The Washington Diplomat / February 1999
By Larry Luxner
If you want to see the trappings of diplomacy in Washington, take a drive along tree-lined Massachusetts Avenue, where the colorful flags of more than a hundred embassies flutter from the tops of stately mansions.
But the real grunt work is done on K Street, where sleek steel-and-glass buildings house many of the capital's 17,500 or so lobbyists -- the hired guns who, for a fee, try to sway the White House, Congress and a bewildering array of federal agencies on behalf of their various clients.
Make no mistake about it: lobbying is a booming business in the nation's capital -- as countries from Azerbaijan to Zimbabwe increasingly look for more influence on Capitol Hill than their often underfunded, unsophisticated embassies can provide.
"We tend to be thought of when governments or businesses are trying to find repre-sentation in Washington," says John Merrigan, co-chair of the Latin American practice group at Verner Liipfert Bernhard McPherson & Hand, one of the city's top lobbying firms.
Merrigan says his firm's overall foreign practice generates "in excess of $5 million in annual revenues," with Latin American countries accounting for about a third of that.
"In the first place," Merrigan tells The Washington Diplomat, "we've invested a lot of our own time and effort developing sound relationships throughout Latin America. Secondly, we have reach in Washington and in the investment community that a number of interests in Latin America find helpful."
Among Verner Liipfert's clients are the governments of Chile, India, Mexico, Puerto Rico, Slovenia, Taiwan, Uruguay and the United Arab Emirates. It also represents non-governmental entities ranging from the Polish-American Congress to Chiquita Brands International, which is currently battling the European Union over banana import quotas.
Last year, Verner Liipfert successfully lobbied the Commerce Department not to impose penalties of 40% or more on Chilean salmon imports, as Maine and Washington state salmon producers had urged.
Instead, tariffs of no more than 5% were assessed -- and Merrigan says the govern-ment of Chile was "very satisfied" with the results. It must have been; the Chilean Embassy is renewing its six-month contract with Verner Liipfert for $35,000 to $50,000 a month.
Says fellow lobbyist Michael Barnes, a former Democratic congressman from Maryland who chaired the House Subcommittee on Western Hemisphere Affairs: "Latin American companies and governments are all interested in the trade issues, and they're concerned about the failure to pass fast-track, and about Washington's frequent inattentiveness to the region."
Today, Barnes makes a living as a partner with Hogan & Hartson, Washington's largest law firm. Among his clients are Brazil's Petrobras, which recently won World Bank financing to help build the $2 billion Bolivia-Brazil gas pipeline, and Drummond Coal, which has a $600 million coal mine in Colombia.
Lobbying provides a nice income to Hogan & Hartson, which takes in more than $6 million a year in lobbying fees. According to industry sources, Washington's top 50 lobbyists alone rake in about $125 million a year in revenues. Overall, in 1997, a record $1.2 billion was spent trying to influence the U.S. government and Congress about one cause or another.
This kind of money is pulling in talent from across the political spectrum. At least 128 former members of Congress are now working as lobbyists on Capitol Hill. Among Verner Liipfert's brightest stars are former Sen. George Mitchell and President Clinton's first Treasury secretary, Lloyd Bentsen. The law firm also has on its payroll ex-Senator and Republican presidental candidate Bob Dole.
Lobbyists, of course, credit their profession with great Latin victories in Washing-ton, such as the successful passage of the North American Free Trade Agreement through an extremely hostile Congress in 1993.
"I would say that NAFTA was a successful lobbying effort. It was run by the Mexican Embassy, and they had seven well-picked lobbyists," says Stephen Lande, a former registered agent for Mexico who now runs a company called Manchester Trade Ltd.
But lobbying for Latin causes has occasionally proved to be an expensive waste of time. Chile recently got anti-dumping tariffs imposed on its mushrooms, despite the best efforts of Porter Wright Morris & Arthur, which represented the U.S.-based Mushroom Trade Alliance.
Likewise, many developing countries tried to stop the Federal Communications Commission from revising the agreement covering the international accounting rate -- the official rate phone companies charge each other for carrying their respective international calls. Comtelca, a Central American association of telephone companies, hired Squires Sanders & Dempsey to help its efforts. It lost.
In the same vein, attempts by Caribbean and Central American nations to win NAFTA-like access to the U.S. market under the Caribbean Basin Initiative (CBI) haven't paid off, despite all the big bucks spent on the effort.
"I think most people who pay these hundreds of thousands of dollars in contracts are usually disappointed," said Lande. "The CBI countries, for example, did that, and they weren't very happy with the results."
Among leading lobby firms in Washington are Arnold & Porter, Akin Gump, Hill & Knowlton, Greenberg Traurig and Manatt Phelps. Asked if a lobbyist has to know very influential people to be effective in Washington, Lande replies that it's not that important.
"I don't have to know Newt Gingrich by name, but obviously I have to know people who know him," says Lande, though he adds that "if your embassy is completely ineffective in this town, maybe you do need to have a big name."
Perhaps the most notorious failure of Latin American lobbying is that of the government of former Colombian President Ernesto Samper. Despite having five full-time Washington lobbyists on its payroll, the Clinton administration's hostility toward the embattled leader endured until his very last day in office. Samper still can't get a U.S. visa.
When it comes to sheer variety, the undisputed king of foreign lobbying has to be Edward J. von Kloberg III, whose firm, Washington World Group Ltd., speaks for five countries at the moment: Bahrain, Democratic Republic of Congo (formerly Zaire), Gambia, Kyrgyzstan and Slovakia.
Since establishing his own public-relations firm in 1980 after a long administrative career at American University, von Kloberg has served as the Washington mouthpiece for 72 countries ranging from Burma to Burkina Faso.
"I'm an old-fashioned lobbyist," says von Kloberg, 57. "I give a lot of dinners and lunches."
He's also a name-dropper, and enjoys distributing photocopies of articles from the Washington Times and various magazines that highlight his company's activities in red ink.
Von Kloberg's many accomplishments range from winning Most Favored Nation status year after year for Romania -- one of the few Soviet satellite states that maintained good relations with the United States during the Cold War -- to securing FAA approval for Bangladesh Biman to fly in and out of New York's JFK. He's also very proud of having had Zaire removed from the UN Human Rights Oversight list in 1989.
"I would rather have ten $50,000 clients than one $500,000 client," says the gregarious lobbyist, who recently spent 11 days in Congo -- which is paying him half a million dollars for a six-month contract. The Gambians, who have a much smaller country and less to spend, have forked over $180,000 for one year's worth of representation.
"We have 10 full-time people, but we also use ex-congressmen and senators on a case-by-case basis. I don't think anybody has our breadth regionally," says von Kloberg, adding that he doesn't believe in newspaper supplements on specific countries -- known in the trade as advertorials. "Everybody knows they're paid for. They go out with the morning's garbage."
Von Kloberg, praised by Executive Class magazine as "a master of diplomatic mixing and mingling" and ranked by Washingtonian in 1993 as one of the top 50 lobbyists in Washington, says his first foreign client was the Kingdom of Nepal, in 1982.
Since then, he's acquired a reputation for taking on causes no one else will touch. While most of his clients have been nations few Americans could find on a map, others are notorious enough to raise a storm of controversy, among them Romania's Nicolae Ceau-cescu, Suriname's Desi Bouterse, Zaire's Sese Seko Mobutu and Iraq's Saddam Hussein.
"I represented Iraq from 1984 to 1987, right after the U.S. re-established diplomatic relations," he said. "The slogan then was, 'If Iraq fell, the Gulf would fall.'"
Asked if he's ever ashamed to represent men most other people would view as tyrants, von Kloberg retorts: "Shame is for sissies." He adds quickly that "my job is to give my clients the best advice: the truth. If they're a basket-case, they need to know it. I never hide the warts, but show them what they can do better."
In 1996, von Kloberg was hired by the Honduran Apparel Manufacturers Associa-tion to defend it against charges of sexual abuse and child labor in Honduran garment fac-tories producing Kathie Lee apparel. As part of his work, he organized a press conference for the Honduran ambassador, coordinated a visit to Washington by a Honduran delegation which testified before Congress; arranged one-on-one interviews with CNN and other media; drafted a White Paper as a follow-up to the Honduran visit, and provided analysis of events for the association and the Embassy of Honduras.
"Of course it was true," concedes the lobbyist, when asked about the child-labor allegations. "There's no question there were abuses. But they changed their own laws because of us. Why should I turn them down if I can change them?"
Ambassadors seem to appreciate von Kloberg's efforts, judging from hundreds of testimonials to be found in a media kit he passes out to journalists and prospective clients.
"I cannot forget his dedication to help foreign ambassadors like me and those of the Central American and Dominican Group to better perform their duties in the complicated circle of Washington, D.C.," gushed former Costa Rican Ambassador Gonzalo J. Facio in a 1997 letter to syndicated columnist Georgie Anne Geyer.
Writes former Guatemalan Ambassador Edmond Mulet: "Your contacts in the administration and on Capitol Hill proved very helpful to me and my country. Through your expertise in this area, I was able to meet with officials of your government who are in a position to give needed support. Likewise, your media contacts produced interviews and articles which assisted me in pursuing and publicizing Guatemala's objectives."
At the other end of the spectrum is Laurence L. Socci, chief executive manager of the CLA Group.
Unlike von Kloberg, 30-year-old Socci has no confirmed clients other than Citizens for District of Columbia Statehood. At the moment, he's on the verge of signing a $10,000-a-month contract with the Pacific island nation of Fiji, which is trying desperately to get U.S. textile quotas lifted.
"Other firms would charge, at a minimum, $30,000 a month," he says. "I don't think there's anyone in this city who goes as low as we go. That's not to say we work cheap. We work effectively."
Essentially a one-man show operating out of shared office space along Connecticut Avenue, Socci is his firm's chief lobbyist, working with two assistant lobbyists -- one in Texas, the other in Massachusetts. Socci, a lawyer of Cuban extraction married to a Colombian, started his business last year on a shoestring budget by sending out letters to every foreign embassy in Washington. A few wrote back, saying they'd keep his name on file, with Fiji showing the most immediate interest. He's also hoping to represent various South American countries.
"We don't believe it's so much a relationship business. It's an advocacy and knowledge business. One person cannot put a country in a better position," he said. "You have to know how laws are made, and who hold the power in the United States. Voters are the people Congressmen listen to. You have to find a way to connect with the people."
Verner Liipfert's Merrigan would not necessarily agree.
"Our clients get advice, and to the extent they need it, they get representation," he said. "By virtue of their experience and the relationships they've built over a number of years, [former lawmakers] add value. They can also provide valuable strategic advice."
Merrigan also says his firm won't represent countries just because they may offer big bucks.
"There are many clients we don't take on. We've turned away quite a number of clients when we've disagreed with the policies they're advocating, or for political reasons why it wouldn't be appropriate," said Merrigan, though he declined to give examples.
Lande, who says that income from lobbying represents less than 10% of his income, says "I think there's a certain line beyond which I would not go. For example, I wouldn't accept a protectionist as a client."
Asked how Verner Liipfert and other lobbyists successfully defend a country's trade policy when its position is diametrically opposed to that of the United States, Merrigan says it usually resorts to "Americanizing" the dispute.
"Most dumping cases -- while they're aimed at foreign suppliers -- have an adverse impact on U.S. interests," he said. "In the Chilean salmon case, the injured parties would have extended beyond Chile to include Miami importers, air-cargo carriers and others. So to the extent you can demonstrate the American impact, it helps to interest lawmakers in the case."
Today, the No. 1 issue in Washington, at least for most Latin American govern-ments, is the proposed Free Trade Area of the Americas, and lobbyist Barnes of Hogan & Hartson isn't optimistic.
"I wish it were otherwise, because I think we ought to be moving more rapidly to implement the FTAA," he says, "but it's difficult to be optimistic given the climate in Congress on these issues."
Bad news for Latin America -- but for the hired guns on K Street, the tidings couldn't be merrier. "When fast-track failed to come to a vote in the Senate, it was perceived as a big defeat for the president," said Washingtonian. "But for the Washington lobbyist, there is nothing so welcome as a draw. As in boxing, it simply means another fight on another day, with an even bigger paycheck."