US Lobbyists drop Chinese clients amid tightened scrutiny

Lobbying firms in Washington are reportedly rushing to drop clients from China as lawmakers look to tighten scrutiny. The push comes in the wake of a surge in Chinese lobbying in recent years and growing concerns about China's influence.

U.S. lawmakers say they are promoting legislation that would provide more transparency into who is lobbying for Chinese companies. The legislators aim to prevent the Chinese Communist Party (CCP) and the People's Liberation Army (PLA) from using gray areas to secretly advance policy agendas that harm the interests of the American people.

Republican Senator John Cornyn told VOA's Mandarin Service last week that lawmakers are very close to completing work on legislation that aims to address the problem. Last year, lawmakers in the Senate passed the disclosing Foreign Influence in Lobbying Act and members of the House have introduced a similar bill. Cornyn was a co-sponsor of the Senate bill.

"We've encountered some dissent but will continue to work because it's important to understand who is actually lobbying these policymakers," Cornyn said. 'The primary focus has been on making sure people register under the Foreign Agents Registration Act. As you know, there's been a lot of problems associated with people not disclosing their lobby contracts with foreign countries."

Closing loopholes

In pushing legislation, lawmakers are looking to close existing loopholes in the Foreign Agents Registration Act of 1938 (FARA) and the Lobbying Disclosure Act of 1995 (LDA) to demand more transparency regarding foreign governments and political parties that participate in the planning, supervision, direction or control of lobbying efforts regardless of whether they have made any financial contributions or not.

China is a unique challenge, Cornyn noted.

"The Chinese are unique in that there is no true solely private sector; they are forced to share information with the PLA and with their intelligence agencies," he said. "So, I would say anytime we're dealing with the Chinese-owned enterprise, it's a cause for concern."

U.S. lobbying is regulated by the LDA, which requires disclosure of domestic lobbying, and FARA, which requires disclosure of lobbying and other forms of influence by foreign governments and political parties. However, in 1995, FARA was amended to exempt those who represent foreign companies or individuals if the work is not intended to benefit a foreign government or political party. As a result, lobbyists registered under the far less transparent LDA and the result was a dramatic drop in FARA registrations.

Clients dropped

The effort to tighten scrutiny of China's lobbying activities follows the U.S. Department of Defense's release in late January of a list of 'Chinese military companies' operating directly or indirectly in the United States known as the 1260H list.

Lawmakers subsequently said they were considering a measure prohibiting lobbyists who represent companies on the list from meeting with members of Congress, even to discuss matters on behalf of their American clients.

Following the release of the 1260H list, a chart began circulating on Capitol Hill that named various Chinese companies, including some military firms, as well as the names of their lobbying firms and whether they appear on the 1260H list.

Responding to the chart, at least five U.S. lobbying firms dropped Chinese clients as of late February. Steptoe LLP has terminated its contract with Shenzhen biotech company BGI. Akin Gump Strauss Hauer & Feld filed cease-and-desist documents to stop lobbying for Chinese LiDAR maker Hesai Group and terminated its cooperation with Xiaomi, a Chinese electronics company not on the 1260H list. The Vogel Group has also dropped lobbying services for Chinese drone company DJI and Complete Genomics, a subsidiary of genetic technology company BGI.

DJI and Hesai are both on the 1260H list. Complete Genomics is not on the list, but its previous parent company, BGI, is on it.

Boycotting meetings

Republican Senator Marco Rubio told VOA that while it is difficult to pass a law prohibiting members of Congress from meeting with anyone, some congressional offices have decided not to meet with lobbying firms representing Chinese military companies.'There are just certain entities we won't meet with because we understand that while they may be doing it for commercial reasons, the interests that they're representing are linked to Chinese goals, military goals and aspirations," he said. "And so ... we've made that decision unilaterally."

Robert Sutter, professor of practice of international affairs at the Elliott School of George Washington University, said historically, Chinese military entities' lobbying activities have been an ambiguous area, and the enforcement has been weak.

'These [companies] lobbying for these firms ... it's probably legal in some way. But there is a reputational cost, and I think that's what the Congresspeople are calling attention to in saying they will boycott these firms,' he said.

According to Open Secrets, a political money website, China's lobbying has surged in recent years. China spent more than $330 million on lobbying between 2019 and 2023. That stands in sharp contrast to the $60 million it spent between 2015 and 2018.

China's lobbying roster

Craig Singleton, a senior researcher with the Foundation for Defense of Democracies, notes up until a few years ago, Chinese corporate lobbying in Washington was almost non-existent but that changed when the U.S. government went after Huawei.

After that, "Chinese firms switched gears and quickly scaled up, deploying lobbyists to protect their bottom lines in the face of increasing scrutiny from Democrats and Republicans alike,' he said. 'Today, China's lobbying roster reads like a 'who's who' of Washington insiders, from retired Pentagon brass to former high-ranking congressional aides. The goal of these lobbying operations is simple: disrupting any actions that could negatively impact their clients' market share, deflecting regulatory scrutiny and defending against sanctions.'

Singleton said the Department of Justice - which is responsible for administering and enforcing FARA - could play a bigger role in curbing the CCP's malign lobbying influence on Capitol Hill.

'The U.S. Department of Justice currently mandates only two Chinese companies, Huawei and Hikvision, to disclose their lobbying activities under FARA, offering a comprehensive overview of their engagements," he said. "Despite additional Chinese firms being flagged as national security risks by the Defense Department and FCC, the Justice Department has not extended FARA filing requirements to these problematic entities. The only apparent obstacle to such action is a lack of political will within the Justice Department itself.'

VOA Mandarin reached out to the Department of Justice, but it declined to comment.