Oct. 23: This post has been corrected.
In 2008, Bermuda’s influential reinsurance industry needed some help. Successive seasons of monster hurricanes in the United States, where much of its client base is, had cost these insurers of insurance companies $22 billion in losses. Eager to avoid a repeat — and unable to change the weather — the companies and Bermuda’s government turned to something they could influence: The U.S. Congress.
At the behest of his government’s lobbyist, Premier Ewart Brown of Bermuda met in June with key congressmen, among them the powerful House Ways and Means chairman, Charles Rangel, D-N.Y., and two Democrats from states in hurricane alley, G.K. Butterfield of North Carolina and Bennie Thompson of Mississippi.
The sessions, Brown boasted later in Bermuda’s Royal Gazette, were part of a “very successful trip” that included “meetings with people who were not even on the schedule.”
In fact, the success was almost immediate. On June 26, a day after meeting with the Bermuda delegation, Thompson introduced a bill to give businesses and homeowners in hurricane zones taxpayer-subsidized loans for storm windows and doors — a program that could also save untold millions for insurance companies by cutting damages in future hurricane seasons.
How the Bermudan government wrangled legislation favoring one of that country’s most powerful businesses might be a mystery today but for a little-known law. The Foreign Agents Registration Act, or FARA, requires foreign governments and government-controlled groups to file detailed lobbying disclosures — far more information than domestic lobbyists must provide. These filings have been available on a Justice Department Web site, but in a form that makes them cumbersome to use.
Now, a new project by the Sunlight Foundation and ProPublica has for the first time digitized one year’s worth of FARA records, making them accessible in a searchable database that allows users to easily follow the money and connect the dots. With the Foreign Lobbying Influence Tracker, anyone can quickly learn what governments are lobbying whom, how often and about what.
An examination of the records, which were filed in 2008 and cover activity during that year and the latter part of 2007, show how busy these special interests were:
- More than 280 lobbying firms collected $85 million in fees for representing 340 foreign clients, including governments, government-controlled organizations, political parties, separatist groups and a handful of for-profit firms.
- Lobbyists or other officials reporting under FARA contacted members of Congress, their staff, executive branch officials, journalists and others more than 22,000 times.
- Several prominent former lawmakers have signed on to represent foreign countries, among them ex-Senate leader Bob Dole (Taiwan and Montenegro) and former House Appropriations Chairman Robert Livingston (Turkey and others).
As with the Bermudans, the many contacts often paid off. The data reveal multiple instances in which legislation was introduced or blocked after foreign agents wooed members. They shaped spending decisions on issues from foreign aid to F-22 fighters, and they generously doled out campaign cash — nearly $2 million to congressional campaigns, according to the data. (More on who got the most, what lobbyists gave and who they contacted is here.)
The FARA data show the deep reach that even small foreign governments can have on Capitol Hill. The biggest spenders in foreign lobbying aren’t always America’s closest allies or its biggest trading partners. Interests in Dubai, Morocco and Equatorial Guinea were among the top spenders on lobbying and public relations campaigns. Smaller, poorer countries also weighed in on issues such as debt relief and human rights.
Then there are the advocates. FARA records offer a rare glimpse into the methods of some of K Street’s biggest lobbying shops, multinational law firms and solo operators — the hired guns for foreign interests. Their ranks include several former members of Congress and executive branch officials who’ve carved out second careers.
The impact of the lobbying detailed in the FARA forms can be difficult to fully measure. From territorial disputes to foreign and military aid requests to trade matters, many of the issues that populate the reports are narrow. As such, they seldom resonate above the din of debates on health care, taxes and other domestic issues that dominate in Washington. But this much is clear from the records: In a substantial number of instances, countries that played the lobbying game often got just what they wanted.
$4.2 million to dispute a single word
Perhaps no player in the field shows the influence of foreign agents as much as Robert Livingston, the powerful ex-appropriations chairman who was in line to be House Speaker before a scandal derailed him. His firm, Livingston Group, reported the highest number of contacts with government officials, and Livingston was the second-biggest political giver among lobbyists for foreign agents, listing more than $99,000 in campaign contributions, most of which went to members of Congress. His clients — including the governments of Azerbaijan, Egypt, Libya and the Republic of Congo and the Bank of the Netherlands Antilles — showered his firm with $3.1 million in fees, the third-highest total among all firms that reported during the period.
Also among them was one country with a longstanding image problem: Turkey.
From 1915 to 1923, as many as 1.5 million Armenians perished, many at the hands of the Ottoman government, but a precise description of the events has been an extraordinarily sensitive subject in Turkey. The issue also has risen regularly in Congress, thanks in part to American-Armenian groups that have pushed for government affirmation that the killings amounted to genocide.
In October 2007, with elderly Armenian survivors from the era in attendance, the House Committee on Foreign Affairs approved a resolution that would do just that. The next step would be a vote before the entire House, something Turkey wanted desperately to avoid. On more than any other issue, Turkey, which has a U.S.-led war in Iraq on its border, is seeking help in a longstanding effort to join the European Union.
The genocide question split U.S. leaders. All eight living former secretaries of state at the time sent a letter warning Congress that offending Turkey could have serious diplomatic consequences for the United States. Both Barack Obama and his chief opponent for the Democratic presidential nomination, Hillary Rodham Clinton, were in the Senate; Clinton backed a resolution recognizing the genocide, and Obama made it a campaign pledge.
Turkey’s lobbyists made contact with the executive branch 100 times to enlist help pressuring congressional leaders to squash the resolution. The Livingston Group worked Congress. The firm’s lobbyists contacted the office of Rep. Adam Schiff, D-Calif., author of the resolution, four times on Oct. 4 to arrange a meeting with Turkish Ambassador Nabi Sensoy. A few weeks later, Sensoy was withdrawn in protest of the House’s consideration of the measure.
Turkey didn’t lobby just Congress — the country hired foreign agents to promote the cause with people outside the administration, too. Noam Neusner, who served as a speechwriter for President George W. Bush, worked the powerful Jewish lobby, meeting with an array of groups including the influential American Israeli Public Affairs Committee a combined 96 times to persuade them to oppose the resolution, FARA records show. Turkey was the first Muslim country to recognize Israel, and relations have been generally positive; but in the end, AIPAC supported the resolution.
On Oct. 26, 2007, some sponsors of the resolution backed off a full floor vote, and the legislation never advanced. FARA records quantify the effort Turkey’s lobbyists put into the issue: 673 contacts in a single month, and more than 2,200 in the filings overall — the most of any country.
In all, records show, Turkey spent $3.5 million to mobilize its lobbyists to influence a resolution that hinged on the single word -- genocide. Some $1.9 million of that went to DLA Piper, a top-50 U.S. law firm that operates globally and has taken on such high-profile cases as the defense of imprisoned Nobel Peace Prize laureate Aung San Suu Kyi in Myanmar. The dispute demonstrates the power of labels — and the lengths to which a country will go to protect its world image.
Debtors’ rights and human rights
Turkey was just one of Livingston Group’s successes.
Although it is among the countries that rely most heavily on humanitarian aid, the Republic of Congo (Brazzaville) turned to the firm for help getting protection from hostile creditors.
The impoverished country’s problem involved so-called “vulture funds” — investment vehicles that buy up defaulted debt from Third World countries at bargain prices and then use court systems, principally in the United States and Britain, to try to force debtor countries to make good on the entire obligation. The Republic of Congo was sued for $120 million by one such fund, Kensington International, which acquired the debt for only $1.8 million. (The case has since been settled.)
The Livingston Group, along with two other firms, reported having 36 contacts with Rep. Maxine Waters, D-Calif., and her staff, including four meetings, one of which Waters attended, exploring legislative actions to limit the ability of vulture funds to sue. The effort paid off in June, when Waters introduced the “Stop VULTURE Funds Act.” Among other things, the act would make it illegal to use U.S. courts to sue poor countries for payments it defines as usurious.
The bill also had the backing of other developing countries, human rights groups and African states facing similar lawsuits, including Zambia and the Democratic Republic of Congo, the much bigger next door neighbor to the Republic of Congo (Brazzaville), where the annual per capita income is only about $4,000 a year. According to FARA documents, the Republic of Congo (Brazzaville) spent close to $340,000 to pay for U.S. lobbying on vulture funds and other issues in 2008.
The republic wasn’t the only poor African country with cash to buy K Street’s help.
Ethiopia has a per capita GDP of only $800 and received $467 million in U.S. aid in 2007, according to the latest figures available. FARA records show that Ethiopia spent $2.3 million securing the services of three firms, including DLA Piper, to defend its access to U.S. money.
The focus of Ethiopia’s lobbying was not on the amount of aid it was to receive, but whether it would come with obligations to improve its human rights record. The Bush administration saw Ethiopia as a key ally in the war on terror; members of the House, led by Rep. Donald Payne, D-N.J., the chairman of the House subcommittee on Africa and Global Health, wanted to use the financial support that came with that designation to prod Ethiopia toward democratic reforms.
Payne, joined by 85 co-sponsors, introduced a bill to do just that. Ethiopia’s lobbyists had 138 contacts with congressional offices to oppose the bill. Although the House passed it, the lobbying offensive worked in the Senate, where the measure stalled.
A fight over independence
The Western Sahara is an inhospitable patch of desert about the size of Colorado on Africa’s Atlantic coast, with a population of about 400,000, a GDP of only $900 million, and an economy based on nomadic herding, fishing and phosphorous mining. It is also one of the last colonies in the world — Morocco annexed it a few years after Spain granted it independence in 1975 — and the subject of 34 U.N. Security Council resolutions on the territory since 1999.
In late 2007 and 2008, the desert region was a top priority for Morocco’s hired lobbyists. At issue was Western Sahara’s autonomy, but the story also shows how, in a foreign lobbying arms race, the side with the biggest arsenal can come out on top.
The government of Morocco sought the support of Congress in this lengthy territorial dispute. The region has long demanded independence. An indigenous insurgent group, the Polisario Front, waged a guerrilla war against the Moroccan military until the United Nations brokered a cease-fire in 1991.
Part of the terms of that deal included holding a referendum to determine the territory’s final status, but no vote has been held. In 2007, Morocco issued a proposal to grant Western Sahara autonomy within sovereign Morocco. The U.S. initially welcomed the proposal, and direct talks began between Morocco and the Polisario with the involvement of Algeria, which supports self-determination for the Sahrawi tribes from the area.
Toby Moffett, a lobbyist for Morocco who served as a Democratic congressman from Connecticut in the 1970s and ’80s, wrote an op-ed for the April 8, 2007, edition of The Los Angeles Times, explaining how he presented Morocco’s position to an unnamed member of Congress: “Morocco has a good story to tell,” he wrote. “It believes that the long-standing dispute with Algeria and the rebel Polisario group over the Western Sahara must be resolved.
“We tell the congresswoman and her staff that the region is becoming a possible Al Qaeda training area,” he wrote. “Algeria and the Polisario recently hired lobbyists, too, so we’ll have our hands full.”
Indeed, records show the Algerian government’s lobbyists had 36 contacts with members of Congress and staff promoting self-determination for the people of Western Sahara. The Algerians paid a modest $416,000 in lobbying fees.
By comparison, lobbyists for the government of Morocco had 305 contacts with members of Congress and their staff. Morocco paid $3.4 million in lobbying expenses — putting it among the top foreign government spenders for FARA filings in the period.
The intense campaign won converts. A bipartisan group of some 173 House members signed on to a statement supporting Morocco’s offer of autonomy for the region without formal independence. President Bush also expressed support for Morocco’s plan in summer of 2008. And this April, 229 representatives sent a letter to President Obama urging him to back Morocco.
Until Obama reversed Bush’s stance last month, Morocco’s investment worked.
Powerful industry gets a bill
Issues involving human rights and sovereignty are a minority in the FARA reports. By far most of the foreign lobbying involves matters of trade, taxes, tourism, aid or other economic matters.
So it was when Bermuda pitched beneficial legislation for its reinsurance industry. The Association of Bermuda Insurers and Reinsurers includes 23 companies that together covered 30 percent of the losses from hurricanes Katrina, Wilma and Rita in 2005. They make money selling policies to regular insurance companies to cover losses in catastrophic events. Together, they collect $61 billion in global premiums, according to the association.
The Bermudan government has long supported the industry with favorable regulatory and tax laws. When it sought further assistance from U.S. taxpayers, FARA reports show, it turned to Darlene Richeson, a former in-house lobbyist for Verizon.
Bermuda hired Richeson’s firm in January 2007 to “develop a long term strategic plan on behalf of Bermuda focusing on the U.S. Congress and Administration” that would “ensure that all key Committees are penetrated and educated on issues pertinent to Bermuda’s long term future, such as legislation regarding tax laws,” according to the disclosure her firm filed.
Part of her strategic plan was executed over two and a half days in June 2008.
Richeson arranged a series of meetings for Bermudan Premier Brown and the U.S. consul general, Gregory Slayton, with members of Congress, including Sen. Thomas Carper, D-Del., and Democrat Rangel, chairman of the tax-writing Ways and Means panel. They also met with Reps. Thompson and Butterfield, both of whom had received modest campaign contributions from Richeson.
In an interview with the Royal Gazette, Brown raved. “I feel even better about the way Bermuda is perceived and the sensitivity to our needs,’’ he said, expressly thanking Slayton and Bermuda’s lobbyists for setting up the contacts.
One day after a meeting with Richeson and the Bermudan delegation, on June 26, Thompson introduced a bill in the House, later co-sponsored by Butterfield, to give homeowners and business owners in areas susceptible to hurricanes, floods and other natural disasters tax credits and other financial assistance to help reduce damages. Richeson has contributed to both members’ campaigns.
Richeson declined to comment about the lobbying drive. Thompson’s office did not respond to requests for comment.
Butterfield’s communications director, Ken Willis, described the legislation as “fiscally sound” and said that Butterfield’s co-sponsorship had nothing to do with the meeting with Richeson. “While he does meet with Richeson from time to time,” Willis wrote in an e-mail, “it was not what persuaded him to co-sponsor the bill. His interest in Bermuda stems from his father being born there.”
Though the hazard mitigation bill didn’t pass, members are still pushing it. Carper — who also met with Richeson and the Bermuda delegation that June — proposed an amendment to the American Recovery and Reinvestment Act, the $787 billion stimulus bill, that called for hazard mitigation.
Although the Association of Bermuda Insurers and Reinsurers backed the amendment – as did other insurers and some environmental groups — it ultimately failed. In the House, Thompson reintroduced his bill this year. Further action is pending.