LOBBYING & LAW - A Clash Over Export Curbs

By Peter H. Stone, National Journal
© National Journal Group Inc.
Saturday, Jan. 23, 1999

	      On Jan. 8, about a dozen computer industry CEOs flew into 
Washington for a frenzied day of lobbying that included 
discussions about export controls with both Secretary of Commerce 
William M. Daley and a key Republican ally in Congress. 
	     All standard operating procedure, but the timing of the 
visit was a bit serendipitous. Roughly a week earlier, a 
congressional committee had announced several findings of a 
classified study, which had concluded that some high-technology 
exports to China threatened national security. The bipartisan 
report prepared by a House select committee chaired by C. 
Christopher Cox, R-Calif., blasted two American satellite 
companies for providing information to China that allowed that 
nation to bolster its ballistic missile system. The report also 
examined the dangers posed by the overseas sale of superfast 
computers and other technology to China. 
	     The Cox report has not yet been released, but it has 
already provoked considerable anxiety among high-tech lobbyists 
who fear that tougher restrictions on exports may be in the 
works. After all, Congress, just last year, transferred the 
authority over satellite exports from the business-friendly 
Department of Commerce to the security-conscious Department of 
State, which has stricter export-licensing requirements. Now 
high-tech lobbyists worry that a host of other products-- 
computers, machine tools, and semiconductors--may also face 
tougher export-licensing regulations. 
	     Most of the lobbying is aimed at blocking additional 
government regulation of exports. But the computer industry is 
also trying to ease export restrictions that Congress tightened 
about a year ago. The computer industry CEOs, including the 
leaders of Hewlett-Packard Co., IBM Corp., and Unisys Corp., 
raised the issue at a luncheon meeting with new House Rules 
Committee Chairman David Dreier, R-Calif., who's a potential ally 
because of the industry's clout in his district. Dreier, said a 
lobbyist familiar with the meeting, was sympathetic and ''offered 
to work with us.'' 
	     In fact, Dreier understands the need to loosen 
restrictions on computer exports, the lobbyist added. The 
computer industry has argued that tough export controls on some 
high-speed computers are unwarranted because other countries are 
also exporting advanced computers. 
	     During their Washington visit, the computer executives 
also pressed Daley, often an industry ally, about relaxing export 
controls on advanced computers. But according to an industry 
lobbyist, Daley told the executives that they ''first had to have 
a strategy for dealing with the Cox report and its 
recommendations'' before tackling other industry priorities. 
Daley and other Commerce officials informed the industry 
executives that it ''would be inappropriate'
' at this time to press for reduced export controls, the lobbyist 
said. 
	     Meanwhile, the Computer Coalition for Responsible 
Exports, an industry group formed last year by about a dozen 
leading companies and trade groups, intends to lobby more 
aggressively this year. The group has boosted its 1999 lobbying 
budget to $ 1.5 million, up about $ 500,000 from last year. The 
computer group is about to publish a primer on exports, which 
will be disseminated on Capitol Hill. The CCRE has tapped the 
Fratelli Group, a Washington public affairs company, to help 
produce the primer. 
	     Some computer company lobbyists have also attended 
several recent meetings that the National Association of 
Manufacturers has sponsored. The manufacturers' group is trying 
to put together a loose-knit, multi-industry coalition to tackle 
export control issues. The meetings have drawn lobbyists from a 
number of groups, including the Aerospace Industries Association 
of America, the Emergency Committee for American Trade, and the 
U.S. Chamber of Commerce. The groups are considering some joint 
lobbying efforts in the various House districts and on Capitol 
Hill. 
	     Moreover, some computer companies may join a grass-roots 
drive on the export issue recently launched by the American 
Electronics Association. The AEA, which boasts 3,400 member 
companies, has also recently agreed on a set of export principles 
that it plans to push on Capitol Hill. The AEA wants to ensure 
that coming fights over regulating high-tech exports adequately 
balance national security concerns with economic interests. 
	     Also, lobbyists for satellite makers, including 
representatives of the Aerospace Industries Association, have met 
with State Department officials who, beginning in mid-March, will 
be responsible for regulating satellite exports. The satellite- 
industry lobbyists are urging these officials not to issue 
regulations that would impose lengthy export-licensing 
procedures. 
	     High-tech lobbyists are jittery about the prospect of 
additional congressional hearings. The Senate Governmental 
Affairs Committee chairman, Fred D. Thompson, R-Tenn., plans to 
hold a new round of hearings this year. In 1998, the committee 
investigated charges that the Clinton Administration relaxed 
controls on high-tech exports to please industry. 
	     Still, many high-tech lobbyists note that they may have 
to adopt a go-slow approach, at least for now. They point out 
that much of their activity involves information-gathering, 
because the lion's share of the substance of the Cox committee 
report and its 38 recommendations won't be known for at least 
several weeks. The Administration is expected to issue an 
official response to the Cox findings next month. A declassified 
version of the report is slated to be published soon thereafter. 
''For anybody to pull a major lobbying trigger right now, without 
knowing what's in the report, is folly,'' cautioned AEA president 
and CEO William Archey. 
	     Still, the Cox report's conclusion that two commercial 
satellite companies--Loral Space & Communications Ltd. and Hughes 
Electronics Corp.--damaged U.S. security when they provided 
Chinese scientists with technical data that helped China's 
ballistic missile effort, was hardly a shocker. Allegations to 
this effect have pervaded press reports over the past year. The 
nine-member committee that unanimously approved the study 
criticized the Clinton Administration for relaxing some export 
controls. Its report also noted that export problems date back at 
least 20 years and include policies supported by two Republican 
Administrations. 
	     The select committee was formed last June after press 
disclosures that the Justice Department was probing whether Loral 
and Hughes violated export control laws. Those investigations are 
continuing, and both companies have denied they did anything 
illegal.