Lobbying for China

Posted: Jul 04, 2005 12:00 AM

WASHINGTON -- On June 22, members of Congress received an e-mail from CNOOC Ltd., the Chinese government's huge oil producer, defending its takeover bid of Unocal (along with its substantial oil and gas reserves). The letter was signed by Fu Chengyu, the Beijing-based chairman and CEO of CNOOC. If the U.S. lawmakers need "further information," they were urged to contact "our U.S. advisers at the firm of Akin Gump Strauss Hauer & Feld" in Washington.
That lifted eyebrows on Capitol Hill, where bipartisan opposition erupted against attempted Chinese acquisition of one of the last American energy assets. Akin Gump is one of the capital's legal-lobbying behemoths and needs no quick influx of income. Yet, two months ago, Akin Gump on its own initiative dropped its representation of Chevron Corp., CNOOC's competitor in acquiring Unocal.

 The unsolicited $18.5 billion CNOOC bid for Unocal tops the $17 billion agreement that Chevron had negotiated with Unocal. That leads to a widely held conclusion in Washington that Akin Gump switched sides to work for the highest bidder. The unkind appraisal would be that the firm is part of the capital's current climate that elevates money above all else.

 Akin Gump was a prestigious Dallas law firm with no Washington presence in 1970 when one of its partners, Robert S. Strauss, was elected treasurer of the Democratic National Committee (two years prior to becoming its chairman). About to spend lots of time in Washington, Strauss figured he should open an Akin Gump office in the capital and brought one of the firm's lawyers up from Dallas. That grew to hundreds of lawyers, far more than worked at the home office, in a DuPont Circle building bearing Strauss's name.

 With Strauss and Clinton friend Vernon Jordan its biggest names, the Washington office at first had a Democratic coloration. But Bill Paxon (once considered a future Republican speaker of the House) became Akin Gump's dominant figure after joining the firm in 1999, following his surprise retirement from Congress at age 44. Strauss last year won the lobbyist race to hire another big-time Republican, Tommy Thompson, upon his resignation as HHS secretary. Like most modern lobbying firms, it does not take sides in politics, ideology or global competition.

 The new-style Akin Gump might seem an odd fit to represent an oil company controlled by the Chinese government, particularly since Paxon in Congress occasionally voted against U.S.-Chinese trade relations. Sources at Akin Gump informed me that the firm, which often has turned down clients offering a lucrative payoff, debated the Chinese bid long and hard before accepting it.

 Trying to probe the internal decisions of these massive lobbying firms is tougher than delving into the Mafia or the old Kremlin. Nobody talks on the record, and what is said on background is carefully parsed. At Akin Gump, I was referred to the firm's "ethics officer," who asked me not to use his name. He said the firm had decided in April not to renew an arrangement with Chevron that included work on "legislation" (though not as a registered lobbyist).

 Trying to ascertain how Chevron felt about getting dumped by Akin Gump, I telephoned the head of the California-based oil company's Washington office: Lisa Barry, a veteran government and corporate official. Informed that she never talks to reporters, several hours later I was contacted by a Chevron public relations officer. He told me Chevron had no hard feelings about being dumped by Akin Gump in favor of CNOOC.

 That would be inexplicable had not the Akin Gump ethics officer informed me that his firm still represented Chevron in litigation he would not identify. In the Washington world of big-time lawyers and lobbyists, there are no permanent alliances or enmities.

 China's oil bid raises serious policy questions that are being debated at high levels of the Bush administration. But CNOOC treats its efforts as another special interest campaign in Washington. It has hired Public Strategies, the firm of Mark McKinnon, the former Democratic advertising whiz who worked for George W. Bush's presidential campaigns and has committed to Sen. John McCain in 2008. Money talks in Washington, and it does not matter much who does the paying.