What’s Behind Surge in Foreign Campaign Cash?

One of the most intriguing questions about this year’s nasty campaign finance scandal has been left hanging: Why the sudden surge in foreign interest in buying influence in Washington?

Other governments and international corporations have always sought to buy support in the United States, both through legitimate and illegitimate means. But the 1996 election cycle raised their intervention to new highs--or lows--kicking off a massive investigation by Congress and the FBI that is still unfolding.

What seems to be at work is the globalization of American politics, a new and dimly understood phenomenon running in tandem with the globalization of American business.

The demise of the Soviet Union and the end of the Cold War has left the United States as the world’s sole remaining superpower, and Washington as the de facto capital of the world. At the same time, the United States economy has undergone a remarkable and unanticipated renaissance and now has become the most productive and competitive among the major industrialized powers.

So a heady combination of military and economic prowess has allowed America--however briefly--to regain the kind of aura of supremacy it last enjoyed in the 1950s and ‘60s. The United States now plays a significant role in virtually every international crisis or dispute, even in regions where the U.S. military will never be brought to bear.

But Washington’s unprecedented reach means that the rest of the world now has an enormous stake in American policy--and politics.

*

China wants to join the World Trade Organization, but it needs Washington’s blessing first. Romania, a former member of the Warsaw Pact, now wants to join NATO, so its officials come hat in hand to the Clinton administration. Chile wants to become a participant in the North American Free Trade Agreement, but it has to convince the U.S. Congress that it is a good idea. Mexico lobbies desperately to avoid U.S. sanctions for drug trafficking.

With so much at stake in Washington, foreign diplomats and corporate lobbyists are tripping over each other along the city’s corridors of power. The most sophisticated nations have learned to use American corporations as their Washington proxies.

China’s campaign to maintain its most-favored-nation trading status with the United States, for instance, relies heavily on the lobbying efforts of giant American companies like Boeing, Ford and IBM, all of which want to maintain or expand their business projects in China. Boeing, which has sold China more than 200 planes worth more than $7 billion over the last five years, was China’s best advocate in Congress, arguing that MFN ultimately meant more U.S. export-related jobs.

*

But freelance international entrepreneurs are also showing up in Washington in unprecedented numbers, lured by the hope of winning U.S. blessing for their ventures. And at least a few of them are bringing with them the questionable lobbying and influence-peddling practices that have worked so well in other nations, and happened to arrive in town just as both the Democrats and Republicans were desperate for cash to feed their mounting campaign bills.

Roger Tamraz is a perfect case study. Born in Egypt, raised in Lebanon and schooled in the United States, Tamraz has developed over the years an uncanny knack for leveraging personal connections into business opportunities. Once close to Saudi princes, the president of Lebanon and a former director of the CIA, Tamraz has worked all the angles in the Middle East; he made a fortune selling his Italian oil company to Libya, and later considered rescuing the crumbling Maxwell media empire as a favor to senior officials in the Israeli government.

Tamraz had been on the edges of the oil business throughout most of his career, and so he turned his attention from the Middle East to the Caucasus in the mid-1990s as huge new oil strikes in the Caspian Sea gave the region a Gold Rush feel.

The big problem with the Caspian oil was that it was caught in the middle of some of the most heavily disputed territory in the world. Undaunted, Tamraz saw that problem as an opportunity--the man who could transport Caspian oil to the West at the lowest possible price would be a new oil baron. So he concocted a plan for what he called a “peace pipeline” that would transport oil from the Caspian through Azerbaijan, the breakaway republic of Nagorno-Karabakh, Armenia and finally to Turkey and the Mediterranean. Tamraz’s plan was a longshot at best, and Tamraz knew he needed some political muscle if he was going to pull it off.

Until 1991, Tamraz would have had to lobby Moscow, since both Armenia and Azerbaijan were republics of the Soviet Union. But times have changed, and in the post-Cold War world, he figured the only way to shorten the odds for his project was to get the support of the United States, the only power that all sides in the Caucasus might respect.

*

So with the help of the U.S. ambassador in Armenia, Tamraz arranged meetings with officials involved in U.S. policy on the Caucasus at the State Department, the Energy Department and finally the National Security Council. When none of those contacts paid off, Tamraz began donating heavily to the Democratic Party for the first time in his life.

The Democratic National Committee quickly began opening doors, and Tamraz was soon enjoying White House coffee with President Clinton. Tamraz then turned around and talked up his White House access to impress leaders in other countries, including Turkey.

Tamraz was never able to translate his intricate network of connections into a trans-Caucasus oil pipeline and instead has ended up as a footnote in the campaign finance controversy. But his case has also become a cautionary tale for American leaders, who have yet to learn that Washington is now the biggest political bazaar in the industrial world.