So You Want To Trade With a Dictator

A step-by-step guide on how to get around foreign trade sanctions, human rights groups, and religious activists, and still have God on your side

  • Update 4/28/98:
  • Newly leaked memos show Anne Wexler's powerhouse lobby shop, The Wexler Group, working to kill human rights sanctions.

    Americans may be fickle when it comes to politics, but as politicians and moviemakers know full well, there's one reliable "gimme": We hate dictators. Tyrants, autocrats, despots—we just don't like them.

    So imagine how tough it would be to build a public campaign promoting trade with countries such as Iran, Burma, or Nigeria, whose dictatorial regimes have horrible human rights records. That's the challenge for a coalition of the nation's biggest corporate exporters, including aerospace titan Boeing; construction equipment giant Caterpillar; the country's biggest oil companies, including Unocal, Chevron, Mobil, and Texaco; and other Fortune 500 firms such as IBM and Motorola.

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    Tianammen Square in 1989
    All have money to make overseas, and economic sanctions are just another obstacle. Now the coalition, led by its front group, USA*Engage, will have its two big shots at success.

    For starters, it plans to file a lawsuit to overturn the "selective purchasing" laws that have sprung up in 18 different cities across the U.S. banning government contract work from being awarded to companies that trade with tyrannical regimes. More impressively, they have already managed to have a bill introduced in Congress—which appears to have been drafted by their own lobbyists—that would severely restrict the use of sanctions, and would pave the way for greater trade with outlaw nations. How will they convince legislators, or the voting public, that trading with dictators is good? Their strategy is detailed in a series of internal memos obtained by Mother Jones that describe how to spin the most morally questionable of campaigns—with help along the way from religious leaders and institutions such as the Rev. Billy Graham and the Catholic Church.

    Step 1:
    Find Your Sales Team
    The anti-sanctions drive is run out of the National Foreign Trade Council, a prominent Washington, D.C., trade association that represents the nation's 500 biggest exporters. But when it came time for its attack on sanctions, the NFTC needed a cover—provided, preferably, by someone who was liberal, popular, and well-connected. So in early 1997, it hired Anne L. Wexler, who heads the Wexler Group, and recently was ranked one of the capital's 10 most influential lobbyists by Washingtonian magazine.

    The ultimate power broker, Wexler has Beltway access to burn, and her liberal credentials include working as a campaign organizer for Eugene McCarthy's 1968 presidential race, doing a stint as a consultant for the government watchdog group Common Cause, and serving, from 1975 to 1977, as the associate publisher of Rolling Stone during its muckraking heyday. Wexler followed that with a job as a top aide in Jimmy Carter's White House before launching her political consultancy, which boasts executives with close ties to President Clinton (Betsey Wright, his chief of staff when he was governor) and to Newt Gingrich (former Pennsylvania Republican Rep. Bob Walker, formerly a close Gingrich ally).

    Wexler may have come far from her days as a war protester, but her lobbying efforts still carry a liberal spin. Arguing against sanctions, she says that because they limit investment opportunities for business, "the only people they end up hurting are U.S. workers."

    The NFTC also lined up important politicians on both sides of Washington's revolving door. It signed up seven lobbyists from Hogan & Hartson. One of them, Republican Clayton Yeutter, while acting as President Reagan's U.S. trade representative, threatened trade sanctions against Southeast Asian countries that did not open their markets to American tobacco companies.

    Another of the group's lobbyists, former Rep. Michael Barnes, a Democrat, demanded that sanctions be imposed on Haiti in 1994 when he worked as a lobbyist for ousted president Jean-Bertrand Aristide. During the first half of 1997 alone, the NFTC paid $340,000 to Hogan & Hartson for its campaign against sanctions.

    The NFTC also made sure to cement a relationship with a key State Department official, Undersecretary of State Stuart Eizenstat—who chairs the sanctions review team created last year by the State Department—by retaining his former law firm, Powell Goldstein.

    Step 2:
    Put on a Happy Face
    With its lobbying army in place, the NFTC next needed to start a front group to head the anti-sanctions drive. Engineered by the Wexler Group, USA*Engage was officially unveiled at an April 1997 press conference, during which it portrayed itself as a dynamic "broad-based coalition representing Americans from all regions, sectors, and segments of our society." The address on USA*Engage's letterhead belongs to the Wexler Group, which is also where the number listed for USA*Engage rings (though callers are routed around the Wexler Group's main switchboard).

    In its literature, USA*Engage claims to have more than 600 members. But when contacted, several of the smaller companies listed on its roster responded with puzzlement. Tim Hussey, president and CEO of Hussey Seating of Maine, said he had no idea what USA*Engage was. Richard Gravenhorst, co-owner of Reco Industries, a Louisiana road equipment company, also didn't know about USA*Engage, replying that his firm had little international business. Sanctions, he said, "[are] certainly not one of our priorities."

    When he is asked about USA*Engage's bloated membership, Frank Kittredge, the NFTC president who doubles as the group's vice chairman, admits that no more than 50 to 100 companies are active participants. "USA*Engage was formed because a lot of companies are not anxious to be spotlighted as supporters of countries like Iran or Burma," he says. "The way to avoid that is to band together in a coalition."

    So who is behind USA*Engage? The oil industry, for one. Unocal's chief Washington lobbyist, Jack Rafuse, chairs USA*Engage's State and Local Sanctions Committee. Unocal co-owns a billion-dollar natural gas pipeline in Burma, and one of its partners is Burma's State Law and Order Restoration Council (SLORC), the military dictatorship that the State Department says used slave labor to help build the pipeline. Jefferson Waterman International, a Beltway firm that lobbies for Burma, is also a member.

    USA*Engage members also include Mobil and Texaco—both of which have major investments in Nigeria and have lobbied to prevent strong sanctions against Gen. Sani Abacha's regime, despite its having imprisoned 7,000 people without charge and, among other atrocities, having executed protester and writer Ken Saro-Wiwa.

    USA*Engage's chairman, William Lane, is the Washington director for Caterpillar, a company that has obvious reasons for belonging to the coalition. It has its own Burmese dealership, and has business in other nations threatened with or currently under U.S. sanctions, including Sudan, Indonesia, Colombia, and Nigeria. Other USA*Engage members have just as much incentive for wanting to trade with dictators. Boeing, for instance, has long battled the government's threatened sanctions against China, where it sold one-tenth of its airplanes between 1992 and 1994. Another group of coalition members—including Westinghouse and ABB—has been pressing the Clinton administration to lift a ban on nuclear power exports to Beijing.

    Step 3:
    Call in the Rent-a-Scholars
    Once USA*Engage was formed, coalition leaders quickly turned to a web of Beltway think tanks and scholars to provide the sanctions drive with badly needed intellectual ammunition.

    The Institute for International Economics (IIE) prepared a study in 1997, released at USA*Engage's debut press conference, which states that sanctions cost the U.S. economy $15-$20 billion, and caused the loss of 250,000 jobs in 1995 alone. The study, confirms an IIE sanctions specialist, Kimberly Elliott, was funded "in part" by the NFTC.

    Georgetown University law school professor Barry Carter authored another study, paid for by the National Association of Manufacturers (NAM), a USA*Engage member. When it came out, NAM trumpeted the findings, saying the study showed that sanctions come "with a steep price tag for U.S. commercial interests." The coalition also uses reports from prominent think tanks such as the Cato Institute, the Center for Strategic and International Studies, and the Center for the Study of American Business to arm itself with intellectual firepower. All have received funding from companies that belong to USA*Engage.

    Step 4:
    Get Religion, Kill Thine Enemies
    Once USA*Engage had its research studies in hand, it figured it would have an easier time convincing Congress to lift trade sanctions. But then the coalition faced a new enemy, one that any economic analyst would have a tough time countering: The God Lobby.

    In May 1997, Rep. Frank Wolf (R-Va.) and Sen. Arlen Specter (R-Pa.) introduced the Freedom from Religious Persecution Act, which would slap mild sanctions on nations that persecute religious groups as a matter of government policy. The bill boasted a remarkable lineup of organizations that testified on its behalf—from the Christian Coalition to Amnesty International—and had strong backing from the Republican leadership.

    USA*Engage sprang into action. On August 29, 1997, Don Deline of Dallas-based Halliburton, a USA*Engage member and the world's second-largest oil field services company, sent a memo to coalition members outlining the group's strategy to defeat the Wolf-Specter bill.

    The plan: fight fire with hellfire. According to the memo, Deline met with two officials at the State Department, Deputy Assistant Secretary Bill Ramsay and David Moran, the director of the Office of Economic Sanctions Policy, who both told him they didn't like the bill but were "constrained for obvious reasons in how active they believe they can be in opposing them." Similarly, they suggested that business leaders would be unsuccessful opposing the bill publicly. Instead, they suggest, "religious leaders and organizations should take the lead for best results."

    The resulting USA*Engage strategy matched members with key religious leaders. Specifically, Deline wrote, "Boeing will contact Rev. Billy Graham; Marjorie Chorlins will contact Drew Christian," whose last name is actually Christiansen, and who represented the U.S. Catholic Conference, the Vatican's organizational arm in the United States.

    When asked whether USA*Engage ever tried to get religious leaders to speak out against the Wolf-Specter bill, Deline admitted that the group had "low-key" conversations with religious leaders, but says that was it. "Nobody that I know of is shoving religious leaders out front for their personal gain," he says. Chorlins, a lobbyist for Motorola, confirms that she did speak with Drew Christiansen about Wolf-Specter, but then adds her own, nearly identical qualifier: "Business is not pushing religious leaders out there."

    Says Chorlins, "I talk to different organizations and communities because I want dialogue, not to push them out front."

    Both Graham and Christiansen eventually did come out against the religious persecution act just as planned in the memo. Graham traditionally has ignored human rights conditions in the countries, such as China, where he preaches. He also joined Boeing last year in urging Congress to extend China's Most Favored Nation trade status.

    And two weeks after Deline's memo, Christiansen, speaking before a House International Relations Committee hearing on the bill, said the U.S. Catholic Conference recommended being "cautious and deliberate in invoking [sanctions] as a remedy in public affairs." Christiansen then made two proposals that came straight out of USA*Engage's playbook: He suggested that the government require extensive public review before imposing sanctions, and advocated that the proposed presidential waiver included in the bill be extended.

    Brian F. O'Connell of Interdev, a Seattle-area evangelical group, who also opposes Wolf-Specter, told Mother Jones that a Washington, D.C.-based business group—he won't say which but confirms that he talked to people from USA*Engage about Wolf-Specter—wanted to fly him to Washington to testify against the bill. O'Connell, however, declined the offer.

    Gregg Wooding, a spokesman for the Billy Graham Evangelical Association, says Graham would not comment on this story because "he's not a politician and doesn't like to talk about politics." Christiansen also declined to be interviewed.

    Ultimately, Congress deferred further consideration of the bill, and it was eventually rewritten to narrow the chances of sanctions and broaden the presidential waiver. A report sent out from Wexler's office to coalition members in February boasted that "USA*Engage is widely credited for the failure of [Wolf-Specter] to come to a vote in 1997."

    Step 5:
    Write Your Own Bill
    Now, having at least temporarily dispatched Wolf-Specter, USA*Engage was ready to put together its very own sanctions "reform" bill. The coalition quickly signed up two Hoosier friends in Congress to sponsor the legislation: Republican Sen. Richard Lugar, of the Senate Foreign Relations Committee, and Democratic Rep. Lee Hamilton, the ranking Democrat on the House International Relations Committee.

    When initially asked about her company's role in moving the legislation forward, Wexler replies, "We don't lobby." When pressed, she concedes that her firm "worked closely" with members of Congress who worked on the legislation "so I guess we do lobby." However, she says firmly, "That bill was written on the Hill."

    But a USA*Engage lobbyist memo suggests that the role Hamilton and Lugar played in sponsoring the legislation was largely ceremonial, and that it was the lobbyists who drafted the bill. In a memo dated September 4, less than two months before the bill's introduction, the Wexler Group's Erika Moritsugu wrote Richard Lehmann, a lobbyist for coalition member IBM, telling him that he would be receiving more information from her as soon as "we work to finalize the bill language." According to the memo, Wexler's people were also planning "a target date for introducing the bill" and even drafting the "Dear Colleague" letters that lawmakers send out to their peers to build support for legislation.

    In the memo, Moritsugu also thanked Lehmann for contacting Rep. Jim Kolbe (R-Ariz.). According to other memos, the Wexler Group sent out requests to coalition members asking them to fax in summaries on their progress finding co-sponsors for the legislation. Wexler used this "Co-Sponsorship Meeting Response Form" to keep track of how far USA*Engage's tentacles had spread throughout Congress. In the case of Lehmann, they went far: Kolbe signed on as a co-sponsor of the House bill.

    On October 23, Hamilton introduced the Enhancement of Trade, Security, and Human Rights through Sanctions Reform Act in the House (Lugar followed suit in the Senate early the following month). The bill would protect overseas contracts signed at the time sanctions are imposed and would require that sanctions expire after two years unless specifically reauthorized.

    The legislation also makes the process of imposing sanctions a bureaucratic nightmare while specifically exempting restrictions on the use of measures "imposed to remedy unfair trade practices." In other words, says Mark Anderson, a union officer at the Food and Allied Service Trades who closely monitors USA*Engage, "sanctions are just fine if the economic interests of a company are threatened by intellectual property theft or expropriation, but they should not be imposed if a dictatorship is killing its people or depriving workers of their rights."

    Meanwhile, the law firm Hogan & Hartson has been scheduling meetings between leading members of USA*Engage and congressional staffers. A series of three internal campaign memos from last fall urged key coalition members to attend engagements set up with a number of Capitol Hill offices, including the Senate Finance Committee.

    Step 6:
    Seize Control
    With Congress about to consider the bills, the future looks sunny for USA*Engage. The group mailed out a progress report to member companies stating that the coalition had "surpassed its 1997 goals across the board." Furthermore, USA*Engage's "continuous and aggressive media education effort" has paid rich dividends. According to the report, of the 242 newspaper editorials written on the sanctions issue since USA*Engage's founding last year, 180 had been favorable to the coalition, 36 were neutral, and only 26 were hostile.

    The progress report also urged supporters not to let up, mentioning that "member companies are currently deeply involved" in recruiting more co-sponsors for the Hamilton-Lugar legislation, which already boasts 10 senators and 14 House members.

    There's also good news for one of USA*Engage's congressional partners. While Hamilton will retire at the end of his term, Lugar will be up for re-election in 2000 and is apparently tapping into USA*Engage's membership lists. A member of the coalition, who asked to remain anonymous, says that after joining USA*Engage he received an invitation charging a $1,000-a-head fee to a fundraiser for Lugar in March at Washington's exclusive Monocle restaurant.

    Along with the sparks that will occur when Congress debates the legislation, coalition members can expect a howl from human rights advocates, such as Simon Billenness of Franklin Research & Development Corp., a progressive investment firm in Boston, who notes the importance economic sanctions played in ending South Africa's apartheid regime. "If USA*Engage had succeeded with these tactics during the apartheid years, Nelson Mandela might still be in prison," he says.

    But they can also expect support from sources higher up—and even more important than Billy Graham. The Clinton administration is highly sympathetic to USA*Engage's cause, especially the State Department's sanction review team, headed by Wexler contact Stuart Eizenstat.

    As the anti-sanctions laws work their way through Congress, according to the progress report, USA*Engage will assist Eizenstat in dealing with any problems that might arise, such as the weak drug policies in Mexico and Colombia, and the upcoming Nigerian elections—rigged in advance by the country's generals. These cases, the report warns, "may result in a call for sanctions."

    Not to worry. Eizenstat's sanctions review committee will have a strong say in such matters and, the report assures, "USA*Engage has encouraged this effort from the outset and will provide private sector input as it unfolds."

    Ken Silverstein is a Mother Jones contributing writer and co-editor of CounterPunch, a Washington, D.C., investigative newsletter. He is most recently the author of Washington on $10 Million a Day: How Lobbyists Plunder the Nation. His last article for Mother Jones, "Power Broker" appeared in the March/April issue.

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