K Street lobbyists, lawyers exercise diplomatic clout

February 16, 1999|By Larry Luxner

WASHINGTON -- If you want to see the trappings of diplomacy, 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.

Lobbying is a booming business in the nation's capital -- as countries from Argentina to Zimbabwe increasingly look for more influence on Capitol Hill than their often under-funded, unsophisticated embassies can provide.

"We tend to be thought of when governments or businesses are trying to find representation 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 firms.

Mr. Merrigan says his firm's overall foreign practice generates "in excess of $5 million in annual revenues," with Latin countries accounting for about a third of that.

Washington reach

"We've invested a lot of our own time and effort developing sound relationships throughout Latin America," he says. "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 such as 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 percent or more on Chilean salmon imports, as Maine and Washington state salmon producers had urged.

Instead, tariffs of no more than 5 percent were assessed -- and Mr. Merrigan says the government 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 (the bill that would have renewed President Clinton's authority to negotiate international trade deals), and about Washington's frequent inattentiveness to the region."

Today, Mr. Barnes makes a living as a partner with Hogan & Hartson. 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 more than $6 million a year to Hogan & Hartson. 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.

Politician lobbyists

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. Rep. Bob Livingston, once designated as the next speaker of the House, will soon join their ranks.

Among Verner Liipfert's brightest stars are former Sens. Robert Dole and George Mitchell, and President Clinton's first Treasury secretary, Lloyd Bentsen. The firm recently opened an office in Miami to give it easier access to Latin markets.

Lobbyists, of course, credit their profession with great Latin victories in Washington, such as the 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.

But lobbying for Latin causes isn't always successful. 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. And 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," Mr. Lande said. "The CBI countries, for example, did that, and they weren't very happy with the results."

King of variety

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