wyoming governors china trip

What the governor says he did not know before landing in China with his wife Nancy and energy advisor Rob Hurless, was that one of the longtime sponsors of the United States-Asia Foundation is General Electric Company. GE is currently engaged in sensitive negotiations with the state over a proposed $100 million coal gasification research project for which Wyoming has pledged half the money.

"The governor said he doesn't know much about this group [United States-Asia Foundation] but if there is something we should know, he hopes you'll share it with us," press secretary Cara Eastwood said on April 10, the eve of the governor’s departure.

Questioned subsequently, Freudenthal said he never asked if General Electric money was involved. The trip itinerary did include a visit to a GE coal research center in Shanghai. Accompanying the group was GE Energy Washington lobbyist Rob Wallace, a longtime player in Wyoming politics who also has the title "senior advisor" in the U.S.-Asia Foundation.

In response to questions while the governor was still on the trip, Atlanta-based GE Energy spokesman Daniel Nelson acknowledged that "GE has financially supported the U.S.-Asia Foundations programs to promote improved relations between the U.S. and countries in Asia."

Nelson declined to disclose how much money GE has contributed to the foundation over the years. However, Nelson said that travel expenses for Wallace, a veteran of several trips organized by the foundation, were paid for directly by GE.

Marsha Lefkovits, 51, a former U.S. Senate staffer who operates the U.S.-Asia Foundation with her husband, retired Army Reserve Brig.Gen. Richard G. Quick, 65, said money for the Freudenthal trip came from the foundation's general fund.

"With respect to GE," Lefkovits wrote in an e-mail response to a reporter's questions, "they have been a long time supporter of the foundation, but their contribution represents a small part of our annual budget and assets. The funding for the governor's trip was from our general fund and none of the GE contributions were earmarked for this purpose."

Lefkovits said the foundation received $726,826 in contributions in 2006, the last available reporting year. She said that Wallace, a Wyoming native and former chief of staff for U.S. Sen. Malcolm Wallop, receives no money from the foundation for his role as "senior advisor."

Registered with the Internal Revenue Service as a Washington, D.C., public charity, the United States-Asia Foundation - which operated previously under the names Far East Studies Institute and Asia Pacific Exchange Foundation - has a history of serving as a public front for undisclosed corporations that sponsor overseas travel by elected officials to countries where the companies have business.

Under IRS rules as a 501 (c) (3) Public Charity, the foundation is not required to reveal the names of its corporate or individual contributors. In a 1992 application to the IRS, the foundation described its fundraising efforts as follows:

"The institute [Far East Studies Institute] solicits funds from corporations, foundations and individuals by selective mailings. Mailings are directed to those corporations, foundations and individuals who the officer and directors believe will have an interest in the affairs of the Institute."

The foundation told the IRS that it expected about 50 percent of its funds to come from corporations; 35 percent from foundations and 15 percent from individuals.

"The United States-Asia Foundation is the perfect example of a Washington organization that is funded by undisclosed interests to try to manipulate the opinions of influence-makers," said Jock Friedly, founder of LegiStorm, a Washington watchdog organization that monitors Congressional travel records. "While there is nothing necessarily illegal about these organizations, they certainly do not comport with the spirit of public disclosure otherwise required of corporate interests."

Dozens of foundations, protected by rules that guard the privacy of their contributors, operate in Washington as discrete travel agencies for corporations and members of Congress and their staffs. One of the busiest, the United States-Asia Foundation has earned a reputation as an organization willing to take on trips to problem states.

In 1990, for example, Foundation President Richard Quick arranged the first Congressional delegation to meet with Chinese Premier Li Peng following the June 1989, massacre of pro-democracy demonstrators in Tiananmen Square. By most accounts, Premier Li had ordered the Chinese troops into the square and presided over the brutal crackdown.

The most widely-reported example of a foundation trip to a rogue state was a 1996 journey to Burma(Myanmar) by then-House Majority Whip Tom DeLay (R-Texas) and three other Republican congressmen at the invitation of the Southeast Asian country’s military dictators. The trip was organized by the Asia-Pacific Exchange Foundation, renamed in 1999 as the United States-Asia Foundation.

Tom DeLay

Ostensibly a fact-finding trip probing Burma’s opium trade, the congressmen also traveled by military helicopter to a remote location where the American oil company Unocal and its French partner Total were building a $1.2 billion natural gas pipeline.

The pipeline flyover took place when the Clinton administration was considering trade sanctions against Burma because of human rights rights abuses by the ruling junta. At the time, Unocal was the biggest US investor in Burma and had the most to lose if the trade sanctions were declared.

The delegation did not ask to meet with Nobel Peace Prize winner Aung San Suu Kyi, then under house arrest, or any other opponents of the military regime.

A spokesman for Unocal, David Garcia, confirmed at the time that the company had given funds to the Asia-Pacific Foundation but like Nelson at GE, declined to say how much.

"We have every right to support a balanced view of foreign policy issues," Garcia told reporters for the Dallas Morning News. Garcia also acknowledged that Unocal opposed trade sanctions against the regime.

The Burma trip prompted a furious reaction from human rights organizations. Larry Dohrs, a member of the Free Burma Coalition, said the Asia-Pacific Exchange Foundation’s role "bears a certain similarity to money laundering."

United States-Asia Foundation executive director Lefkovits said the foundation was unfairly criticized for arranging the Burma trip because, at the time, it had been asked asked by federal authorities not to disclose a secret aspect of the mission.

"It is our understanding that this program made it possible for the Congress to gather important information, otherwise not available, and made it possible for the DEA to accompany a delegation to the Burma side of the Golden Triangle for the first time," said Lefkovits. "Unfortunately for us, we were asked not to disclose the purpose of our mission at the time and we were severely and unfairly criticized by some of the anti-Myanmar groups. The program was terminated over 10 years ago and we have no plans to return."

Lefkovits said focusing on one or two trips misses the broader role y the foundation plays. She said the countries visited in the past 20 years include Australia, China, Japan, South Korea, Singapore, Hong Kong, Thailand, Indonesia, Kyrgyzstan, Turkey, Vietnam, Nepal, Kazakhstan and Uzbekistan.

The foundation has made so many trips to Kyrgyzstan, an extremely remote Central Asian former Soviet republic with a recent history of autocratic rule, that foundation president Richard Quick was named by Kyrgyz officials as the country's "Honorary Consul General" and awarded the "Dank Medal," one of the country’s highest honors.

An August 2004 report by the Kyrgyz government news agency, Kabar, reported that a 20-person Congressional delegation arrived in Bishtek, the Kyrgyzstan capital, headed by "the vice-president of General Electric and senior advisor to the US-Asia Foundation Rob Wallace."

In 1992, GE was one of the first American corporations to do business with the new Kyrgyz Republic after it split with the Soviet Union, signing an agreement to build a new $100-million hydroelectric dam on the Naryn River.

Since then, GE has maintained strong interests in the hydroelectric, mineral and fossil fuel potential of the country, strategically located on the western edge of China. In 2003, the company's CEO Jeff Immelt singled out "harder to get places, like Africa and Kyrgyzstan" as places especially suited for GE’s oil and gas exploration technology business.

Most of the United States-Asia Foundations trips are sponsored under the Mutual Educational and Cultural Exchange Act (MECEA) of 1961, known originally as the Fulbright-Hayes Act, that was created to foster "mutual understanding between the people of the United States and the people of other countries by means of educational and cultural exchange."

Over the years, particularly after the recent Jack Abramoff lobbyist scandal in Washington, corporations have increasingly used MECEA when they fund business trips.

"MECEA is a very slippery law that allows corporations to avoid any disclosure whatsoever," said LegiStorm's Friedly. "The act was designed for cultural and educational exchanges among governments, not corporate interests and Congress."

Lefkovits, who worked for seven years in the office of Alabama U.S. Sen. Richard Shelby before joining the foundation in 1992, pointed to busy program arranged for Gov. Fruedenthal as an example of the hard work and serious nature of the foundation.

"His intensive schedule included a briefing at the US Embassy," Lefkovits said. "A meeting with the vice minister of commerce to promote trade, meeting with a senior official at their department of energy to talk about clean coal technology, and meetings with senior officials of Shanxi Province and Shanghai to promote trade."

The Governor tours a Chinese energy research center

Compared to many visiting delegations to China, in fact, Freudenthal’s itinerary was focused fairly sharply on Wyoming interests. Only one day, April 13, was devoted to tourism with a visit to the Great Wall and Beijing’s Forbidden City.

The governor also spent two full days in one of the bleakest parts of China, the coal mining region in Shanxi Province and its grimy provincial capital, Taiyuan. Even the April 17 tour of the GE China Technology Center in Shanghai had a specific Wyoming purpose: scientists there are experimenting with sub-bituminous coal brought in from the Powder River Basin to see if they can make it more adaptable to gasification technology.

Given the nature of the trip, in fact, it is doubtful that even the GOP -dominated Wyoming legislature would have balked at coughing up public money for the trip.

The First Lady visits a Chinese school

"If the governor had asked us, we could have put in the budget funding for him to travel with his spouse," said Sen. Phil Nicholas (R-Laramie), chairman of the senate appropriations committee.

That way Freudenthal could have avoided the potential embarrassment of embarking on an overseas mission financed by a foundation sponsored by a company that is currently engaged in negotiations with the state over who owns the technology developed in the proposed $100 million joint coal research facility to be built in Wyoming.

Mark Northam, director of the UW School of Energy Resources that will participate in the project, said the GE talks are at a critical state. "We are negotiating a Joint Operating Agreement, expected to take another month," Northam reported on April 16. "I am not allowed to disclose anything else at this time due to the sensitive nature of the negotiation."

But not even the delicate nature of the negotiations, putting Wyoming across the table from one world's most powerful corporations, has Sen. Nicholas too concerned over GE’s role in financing the governor’s trip.

"It's not going to give me heartburn," said Nicholas, a Laramie attorney who during legislative discussions over the proposed GE pact asked some of the most penetrating questions about the project and state retention of intellectual property rights.

"If the governor finds that there is anything embarrassing about it," said Nicholas, "he can take a step back and we will reimburse him for the trip. On the other hand, I'm glad he is out there on the forefront pursuing the advancement of Wyoming coal. I'm less concerned about who's paying for it."

Gov. Freudenthal's fellow Democrat, state Sen. Mike Massie of Laramie, said he also was "pleased the Governor is pursuing Wyoming's interests in China and know the knowledge he gains will benefit the state."

Massie added, however, 'As a separate issue, private organizations that fund the activities of public officials should disclose the sources of their funding and the role, if any, these funders have in determining who receives grants. This transparency would benefit the public and the public servant."