Trade Nomination Raises `Revolving Door' Issue
If confirmed to key trade post, Susan Esserman is almost certain to face questions involving important clients of her former law firm
BOSTON — WHEN Congress reconvenes this month, the Senate Finance Committee is expected to take up a case raising new questions about whether the administration is keeping its pledge to shut the ``revolving door'' between the executive branch and paid lobbyists.
President Clinton's nomination of Susan Esserman for assistant commerce secretary for import administration could put her in a position to rule on cases involving clients of Steptoe & Johnson, the Washington law firm where she is a partner.
Ethics watchdogs say such conflict-of-interest issues could compromise the trade-enforcement mechanism at a time when new rules - embodied in the North American Free Trade Agreement (NAFTA) and Uruguay round of the General Agreement on Trade and Tariffs (GATT) - are to take effect.
At her firm, Ms. Esserman represented parties concerned by government programs intended to protect domestic producers from unfair competition from imports.
She will administer many of the same programs - affecting Canadian lumber imports, semiconductor trade with Japan, steel, watches, and more - as the department's top referee on unfair trade disputes.
Steptoe & Johnson ``is almost a metaphor for the revolving door,'' says Charles Lewis, director of the Center for Public Integrity in Washington.
Steptoe & Johnson is a registered foreign agent for nine clients, including the Canadian government and the Electronic Appliance Manufacturers Committee of Hong Kong, according to the Justice Department. Since 1989, it has represented Nippon Steel, which has been the target of at least three antidumping actions since May 1992.
The law firm was also one of a group of firms that was paid by Mexican business interests working toward NAFTA's passage. Another partner in the firm, Olin Wethinton, negotiated the financial-services portion of NAFTA while working as a Bush administration assistant treasury secretary, according to the National Law Journal.
Esserman would join Deputy United States Trade Representative Charlene Barshefsky as the second of the firm's partners to be named to a top trade position by the Clinton administration. The firm has also hired former top officials of the Trade Representatives' office to work for its foreign-trade lobbying affiliate, SJS Advanced Strategies.
``It's pretty easy to see and recognize a revolving-door situation,'' says Ellen Miller, executive director of the Center for Responsive Politics in Washington. ``Someone in the private sector who has worked on a set of issues that they will relate to in their government position presents a direct conflict of interest.
``Always residual in the mind of that person are the attitudes they developed in their private employ,'' she adds.
Eric Garfinkel, assistant secretary of commerce for import administration in the Bush administration, now a senior fellow at the Council on Competitiveness, defends both the nominee and the need for experience in this quasi-judicial post.
``She's got tremendous integrity,'' he says. ``Her experience as a practitioner may make her a better administrator of the law.''
In her private practice Esserman handled antidumping and countervailing duty cases, areas of regulation that are the responsibility of the import administration's assistant secretary.
* In 1991, Esserman and Ms. Barshefsky appeared before the International Trade Commission (ITC) in a countervailing duty probe for the Canadian Forest Industries Council. Softwood lumber countervailing duties remain a live issue.
* Esserman represented Cemex, S.A. of Mexico, one of the world's largest cement producers, during a 1989 dumping probe by the ITC. If confirmed, she would be responsible for the Commerce Department's enforcement of US antidumping laws, which make it illegal to charge less than the cost of production for goods exported to the US.
* In 1988, she argued before the interagency Trade Policy Staff Committee on behalf of the Benrus Watch Company, seeking the continuation of a special tariff on imported watches. Her new job would include administering the statutory program on watch-assembly imports.
The Clinton administration is planning to invoke trade sanctions against Canadian wheat producers, affecting another Steptoe & Johnson client, the Canadian Wheat Board. Commerce Department action was promised to US farm interests in exchange for their support for NAFTA. Steptoe & Johnson has been a registered foreign agent for the Canadian Wheat Board since 1991.
In order to avoid appearance of a conflict of interest, Esserman will recuse herself for one year from matters involving 10 former clients, including those she represented in the year prior to her appointment, and all current Steptoe & Johnson clients, says Barbara Fredericks, assistant general counsel for administration at the Commerce Department. (Recusal means that she will be disqualified from those matters - unless she gets a specific waiver from an ethics official.)
During her confirmation hearing before the Senate Finance Committee last May, Barshefsky told senators that to avoid ``even the appearance of a conflict of interest,'' she would ``not participate in particular matters involving the government of Canada, [NAFTA], the Canadian softwood-lumber industry, and the British steel industry.''
``In the real world that kind of thing doesn't mean much,'' Miller says. ``A year goes by awfully quickly. She's not going to forget who her friends are.''
``The trade bar ... is practiced almost entirely in Washington, and there is an awful lot of swinging back and forth,'' says one Washington trade lawyer. Administration of those laws has only recently begun to be held to judicial standards of fairness and due process, he adds.