After years of quietly advising politicians and lobbying outside public view, William Daley is now revealing his blue-chip list of clients and personal fortune as the Senate prepares to consider Wednesday his nomination to be secretary of commerce.
Documents made available on the eve of his hearing before the Senate Commerce Committee provide a rare glimpse into the professional life of the brother of Chicago’s mayor. They show he has represented some of the nation’s best-known corporations, along with prominent foreign companies, and earned nearly $1 million as a lobbyist and corporate adviser last year.
United Air Lines, Sears, Roebuck and Co., Monsanto, Burlington Northern Santa Fe Railroad, Nestle S.A., Deutsche Telekom, Sara Lee, WMX Technologies and Lockheed Martin are among the firms for which Daley has worked–impressive testimony to the lure of his name, ample connections and apparently effective, low-profile ways.
Financial statements provided to the Senate show Daley’s law practice, his extensive stock holdings and other sources of income have made him a wealthy man, with assets worth between $1.7 million and $3.5 million, not including the value of his two homes.
The government requires reporting of asset values in a range, such as $50,000 to $100,000, preventing a more precise tally of Daley’s wealth. He also reported three outstanding loans totaling between $310,000 and $615,000.
Daley would earn $148,400 in the Cabinet post.
Although Senate Republicans say Daley’s confirmation appears virtually certain, some have voiced concern about his taking over a department already beset by charges of politicization, given his background in lobbying and his fundraising for Democratic candidates.
Commerce Committee Chairman John McCain (R-Ariz.), in a questionnaire sent to Daley, expressed concerns over allegations that Democratic Party contributors have received favorable treatment from the Commerce Department.
Daley responded that “there will be no connection between campaign contributions and making decisions on important departmental programs.”
If confirmed by the Senate, Daley has agreed to recuse himself from decisions directly involving former clients for a year after going to the Commerce Department or for a year after his work for the company ceased.
As a partner at the Chicago law firm Mayer, Brown & Platt, Daley made $825,775 last year, and he will receive a $400,000 severance payment from the law firm, according to documents. He also received lucrative fees and stock options as a member of several corporate boards, including those of Everen Securities Inc., Federal National Mortgage Association (Fannie Mae), and Wheelabrator Technologies Inc.
As a board member at Everen, the Chicago-based financial firm formerly known as Kemper, Daley received $47,774 last year. He was given another $24,813 in director fees by Fannie Mae, the government-chartered corporation that purchases and repackages mortgages into investment instruments. Daley was appointed to the board of Fannie Mae, for whom his law firm does work, by President Clinton in 1993.
Although not required to do so under federal ethics rules, Daley is resigning from all corporate and charitable boards on which he serves. He will receive lump-sum payments from Everen, Fannie Mae and Wheelabrator as part of deferred-compensation agreements. Those payments could be substantial.
Daley listed Fannie Mae and the Wheelabrator deferred-compensation plan as being worth between $100,000 and $250,000. Daley has earned another $100,000 to $200,000 in stock options and dividend reinvestments from Fannie Mae.
Daley said he will not participate in matters affecting the companies for a year.
A real estate partnership with his brothers Michael and John earned Daley another $13,100 in 1996 from a commercial property on South Halsted Street, the offices of an insurance brokerage owned by Daley family members. The property has a value of between $50,000 and $100,000, according to Daley’s disclosure form.
Daley is a limited partner in another real estate venture in New York City and he owns a vacation property in Grand Beach, Mich.
Some senators’ concerns about Daley stem from his close relationship with his brother, Mayor Richard Daley. McCain, for example, has questioned whether Daley, who has not previously held an administrative job in government, will lavish Chicago with Commerce Department largess.
In a written response to McCain, Daley has promised he will recuse himself from all decisions on specific matters, such as grants, in which Chicago city government is a party for as long as his brother is mayor.
“I agree that favoritism for a particular municipality is wrong,” Daley wrote. “This recusal is not required by the governing federal law and regulations, but I believe it is appropriate to avoid any appearance of a conflict of interest.”
Daley also has promised that “to avoid an appearance of impropriety,” he will have no “professional contact” with employees of Mayer, Brown & Platt during his tenure as commerce secretary. Likewise, he promised not to get involved in any Commerce Department-related matter involving “close family members.”
Despite Daley’s long list of recusals to avoid conflicts, there are loopholes. A government ethics lawyer involved in approving the arrangement said Daley could take part in Chicago-related matters if his role were approved by a third party inside the Commerce Department.
Former Commerce Secretary Ron Brown, who came to the job with a background similar to Daley’s, agreed to such restrictions, but questions arose during his tenure about whether he was abiding by the arrangement.
To further insulate himself from criticism and to comply with federal ethics rules, Daley has agreed to sell all his individual stocks.
His biggest holdings include stock worth $1,000 to $15,000 in AT&T, Ameritech Corp., Lucent Technologies, Home Depot, Inc., Motorola, Adobe Systems, ConAgra, Fluor Corp., Walt Disney, and Walgreen Co. Among the holdings that Daley is selling are shares of Tribune Company stock worth $1,000 to $15,000.
Associates say Daley intends to trade his holdings for mutual funds, in which he has no control over the stock purchases, or government bonds.
Daley also has substantial cash savings in Amalgamated Bank of Chicago, which he once headed, and Northern Trust Bank. He has between $50,000 and $100,000 at Amalgamated, and between $250,000 and $500,000 at Northern Trust.
He also has a savings plan at Mayer, Brown & Platt valued at $100,000 to $250,000, according to his financial disclosure.
