Government officials wooed by Web businesses

As regulation comes to the Net, so will former government officials--or so conclude headhunters watching trends in the overheated ".com" employment market.

Evan Hansen Staff Writer, CNET News.com
Department Editor Evan Hansen runs the Media section at CNET News.com. Before joining CNET he reported on business, technology and the law at American Lawyer Media.
Evan Hansen
3 min read
As regulation comes to the Net, so will former government officials--or so conclude headhunters watching trends in the overheated ".com" employment market.

Just yesterday, Federal Election Commission head Trevor Potter became one of the lucky ones, landing a place on the advisory council of start-up Politics.com, a Web company whose mission includes "increasing the impact individuals can have on the political process."

Not surprisingly, the appointment came as the FEC is considering new rules for Web-based political fund-raising and campaigning.

Then there's Jay Perlman. The No. 2 man in the Securities and Exchange Commission's Internet enforcement division left last month to become associate general counsel at the Motley Fool, a Web site that offers investment advice. The SEC has been one of the most active agencies on the Net, scrutinizing online trading activities and discussion groups that tout stocks and cracking down heavily on Web-based stock scams.

Policy wonks leaving public service have long come to expect a well-oiled revolving door into the private sector, and it's unlikely the Internet will prove any different.

Thanks to the government's hands-off approach to the Net, however, e-commerce has been something of a bust for former regulators looking for work. Instead, they've had better luck with industries such as banking and telecommunications, which typically rely on armies of government-savvy employees to cut through red tape.

A barrage of government officials migrating to the Net is "probably something you won't see for another year or two," said Peter Gregory, a senior partner with employee search firm Confidential Global Search. "The Internet is still mostly unregulated, so government experience may not be so highly valued yet."

Still, a few public servants have traded fame to get their foot in the e-commerce door early.

Former Surgeon General C. Everett Koop is probably the most well-known official to journey online, launching his Drkoop.com medical advice Web site and taking it public earlier this year. Astronaut Sally Ride, the first American woman to orbit the Earth, made a splash in September, signing on with Lou Dobbs's astronomy Web site, Space.com. And retired generals Colin Powell and Alexander Haig sit on the board of America Online.

"Everybody in the '.com' and e-commerce business is looking for marquee names," said Jeff Christian, of Cleveland-based executive search firm Christian & Timbers. "The obvious ones have run out, so people are looking around in unusual areas. It'll be interesting to see what comes out of the woodwork."

Just this week, Dick Morris, the former political adviser to President Bill Clinton, threw his hat in the Internet ring, launching Vote.com, a Web site that lets people sound off on hot-button political issues.

For most government employees, however, opportunities in the private sector have been relatively sparse on the ".com" front.

"This is just not an area where the government is deeply involved," Confidential's Gregory said. "It appears to be unregulated outside of a few specific areas."

Gregory added, however, that there are a few industries to keep an eye on for increased government scrutiny, as well as private-sector opportunities for former regulators: education, online prescription drug sales, and financial services.

A random search of Internet companies that have gone public recently did not reveal a large number of former public servants in boardrooms or top executive suites, although a couple did turn up among online medical companies.

According to SEC filings, Drugstore.com's vice president of operations, Chris Hauser, did a stint in the Defense Department as the head of its largest distribution center. And Healtheon board member Laura D'Andrea Tyson, dean of the Haas School of Business at the University of California at Berkeley, is a former presidential adviser to Bill Clinton. In the mid-1990s, she served as the president's national economic adviser and sat on the national security and domestic policy councils.

Healtheon plans to use Internet efficiency to cut down on medical paperwork. Access to online health records has been pinpointed recently as a major policy issue, with the White House unveiling a privacy proposal on the subject last week.

Although opportunities have been slim so far, headhunters say they expect more public servants to find a way to get a piece of the Internet economy--as long as it continues to grow.

"Generally speaking, people decide to pursue politics instead of pursuing wealth," Christian said. "But nobody wants to be left out of the '.com' experience."