Are we paying for Election ‘08?

Uncovering the shady relationship between the British Government and the Washington lobbyists funding the US campaigns

Every epic needs a villain – and in the interwoven sagas of the American Presidential campaign and the American economic meltdown, the identity of the ghoulish bad guy has never been in doubt.

“I am in this race to tell the corporate lobbyists that their days of setting the agenda in Washington are over,” declares Barack Obama. “They will not run my White House.” Senator John McCain is in complete accord, pledging to dramatically reform a broken system in which “the special interest lobbyists with the fattest wallets and best access carry the day.”

Such proclamations don’t survive the lightest scrutiny –McCain’s staff is dominated by lobbyists, and Obama has performed the neat manoeuvre of refusing all donations from the lobby shops, before accepting cash direct from the corporate interests they represent – but they do perfectly reflect the national mood. America has grown heartily sick of its booming influence-peddling industry, a grubby trade of over 34,000 employees (it’s doubled in size during the Bush administration) which spends over $2 billion a year buying favours, bending legislation and warping the nation’s democracy – between 1998 and 2006 lobbyists spent over half a billion dollars trying to influence elections in the US.

According to recent polls, three quarters of Americans believe that lobbyists have too much control over their politicians, and only one in ten believe ordinary people can still influence how the country is run. It seems that as they watch their quality of life declining, their economy imploding and their international prestige fading, Americans have directed much of the blame at the slippery customers who’ve corrupted their nation’s politics on behalf of the shady special interests that pay their bills.

Shady special interests such as, well, the British Government.

Because according to documents provided by an obscure outpost of the US Justice Department, since 1997 the UK has given over $3.7 million (roughly £2 million at historic exchange rates) to some of the largest and most powerful lobbying firms in Washington, to influence American lawmakers. The special relationship, it seems, now needs cash to keep the love alive.

The Foreign Agents Registration Unit is a tiny backwater of the federal bureaucracy, charged with monitoring the activities of American representatives of overseas interests. Like most of the US civil service under the current administration, it’s under-funded to the point of decrepitude – the computers on which the Unit’s findings are stored are literally collector’s items, and when the watchdog group The Centre for Public Integrity recently requested a printout of the Unit’s database, they were told that hitting ‘Print’ would probably be enough to permanently crash the system. Some of the lobbyists who are bound by law to inform the feeble Unit that they are working for foreign clients simply don’t bother, but many do, and the sketchy reports that emerge offer some remarkable reading.

Between 2000 and 2006 the UK Department of Defence Procurement paid Van Scoyoc Associates, one of the top four lobbying firms in Washington, over $356,000 in fees. In return, Van Scoyoc has “met with members of Congress, congressional staff and various agencies to discuss arms sales requests,” and, in another submission, “to discuss defence related areas of interest to the British.”  In a disheartening revelation about the UK’s true standing in Washington, during the second half of 2003, at the zenith of the War on Terror, the Defence Procurement Secretary Lord Bach was having to pay Van Scoyoc $31,000 to secure him meetings with influential US Congressmen.

It seems clear that the Department of Procurement was acting in its primary capacity – as a travelling huckster for the British arms industry – and that they’d chosen the right firm to retain. Based in gleaming offices in the closest commercial building to the Capitol, and with clients that include defence leviathan Lockheed Martin, Van Scoyoc wields enormous influence through its political fundraising activities (in 2007 the company’s employees individually donated over $400,000 to election candidates, and helped them raise many times more) and is rated the leading firm in Washington at securing ‘earmarks’, lucrative pet projects tagged onto unrelated legislation. The campaign group Taxpayers for Common Sense reported that Van Scoyoc managed to insert 18 earmarks, earning a total of $66 million dollars for their clients, into the 2006 US defence budget. 

One piece of evidence suggests they served the UK government well. In the second half of 2002 Van Scoyoc lobbyists met with Congressmen and staffers “to discuss updates to the Foreign Aid bill” (America’s annual global military and humanitarian hand-out) on the UK’s behalf. Eleven months later it emerged that funds from that very Foreign Aid bill were being channelled to the British arms industry, via the Israeli government.

The Unit’s record’s also show that between 1996 and 2000 the Ministry of Defence was paying an even more transparent lobbying contract, to the office of one Zel E. Lipsen. The MoD handed over more than $212,000 for Mr Lipsen to, according to his contract, “advise the British Embassy on how best it should present British Defence Sales interests in Washington DC,” and to “make appropriate introductions to key figures in both Congress and the Administration.” Lipsen was another smart hire, with close ties to members of the powerful and free-spending Congressional Defence Appropriations Sub-Committee, the spigot through which much of the Pentagon’s booming military expenditure flows. In the last five electoral cycles, Lipsen has made twenty-two separate campaign donations to members of this committee, including ten donations to the coffers of the committee chairman John P. Murtha.

Murtha is known as the ‘King of Pork’ for his brazen generosity towards his allies – in 2007, when his committee administered a Defence Spending bill containing over $10 billion in earmarks, it soon emerged that every one of the 26 private concerns that benefited from Murtha’s insertions had donated money to him in the past two years. Several of Mr Lipsens’s client list have been recent beneficiaries of Defence Appropriations cash, receiving government funding, on a least two occasions, to open offices in Congressman Murtha’s home town. Buying ‘pork’ may appear an unseemly use of British public money, but Mr Lipsen’s capacity to secure cash for his UK clientele was demonstrated in 2006, when AEA Technology, the privatised offshoot of our old Atomic Energy Authority (which was paying Lipsen up to $90,000 a year) received up to $5 million in earmarked federal contracts in that year’s Water and Appropriations bill. The Washington Post later revealed that Zel. E. Lipsen had contributed $3,500 to David L. Hobson, the chairman of the House energy and water development appropriations subcommittee, in the previous three years, and $1,500 to Peter Visclosky, the committee’s ranking Democrat member, since 2001. Nothing illegal or irregular was deemed to have taken place.

The final noteworthy contract is the largest, between Ministry of Defence representatives in Washington and the powerhouse legal and lobbying firm Holland & Knight, worth over $2.3 million since the year 2000. While some of that money has undoubtedly been for mundane legal services, Holland & Knight have done much more – according to their submissions to the Unit, they’ve represented the UK government on matters of “defense issues”, “military appropriations”, “trade and tax issues”, “export control”, “offsets” [which almost certainly refers to goods and services supplied to the US government in return for lucrative defence contracts]  “intelligence matters” and “the Export Administration Act agenda,” which is the legislation authorizing US Government control over all military-related trade.

Holland & Knight are currently registered as ‘active’ agents of the British Government, but the MoD denies they’re employed as lobbyists, saying H&K serve only as “legal advisers on very specific tasks related to contract and trade matters only… They do not lobby Congress on behalf of MoD.” This position seems to be contradicted by the company’s own website, which lists the UK, along with El Salvador, Senegal and Bahrain, as governments for whom they “strive to effectively lobby” to achieve “the desired trade policy outcomes.” It’s also in conflict with all fifteen of the semi-annual reports of the US Attorney General on foreign agents’ activities, covering the period from December 1999 to December 2006 (the most recent available), all of which list ‘Lobbying’ under the ‘Nature of Services’ H&K provides to the UK, along with legal and ‘other services’. Five of these reports specifically note that H&K contacted “members of Congress” on the UK’s behalf.

According to the MoD “The confusion arises because companies such as H&K have to register their clients in a congressional record - because they work for MoD it does not mean that they lobby for MoD” This also seems to be contradicted by the public record. The Government’s initial November 1998 contract with Holland & Knight (now on file at the Unit) was indeed just for legal advice, and therefore rightly wasn’t declared to FARU. Then, nine months later, a registration form was submitted to the Unit, signed by a partner of H&K, Steven D Gordon. Noting the discrepancy between the contract and the registration, Mr Gordon wrote that “Up until this time services have not included any activities which require registration under FARA.” However, “The foreign principal has now requested expansion of activities.”

This submission required H&K to tick a Yes/No box asking if their newly expanded work for the UK would include “political activities”, defined as any activity with the intent of “formulating, adopting or changing the domestic or foreign policies of the United States”: in other words, lobbying. They ticked ‘Yes’. That declaration remains legally active today.

British public support for Holland & Knight is particularly striking. The firm has lobbied on behalf of the Wal-Mart and Coca-Cola corporations, and according to the Centre for Public Integrity their largest client between 1998 and 2004 was the American Chemistry Council, an huge industrial advocacy body that has campaigned to restrict Americans’ rights to know what toxic pollutants are being emitted in their local environments, has fought against the stricter regulation of carcinogenic dioxins being released into American rivers and skies, and has successfully persuaded the Bush administration to sack federal scientists who’ve highlighted the use of toxic chemicals in consumer goods.

With such an unclear remit, it’s hard to pinpoint specific victories Holland & Knight have delivered to the UK government, but domestic evidence demonstrates their very conventional lobbying tactics. In early 2005 the Illinois congressman Rahm Emanuel announced that he’d secured $2 million in federal earmarks for the Chicago Public Schools. Four days later, Holland & Knight, who were the lobbyists for the Chicago Public Schools, donated $5,000 to the Democratic Congressional Campaign Committee – of which Rahm Emanuel was chairman. All parties contended the two events were unconnected, and under American law and realpolitik, nothing in the slightest untoward had happened.

Holland & Knight are in general a politically generous bunch: forty-five of the firm’s partners and attorneys have so far donated a total of $67,000 to various 2008 Presidential election campaigns, including Obama’s, Clinton’s and McCain’s. As these are all strictly classed as personal donations, there’s no hope of investigating the intriguing possibility that the British taxpayer is unwittingly helping to bankroll the USA’s current electoral jamboree.

But what is our Government up to, hiring some of Washington’s most powerful corporate players, at public expense, to subvert the democracy of our closest ally? The simplest answer is that everyone’s at it – the explosion in the US government’s private expenditure (the Bush administration has doubled the federal money spent on private contractors, reaching, by 2006, around $400 billion a year) and the lure of US consumer markets means many of the world’s nations have recently rushed into buying Washington influence. China and Hong Kong lead the pack, now spending over $2million a year on K Street lobbying to retain their favourable import terms, while Indonesia has hired former presidential candidate Bob Dole as their man in Washington.

Some of the foreign lobbying listed in the Unit’s files comes straight from the panels of the Doonesbury comic strip – in early 2004 one Chester A. Nagle declared that the murderous Georgian kleptocrat Aslan Abashidze had hired him “for the purpose of enhancing awareness of the democratic nature of the Government of Adjara”, only for Nagle to ruefully report, in May of ’04 that in fact “there is neither a President of Adjara nor an Autonomous Republic of Adjara.”

But for most, it seems the money is well spent. As Massie Ritsch of the Centre for Responsive Politics told me, in the current Washington climate, private lobbying is considered a good investment of public money: “We routinely have the situation over here where local or city governments use taxpayer’s money to hire private lobbyists to try and influence the federal government. They see it as a relatively small investment - $100,000 on lobbyists could get you, say, a $10 million earmark for a new road.”

And for Britain, the arithmetic is similarly impressive – between 1998 and 2003, while our government gave Washington lobbyists no more than $300,000 a year, British defence firms received over $14 billion in Pentagon contracts, more than the combined earnings of the next four largest beneficiary nations.

Whether pimping military hardware to the Pentagon is really the British Government’s job is a matter of personal conscience.  What seems unarguable is that the precious ‘special relationship’, nurtured by our largest overseas embassy and, in recent years, sanctified in much blood, isn’t quite special enough for that task. If Britain wants to influence today’s Washington, it seems we have to pay like everybody else.

Brian Schofield’s first book, Selling Your Father’s Bones: The Epic Fate of the American West, is out in July (£20, HarperPress)