David Krone, the new chief of staff for Harry Reid, received $1.2 million from Comcast, his former employer, after he joined the Reid staff.

The payment to Mr. Reid’s aide, David Krone, stemmed from an unusual promise Comcast made when he quit his job as its senior vice president of corporate affairs. Not long before he was offered the Washington job, the cable company agreed to buy his apartment for the price he paid a year earlier, protecting him against a substantial loss. Mr. Krone had purchased the condo when he moved to Philadelphia to work for the company.

Companies often cover real-estate losses when trying to woo prospective employees. It is extremely rare for them to do so when an employee quits, say executive-compensation experts. “Severance benefits and even golden parachutes generally don’t protect executives against personal real-estate losses,” says Chuck Yen, an executive-compensation consultant with Grant Thornton LLP.

“Comcast did not know that David Krone was going to Harry Reid’s office or to any other government or regulatory agency” when his separation agreement was negotiated, according to company spokesman John Demming.

OK, sure, but Krone got to Reid’s staff months ago, and he did not disclose this $1.2 million payment, nor did anyone, until this story in the Wall Street Journal. (UPDATE: I got this wrong. It was disclosed in a 2010 filing. Apologies. I think the thrust of this post stands, however.) And, as the story notes, this arrangement, with payments from private companies coming after they move into the public sector, is not at all unusual. In fact, in 2009, according to the article, about 250 Congressional staffers earned $13 million from outside sources who used to employ them or companies they used to run. This includes stock payments from banks like JPMorgan Chase. And it doesn’t pass the laugh test to say that this has no impact on their jobs and responsibilities.

I don’t quite know how to deal with this – presumably Congressional staffers with expertise has to come from somewhere – but it looks really horrible to have staffers getting these lump sums from corporations.

Read the whole article, it reads the way a sewer might read if it got printed out.

David Dayen

David Dayen

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