult to tell where those interests end.

Broc Romanek, the editor of TheCorporateCounsel.com, a board advisory web-site, claims that Mrs. Bayh is "over-boarded" as well:

... most directors are expected to devote 20 to 30 hours a month to each board. That means Susan Bayh's six current board seats could consume up to 180 hours a month. The eight she served on last year could require 60 hours a week.

"Even for retirees, it is difficult to envision them being able to adequately perform their board duties if they serve on more than three or four boards," Romanek wrote in an e-mail.

As for Senator Bayh, his response to questions about potential conflicts of interest seems rather imperious, as though the mere statement of his self-perceived moral certitude is sufficient to allay any doubts about the rather tangled web of his family's financial interests:

"I'm going to do what I've always done . . . vote my conscience and do what's right for the people of the state. Period....Her activities have had zero influence on me in my official capacity..."

With the publication of Daniel Lee's report in the IndyStar, it seems likely that Senator & Mrs. Bayh's tune may change, or at least have a little volume added.  While blue-state Senators like Diane Feinstein of California and Chris Dodd of Connecticut might be able to get by with the appearance of conflicts of interest, Hoosiers are a more conservative lot and are much less likely to put up with potential financial turpitude.

Ralph Alter blogs at Right on Target.

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