Cutler means- Jobs in China

For the last 25 years, Cutler and his law firm of Akin Gump Strauss Hauer & Feld have worked to help companies send thousands of good paying American jobs overseas, as well as fight charges that China is illegally “dumping” cheap, consumer products in the US at the expense of good-paying manufacturing jobs here.

From 2007 to 2009, Cutler personally led the effort as the Managing Partner of his firm’s Beijing office, where he employed “his experience as a lawyer, government official and political operative,” according to his firm’s website. The result has been the loss of millions of jobs here in the US, including more than 10,000 jobs lost right here in Maine, according to a 2008 study by the Economic Policy Institute.

According to a CNN report Exporting America, these are some of the companies, all clients of Cutler’s firm, that are sending US jobs overseas: AT&T, Boeing, Dow Chemical, Johnson & Johnson, Pfizer, Tyco, Texas Instruments, among many others.

Each one of Cutler’s clients that has moved American jobs to China connects to poignant stories of dislocation and disappointment. Here are just two examples:

In the last decade GE has closed over fifteen factories in Ohio alone. US employment in the lighting division has dropped by 68% and the company plans to send even more jobs to China in anticipation of new US efficiency policies. Starting in 2014 only compact florescent bulbs will be sold in the US and GE plans to make every single one of them in China, where skilled labor is cheap, and unsafe, polluting factories are allowed to operate freely. In fact at least two of the eight large multinational polluters in China, cited by a 2009 Greenpeace report, are Cutler’s clients.

Hanesbrands, Inc., the clothing manufacturer best known for its Hanes, Champion and Playtex brands, announced it would ship 1,300 jobs to China from North Carolina in 2008, devastating lives of loyal US factory workers. Bill Sanders, 69, a lifelong textile worker, found out about the closing of his plant as he arrived to work one day at 7am. “It all ended today. My whole life changed…I went weak…I’ll never find another job in textiles,” he lamented.

But sadly, that’s only half the story. Cutler is known around the world as “China’s Lobbyist,” helping massive state owned and controlled Chinese companies buy up American companies to the tune of billions of dollars. “It is an honor for us to be asked to help Chinese clients in the US,” said Cutler. ”We try to persuade members of the Congress and regulators that the decision…[is] in the best interests of the United States.”

But in at least one blockbuster deal, US officials were not persuaded. In 2005, Cutler’s firm was hired by China National Offshore Oil Company (CNOOC) – the country’s leading offshore exploration and oil development company which is 70% owned by the communist Chinese Government. CNOOC needed the law firm’s help in its $18.5 billion bid to buy California-based petroleum giant Unocal. Cutler’s firm put on a full-court press to win over legislators and White House officials, records show. In just eight days at the end of June 2005, Akin Gump lobbyists reported about 250 contacts with the Office of the President, the Vice President, the Department of Energy, the Department of Commerce, and a long list of congressmen, senators and their staffs. Records show that while some lobbyists knocked on the doors of legislators, others worked the phones, sent out dozens of e-mail messages with information about CNOOC and distributed favorable newspaper articles and editorials about the Chinese company.

The lobbyists also called and sent e-mail to officials at the Treasury Department, which houses the Committee on Foreign Investment in the US (CFIUS), a secretive panel that reviews corporate mergers on national security grounds. CFIUS took a dim view of Akin Gump’s attempt to put Unocal’s energy reserves in the hands of the Chinese government, as a matter of national security.

So did some members of Congress. Rep. Frank Wolf, R-VA, questioned Akin Gump’s loyalties if not its patriotism. “The Chinese government is prosecuting Christians,” he said. “They have Catholic bishops and Protestant pastors in jail. In Tibet, they are prosecuting Muslims and Evangelicals. The Chinese government is spying on the United States. Why would you work for a government that is spying on the United States? Greed is driving them.”

In a strongly worded letter to Akin Gump lobbyists, Wolf wrote, “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.”

Rep. Curt Weldon, a senior member of the House Armed Services Committee, agreed. “Unfortunately, corporate dollars often transcend national security.”

CNOOC and its masters in Beijing eventually withdrew the offer rather than subject itself to thorough examination by US regulators, something to which the Chinese are wholly unaccustomed.

So what was Cutler’s involvement? With all of his Washington experience and contacts, it’s hard to believe he didn’t make at least some of those hundreds of lobbying calls and e-mails to Congress or the Commerce Department. But in a recent interview with blogger Mike Tipping, Cutler claims he wasn’t involved and, astoundingly, claims he doesn’t even remember the case.

“Our representation of CNOOC – I don’t even remember,” he said. “I think I was at the firm then, but I wasn’t involved.”

Someone should explain Google to Cutler, because in prior interviews, Cutler spoke at length about his firm’s work for CNOOC, boasted about it, in fact, and was unapologetic to be working directly against US national interests. He even suggested that he was a personal acquaintance of CNOOC’s chairman and could have salvaged the deal if only CNOOC had come to him sooner.

“[CNOOC] Chairman Fu is a very wise man,” said Cutler. “Had CNOOC come to us earlier…[i]t would have made the deal much easier to get approval.”

In a 2006 interview, Cutler said, “We think that Chinese clients will find that the unique combination of skills and experience that we provide is valuable – perhaps essential – as they navigate the world outside China. This is exactly the reason that China National Offshore Oil Company (CNOOC) came to us last year when it sought to acquire Unocal.”

Cutler had another, far more personal reason to be involved in the CNOOC deal. Since 2004, Cutler has been a trustee of the Thornburg International Value Fund, a huge international mutual fund founded in 1998, that according to its latest annual report holds over $200 million in shares of CNOOC, Ltd. Thornburg is one of CNOOC’s top five institutional shareholders. A takeover of Unocal by CNOOC would have certainly boosted the share price of CNOOC stock and in turn lifted the value of the Thornburg fund of which Cutler oversees.

But today, despite being a senior counsel for the firm that had a major involvement in the failed CNOOC bid, and despite sitting on a board of directors that oversees a fund with a huge investment in the same Chinese oil company, and despite being portrayed on his law firm’s website as a specialist in “energy and global transactions,” Cutler claims amnesia about the whole CNOOC episode, or any involvement in the nasty business of offshore oil.

“By any measure of my work at Akin Gump, over the entire time I was there, you will find almost no oil companies, big or small, or oil service companies, big or small, period,” he told Tipping.

But the outrage and failure of the CNOOC deal didn’t stop Cutler or his firm from continuing to represent China’s interests. In 2008, the firm was hired by Bain Capital to help smooth the way for China’s Huawei Technologies $2.2 billion buyout of 3Com Corp. Because 3Com had defense contracts for computer network security and anti-hacking software – a known Chinese target – the US director of national intelligence labeled the 3Com deal a threat to national security. Huawei was founded by a former People’s Liberation Army officer and current member of the Communist Party. Rumors persist that the firm is actually run by the PLA. The company has been linked to violations of UN sanctions in Iraq and has also been dogged by accusations of intellectual property theft and corporate espionage. (For a recent 60-minutes report on Chinese espionage, go here.)

Congress was again concerned. “U.S. regulators ought to reject the proposed buyout of 3Com by one of the least transparent companies operating in China, a firm with shadowy ties to Chinese army and intelligence services,” said Rep. Ileana Ros-Lehtinen, a Republican on the House Foreign Affairs Committee.

But it was just another client for Cutler and his firm. After Congress began a bipartisan probe of the deal, the Huawei-3Com marriage hit the skids, just like the failed CNOOC deal before it.

Cutler’s Clients Imported Tainted, Dangerous Chinese Products to US and Maine

At the same time Cutler was helping to export jobs and buy up vast swaths of the American economy, he was also representing companies that imported toxic and dangerous Chinese products into the US and Maine.
Claire’s Stores, with at least two locations in the state, sold toxic lead contaminated children’s items in Maine and around the US. In 2007 58,000 children’s necklaces manufactured in China and sold exclusively by Claire’s were recalled by the Consumer Products Safety Commission (CPSC).

GE has had numerous Chinese-made products recalled by the CPSC for defects. One such Item was a GE branded toaster sold in Wal-Marts across the US and Maine that sparked and caused at least 140 fires. 210,000 were recalled in 2008. Other examples of hazardous GE products made in China and recalled here are 146,000 electric slow-cookers and 50,000 electrical outlet converters. In 2008 alone, over 80% of the product recalls by the CPSC involved Chinese products. (Side note: in 2008, Cheryl Falvey was named the CPSC’s new General Counsel. Prior to that position, Flavey was a partner in the law firm of Akin Gump.)

Meanwhile, Cutler and his firm has represented a variety of Chinese companies against charges of illegal “dumping” – flooding the US market with goods that are sold well below their actual production costs making it impossible for US companies to compete. In the past, Akin Gump has proudly represented:

•Chinese honey exporters and importers accused of dumping products on the US market (beekeeping and honey production provide over $100 million annually to the Maine economy.)

•One of China’s largest electricity companies accused of dumping cheap televisions into the United States from Malaysia and China

•An alliance of importers and national restaurant chains that opposed imposing penalties on China for dumping shrimp on the US market which was pushing US shrimp fishermen and dealers out of business.

The International Trade Commission currently has more than 60 separate orders outstanding regarding China’s dumping in industries from paint brushes to hammers, from paper clips to industrial bearings, from tissue paper to steel.

Cutler Helped China Cover Up Human Rights Violations and Suppress Protests During the 2008 Summer Olympics.

In 2007 Cutler’s office formed a P.R. and policy partnership with Publicis Groupe SA to help the totalitarian Chinese government, and the companies that do business with them, deal with protests and bad publicity during the 2008 Summer Olympics. “Everyone is watching China,” said Cutler. “Olympics sponsors are worried about a backlash.”

And well they should have been. The list of China’s human rights problems is long. It is the world’s leading jailer of journalists and executes more “criminals” in any given year than the rest of the world combined. It is home to 16 of the 20 most polluted cities on the planet. It has its hands in crises in Darfur, Tibet, Burma, Iran, Zimbabwe and China’s own Uighur Muslim provinces in the western region of Xinjiang.

The companies that want access to the vast untapped market of 1.3 billion potential customers are constantly caught between appeasing Beijing and the scrutiny of the rest of the world. China was understandably worried about disruption of the games and withdrawal of key sponsors under pressure from those protesting China’s human rights violations, its use of sweatshop labor, its polluted air and water.

China’s abuse of its workforce also contributes to the artificially low cost of Chinese goods. Millions of child workers and forced laborers are used to make products for export to the U.S. Independent labor unions are forbidden, and workers who attempt to form them are fired, imprisoned, or worse. These violations of internationally accepted workers’ rights artificially depresses the labor market, leading to Chinese products being cheaper because the companies only have to pay workers 15 to 50 cents per hour.

But to Cutler, China’s problems are neither unique or significant. “Most of China’s safety and quality problems are caused by good people trying to do their jobs in a domestic marketplace that is so highly competitive and unregulated that it often accounts for nothing but the most direct costs,” he wrote.

As Gerald Weinand wrote on the blog Dirigo Blue, “That people are dying in a genocide, or more slowly by environmental poisoning or lack of work place safety, or that lethal products are being sold around the world, or even the continued occupation of Tibet, all these (for Culter) were simply a public relations problem to be solved.”

Cutler and his team were there to help those money-grubbing corporations keep the protests down and the world’s attention focused where Beijing wanted it: on the Games.

Postscript: A 2008 article in Washingtonian reported on the failure of Akin Gump’s office in China, which Cutler ran, to produce much business. “Tensions are said to be high, with partners in the New York office unhappy that the Washington lawyers are not producing their share of revenue. The firm also closed its office in Taipei…and insiders predict the money-losing Beijing office will be next to go. The China offices have been expensive failures in the eyes of New York partners, who are pressing Washington to stop the bleeding.”

Yet another failed business by Eliot Cutler.

Leave a Comment

Your email address will not be published. Required fields are marked *