Buenos Aires Times

argentina LOBBYING AND BILATERAL RELATIONS

Lobbying in spotlight as Argentina looks to buy influence in Washington

Macri administration's reset with the United States backed by series of new programmes and schemes, yet questions remain over lobbying.

Saturday 24 February, 2018
US President Donald Trump and President Mauricio Macri walking along.
US President Donald Trump and President Mauricio Macri walking along. Foto:Cedoc

A host of new initiatives and programmes related to Argentina have sprung up in Washington DC, as improved ties between the government and the White House open up a new stage in their bilateral relationship. Yet amid the positivity and pressure, a number of questions remain as to the extent and amount of lobbying taking place, its effectiveness and the source of its funding.

Over the past few weeks, the Times has sought to examine the new groups that are pitching in Argentina’s favour in the corridors of power in the US capital. But as ever, it seems things are far from simple in diplomacy and policy.

From the day President Mauricio Macri assumed office in 2015, the Let’s Change (Cambiemos) administration has sought to dramatically improve relations with the United States, seeking to rebuild ties that had stagnated under the preceeding Kirchnerite administrations.

That desire, it seems, is starting to pay off. Over the past 12 months, a series of new groups, initiatives and programmes have been set up by influential think-tanks in Washington DC seeking to spread the word about the opportunities Argentina has on offer. The country even has a group pitching for it in the US Congress.

The Wilson Center has set up the Argentine Project and the Center for Strategic and International Studies (CSIS) has created the Argentine-US Strategic forum programme. In the US Congress, a new ‘Argentine Caucus’ gathers together lawmakers that seek to help further their mutual foreign policy objectives.

REINTEGRATION

After years of being ostracised by the US establishment during the Kirchnerite era, it seems Argentina is starting to reintegrate itself in a capital where millions of dollars are spent each year by foreign governments in lobbying members of Congress, federal agencies, think-tanks and even media organisations.

The Wilson Center, for example, already had a Brazil Institute and Mexico Institute, but it was only last year that they created the Argentine project, a programme which aspires, in its own words, to be “the premier institution for policy-relevant research on Argentina’s political and economic transformation.”

Its Latin America programme is funded by the US government, private individuals, and grants from various foundations. Former McDonald’s executive and franchisee holder through Arcos Dorados holdings, Wood Stanton – the man widely seen as having spread the Golden Arches across Latin America – is the president of the programme’s advisory board.

The Argentina Project has been fundamental in the formation of the Argentine Caucus in Congress, giving the nation a greater presence in Congress after being in the shadows for so long. “The negative perception that Argentina gained in the Kirchner period is hard to change overnight. It’s an uphill battle, but the work we do helps promote awareness of the country in a positive light,” Benjamin Gedan, the director of the Argentine Project and a former South America director on the National Security Council at the White House, told the Times in an interview.

A second think-tank programme is also drawing attention. In February last year, the Americas Program of CSIS launched the Argentine-US Strategic forum, a space for private and public sectors to discuss and promote policy issues. The scheme has six working groups dedicated to working on trade, G20, agriculture, education, IT, healthcare and energy.

The group has historical ties to at least one instance of big money in Argentina. One of its main donors previously was the late Argentine energy sector billionaire Carlos Bulgheroni, who donated over US$5 million for its new headquarters, inaugurated in 2013. Most of the rest of its money comes from countries in the Middle East, Europe, and Asia.

The CSIS, like other influential think tanks, is a primary recipient of funds from overseas, writing policy papers, holding forums and organising private briefings for US government officials, where it coordinates the US and the foreign country’s donors’ interests.

LOBBYING

One of the most effective ways to influence policymakers in Washington over the years, of course, has been to hire professional lobbyists. The use of such professionals, instead of the traditional manner of using diplomatic corps to cultivate relationships with the US Congress, is a trend that has grown over the past few decades, experts told the Times.

“In the last 30 years, we’ve had a blossoming of foreign governments and businessmen hiring multiple lobbying firms to represent their interests,” said Professor James Thurber of the American University in Washington DC, who studies the impact lobbying efforts by foreign government have on US policymaking.

Even though Latin American countries don’t spend as much in hiring professional lobbying firms as other regions in the world, quite a few are still employed to promote their interests in Congress, Thurber – the author of Congress and Diaspora Politics: The Influence of Ethnic and Foreign Lobbying in Washington DC – explained to the Times.

In the last few years, several businesses from Mexico, Brazil and Chile and their respective governments have spent hundreds of thousands of dollars paying lobbyists who can get them access to the right people on the Hill and the Executive, in order to advance their interests. For example, over the past decade, the Association of Chilean Avocado Producers have spent a reported US$200,000, while the Brazilian sugarcane industry association is believed to have paid over US$600,000 in lobbying fees to help their industries.

But not all the money dedicated to lobbying by foreign governments and businesses is efficiently used, Thurber warned. “A lot of money spent by countries to lobby on the Hill is wasted,” he highlighted, whilst pointing to success stories, like Mexico and negotiations over the North American Free Trade Agreement (NAFTA).

Argentina is beginning to take note. Last year, the provinces of La Rioja and San Juan contracted the services of Mr. H.R. Bert Pena, a former staff director of the House Committee on Agriculture turned lobbyist. The Foreign Agents Registrations Act (FARA) shows that the provincial governments spent at least US$5,000 for the “Introduction of Provinces to Agribusiness Community,” in last August 2017. Months later this was followed up by a meeting with the Governor of San Juan, Sergio Uñac, and members of the House of the Representatives, leaders of the Agriculture industry and Associations in Washington DC. In March, a group of US businessmen will travel on a trade mission to San Juan province to evaluate development and investment opportunities in the country.

What becomes apparent, the more one investigates is that the lobbying currently being carried out may just be the tip of the iceberg, as due to giant loopholes in FARA, a lot goes unrevealed. For example, travel and hospitality-marketing firm MMGY registered its public relations activity on behalf of state-run travel and tourism agencies in cities such as Mexico, Switzerland, and Argentina only a month after lobbyist Paul Manafort (formerly a key member of Donald Trump’s presidential campaign team) was indicted for not registering as a foreign agent. Tourism agencies like MMGY are bound by the FARA disclosure requirements, but it hadn’t disclosed it until after the Manafort scandal. This, of course, raises serious questions about whether such activities will really come to light, as they legally should.

After MMGY registered under FARA, it emerged that the Buenos Aires City government had paid marketing firm MMGY Global over US$50,000 in 2015 to help promote tourism.

FIGURES

But while Argentina is starting to be more active in lobbying for its interests, the amounts identified for this report are miniscule in comparison to the figures spent lobbying against Argentina in the past. Infamously, for example, when hedge fund billionaire Paul Singer was in the midst of the hold-outs dispute with president Cristina Fernández de Kirchner’s administration, billions were spent.

According to MapLight, an NGO that analyzes the influence of money on politics, Singer spent US$7.7 million through the American Task Force Argentina in lobbying Congress. And the DCI lobbying group earned at least US$16 billion from its campaign to influence the United States government on behalf of Argentina, according to reports by Bloomberg. Also, between 2007 and 2011, US$3.6 million was donated to the Foundation for the Defense of Democracies (FDD), a neo-conservative think-tank that led a public diplomacy campaign against the Kirchner administration. Singer and other holdout bondholders ultimately won out when the Macri administration agreed to pay US$4.75 billion dollars to settle - three quarters of what they were owed.

Lobbying, in most outlets, seems to have something of a bad reputation (this article is not intended to ‘judge’ lobbying, rather it seeks to raise questions about its use by Argentina and groups supporting the government’s agenda). But it is clear that in Washington today, it can make a key difference in getting the necessary support to achieve a government’s political aims, the success of its agenda. Lobbying expenditure in the United States by Latin American exporters, for example, is a significant determinant in tariff preferences granted by the United States, with returns on lobbying estimated to be around 50 percent, according to the Market Access for Sale World Bank report.

Questions, however, remain. With a protectionist administration in Washington and an Argentine trade deficit that is continuing to widen, perhaps its time for the Argentine government and its businesses to start spending more on lobbying to achieve its objectives. 

In Washington, it seems to be the way business is done.

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