Posts Tagged ‘Diplomats as salesmen’

No surprise: US diplomats acted as Boeing salesmen

January 3, 2011

It comes as no surprise that diplomats and government officials are heavily involved in lobbying and “advocacy” in favour of major corporations in international trade. This applies for sales of all defence equipment, commercial aircraft, major rail transport projects, nuclear and conventional power plant and -in short – virtually all large projects where jobs at the seller’s establishment are involved.

Virtually every visit of a head of government to another country reserves a great deal of time for commercial lobbying activities. Large companies look to such visits to bring purchasing decisions to a head and the months preceding such visits are periods of intense co-operation between commercial sales people, diplomats, bureaucrats and politicians in both countries. So called “agents” (essentially middle-men with “sticky” fingers) thrive on such activity.  During such periods I have seen how diplomats take directions from sales people at private companies or from the “agents”. The ability to access and trigger such “advocacy” is of huge competitive advantage for the companies involved. It is here that large international companies can bring factors outside the conventional sales criteria into play.

It is not just the US or just Boeing involved in such advocacy. Nearly every country indulges in this. The UK (British Aerospace for example), France (Areva and nuclear power or Alstom and High speed trains) or Germany (Siemens for power plants or trains or VW at car factories) are all engaged in similar advocacy. But the particular case of US diplomats acting as salesmen for Boeing is reported by the New York Times from the Wikileaks release of diplomatic cables and these reveal some of the “perks” and extra factors that are brought into play. Such as

The king of Saudi Arabia wanted the United States to outfit his personal jet with the same high-tech devices as Air Force One. The president of Turkey wanted the Obama administration to let a Turkish astronaut sit in on a NASA space flight. And in Bangladesh, the prime minister pressed the State Department to re-establish landing rights at Kennedy International Airport in New York. Each of these government leaders had one thing in common: they were trying to decide whether to buy billions of dollars’ worth of commercial jets from Boeing or its European competitor, Airbus. And United States diplomats were acting like marketing agents, offering deals to heads of state and airline executives whose decisions could be influenced by price, performance and, as with all finicky customers with plenty to spend, perks.

To get the interest of their own politicians and governments every large corporation knows that the magic key is being able to link the sale being pursued to jobs in the home-country and especially in the constituency of the home-politician. “Job creation” is the magic mantra that no politician can resist or can afford to ignore. The use of dubious agents or the use of “undue” influence or the flow of a few percent of the contract value  through some side-channels or the provision of some “perks” to politicians and bureaucrats through the entire chain from supplier to purchaser become critical and pervasive.

When the potential of job creation is involved, questions of ethics are rarely raised and the system of high level corruption is perpetuated.

NYT report

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