Behind White House Role As Pitchman for US Firms
INDIA, like many developing nations, can be a tough place for foreign firms to win new business. But when Jack Shaw visited the country with 20 other American chief executives recently, he scored big, landing a $700 million contract for a satellite-communications system as well as two joint ventures.
Mr. Shaw, chairman of Hughes Network, credits the organizer, guide, and cheerleader of the trip: United States Secretary of Commerce Ron Brown. The presence of a high-ranking US official enabled the American business leaders to see everyone they wanted to, from top politicians to ministry purse holders.
''In my 30 years in international telecommunications, this is the first time that I've felt the US government has truly supported US business,'' says Shaw, whose firm is owned by Hughes Aircraft in Los Angeles.
Shaw's experience is not an isolated one. In its two years in office, the Clinton administration has worked hard to become a humming export-promotion machine, going far beyond the actions of its Republican predecessors as it champions the cause of US firms and scours for business opportunities worldwide.
Secretary Brown, for one, has become a tireless traveler in the contract cause. He may be facing ethics questions at home, but during his trips overseas Brown has helped rack up tens of billions of dollars in deals. US corporate leaders covet invitations to accompany the commerce secretary to Asia, Africa, and the Middle East.
The Clinton administration has developed a sophisticated team to go to bat for business, marshaling players from the Central Intelligence Agency, the Departments of Commerce, State, Energy, and Defense, as well as financing agencies. Penetration of foreign markets is a major topic at President Clinton's National Economic Council meetings.
''It's not just a question of a few high-level trips,'' says Jeffrey Garten, Commerce Department deputy secretary for international trade. ''We have a very elaborate system designed to help sizable firms win contracts overseas.''
Not everyone applauds this pro-business approach. From the left, critics complain that the administration is putting contract courting above other interests. Some claim, for instance, that Washington's official overtures to the Chinese for a bigger stake in its vast commercial market undermine any diplomatic pressure that takes Beijing to task for human rights abuses.
From the right, critics gripe that by getting involved in contract competition the government is inevitably favoring some industries or firms over others. Others, such as Senate majority leader Bob Dole (R) of Kansas, want to abolish the Commerce Department altogether in their zeal to shrink government.
The Clinton team replies that in today's high-competition world economy, playing Mr. Nice Guy leaves your country in the dust and the business and jobs in the hands of your competitors. ''We have found that laissez faire isn't good enough,'' says David Rothkopf, Commerce deputy undersecretary for trade policy development.
All the advocacy is making its mark, administration officials say, pointing to a jump in export-related work, which has increased at three to four times the rate of overall job growth. And though it's true that the US trade deficit continues to get larger, it would be worse if it weren't for the White House efforts, they claim.
So far the biggest push has been in China, Brazil, southern Africa, Poland, and other markets that depend on imports for industrialization. In developing Asian econo-mies alone, there is a trillion-dollar market for infrastructure development.
Yet such nations, while commercially promising, are often prickly. That's because, typically, developing countries' governments act as purveyors of projects, hiring suppliers, engineers, and technicians. Many officials have a tradition of demanding bribes for contract awards.
US firms are bound by the Foreign Corrupt Practices Act, which prohibits the use of bribes to gain foreign business, while their fiercest competitors are not nearly so scrupulous. German firms, lament Clinton officials, have been able to count bribery as a tax-free business expense.
''Our choice is real simple,'' Mr. Garten says, ''to be ideological about it and say the US government has no role [in securing a US foothold] or to look at it more realistically, and say 'this competition is absolutely brutal' '' and tap the financial, political, intelligence, and diplomatic resources the US government has to offer.
The Clinton team, of course, says it has chosen the latter course -- leading, among other things, to the use of spies. As recent French allegations about the CIA's economic espionage seem to indicate, US government agents now routinely set out on tasks meant to help US business.
CIA officials have long said they have no desire to engage in specific snooping intended from the outset to benefit a single US firm. Nor does the intelligence community have any desire to swipe other nations' trade secrets. But the CIA agrees with many private-sector analysts that it can help out by providing ''defensive intelligence'' about a competitor's effort to edge out a US firm from a contract, a country, even an entire market.
This strategy worked well for the Raytheon Company, a Massachusetts-based defense firm, when the CIA informed the US firm that a competitor, France's Thomson CSF, was bribing Brazilian government officials in an attempt to win a $1.4 billion radar contract. Two years ago, US intelligence warned US aerospace firms planning to attend the Paris Air Show that they had been targeted by the French for espionage purposes.
The Clinton administration hasn't been shy about enthusiastically backing the sale of weaponry, either. The White House decided last month to remove official barriers to sales of fighter jets, tanks, and other offensive arms to former Soviet-bloc countries. At the time, Deputy Assistant Secretary of State Eric Newsom insisted that keeping a critical base of US defense firms healthy is important to national security. But, he added, ''our goal here is simply to level the playing field for American companies.''
Washington bureaucrats-cum-business advocates are also struggling to ensure that US companies clawing for contracts abroad are not left hanging as their government-backed foreign competitors offer easy credit terms.
Last month, the US Export Import Bank and the Private Export Funding Corporation announced a new program to provide fixed-rate financing for foreign buyers of US exports. ''This administration is much more activist and aggressive than in the past,'' says Ex-Im chairman Kenneth Brody.
Clearly, the White House expects something back from all this activism. In a broad political sense, it enables Mr. Clinton to portray himself as a ''New Democrat,'' not tied to labor and traditional concerns. In a narrower sense, going to bat for business could win over a well-heeled and active segment of the US voting population: CEOs.
Indeed, even as Clinton's popularity sinks below 50 percent among average Americans, he gets a lot of backslapping support from US corporate leaders. Many private sector executives say that Clinton has done more to move this bastion of Republican support into his camp than any other president in recent history.
ROGER SANT, chairman of AES, an independent power producer, was himself an appointee in the GOP White House of Gerald Ford. But lately he and his colleagues have been hobnobbing with top US officials abroad. He says their recent trips with US Energy Secretary Hazel O'Leary to Pakistan, India, and China have been a boon for their businesses.
''When I call an embassy now, I get an ambassador, and the ambassador wants to help. These guys are all revved up to assist the business community to the point that you wonder how they got their Democratic label,'' says Mr. Sant. ''I've never seen anything like this in any administration.''
Many of Clinton's most important fund-raisers from the 1992 campaign were given jobs as business liaisons for the Treasury, Defense, and Commerce departments or positions at the Democratic National Committee, where they have been working to cultivate contacts. Already, business leaders say, the White House is starting to call in its chits for their financial help.
US trade representative Mickey Kantor, the financial manager of Clinton's 1992 presidential campaign, does expect plenty of big business backing. ''The president had significant support out of the business community in 1992,'' he says. ''I think he'll have significant support in 1996.''