Hogan Lovells Lobbying Team Went to Bat for ZTE in Sanctions Row

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Hogan Lovells office in Washington. Credit: Diego M. Radzinschi / ALM [/caption] The Chinese telecommunications giant ZTE Corp. enlisted Hogan Lovells for lobbying help in April as the company pushed to ease penalties over past violations of U.S. sanctions against North Korea and Iran. ZTE USA Inc. hired Hogan Lovells regulatory partner Aaron Cutler and former Republican U.S. Sen. Norm Coleman of Minnesota, now a senior counsel at the firm, to lobby on national security issues and on the seven-year export ban against the company, according to a lobbying disclosure filed June 1. Cutler is a one-time aide to former House Majority Leader Eric Cantor. The engagement has deepened ZTE’s relationship with Hogan Lovells, which had advised the company last year in its efforts to comply with the terms of a $1.19 billion settlement with U.S. authorities over shipments of electronics to North Korea and Iran. The U.S. Commerce Department said it followed-up a year later after discovering ZTE had made false statements about the steps it took to punish employees involved in the sanctions violations. The export ban poses an existential threat to ZTE, which said in May that it had ceased “major operating activities.” In the midst of trade talks between the United States and China, however, the company’s plight has apparently drawn sympathy from President Donald Trump. Citing job losses, Trump tweeted in May that he was working with his Chinese counterpart, President Xi Jinping, to give ZTE “a way to get back into business, fast.” Commerce Secretary Wilbur Ross traveled to China for trade talks over the weekend that ended in an impasse, according to multiple press reports, with no resolution over ZTE. Hogan Lovells began lobbying for ZTE on April 18, according to the disclosure. The form was filed under the Lobbying Disclosure Act, the law that applies to influence work for domestic companies but can also cover advocacy for international companies that is not coordinated or funded by a foreign government or political party. Hogan Lovells declined to comment about its advocacy for ZTE. On ZTE’s behalf, Hogan Lovells in May struck a three-month consulting contract with the lobbying and public relations firm Mercury Public Affairs. That agreement was disclosed to the U.S. Justice Department on May 24 under the Foreign Agents Registration Act—an obscure lobbying disclosure that has found prominence amid the special counsel investigation into Russian interference in the 2016 election. Former Trump campaign chairman Paul Manafort and his business associate Rick Gates hired Mercury in connection with their work for European Centre for a Modern Ukraine. The firm later came under scrutiny from Special Counsel Robert Mueller’s team in connection with the work. Mercury, which said last year it was cooperating with Mueller, has maintained that Manafort and Gates misled the firm about the Ukrainian group. In 2017, the firm retroactively registered, explaining that it had initially not done so because the European Centre for a Modern Ukraine had given assurances that the group’s activities were not directed or financed by a foreign government or political party. Mercury Public Affairs appears to have taken a cautious approach in registering its work for ZTE. The firm said it has “no direct information concerning any level of government control or funding over ZTE Corporation” but was registering nonetheless with the “understanding that the work done under this arrangement may inure to the benefit of the People's Republic of China.” Bryan Lanza, managing director of Mercury’s office in Washington, is working for ZTE on the export ban. Before joining Mercury, Lanza served as deputy communications director for the Trump campaign and, later, communications director for the transition team. Lanza did not respond to requests for comment. Hogan Lovells partner Stephen Propst, who focuses on economic sanctions, signed the Mercury consulting agreement for the firm, as did Shen Nan, ZTE's acting chief compliance officer. Read more:Revenue Tops $2 Billion at Hogan Lovells, Led by Corporate PracticeUS Wants to Implant Compliance Officers at China's ZTE Corp.ZTE Corp. Pleads Guilty to Violating Iran Trade Sanctions