Ex-U.S. Officials’ Foreign Lobbyist Work Is Debated

William von Raab has no doubts about who torpedoed his decision to slap a 25% tariff on Japanese minivans when he was U.S. customs commissioner in 1989: It was James Lake, a former campaign adviser to President Bush turned influential lobbyist, intervening for the Japanese, he contends.

As Von Raab tells it, his Customs Service ruling was unquestioned until Lake, who had served as a top campaign strategist for Bush in 1988 and is a confidant of former U.S. Trade Representative Clayton K. Yeutter, quietly began pulling strings to have it overturned. Almost immediately, Von Raab’s order was suspended. Six weeks later, the tariff was cut back.

To Von Raab, Lake--who once again is serving as a key adviser on Bush’s campaign staff--was “the godfather” in the case. “It was the most impressive blitzkrieg of influence-peddling that I have ever seen,” he recalled of the weeks leading to the Treasury Department’s reversal. “They (Lake’s forces) just came in and struck Treasury dumb.”

As is usual in such instances, not everyone sees the case as Von Raab does. Trade experts say that the minivan tariffs had been juggled for years to accommodate both U.S. and Japanese auto makers and that Detroit was reviving the issue in order to blunt a Japanese sales push. Both sides lobbied hard; Lake was only one of the pack. And a 25% tariff would have hurt American consumers.

But the issue--whether former top U.S. officials and advisers should be able to use their connections and expertise to lobby on behalf of foreign governments and business interests--is blazing anew, providing fuel for several candidates in an election campaign where the public already is disenchanted over perceived corruption in the nation’s capital.

Last month, Democratic presidential candidate Bill Clinton pledged to bar U.S. trade negotiators from representing foreign governments or corporations after they leave government, and both the House and the Senate are considering similar--though somewhat less restrictive--proposals.

The primary aim of U.S. trade officials must be “to serve their country, not sell out for lucrative lobbying paychecks from foreign competitors,” Clinton’s economic white paper asserted.

Undeclared independent candidate Ross Perot has also been hammering at the issue. Perot has been charging during TV appearances that America is being shortchanged in its trade dealings because former U.S. officials are “making $25,000 and $30,000 (a month)” as lobbyists, “whispering in everybody’s ear, creating one-way streets for trade.”

By contrast, he contends, poor U.S. dairy farmers have no such high-powered help and are not “properly represented” in Congress. What is needed, he says, is to “make it illegal for foreign nations, foreign companies . . . to lobby . . . and for former government officials to cash in by making . . . $30,000 a month . . . (to lobby) for foreign countries.”

By any measure, the list of former U.S. officials who regularly represent foreign governments or overseas interests is stunning. Pat Choate, the self-styled “political economist” who called attention to the issue in a 1990 book, “Agents of Influence,” estimates that more than 200 former key U.S. officials are now representing foreign interests.

More troubling to some analysts, the list includes some of the most influential firms in Washington, ranging from that of Howard H. Baker, former U.S. senator from Tennessee and onetime White House chief of staff, to former Defense Secretary Frank C. Carlucci and William E. Colby, who once served as director of the CIA.

Clyde V. Prestowitz, a former Commerce Department trade negotiator who currently heads the Economic Strategy Institute, a Washington think tank, argues that the situation is worsening. Over the past 10 years, he says, the game has come to involve “more people and bigger sums of money. I think it’s a serious problem,” Prestowitz said.

Critics of the Choate analysis--including many experienced former U.S. trade negotiators who have become noted for their hard-line stance and do not represent any foreign interests--say the issue has been far overblown and that those who embrace it, Clinton and Perot included, are merely pandering to the current mood of American xenophobia.

For one thing, the critics say, U.S. trade policy-making is so fragmented--involving some dozen agencies from the U.S. trade representative to the Pentagon--that it is almost impossible for a lobbyist to control a decision. Moreover, each department has its own “institutional” view: The Treasury traditionally has been oriented toward free trade, while the Commerce Department takes a harder line in favor of U.S. firms.

For another, the critics argue that no matter how good the connections of these high-powered lobbyists, in the end, trade decisions are influenced mainly by domestic considerations--the President’s own political ideology and the pressure brought by U.S. industries and voters, who have the power to throw the Administration out of office.

Alan William Wolff, a former Democratic trade official who makes a point of representing only U.S. firms, says he would be “hard-pressed” to cite a single case in recent memory in which lobbying by counterparts representing foreign interests has seriously affected the outcome of a trade decision.

Von Raab’s accusations involving the minivan case reflect the difficulty of determining just what goes into a decision. Although Lake’s tactics in representing clients are not universally admired in Washington, both hawks and doves familiar with the case say both the issue and the competing pressures were far more complex than Von Raab’s analysis suggests.

Many U.S. officials felt then that American auto makers, who have a history of seeking government protection and then raising prices once they get it, had been seeking to change the rules in the middle of the game. And they say that Von Raab’s Customs Service had no business making a decision to alter broad trade policy without consulting top trade officials.

Indeed, after a detailed review of the situation, the U.S. International Trade Commission, a regulatory body, declared last month that three years after the initial flap, the competition from Japanese auto makers has had only a minimal effect on American manufacturers. U.S. auto makers still hold more than 85% of the minivan market in the United States.

Other examples often cited by Choate’s supporters contain similar flaws. Trade experts say the move to impose congressional sanctions on the Toshiba Co. in 1989 was defeated not because of high-level influence-peddling but because U.S. corporations lobbied to block it for fear that they would no longer be able to obtain parts for their own manufacturing.

Many former U.S. trade officials who were known for their hard stands in negotiations with foreigners contend that for all the charges by critics, most of the lobbyists serve proper and useful functions, from representing clients in trade proceedings before regulatory bodies to seeking clarifications of U.S. trade policy.

“During the 10 years that I was at (the U.S. trade representative’s office), 95% of the calls I had from representatives of foreign governments or firms were on legitimate business that they had a right to know,” said Michael B. Smith, a former deputy U.S. trade representative who has a reputation for toughness at the bargaining table.

Smith contends that U.S. negotiators can sometimes use such lobbyists to suggest possible solutions to impasses in formal talks without seeming to demand them from the other countries’ negotiators--an important face-saver for many foreign governments. “Many times these guys were crucial to a settlement,” Smith said.

There’s no doubt that many former U.S. officials who represent foreign interests are well paid. While few charge the $30,000-a-month that Perot so regularly cites, the business certainly is lucrative. Some bills over the months can add up to hundreds of thousands of dollars.

Paul Freedenberg, a former Commerce Department official, points out that U.S. trade policy is so complex that foreign clients often need the help of American experts to wend their way through countless trade laws and pronouncements that investment or trade with the United States requires.

U.S. companies do hire former European, Asian and Latin America trade officials to represent them in capitals abroad. Getting ex-Japanese officials to perform such services is far more difficult, not because of any legal prohibition, but because Japanese culture frowns upon working for foreigners.

Despite the U.S. industry’s failure to win the minivan case, there is little doubt among most trade experts that domestic industries and corporations have the advantage in trade disputes. Not only are they familiar with U.S. business practices, but they hold all the political clout through campaign contributions and sway over Congress.

Perot himself has launched some classic campaigns to win tax breaks and other special favors for his businesses, including a $34-million subsidy to build an airport near land he owns outside Ft. Worth, a no-bid contract for automating the U.S. Postal Service and a multimillion-dollar tax break from the House Ways and Means Committee.

The last one was rebuffed only after newspapers exposed the campaign contributions that he had made to members of the tax-writing panel.

And Perot’s contention that American dairy farmers are not “properly represented” in Washington has drawn nothing but snickers. The dairy lobby, which traditionally has given generously to campaign coffers in both parties, is universally regarded as one of the nation’s most powerful special interest groups--and one of the most effective.

What does trouble some critics is the appearance of undue influence that such lobbying by former U.S. officials creates, and the possibility that the lobbyists occasionally may be privy to information--mainly about procedural issues--that they would not have gotten without connections.

Robert E. Lighthizer, a former U.S. trade negotiator, argues that even if the former officials do not sway high-level decisions, “the mere fact that they are using the expertise they gained in government to argue in behalf of foreign interests is offensive” to Americans’ sense of fairness. “That doesn’t make it right,” he contended.

And Choate, who has spent some time advising Perot on trade issues in recent weeks, argues that even if these former trade officials are not always successful in swaying specific policy decisions, their relationships with foreign governments has an impact on their willingness to take part in the national debate over trade policy.

“We cannot have an honest discussion or an honest trade policy until we slam that door,” he declared.

Current law requires any former U.S. officials representing clients before a federal agency to recuse themselves for a year in any cases involving either the agency or the issues in which they were working while in government, but critics say that is not enough.

Both Perot and Clinton appear to be calling for a lifetime ban for all government officials connected with trade policy. Choate is pushing for a lifetime prohibition for Cabinet-level and sub-Cabinet-level officials and a five-to-10-year ban for lower-level negotiators. He also wants to forbid presidential candidates from hiring “foreign agents” as campaign advisers.

But many of those with experience in trade negotiations contend that such prohibitions would do more harm than good by risking retaliation by foreign governments against access to their officials by U.S. corporations and by discouraging talented Americans from entering government service in the first place.

Although bureaucrats in other countries tend to make government service a career, they say, the American system all but guarantees a “revolving door” between industry and government because policy-making officials regularly change with incoming administrations.

“I think ultimately, what you’d get would be people in the executive branch who are less and less competent,” Wolff said.

Charles Lewis, executive director of the Washington-based Center for Public Integrity, which recently compiled a study on the influence of former U.S. officials who represent foreign interests, says the jury is still out about how much impact these lobbyists have. For the moment, he says, the most that watchdog groups can do is shed light on as many such arrangements as possible.

“For John Q. Citizen,” he said, “it helps to know what these advisers are about.”