Wednesday, July 20, 2005

Introducing, Indonesian Lobbyist Firms

Washington DC is home to the largest number of lobbyist firms in the world. They have specialties in certain industry, area, or country. Their customers ranged from governments and big corporations. The recent statistics shows, number of lobbyist firms already thousands in the US capital city, doubled in less than one decade.

Lobbyist is one of the highest paid professionals in the country with starting salary at US$300,000. Wow!

Lobbyist firm is already part of political system in most western democracies, publicly declared and registered. But I never heard of a publicly registered lobbyist firm in Indonesia. I know for sure most of former high-level officers (both from departments and military) became lobbyist for many tycoons, installed them as member of commissioners, let say. Some analysts and PR consulting firms are also conducting such activities. But rarely we heard that public-listed company is hiring a lobbyist firm to lobby parliament members (DPR) or government.

So I was bit surprised when a friend told me that a well-respected company is open a bid to hire lobbyist for certain issue. You know how much is the annual retainer fee? US$84,000!

There are some analysts who act as lobbyist or informal spoke person, let say with writing articles in newspapers, for big corporations with damn good payment. But I never heard of formal bidding to hire lobbyist in the country. So, here we are. I am bit skeptical of its effectiveness though. Indonesian political and social system still sees lobbyist negatively. Lobbying is seen similar to bribery.

But I am not surprised if that’s one of the most promising jobs in the future. Anyway, Indonesia government has to pay huge sum of money to these kinds of firms for various international lobbying activities. On human rights issues, where Indonesia under international pressure most of the time, Indonesian government turned to US-based lobbying firms.

On Saturday, February 5, 2005, Diane Farsett published an article at CommonDreams.Org titled How Indonesia Wins Friends and Influences US Foreign Policy.

Farsetta wrote that Hill & Knowton and White-Case, for example, contributed to Indonesia’s lobbying bill for mid-1991 through 1992, which totaled US$6.8 million. Burson-Marsteller got US$5 million in 1991 and another US$5 million in 1996.

In early 2001, Indonesia's Sekar Mahoni Sakti Foundation hired Advantage Associates, "to create a positive view of Indonesia with the U.S. Congress, Administration, and Department of Defense," according to U.S. Foreign Agents Registration Act filings. One goal was "to lift an embargo on spare parts for the C-130 military aircraft."

The government retained APCO Worldwide in 2003, to pitch its importance as a "front-line state in the war on terrorism," wrote the PR trade publication O'Dwyer's. The deal included media outreach and legislative meetings. In 2004, Alston & Bird contracted with an Indonesian logging magnate to "position" the country "as a solid ally in President Bush's war on terror and one that is committed to democracy and human rights." In addition to policymakers and reporters, Alston & Bird was directed to sway other U.S. "opinion-shapers," including "think tanks and academia."

Indonesia's most influential ally may be former U.S. Senator - and current Alston & Bird special counsel - Bob Dole. In January 2004, the Far Eastern Economic Review reported that Indonesia had hired Dole as a lobbyist. "Among the issues Dole might address is the restoration of a program to train Indonesian military officers in the United States," according to National Journal's CongressDaily.

According to Kevin Bogardus in his article Bob Dole: Indonesia’s Man in Washington; Former Republican Presidential candidate is paid to lobby for the country’s oil interest, published by Center for Public Integrity in September 22, 2004, Indonesian government paid the Alston & Bird law firm nearly $850,000 to have Dole and nine other lobbyists wine and dine Washington officials during a five-month period in the past year. Another political insider, Jonathan Winer, a former deputy assistant secretary of state for International Law Enforcement and chief counsel to Sen. John Kerry, the Democrats' presidential candidate, is part of Dole's team.

One of the top tasks for Dole and company is protecting the interests of Indonesia's state oil company Pertamina in a huge, multi-million dollar legal case brought against it by Karaha Bodas Co., a Cayman Islands-based joint venture between U.S. companies Caithness Energy and Florida Power and Light Co.

Last month, Jeffrey H. Birnbaum, wrote interesting article in Washington Post titled The Road to Riches Is Called K Street. Below is excerpt from his article.

The number of registered lobbyists in Washington has more than doubled since 2000 to more than 34,750 while the amount that lobbyists charge their new clients has increased by as much as 100 percent. Only a few other businesses have enjoyed greater prosperity in an otherwise fitful economy.

Lobbying firms could hire former White House or Capitol Hill aides with starting salary of US$300,000 a year.

The fees that lobbyists charge clients have also risen substantially. Retainers that had been $10,000 to $15,000 a month for new corporate clients before President Bush took office now are $20,000 to $25,000 a month or more, lobbyists say.

All-Republican lobbying firms have boosted their rates the most. Fierce, Isakowitz & Blalock and the Federalist Group report that at the end of the Clinton administration, $20,000 a month was considered high. Now, they say, retainers of $25,000 to $40,000 a month are customary for new corporate clients, depending on how much work they do.

Such fee inflation is widespread, even by newcomers. Venn Strategies LLC, a bipartisan lobbying firm that opened in 2001, has doubled its retainer for new clients. "When we first started, most of them came in at $7,500 a month or $10,000 a month," said Stephanie E. Silverman, a principal in the firm. "Now retainers are more in the $15,000- and $25,000-a-month range."

Corporate clients accept the extra cost as the price of success in Washington. At the turn of the year, the American Ambulance Association decided to step up its lobbying and switched to Patton Boggs LLP, the Capitol Hill powerhouse, from a smaller lobbying shop across town. In the process it boosted its lobbying budget by about a third, to more than $300,000 a year.

Take the example of Hewlett-Packard Co. The California computer maker nearly doubled its budget for contract lobbyists to $734,000 last year and added the elite lobbying firm of Quinn Gillespie & Associates LLC. Its goal was to pass Republican-backed legislation that would allow the company to bring back to the United States at a dramatically lowered tax rate as much as $14.5 billion in profit from foreign subsidiaries.

The extra lobbying paid off. The legislation was approved and Hewlett-Packard will save millions of dollars in taxes. "We're trying to take advantage of the fact that Republicans control the House, the Senate and the White House," said John D. Hassell, director of government affairs at Hewlett-Packard. "There is an opportunity here for the business community to make its case and be successful."

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Blogger afatchur said...

mas Yosef, interesting article. however, Indonesia has little knowledge on how Indonesia's firm manage their lobbying activities. Some journals assert that US style of lobbying or Corporate Political Activity is geared towards politician and party campaign fund, with clear regulation. While companies from EU style is intended to influence EU policy. In Indonesia, perhaps lobbying is geared towards individual politicians' pocket or in short, bribery. look at BI-DPR case when BI had to paid DPR over 3 billion, or according to latest ICW statement 18 billion.
if you need some journals on corporate political activity/lobbying, contact me agam

November 03, 2007 2:50 PM  

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