Federal Lobbying: China Permanent Normal Trade Relations (PNTR) Lobbying
Activities and Costs (Correspondence, 09/29/2000, GAO/GGD-00-199R).

Pursuant to a congressional request, GAO reviewed the efforts of the
White House China Trade Relations Working Group, focusing on: (1)
whether such efforts violated the antilobbying provisions of 18 U.S.C.
1913 or any applicable appropriations statutes; and (2) how much the
administration has spent on its efforts to garner support for China
Permanent Normal Trade Relations (PNTR).

GAO noted that: (1) after reviewing the documents that the White House
and agencies represented on the Working Group provided to GAO through
August 31, 2000, GAO has not found any further violations of the
antilobbying restrictions, aside from the one violation GAO already
reported; (2) 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; (3) GAO computed this
amount on the basis of estimates that the White House and agencies
associated with the Working Group provided to GAO; (4) 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; (5) of the $1.6 million, an estimated $1.3 million was for
personnel costs; (6) a number of different federal organizations
provided personnel for the China PNTR effort; (7) 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; (8) for three
agencies, the time period was slightly different, all three began
January 1 and individually ended on April 7, May 3, and May 31; (9) the
White House and 4 agencies reported 21 trips within the United States
and to China at an estimated cost of about $299,000; (10) 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; (11) one agency, the State Department, has
not provided travel data; (12) a limitation to the travel cost data is
that the trips were not always exclusively devoted to China PNTR; (13)
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; (14) other costs related to the China PNTR effort, such as
printing and the "China Trade Relations Working Group" Web site,
totalled about $61,000; (15) all of the reported costs were borne by the
Department of Commerce; (16) the bulk of the costs, about $58,000 was
for the printing of such items as booklets, briefing books, and state
reports; and (17) the design and development of the Web site cost
$3,000.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  GGD-00-199R
     TITLE:  Federal Lobbying: China Permanent Normal Trade Relations
	     (PNTR) Lobbying Activities and Costs
      DATE:  09/29/2000
   SUBJECT:  Ethical conduct
	     Appropriated funds
	     Lobbying activities
	     Foreign trade policies
	     Foreign governments
	     Appropriation limitations
	     International travel
IDENTIFIER:  China

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GAO/GGD-00-199R

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).

B- 285298

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

B- 285298

Page 3 GAO/ GGD- 00- 199R China PNTR

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

B- 285298

Page 4 GAO/ GGD- 00- 199R China PNTR

ï¿½ 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;

ï¿½ documents identifying travel costs associated with the China PNTR effort;

ï¿½ copies of all China PNTR- related speeches and press releases;

ï¿½ 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;

ï¿½ copies of any information packets, e. g., kits, pamphlets, or media
communications, and the cost of such information packets;

ï¿½ 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

ï¿½ 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.

B- 285298

Page 5 GAO/ GGD- 00- 199R China PNTR

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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