When Lobbyists Become Insiders

By MICHAEL DUFFY WASHINGTON

When Ross Perot challenged George Bush and Bill Clinton in the final debate to explain why they "have people representing foreign countries working on their campaigns," his rivals bobbed and weaved. Clinton deflected Perot's dare by promising, if elected, to toughen laws governing foreign lobbyists. Bush had a see-no-evil response. "I don't think there's anything wrong," Bush said, "with an honest person who happens to represent an interest of another country from making his case. That's the American way."

Lobbying is certainly nice work if you can get it. Governments and corporations -- foreign or domestic -- will pay top Washington influence peddlers as much as $45,000 a month. But what is worrisome is that several of the most sought-after foreign lobbyists have attached themselves to the campaigns of Bush and Clinton, offering advice about politics, trade and international affairs, usually for no salary. The contribution enhances a lobbyist's value to his clients, but it creates at least the appearance that candidates are beholden to the foreign and domestic clients who pay their advisers' salaries. "When lobbyists and politicians team up," notes Charles Lewis, executive director of the Center for Public Integrity, "there is a sense that only access and influence matters, and that erodes public trust in government."

Because of their proximity to power, the hired guns in Bush's posse are the most controversial. Charles Black, the unpaid senior political adviser to the Bush campaign, is a partner in the public relations firm of Black, Manafort, Stone and Kelly, which represents a rebel faction in Angola; the governments of Greece and Nigeria; and the Pacific Seafood Processors Association, which battled the Commerce Department earlier this year for the right to process a larger share of the $800 million Alaskan pollack catch. James Lake, Bush's unpaid deputy campaign manager, is a partner in the public relations firm of Robinson, Lake, Lerer & Montgomery, which represents a variety of clients, including Mitsubishi Electronics, the government of Ukraine and the Mexican cement giant Cemex.

Black and Lake contend that they have refrained from lobbying on issues involved in the campaign and have disclosed to campaign lawyers a list of ( clients, financial holdings and prior lobbying activities. Since early summer, both have promised to forgo lobbying the Executive Branch until after the election.

But Lake's efforts on behalf of several clients earlier this year raise questions about influence peddlers who volunteer their time. Last February, just a month after Lake joined the Bush campaign, the Canadian Forest Industries Council hired Lake's firm to "track legislation" and monitor "administrative activities." A month later, the Commerce Department imposed a 14.5% tariff on subsidized lumber imports from Canada under the terms of the U.S.-Canada free trade pact. During the next 10 weeks, Lake twice telephoned Clayton Yeutter, who was then White House domestic-policy adviser; in a conversation on May 10, Lake asked Yeutter to take a phone call from a lawyer pleading the Canadians' case. Five days later, the Commerce Department reduced the duty on lumber imports to 6.5%. Yeutter has denied that Lake's intervention had any impact on the department's final decision.

Lake's firm also represents the Abu Dhabi Investment Authority, which owns a majority stake in the scandal-plagued Bank of Credit and Commerce International. Massachusetts Senator John Kerry has accused the holding company of hiding evidence of B.C.C.I.'s fraud from U.S. investigators. In April, according to documents filed with the Justice Department, Lake put aside his campaign work for five days and flew to Abu Dhabi to consult with company officials about "strategy and developments." Says Lake: "We gave them advice. That's not lobbying."

Lake and Black have many Japanese clients as well, which led Patrick Buchanan in January to liken the two men to "geisha girls of the new world order" and charge that "Mr. Bush's campaign is virtually a wholly owned subsidiary of Japan Inc." Senior White House officials later pressed Lake and Black to sever ties with their firms to prevent Clinton from capitalizing on the issue, but the effort fizzled. Explains Bush-Quayle counsel Bobby Burchfield: "If you have to sever your ties with business in order to work in presidential campaigns, people will not work in presidential campaigns."

Clinton has not exploited the issue, in part because many of his own advisers do lobbying work too. Clinton national campaign chairman Mickey Kantor is a partner in the Los Angeles law firm of Manatt, Phelps, Phillips & Kantor, which represents Japan's NEC Corp., United Airlines and the National Cable Television Association. Democratic Party chairman Ron Brown is an "inactive" but still salaried partner in the Washington law firm of Patton, Boggs & Blow, which represents more than 100 companies, governments and other clients, including the Abu Dhabi Investment Authority.

Should lobbyists moonlight for presidential campaigns? Montana Senator Max Baucus has introduced a bill to prohibit senior campaign officials from lobbying for foreign interests to "ensure that they do not use their public positions to promote the agendas of their private-sector clients." But the problem isn't only foreign lobbyists. As long as presidential candidates rely on the advice of those whose salaries are paid by special interests, foreign or domestic, they reinforce the impression that government is for sale to the highest bidder.

With reporting by Melissa August/Washington