Bulgarian Minister of Finance Milen Velcnev, 38, almost 2 meters tall, with movie-star looks and a resume that stresses a seven-year stint at Merrill Lynch’s London office, stood in front of his country’s ageing embassy building on 22nd St., off Massachusetts Ave., in the diplomatic heart of Washington DC, and gloomily looked down the twilight-darkened street.
The embassy’s battered minivan stood out next to the rented shiny black limousine parked at the entrance to the building. The sight, perhaps, made it clear to Velcnev how important and urgent were his pending meetings with senior administration officials, Capitol Hill legislators, key Wall Street players, and respected financial news editors.
The fate of Bulgaria would not be decided at these meetings, but they would unquestionably have a critical effect on the country’s standing with NATO, the State Department, and National Security Council, and the attitude of the investment community, international banks, and multinational corporations, toward the Balkan state. The upcoming talks could have a powerful effect on the welfare and security of his country’s people. This is a heavy burden for the shoulders of a 38-year-old economist to bear, when he must genuflect to the capriciousness of the world’s sole superpower in an effort to promote his country’s interests. Velcnev was fortunate that Yuval Rabin, Shimon Sheves, and Gil Birger were there to help.
Registered foreign agents
It was hot and the minister was exhausted. He had spent the previous hour in the embassy’s modest reception hall, standing by the long tables overflowing with sliced salami slices, stuffed vine leaves, and salted cheese. A small group of Americans who earn their living from US-Bulgarian relations - lawyers, lobbyists, and businessmen - came to pay their respects to him. Velcnev, who knows where the bread of an emerging economy is buttered, expertly maneuvered his way among them, without hiding the fact that he had come to the embassy directly from Dulles International Airport, after a wearying 10-hour flight from Sofia. He had not even had time to change his shirt.
Now, on the building’s steps, he could dispense with formality. He could loosen his tie as he readied himself for the hard day ahead tomorrow. Beside him stood Sheves, a compact man in a dark suit with well-cut greying hair, who commented to Birger, in Hebrew, that press packs needed to be compiled for the Bulgarian minister and his entourage. Yuval Rabin checked the logistical arrangements with typical nonchalance. The three Israelis then spoke some final words, in English, with the head of Velcnev’s office, and the finance minister’s entourage disappeared into the air-conditioned limousine.
The Bulgarian’s ambitious journey to strengthen his country’s relations with the US was underway, without a single American by his side to arrange matters. Only a few Israelis with an elegant Washington office, plenty of initiative and connections, and most important of all, a lot of hutzpa.
So far as is known, Yuval Rabin, the son of the late Prime Minister Yitzhak Rabin; Sheves, Prime Minister Rabin’s chief of staff; Birger, a high-tech entrepreneur and former economic attaché at the Israeli Embassy in Washington; and former minister and IDF Chief of Staff Lt.-Gen. (res.) Amnon Lipkin-Shahak are the first and only non-Americans working as professional lobbyists - i.e. for pay - on behalf of foreign governments vis-à-vis the administration, Congress, and non-governmental organizations in Washington.
The US Department of Justice lists the quartet as “foreign agents”, as required by law. Their firm, Rabin, Sheves, Lipkin-Shahak, Birger Partners (RSLB Partners) is registered in the US. Its office has one of the most prestigious addresses in the capital: 101 Constitution Avenue, in a modern building that overlooks the beautiful Capitol Dome.
RSLB Partners currently represents five countries and one nation, in addition to Bulgaria. The partners are willing to disclose only Ivory Coast and the Kurds. In the US, they represent two other African countries (mostly defense matters for one) and an Eastern European country, about which “it is too soon to talk about”. The firm’s clients also include “a Latin American political personage”. The firm also reportedly represents economic interests for eight companies, mostly Israeli, generally acting as a go-between for their customers or potential partners.
They are not first Israeli lobbyists to set up tent in Washington. Zvi Rafiah was an old-timer who spent much of his career lobbying Congress for budget allocations for Israel Military Industries and other defense contractor projects. Adam Emmanuel also walked the same corridors on Capital Hill on behalf of Israeli defense contractors. Yoram Ettinger, an embassy official responsible for relations with Congress in the mid-1990s, mostly lobbied on behalf of Israel’s right wing, but was also acquainted with the business lobbies. European and Asian lobbyists are a common sight on Capital Hill as they lobby for foreign corporations from aerospace manufacturers to high-tech developers.
“The dream of every Israeli diplomat in Washington, upon their tiniest exposure to Congress, is to become a Congressional lobbyist upon retirement, but almost none of them actually do it,” a diplomat, who did not act on that dream, once told me.
Politics and the army in the service of business
The initiative of a professional foreign lobbyist to represent foreign countries vis-à-vis the Washington establishment is a major innovation in the industry. “This is the first I’ve ever heard of such a thing,” said two-time Israel Ambassador to Washington Zalman Shoval.
A professional lobbyist, who asked to remain anonymous, said RSLB Partners made a breakthrough, although he wasn’t sure if it was the right one for the firm’s clients. “If I were a foreign government, I’d prefer hiring someone who really was an insider; someone for whom the administration was once home,” he said.
Indeed, an observer might wonder why foreign governments knocking on Washington doors would need the assistance of Israelis, none of whom have worked even one day in a US government office, as they seek a guide to navigate the labyrinthine Washington bureaucracy, someone to utter “Open Sesame” to the door of National Security Adviser Condoleezza Rice, or provide an insider tip about a member of Congress who could promote a desired piece of legislation.
The secret of RSLB Partners’ success in recruiting six countries as clients within two years, despite rational fears about the ability of foreign lobbyists’ ability to function in the Washington climate, does not just lie in the names Rabin, Sheves, Lipkin-Shahak, and Birger, or in each of the men’s advantages, but in the reputation of their country of origin and its relationship with the host capital city.
Sheves recruited Bulgaria, where he serves as “a political consultant to several government entities,” as he put it. Lipkin-Shahak, who fostered excellent relations in Africa during his military career, helped recruit Ivory Coast and the other two African countries. The name Rabin opens countless doors in Washington, where the late prime minister has many admirers. Birger is an expert in the complexities of the World Bank and IMF, and has excellent connections there.
Besides personal connections, RSLB Partners benefits from Israel’s reputation as America’s great ally, a country for whom all doors are open in Washington. Anyone who knows about the almost unlimited access Israeli diplomats enjoy in both the executive and legislative branches of government could hardly disagree. This perception is fueled by the fact that the relatively wealthy Israel receives $3 billion a year in US aid. It is no secret that many countries try to foster relations with Israel in order to get close to the US. Islamic Mauritania renewed diplomatic relations with Israel partly for this reason, and even Jordan has been helped more than once by Israel’s good offices in Washington.
The widespread belief that American Jews have unlimited power - a belief that does not always meet the test of reality - reflects on the four Israelis. They don’t deny it. “Our relations with American Jews, Jewish politicians, Jewish congressional aides, Jewish legislators, and pro-Israeli people everywhere undoubtedly helps us a great deal,” said Sheves.
The question is whether RSLB Partners’ can deliver the goods. An immediate answer cannot be given. The results of their decisions, assumptions, and activities, like those of all lobbyists, must be tested over months, or even years. But it is clear that RSLB Partners are movers and shakers. The Bulgarian Embassy would have found it hard, or even impossible to emulate their work on behalf of Bulgaria’s Minister of Finance in Washington by itself. Washington is a cruel town for the embassy of a tiny country.
The cold shoulder and brush-off syndrome is not merely due to ego and power games. They are necessary mechanisms in the face of very limited available time. The importance of a diplomat in Washington is measured by the number of minutes a senior administration or Congressional decision-maker dedicates to him or her.
Velcnev came to Washington to save something from Iraq’s debts to Bulgaria, promote economic cooperation with the US, and maybe even ask for some aid. RSLB Partners arranged hundreds of precious minutes with top officials, including with under secretaries of Commerce, Defense and State; deputy National Security Council advisors; ten top members of Congress, including Senator Hillary Clinton (D-NY); the heads of the IMF and World Bank; top executives at Lehman Brothers and Credit Suisse First Boston in New York; major investors, including Ron Lauder; and editors at “The Wall Street Journal” and “Washington Post”. Sheves says, “Everything was done in five days, at the pace of the late Yitzhak Rabin.”
The case of the Ivory Coast, where RSLB Partners works with an Israeli businessman, is different and possibly even more fascinating. Birger says, “We started working with the Ivory Coast Ministry of Finance to promote bilateral commercial relations and foster US investors’ awareness of business opportunities in the country, and to offset French influence there. They had something to sell: growth; democracy; economic openness; and no restrictions on capital movement.
“The rebellion that broke out in Abidjan in 2002 changed things. Our new mission was to obtain US support for the government of President Laurent Gbagbo. We had to collaborate with leading lobbyist firms in Washington and succeeded in winning declarations of support for the government by the State Department and House Foreign Affairs Committee.”
In the major leagues
For RSLB Partners, the fact that they represent countries, and not merely companies, automatically puts the firm in the major leagues. How much money the firm earns is unclear, and the partners decline to comment on the subject, but one said, “Let’s say that we spent tens of thousands of dollars to start up and get things going, and we got a return on the investment within months. We have only profits now.”
The economic potential in lobbying is immense. 43 lobbying firms in Washington each earned at least $5 million in 2000, according to an Internet survey conducted by a company in the field. The estimated earnings for 2002 are 10-15% higher. Washington’s largest lobbying firm, the Patton Boggs law firm, earned $46.1 million in 2002.
For clients, the following scenario is typical: GoodWorks International, whose chairman, Andrew Young is a former US Ambassador to the UN, represented Nigeria in the US in 2001. “GoodWorks can work to change Nigeria’s poor image by effectively representing its interests in the US,” states the contract between the parties. The price was a $500,000 down payment, and $60,000 a monthly fee up to $1.5 million in total expenses in the first year.
Gabon paid four lobbying firms $1 million in 2001. Angola paid C/R International $930,000. Possibly coincidently, C/R International is run by the former head of the Angola Desk at the State Department.
RSLB Partner presumably does not yet see such sums. Ivory Coast’s former lobbyist, Wayne Valis of Valis Associates, received a down payment of $35,000 and $16,700 a month from Abidjan for “rehabilitating the good relations between the US and the Ivory Coast”. If RSLB Partners’ growth continues at the same pace as in the past two years, it will be one of the lobbying industry’s great success stories.
Published by Globes [online] - www.globes.co.il - on July 1, 2003