Ron Brown’s V.I.P. junkets

Abstract:

The Republican-controlled Congress is threatening to eliminate the Commerce Dept at a time when it has been more active than ever before, helping to obtain huge international contracts for US businesses. However, there are indications that Sec Ron Brown has favored Democratic contributors.

Full Text:

The cries of outrage coming from the White House over Republican threats to eliminate the Commerce Department have at least as much to do with self-interest as with fealty to the corporate cause. Through the department’s efforts to promote exports, the Clintonites argue, American businesses landed foreign deals worth $47 billion last year. But a little cross-referencing of the companies thus helped and of campaign contribution records and internal Democratic Party fundraising memorandums shows that for both corporations and the Administration, to give is truly to receive.

Early last year, for example, Saudi Arabia was looking to expand its commercial air fleet and examined proposals from U.S. and European aircraft makers. After being furiously lobbied by President Clinton and Secretary Ron Brown, the Saudis placed a $3.6 billion order with Boeing. Within six months of closing the deal, the company had laden Democratic National Committee (D.N.C.) coffers with $65,000, four times more than it had donated during the previous three years.

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At about the same time, Administration pressure won Raytheon a $1.4 billion deal with Brazil for building a satellite surveillance system in the Amazon. In the 1992-94 election cycle, Raytheon donated $175,110 to Democratic candidates.

Export promotion–precisely what the Republicans have singled out for cutting–is at the heart of Brown’s strategy at Commerce, and indeed of Clinton’s strategy in foreign policy. When it comes to drumming up commerce for U.S. corporations, this Administration has outstripped its two wildly pro-business Republican predecessors. In Brown’s “war room,” bureaucrats monitor bidding on dozens of global deals, gathering intelligence (with help from the C.I.A.) and coordinating financing from government sources to give U.S. firms an inside track. More directly, Brown leads select groups of executives on commercial trips abroad. Last year corporations fought to accompany the Commerce Secretary to Brazil, Argentina, Chile, China, Hong Kong, South Africa, Russia, India and the Middle East. Some 300 C.E.O.s applied for seats on the trip to Russia alone; only twenty-nine were chosen.

Details of those trips have been obscure because Commerce has been stingy about providing information. That will soon change, since in mid-May the courts forced Commerce to turn over to Judicial Watch 30,000 pages of documents concerning which companies were picked, which were left behind and what the basis for decision was. But from what I have been able to piece together from published reports and from various internal documents (including some now ordered for release), it is already clear that the relationship of donations to access is like that of spring rain to garden blooms. Melissa Moss, head of the Commerce Department’s Office of Business Liaison, decides who accompanies Brown. She has said firms “are chosen on merit and real business consideration.” But, like her boss, she is also intimately familiar with party money matters. Prior to joining the Administration, Moss was a top fundraiser for the D.N.C. under Brown, and before that, for the Democratic Leadership Council, which Clinton helped found and once chaired.

The group she assembled for Brown’s September 1994 trip to Beijing is revealing. Embarking three months after Clinton extended most-favored-nation trade status to China, Brown’s entourage included:

[sections] Lodwrick Cook of Atlantic Richfield, which gave $201,500 to the Democrats between 1992 and 1994. Cook is also close to Clinton, who last June presented the Arco chief with a birthday cake during a White House lunch for executives.

[sections] Edwin Lupberger of Entergy, who closed an $800 million deal to build a power plant in China. Lupberger is a personal friend of Clinton, and in the last election cycle Entergy donated $60,000 to Democratic candidates.

[sections] Bernard Schwartz of the Loral Corporation, who negotiated deals that will net his telecommunications company $1 billion over the next decade. Three months before the trip Schwartz donated $100,000 to the D.N.C.

[sections] Raymond Smith of Bell Atlantic, which has given nearly $200,000 to the Democrats since 1991. According to Democratic fundraising memos I obtained, Smith is also a party “trustee’ ” meaning he has personally helped raise $100,000 or more’

[sections] Leslie McGraw of Fluor, which came through with $108,450 for Democratic candidates in the last election. McGraw, like several of the executives who have been picked to accompany Brown, is also a donor and board member of the Democratic Leadership Council.

All told, at least twelve of the twenty-five firms whose officials made the trip to China are major donors or fundraisers for the President’s party. Those companies gave almost $2 million to Democratic candidates during the last election cycle. “I only believe in coincidences occasionally,” says Chuck Lewis, head of the Center for Public Integrity. “Here you see consistent patterns.”

It’s the same with Brown’s other trips. Traveling with the Commerce Secretary to South Africa were Donald Anderson, an adviser to the president of Time Warner, which donated $508,333 to the Democrats between 1992 and 1994, and Ronald Burkle, C.E.O. of the Yucaipa Group and a “managing trustee” of the D.N.C. The title designates him as having helped the party raise $200,000 or more.

Even some of the smaller businesses that have had access to Brown’s expeditions have paid their dues in advance. Robin Brooks, director of the Brooks Sausage Company out of Kenosha, Wisconsin, got to go to South Africa. In 1992 she organized a fundraiser for Clinton, and, in the last election cycle, her firm gave $23,000 to the Democrats.

The currency of influence is not limited to cash. For instance, the chances that a US. firm seeking business in Russia will receive official support seem to grow in direct proportion to that company’s links to Democratic power broker Robert Strauss. A senior partner at the law firm Akin, Gump, Strauss, Hauer & Feld–where his colleagues include Vernon Jordan, President Clinton’s friend and golfing partner–Strauss served as U.S. Ambassador to Russia from 1991 to 1992. Two years ago he set up the U.S.-Russia Business Council, which has received government funds to promote commerce between the two countries.

At least eight of the twenty-nine companies that were invited to go to Russia are linked to Strauss and his firm. AT&T, Westinghouse, Dresser Industries (a Dallas-based oil equipment company) and Enron (a Houston-based natural gas conglomerate) are all Akin, Gump clients. Litton Industries and General Electric have representatives on the board of the U.S.-Russia Business Council. Rockwell International and Bristol-Myers Squibb are former clients of Strauss.

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Several of those companies are also major contributors to the Democrats. AT&T alone gave the party’s candidates $765,763 over the past two years. Among high-donor companies represented on the Russia trip were Occidental Petroleum ($152,549 over the same period) and US West ($147,667).

US West signed a telecommunications agreement while in Russia that will be backed by a $125 million loan guarantee from the US. government’s Overseas Private Investment Corporation. OPIC is headed by Ruth Harkin, wife of Senator Tom Harkin and, prior to joining the Administration, a top corporate lawyer at Akin, Gump.

Enron, which closed a deal, backed by the US. Export-Import Bank, to develop European markets for Russian gas, has been one of the biggest beneficiaries of the Administration’s export policy. During the past two years the Ex-Im Bank has supported Enron’s agreements with Turkey, India, the Philippines and China–deals worth nearly $4 billion. Kenneth Brody, head of the Ex-Im Bank, is a close friend of Treasury Secretary Robert Rubin, having worked with Rubin at Goldman, Sachs. Enron is listed on Rubin’s 1993 financial disclosure statement as one of forty-four companies with which Rubin had “significant contact” during his years at the investment firm. (Brody, by the way, is said to be a leading candidate to take over at Commerce if Brown, under investigation for everything from slumlording to collecting $400,000 for his “share” in a company in which he had invested nothing, is forced to resign.

Like Boeing, many companies have larded the Democrats after being helped by the Administration on the export front. Westinghouse executives have traveled with Brown to South America, Russia and China, where the company racked up $430 million in sales. It also received Ex-Im backing for a $300 million plan to complete and upgrade the Temelin nuclear power plant in the Czech Republic. (When that deal was originally hatched in 1993, Warren Hollinshead, Westinghouse’s chief financial officer, chaired the Ex-Im Bank’s nonvoting private advisory committee.) Westinghouse has traditionally favored the G.O.P. for political contributions, but during the last election cycle the company gave $149,350 to the Democrats, compared with $78,825 to the Republicans.

Given these kinds of disparities, it’s no wonder some Republicans are now talking about shutting down Ron Brown’s export-boosting operation. It would be surprising if they moved very far on that front, though, since their bread is buttered on the same side as Brown’s. As James Treybig, who negotiated a $100 million joint venture agreement for Tandem Computers while in China with the Commerce Secretary, told The Wall Street Journal, “Whether you’re a Democrat or a Republican, you really have to respect this guy for what he’s done for Corporate America.”

Ken Silverstein is co-editor, with Alexander Cockburn, of the bimonthly Washington-based newsletter “CounterPunch.”

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