Lawmakers' trips to Baku conference raise ethics questions
Question lingers: Who paid tab for luxury jaunt prior to sanction vote?
By Will Tucker and Lise Olsen
July 26, 2014 | Updated: July 27, 2014 12:16am
Larry Luxner
Security guards were posted outside the Heydar Aliyev Center in Baku,
Azerbaijan, the site of the 2013 conference organized by Houston
businessman Kemal Oksuz.
In May 2013, Richard Lugar, former U.S. senator and onetime chairman
of the Senate Committee on Foreign Relations, took the podium at a
sleek, modern convention center in the capital of Azerbaijan and urged
the U.S. Congress to exempt a natural gas field in the Caspian Sea
from economic sanctions against Iran.
The Baku conference was sponsored in part by SOCAR, the Azeri national
oil company, and the vast Shah Deniz gas field was a potential
game-changer in the country's quest to become a major player in global
energy circles.
But one of SOCAR's partners in the Shah Deniz project was the Iranian
national oil company, NIOC, and Congress was considering a new round
of sanctions against Iran, Azerbaijan's neighbor, that could
potentially derail a $28 billion project.
The Azeris, SOCAR and other major energy partners in the Shah Deniz
project desperately wanted an exemption.
Ten congressmen and 35 staffers accepted all- expense-paid trips to
the Baku conference. In Lugar's audience that day were three members
of the U.S. House of Representatives who sit on the House Foreign
Affairs committee considering Iranian sanctions - Texas Reps. Steve
Stockman and Ted Poe, both Republicans; and Gregory Meeks, D-N.Y.
Less than two months later, the day before the House vote, the Shah
Deniz exemption mysteriously appeared in the final draft of the
sanctions bill, which passed.
It's unclear who engineered that last-minute change.
Ethics rules at issue
A Houston Chronicle analysis of reports that Stockman, Poe, Meeks and
the seven other U.S. lawmakers later filed with the House Ethics
Committee show that none disclosed any sponsorship of their Baku
conference trips by corporations, foreign governments or lobbyists.
Taking a foreign trip to a conference sponsored by corporations that
employ lobbyists appears to be a violation of congressional ethics
rules, according to the House ethics manual.
The conference in Azerbaijan's capital included a discussion by Kemal
Oksuz, right, with President Barack Obama's 2008 campaign manager,
David Plouffe.
Only five of the 10 American lawmakers who made the Baku trip agreed
to respond to the Chronicle's questions and said they complied with
disclosure requirements.
The 2013 conference, called "U.S.-Azerbaijan: Vision for Future," was
held at the Heydar Aliyev Center in Baku, a gleaming white
architectural masterpiece by the Caspian Sea that, though named for a
despot, serves as a symbol of Azerbaijan's transformation from former
Soviet-bloc state to an energy-rich political player.
SOCAR, along with other Azeri government interests, has become one of
Washington, D.C.'s big spenders in efforts to win American allies to
get its petroleum products to markets worldwide.
Public records, programs, photos, emails and interviews collected by
the Chronicle confirm that lobbyists, the Azeri government and energy
companies all participated in the elaborate Baku gathering.
In addition to the 10 U.S. House members and staffers, state
legislators and local politicians accepted all-expense-paid trips to
the conference, which was festooned with the logos of SOCAR's powerful
energy allies, including BP and ConocoPhillips.
Along with Stockman and Poe, Texas lawmakers Sheila Jackson Lee and
Ruben Hinojosa, both Democrats, made the trip.
At least four congressmen took along a spouse or fiancé. Some flew
first-class and extended their trips with stays in luxury hotels in
Turkey. The congressional travel tabs alone totaled $270,000, trip
reports compiled by the Chronicle show. That doesn't include fees or
expenses paid to former government officials, like Lugar, who attended
as speakers. He declined an interview request.
And according to documents, those bills were covered by five related,
U.S.-based Turkic nonprofit organizations, one of which, the Turquoise
Council of Americans and Eurasians, is based in Houston and described
itself as the event's "organizer."
Under federal law, the Turquoise Council was required to disclose any
corporate support or foreign government assistance for the Baku
congressional trips. The Chronicle's analysis indicates it did not.
Scandals led to reforms
Scandals involving jaunts enjoyed by lawmakers to Caribbean islands
and lavish European golf outings prompted the House of Representatives
in 2008 to approve reforms that banned lobbyists and corporations that
employ U.S. lobbyists from planning or funding foreign trips.
But foreign governments or corporations can still donate to nonprofits
that give foreign trips to congressmen - a loophole that has created a
boom in nonprofit-funded trips - provided both the nonprofits and the
lawmakers disclose such support.
"Knowing the sponsors of these fact-finding trips gives voters the
opportunity to hold their representatives accountable for any improper
relationships. Without transparency there is no accountability," said
Benjamin Freeman, a senior policy adviser at the nonpartisan Third Way
in Washington, D.C. "How often does this happen? The honest answer is
that we have no idea, because we don't know who many of these sponsors
are. That must change."
The Baku conference, the marquee event of the congressional trips,
featured a speech from Azerbaijan's president, Ilham Aliyev, whose
family controls much of his country's wealth, and focused on
Azerbaijan's political and energy agenda. It enjoyed substantial
corporate support, including sponsorships from BP, ConocoPhillips and
Caspian Drilling, as well as from SOCAR itself.
Energy giant BP confirmed with the Chronicle that it contributed
$10,000 for the convention and gave more again this year for a
follow-up event in Washington.
In an email, Houston-based organizer Kemal Oksuz said the Turquoise
Council received $10,000 from various sponsors for the Baku
conference, whose names appeared on the conference website. But Oksuz
did not disclose that in travel forms he filed for congressmen who
accepted funding from his group. Oksuz said he did not have to
disclose corporate sponsorships, in part, because "those contributions
always came after the conventions."
Nondisclosures illegal
Lawmakers who went to Baku and nonprofits alike should have disclosed
any corporate conference sponsorships, said Ken Boehm, an expert in
congressional ethics who reviewed the records at the Chronicle's
request.
By failing to do so, even after seeing event banners and websites
listing sponsors, congressmen may have violated ethics rules, he said.
Leaders of nonprofits that organized trips to Baku may have violated
federal law by failing to disclose corporate sponsors, said Boehm,
chairman of the National Legal and Policy Center, a nonprofit that
promotes ethics in government.
"Once the corporate sponsors admit their paid involvement, it's game
over for whoever signed the House pre-trip forms stating falsely that
there was no such sponsorship," he said.
To pass muster, congressional "fact-finding" trips abroad must be
organized principally for education purposes. Congressional officials
must first ask the House Ethics Committee for permission to go, and
sponsors must affirm that lobbyists will neither be involved in
planning nor accompany House members on the trip.
Nonprofits sponsoring trips must disclose support from corporations or
foreign agents. And, once they return to the United States, lawmakers
must report true sponsors of trips to the best of their knowledge.
Records show that Meeks did not disclose his Baku trip expenses until
a year after the deadline. Meeks did not respond to a request for
comment.
Congressman Poe and two other Houston-area House members - Stockman
and Jackson Lee - spoke at the conference in Baku at the invitation of
the Turquoise Council. All three took flights that cost from $10,500
to $12,000, more than the current advertised first-class fares.
Stockman got another $5,000 in campaign contributions in three
installments that same month from Oksuz personally.
Neither Stockman nor Jackson Lee responded to any questions.
Poe said all trip expenses were properly disclosed.
"The congressman does not believe he was lobbied in Baku," said
spokesperson Shaylyn Hynes. "He viewed the events as informational."
Hinojosa emphasized that "all expenses were also reported and
approved. The purpose for the trip was to learn more about U.S.
interests, and in my case, educational programs that the Azerbaijani
government is developing."
Dominic Gabello, chief of staff for Rep. Michelle Lujan Grisham,
D-N.M., said her boss used the trip as an "opportunity to learn more
about the challenges Azerbaijan faces" and specifically questioned
Azeri leaders about how they deal with poverty.
"She has not been lobbied about specific issues," Gabello said.
Vague tax records
Oksuz, a Houston public relations director, serves as president of the
Turquoise Council. He told the lone U.S. journalist present in Baku
that the event cost around $1.5 million and that he'd offered speakers
fees of $2,500. Some accepted gifts of hand-woven rugs, too, he told
the Washington Diplomat.
He leads two nonprofits that share the same suite in a Galleria office
tower, tax records show.
Both groups were identified as sponsors or organizers of the Baku
conference, and both have accepted money from SOCAR. One group, the
Assembly of the Friends of Azerbaijan, operates as a U.S.-based public
relations arm of SOCAR, according to foreign government lobbying
disclosures filed in 2014.
Via email, Oksuz answered a few basic questions, but then repeatedly
delayed and canceled interviews requested by the Chronicle. He did not
respond to requests to provide updated financial records that his
nonprofit must disclose under state and federal laws.
The Turquoise Council's 2012 nonprofit tax return, available on the
Internet, is "bare bones," discloses no expenses related to trips for
elected officials and provides unusually vague descriptions of major
funding sources, said David Nelson, a Houston attorney who specializes
in nonprofit law.
'Educational' trips
Records show the Turquoise Council shared Baku congressional trip
expenses with four other interconnected and obscure nonprofit
organizations run by Turkic Americans, all of which claim to use
"educational" trips to promote cross-cultural understanding, according
to a Houston Chronicle review of dozens of federal disclosure records
and nonprofit tax returns.
The groups included the Turkic American Federation of Midwest, based
in Chicago; an umbrella group called the Council of Turkic American
Associations, based in New York City and the Turkic American Alliance,
based in Washington, D.C.. Each group leader identified his own
nonprofit as lone trip sponsor.
Faruk Taban, leader of the Turkic American Alliance, said his group
works to coordinate efforts among 240 different community
associations. Generally, those groups work to "foster dialogue and
understanding between Turkic states - in this specific case,
Azerbaijan - and the U.S. Our work focuses as much on promoting
understanding between the countries as between the communities," he
said via email.
Many of those nonprofits are led by followers of Fetullah Gulen, a
moderate Turkish ex-imam who lives in exile in an enclave in
Pennsylvania but wields a philosophical and political influence
throughout the Islamic world. Many Gulenists are involved in prep
schools in Turkey and in Azerbaijan, as well as in charter schools in
the United States, including the Harmony Schools in Texas.
Denies hiring lobbyists
Collectively, Turkic groups have funded 272 foreign trips for members
of Congress and their staffs from 2009-2013, according to information
analyzed by the Chronicle from a database of travel data compiled by
LegiStorm. Together they have helped make Turkey the top foreign
travel destination for members of Congress, after Israel. Trips to
Azerbaijan are far less common.
Oksuz said the Turquoise Council has no formal ties to Gulen. He
denied retaining any lobbyists or foreign agents in disclosures he
made as a Baku 2013 trip sponsor.
Other records show that a SOCAR official in Azerbaijan, who normally
would have nothing to do with visa approvals, helped Oksuz obtain
visas for 21 people, including members of Congress and a lobbyist, Ari
Mittleman of the Washington firm Roberti&White, a registered foreign
agent.
Records show lobbyists attended the conference - and two reported
meeting with congressmen the day of their 12-hour return flight to the
US. There is no rule against lobbyists and congressmen meeting on
foreign soil, though there is one forbidding them from accompanying
each other on trips.
"Once they get members overseas, it's kind of back to the wild, wild
West of lobbying," said Freeman. "So long as the foreign agent and
policymaker are overseas; the requirements for reporting meetings are
void."
Historical connection
Azeri interests have continued conversations with D.C. lawmakers with
help from one of the nonprofits run by Oksuz. In April, the Assembly
of the Friends of Azerbaijan held another "U.S.-Azerbaijan: Vision for
Future" convention, this time at the Willard Hotel in Washington. It
is the lobby of the Willard, where influential men once stood around
hoping to buttonhole President Ulysses S. Grant, that inspired the
term "lobbyists."
Many of the same sponsors from last year returned, including SOCAR, BP
and ConocoPhillips. But several U.S. lawmakers advertised as speakers
did not show up. Then came a late announcement: Rep. Steve Stockman
would speak. Stockman walked to the podium and, in a booming voice,
called for the U.S. to "stand by" Azerbaijan.
"We have a lot of friends in the media who want to criticize this
country, but I've been there," he said. "The future is there ... One day
I hope for a direct flight from Houston to Baku."
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