AMERICAN PERISCOPE. Can businessmen make good politicians?

November is election time in the US: that means one topic will surely get time on the airwaves — outsourcing. But I am getting ahead of myself.

In Massachusetts, two candidates are competing for the post of governor. Martha Coakley the Democratic Party candidate, is going hammer and tongs against Charlie Baker of the Republican Party. Republicans are traditionally pro-business and can expect to find Democrats, traditionally liberal, to challenge their policies. But there’s another twist. Baker is a successful CEO who headed Harvard Pilgrim Health Care, a health insurance firm, and turned it around from a failing to a very profitable firm. That gives him two points to talk about: as a successful manager, he will bring superior business skills to state administration and his special skills as a turnaround manager will be useful in government.

That raises the question of whether successful businessmen make good politicians and administrators. The present governor of the state was also in the corporate world in a previous incarnation; the governors of Utah, Florida and Michigan have been successful business leaders.

Yet, the baggage all political candidates carry, namely a record that is going to be closely scrutinised, can come to hurt. Mitt Romney, who ran against Barrack Obama for president and touted his business skills on the campaign trail, found that his decisions as an investor shutting down business and laying off workers while fixing other businesses, could be looked upon very negatively in the political world, even while they could pass for efficiency and hard decision-making in the business world.

And that is where Baker stands exposed. In 1999, he decided to move the information technology and claims operations of the company he headed to another firm, Perot Systems, as an efficiency and cost-saving measure. About 800 employees from Harvard Pilgrim were transferred to Perot Systems as a result of the outsourcing contract. About eight years later, Perot Systems decided to move about 200 jobs to — where else? — India.

Now, why would this action come back to haunt Baker? That’s because the gnomes working in the campaign office of Coakley managed to find a photograph of a smiling Baker proudly receiving an ‘Outsourcing Excellence Award’ from an organisation called the Outsourcing Center! If he took credit for it then, it is time to pay the price now.

Outsourcing (really offshoring in this case) continues to be a hot issue in election campaigns. In Wisconsin, the governor running for re-election has chosen to attack his challenger, a business person, for outsourcing jobs from her company to China.

In the state of Georgia, a former businessman who is a candidate for the senate has been accused by his challenger of shipping American jobs overseas. And rather than explain it away, he has decided to take it head on and say he is proud of doing it because that is part of running a business. Time will tell if voters buy this argument.

Meanwhile, Baker is having to face other inquiries into his business record. To revive the company, he had to cut jobs, reduce insurance coverage for the elderly, and raise insurance premiums, all actions that helped turn around the company and pleased the board of directors who rewarded him with fat pay raises. His salary tripled to $1.7 million (about ₹10.2 crore) which provides additional fuel for his challenger who has been going to town accusing him of being heartless — cutting jobs while taking a bigger share of the pie for himself.

So, is being a successful business person a handicap in a political race?

I don’t know but when you recall that George Bush, the younger, became a two-term president although it was widely known that he was quite a failure as a businessman, it makes you think!

The writer is a professor at Suffolk University, Boston, and Jindal Global Business School

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