Business & Lobbying

Trade deals were cash cow for K Street

A multimillion-dollar stimulus package for K Street is coming to a close.

The expected passage of the trade deals with Colombia, Panama and South Korea marks the end point of a long campaign that saw the respective governments spend freely on lobbyists, lawyers and public relations to help push the deals to the finish line.

{mosads}A review by The Hill of Justice Department records shows that the three countries’ Washington embassies, foreign ministries and trade agencies spent at least $15 million on lobbying, legal and PR work since the beginning of 2006 to press for passage of the free-trade agreements (FTA).

The sum includes at least $2.3 million spent by the countries so far in 2011.

The lobbying blitz on the deals — which were negotiated by the George W. Bush administration in 2006 and 2007 — has involved dozens of lobby shops and PR firms over the years.

More than 30 lobby shops, law firms and PR companies have worked the pro-trade campaign for at least one of the three countries, according to Justice records.

The $15 million figure cannot begin to capture the amount of time and investment spent as foreign governments, business groups, multinational companies and lobbyists all worked together to pass the agreements.

It also cannot quantify the funds that went into a fierce counter-lobbying effort from unions, human-rights advocates and other liberal-leaning groups that worked to block them.

The Korean government was the biggest spender among the three, with close to $6.3 million spent on lobbying and PR from 2006 into 2011.

Not included in the Hill’s analysis was lobbying and PR spending recorded in Justice records by any private groups — such as the Korea Trade-Investment Promotion Agency, a quasi-governmental agency — or government agencies not connected to the trade agreements.

Opponents of the trade deals are still lobbying hard against the agreements and said there will be nothing to celebrate if the president signs them.

“With the projections that hundreds of thousands of manufacturing workers will lose their jobs from the pending trade pacts, it’s hard to work up too much sympathy for the relative handful of lobbyist contracts that may expire after Congress votes on the deals,” said Todd Tucker, research director for Public Citizen’s Global Trade Watch. 

Bill Reinsch, president of the National Foreign Trade Council, a pro-trade business group, called the expected passage of the agreements “a good thing.”

“Evidence of the benefits of the deals and the costs of not implementing them has been piling up for some time, so it’s good to get them done. Also, being able to do it with a degree of bipartisan cooperation is also good news for the Congress’s ability to get anything done,” Reinsch told The Hill.

Lobbyists said there is a sense of excitement that Congress is ready to close the book on the trade deals.

“There’s a sense of accomplishment. This is finally coming to fruition,” a Republican lobbyist said.

It could also mean that Colombia, Korea and Panama will cut back on their substantial lobbying roster once their long-awaited trade deals are approved.

Reinsch predicted there would be some reductions in the lobbying corps.

“I imagine some will, particularly if they were specifically for enactment of the legislation. However, even after the president signs the bills, there are many things that have to happen before they actually enter into force, and countries might find it in their interest to maintain some level of representation,” Reinsch said.

Firms working on the trade agreements have included some of K Street’s biggest names, including Elmendorf | Ryan and Peck, Madigan, Jones & Stewart Inc. for Colombia; Akin Gump Strauss Hauer & Feld and Fierce, Isakowitz & Blalock for Korea; and Mehlman Vogel Castagnetti for Panama.

The GOP lobbyist said it’s likely that the foreign governments involved will cut back on their K Street presence once the trade deals are signed by President Obama.

“They definitely staffed up to push through the FTAs,” the lobbyist said.

A spokeswoman for the Colombian embassy declined to comment for this piece, and messages asking about lobbying representation for the other two embassies were not returned before press time.

Since 2006, lobbyists and PR executives have tried everything and anything to help get the deals passed — even trinkets and flowers.

On behalf of the Korean embassy, PR giant Edelman produced tchotchkes — pens and buttons — promoting the trade deal that then were handed out to supporters, according to Justice records.

The Colombian government hired Endeavour Global Strategies to help run a campaign to change Americans’ perceptions of Colombia, which included having a photo taken with the real Juan Valdez, free Colombian coffee and free bouquets of Colombian flowers.

Lobbyists’ plans were often very precise.

In a July 2010 letter to the Korean ambassador on file with Justice, Akin Gump laid out a month-by-month strategy to pass the country’s trade deal. The plan included hosting social gatherings at the embassy; exploring hosting an event in Napa Valley to coincide with then-House Speaker Nancy Pelosi’s (D-Calif.) retreat; reaching out to national security experts at think tanks like the Center for American Progress and Third Way; and organizing the ambassador’s visits to California, Illinois, Michigan and Washington state.

The firm’s team advocating for the agreement included former Reps. Vic Fazio (D-Calif.) and Bill Paxon (R-N.Y.) as well as Vernon Jordan, the close friend of former President Clinton.

Major multi-national companies were also heavily involved with the lobbying push. Caterpillar, the Peoria, Ill.-based company, lent its weight to the effort.

“We didn’t hire any outside lobbyists. We did it all in-house,” said Bill Lane, Washington director for Caterpillar. “We were able to remind folks of how important trade is, especially with Latin America.”

In March this year, Caterpillar employees mailed more than 31,000 letters to lawmakers urging them to support the trade deals. Lane said that grassroots effort has been restarted to prepare for the deals’ final votes.

The company also sponsored an ad campaign within the Beltway, including one print ad that ran in 2010, asking policy-makers to not “kick a field goal on second down” by passing just the Korea agreement, rather than all three.

“It clearly agitated some folks at the White House,” Lane said.

The construction equipment company has been a solid presence on K Street throughout the years and has already spent close to $1.7 million on advocacy so far in 2011, according to lobbying disclosure records.

It’s not clear what’s next for trade lobbyists once Congress approves the trade deals. There are negotiations for the Trans-Pacific Partnership, but that has not elicited the same level of fervor from interested parties.

Reinsch said there will be celebrations once the trade deals pass.

“Everyone will breathe a big sigh of relief, have a party and move on to the next issue,” Reinsch said.

“You make a toast and move on,” said Lane.

Rachel Leven contributed to the report.

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