The US Pavilion at Expo 2010, Conflicts of Interest, and Deputy Assistant Secretary of Commerce, Dr. Ira Kasoff – UPDATED

[UPDATE – February 22, 2010. Three weeks later, Tim Stratford accepts a job in the Beijing law office where Dr. Kasoff’s wife is a partner.]

Tomorrow at 12:30 PM, the US-China Business Council [USCBC] and the US Information Technology Office [USITO] in Beijing will host a luncheon briefing featuring Tim Stratford, an assistant US Trade Representative, and Dr. Ira Kasoff, the Deputy Assistant Secretary of Commerce for Asia. According to the notice for the event posted at the American Chamber of Commerce, the two gentlemen “will provide an update on plans for the Joint Commission on Commerce and Trade (JCCT) in 2010 and a briefing on their meetings with Chinese officials during their visit.” It should be an interesting briefing: the JCCT is a twenty-seven-year-old dialogue between senior US and Chinese government officials that has played a key role in resolving trade disputes and, in the process, has directly benefited – and penalized – companies involved in that trade (a list of China’s JCCT commitments between 2004 and 2009 can be found here).

The presence of Dr. Kasoff at the event should be particularly informative. As a senior Commerce Dept deputy for Asia, and a member of the Market Access and Trade Compliance Staff at the International Trade Administration in Washington, D.C., Dr. Kasoff is a highly influential figure in US-China trade relations. And he has been so for years: prior to his current role, he served in six US Commercial Service assignments in Asia, including a stint as the Chief Commercial Officer in Shanghai.

Thus, when Friday’s off-record lunch convenes at the Westin Chaoyang in Beijing, Dr. Kasoff’s stature ensures that he will look out at an audience that includes  representatives of leading American and Chinese businesses with a keen interest in how his actions – and, by extension, the work of the ITA and the JCCT – will impact their operation in coming weeks, months, and years. No doubt, many of those faces will be familiar to Dr. Kasoff from his years of work on US-China trade issues and, no doubt, many of them will be familiar to Dr. Kasoff’s wife, Ellen Eliasoph, a co-chair of the troubled US pavilion at Expo 2010 in Shanghai. [She is also a partner in the Beijing office of Covington &Burling, the law firm which Stratford announced he was joining three weeks after his joint appearance with Kasoff.]

The reason is pretty straight-forward: Ms. Eliasoph, in her official State Department-designated capacity, has naturally solicited many if not most of the leading US companies operating in China for donations to the privately-financed US pavilion project (donations that are often measured in the millions of dollars). She has also solicited and raised money from Chinese companies. In both cases, her actions, and relationship to Dr. Kasoff have gone mostly unquestioned.

Those questions need to be asked.

In late 2008, as part of the lead-up to Hillary Clinton’s appointment as Secretary of State, concerns were raised in many quarters about the potential conflicts of interest created by her husband’s fund-raising for his private foundation, and Secretary Clinton’s official duties. Senator Richard Lugar framed the issue concisely: “The foundation exists as a temptation to any foreign entity or government that believes it can curry favor through a donation.” As a solution, the Clintons agreed to an annual disclosure of the foundation’s donors, and to subject future donors to a review by a government ethics officer. This is a reasonable if rather weak solution to the problem (thoughtful voices have suggested much stronger measures were in order), and one would think that Kasoff and Eliasoph – senior government official and non-profit fundraiser – would be subject and agreeable to the same kind of arrangement. After all, the US pavilion has been struggling mightily for funding for more than a year, and the failure to raise it has become an official embarassment – both to the State Department and Ms. Eliasoph personally. With that in mind, and using Senator Lugar’s language, the US pavilion could exist as a temptation to any foreign entity, government, or US corporation that believes it can curry favor [with Dr. Kasoff] through a donation.

There is an irony here: the State Department and USA Pavilion, Inc., the non-profit authorized to run the US pavilion fund-raising, design, and construction effort, have so far refused to release their “Action Plan” governing the US pavilion, and which – presumably – includes ethics and conflict of interest rules for those involved in the project. As a result, a private citizen has actually gone through the trouble of filing a Freedom of Information Act [FOIA] request for those materialsa request that the State Department still hasn’t fulfilled. Why the secrecy? It’s anybody’s guess. But it’s likely the case that the undisclosed Action Plan includes provisions that the State Department and USA Pavilion, Inc find unflattering, if not embarrassing. For example, last year, in the course of reporting a story on the US pavilion, I obtained confirmation that the State Department had changed the pavilion’s strict fund-raising rules so as to allow donations from foreign entities, including foreign corporations. No date was given for the change; but previously, for reasons undisclosed, State Department officials had good reasons for not allowing such donations.

Last year, when I attempted to contact Mr. Kasoff in regard to his relationship to the USA Pavilion, a spokesperson for the ITA wrote to tell me that Dr. Kasoff “has recused himself from this issue.” Other reporters and individuals who have attempted to broach this subject with Dr. Kasoff, USA Pavilion, Inc, and State Department employees, have been told that a) the Commerce Department has no role in the US pavilion project, or b) Dr. Kasoff is above reproach. Both of these answers may be true, but they don’t answer the questions: namely, what are the fund-raising rules for the USA pavilion, and what role – if any – has Dr. Kasoff had in the USA pavilion effort, including his role – if any – in obtaining State Department authorization for his wife’s organization. And, even more seriously, neither answer prevents a US or Chinese corporation from thinking that maybe – just maybe – a donation to the US pavilion might help them with whatever trade compliance or market access issues they’ve been having.

I’d like to ask Dr. Kasoff these questions in person, and if I didn’t have a prior, unbreakable engagement, I’d happily fly to Beijing on Friday morning to attend his luncheon briefing in hope of doing so. Alas, I will be in Shanghai, and so it’s my hope that somebody else will ask the questions for me. Luncheon registration information is available here. The event is officially off-record, but I’m sure that – in hope of clearing up any confusion – Dr. Kasoff will be happy to wave that rule to clear up this matter.

15 thoughts on “The US Pavilion at Expo 2010, Conflicts of Interest, and Deputy Assistant Secretary of Commerce, Dr. Ira Kasoff – UPDATED

  1. Curiouser and curiouser. It will be interesting to read what was discussed at that luncheon.

  2. This seems to me to be the real problem with Eliasoph Kasoff relationship and not any wild conjecture about what might or might not have happened during the awarding of the pavilion. The potential for conflict is real and somebody should have stepped down long ago.

  3. This is what happens when agencies operate knowing that nobody cares about what they’re doing on an issue. The author is right that there is little difference with the clintons and this fiasco but he’s wrong to think that anybody is looking other than him. If people were looking the deputy assistant wouldn’t dare risk his pay grade and pension on this. This is corruption committed by limp bureaucrats who live coddled lives and imagine that they deserve better. Who gives a damn?

  4. The mainstream press seems ignorant — willfully ignorant.

    Access to those in power seems an irresistible temptation and cause for compromise.

    Another reason why the US shouldn’t be lecturing other nations about their devotion to freedom of expression and a free press. Its own press appears to be bought.

  5. David Barboza did a puff piece for the times. I don think he was bought. I think he was lazy.

  6. Shame on Bea Camp and Tom Cooney for ignoring the indigenous efforts of the US business community in Shanghai who tried to do something better and cheaper. Their reputations will forever be tarnished by their involvement and arrogance.

  7. In regard to comment #8 – Bea Camp is the US Consul General in Shanghai. Tom Cooney is the Deputy Commissioner General for the US pavilion. I’ll let that comment stand, but – for future reference – readers, take care not to make your comments personal.

  8. State has been playing for time on this thing, hoping that whatever mistakes were made in process would be forgotten when the pavilion opened to universal accolades. I don’t think they ever considered the possibility that the pavilion design would be criticized. They have to be worried now that it’s becoming obvious that the building will be panned. That will open them up to all kinds of questions about how it was chosen. Somebody has to be wondering if State would have been better off declining the Expo invite.

  9. I think blaming Bea Camp is a bit much. What did you expect her to do? Tell Foggy that the business community in shanghai is better capable of handling the pavilion than an inexperienced lawyer in Beijing and her friend in LA? You expect too much my friend.

  10. It is true that Commerce has nothing to do with the US Pavilion. It is not true that the expat community in Shanghai was ready to manage or oversee the US Pavilion. It can hardly raise enough money to support the AmCham in Shanghai much less a US Pavilion. And it’s not true that allowing foreign companies to contribute is something new. When the Expo was in Japan it was underwritten by Japanese corporations because even then, Congress prohibited US Govt funds to be used to build the US Pavilion.

  11. Jay –

    The rules under which the 2010 pavilion operates are different than the rules under which Aichi operated. And it is very much the case that the rules for the 2010 pavilion were changed mid-stream, from prohibiting foreign contributions, to allowing them. The State Department will confirm that if you inquire.

  12. Certainly never send a China expat to do a man’s work. Many can now see how Americans (and other foreign friends) conduct business in China.

  13. Jay, you don’t need to be apologist for the State Department. It does good spin jobs on its own without anyone’s help. In fact, that’s most of what it does.

    The Big Lie that Congress prohibited funding for the Expo was discredited in 2008. Rice or Clinton at any time could have gone to the Congress for funding. They purposely chose not to, it seems, in order to sell the pavilion for corporate financial and political favors.

    While it may be true that Commerce institutionally had nothing to do with the Expo, Adam herein is addressing one influential Commerce assistant secretary’s role. No fair changing the topic, Jay.

    As for Aichi, stinky as the precedent it set may be, at least in 2005 State twisted the Japanese arm pretty much in public. (Toyota American actually contributed the lion’s share.) For Shanghai, the Chinese role — amounting to $1 million at least, probably more — has been strictly under the table, to save face.

    But according to the scuttlebutt, no one in Beijing or Shanghai is particularly happy about these developments or the people allegedly behind them including Consul General Bea Camp her henchman, Tom Cooley (since promoted to Deputy Commissioner General for the Pavilion), or the AmCham leadership. There will be a payback, it’s rumored. Given the current damp relations between China and the USA, it may have already started.

    If this stone is turned over and the sunshine allowed in, the little (and some big) bugs are going to start scuttling. In an election year, this could really smell bad.

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