Congress and the White House appear to have reached a deal on a landmark North American free-trade agreement (not to be confused with the North American Free Trade Agreement), and few people in Washington are more pleased about it than Mike Pence.
Since President Donald Trump took it upon his administration to remake North American trade policy, upending a 20-year tenure of mostly free-flowing goods on the continent, it has largely fallen to the vice president to whip up support for the plan in Congress, among the president’s supporters, and in the public more generally.
In a statement Tuesday, Pence was characteristically deferential to his boss. “Thanks to the strong leadership of President [Trump] and the efforts of our Administration over the last year, Speaker Pelosi and Congressional Democrats have finally acquiesced to the voice of the American people have agreed to allow a vote on the USMCA in the House,” he tweeted. But the deal was undoubtedly a win for Pence personally.
It was also significant for the sprawling influence operation that sprouted up in Pence’s political orbit amid his central role in negotiating a deal with high financial stakes for many huge U.S. companies. As Pence spearheaded the administration’s U.S.-Mexico-Canada Agreement push, the vice president’s office became a nerve center of the K Street apparatus focused on tweaking, navigating, or pushing for the trade deal. And with Fortune 500 companies and leading trade associations determined to advance the best trade deal possible, a cottage influence industry quickly emerged within the inner circle of Pence aides and advisers, who found themselves in positions of immense influence over one of the most economically important measures of the Trump presidency.
The result was an intertwined network of campaign operatives, lobbyists, advocacy groups, and political organizations with ties to or the ear of the vice president.
The Trump administration announced in May 2017 that it would be renegotiating NAFTA, and corporate America quickly realized that Pence’s office was the hub of the administration’s work on the emerging USMCA.
Throughout the entire Obama administration, an average of about 12 lobbying clients per year reported tasking their representatives in Washington with contacting the vice president’s office while working on trade-related issues. In 2017, that number more than doubled to 29. The following year it shot up to 66. Through the first three quarters of 2019, lobbyists working on trade matters for 38 different clients reported hitting up Pence’s office.
Some major clients working on the USMCA specifically reported contacting Pence’s office in 2018 and 2019. They included the Chamber of Commerce, Chevron, Pfizer, Morgan Stanley, and the American Automotive Policy Council.
As other branches of the administration worked behind the scenes on crafting the USMCA, Pence became its most prominent public face. He headlined frequent USMCA-themed events from Florida to Virginia to Wisconsin for the pro-Trump dark-money group America First Policies, which took the institutional lead among friendly political outfits in promoting the trade deal.
Pence’s key role in shepherding the deal made him a key point of influence for outside interests looking to affect the deal or its contents. That put a premium on the services of those in a position to influence Pence himself. Fortunately for the companies and trade associations looking to bend the vice president’s ear, he’d already turned his office into a nexus of Trump-era influence-peddling.
Phil Cox capped off the 2014 election cycle with a tremendously successful run as the executive director of the Republican Governors Association. The GOP picked up four Democratic-held gubernatorial seats, and gave up just two. When the dust settled, Republicans controlled 31 of the country’s 50 governorships.
After the 2014 cycle, Cox teamed up with a one-time rival, former Democratic Governors Association Executive Director Colm O’Comartun, to form 50 State, a public-affairs shop focused on state capitals. “With Washington, D.C. mired in partisan gridlock, companies and interest groups find it more and more difficult to achieve their policy goals at the federal level,” the firm’s website reads. “The real action—and opportunity—is at the state level.”
But just a few years later, Cox recognized opportunity at the federal level as well. Weeks after Trump’s election, he formed a new firm, GuidePost Strategies, that soon went to work in Washington.
GuidePost has eight federal lobbying clients, according to congressional disclosure records. And according to the Federal Election Commission, four of them—drug company Eli Lilly, engineering giant Honeywell, satellite communications firm Intelsat, and tobacco company Reynolds American—have donated the per-cycle legal maximum to Pence’s PAC, the Great America Committee, since hiring GuidePost.
Cox hasn’t worked for Pence, but he has some notable connections in the VP’s orbit. His predecessor at the RGA, Nick Ayers, was the vice president’s first chief of staff, and in early 2018, Ayers sold the assets of one of his companies, C5 Creative Consulting, to GuidePost. In September 2017, Cox replaced Phil Musser, another former RGA executive director and a longtime Pence adviser, as the chairman of the Republican digital consultancy IMGE. That came just weeks after Great America began cutting five-figure checks to the firm.
Later that year, Cox would also succeed Musser as the president of a dark-money group called the American Economic Freedom Alliance that has worked closely with IMGE. The group was incorporated in 2017 by Michael Adams, who serves as Great America Committee’s legal counsel. Its latest publicly available tax filing lists its executive director as Catherine Chestnut, the director of operations at GuidePost. And one of AEFA’s directors is Marty Obst, a senior political adviser to Pence and Great America’s executive director.
Obst, Cox, and Marc Short, who would soon sign on as Pence’s chief of staff, also teamed up this year to form a separate outfit, Trade Works for America, explicitly to push for USMCA’s passage. That group “is being run out of GuidePost similar to how other firms also manage coalitions,” a source familiar with the arrangement told PAY DIRT this year. Its staffers include Chestnut and GuidePost principals Generra Peck and Andy Koeing, a former Short aide.
Trade Works for America is funded by “the pharmaceutical industry, oil and gas, the automotive and agricultural sectors, and traditional GOP donors,” Cox told Axios in February. The group ran ads and held events in states around the country pushing for USMCA’s passage. Its goal, Cox told Politico over the summer, was “to get Speaker Pelosi to bring the USMCA to a vote.”
When PAY DIRT first reported on Cox’s dual roles with the American Economic Freedom Alliance and Trade Works for America, he told us 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.”
But there was one crucial distinction: Trade Works for America was an unqualified USMCA supporter. But AEFA had some very particular concerns. The group worried that stringent requirements on foreign-sourced auto parts would imperil jobs in South Carolina.
“South Carolina workers ship cars to 140 countries across the globe—but now their jobs are in jeopardy due to unfair trade policy,” the group lamented in a number of Facebook ads. “Fight back against harsh USMCA deadlines.”
That was an oddly specific line of criticism, but it dovetailed with the interests of another of GuidePost’s clients, German automaker BMW. That company has a huge plant in Spartanburg, South Carolina, but it imports engines from Germany, potentially putting it on the wrong side of USMCA standards that require more auto parts to be sourced in North America. BMW has already eyed a new plant in Mexico to comply with the rules. But building such a facility takes time, and an extended deadline could save a bundle.
The final implementing language of the USMCA—the actual legislation that Congress will consider—hasn’t yet been made public. So we don’t know whether BMW will get a reprieve from those deadlines. We also don’t know whether Honeywell and Eli Lilly, two other companies for which GuidePost reported lobbying on trade issues, managed to affect the final product. And we don’t know whether any of the other companies that have lobbied Pence’s office on trade issues generally or the USMCA in particular landed any goodies in the legislation.
But regardless of the final product, or the outcome of the USMCA vote, it is clear that this policy fight has been a boon for Penceworld.
