Welcome to Pay Dirt—exclusive reporting and research from The Daily Beast’s Lachlan Markay on corruption, campaign finance, and influence-peddling in the nation’s capital. For Beast Inside members only.
A conservative dark-money group behind ads criticizing President Donald Trump’s revamped North American free-trade deal is run in part by a lobbyist for leading German car manufacturer BMW, which is expected to take a hit from the deal.
It’s the same lobbyist, it turns out, who just launched a separate group promoting the deal.
The American Economic Freedom Alliance has purchased dozens of Facebook ads since December claiming that the current iteration of the United States-Mexico-Canada Agreement (USMCA), as Trump has dubbed the tentative deal, will imperil thousands of automotive jobs in South Carolina. It’s a notably specific line of opposition, but it dovetails with the interests of one of AEFA’s executives.
Washington, D.C. incorporation records list four officers for the group, including Phil Cox, a veteran Republican operative who also runs the lobbying firm GuidePost Strategies. That firm inked a deal with BMW last summer to lobby the White House on trade policy. The German company’s largest plant in the world happens to be in Spartanburg, South Carolina.
BMW’s interest in at least softening USMCA is clear. Its Spartanburg plant is facing a dire financial outlook due to Trump administration trade policies, including a USMCA measure that would force BMW to move some engine-manufacturing operations to North America or face steep trade duties.
But Cox’s role in AEFA’s ad campaign is murkier due to a parallel campaign he’s spearheading in support of the USMCA. In February, he launched another group called Trade Works for America (TWA), which supports the deal without qualifications, and even lauds its benefits for American auto workers.
Four of TWA’s publicly listed employees, including Cox, also work for GuidePost, and a source familiar with the arrangement said the advocacy group is being run out of the lobbying firm’s offices. Cox told Axios that TWA is looking to raise between $15 million and $20 million from “the pharmaceutical industry, oil and gas, the automotive and agricultural sectors, and traditional GOP donors.” At least one pharmaceutical company, Eli Lilly, is both a GuidePost client and a member of the USMCA Coalition, which supports the deal.
As TWA pushes for ratification of the USMCA, AEFA is asking its supporters to postpone a “deadline” for foreign automakers to step up North American sourcing for the parts that go into their cars. That’s a problem for BMW, which manufactures its engines in Germany and has already been forced to eye a new plant in Mexico in anticipation of USMCA’s passage.
Postponing that deadline isn’t necessarily inconsistent with ratification of the agreement as a whole. But the tone of the two groups’ messaging on the issue—TWA says auto workers are clear winners, while AEFA warns “their jobs are in jeopardy due to unfair trade policy”—is striking for how they diverge.
Cox downplayed that divergence in a statement. “Both groups support the overall mission of the USMCA and are advocating for the passage of a final measure that works for the American economy,” he wrote. “NAFTA is a 25-year-old trade agreement that is out of date. USMCA is a modern agreement that benefits our economy and American workers.”
The AEFA was created in mid-2017 and engaged in more overt politicking during the 2018 midterm elections. It donated $1.1 million to super PACs supporting Republican Senate candidates in New Jersey and Indiana. The group also spent more than $300,000 directly on ads supporting Indiana Senate hopeful Luke Messer.
As a 501(c)(4) nonprofit group, AEFA must spend more than half of its money on “social welfare” activity, which includes issue advocacy that doesn’t explicitly call for the election or defeat of a candidate. And in late 2017, the group began working on a campaign to roll back prohibitions in Indiana on the sale of beer in convenience stories.
That campaign intersected nicely with the financial interests of another one of its executives, Quinn Ricker, then the president and chief executive of Indiana gas station and convenience-store chain Ricker Oil. The company was acquired by supermarket and convenience-store chain Giant Eagle in late 2018, and Ricker took a position with that company.
AEFA has also invoked potential damage to businesses like Ricker’s in attacks on a proposal to hike tobacco taxes in Indiana. It’s been running Facebook ads since January warning, in the words of one ad, that such taxes “can have unintended consequences on local businesses like convenience stores.”
At the same time, though, AEFA has purchased a rash of Facebook ads in support of a proposal to raise the state’s minimum age for the purchase of tobacco and nicotine vapor products. “According to the CDC, 1 of every 5 high schoolers has used an e-cigarette in the last month,” one ad said. Then on Tuesday, AEFA changed course once again. It purchased 15 new Facebook ads hitting the tax issue. “This tax could kill Indiana’s e-vapor industry,” it warned. “Speak up and say that Indiana doesn’t want this vape tax.”
The disconnects between AEFA’s various advocacy campaigns, and between AEFA’s and TWA’s, baffled Brendan Fischer, the director of federal and Federal Election Commission reform programs at the Campaign Legal Center.
“Corporate front groups are nothing new, but this group’s scattershot politics are kind of bewildering,” he wrote in an email. “As best I can tell, [they’re] just a hired gun for whichever corporate interests are paying that month.”
Get the data:
