Current and former officials intervene on company’s behalf in battle with PeruBy Keenan Steiner Mar 08 2011 11:03 a.m.
Battling the government of Peru over an inactive metal smelter in one of the most polluted places on earth, billionaire Ira Rennert’s Renco Group hired eight former government officials from five lobbying firms in a span of 82 days since November.
Renco signed up a former member of Congress, a former trade official, former congressional staffers and a campaign manager for a high-ranking Senate Republican to plead its case in Washington. In a little less than two months of lobbying, two of those firms have reported receiving $225,000 in fees while attempting to enlist Congress and the Obama administration as allies in Renco's struggle with Lima.
The lobbying campaign appears to have borne fruit. Correspondence obtained by the Sunlight Foundation Reporting Group shows that members of Congress from both parties and Obama administration officials have intervened on behalf of the company.
The flurry of hirings, found in Sunlight Foundation’s Lobbying Registration Tracker, provide a glimpse of how private interests strategically build teams of Washington insiders to influence public policy in their favor, attempting to gain access to decision makers by employing their former colleagues.
For example, eleven days after Kerry McKenney, a former chief of staff to Rep. Donald Payne, D-N.J., registered to lobby for Renco Group, the New Jersey representative entered the text of a letter into the Congressional Record that he’d sent a few days before to two cabinet officials, Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner, expressing his “serious concern” about Peru’s treatment of the company.
Four days later, on February 15, Marisa Lago, the Assistant Treasury Secretary for International Markets and Development, wrote to Payne that, “Our embassy has been in touch with the Government of Peru on a number of different occasions with respect to this case, emphasizing that we expect it to make a good faith effort to work with DRP to resolve the pending financial and environmental issues.”
And Payne's current chief of staff, LaVerne Alexander, told Sunlight that, "Secretary Geithner has indicated that they have approached the Peruvian government about the issue." She did not answer questions about how Payne developed an interest in Doe Run Peru.
McKenney works for Monument Strategies, a bipartisan firm that counts Alabama law and lobby shop Jones Walker as a strategic partner. Palmer C. Hamilton, a Jones Walker partner who registered to lobby for Renco Group on Nov. 11, 2010, is of counsel to Monument. Monument’s website notes that its strategic partners are “in day-to-day contact with each other working together as a team and delivering success.” Neither McKenney nor Hamilton responded to questions from the Sunlight Foundation.
Hamilton served as chairman of Sen. Richard Shelby’s, R-Ala., 1992 campaign and is a consistent donor to Rep. Spencer Bachus, R-Ala., chairman of the House Financial Services Committee, having given him $18,000 over the last 16 years. Like Payne, Bachus wrote a letter—on Jan. 25—to the Treasury Department on behalf of Renco Group. On Feb. 15, the same date Lago corresponded with Payne, she sent an identical letter to Bachus. Bachus's staff declined to comment on this article.
In the United States, Renco Group has made a fortune for its owner, Ira Rennert, who built his empire with junk bonds and built himself the largest home in the country, a vast waterfront mansion in the Hamptons dubbed Fair Field. More than 3,600 miles away, a Renco Group subsidiary owns a smelter that has contributed to the environmental devastation of the town of La Oroya, Peru, making it one of the world’s ten most polluted places according to the Blacksmith Institute, which studies pollution in the developing world. Not all of the pollution is Doe Run Peru's fault—the smelter was built in 1922 and been in action since—but both the government of Peru and Renco dispute who is liable for what expenses, whether they're court claims by residents of La Oroya suffering from lead poisoning or remediating La Oroya's environment.
Renco spokesman Jim McCarthy did not provide a comment for this article.
Doe Run Peru acquired the smelter in 1997 from the government of Peru; as part of the privatization deal, the company agreed to clean up La Oroya with government help. Doe Run Peru has requested—and received—several extensions for completing the clean up work. All of that came to a standstill when Doe Run Peru suspended operations in 2009 due to a slowdown in the world economy and a failure to secure financing for the plant.
On July 27, Peru’s Ministry for Mining and Metals revoked the company’s permit for operating, citing the lack of financing. Indecopi, the Peruvian government agency that regulates competition and oversees the bankruptcy process, began considering whether to restructure Doe Run Peru or to liquidate it to pay off creditors; it has yet to reach a decision on the company’s fate.
In late December 2010, Renco filed its intent to begin international arbitration against Peru, arguing that Lima is violating the United States-Peru Trade Promotion Agreement by discriminating unfairly against a U.S. company and that Lima has broken an investment contract.
In between losing its permit and filing for arbitration, the Renco Group started acquiring its Washington lobbying team. On Nov. 9, 2010, Timothy Keeler of Mayer Brown LLP registered to lobby for Renco Group. As the chief of staff of the office of the United States Trade Representative from 2006 to 2009, Keeler oversaw implementation of all U.S. trade agreements, according Mayer Brown’s website, including the U.S.-Peru pact, which was approved by Congress on his watch. Mayer Brown’s most recent lobbying disclosure says that Keeler is lobbying his former agency and Congress to negotiate with Peru over its “legal obligations and acknowledgement of full liability of injury claims.” In response to an interview request from Sunlight, he wrote in an email that he could not comment on his lobbying for Renco.
Six days after hiring Keeler, the Renco Group added Capitol Counsel, a firm that includes former Ways and Means Committee Chairman Jim McCrery, R-La., among its professionals. As ranking member after Republicans lost their majority in the 2006 elections, McCrery played a key role in moving the Peru trade agreement through Ways and Means.
Renco’s Capitol Counsel team also includes the shop’s founder John Raffaelli, one of Washingtonian Magazine’s 50 top lobbyists in 2007 and a former international trade counsel to the late Lloyd Bentsen, D-Texas, and Shannon Finley, who recently worked for eight years as a political advisor to Max Baucus, D-Mont., who as Senate Finance Committee chairman, is perhaps the most powerful gatekeeper of trade deals in Congress.
Raffaelli and Finley have helped direct campaign dollars to powerful Senate Democrats. The duo have rallied up special interest contributions for powerful Senate Democrats, including Debbie Stabenow, D-Mich., and Robert Menendez, D-N.J., both of whom sit on the Finance Committee’s international trade panel, by hosting D.C. fundraisers, according to Party Time’s database. The pair also helped Rep. Charlie Rangel, D-N.Y., then the Ways and Means chairman, fundraise at a private dinner in Dec. 2009. Rangel garnered support from colleagues for the trade deal in 2007.
Renco Group brought in Jones Walker and Palmer C. Hamilton on Nov. 11; in the fourth quarter of 2010, Jones Walker reported receiving $110,000 from Renco, more than it reported for any other client. In 2011, two firms, Monument Strategies and Royer and Brooks, registered as lobbyists for Renco, including Rep. Payne’s former chief of staff, adding three more former congressional staffers to Renco’s influence team.
Rennert and Renco Group are no strangers to finding the right man for the job in Washington. Lobbyists for AM General, the maker of Humvees used in Iraq and Afghanistan which is now jointly owned by Renco and another holding company, McAndrews and Forbes, reported spending nearly a half million dollars lobbying Congress last year on Pentagon spending bills; Jim Saxton, a former Republican House member who served on the House Armed Services Committee, which authorizes appropriations for the Pentagon, is one of AM General’s lobbyists. In 2001, Renco’s MagCorp subsidiary hired Robert K. Weidner, a former aide to former Utah Sen. Jake Garn, to lobby for them; they soon added three insiders from Baker, Donelson including a former staffer on the Senate Environment and Public Works Committee, on environmental compliance issues faced by the company.
Those issues could provide work for an army of lobbyists. In a 1998 report, the Environmental Protection Agency ranked Renco Group as the country’s 10th largest polluter, largely for the magnesium site in Utah, which was designated as a Superfund area despite the company’s court challenges. The Environmental Protection Agency sued MagCorp for almost $1 billion in fines in 2001 over its production of hexachlorobenzene, a chemical ruled a poison decades ago, a suit which the magnesium company has fought over the past decade, arguing that it is exempt from a hazardous waste law. Another subsidiary, the St. Louis-based Doe Run Company, also has a long record of battles with the EPA, and in 2010 agreed to spend $65 million plus a $7 million civil penalty for violations of environmental regulations.
In its bid to hold onto its Peruvian subsidiary, the Renco Group recently announced it would loan the company up to $50 million to help clean up La Oroya. The loan is contingent on unspecified matters being negotiated with the Peruvian government, and approval of Renco’s restructuring plan for the company.
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