Wolf Hits Law Firm Over China

Posted July 13, 2005 at 6:40pm

In a rare instance of a Member of Congress lashing out publicly against a lobbying firm, Rep. Frank Wolf (R-Va.) cited human rights abuses by the Chinese government in calling on the law and lobbying firm Akin Gump Strauss Hauer and Feld to quit its representation of China National Off-Shore Oil Corp.

Congressional concern over CNOOC — a state-owned company that is trying to outbid Chevron Corp. to acquire the American oil company Unocal — has grown in recent weeks. But Wolf is the first lawmaker to express unease with the high-powered team CNOOC has assembled to squire its bid.

A vocal human-rights advocate, Wolf said that his letter to Akin Gump was prompted by his anger over efforts by the Chinese to block a U.N. Security Council resolution condemning government-supported massacres in the Darfur region of Sudan.

“This is really an issue of morality and ethics, what’s appropriate and what’s good for America,” Wolf said in an interview. “On that basis, the firm should make a decision.”

Akin Gump’s chairman Bruce McClean countered that their client is a company with publicly traded stock, rather than the Chinese government itself.

“This factual distinction is not a mere legalism,” McClean wrote in a letter to Wolf.

McClean added that CNOOC volunteered its bid for review by an interagency panel sanctioned by Congress.

“Having established a formal review process, the Congress should now allow the law to operate as intended and should trust the President, and the senior government officials who serve on the [interagency board] to act in accordance with the law,” he wrote.

The exchange comes as lawmakers from both parties stepped up criticism of CNOOC’s bid.

Armed Services Chairman Duncan Hunter (R-Calif.) held a hearing Wednesday to highlight national security threats posed by the proposed takeover.

In the meantime, Senate Finance Chairman Chuck Grassley (R-Iowa) and ranking member Max Baucus (D-Mont.) on Wednesday sent a letter to the White House, asking the administration to review national-security implications of the bid and its possible violation of World Trade Organization agreements.

CNOOC is ramping up its public relations efforts as the scrutiny intensifies, premiering print ads in inside-the-Beltway publications Wednesday. That campaign is being managed by Public Strategies, a public relations firm whose vice chairman, Mark McKinnon, led media efforts for President Bush’s reelection campaign.

CNOOC has retained an array of American companies for help with different aspects of the proposed deal. For financial advice, they have turned to Goldman Sachs and J.P. Morgan. They are receiving legal assistance from Davis Polk and Wardell.

Most of the talk on Capitol Hill continues to focus on domestic implications of CNOOC’s bid. Wolf, however, reeled off a list of human rights abuses by China in an effort to explain his concern with Akin Gump’s work on CNOOC’s behalf.

He said he knows people at the firm, which he called “reputable and distinguished.”

“That’s what’s really surprising about this,” he said. “They’re not a fly-by-night sleazy firm.”

Wolf said that while he understands that Akin Gump is not the first firm to represent foreign entities whose countries have questionable humanitarian records, “I don’t know that anyone has represented anyone as bad as this.”

“Hopefully, this is not the trend of the future,” he said.

In a postscript to his letter, Wolf notes, “During the presidency of Ronald Reagan, no major law firm or lobbying organization would have represented the Soviet Union if it had tried to take over an American oil company.”

Ironically, Bob Strauss, a name partner with the firm, served as the last American ambassador to the Soviet Union. He was sworn into the position August of 1991, and after the nation’s break-up, he continued to serve as ambassador to the Russian Federation, according to his online biography.

He resigned in November 1992 to return to Akin Gump.