If Scott Pruitt were a CEO, he'd be long gone

Columnist
Yahoo Finance

President Trump wants to run the US government more like a business. So one has to ask: Why in the world does he still employ Scott Pruitt?

Pruitt is the embattled head of the Environmental Protection Agency, and his tenure is turning into a daily reminder of Trump’s worst hiring instincts. Pruitt is on the hot seat for an ever-growing list of infractions and overindulgences at the EPA, which so far include:

Pruitt is a journalist’s dream, because every inquiry into past or present behavior seems to turn up some sort of self-dealing. There are fishy real-estate deals involving front companies when Pruitt was Oklahoma attorney general several years ago. A banker friend barred from the industry for life ended up on the EPA payroll. If a reporter tracked down Pruitt’s nanny or dog walker, they’d probably learn he paid them from some slush fund or demanded they work for free.

Pruitt is a goner. He seems to be the only one who doesn’t realize this. Trump is probably just dragging out his departure to create a little space between Pruitt and his last hiring flameout, Veterans Affairs Secretary nominee-withdrawer Ronny Jackson. But it’s too bad Trump isn’t really running the government like a CEO, because if he were, Pruitt – who’s been in the job since February 2017 – would have been gone long ago.

Corporate America isn’t exactly a bastion of propriety. The Harvey Weinstein and Steve Wynn scandals prove that powerful honchos can get away with abuses for years before getting caught. Some probably never get caught.

Assessing the damage

But there’s also a red line in business that even the CEO can’t cross: When CEO behavior damages a company’s brand, the boss has to go. There’s typically a period of hesitation in the aftermath of a scandal, as the board of directors weighs shareholder discomfort and tries to assess the damage. Is the controversy a mere blip? Or something likely to persist? Every scandal is different, and the board has to first determine where the red line is. But once they know that, there’s little choice but to act.

Uber co-founder Travis Kalanick had to go when it became apparent his brash management style was hurting the company. Richard Smith left Equifax after presiding over a giant hack of consumers’ financial data, which infuriated the public. Ford fired Mark Fields simply because he wasn’t transforming the company fast enough into something more futurey.

Boards don’t always pull the trigger. United Airlines CEO Oscar Munoz was in the hot seat last year after the notorious forced removal of a paying passenger from a flight. That incident clearly hurt the company’s image. But Munoz didn’t personally order the removal, or even write the policy that supposedly allowed it. Meanwhile, he apologized for the incident and enacted changes to make sure it didn’t happen again. That’s a good template for how to keep your job in a crisis.

Is Scott Pruitt hurting the EPA’s image? Unmistakably, yes. There are now more than a dozen official investigations into all things Pruitt, including some led by his fellow Republicans. This means the stream of bad publicity will continue and maybe intensify. Top aides are fleeing the EPA, adding to the air of crisis and impairing the agency’s ability to function.

Pruitt is also harming Trump’s image, which is the real reason he’ll be gone before long. Trump critics have seized on Pruitt as the “swampiest” Trump appointee of all, worse even than disgraced former Health and Human Services Secretary Tom Price, who resigned last fall after a spree of plush, taxpayer-funded trips on private jets. Trump may actually care about this, because grifters living large on taxpayer money puncture his persona as the populist outsider gone to Washington to champion the little guy. But firing Pruitt, whenever it comes, will be long overdue. President Trump could use a board of directors.

Confidential tip line: rickjnewman@yahoo.com. Click here to get Rick’s stories by email

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Rick Newman is the author of four books, including Rebounders: How Winners Pivot from Setback to Success. Follow him on Twitter: @rickjnewman

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