United States General Accounting Office General Government Division

Washington, D.C. 20548

Page 1 GAO/GGD-00-199R China PNTR

B-285298

September 29, 2000

The Honorable Frank R. Wolf

House of Representatives

The Honorable Dan Burton

Chairman, Committee on

 Government Reform

House of Representatives

Subject: Federal Lobbying: China Permanent Normal Trade Relations (PNTR) Lobbying

Activities and Costs

In response to your request, we have reviewed the efforts of the White House China Trade

Relations Working Group (Working Group) and selected agencies to garner support for

permanent normal trade relations (PNTR) for China. You were particularly concerned

whether such efforts violated the antilobbying provisions of 18 U.S.C. 1913 or any applicable

appropriations statutes. You also wanted to ascertain how much the administration has

spent on its efforts to garner support for China PNTR.

We previously provided you with two updates on our review. Our May 8, 2000, letter to you

described the types of information we had requested from the White House and selected

federal agencies and presented preliminary information related to staff resources for the

Working Group and travel by Working Group members in support of PNTR.1

 On May 22,

2000, we reported that we had identified one e-mail authored by a Working Group member

that, on its face, constituted a violation of the applicable antilobbying appropriation

provision. That violation involved a minimal expenditure of appropriated funds and did not

warrant further action on our part or a referral to the Justice Department. Enclosure I

contains a copy of our May 22 letter. This letter provides our final response to you on the

administration’s efforts to garner support for the China PNTR legislation (H.R. 4444) that

passed in the House of Representatives on May 24, 2000, and in the U.S. Senate on September

19, 2000.

The stated role of the Working Group, which was established on February 1, 2000, pursuant

to the President’s request, was to coordinate interagency activities associated with the

 1

 Federal Lobbying: China Permanent Normal Trade Relations (PNTR) Lobbying Activities (GAO/GGD-00-130R, May 8, 2000).
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Page 2 GAO/GGD-00-199R China PNTR

passage of PNTR for China. Its activities were to include outreach efforts to business, labor,

environmental, and other groups and continued development of U.S. economic policy

towards China. In addition to the White House, agencies involved in the effort included the

Departments of Agriculture, Commerce, State, and the Treasury and the Office of the U.S.

Trade Representative. The White House and the five agencies provided thousands of

documents to us for this review related to the administration’s efforts to garner support for

the passage of PNTR for China.

Results

After reviewing the documents that the White House and agencies represented on the

Working Group provided to us through August 31, 2000, we have not found any further

violations of the antilobbying restrictions, aside from the one violation we already reported to

you. The documents we reviewed showed that the administration carried out extensive

outreach and coordination efforts with outside groups, such as public corporations and trade

coalitions, to garner support for China PNTR.

Although the exact costs of these efforts cannot be calculated, the administration spent at

least an estimated $1.6 million on its China PNTR efforts through about May 24, 2000, when

the House of Representatives voted on China PNTR. We computed this amount on the basis

of estimates that the White House and agencies associated with the Working Group provided

to us. These estimates included the cost of personnel working full-time or part-time on China

PNTR; trips associated with the PNTR effort; developing the Working Group’s Internet Web

site; and printing charts, booklets, and other documents. Generally, the cost estimate has

several important limitations, including that (1) agencies’ or employees’ estimates of the

amount of time spent working on PNTR for China were not based on documentary records;

(2) as discussed below, agencies did not provide some cost data we requested; (3) the time

periods covered by estimates varied; and (4) the costs for certain events, such as trips,

included expenditures that were not made exclusively for the China PNTR effort. In addition,

these costs generally do not represent sums that would have been saved absent the China

PNTR effort; for instance, officials’ salaries would have been paid regardless of whether the

PNTR effort was undertaken.

Most—$1.3 million—of the estimated $1.6 million was for personnel costs. A number of

different federal organizations provided personnel for the China PNTR effort. The White

House reported that 10 principals were associated with the Working Group. Five were

presidential advisers; and the remaining five were the Secretaries of Commerce, Agriculture,

the Treasury, and State and the U.S. Trade Representative. Nine employees from the

Departments of Agriculture, Commerce, and State and the U.S. Trade Representative were

assigned to the Working Group. Ten White House staff members assisted the Working Group

staff, according to the White House. In addition, 196 employees at Commerce, Agriculture,

Treasury, State, and the U.S. Trade Representative contributed to the China PNTR effort

through May 24, 2000, when the House passed H.R. 4444. These individuals, according to the

White House and the respective agencies, spent differing amounts of time over several

months working on China PNTR, ranging from a little of their time to all of their time. The

White House did not provide us with personnel costs for any of the 10 principals associated

with the Working Group because it believes that there is a strong interest in protecting the
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confidentiality of how the President’s senior advisors spend their time. However, for two of

the principals, the Secretaries of Commerce and the Treasury, associated personnel costs

were provided by their agencies. Treasury could not provide us with cost estimates for 3 of

30 employees because, according to a Treasury official, the agency does not track time spent

by employees on individual projects they work on, and these employees no longer work at

the agency.

The time period covered by the White House and two agencies’ personnel costs included the

period from the Working Group’s establishment on February 1, 2000, through May 24, 2000,

when the House voted on H.R. 4444. For three agencies, the time period was slightly

different; all three began January 1 and individually ended on April 7, May 3, and 31.

The White House and 4 agencies reported 21 trips within the United States and to China at an

estimated cost of about $299,000. The travel cost estimate does not include the cost of

military airfare for a trip to China sponsored by the Department of Agriculture, which was

paid for by the Department of State. One agency, the State Department, has not provided

travel data. A limitation to the travel cost data is that the trips were not always exclusively

devoted to China PNTR. According to agency officials, a large number of trips were related

to the specific agency’s mission and were planned prior to the emphasis on China PNTR.

Other costs related to the China PNTR effort, such as printing and the “China Trade Relations

Working Group” Web site, totaled about $61,000. All of the reported costs were borne by the

Department of Commerce. The bulk of the costs, about $58,000, was for the printing of such

items as booklets, briefing books, and state reports. The design and development of the Web

site cost $3,000.

Agency Comments

We requested the White House’s comments on a draft of this letter from the Assistant to the

President and Director of Management and Administration. On September 22, 2000, an

Associate Counsel to the President said the White House had no comments.

Approach

To determine whether the efforts by the Working Group and selected agencies to garner

support for China PNTR may have been in violation of the antilobbying provisions of 18

U.S.C. 1913 or any applicable appropriations statutes, we submitted a detailed information

request to the White House on April 11, 2000, and to selected agencies on April 13, 2000. The

detailed request also asked for cost-related information. These agencies included the

Departments of Agriculture, State, Labor, and the Treasury and the Office of the U.S. Trade

Representative. Subsequently, the Department of Labor said the Secretary was not a

principal of the Working Group, and it had no employees assigned to the China PNTR effort.

In our information requests to the White House and the agencies, we asked for a variety of

information, including
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• information pertaining to the staffing of the China Trade Relations Working Group,

including both those employees assigned to the Working Group and those supporting it;

• documents identifying travel costs associated with the China PNTR effort;

• copies of all China PNTR-related speeches and press releases;

• copies of all China PNTR-related communications, e.g., letters and e-mail, between the

Working Group and executive branch agencies or between any executive branch

participant in China PNTR activities and parties outside the executive branch;

• copies of any information packets, e.g., kits, pamphlets, or media communications, and

the cost of such information packets;

• copies of various other documents, such as mailing lists, lists of private groups contacted,

planning documents, and reports or summaries of the China PNTR effort; and

• copies of all laws and guidance on lobbying restrictions applying to either the White

House or any of the participating agencies and an explanation of the steps taken to ensure

that the restrictions were followed.

We met with officials of the White House and the other agencies between April 18, 2000, and

May 3, 2000, to answer questions about our information request. We instructed them to

provide the requested documents on a continual, rolling basis, and they have done so. As we

reviewed the documents, we had follow-up questions, which we directed to appropriate

officials. The officials responded to those questions.

On September 25, 2000, a White House official informed us that their automated search for emails relevant to the China PNTR effort may not have been complete or accurate from April

15, 2000, to April 30, 2000, because of a problem associated with their system’s automated email search function. According to the White House official, the problem as understood at

this point may have affected about 1 percent of the e-mails during the 16-day period. The

White House official noted that there is no way to identify which e-mails were affected.

According to the White House official, they are working with the contractor to resolve this

problem, but they do not yet have a timetable to resolve the matter. The official also noted

that in responding to our request for e-mails, the automated search was conducted in addition

to staff searching their paper and e-mail files manually. The official said that e-mails from the

manual and automated searches were provided to us. Although we cannot be sure that we

received all relevant e-mails for the 16-day period, we did receive a number of e-mails from

that time frame.

We did our work in Washington, D.C., between April 2000 and September 2000 in accordance

with generally accepted government auditing standards.
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As agreed with your offices, unless you announce the contents of this letter earlier, we plan

no further distribution until 30 days after the date of the letter. At that time, we will send

copies of this letter to Mr. Mark F. Lindsay, Assistant to the President and Director for

Management and Administration, The White House; the Honorable Daniel R. Glickman,

Secretary of Agriculture; the Honorable Norman Y. Mineta, Secretary of Commerce; the

Honorable Alexis M. Herman, Secretary of Labor; the Honorable Madeleine K. Albright,

Secretary of State; the Honorable Lawrence H. Summers, Secretary of the Treasury; and the

Honorable Charlene Barshefsky, U.S. Trade Representative. We will make copies available to

others on request.

Please contact me on (202) 512-8676 if you or your staff have questions. Key contributors to

this letter are listed in enclosure II.

Michael Brostek

Associate Director, Federal Management

 and Workforce Issues
Enclosure I

May 22 Letter to Representative Frank R. Wolf

Page 6 GAO/GGD-00-199R China PNTR

Note: A separate letter

was sent to Representative

Dan Burton, Chairman,

House Committee on

Government Reform, on

the same date.
Enclosure I

May 22 Letter to Representative Frank R. Wolf

Page 7 GAO/GGD-00-199R China PNTR
Enclosure I

May 22 Letter to Representative Frank R. Wolf

Page 8 GAO/GGD-00-199R China PNTR
Enclosure I

May 22 Letter to Representative Frank R. Wolf

Page 9 GAO/GGD-00-199R China PNTR
Enclosure I

May 22 Letter to Representative Frank R. Wolf

Page 10 GAO/GGD-00-199R China PNTR
Enclosure II

GAO Contacts and Staff Acknowledgments

Page 11 GAO/GGD-00-199R China PNTR

Michael Brostek (202)512-8676

Richard W. Caradine (202) 512-8676

In addition to the individuals named above, Alan N. Belkin, Ronald J.

Cormier, and Jessica A. Botsford made key contributions to this letter.

GAO Contacts

Acknowledgments
Page 12 GAO/GGD-00-199R China PNTR
Page 13 GAO/GGD-00-199R China PNTR
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