Did DC Public Relations Firm Fully Disclose Its Work For Egyptian Steel Tycoon?

Ahmed Ezz
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Egypt’s extensive military, lobbying and public relations connections in Washington have been under the media microscope since pro-democracy protests have undermined the Mubarak regime, but one contract in particular, involving a well-placed Mubarak supporter and a major DC public relations firm, hasn’t received much attention.

Qorvis Communications, a powerful player in the DC media world, had a two-year contract with Egyptian steel tycoon Ahmed Ezz from 2007 to 2008. Egyptian protesters have torched the Cairo headquarters of Ezz’s multinational steel company three times in the last month, displaying a particular hostility for Ezz and the politically powered wealth he represents, the New York Times reported Monday.

Ezz, who was until last month a leading figure in the ruling National Democratic Party and a close friend of President Hosni Mubarak’s son Gamal, is the chairman and managing director of Al Ezz Industries, a major manufacturer of steel and ceramics in the Middle East and North Africa.

The company holds more than two thirds of Egypt’s steel market share, and opposition parties, including the Muslim Brotherhood movement, have accused Ezz, a member of the Egyptian Parliament, of using his government connections to build a monopoly and hike steel prices by as much as 70 percent.

In the last two weeks, Ezz has become a symbol for protesters’ grievances with Mubarak’s administration, and the NDP appears to have turned against him in an effort to appease protesters and look responsive, although it is yet to be seen if he will be punished in any serious way.

Ezz resigned from the NDP in late January, and last Thursday the Mubarak government retracted his right to travel out of the country and froze his bank accounts in Egypt as part of a corruption investigation.

Ezz has denied allegations of corruption in the past. As of Sunday his whereabouts were unknown, according to the Times.

Between 2007 and 2008, Ezz paid Qorvis $204,000, a pittance compared to the amount the Egyptian government has paid PLM, a lobbying partnership among Tony Podesta and ex-Reps. Bob Livingston (R-LA) and Toby Moffett (D-CT). PLM does the lion’s share of the Washington lobbying work for the Mubarak regime, which pays the partnership more than $1 million a year.

But Qorvis’ contract with Ezz is much more opaque.

In 2007, Ezz paid the firm $125,000 for support of “The National Party’s Conference,” which made up “50 percent of the contract fee,” according to filings submitted by Qorvis under the Foreign Agents Registration Act (FARA) and made available through the Sunlight Foundation’s online database. It’s not clear whether the other 50 percent of the contract fee was paid to Qorvis. The following year, Ezz paid Qorvis another $79,000 for a trip to Egypt in late October and early November 2007, according to the FARA report.

It’s unclear from the brief description in the report who went on the trip or what its purpose was.

In its FARA registration, Qorvis said Ezz was not controlled by the Egyptian government or a foreign political party. In fact, if registering a foreign government or political party, the form asks for the address of each. Qorvis left that section blank.

“Mr. Ahmed Ezz is a private businessman,” Qorvis wrote on the form. “He is the chairman for Al Ezz Group Holding for Industry and Investment, also known as Ezz Industries. He is also the majority whip for the National Democratic Party of Egypt.”

Qorvis doesn’t mention its work for Ezz on its website. Instead, the firm says it worked for the NDP and helped raise awareness about “reforms” at the party’s ninth general conference in 2007. A search of the FARA online database turned up no contract between Qorvis and the NDP.

“Qorvis communicated initiatives at the party’s Ninth General Conference in 2007,” states a description of the work on its website. “Qorvis raised awareness about reforms in the areas of investment and employment, social justice, national security, and democracy and citizenship made by the party-controlled government. As a result of our efforts, hundreds of major American news outlets published articles on party reforms and numerous think tanks are now studying the modernization underway.”

Scott Thomas, a former Federal Election Commissioner who runs the political law practice at Dickstein Shapiro, said Qorvis’ filing raises questions about what interest the firm served and who paid for the contract.

“It clearly raises questions,” he said. “It looks like they were registering on behalf of an individual but it looks like the work that was done at a minimum was to promote Egypt as a country…it’s confusing.”

“You could see how — as a private businessmen — there would be an interest in promoting Egypt as a great place to invest…but that’s not what the form says,” he added. “Quite often lobbying firms that are trying to get international business — they like to say they are representing the sexiest part of it–that they are right in the political game … maybe they should have had the party listed as the foreign entity…”

Public Citizen’s Craig Holman was more critical.

“It doesn’t appear that [Qorvis] is being honest in its disclosure reports and they are also being incomplete,” he said.

The FARA disclosure system first began under President Franklin D. Roosevelt in an attempt to monitor foreign influence and any attempts to draw the U.S. into a war with Germany and Adolph Hitler, Holman explained.

“The FARA disclosure system is quite superb,” he said. “It is supposed to be a diary of what’s been going on on behalf of a foreign principal. The Qorvis reports are skeletal–one sentence descriptions. This is not what is expected.”

He also said the report is misleading because it says Ezz is not controlled by a foreign government or political party.

“It would appear that Ezz is controlled by the NDP. Even as a whip, he’s an agent of the party,” Holman said. “And I also understand he is one of largest if not the sole funder of the NPD. Qorvis is correct on their web page — that they are representing the NDP –but they are incorrect on the FARA report, when they say he is not being controlled by a foreign country or political party.”

Qorvis partner Don Goldberg declined to comment about the contract with Ezz. He told TPM the account was run by Matt Lauer, the former executive director at the State Department’s U.S. Advisory Commission on Public Diplomacy who joined Qorvis as a director in 2004 and was later promoted to managing director. Goldberg said Lauer was traveling in the MIddle East and could not be reached immediately.

Ezz remained a major player in the NDP as of late last year. He presided over the party’s parliamentary election campaign, which resulted in the opposition parties winning only a handful of seats. Amid allegations of widespread intimidation and election rigging, political analysts and even at least one NDP member criticized Ezz for going too far in trying to squelch any opposition party election inroads, according to the Times.

Qorvis is no stranger to representing controversial foreign governments. The firm has received plenty of scrutiny for its work for the government of Saudi Arabia. In 2002, Qorvis announced that it was receiving $200,000 a month for the Saudi account. Later that year, the Times reported that three of the founding partners were leaving the firm because of “deep discomfort” with the account and efforts to counter the perception that Saudi leaders had turned a “blind eye to terrorism.”

In December 2004, Justice Department officials showed up at Qorvis’ offices unannounced, although Goldberg said it was not an “FBI raid,” as previously reported. At the time, Qorvis said the Justice Department was conducting a “compliance inquiry” under the Foreign Agents Registration Act and that they had fully complied with it and thought the matter would be resolved “favorably.”

Newsweek reported that the investigation focused on a 2002 radio ad campaign allegedly paid for by a group called the Alliance for Peace and Justice, which Newsweek described as “hastily arranged and now dormant group consisting of well-established Washington organizations active in Middle East issues.”

The Justice Department reportedly looked into whether Qorvis and the Saudi embassy were using the Alliance for Peace and Justice to mask efforts to help bolster Saudi Arabia’s image within the U.S. and abroad. FARA law requires “political or ‘informational’ messages to be clearly labeled with a statement that the message was sponsored by a foreign government.”

The Justice Department never filed charges against Qorvis.

Goldberg told TPM in an e-mail that Qorvis “has never been the subject of a complaint or formal action involving FARA for any client.”

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