Six years ago, the Bush administration agreed that Canadian timber producers were getting unfair subsidies from their government. So our government slapped tariffs on Canadian wood imports, collecting more than $5 billion.
But Canada challenged those tariffs in international trade courts, winning the cases but continuing to lose markets over the tariffs. So Bush finally offered a settlement: the U.S. would refund the $5 billion and drop the tariffs -- but the Canadians would pay the administration $1 billion. Why not just refund $4 billion? Well, then the other $1 billion would go to the U.S. government. This way it went to a slush fund controlled by the administration, which it could use for off-budget expenditures on behalf of timber companies and their allies.
In effect the administration privatized tariff collection -- something that used to happen in the bad old days of banana republics and corrupt regimes like Manchu China. Canadian timber interests were bitter. It's "the worst deal Canada ever made," one Canadian lawyer said. "Most of us in the industry believe it was done out of political expediency," said Ron McAllister, a Toronto timber dealer. But Bush administration officials pointed out they could have kept dragging the lawsuits out for many more years -- sound familiar?
What happened to the money? That's what Seattle environmentalist Peter Goldman set out to learn several years ago. He didn't like what he found. The money -- surprise -- didn't seem to be going to the purposes originally specified. So Goldman has sued. "This is about an administration that wanted to see this money go to friendly faces and didn't want the inconvenience of dealing with Congress."
But the White House claims that the $1 billion is not public money, because it was deposited in "special U.S. Customs accounts" and never went to the U.S. Treasury. "The United States (government) never claimed a right to the funds," said Gretchen Hamel of the U.S. Trade Representative's Office. She doesn't explain why not.
You and I might be forgiven for wondering just what a "special U.S. customs account" is -- when you come across the border and have to pay duty, you probably thought the money went to your government, regardless of which account it first hit.
It appears there was once a legal provision for trade penalties to be paid out to private groups, not the government. But the Courts repeatedly threw this provision out, and Congress allowed it to expire -- before the Canadian deal was signed.
So where did the money go? Well Goldman and his fellow plaintiffs, including the Sierra Club, have filed a Freedom of Information Act request to find out. According to an investigative story in the Seattle Post Intelligencer by Robert McClure:
The records show that the deal was monitored by Harriet Myers, then President Bush's chief lawyer. They also show that the University of Washington College of Forest Resources was among those trying to get a slice of the money. That was not successful, but a retired dean of the college was appointed to the board of the nonprofit that got the most money, the U.S. Endowment for Forestry and Communities.
The administration will next send the environmentalists a listing of all the documents the administration chose to withhold, and citing the section of the law that allegedly allows the withholding.
But most of the money has been spent, it appears, on public relations for the timber industry, including a campaign to encourage the use of wood products as a way of curbing global warming. Jon Gartma an executive with Sierra Pacific Industries involved in the project, said, "Science supports the use of wood as environmentally preferable to any other building product."
This is all reminiscent of the scandal over the arms-for-hostages deal the Reagan administration cooked up to finance the Contras back in 1986 -- with an administration that doesn't want to deal with Congress simply taking important governmental functions off the books by claiming that, as long as the bank accounts in question don't bear the citation "U.S. Treasury," it's really not Congress's or the public's business. Meanwhile, of course, our National Forests have been starved for basic services and funding over the past six years because the government "can't afford" to do the people's business.
So the rural communities and forests that were the actual victims of unfair Canadian competition -- if it was unfair -- have gotten nothing out of this settlement. That could stand as a memorial to this administration -- it's standard operating procedure. To reverse the fabulous quote from Robert Goodloe Harper celebrating Thomas Jefferson's repudiation of the Barbary Pirates at the beginning of the 19th century, this Administration finds "billions for tribute, not one cent for defense" -- or any other public purpose.