Foreign Aid to Tyrants Who Buy Gov’t Good Will
Business + Economy

Foreign Aid to Tyrants Who Buy Gov’t Good Will

AP Photo/ Katharine Houreld

Shortly before he became prime minister of Somalia last fall, Mohamed Abdullahi Mohamed reached out to a Washington, D.C., public relations firm for help. If ever there was a country in need of an image makeover, it was Somalia.

The U.N. Security Council upbraided the country for its persistent use of child soldiers; murderous Somali pirates were abducting hostages and making headlines; and an Islamic insurgency was linked to al-Qaeda. Making matters worse diplomatically, Somalia had been accused of mismanaging international humanitarian funds--a 2010 U.N. Security Council report indicated half of its $850 million in food aid was stolen.

Mohamed, who holds dual Somali-U.S. citizenship, needed help explaining Somalia to Congress. So he turned to a friend and former employer, Joel Giambra, the former County Executive in Buffalo, N.Y.,  and  now managing director of at Park Strategies, a P.R. firm founded by former Sen. Afonse D’Amato, R-N.Y.

Somalia is not the only outcast country spending handsomely to spruce up its image on Capitol Hill. Six of the 13 most repressive regimes in the world – including Libya, Burma and Equatorial Guinea – have paid American lobbying and public relations firms hundreds of thousands of dollars in recent years according to Justice Department records, and many of these repressive regimes may have to step up their lobbying effort in Washington to protect their financial interests.

As violence rages in Libya and antigovernment protests spread across the Middle East, there is growing sentiment on Capitol Hill to either cut foreign aid or use it more skillfully to extract reforms and concessions in this explosive region.

In the case of Somalia, Giambra felt compelled to assist Mohamed out of friendship, and he wanted to make a modest contribution to promote democratic principles in the lawless country. Last month, the deal was finalized: Park Strategies would be paid $240,000 for a year of service. That would include representing Somalia before Congress, “assist[ing] in drafting, introducing and securing the consideration of certain resolutions and bills,” coordinating meetings with the State Department and executive branch, and organizing trade and investment missions.

"We always vet the potential client," said John Zagame, vice president of Park Strategies. "We weigh the equities, determine what value the firm could add and ask if we could adequately represent their interests in good conscience."

Park Strategies is not alone in taking on clients who some feel should be indicted instead of represented.  Of the 47 nations designated “not free” by Freedom House, the independent democracy watchdog, 21 have inked deals with U.S. public relations and strategy firms in the past 15 months alone. Those countries include several Middle East nations embroiled in revolution: Bahrain, Yemen, Jordan and Egypt, which signed on before the ouster of President Hosni Mubarak

The Acid Test of Foreign Aid
"We must shift our foreign aid focus from failed strategies … that, in some instances, perpetuates corrupt governments, to one that reflects current realities," Rep. Ileana Ros-Lehtinen (R-Fla.) said in a statement after being named chairman of the House Foreign Affairs Committee.

Even Sen. Richard Lugar, R-Ind.,– ranking member of the Senate Foreign Relations Committee and a supporter of foreign aid – cautioned the State Department last month that "all requested spending … will have to pass the acid test" of whether foreign assistance benefits national security and economic development. The result has been an aggressive attempt by some nations to enhance their image in Washington. Such work is legal, as long as the relationships are fully reported.

The Livingston Group, headed by former House Appropriations Committee Chairman Bob Livingston, R-La., was paid $2.4 million to lobby Congress and the administration on behalf of Libya in 2008, and another $360,000 for the 12 months through May 2010, records show. The work included "research" and "council" on "policies of concern." The Livingston Group did not respond to a Fiscal Times request for an interview. As of two weeks ago, its foreign registration had been “terminated” in the government data base, meaning it is no longer representing foreign interests.

Another Republican firm, BGR Group, was paid $25,000 per month for media outreach last year by Kazakhstan, led by former Soviet strongman Nursultan Nazarbayev.  Ed Rogers, former deputy assistant to President George H.W. Bush, co-founded BGR with former Republican national party chief Haley Barbour, who is now the governor of Mississippi and a potential presidential candidate. 

Democrats are also in the game. The Podesta Group, headed by Tony Podesta – brother of former Clinton administration chief of staff  John Podesta – represented Mubarak's Egypt, Thailand and, last year, the National Security Council of the Republic of Georgia, for which it received a six-month, $300,000 contract with an automatic six-month renewal option. The Podesta Group’s job was to influence Congress, the administration, the media and the policy community.

"A concern is that well-resourced, corrupt regimes are getting disproportionate influence on policy, security and financial decisions important to U.S. taxpayers," said Christopher Walker, director of studies at Freedom House.

Other PR deals include:

  • Morocco, considered partially free and confronted by protests calling for reform, last month signed a $2.5 million, two-year deal with Gerson Global Strategic Advisers to advance the kingdom’s political and economic interests in the United States.
  • Libya relied on the law firm of White & Case in 2008-2009 to represent it in U.S. courts and with the State Department after it abandoned its nuclear program, records show. The firm charged up to $975 per hour – minus a 10 percent-15 percent "prompt payment" discount. The work led to a congressionally-approved agreement under which Libya would pay $1.5 billion in compensation to Americans with terrorist-related claims said Nicholas Clarke, a spokesman for White & Case. This includes settlement of the 1988 bombing of Pan Am flight 103 over Lockerbie, Scotland, in which 189 Americans were killed.
  • Saudi Arabia – an American ally but among Freedom House's 17 most repressive nations for its lack of political and civil rights – has a string of contracts. Two years ago, for instance, law firm Hogan & Lovells signed a $50,000 per month deal to provide Saudi Arabia guidance on U.S. foreign policy and legislative and regulatory issues, and to influence the U.S. government and media.

“Most lobbyists will work for anybody,” says Ken Silverstein, a fellow at the Open Society Foundations, which promotes democracy and government accountability abroad. While at Harper's magazine in 2007, Silverstein visited two top lobbying firms posing as a representative of a fictitious investment company with a stake in Turkmenistan, a Stalinist-like abuser of human rights. He asked the firms to whitewash the regime’s image. They "badly wanted that account,” with one quoting a price of $1.2 million-$1.5 million per year.

Qorvis Communications has had contracts in the past two years with Bahrain, Brunei, Kurdistan (Iraq) and Sri Lanka. Last August, Qorvis wrote that it was "delighted" to provide public relations for Equatorial Guinea, just after Amnesty International reported the secret detention, military trial and execution of four men abducted by the nation from Benin in January 2010.

"We only work with strategic allies of the United States," said Qorvis partner Matt Lauer of the $55,000 per month contract. Human rights are a "factor," but don't determine whether the firm takes a client.
But many question the ethics of representing oppressive regimes.

“In a court of law, everyone is entitled to be represented. I’m not sure that’s true in P.R.,” said a senior executive at a large firm that represents sovereign nations who requested anonymity. “Not everyone has an inalienable right to get their story out.”