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Politics

German companies beef up US interests

Michael Knigge Washington
May 18, 2018

Germany's largest public companies increased their efforts to influence the US government in President Trump's first year in office, a DW analysis has found. Can they cash in on a business-friendly environment?

A TV screen at the Frankfurt Stock Exchange showing the US election outcome
Image: Getty Images/T. Lohnes

With its stated agenda of deregulation, the Trump administration and the Republican-led Congress has opened the door for companies trying to reduce regulatory burdens and weaken governmental oversight.

The best publicly known example of the Trump government's openness to influence from business interests is arguably the Environmental Protection Agency (EPA) which is led by a man who leased a condo tied to a lobbyist for favorable conditions and whose deputy is a former coal lobbyist.  

Read moreShould lobbyists be excluded from climate meetings?

Given the current business-friendly and receptive political sentiment, it is not surprising that industry groups and companies would ramp up their efforts to advance their interests in the Trump administration and Congress while that window is open.

Great time to shirk regulations

"If you are a business and you see regulations that you don't like — this is a great time to try to get it changed," said Daniel Schuman, policy director of Demand Progress, a grassroots group that fights for an open government.

And it is not just US companies and business groups that have gotten the message. Germany's 30 largest publicly listed companies, the DAX 30, ramped up their efforts at lobbying the US government in the first year of the Trump presidency.

Combined they spent around $42 million (€35 million) in 2017, according to DW's analysis of data filed in accordance with the Lobbying Disclosure Act. That's an increase of 7.1 percent compared to the year before. The number of lobbyists involved also increased to 356 in 2017 from 297 the year before. Only seven of the 30 companies featured in the DAX 30 did not report any US lobbying, among them utility RWE, consumer goods maker Beiersdorf and Deutsche Börse, the exchange organization.       

Siemens with its CEO Joe Kaeser (center) is one of several German companies that have increased their US lobbying effortsImage: Reuters/C. Barria

Lobbying the Trump administration and Congress this way is perfectly legal in the US. It's also important to point out that the money companies invest in lobbying and the number of lobbyists involved can fluctuate according to current political issues. What's more, the number of lobbyists involved is not necessarily an indicator of effectiveness.

Read moreGerman giants spend millions lobbying US

Having said that, most large companies, whether American or foreign-owned with subsidiaries or strong business interests in the US, maintain a fairly consistent lobbying presence in Washington.                   

Neonicotinoids and GMOs

Just like Bayer, which has been lobbying the US government consistently since 2003. Last year, the German drug maker spent $10.5 million lobbying the Trump administration and Congress, the largest amount by far of any DAX 30 firm. Bayer, which was in the midst of a takeover bid for US chemical and seed company Monsanto, invested 14 percent more in lobbying in 2017 than the previous year. It also increased the number of lobbyists to 54 from 46.

The issues that lobbyists for Bayer, which has a sizeable US operation, were interested in are broad and range from "mergers and acquisitions," which seems to be linked to its Monsanto bid, to more controversial topics such as "neonicotinoids," "biotechnology deregulation" and "genetically modified labeling."

Neonicotinoids, which Bayer produces, are insecticides that the EU recently banned after it had concluded that they harm bees. The EPA is currently re-evaluating its stance on the substance and is among those agencies singled out by Bayer for lobbying.         

Bayer did not answer specific questions about its increased lobbying efforts. Instead the company provided DW with this one-liner: "Bayer is proud to actively participate in the US political process to ensure that our voice is heard."

Lobbying the White House

Deutsche Telekom, the second largest spender among DAX 30 companies, last year increased its US lobbying investments by 3 percent to $8.3 million. The company, which owns T-Mobile USA, has consistently been eyeing a possible merger with US mobile phone rival Sprint, a move which is currently pending approval by regulators. 

Deutsche Telekom also beefed up its lobbying staff to 76 from 67 last year and lobbied on issues related to wireless policy, cybersecurity and privacy. The company did not respond to a request for comment on its lobbying practices.

Deutsche Bank, which is under scrutiny for its financial ties to Trump, spent $600,000 in 2017 on lobbying, the same amount it had invested the previous four years. According to public records, it lobbied only the Senate and the House of Representatives, but not the White House or the Executive Office of the president, on financial regulation generally as well as financial regulation pertaining to foreign banks, tax reform and cybersecurity. 

Closing out the top lobbyists among Germany's publicly listed companies, is Siemens, the Munich-based engineering conglomerate. It cranked up its US lobbying activities by 20 percent to $4.1 million last year and the number of lobbyists to 27 from 24. Siemens, which has a large footprint in the US, reported that it lobbied on issues from cybersecurity to legislation involving the Affordable Care Act, President Obama's embattled health care reform bill. 

In a statement provided to DW, Siemens did not address specific questions about its increased US lobbying efforts and its lobbying vis-à-vis the White House. The company noted that its US government affairs team included internal lobbyists, but that the firm also uses "four federal consulting firms to assist us in our advocacy. And we are members of different associations whose apportionment of costs that are associated with lobbying, are included in our estimated lobbying expenditures."

Tariffs, trade war and unpredictability

Siemens also stated that it consistently lobbied past administrations and Congress, indicating that last year's lobbying was not a Trump-related one-off event. 

The Trump administration's anti-regulation agenda presents companies with a welcome opportunity to push for loosening of rules and restrictions that they think could hamper their business. But that's just one side of the coin. Companies, especially globally-oriented or foreign-owned firms, must also grapple with an administration that is led by a president who harbors strong protectionist impulses and is widely regarded as unpredictable.

Read moreProtectionism: from Bismarck to Trump 

Against the backdrop of US tariff threats and a possible trade war, many German companies in 2017 not only lobbied the US government on concrete business-related topics, but also on broader trade issues — out of necessity.

President Trump has threatened to impose tariffs on European products Image: Imago/Ralph Peters

"The Trump administration and this Congress are not acting predictably or some would say rationally," said Schuman of Demand Progress. "They act on impulse and they are not thinking through the consequences of their behavior, so that it is more important than ever if you represent an industry - that you want to be there in the room when they are making decisions about what they are going to do. If you are a big business you almost cannot afford not to be lobbying now — because if you do, you are taking a big chance."

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