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Sunday, September 15, 2013

Lobbying and a Chinese Transaction

Our chapter on interest groups points out that lobbying often targets the executive branch (and in ways that are largely obscure to the general public) and may involve foreign interests.  A recent Open Secrets post illustrates these points:
The United State's largest supplier of pork has cleared a major hurdle in winning approval for its sale to a major Chinese company, thanks in part to a targeted lobbying campaign on Capitol Hill.
The acquisition of the Virginia-based Smithfield Foods, the nation's leading pork producer and processor, was cleared by the Committee on Foreign Investment in the United States (CFIUS), a panel overseen by the Treasury Department, late last week. Shuanghui International, China's largest meat processor, has proposed to buy the company for $4.7 billion -- potentially the biggest Chinese purchase of a U.S. company in history, according to Bloomberg.

Smithfield, which spent $700,000 on lobbying in the first half of this year, specifically targeted CFIUS in its lobbying efforts on the Hill, listing "CFIUS issues related to corporate transaction" as among the issues it lobbied.

The panel's decision comes amid certain misgivings from members of Congress -- including Sen. Debbie Stabenow (D-Mich.), chairwoman of the Senate Agriculture Committee -- who have expressed concerns regarding the impact the buyout will have on U.S. food security. In the past, Shuanghui was the subject of a controversy regarding its use of harmful food additives in pork products