Oh, You Meant *Moral* Bankruptcy…

This just in, via Politico, from the Insomniactive Can’t Make This Stuff Up desk:

If Hillary Rodham Clinton becomes Barack Obama’s secretary of state, she could wipe away her lingering $7.6 million presidential campaign debt.

As the nation’s top diplomat, she would be barred by tradition and ethics rules from partisan political activity, including raising cash to pay off debt from her unsuccessful bid for the Democratic presidential nomination.

And that could give her a powerful case to make to the Federal Election Commission about why it should forgive her campaign debt through a settlement process not unlike filing for bankruptcy.

For openers, nobody has confirmed that Sen. Clinton will go this route.  And granted, most of what she owes is to the likes of Mark Penn and Howard Wolfson (forgive the lack of alligator tears), and apparently there is precedent for this type of thing (although not nearly his magnitude).  And Penn et al probably never expected to be paid if they lost.  But is anybody other than me struggling to supress his gag reflex?  The woman is a centimillionaire via her husband’s ability to charge up to $425,000 per speech.   And she’s going to cry poor to the Federal Elections Commission.

On its face, this would violate Mother Thornton’s One Easy Rule of Ethical Behvior:  namely, “what would happen if everyone behaved that way.”  Of course, the Doctrine of Clinton Exceptionalism trumped Mother Thornton long, long ago.

But here’s what’s would be really contemptible about the FEC giving Sen. Clinton a hall pass.  Let’s say that Penn’s and Wolfson’s firms pay taxes at the 35% marginal corporate rate.  If Secretary Clinton stiffs them, they will write off $7.6 million in concollectable receivables.  As a result, they will pay $2.66 million less in taxes than they would have otherwise.  So basically, the American taxpayer is subsidizing the Secretary of State to the tune of $2.66 million.  And do you think anyone will ever audit the bills Penn and Wolfson submitted? 

In a season brimming with bailouts, this would be the smallest.  But it would also the most ethically reprehensible.   A centimillionaire employes resources which are not hers in pursuit of power she does not attain.   But by dint of achieving considerable power nonetheless, she is able to stiff her vendors and leave taxpayers with a nearly $3 million bill. 

Legally, that may all be kosher. Ethically, it’s black and white:  HIllary Clinton should write the U.S. Treasury a $2.66 million check before she is allowed to be sworn in as Secretary of State.  If not, we should all write the following type of letter:

Dear President Obama:

Please name me to the post of Assistant Deputy Undersecretary of Mustard.  My American Express bill is very high this month, and I would like to have it forgiven.

Especially the $2,300 that went toward the retirement of Hillary Clinton’s debt.

Sincerely,

Insomniactive Management

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