Photographer: David Paul Morris/Bloomberg

Trump’s Trade Representative Could Negotiate for His Biggest Client’s Industry

  • Lighthizer represented U.S. Steel in various trade disputes
  • USTR nominee disclosed assets of at least $18.6 million

President Donald Trump’s pick to become the top U.S. trade representative could find himself making policy decisions that affect his biggest former client, a review of his ethics agreement shows.

As a private attorney, Robert Lighthizer represented U.S. Steel Corp., the nation’s second-biggest producer in an industry that Trump has promised to revive by renegotiating trade rules. Lighthizer has agreed to sit out for two years on any decisions that specifically involve former clients at the law firm Skadden, Arps, Slate, Meagher & Flom LLP. But that won’t block him from matters that affect the industry as a whole, according to experts who reviewed the agreement posted Thursday on the website of the federal Office of Government Ethics.

Lighthizer’s agreement adheres to standard practice, said Stan Brand, an attorney and government-ethics expert at Akin Gump Strauss Hauer & Feld LLP. Ethics laws require only that Lighthizer recuse if his former firm or his former clients are directly involved in a matter and he has a “decision-making role,” Brand said.

Meredith McGehee, chief of policy for Issue One, a group that aims to reduce the power of money in politics, agreed that Lighthizer’s plan adheres to ethics laws. However, she said, “the prospect that he is going to be deeply involved in making decisions that will affect his clients or his firm’s clients is troubling.”

Lighthizer didn’t respond to a request for comment. “Ambassador Lighthizer has spent his career defending the interest of American workers,” said White House spokeswoman Lindsay Walters. “That is exactly what he intends to do should he be confirmed.”

‘Skyscrapers Soaring’

Reviving American steel production was one of Trump’s recurring campaign themes last year. In an August speech in Detroit to lay out his economic agenda, he promised, “American steel will send new skyscrapers soaring. We will put new American metal into the spine of this nation.”

Lighthizer has represented Pittsburgh-based U.S. Steel in trade disputes with firms from major trading partners including China, Japan, Taiwan and South Korea. Two cases in which the company claimed that foreign governments were subsidizing their steel industries were decided in U.S. Steel’s favor in June.

Lighthizer also this week disclosed assets worth between $18.6 million and $73.8 million. (Nominees for government jobs list their holdings in broad ranges.) He said he would sell 56 assets, including stock in energy, tech, manufacturing and banking firms. He also listed two sources of income: Skadden paid him about $1.8 million last year, of which at least $5,000 came from his work for U.S. Steel. Nominees are required to disclose clients who paid them at least $5,000 but they don’t have to provide the total income.

Two-Year Recusal

In his ethics agreement, Lighthizer also pledged to recuse himself from matters involving his former law firm for two years, a requirement for all incoming appointees.

One area where he might be sidelined is the Committee on Foreign Investment in the United States, a nine-member panel of government officials, that determines whether foreign purchases of U.S. firms could compromise national security. The USTR is a voting member of the panel, and Skadden has a significant practice before it. Over the past two years, the firm’s CFIUS specialists were involved in at least 13 deals worth $76.5 billion, including transactions involving foreign purchasers from China, Saudi Arabia and Singapore, according to the firm’s website.

Skadden has about 1,700 attorneys working in 22 offices in the U.S. and 11 foreign countries including major trading partners like China, South Korea, Japan and Germany, according to its website. It represents about half of the Fortune 250 industrial and service companies.

Eligibility Question

Lighthizer has already faced some scrutiny over his registration to lobby on behalf of five foreign clients. In 1985, he registered with the Department of Justice to lobby on behalf of the government of Brazil in a dispute over ethanol, a move that raised questions among lawmakers regarding Lighthizer’s eligibility to serve as USTR. A 1995 law bars anyone who registered to lobby for a foreign government in a trade negotiation or a trade dispute from serving as USTR.

Last week, a spokesman for Senator Orrin Hatch, chairman of the Senate Finance Committee, the panel that will consider Lighthizer’s nomination, said the committee would review the matter. Congress could grant a waiver that would allow Lighthizer to serve.

Skadden hasn’t lobbied for a foreign client since 2008, when the firm represented Dubai Aerospace Enterprise Ltd. in its acquisition of a pair of U.S. aviation companies, according to disclosures with the Justice Department. 

In 1993, the firm represented Cemex, the Mexican cement maker, ahead of the passage of the North American Free Trade Agreement, and signed a contract to lobby for the Government of Mexico in October 2001, disclosures show. Skadden advocated on immigration reform and trade policy relating to sugar and tuna, and monitored efforts to block Mexican truckers from access to U.S. highways that were permitted under NAFTA. For that work, Skadden took in $630,000 in fees through the end of 2002.

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