The government of the Bahamas has signed a contract to pay the public affairs firm of Black, Manafort, Stone & Kelly $360,000 a year. The figure was incorrect in a chart last Sunday.
Former officials of the Reagan administration and influential Reagan-Bush campaign aides are being paid millions of dollars by foreign governments and corporations, in many cases to help those clients block or counter administration initiatives.
Foreign interests have been so successful in hiring well-connected Americans to lobby for them that some U.S. business leaders and trade officials in the administration have complained in private conversations that foreigners have greater access to White House decision-makers than they do themselves. These business leaders and officials, many of them presidential appointees, have declined to make their comments public.
The most prominent former Reagan aide representing foreign interests for large fees is Michael K. Deaver, a confidant of President Reagan and his wife, Nancy. Deaver resigned last May as deputy White House chief of staff to found a public relations firm that now has contracts worth $2,475,000 to represent foreign interests.
Democrats such as Robert S. Strauss and Brock Adams, who served in the Carter administration, and former senator J.W. Fulbright (D-Ark.) also have been hired by foreign interests to help with trade and foreign policy problems. But the large fees involved, the high rank of many of the former Reagan aides and the fact that they are working against the administration they recently served have made this version of Washington's traditional revolving door unusual.
Deaver's highest-paying clients by far are South Koreans, who are faced with trade complaints from the administration and U.S. companies. Last fall, Reagan ordered an investigation into charges of unfair trade practices by Korea as part of an administration trade initiative.
Deaver's firm is being paid $950,000 by two South Korean government entities and $475,000 by a public foundation that wants him to "protect, manage and expand trade and economic interests" of Korea. In addition, one of Korea's largest trading companies, Daewoo International Corp., is paying Deaver's firm, Michael K. Deaver & Associates, $250,000.
Two other new public affairs firms with close ties to the Reagan White House -- Gray & Co. and Black, Manafort, Stone & Kelly -- also are collecting millions of dollars in fees from foreign clients, many of whom are involved in trade battles with American firms or the U.S. government.
Gray & Co., headed by Robert Gray, who ran Reagan's 1981 inaugural committee, was paid $1.9 million by foreign clients in a six-month period last year, according to records at the Justice Department.
Among those fees was $246,000 for one month's work handling the American visit of Susumo Nikaido, vice president of Japan's ruling Liberal Democratic Party (LDP) and eight other party leaders. The visit, according to Japanese officials, was aimed at reducing trade tension with the United States.
Arrangements for the Nikaido visit were handled by retired admiral Daniel J. Murphy, former chief of staff for Vice President Bush and now a Gray & Co. executive.
Murphy said the fee for the Nikaido visit was high because it involved visits to three cities by nine LDP leaders, and all the preparatory work had to be done in four days.
Justice Department filings, required under the Foreign Agents Registration Act, show that a firm run by key operatives in the Reagan reelection campaign -- Black, Manafort, Stone & Kelly -- signed contracts last year worth more than $3.4 million with nine foreign clients. The fees include $950,000 from a Philippine business association with close ties to President Ferdinand Marcos and $1 million from the new military ruler of Nigeria.
Paul J. Manafort, who is in charge of the foreign part of the company's business, was political director for the 1984 Republican National Convention. His partner, Charles R. Black, was political director of the Reagan-Bush 1984 reelection campaign while Roger Stone was northeast coordinator for Reagan-Bush. Peter G. Kelly was finance chairman for the Democratic National Committee.
Deaver declined to talk about potential conflicts between his former White House job and his foreign clients. "I don't talk about my clients, either foreign or domestic," he said.
Manafort did not return phone calls.
Traditionally, Washington representation includes a combination of intelligence gathering, lobbying of Congress and the executive branch and public relations. In most cases it is impossible to determine just what these former officials are doing for their clients or what success they have had. Secrecy is considered a sign of success among practitioners of these arts.
Stanton D. Anderson, director of economic affairs for the Reagan administration's 1980 transition team, has emerged as the leading lawyer-lobbyist for Japanese trade interests in Washington. Anderson's law firm -- Anderson, Hibey, Nauheim & Blair -- was paid at least $400,000 last year by Japanese electronics and machine-tool groups that face trade complaints from either the Reagan administration or U.S. companies.
Eric I. Garfinkel, who worked in the Reagan White House as a presidential assistant specializing in trade, is a partner in the Anderson firm.
Anderson's connections with Japanese interests go beyond his law firm. He is a partner in Global U.S.A., a lobbying organization that received more than $1 million last year from Japanese clients.
The Anderson law firm represents the Japanese semiconductor makers who are fighting an unfair-trade-practices complaint brought by Reagan's special trade strike force.
William Walker, who aided in the transition when Clayton Yeutter was named U.S. trade representative this summer, also picked up a $200,000 piece of the Japanese seminconductor business for his law firm, Mudge, Rose, Guthrie, Alexander & Ferdon.
Walker, a former Reagan administration trade official, also represents the Japanese Aluminum Federation, which is fighting U.S. efforts to break up a cartel that has been accused of blocking American sales in Japan and shipping subsidized, low-cost aluminum to this country.
James H. Lake, chief spokesman for the 1984 Reagan-Bush campaign, began collecting Japanese clients soon after Yeutter, a friend of 13 years, received his appointmemt as Reagan's top trade official. Along with Walker, Lake handled the Yeutter transition into the trade job.
"The Japanese sought me out. Did I think it was odd? No. They knew I was a friend of Clayton Yeutter. The Japanese work very hard to figure out who has access and who can communicate" their views, said Lake, a nonlawyer who is associated as a public affairs consultant with the law firm Heron, Burchette, Ruckert & Rothwell.
One of the clients Lake brought to the law firm is Japan Tobacco Inc., which was accused by Reagan this fall of unfairly blocking the sale of American cigarettes. The government-owned corporation agreed to pay the law firm $120,000 a year to represent its interests in Washington.
Japan Tobacco also hired a Washington consulting firm, International Business-Government Counselors Inc. (IBGC) to help fight the Reagan administration trade case. IBGC brought in Claud Gingrich, who resigned last spring as general counsel in the U.S. Trade Representative's Office, as a "special adviser" in the case.
"He is a an expert . . . because he used to be general counsel for USTR," explained K. Taksahashi of Japan Tobacco's Washington office, who signed the contract with the consulting firm.
"I brought Claud over," added John McDermid, general counsel of IBGC, who has known Gingrich since they both worked at the International Trade Commission in 1974. "Japan Tobacco didn't say we had to hire Claud, but I'm not sure they would have hired the firm if he had not been brought in."
Under federal ethics rules, Gingrich can work on the case as long as he does not appear before his old agency, the Office of the U.S. Trade Representative. He said he is not doing anything wrong by representing foreign clients. "The law does permit me to advise them about the cases," Gingrich said.
Gingrich, a partner in a consulting firm started by Langhorne A. Motley, former ambassador to Brazil and assistant secretary of state for inter-American affairs, also represents Brazil's computer industry in fighting another trade complaint brought last fall by Reagan. That complaint accuses Brazil of unfairly blocking U.S. computer sales. The Brazilian Computer and Peripherals Industry Association is paying L.A. Motley & Co. $120,000 a year, according to Justice Department records.
The firm also was paid a $180,000 fee to help the Brazilian shoe industry protect and expand its sales in the United States.
Of all these former administration officials, Deaver appears to maintain the closest ties to the White House, thanks primarily to his personal relationship with the Reagans. His special status was symbolized by the fact that he was allowed to keep his White House pass after leaving the government. The president still calls on Deaver for help and advice. For example, Deaver was brought in to advise on public relations strategy for last November's summit meeting with Soviet leader Mikhail Gorbachev.
The language of Deaver's contracts with the foreign clients makes it clear that Deaver's presence is the reason they hired his firm. The contracts contain clauses that allow clients to pull out if he should leave the firm "whether by death, assumption of public office or otherwise."
Deaver's firm includes two other former Reagan White House aides: William F. Sittman and Pamela G. Bailey, both former special assistants to the president. To provide trade expertise, Deaver hired Doral S. Cooper, a former deputy U.S. trade representative in the Reagan administration, and Lisa Berry, considered by her colleagues as one of the brightest of the young trade professionals at the Office of the U.S. Trade Representative.
Deaver's contracts with foreign clients also contain clauses that require the people paying the bills to keep his reports confidential. And even though the contracts are on file with the Justice Department and open under the law to public inspection, they attempt to keep Deaver's relations with his clients confidential.
"Neither party hereto shall make or cause to be permitted to be made a public announcement of or subject matter of this agreement without the express prior written consent of the other party," says the contract with the government of Mexico.
"What we do in the trade area -- and we do a lot of work in the trade area -- is to try to work out disagreements to the benefit of both parties," Deaver said in a telephone interview yesterday. "In areas where we have been successful, both parties have been satisfied with the results," he said.
But he declined to say what trade differences he has managed to get settled.
House Democrats link the record U.S. trade deficit to influence-peddling on behalf of foreign clients by former key administration officials. Some argue that this lobbying can be a potent campaign issue for this year's congressional races.
"Former high-ranking officials are now employed by law firms and consultants to represent foreign interests often at odds with our nation's best interests," said Rep. Don Bonker (D-Wash.) in a speech on the House floor that provided a preview of this argument.
"How can we be confident that our trade representatives are negotiating aggressively on behalf of America's interests when they may have their eyes on lucrative future employment opportunities with those on the other side of the table?" asked Rep. Howard E. Wolpe (D-Mich.), who, with Rep. Marcy Kaptur (D-Ohio), last year introduced a bill that would bar former high-level federal employes from representing foreign interests.
"We think it is simply wrong that former top-level American officials should be for sale to the highest foreign bidder," Wolpe said.
It is unclear how successful the former Reagan aides have been for their foreign clients or what exactly they have done to earn their fees. South Korea, for instance, still thinks it is being picked on by the Reagan administration for its successes in gaining footholds for new products in the United States. Korean business and government officials have said that Japan has managed to avoid trade retaliation because it has hired influential Americans to represent it and mount extensive public relations efforts on its behalf.
Japan has the largest numbers of Americans registered as its agents with the Justice Department and even more who are unregistered because they work for U.S. subsidiaries of Japanese corporations. But there are indications that some of Japan's recent efforts have backfired.
Following the advice of Anderson and Walker, for instance, a high Japanese trade official called Yeutter at home late one night to ask for an immediate meeting in an attempt to head off a presidential investigation of charges that Japan had been "dumping" sophisticated computer memory chips in the United States at prices below their cost of production. Yeutter reportedly became so annoyed at this approach that after a 6:30 meeting the next morning he recommended the investigation proceed.
Similarly, Japanese semiconductor industry lawyers persuaded the White House to water down Commerce Secretary Malcolm Baldrige's moves against possible unfair trade practices by Japan, but Baldrige forced White House aides to back down. Critical members of Congress now refer to the strong lobbying by Walker and Anderson for their Japanese clients as examples of the pressure former administration aides can exert on the government.