Wednesday, August 10, 2005


PD says Kraftmaid/Masco tariffs are b.s. as reason for LaTourette CAFTA vote

Stephen Koff at the PD seems to be all over the LaTourette CAFTA vote like a bad after shave - and it's a good read.
So when U.S. Rep. Steve LaTourette said he suddenly learned that the company had been socked with tariffs on Central American plywood -- and that they jeopardized the company's jobs in Ohio -- he decided to vote for a controversial trade pact to eliminate those tariffs.

"Absolutely," he said after the vote two weeks ago, confirming that his motivation was solely to protect KraftMaid jobs.

One problem: No U.S. company has to pay tariffs on plywood from Central America, according to trade records reviewed by The Plain Dealer and interviews with industry and trade officials.
About 10 days ago, we were the first media source to suggest that KraftMaid's parent company, the large conglomerate Masco, may have had something to do with LaTourette's vote. We also noted that Masco chief Richard Manoogian had strong GOP ties and had personally given $100,000 to the RNC.

Koff, to his credit, also picks up on this train of thought:
But KraftMaid is owned by a larger corporation, Masco Corp., whose Michigan-based chairman is a major Republican donor. Richard Manoogian donated $115,000 to the Republican National Committee and its affiliates between 2002 and 2004, as well as $4,000 for Bush's re-election, records from PoliticalMoneyLine show. He has stayed overnight at the White House as a guest of Bush, according to the Center for Responsive Politics.
Koff also seems to be giving low perfomance marks to newbie U. S. Trade Representative (and former OH-2 congressman) Rob Portman. Koff doesn't actually accuse Portman of spreading disinformation, but he comes awfully close, and maybe Koff has a few more shoes to drop on the Portman angle:
After his conversation with [KraftMaid President Tom] Chieffe, LaTourette asked U.S. Trade Representative Rob Portman's office about the issue, according to LaTourette's statement. Portman's office sent over a document listing plywood products, enumerating their 8 percent "base" tariffs and stating that CAFTA would eliminate those tariffs.

But that list is misleading, according to both a private and a government trade lawyer. It cites the tariffs charged under the United States' normal trade relations program but fails to note a crucial fact: "Base" tariffs on most Central American exports - including wood and wood products - do not have to be paid because of other exemptions already given by Congress.

So there was almost no risk that companies would lose their breaks even if CAFTA failed, trade experts said.

[. . .]

Portman's office acknowledges giving LaTourette a paper that made it appear CAFTA would eliminate the 8 percent tariffs. It defended its actions in interviews with The Plain Dealer over the last week, saying the existing plywood exemptions were not as sweeping as those offered under CAFTA.

"And this locks in the benefits and therefore locks in the supply" of plywood, said Matt Niemeyer, Portman's congressional affairs liaison.

Yet figures from the International Trade Commission, an independent panel, and the Census Bureau, citing tariff collections, show that to be an unnecessary distinction in the claim that tariffs were jeopardizing a big corporation.

Plywood was exempt before CAFTA - and still will be exempt when CAFTA eventually goes into effect.
Something tells us there is an enormous, behind-the-scenes story that explains all this. Given that LaTourette essentially cast the deciding vote, the implacations are huge.

Now, LaTourette is no dummy and he's usually not naive. So, did he get hoodwinked by Portman and KraftMaid? Did he let himself get hoodwinked by not asking too many questions? Did he get a call from Manoogian, himself? Did Portman know the tariff claims were bogus, and if so, who did he get clearance from in the White House to distribute the misleading info? And if Portman knew they were bogus, what is this going to do to his credibility as the Trade Representative?

We hope Koff will let us know.


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