by Lachlan Markay as published on The Daily Beast
“You might be able to buff up an old pair of boots but you just can’t polish a turd…” ~ R.T.
The former interior secretary is entering the blockchain business after a fortuitous in-flight chat about Americans dying for foreign oil
On April 20, 2018, Ryan Zinke was returning to Washington from an environmental conference in Texas. During the first leg of the trip, on a flight from Dallas to Atlanta, the then-Interior Secretary had an auspicious seatmate, an investor with a checkered legal past and a new company focused on blockchain technology.
The seatmate was Daniel P. Cannon. Over the course of the flight, Cannon said, “business was not discussed.” Instead, the two talked about “how U.S. soldiers dying for foreign oil was unacceptable to the president.”
Whatever was said must have impressed Zinke. Less than a year later—just weeks after he left the Interior Department—he joined Cannon’s company.
On Monday, Cannon’s investment banking and blockchain advisory firm, Artillery One, announced in a press release that Zinke was coming on board. The former interior secretary, Cannon told The Daily Beast, will provide “analysis” of pending legislation and regulatory requirements and receive “C level executive compensation” for that work.
Such policy advice, and a correspondingly sizable salary, are typical of post-government jobs for high-ranking administration officials who leave for the private sector.
But Artillery One, which describes itself as “a unique and sophisticated FinTech consulting company whose principals specialize in all forms of finance, crypto finance, investment banking and cybersecurity,” is not a typical cash-out opportunity.
Nor is Cannon a typical executive. His registration profile with the Financial Industry Regulatory Authority, a private financial watchdog group, is littered with red flags. They include criminal charges for cocaine possession in 2008—dismissed on the condition that Cannon receive substance abuse treatment—and possession of controlled prescription medication in 1995, which was also dismissed after Cannon agreed to serve two years of probation.
According to FINRA, one of Cannon’s former employers, Interfirst Capital Corporation, was also accused of “churning,” or conducting excessive trades in order to collect additional fees. The charges were settled for less than $10,000, and Cannon called the allegations “frivolous.”
Perhaps the largest red flag on Cannon’s record is a $1.6 million federal tax lien dating from 2001. His FINRA profile says that lien stemmed from “losses suffered as a result of 9/11/2001.” In 2009, documents were filed in a court in Florida indicating the issue remained unresolved. Asked about the lien’s status, Cannon said “the matter was solved long ago.”
Asked about other legal mishaps, Cannon responded: “So kind of you to point that out Lachlan. You know how to make friends.”
In starting Artillery One, Cannon sought to be among the thousands of companies hoping that blockchain, a digital ledger and database technology commonly used for cryptocurriencies such as bitcoin, would be the next big trend in tech, and make its investors billions. The firm chose to offer traditional investment banking services as well. But it billed its technological expertise as the stuff that can “make your strategic blockchain vision real.”
Cannon’s in-flight conversation with Zinke last year came shortly after a major Artillery One deal fell through. The company had stepped in to bail out a struggling Swiss blockchain company, offering just over $2 million to acquire the firm Monetas. But the deal fell apart after Monetas claimed Artillery One had only ponied up $400,000, and Artillery One insisted it had been misled about the scale of debt on the books of its acquisition target.
Nonetheless, Artillery One maintains business relationships with other companies, with an apparent focus on blockchain firms in Kosovo, where cryptocurrency businesses have soared in popularity of late. A cached version of its website, which was not available immediately after the announcement of Zinke’s hiring, lists two companies run by Kosovars, Sentry Cybersecurity and Bitsapphire, as “strategic alliances.” The press release announcing Zinke’s hiring listed a press contact in Kosovo. And Cannon himself appears to keep an eye on political goings-on in the Balkan nation.
How Zinke fits into the company’s vision is not entirely clear. As Interior Secretary he had no obvious jurisdictional overlap in cryptocurrency. And as congressman, he doesn’t appear to have touched the issue, save to vote alongside 384 of his then-colleagues in expressing the sense of the House of Representatives “that the United States should adopt a national policy for technology to promote consumers’ access to financial tools and online commerce to promote economic growth and consumer empowerment.”
As part of his new position at the company, Zinke is slated to attend the Crypto Finance Conference in St. Moritz, Switzerland this month. But his utility appears likely to be more as a D.C. operator than an expert on the technology underlying Artillery One’s business.
Stateside, Cannon has already sought to advise U.S. policymakers on the benefits of blockchain technology. Last year he was pictured with Rep. Kevin Brady (R-TX), then the chairman of the House Ways and Means Committee, with whom Cannon says he discussed “the Ways and Means to implement Blockchain within the U.S. Government” and “clarification for the SEC.”
Zinke’s hiring, it appears, is geared towards expanding Artillery One’s ability to connect with members like Brady and navigate often complex and evolving financial regulations.
“Secretary Zinke brings a wealth of experience and understanding of the workings of business and government,” Cannon said in Artillery One’s press release. He and Zinke, the firm added, “will continue to follow the vision of President Donald J. Trump in Making America Great Again, by bringing economic development, jobs and opportunities for people, at home and internationally.”
But in Zinke, Cannon is getting somewhat damaged political goods. The former secretary’s tenure at Interior ended amid a host of active investigations into his conduct, including one probe that was reportedly referred to the Justice Department, which can be a precursor to criminal prosecution. Some of those investigations revolved around Zinke’s travel practices, including a habit of bringing his wife along on taxpayer-funded official business trips.
It was not immediately clear whether that fateful flight from Dallas to Atlanta was one that has come under investigative scrutiny in the months since. But Zinke will likely have opportunities to take many more flights alongside Cannon.
“While Zinke will be based in Montana and California,” Artillery One’s news release said, “his work activities are expected to include extensive travel overseas in Europe and elsewhere.”