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The influence machine: how an American neoliberal lobby group operates in NZ

Emails between the New Zealand branch of the US Chamber of Commerce and the Ministry of Foreign Affairs and Trade offer a fascinating window into the way trade lobbying happens in NZ, writes Branko Marcetic.

If you have a passing familiarity with US politics, you’ve probably heard of the US Chamber of Commerce. Alyssa Katz, author of The Influence Machine, describes the Chamber as “a well-funded influence machine seeking to build an economy where government becomes a tool of big business.” In the US, it’s used its considerable power to fight everything from environmental regulations to government health care by utilising a four-pronged approach of lobbying, political donations, policy writing and an army of lawyers that it deploys against laws it disagrees with.

And it has a branch right here in New Zealand.

The American Chamber of Commerce in New Zealand (AmCham) is one of 83 foreign offices of the US Chamber and, until recently, was run out of an office in Auckland. It now calls itself a “virtual organisation” with no physical office. It’s an unintentional symbol of the invisibility with which AmCham largely operates here in New Zealand.

This isn’t to say AmCham is secretive. It has a public website that contains lengthy newsletters, as well as detailed information on the organisation and the various events it holds. The organisation’s activities are easily findable if you know where to look. Yet little, if anything, has been written about its role and presence in New Zealand thus far.

I recently obtained several years’ worth of emails between AmCham and the Ministry of Foreign Affairs and Trade (MFAT) through an Official Information Act request. The emails, which span April 2011 to October 2016, show the active role AmCham has had in promoting the ultimately stillborn TPP agreement, often in collaboration with the New Zealand embassy in Washington, D.C. and MFAT.

The emails are also a candid look at not just the close ties between our government and business organisations and lobbying groups like AmCham, but also at the way that lobbying organisations operate in our country — something we all know happens, but would be hard pressed to describe in concrete terms if asked.

Tom Donohue, president of the Chamber of Commerce, in 2010. (Photo By Tom Williams/Roll Call/Getty Images)

The US Chamber of Commerce presents itself as 3 million-strong federation that acts as the voice of all businesses in Washington, from a smallest mom-and-pop store operating on the street corner to the biggest multinational whose influence stretches across several time zones.

In reality, the Chamber is a massive and well-financed neoliberal lobbying group that is dominated by a few dozen large corporations, which fund more than half the organisation’s budget.

In its 105-year history, the Chamber has been busy. It fiercely opposed Franklin Roosevelt’s New Deal in the 1930s, which among other things established the modern American welfare state, and which the Chamber saw as an attempt to “Soveitise” the country. It indulged in McCarthyism before it even had a name, and later teamed up with the notorious senator himself to supposedly root out communists. In the 1960s it opposed Medicare, the American government-funded health care system for the elderly. More recently, it’s tried to set up a “trial-style public hearing” on the science of climate change, opposed virtually every attempt to roll back pollution, and even fought Obamacare.

According to the organisation’s website, AmCham was founded here in 1965 as the American Trade Association of New Zealand, and became a member of the US Chamber five years later. Nominally, the Chamber’s international branches are independent organizations. They don’t necessarily exist to do the bidding of the Chamber and its wealthy funders. But that doesn’t mean they never have.

When the Chinese government put forward a law in 2006 that would have set up baseline standards for Chinese workers’ rights — giving them the right to strike and form independent trade unions — US corporations, spooked by the idea of Chinese workers being able to fight for their rights, leapt into action, attacking and lobbying against the law. One of their chosen instruments was the AmCham in Shanghai, which threatened that businesses would leave China if the “rigid” restrictions were put in place. One US Congresswoman called it “a shameful lobbying campaign.”

In other words, it’s not exactly unprecedented for AmChams around the world to use their influence to shift policies in a way that would benefit large American multinational corporations. So what exactly has AmCham in New Zealand been up to?

The emails I obtained don’t reveal anything as extreme as what happened in China. But they do show the closeness with which AmCham and the MFAT co-ordinated to push the TPP agreement and forge ties between government figures and businesses.

Some emails show AmCham and MFAT working together on lobbying efforts in the United States, down to developing the strategies and messaging that AmCham members would use to sell the TPP to sceptical US Congresspeople.

For instance, in June 2014, Mike Hearn, AmCham’s executive director, emailed three MFAT staff members about the impending policy “Doorknock” in Washington by APCAC, the Asia Pacific Council of American Chambers of Commerce — a local federation of 29 AmChams in the Asia Pacific Region of which the New Zealand AmCham is a part. The Doorknock is annual lobbying event where an APCAC delegation comes to Washington, D.C. to speak to Congresspeople and members of the current presidential administration to increase, in one AmCham’s own words, “the US government’s awareness of American business activities and concerns in the region.”

Hearn sent over to MFAT the Doorknock agenda and asked staffmembers for suggestions they might have about anyone else he should meet. In another email, he outlined a short list of US Congresspeople they were planning to meet with and assured an MFAT staff member there were “a lot of relevant and powerful Hill staff confirmed for meetings.” The staff member suggested that Hearn touch base with another MFAT staffer “to get a sense of how the Prime Minister’s visit has gone on TPP, and we can also give you a sense of the messages we are using on the hill.”

Hearn concurred: “be good to have a chat about the messages.”

In another email from August 2016, Hearn updated Philip Houlding, the trade and economic counsellor at the New Zealand embassy in Washington, D.C., on the pro-TPP efforts and tried to co-ordinate theirs and the New Zealand government’s messaging. It was particularly crucial at this point, given that the TPP was under peril — both presidential candidates had come out against it (at least in terms of rhetoric), and it was looking doubtful as to whether it would have the votes in Congress. Hearn forwarded to Houlding an email from the APCAC chair with some “suggested strategies” and told him they were “working on an op-ed piece.”

“My board is questioning just how much influence can AmCham NZ bring to the table at this late stage,” he wrote, pointing out that they would need to solicit more funds from their members to participate. “Do you believe it would be worthwhile and how would it fit in with the Embassy’s /MFAT’s strategies?”

“Not sure what other non APCAC TPP AmCham’s are doing,” he added. “Will need to liaise with Tami at the US Chamber.”

Much of Houlding’s reply has been redacted under section 6(a) of the OIA, which lets agencies withhold information that would “prejudice the security or defence of New Zealand or the international relations of the Government of New Zealand.” Still, even with the redacted parts left out, we can see Houlding suggesting to Hearn how to lobby for the TPP.

“In my view the best thing the APCAC Chambers can do is write to relevant Members of Congress/committee members, or the local Members for their US operations [redacted],” he wrote.

“What members need to hear is that the US’s prestige in the region — particularly with respect to their competitors [redacted],” he wrote. “That kind of advice coming ‘from the outside in’ is likely to be compelling.”

“If Americans in the region, particularly those from the private sector, are telling Members this, that will be helpful,” he added.

The government’s collaboration with AmCham to move the TPP forward in the US is significant. For one, American opposition to the TPP was the agreement’s very last roadblock. It was virtually a foregone conclusion that it would pass in New Zealand, which it in fact did a few months later. It was only the growing anti-TPP sentiment in the United States that ultimately doomed it — without the US as part of the agreement, it was worthless.

But more than that, the TPP in many ways the embodies the perception of the Chamber and its affiliates as working for the benefit of a small number of large multinationals at the expense of workers, the environment and national sovereignty. There was a reason the TPP was so controversial. Though often referred to as simply a trade deal, what critics objected to were provisions like those that severely tightened intellectual property laws and that allowed companies to take governments to court if they passed regulations that affected their profits. It’s not for nothing that critics both here and abroad characterised it as a “giveaway to corporate interests.”

Who exactly funds AmCham? Though there’s no list of its exact membership, the AmCham website gives us a sense of where its support and money may come from. Its board of directors represent companies like Citibank, Microsoft, IBM, Lockheed Martin and Pfizer. The organisations also lists its “key supporters,” which include not just these companies, but GE, Fonterra, 3M, Air New Zealand, 2 Degrees, ASB Bank, Deloitte, Baldwins (a law firm specialising in intellectual property) and HSBC. The list also has some more unexpected names like AUT and the Auckland Council.

Many of these companies stood to benefit directly from the TPP. A pharmaceutical giant like Pfizer, for instance, would have had longer patents on new drugs, raising New Zealand’s medicine bill, and there were genuine concerns that the agreement would have undermined PHARMAC’s ability to get cheaper medicine for Kiwis. Big banks like Citi spent millions lobbying to ensure the concept of “national treatment” — that foreign banks must be treated the same as domestic ones — into the agreement. And all of the companies would have been able to make use of the investor-state dispute settlement tribunals to fight against regulations they didn’t like.

Tim Groser, former NZ trade minister, now NZ ambassador to the United States, speaking at the World Economic Forum in Davos, Switzerland, in 2013. Photo: World Economic Forum / CC BY-SA 2.0

While the emails regarding the TPP are most interesting, other emails show the close relationship between MFAT and AmCham. Many of the emails feature MFAT staffers and Hearn working to set up events and meetings with various individuals and business organisations, such as the US ambassador in New Zealand or the Canada New Zealand Business Association (CANZBA).

In one 2016 email, Hearn enquires if he can go ahead and book a combined AmCham/CANZBA breakfast with Tim Groser, by now New Zealand’s ambassador to the United States, Leon Grice, then the consul general with MFAT, and Daniel Mellsop, New Zealand high commissioner to Canada. In another email from 2011, an MFAT staffer sends an invitation to a barbecue at his place to a list of individuals that includes Hearn, Sarah Thorn (who’s in charge of international policy issues at Wal-Mart) and Christopher Wenk, the US Chamber’s executive director of international policy. (Thorn and Wenk were, incidentally, major supporters of the TPP).

In an earlier email, the same MFAT staff member sends Hearn tips for how to schmooze with those attending the embassy’s annual wine-tasting event, also attended by Fonterra’s director of social responsibility and Beef + Lamb NZ’s chief economist.

“It would be a shame for all of you to waste your firepower there chatting to each other when you could and should talk to the staffers and other US business people there,” he says. He suggests going out somewhere afterwards, or meeting with them another night, and provides options for where to get a drink in D.C.

In fact, some emails suggest some of the events were taxpayer financed. In March 2015, Houlding told Hearn in advance of that year’s Doorknock that the embassy would host the Asia-Pacific AmChams while they visited D.C. “We are happy to fund the function,” he wrote. When Congressman Erik Paulsen, a big TPP booster, prepared to visit Auckland in 2015 for the United States New Zealand Council’s Partnership Forum, Houlding asked Hearn to “run a lunch or other roundtable with US businesses” that would include him. “We would host, financially speaking,” he wrote.

Even without looking at the emails, we can see that there’s a close relationship between AmCham and the New Zealand government. AmCham has hosted a number of ministers over the years. While the TPP was still being negotiated, AmCham and the CANZBA organised an “update” on what was happening with the agreement with then-Trade Minister Tim Groser in the MFAT offices. It’s hosted Steven Joyce a number of times, and even John Key dropped by its annual awards show and 50th anniversary dinner to present four awards.

The government, of course, has every right to work with businesses and business organisations for the benefit of New Zealand. But when one of those organisations is a branch of a multimillion dollar foreign corporate lobbying group whose board of directors is itself dominated by various huge multinationals, these lines become more blurred. You have to ask, exactly whose interests are being represented?


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