Politics of persuasion: lobbying plays important role in Mexican Congress.

If prostitution is the world's oldest profession, the newest is lobbying--at least in Mexico, where the practice barely existed until the late 1990s.

While prominent deputies like Emilio Chuayffet (Institutional Revolutionary Party or PRI) and Juan Molinar (National Action Party or PAN) appreciate the importance of lobbyists, Pablo Gomez of the Party of the Democratic Revolution (PRD) publicly tars prostitution and lobbying with the same brush. Except, of course, lobbyists sell their services to greedy corporations rather than sex-hungry men.

This myopic view represented by Gomez and his leftist party fails to recognize the profound changes that have swept across Mexico's political landscape. When the president ruled over the country like the Tlatoani, anyone interested in influencing policy made a beeline for the executive branch. If you had a friend who was the cousin of the wife of the finance secretary, these contacts might facilitate inserting a self-serving loophole in the nation's Byzantine tax code.

Even legislators depended on the executive branch for achieving their goals. When Juan S. Millan, now the distinguished governor of Sinaloa, served in the Senate in the early 1980s, he received a call from Culiacan Mayor Jorge Romero Zazueta. Don Jorge was upset because the federal government had slashed road-building funds for the state. Millan immediately phoned Planning and Budget Undersecretary Manuel Camacho Solis, the two men met at 6 p.m. that very day near the San Angel Inn in southern Mexico City, and the politically astute Camacho restored the monies to the budget.

Back then, legislators convened only to get their marching orders from the executive. They were basically a rubber stamp device, mechanically approving the president's agenda with little or no debate.

Although personal ties continue to be extremely important, Congress is no longer a puppet of Los Pinos. This is obvious in President Vicente Fox's painful inability to push through the fiscal, labor, energy and judicial reforms he had promised as "the candidate of change."

Nevertheless, senators and deputies have not matched their success in blocking presidential initiatives with the ability to enact vital legislation of their own. As a result, Congress (with a 6.9 on a scale of 10) ranks far below doctors (8.2), the Church (8.1), the military (8.1), the Federal Electoral Institute (7.9), and other public institutions, according to the Interior Secretariat's national survey on political culture.

Some of this could be attributed to missteps due to the novelty of independence from the executive branch and the unfamiliarity with parliamentary procedure. Since 1997, no single party has held a majority in the Chamber of Deputies. And without an all-powerful president pointing the way, congressmen have had to learn the finer points of legislating--establishing policy agendas, formulating proposals, and especially negotiating and compromising--for themselves.

WINNING FRIENDS, INFLUENCING POLICY

Entering the fray, lobbyists have sought to shepherd legislation through this political maze. Most often, these lobbyists boast long, distinguished careers in public service--in Congress, in top government posts and in party politics. In large part, their experience allows them to have a better grasp of the intricacies of the legislative branch. They can also rely on long-established political connections to exert influence on or win the confidence of legislators when necessary.

Private sector organizations and business chambers also quickly recognized the benefits of lobbying Congress and promoting legislation. Congressmen have come to rely upon their input to consider how proposals may affect the interested parties.

Meanwhile two factors will greatly influence how the practice of lobbying evolves in Mexico.

First, Mexico has no laws governing lobbyists. Nothing prevents unprincipled merchants of influence from sponsoring orgies in Acapulco or giving huge contributions to a candidate's campaign war chest in the hope of receiving favors if the candidate is elected.

Anecdotal evidence also shows that often the proposals lawmakers cobble together have so many unintended ramifications that many lobbyists spend 80 percent of their time trying to defeat or modify these deeply flawed measures.

Secondly, the Constitution's no reelection provision limits the ability of legislators to master issues and procedures, as suggested above. Moreover, they have few staff members, and there is no equivalent at San Lazaro or Xicotencatl of the Congressional Research Service that provides U.S. lawmakers with unbiased, meticulously researched reports on subjects important to them, their committees, and their constituents.

STEPPING INTO THE BREACH

This is where lobbyists can play an invaluable role. Lic. Maria Emilia Farias, who founded the lobbying firm Cabildeo y Comunicacion in 1997, has won the admiration of legislators for presenting hard facts and exhaustive analyses of pending bills, often based on the track record of similar measures in other countries. "I let them know the consequences--both good and bad--of legislation on which they will have to vote," she said.

What makes Farias so effective? She understands the political agenda, has an insider's knowledge of how Congress operates, enjoys a broader network of personal contacts than most Cabinet secretaries, and her firm has accumulated an extraordinary database on legislators and legislation. She has served as a federal deputy and presidential trouble-shooter, and is currently an alternate senator (senador suplente). Additionally, her father was a federal congressman, mayor of Monterrey, and substitute governor of Nuevo Leon.

In contrast with other firms, Cabildeo y Comunicacion has only nine clients, so Farias can give personal attention to the companies, agencies and NGOs she represents.

Lic. Gustavo Almaraz Montano created the Grupo de Estrategia Politico (GEP) in 1996, which makes him the respected dean of the Mexican lobbying corps. His experience in PRI politics, especially in the northern states, as well as his three years as a senator (1988-91), is evident in the thorough analysis he presents to clients. GEP is now engaged in trying to convince legislators to pass the controversial Law on Gambling and Lotteries (Ley Federal de Juegos y Sorteos), which Don Gustavo hopes to see approved "no later than April 2005." Needless to say, various moguls--some on moral grounds, others for business reasons--have lined up on the other side of the fence on this issue.

Lic. Javier Medina Medina is one of the newest lobbyists on the Mexican scene. He is the director general of legislation relations of Grupo Salinas, whose lobbying component was established by savvy political veteran Jorge Mendoza. Mendoza launched the Congressional Liaison Office because "Congress has become a real factor in the decision-making process."

The enthusiastic and thoughtful Medina, who earned praise as the Mexican Embassy's emissary to Capitol Hill in Washington D.C., insists that "to try to govern without Congress or without the participation of the people is like attempting to applaud with one hand."

Like Farias, Almaraz and Mendoza, Medina regards lobbying as a means to allow more individuals and groups to have their voices heard as Mexico rapidly moves away from its authoritarian past.

In his view: "Lobbying is one of the new forms of political interlocution that serves to avoid the abuses of authority, to fight negligence, to achieve a balance between economic and public interests, and to prevent extreme actions by the government."

"In other words, lobbying functions to level the playing field in a democracy."

Just as Farias has a comparative advantage with her formidable database and extensive contacts, Grupo Salinas' ties to TV Azteca provide lawmakers with a media outlet for disseminating their views on bills relevant to its clients.

Meanwhile, the highly regarded Grupo de Asesoria Estrategica, which forms part of the Structura group headed by former Energy Secretary and Ambassador to Washington Jesus Reyes Heroles, can complement its lobbying with in-depth economic analyses and public opinion polling conducted by its sister organization GEA.

For its part, Public Strategies de Mexico is the Mexico City office of a firm with 11 offices in the United States and one in London. It has a comparative advantage on economic issues in general and trade questions in particular. One of its top consultants, Dr. Luis de la Calle, played a key role in the Nafta negotiations and later headed the Commerce Department's office in Washington.

Ambassador Jorge Montano, the principal of Asesoria y Analisis, served as Mexico's envoy to both the United Nations (1989-92) and the United States (1993-95). He knows the Mexican political scene like the back of his hand, and is better informed about U.S. politics than most Americans. As a result, he provides advice to investors, corporations, PRI Senate members and those aspiring to succeed Fox in 2006.

Lic. Alfredo Phillips-Olmedo, founder of PSG Global Mexico Estrategica Consultores, is helping Hidalgo Governor and presidential hopeful Manuel Angel Nunez Soto enhance his knowledge of the corridors of power north of the Rio Grande. Phillips has an extensive background in Mexico's public financial sector, was ambassador to Canada (1989-91) and Japan (1991-92), and served as a federal deputy in the late 1990s.

ESTABLISHING GUIDELINES

While legislators used to lobby the executive branch, now government agencies seek to win friends and influence people in Congress. Although not involved in direct lobbying, PSG was the external advisor to the Federal Electric Commission (CFE) on reforming the nation's archaic electric power system. PSG helped draft the legal documents and proposed a lobbying strategy, although the energy secretary wound up using his own approach, which ran into a legislative brick wall.

PSG has assisted companies like AeroMexico, attempting to adapt to the nation's new political environment, to design their lobbying "strategy and define the specific actions to be taken and with whom," said Lic. Alfredo Phillips Greene, the firm's executive partner.

Farias, Mendoza, Medina, Reyes Heroles and more than a half-dozen other executives have founded the National Association of Lobbying Professionals (Asociacion Nacional de Profesionales del Cabildeo, or Procab), whose outgoing president is Julio E. Portales, director of corporate affairs for pharmaceutical giant Eli Lilly's Mexican subsidiary. The objective of Procab, which has adopted a rigorous code of ethics, is to promote professionalism in the sector. Its principles stress a commitment to "transparency," "honesty," "confidentiality," "integrity," and "fair competition."

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Portales wants to make sure lobbyists accurately present the pros and cons of relevant legislation, as well as providing sound information and in-depth studies.

"Above all, we want to prevent unscrupulous firms from trying to obtain votes by taking legislators on trips to fancy beach resorts with beautiful girls," he told me. "Such an approach is not only counter-productive, but it damages the reputation of lobbying professionals."

Medina insists any regulations should include:

* Registration of individuals and firms that lobby

* Prohibition on the use of public resources to exert influence on agencies or between branches of government

* Regulation of gratuities and gifts given to public officials

The adoption of such norms might not automatically make lobbyists purer than Caesar's wife, but they would help ensure Mexico's newest profession is not mistaken for the world's oldest.

RELATED ARTICLE: AmCham's Lobbying Efforts

Lobbying--a sophisticated, well-developed and highly effective means of influencing political leaders and policymakers--is a nascent concept in Mexico. It has existed however, if only in amoebic form, for some time.

Indeed, even in the economically and politically insular Mexico of yesteryear, business and social organizations made their positions known to the authorities, and sometimes had luck in achieving their goals. In that environment, AMERICAN CHAMBER/MEXICO'S own incursions into the field were traditionally discreet and focused on a few select executive branch contacts.

But in Mexico's new and rapidly changing political landscape a new approach to lobbying is both possible and desirable. The Chamber recognizes that part of its raison-d'etre is to help member companies resolve their day-to-day issues, and to help Mexico as a country resolve the bigger issue of competitiveness.

Last year, the Chamber created the Public Affairs Steering Group in an effort to develop a more structured lobbying and outreach program. The idea is to interact more regularly and effectively with decision-makers in both the executive and legislative branches of the Mexican government. In addition, the Chamber conducts an annual trip to Washington to take issues of concern for our members to the U.S. authorities and the U.S. Congress. But lobbying doesn't always take place behind closed doors. The Steering Group is also charged with disseminating the Chamber's actions and positions to a much wider audience through mass media channels--influencing authorities and other audiences alike.

The Steering Group works closely with the Chamber's committees and task forces, many of which have been actively involved in formulating positions on issues that affect companies, as well as discussing them with legislators and government officials. We invite members to participate in our committee system and have a bigger impact in effecting change for the good of our companies.

--Olaf Carrera, Director of Public Affairs and Government Relations at AMERICAN CHAMBER/MEXICO

RELATED ARTICLE: Differences between U.S. and Mexico

* 1. U.S. firms are often associated with Political Action Committees (PACs), which give contributions to candidates who favor their positions. PACs have yet to emerge in Mexico, where there is public financing of campaigns. The fact that U.S. lawmakers can run for re-election requires them to raise money continually--another factor that enhances the salience of the nearly 4,000 PACs in the United States.

* 2. Former members of the U.S. Congress enjoy advantages unavailable either to other U.S. lobbyists or to ex-deputies in Mexico. For example, they have access to the floor of the House of Representatives. They have also been known to use the House gymnasium.

* 3. Although weakly enforced, there are laws that govern lobbying in the US. No such legislation exists in Mexico.

* 4. While there are more than 60,000 registered lobbyists in Washington, there are only a dozen or so lobbying firms in Mexico--none of which must register.

* 5. U.S. lobbyists are quite active at the state and local level (especially in large cities). All told, there are 44,000 registered lobbyists in the 50 states. In contrast, Mexican lobbyists devote the overwhelming amount of their attention to the Chamber of Deputies and the Senate--with occasional meetings with deputies in the Asamblea Legislativa del D.F.

* 6. U.S. legislators have staffs ranging from 20 to 150 people. Thus, lobbyists often speak with staff members who are conversant with their interests. The limited staffs in the Mexican Congress mean lobbyists generally meet with the individual deputies or senators.

* 7. Except for trade and investment issues, Mexican lobbyists do not concentrate on foreign policy. There are lobbying groups and scores of PACs in the United States that exist mainly to bolster Washington's support for Israel.

* 8. So-called "Iron Triangles" help explain why tobacco companies and other industries with poor reputations are able to obtain tax benefits on Capitol Hill. The (a) industry lobbying group, which is connected to affluent PACs, works with (b) senior legislators from tobacco-producing states and (c) bureaucrats in the Department of Agriculture who administer Tobacco-related programs to keep the funds flowing. The ban on re-election has prevented the formation of Iron Triangles in Mexico.

--George W. Grayson

George Grayson, who is writing a book on Mexico City Mayor Andres Manuel Lopez Obrador, teaches at the University of William & Mary. He wrote A Guide to the 2004 Mexican State Elections, published by the Center for Strategic & International Studies in Washington, D.C. He can be reached at [e-mail].