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Right Turn
Posted at 08:30 PM ET, 06/01/2012

Biden’s role in U.S. companies’ deals with China

In a May 29 post on the media’s fascination with distracting story lines, I quoted this from the conservative Washington Free Beacon:

“In addition to being the largest single donor to the pro-Obama Super PAC Priorities USA at $2 million, [DreamWorks CEO Jeffrey] Katzenberg’s company is currently under investigation by the SEC for allegedly bribing Chinese officials.

The SEC investigation comes just weeks after Katzenberg announced this February that DreamWorks had struck a $2 billion deal to open a studio in Shanghai under the Oriental DreamWorks brand. The China deal was inked in a ceremony that featured Katzenberg alongside Chinese Vice President Xi Jinping, who stopped off in Los Angeles in February on his way back to China after a series of high-level meetings at the White House, including meetings with Obama. Katzenberg joined Vice President Joe Biden, Secretary of State Hillary Clinton and the Chinese vice president for a meeting that led to the DreamWorks deal. In an interview with the Financial Times, Katzenberg said the deal required Xi’s personal approval in order to move forward.”

That report relied on a Sunlight Foundation report that read, in part: “Katzenberg was a guest at a Feb. 14 luncheon hosted by Vice President Joe Biden and Secretary of State Hillary Clinton for Xi Jinjing, the current vice president and all-but-certain next president of the People’s Republic of China. Katzenberg wasn’t just there to offer a valentine; he told the Financial Times that he needed Xi’s personal approval of a deal he had arranged with three state-owned media firms to create a Chinese-based studio that hopes to launch its first feature film in 2016.”

The Financial Times likewise reported: “The deal to create Oriental DreamWorks will see DWA partner with China Media Capital, Shanghai Media Group and Shanghai Alliance Investment Limited to produce films, TV series and other content aimed at the Chinese market. Jeffrey Katzenberg, DWA chief executive, told the Financial Times the deal was personally approved by Mr Xi, who has been in the US this week on his first state visit Mr Katzenberg met Mr Xi this week at a State Department event held in Washington and had lunch with him in Los Angeles on Friday, together with Jerry Brown, California’s governor. He was also due to attend a Los Angeles Laker game with Mr Xi on Friday evening.”

Friday morning Vice President Biden’s press secretary contacted The Post. She stressed that the Washington get-together with Biden, Xi and others was a luncheon, not a “meeting,” and was attended by 170 people. Biden’s office denies that this “led” to the deal.

Let’s recollect the sequence of events of Xi’s February visit. He began his trip in the District with meetings with the president and top administrative officials and attended the State Department function. Later, both leaders traveled to California. There, in consultation with Hollywood movie moguls, they negotiated a deal to open China to more film production.

The Sunlight Foundation reported: “The Chinese agreed to allow 14 more films in per year, as long as they are big-ticket Imax or 3D productions. A final sticking point was the percentage of the box office that U.S. studios would receive for their films. After consulting with Katzenberg and Robert Iger, CEO of the Walt Disney Company, Biden set the figure at 25 percent, and Xi agreed. Biden announced the new trade deal.”

But that very same day Katzenberg announced a DreamWorks-specific deal for a new joint venture, an animation studio in China. Biden’s office contends that the vice president didn’t set up that meeting or assist that deal in any way, although Biden had spent the bulk of the week with Xi working on the multi-studio deal. But who if anyone did help DreamWorks reach its lucrative deal?

Katzenberg has disclosed that the negotiations started about a year earlier. I contacted DreamWorks on Friday. Its governmental affairs consultant Andy Spahn, who is also an Obama bundler and assists DreamWorks in its campaign fundraising, told me that no one from the White House gave any support or assistance in making the DreamWorks deal. He explained that DreamWorks personnel and Chinese officials “on the ground” were negotiating up to the very end. When was Xi’s sign-off obtained? Spahn said, “at the signing ceremony,” which took place at a Los Angeles hotel. He said that not only the DreamWorks deal was signed then but also “tens and tens” of other deals by U.S. companies. Biden then showed up for the lunch directly following. Spahn said he was unaware of any contact between Katzenberg and Biden in the multi-studio deal.

The potential involvement of the Obama administration (which, after all, got Xi most of the way to California) would not be an issue if it were not for the lucrative fundraiser for President Obama co-hosted by Katzenberg in Los Angeles in May and the huge campaign donations he has made to the Democratic National Committee and the Obama superPAC. The intermingling of campaign donations and lucrative business deals is not exactly unusual in this administration.

NOTE: I was employed by DreamWorks as a lawyer until the summer of 2005 and consulted with the company for a brief time thereafter. I have had no association with the company for approximately five years.

By  |  08:30 PM ET, 06/01/2012

Categories:  2012 campaign, foreign policy

 
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