Poor nations investing in Washington DC lobbyists

EDITOR’S NOTE: The beggar regime in Ethiopia led by Meles Zenawi pays the Washington DC-based DLP Piper lobby and law firm $50,000 per month. On top of that, officials of the regime and their partners take hundreds of millions of dollars (hard currency) out of the country to buy homes and other properties in the U.S. and other developed countries. I urge the author of the following report, Carol Leoning of Washington Post, and other media to investigate the flight of capital out of countries like Ethiopia. They can start with Samuel Tafesse, a business partner of Meles Zenawi and wife. — Elias Kifle

By Carol D. Leonnig | Washington Post

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.

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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.

FORUM | AMHARIC