What's That Smell? US Officials Chase Profits in 'Tawdry' Business Deals

By Justin Rohrlich  DEC 13, 2012 9:41 AM

None of it quite sits right with experts on the inside. Yet it's all perfectly legal.

 


MINYANVILLE ORIGINAL

"We’re going to employ people, provide training, create exports and help the country grow and develop as a democracy,” Wesley K. Clark, the retired US Army General and former supreme allied commander of NATO forces in Europe, told the New York Times recently.

Clark, who led the campaign to drive Serbian forces from Kosovo in 1999 and is now the chairman of a Canadian energy company called Envidity, was responding to questions regarding the outfit’s desire to turn Kosovo’s estimated 14 billion tonnes of coal deposits into synthetic diesel fuel.

“My business is aboveboard, transparent and helps the Kosovar people,” he said. “We are going to use a resource that had no value to the Kosovo people and bring in hundreds of millions of dollars of investment.”

However, Craig Holman, legislative representative for non-profit government watchdog group Public Citizen, suggests Clark’s ambition may not be fueled purely by humanitarian instincts.

“This is about money, not politics,” Holman, who serves as Public Citizen’s Capitol Hill lobbyist on governmental ethics, lobbying, and campaign finance, tells me. “When Wesley Clark was liberating Kosovo, that was political. But now it’s after the fact, and he’s being hired by private interests, which has nothing to do with the people of Kosovo and everything to do with Wesley Clark.”

The privatization of certain sectors of Kosovo’s economy has also attracted former Secretary of State Madeleine Albright, who served under President Bill Clinton during the country’s liberation. PTK, Kosovo’s state telecom company, is selling a 75% stake to the highest bidder -- one of which happens to be DC-based Albright Capital Management, an “investment advisory firm focused on emerging markets,” chaired by Mrs. Albright herself.

“We take seriously all of our obligations -- legal and ethical, in this and all other potential investments,” a statement provided to the Times by Nelson Oliveira, managing director and general counsel of Albright Capital Management, read. “We believe that a transparent, well managed privatization of the state-owned telecom company should bring substantial benefits to the economy and people of Kosovo.”

Problem is, as transparent and aboveboard as Kosovo’s foreign suitors may be, it’s Kosovo that seems to have trouble operating that way.

An October report from the European Court of Auditors found, among other things, “weak powers and overlapping responsibilities” on the part of Kosovo’s three anti-corruption bodies, “complex” and “fragmented” supervision of public procurement, leading to an “increase[d] risk of corruption,” a “judiciary [that] continues to suffer from political interference, inefficiency and a lack of transparency and enforcement,” and “almost no progress in establishing the rule of law in the north of Kosovo.”

Transparency International’s 2012 Corruption Perceptions Index doesn’t paint a particularly hopeful picture of the way Kosovo’s public sector does business, either.

Tied for 105th place, alongside Algeria, Armenia, Bolivia, Gambia, Mali, Mexico, and the Philippines, Kosovo lags behind countries such as Rwanda (#50), Morocco (#88), and Colombia (#94).

Still, no US law prevents former American officials from doing business where they once served in a governmental capacity.

“These sound like revolving door abuses -- especially if there are direct ties with people who are part of Kosovo’s government getting involved in this -- but it is up to Kosovo to regulate, not the United States,” Public Citizen’s Holman tells me.

Holman says the awesome power of high-level connections simply cannot be underestimated, and points to the Czech Republic as an example.

Secretary of State Hillary Clinton visited the country on December 3rd, where she met with Prime Minister Petr Necas in an attempt to steer a $10 billion nuclear power project away from Russia’s Atomstroyexport, and toward Westinghouse, a unit of Japan’s Toshiba Corp., which will reportedly create 9,000 related US jobs. (A bid from France’s Areva was thrown out in October for failing to meet “crucial requirements.”)

“[We] clearly hope that Westinghouse will receive the utmost consideration as this process moves forward," Clinton announced in a press conference after meeting with Czech Foreign Minister Karel Schwarzenberg.

“The Czech government wants to expand a nuclear reactor near Prague,” Holman explains. “Now you’ve got the Obama Administration lobbying to get the contract awarded to Westinghouse. The fact that Westinghouse has the US government lobbying for them to get this contract doesn’t pass the smell test for me -- and many people in the Czech Republic are quite upset about it.”

As it happens, many Kosovars are apparently quite upset about the PTK sale, as well, with some 50,000 people having signed a petition to stop it.

According to the New York Times, Steven Schook, a retired United States army brigadier general and former chief of staff of KFOR, NATO’s force in Kosovo, has “mixed feelings” about “the interplay between dealing and diplomacy.”

“If I’m a large corporation and I want to get in to be competitive, I want to work with people to help me do that,” he said. “But on the other hand, it seems a bit tawdry. One minute you’re liberating a place, and the next minute you’re trying to get an energy tender.”

Indeed, as Walmart (NYSE:WMT) has discovered, what may be "lobbying" in one place can be considered "bribery" in another. And, per the FCPA Blog, which keeps a tally of American companies violating the Foreign Corrupt Practices Act, such other household names as IBM (NYSE:IBM), Johnson & Johnson (NYSE:JNJ), Diageo (NYSE:DEO), and Tyson Foods (NYSE:TSN) also ran afoul of US authorities in 2011. Even when no laws are violated, America's global lobbying dominance leaves Craig Holman, for one, unimpressed.

“When it comes to foreign interests, it’s kind of sad that US lobbyists and political consultants have developed such professional expertise in getting things done, that we are essentially exporting our lobbyists and political consultants to other countries to start manipulating their affairs,” he tells me. “I’ve seen every major US lobby shop get set up in Brussels; there is a huge European Union lobbying industry now, and they have very little disclosure in place.”

In fact, Holman says, he has visited Brussels in an attempt to push for greater lobbyist registration and disclosure.

“One commissioner interrupted me and said, ‘I know that back in the US, you have a problem with lobbying because of people like Jack Abramoff,’” Holman tells me. “’But this is Europe,’ he said. ‘We don’t have any Jack Abramoffs in Europe.’”

A decision on the PTK deal will be made in 2013.

Follow Justin Rohrlich on Twitter: @chickenalaking

No positions in stocks mentioned.

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