Choate Stirs Up Emotions Over Foreign Lobbies in Washington : Politics: The economist blames ‘easy ethics’ for gains by foreign interests. Some say his claims are exaggerated, but members of Congress are listening.

Pat Choate is speaking to 71 of America’s top labor leaders. Passion transforms the amiable mien and friendly Texas drawl of this Washington insider and prominent policy analyst. The Japanese, Choate thunders, have waged the most effective, well-financed, best-organized lobbying effort in the United States of any foreign nation.

He reels off his arguments: The Japanese are spending $400 million a year to advance their economic interests through political influence. That’s more than the 12 nations of the European Community combined, more than the five most influential U.S. business organizations. They have hired 1,000 Americans, including scores of former U.S. trade officials.

Choate claims that the Japanese have become so powerful that they can stop nearly any U.S. legislation they dislike and out-lobby even U.S. special interests.

These are highly provocative words, but his target isn’t really the Japanese. Stumping for his new book on the issue, “Agents of Influence,” the former TRW Inc. analyst saves his strongest words for those he considers the nation’s real adversaries: the American officials who represent foreign interests.

“The problem is not found in Bonn; it is not found in Tokyo or London. The real problem is in Washington and in America, in a culture that permits easy mercenary ethics. Increasingly we are seeing people come to public service not for the privilege of public service but for the opportunity for public gain,” Choate says to the mesmerized audience, some of whom furiously scribble notes. “This kind of public, systematic corruption has got to be stopped.”

“On Wall Street,” he later adds, “they’re selling stocks and bonds, junk bonds, equity in companies. In Washington, they’re selling the national interest.”

Choate, 49, has a Ph.D. in economics but crafts his message in the plain language of populism. He has a phrase for U.S. officials who lobby for foreigners at the expense of American interests: “political concubines.” For the Japanese, he has a line that wins American applause every time: “You’re welcome to participate in our economy, but you’re absolutely unwelcome to participate in our politics.”

And for the American people, he has crafted an epigram, a snappy phrase that he hopes will capture the essence of his message and reverberate in people’s minds: “Only Americans can stop it.”

The labor leaders love it. They give him a standing ovation. Later, one leader says this is the first time he has seen such a battle-scarred crowd of political veterans get so fired up by a speech.

“People are going to be remarkably receptive,” predicts Howard Samuel, chairman of the Industrial Union Department, AFL-CIO. “A lot of people in the labor movement had suspected we’d been sold out by those to whom we had entrusted our future. What Pat has done is confirm it.”

It is this kind of reaction that may well make Pat Choate a household name and “Agents of Influence” an instant best-seller when it hits the bookstores Oct. 1. The national media have already begun clamoring for Choate’s time. He has lined up appearances on “60 Minutes” and the morning talk shows, negotiated a PBS special and made an audiotape of his book. He has given interviews to national magazines and arranged a three-week, 10-city book tour, including an appearance in Los Angeles on Oct. 17.

The Senate Commerce Committee plans to hold a hearing Sept. 27 on the issue of foreign lobbying, featuring Choate, of course, as the star witness. He is also a star victim, friends say. Choate was recently forced from his position as vice president for policy analysis at TRW, according to friends, because the Cleveland-based firm reportedly does $400 million a year in business with Japanese firms and did not want to be associated with the controversy. TRW denies ousting him, saying the separation was by mutual agreement, and Choate won’t comment.

The furor surrounds a book that will detail how the Japanese have hired Americans and present case studies of lobbying. One example he cites is their victory to escape higher tariffs on imported sport utility vehicles over the combined opposition of General Motors, Ford, Chrysler and the United Auto Workers. The effort cost the Japanese and others $3 million in lobbying fees, but the U.S. Treasury lost $500 million annually in customs duties, he says.

In perhaps the book’s most highly awaited feature, Choate lists 200 former U.S. officials, half Democratic and half Republican, who have been hired as foreign lobbyists and how much they were paid.

Just to compile that list, Choate has filled two long file drawers and several cardboard boxes with documentation, mostly Justice Department records. Two black binders, titled “The List of 200,” contain the signed statements of each former U.S. official registering as a foreign lobbyist.

“Got it. Got it clean. These are their statements with their signatures saying they’re doing it,” Choate says, a pleased look flickering over his face. He is back in Washington, in front of his Apple computer in the study of his two-story home filled with Japanese calligraphy scrolls, wood block prints and a wall mural of Mt. Fuji.

The lobbying is all perfectly legal, he hastens to add. But Choate argues that what is legal is not always ethical and that the multimillion-dollar Japanese lobbying effort amounts to “legalized public corruption.”

Many, of course, vehemently disagree with him.

“Pat Choate is an articulate, influential paranoid who happens to represent a lot of protectionist interests in this country,” said James R. Olson, vice president of external affairs of Toyota Motor Sales, U.S.A. Inc. in Torrance. Olson said some of Choate’s information is just plain wrong. Choate had asserted that Japanese auto makers successfully reclassified their sport-utility vehicles from trucks, which carry a 25% tariff, to cars, which carry a 2.5% markup. Olson said, however, that the five-seat vehicles had always been classified as cars and levied the lower tariff from the time they began being imported into the United States.

Hiroshi Hirabayashi, economic minister at the Japanese Embassy in Washington, questions why Japan is singled out when other foreign nations also mount lobbying campaigns in the United States. Indeed, former U.S. trade negotiator Clyde Prestowitz says the Israelis are equal or better lobbyists in Washington.

Yoshihisa Komori, the Washington bureau chief of the Sankei Shimbun, a national newspaper in Japan, says Choate vastly exaggerates the impact of Japanese lobbying. Komori wrote a book on the topic, “The Japan Lobby,” in 1980 and concluded that the Japanese actually had been suckered into paying millions of dollars to U.S. lobbyists who delivered very little .

In recent years, Komori adds, Japanese lobbyists have failed to stop sanctions for dumping semiconductors. They couldn’t prevent the United States from extracting concessions on supercomputers and satellites or establishing the “Super 301” process to attack unfair trade practices.

“It seems to me that the whole theme of Japanese lobbying is a story more about Japanese gullibility and shrewd mercantilism of some American so-called experts than about real influence-peddling operations,” Komori said.

Prestowitz, Choate’s friend and intellectual soul mate, also thinks some of the claims of Japanese influence are exaggerated. Like Choate, however, he maintains that the real problem is the seeming inability of Americans to define a clear national economic interest.

Unlike Prestowitz, Choate is not an expert on Japan and some of his assertions about the country are criticized as overstated. He asserts, for instance, that Japanese don’t significantly change their trade practices and that claims of change are merely “a deflection device” to fend off U.S. demands for open markets. In fact, the Japanese are buying more foreign products, ranging from fancy European cars to California wine, as conspicuous consumerism takes hold in the once frugal nation.

Rather, the economist’s main intellectual interest has always been how to use governments and industries to create jobs and provide economic development.

Choate, after earning a doctorate in economics at the University of Oklahoma, also held public policy posts in West Virginia, Tennessee and Oklahoma. He landed in Washington in 1975 to work on economic development issues for the Carter Administration.

Choate’s faith in government was bred in Maypearl, a populist, hard-scrabbling rural town of 150 people in central Texas. His father was a self-made man who advanced from being a poor sharecropper to owning his own cotton farm, where Choate labored after school and during the summer. The town didn’t get electricity until Choate was 7 years old, in 1948, and it was brought by the public Rural Electrification Administration.

He attended the University of Texas on an ROTC scholarship and wanted to be a career officer in the U.S. Army but was barred from military service because of diabetes. During the Vietnam War, as protest tore the country apart, he tried to piece it together through public works programs in the Appalachians.

His experiences have given him an upbeat view of the country’s future. He has authored books such as “America in Ruins” and taken industry to task for losing its competitive edge. But Choate also delivers patriotic lines such as this one to a group of legislative assistants in Washington: “We did not build a $5-trillion economy because we are incompetent people and because our workers and because our management and our boards are dunderheads. We are not.”

Despite the controversy he creates, Choate comes across as gracious and charming.

Rep. Marcy Kaptur, (D-Ohio), says Choate is effective because he has the intellect to take complex problems of politics and economics and boil them down to their essence. Others laud his vision to craft fresh solutions, proposals like his “portable pension plans,” which would move with the worker instead of the job.

Choate is also considered a creative genius at packaging and marketing ideas. He is regarded, for instance, as the “godfather of competitiveness,” the analyst who drew national attention to the issue in the mid-1980s. Reagan eventually made U.S. industrial competitiveness the centerpiece of his 1987 State of the Union address.

The mild-mannered Texan is also a master schmoozer with the savvy to marshal the political forces in both parties--across the ideological spectrum--necessary to transform ideas into legislation, and legislation into law. For that purpose, he remains politically independent, although his parents were both conservative Democrats.

“I’m interested in whoever is interested in the idea,” says the bearded, bespectacled Choate.

Perhaps the most critical key to Choate’s effectiveness is a quality rare in Washington: the humility to let others take the credit. He ghost writes Op-Ed pieces for others, suggests legislation.

“It’s very important to take an idea, be inclusive about it and then get out of the way,” Choate says. “Many people will not do things unless they get the credit. Let them have the credit. My satisfaction is seeing it done.”

All of these talents will be required to push through the kinds of reforms Choate has in mind. He wants to permanently prohibit certain top officials, such as the director of the Central Intelligence Agency, from becoming foreign agents or paid lobbyists for any corporation, foreign or domestic. He wants a five- or 10-year “cooling off” period for lower-level officeholders instead of the current 12 months.

He also wants a full disclosure of anyone--journalists, academicians, lawyers, foundations--who represents foreign interests, unlike the current loophole-filled law. And Choate would flatly prohibit foreign companies from participating in U.S. elections, which they are now allowed to do through political action committees.

“This is a worthy political fight,” Choate says. “It’s important. These things need to be done. And I feel at least if I can do it, I have a responsibility to do it.”