Lobbyists for foreign
corporations make
the U.S. Treasury
poorer every year.
corporations make
the U.S. Treasury
poorer every year.
The American Spark
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Foreign Companies Take Millions From U.S. Treasury Each Year
By Cliff Montgomery
For the past several years, foreign corporate executives and Washington-based lobbyists have drafted hundreds of
Congressional bills to suspend tariffs--taxes levied on products and materials shipped to the United States from
overseas. These suspensions often end up costing American taxpayers hundreds of millions of dollars in lost revenue,
according to a recent Washington Post analysis of U.S. trade data.
It may also end up crushing small businesses, one of the principal reasons for the tariffs on foreign goods in the first
place. Tariffs have been around since the earliest years of the republic--in fact they funded the government long before
income taxes. In the 19th century, legislators began using them as a means to protect domestic businesses from more
cheaply-made imports.
The matter here turns on a little-known congressional apparatus which allows companies to erase these protections for
years at a time.
"It's become sort of a lobbyists' dream," Jim Schollaert, a former State Department trade specialist-turned-lobbyist told the
Post. "It's a gravy train, and there's little work to it."
For those who don't yet realize how a bill really becomes a law, we should briefly spell it out here. There is a street in
Washington, D.C. called K Street, a road in the nation's capitol crowded with high-priced professionals who are
handsomely paid by those with the biggest wallets. These professionals are called lobbyists.
The job of a lobbyist boils down to one thing: getting lawmakers to back the personal whims or desires of the people with
the big wallets.
These lobbyists are often former congresspeople themselves; in any case they usually have some close tie to those in
political power, which gives them an access denied to the rest of us. And if friendship don't work, there's always
dollars--many companies and their executives employ lobbyists to give multi-million-dollar "campaign contributions" to
just the right politicians, who then help turn these personal whims into laws everyone must obey.
After the "contributions," lawmakers usually will introduce these whims as serious bill provisions, all at the behest of the
most successful lobbyists--who in turn almost always represent those with the biggest checkbooks.
It used to be called "influence peddling." Some called it "bribes." But in the halls of power around the nation, members of
both major parties simply call it "access."
Want an example? Rep. Henry E. Brown Jr. (R-S.C.) recently sponsored the suspension of a chemical tariff. This request
expressly came from Lanxess Corp., which has two plants in South Carolina.
Lanxess is a 2004 spinoff of Bayer AG, a German company whose U.S. lobbying committee has donated $3,500 to Brown's
campaigns since 2000.
Companies linked to Bayer and Lanxess have initiated more than 100 bills in the current session of Congress, according
to the Post. If passed, over the next two years these bills could cost the U.S. Treasury more than $44 million.
Congressional sponsors of such bills--you know, the politicians who take the "contributions" from these lobbyists--insist
they are only trying to lower consumer prices and create jobs by cutting costs for U.S. manufacturers and retailers. They
further claim that they do not want to hurt domestic businesses, and will usually drop legislation if trade officials find a U.S.
company objects.
"Removing these tariffs will help reduce costs for American businesses," House Ways and Means Committee Chairman Bill
Thomas (R-Calif.) said in a statement in March, when the House passed an omnibus bill with hundreds of tariff
suspensions. "This is absolutely the right thing to do."
But this argument is like saying that if someone gives some great advantage to only one competitor in a foot race, this will
somehow help the others win the race.
Besides, if these tariff suspensions help Americans, one would think these congresspeople would work hard to let
everyone know what's being done for the good of all. So that begs the question: why are they apparently working so hard
to hide the "right thing to do" from the American public?
The bills in Congress generally give no hint of whom the tariff suspensions have been designed to benefit, and sometimes
refer to the products only by strings of numbers linked to phone-book-size tariff tables. According to the Post, one has to
look in U.S. International Trade Commission reports produced for Congress, which records tariff legislation, to even find
many corporate names.
Perhaps one of the reasons for this congressional hide-and-go-seek is that the biggest beneficiaries of the rising tide of
tariff-suspension bills are in fact domestic subsidiaries of foreign corporations. Of the 10 companies that will benefit from
the majority of bills examined in the Post's study, eight are owned by--or affiliated with--German and Swiss chemical
companies.
The current session of Congress is on track to enact a record number of suspensions, the Post analysis added. Since the
beginning of last year, legislators have introduced more than 1,400 bills seeking new or renewed tariff waivers or
reductions.
"It's a huge number," said John Deming, a lobbyist for Ciba Specialty Chemicals, which according to the Post analysis has
initiated more than 30 tariff-suspension bills in the past two years.
"The chemical industry has always been doing this, and now other people are doing it. It's amazing this time, everybody
understands how this works now."
By Cliff Montgomery
For the past several years, foreign corporate executives and Washington-based lobbyists have drafted hundreds of
Congressional bills to suspend tariffs--taxes levied on products and materials shipped to the United States from
overseas. These suspensions often end up costing American taxpayers hundreds of millions of dollars in lost revenue,
according to a recent Washington Post analysis of U.S. trade data.
It may also end up crushing small businesses, one of the principal reasons for the tariffs on foreign goods in the first
place. Tariffs have been around since the earliest years of the republic--in fact they funded the government long before
income taxes. In the 19th century, legislators began using them as a means to protect domestic businesses from more
cheaply-made imports.
The matter here turns on a little-known congressional apparatus which allows companies to erase these protections for
years at a time.
"It's become sort of a lobbyists' dream," Jim Schollaert, a former State Department trade specialist-turned-lobbyist told the
Post. "It's a gravy train, and there's little work to it."
For those who don't yet realize how a bill really becomes a law, we should briefly spell it out here. There is a street in
Washington, D.C. called K Street, a road in the nation's capitol crowded with high-priced professionals who are
handsomely paid by those with the biggest wallets. These professionals are called lobbyists.
The job of a lobbyist boils down to one thing: getting lawmakers to back the personal whims or desires of the people with
the big wallets.
These lobbyists are often former congresspeople themselves; in any case they usually have some close tie to those in
political power, which gives them an access denied to the rest of us. And if friendship don't work, there's always
dollars--many companies and their executives employ lobbyists to give multi-million-dollar "campaign contributions" to
just the right politicians, who then help turn these personal whims into laws everyone must obey.
After the "contributions," lawmakers usually will introduce these whims as serious bill provisions, all at the behest of the
most successful lobbyists--who in turn almost always represent those with the biggest checkbooks.
It used to be called "influence peddling." Some called it "bribes." But in the halls of power around the nation, members of
both major parties simply call it "access."
Want an example? Rep. Henry E. Brown Jr. (R-S.C.) recently sponsored the suspension of a chemical tariff. This request
expressly came from Lanxess Corp., which has two plants in South Carolina.
Lanxess is a 2004 spinoff of Bayer AG, a German company whose U.S. lobbying committee has donated $3,500 to Brown's
campaigns since 2000.
Companies linked to Bayer and Lanxess have initiated more than 100 bills in the current session of Congress, according
to the Post. If passed, over the next two years these bills could cost the U.S. Treasury more than $44 million.
Congressional sponsors of such bills--you know, the politicians who take the "contributions" from these lobbyists--insist
they are only trying to lower consumer prices and create jobs by cutting costs for U.S. manufacturers and retailers. They
further claim that they do not want to hurt domestic businesses, and will usually drop legislation if trade officials find a U.S.
company objects.
"Removing these tariffs will help reduce costs for American businesses," House Ways and Means Committee Chairman Bill
Thomas (R-Calif.) said in a statement in March, when the House passed an omnibus bill with hundreds of tariff
suspensions. "This is absolutely the right thing to do."
But this argument is like saying that if someone gives some great advantage to only one competitor in a foot race, this will
somehow help the others win the race.
Besides, if these tariff suspensions help Americans, one would think these congresspeople would work hard to let
everyone know what's being done for the good of all. So that begs the question: why are they apparently working so hard
to hide the "right thing to do" from the American public?
The bills in Congress generally give no hint of whom the tariff suspensions have been designed to benefit, and sometimes
refer to the products only by strings of numbers linked to phone-book-size tariff tables. According to the Post, one has to
look in U.S. International Trade Commission reports produced for Congress, which records tariff legislation, to even find
many corporate names.
Perhaps one of the reasons for this congressional hide-and-go-seek is that the biggest beneficiaries of the rising tide of
tariff-suspension bills are in fact domestic subsidiaries of foreign corporations. Of the 10 companies that will benefit from
the majority of bills examined in the Post's study, eight are owned by--or affiliated with--German and Swiss chemical
companies.
The current session of Congress is on track to enact a record number of suspensions, the Post analysis added. Since the
beginning of last year, legislators have introduced more than 1,400 bills seeking new or renewed tariff waivers or
reductions.
"It's a huge number," said John Deming, a lobbyist for Ciba Specialty Chemicals, which according to the Post analysis has
initiated more than 30 tariff-suspension bills in the past two years.
"The chemical industry has always been doing this, and now other people are doing it. It's amazing this time, everybody
understands how this works now."
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