webmaster
© Copyright DEHAI-Eritrea OnLine, 1993-2010
All rights reserved
From: Biniam Tekle (biniamt@dehai.org)
Date: Thu Aug 26 2010 - 08:14:36 EDT
http://www.washingtonpost.com/wp-dyn/content/article/2010/08/25/AR2010082506618.html
Poor nation investing in D.C. lobbyists
By Carol D. Leonnig
Washington Post Staff Writer
Thursday, August 26, 2010; A3
Over the past five years, the authoritarian regime of the Congo
Republic has leaned on Washington lobbyists to help with an image
problem.
Gen. Denis Sassou-Nguesso, the president of the country - one of the
world's poorest - had been accused in court and in lawsuits of
diverting tens of millions of dollars in national oil profits to
hidden bank accounts and then using the money to buy mansions in
France and to finance spending sprees in Paris, Dubai and New York.
His main antagonist was a New York investment firm that had accused
him of misspending money in a lawsuit seeking repayment of an old
debt.
Sassou-Nguesso reached out for help on Capitol Hill. In 2006, the
Congo Republic began a Washington lobbying campaign that has now cost
about $9 million and involved more than 100 conversations and meetings
with members of Congress, their staffs and African advocacy groups,
according to lobbying disclosure reports.
A main focus of the effort was to persuade Congress to stop the
profitable business of investment funds like the one that had
embarrassed Sassou-Nguesso.
Experts on the Congo Republic and African debt say the lobbying effort
financed by the small nation in central Africa has been unusual in its
cost and intensity. Impoverished countries struggling to provide food,
water and medical care to residents rarely pay out millions to retain
the services of high-powered D.C. lobbyists.
The Congo Republic made clear that its legislative priorities included
"responding to allegations of misconduct directed at President
Sassou-Nguesso by creditors of the Republic of Congo," according to
reports filed in Washington.
The Congo Republic's lobbyists took the lead among African nations in
pushing for Congress to enact "vulture fund" legislation that would
prevent foreign investors from reaping windfall profits by buying up
at basement prices the debts of poor countries and then suing the
countries to repay in full. The Congo Republic, which settled most of
its outstanding debts to investment firms in a confidential 2008
agreement, said it was seeking protection for all poor African
nations, such as Rwanda, Ethiopia and Sierra Leone.
In the House, Maxine Waters (D-Calif.) stepped forward to sponsor a
bill that won support from 33 co-sponsors, including many members of
the Congressional Black Caucus. She introduced it in 2008 and
reintroduced it in 2009.
Waters told the British news media a year ago that she was unaware
that the Sassou-Nguesso government had been involved in pushing the
legislation. Last week, she acknowledged that lobbyists for the Congo
Republic submitted proposed language for the legislation to her office
in 2007 and met with her and her staff to shape the final bill.
Records show that the Congo Republic's lobbying team has met or spoken
with Waters's office 40 times since 2006, including two meetings with
the lawmaker.
Waters said the legislation is part of her long-standing effort to
help impoverished African nations. She said the Congo Republic's
lobbying against these investors, paid for by state oil revenue, may
well be in the interest of the Congolese people.
"Poor countries have the same right to hire lobbyists and lawyers as
more affluent countries," she said.
To groups that support the legislation, such as TransAfrica Forum and
Jubilee USA, Waters and her colleagues are taking on a powerful
segment of the financial industry and preserving scarce African
resources for their people. Every year, African nations p ay about $14
billion in debt costs to wealthy nations and international
institutions while receiving less than $13 billion in international
aid, advocacy groups estimate.
But John Clark, a professor at Florida International University and an
expert on the Congo Republic, said members of Congress should be wary
of lobbyists for Sassou-Nguesso.
"The purpose of the lobbying is to cover up this nasty reality of
authoritarian politics and to protect the leadership's personal
finances," Clark said.
The trail of Congo Republic money was exposed by Elliott Management, a
New York hedge fund that sued the country for repayment of an
estimated $100 million in debt. The firm declined to discuss the
dispute.
In 2005, it alleged in court that it found that the Sassou-Nguesso
regime had diverted money into shell companies secretly owned by a top
presidential deputy. (A British court agreed that the country had oil
assets in hidden accounts.) Serge Mombouli, the Congo Republic's
ambassador to the United States, said embezzlement charges are
unproved.
Other groups then alleged that Sassou-Nguesso used oil profits for his
personal benefit. A lawsuit brought by French humanitarian
organizations claimed that three African leaders, including
Sassou-Nguesso, misused state money for personal luxuries. A
preliminary French police investigation in 2007 found Sassou-Nguesso
family holdings that included five mansions in or near Paris and a car
worth $224,492.
In France last year, Sassou-Nguesso said the assets were typical for a
world leader.
"All the leaders of the world have castles and palaces in France,
whether they are from the gulf, Europe or Africa," he said.
In 2006, the Congo Republic retained the D.C. law firm Trout Cacheris
to handle several assignments, including working with the
International Monetary Fund to win impoverished-nation status and
dealing with charges made against Sassou-Nguesso. For help, Trout
Cacheris hired the Livingston Group, run by former congressman Bob
Livingston (R-La.); Chlopak Leonard Schechter and Associates; the
former Amani Group, led by former congressman William H. Gray III
(D-Pa.); and the communications firm Public Private Solutions.
John Richards, the main Congo Republic lobbyist, said Sassou-Nguesso
properly sought to stop "a global smear campaign against the Congolese
government."
Lobbyists for the Congo Republic worked closely with Waters as well as
a coalition of U.S.-based religious, human rights and environmental
groups.
Melinda St. Louis, a deputy director of Jubilee USA, a coalition of
religious and human rights groups, said the organization relied on
Richards for expertise. But she said her group has tried to "keep an
arm's-length relationship" with the Congo Republic government.
In an interview last year, Waters said poor nations need protection
from vulture funds. At that time, she said that she would not seek
legislation to shield dictators who are "known to be stealing" from
their people and that she was not aware that the Congo Republic's
lobbying team was involved in the push for legislation.
Waters, who is facing an ethics charge on a separate matter before the
House ethics committee, now says her comments did not accurately
describe her staff's dealings wit h the lobbying team.
In a statement last week, she confirmed that lobbyists had submitted
proposed legislation and were consulted in vetting her measure.
----[This List to be used for Eritrea Related News Only]----