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Sources: Lighthizer confirmation could be tripped up by lobbying provision in trade act

January 23, 2017

Robert Lighthizer, President Trump's nominee for U.S. Trade Representative, could be disqualified for the role by a section of the 1974 Trade Act unless Congress approves a waiver or amends the law to accommodate his nomination, according to documents obtained by Inside U.S. Trade and sources familiar with the issue.

Whether Congress could approve a simple waiver for Lighthizer -- as it has done for other nominees in the past -- or if the law itself would have to be amended remains unclear.

The Trade Act was amended in 1995 to prohibit anyone who has “directly represented, aided, or advised a foreign entity” in a trade negotiation or trade dispute with the U.S. from becoming USTR. According to sources and documents, Lighthizer's involvement with the government of Brazil could fit that description.

According to documents filed with the Justice Department under the Foreign Agents Registration Act (FARA), Lighthizer, from 1985 to 1991, represented the governments of Bermuda, Great Britain, Jamaica and Brazil in his work at Skadden, Arps, Slate, Meagher & Flom. FARA documents show that Skadden, in that same time frame, also represented the Soviet Union.

Those documents show that Lighthizer in 1985 represented Brazil's Sugar & Alcohol Institute (IAA), “part of the Brazilian Ministry of Industry and Commerce, in a broader effort to resolve disputes between Brazil and the United States involving ethanol trade.”

According to the Nov. 14, 1985, contract signed by Lighthizer and IAA President Jose Ribeiro Toledo Filho, Skadden's work included “general legal services related to this litigation and specifically those related to an attempt to settle the cases.”

“The Firm will participate in the efforts to persuade the administration, particularly the Department of Commerce, the U.S. domestic ethanol producers, U.S. agriculture producers and the Congress of the desirability of Brazil and the United States resolving outstanding difficulties concerning ethanol on a friendly and equitable basis. The Firm will also participate in any legislative efforts that might be related to a settlement,” the contract said.

Under section 141(b)(4) of the Trade Act of 1974, as amended through the 1995 Lobbying Disclosure Act and via the 2015 Trade Promotion Authority law, “a person who has directly represented, aided, or advised a foreign entity (as defined by section 207(f)(3) of title 18, United States Code) in any trade negotiation, or trade dispute, with the United States may not be appointed as United States Trade Representative or as a Deputy United States Trade Representative.”

Then-Senate Majority Leader Bob Dole (R-KS) in 1995 included the language in the Lobbying Disclosure Act that blocks certain individuals for the USTR and deputy USTR slots.

Every USTR and deputy USTR nominee who comes before the Senate Finance Committee as part of the confirmation process is asked to respond to a question addressing this issue.

“Have you ever represented, advised, or otherwise aided a foreign government or a foreign political organization with respect to any international trade matter?” the question reads. “If so, provide the name of the foreign entity, a description of the work performed, and the number of hours spent on the representation,” the committee questionnaire continues.

Lighthizer's responses to the committee's questions have not been released; a Finance Committee aide said they will be part of the public record after the nominee's confirmation hearing before the panel. A date for his hearing has not yet been set because the committee, as of Jan. 20, had not received Lighthizer's ethics agreement.

Lighthizer did not respond to a request for comment by press time.

Lighthizer's contract with the Sugar & Alcohol Institute said that he conducted preliminary meetings in Brazil roughly a month before the document was signed.

“This agreement will have retroactive application to October 13, 1985. This is the day before Mr. Lighthizer travelled to Brazil for preliminary meetings on this matter,” the contract said, adding that among his responsibilities were “numerous meetings with administration, congressional and U.S. business interests.”

Congress has moved to waive the law once before, for Charlene Barshefsky, who served as deputy USTR from 1993 to 1996.

Barshefsky was nominated on Dec. 14, 1996 by President Bill Clinton to lead the agency after the amendment to the Trade Act had entered into force on Jan. 1 of that year.

Barshefsky had previously worked for Steptoe & Johnson in connection with “on-the-record trade litigation in two trade cases, one involving Canadian pork, and the other involving Canadian beer,” according to her 1997 testimony before the Finance Committee.

Barshefsky testified that “at no time during the 18 years that I was in private practice did I ever lobby on behalf of any foreign government or foreign entity before the U.S. Government,” and said she did not meet with any U.S. government officials or appear on behalf of Quebec in any proceeding, “nor did my name appear on any of the briefs or submissions in any of the proceedings.”

She also “directed the preparation of memoranda on the options of legal consequences if Canada were to terminate its settlement agreement with the United States involving softwood lumber, as well as the implications on possible future trade litigation,” Barshefsky testified on Jan. 29, 1997, adding that she “represented private Canadian lumber interests in that litigation, not the Government of Canada or the Embassy.”

Then-Senate Finance Committee Chairman William Roth (R-DE) on Jan. 21, 1997, introduced a joint resolution (S.J. Res.5) waiving certain provisions of the Trade Act to exempt Barshefsky from the language that would have kept her from taking the USTR job.

The joint resolution sought to have section 141(b)(3) “not apply to any individual who was serving as the United States Trade Representative or Deputy United States Trade Representative on the effective date of such paragraph (3) and who continued to serve in that position."

Specifically, the joint resolution said the section in question did “not apply to Charlene Barshefsky in her capacity as Deputy United States Trade Representative; and in light of the foregoing, it is appropriate to continue to waive the provisions of paragraph (3) of section 141(b) of the Trade Act of 1974 with respect to the appointment of Charlene Barshefsky as the United States Trade Representative.”

The joint resolution passed the Senate on March 5, 1997, and the House on March 11, 1997, becoming law on March 17.

Whether Lighthizer's appointment would require a joint resolution or a change to the Trade Act of 1974 is unclear.

Sources from both sides of the aisle, as well as business community leaders, have repeatedly emphasized that Lighthizer is a qualified choice for USTR.

In 1996, Lighthizer served as Bob Dole's presidential campaign treasurer. Some sources who were close to the Finance Committee when the Dole amendment passed told Inside U.S. Trade that Lighthizer was said to have lobbied Dole to include the language. -- Jenny Leonard (jleonard@iwpnews.com)

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