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Top Bush Adviser Made Millions Lobbying for BC Forest Biz

Ed Gillespie is 'New Karl Rove.'

Will McMartin 27 Aug

Veteran political consultant and analyst Will McMartin is a regular columnist for The Tyee. Read more of his columns here.

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Gillespie: Peddled softwood deal.

Tabbed to succeed Karl Rove as chief political adviser to U.S. President George W. Bush, 46-year old Ed Gillespie is a veteran Republican operative and a high-profile Washington, D.C., lobbyist. Surprisingly, he also has a keen understanding of British Columbia and our province's largest industry, forestry.

That's because for the last seven years or so, Gillespie's lobbying firm was contracted to represent B.C. lumber exporters seeking a resolution to the Canada-U.S. softwood lumber dispute.

And what a lucrative contract it was. Between 2000 and this past April, the British Columbia Lumber Trade Council paid Quinn Gillespie & Associates nearly $3.7 million -- or an average of more than half a million dollars per year.

Teamed with Gingrich, Armey

Born in New Jersey to Irish-American parents in 1961, Gillespie is a graduate of The Catholic University of America in Washington, D.C., and once worked as a parking lot attendant at the U.S. Senate.

In the mid-1980s, after serving briefly as a low-level staffer with the Republican National Committee, he was hired as an aide to Dick Armey, then a little-known Texas congressman. Over the next several years, Gillespie helped Armey to become, along with Newt Gingrich, one of the GOP leaders in the Democratic-controlled House of Representatives.

In early 1994, in anticipation of that year's mid-term elections, Armey and Gingrich published a campaign manifesto entitled "The Contract with America." Pledging lower taxes and smaller government, the document was credited with helping the Republicans win control of both houses of Congress for the first time in four decades.

Armey and Gingrich subsequently were elected by their fellow GOP lawmakers to the two most powerful positions in the House of Representatives (respectively, majority leader and speaker), and Gillespie -- who was acclaimed as a "principal architect" of The Contract with America -- found himself an increasingly influential party strategist.

In 1998, after putting in more than a decade of service with Armey, Gillespie returned to the Republican National Committee, this time as director of communications and congressional affairs under chairman Haley Barbour. The following year, when Barbour left the RNC to rejoin his prominent Washington, D.C., lobbying firm, Gillespie went with him to set up a subsidiary consulting agency, Policy Impact Communications.

Key to getting Bush elected

George W. Bush, the then-Texas governor who was vying for the GOP presidential nomination, was among the many Republican politicians who sought Gillespie's political and communications advice.

In July 2000, Gillespie was asked to co-ordinate the party convention in Philadelphia, where Bush was nominated as the Republican candidate for president; then, in September, he moved to Austin, Texas, to work with Rove and other senior strategists on Bush's campaign team; and later, in November, he was in Miami managing communications during the lengthy Florida ballot re-counts.

Not long after the U.S. Supreme Court ordered an end to the ballot-counting -- a controversial decision which effectively put Bush into the White House -- Gillespie volunteered to help Texas businessman Don Evans, a Bush friend and his appointee as secretary of commerce, set up operations at the U.S. Commerce department.

It was widely rumoured that Gillespie himself was offered any number of top-level jobs in the Bush administration, but the political insider already had laid the foundation for a more lucrative career.

Big-ticket clients

In January 2000, eleven months before Bush prevailed over Democrat Al Gore in the contest for the U.S. presidency, Gillespie partnered with Jack Quinn, an influential Democratic party insider, to found a new lobbying company.

With a political resume that stretches through the 1970s and 1980s, Quinn served in the White House in the 1990s as chief of staff to then-vice president Gore, and then legal counsel to president Bill Clinton.

In its first year of operation, while Bush and Gore battled for the White House, Quinn Gillespie & Associates began recruiting a staff of well-connected operatives from both the Republican and Democratic parties. And by the end of 2000, the newly founded firm could boast of having more than 30 well-heeled clients, with billings of close to $7.7 million.

Among those purchasing Quinn Gillespie's services were such well-known corporate names as Daimler Chrysler, which paid the lobbying firm $360,000 in 2000; (all figures are in U.S. dollars and were tabulated by the Center for Responsive Politics); Verizon Communications, $340,000; Cisco Systems, $285,000; Viacom, $360,000; SBC Communications, $440,000; Instinet, $575,000; Hughes Electronics, $280,000; Atlantic Richfield, $165,000; and PriceWaterhouseCoopers, $350,000.

A range of special-interest associations and coalitions also sought the services of Quinn Gillespie in 2000, including the American Hospital Association, $216,000; the Health Insurance Association of America, $180,000; the Recording Industry Association of America, $120,000; and the Repeal the Tax on Talking Coalition, $297,000.

But one of the earliest clients to retain Quinn Gillespie -- and among the highest paying -- was a Vancouver-based coalition of B.C. lumber exporters. In April 2000, bare months after opening its doors, the lobbying firm registered with Congress as representatives of the British Columbia Lumber Trade Council.

By the end of 2000, after just nine months of work, the B.C. lumber producers had paid Quinn Gillespie $540,000 -- or $60,000 per month.

Softwood setback

Canada and the United States have been entangled in four softwood-lumber trade disputes over the last 25 years. American lumber manufacturers claim their Canadian counterparts enjoy an unfair price advantage because of a variety of government policies, including below-market stumpage rates for logs from publicly-owned lands.

In 1996, the two countries negotiated a five-year agreement that put a quota on lumber exports from B.C., Alberta, Ontario and Quebec. That agreement was due to expire in April 2001 -- one year after Quinn Gillespie & Associates first registered to represent the B.C. Lumber Trade Council -- and U.S. producers had vowed to renew their efforts to obtain restrictions on Canadian imports.

In August 2001, notwithstanding Quinn Gillespie's efforts, the U.S. Commerce department issued a preliminary finding that Canadian sawmills were unfairly subsidized. The following year, in March 2002, a "final determination" imposed countervailing and anti-dumping duties of more than 27 per cent on Canadian softwood lumber imports.

Still, the B.C. lumber producers continued to send sizeable monthly cheques to Quinn Gillespie. On top of the $540,000 paid in 2000, the Vancouver-based council sent $900,000 to the lobbying firm in 2001, and then another $520,000 in 2002.

Firm lobbied for Enron

Although unable to shield Canadian lumber producers from U.S. tariffs, Quinn Gillespie nonetheless enjoyed considerable success in convincing the Bush administration to buck its free-trade dogma in order to protect the American industries from foreign competition.

Stand Up for Steel, an industry-labour coalition, enlisted the lobbying firm to stop a surge in steel imports and was rewarded in March 2002 with a Bush-imposed tariff. Later that year, on behalf of USEC Inc. (parent of the United States Enrichment Corp., operator of the country's sole uranium enrichment facility), Quinn Gillespie succeeded in persuading the administration to restrict shipments of enriched uranium from Russia.

For its services, Quinn Gillespie & Associates earned almost $2.2 million from Stand Up for Steel between 2001 and 2006, and more than $1.5 million from USEC between 2000 and 2004.

Meanwhile, the lobbying firm's annual revenues continued to grow ever higher, as billings reached $10 million in 2001, and surpassed $15 million in 2005. Its roster of clients grew to include Microsoft, General Electric, Sony, Bristol-Myers Squibb, Burlington Northern Santa Fe, the Bank of America and, for a time, the ill-fated Enron.

$3.6 million to push deal

In February 2006, after working on the lumber trade file for nearly six years, Ed Gillespie visited Vancouver to make the keynote speech at a forum on the softwood lumber dispute, NAFTA and American trade policy. He was quoted by the Canadian Press as telling delegates that he saw "a window" of opportunity, "somewhere between Memorial Day [May 29] and the Fourth of July," when Canada and the U.S. might reach a new softwood agreement.

If a deal wasn't reached by the latter date, he said, "it's going to get tougher in the political environment of the Senate mid-term elections."

Those remarks proved prescient, as the two countries signed a "Basic Terms" agreement at the end of April, and then initialled a final legal text on July 1 in Geneva, Switzerland.

The British Columbia Lumber Trade Council continued to pay Quinn Gillespie and Associates through the final negotiations and beyond. In addition to the sums listed earlier, the B.C. council paid fees of $240,000 in each of 2003 and 2004; $580,000 in 2005; $600,000 in 2006; and a final $40,000 in 2007.

All told, B.C. lumber manufacturers paid Quinn Gillespie $3,660,000 US over seven-plus years. During that period, the council also retained two other Washington, D.C. lobbying firms at a cost of $2,280,000. The total of fees paid to U.S. lobbyists since 2000 came to more than $5.9 million.

'First among equals'

In June, Ed Gillespie took a leave of absence from his lobbying firm to accept a position in the Bush White House. The move puzzled many Washington, D.C., politicos, but began to make sense two months later when Karl Rove announced he was quitting as Bush's senior political adviser.

"It appears that Gillespie will emerge as the first among equals," reported the Washington Post following Rove's departure. "He is likely to be called on to handle political strategy and message management for the president, becoming the dominant voice in determining where and how often Bush appears and what he says during the final 17 months of his tenure."

For the next year and a half, then, the White House will have a senior official with first-hand knowledge of British Columbia and our provincial forest industry. It remains to be seen if that is a positive development, but it probably can't hurt.

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