Gary Locke: A Corporate Champion at Commerce

Our former governor takes to D.C. a record of favors for Boeing and Microsoft.

President Barack Obama’s nomination of former Gov. Gary Locke as U.S. Secretary of Commerce drew wide praise last month from government and industry officials. Senate Commerce chair Jay Rockefeller (D-W.Va.) said Locke was a “lifelong advocate and champion for American productivity,” Boeing cited his “balanced approach to business issues,” and Microsoft cheered him as an “enthusiastic advocate” for innovation.

If confirmed as commerce secretary, Locke will become the government’s voice of business, promoting trade, investment, and new jobs, along with overseeing the NOAA and the census and patent offices. But will Locke’s selection fit voters’ concept of the “change” Obama promised in his presidential campaign?

“The interesting tradition about Commerce,” says Patrick Dobel, a professor at the University of Washington’s Evans School of Public Affairs, “is that, unlike other agencies, the secretary has always been expected to be on the side of business.” Locke’s track record, says Dobel, seems to match up with that conventional role: friend to corporate America.

As King County Executive and then two-term governor until 2005, Locke at times opened the state’s pocketbook to corporations, most memorably helping billionaire Seattle Seahawks owner Paul Allen build a publicly financed football stadium and engineering a $3.2 billion tax break for Boeing to assemble its new 787 jetliner in Everett. Locke also backed a steep reduction in unemployment and injured-worker benefits, particularly those suffering hearing loss, calling it “reform” rather than the coup it was for big business. Since leaving office, Locke has quietly worked in the private sector as an attorney and consultant with Davis Wright Tremaine, a Seattle law and consulting firm. There he has represented some of the same corporations he helped as governor, including Microsoft.

Now he’s destined to assist them again as a federal public official—that is, if he doesn’t drop out. Locke is Obama’s third Commerce nominee in two months. New Mexico Gov. Bill Richardson had to withdraw in January after word leaked of an ongoing federal investigation involving his political donors, and the subsequent nominee, Republican Sen. Judd Gregg, withdrew in February due to philosophical differences with the president.

“I’m sure it’s not lost on anyone that we’ve tried this a couple of times,” Obama said during Locke’s Feb. 25 introduction in Washington, D.C. “But I’m a big believer in keeping at something until you get it right. And Gary is the right man for this job.”

Already awaiting Locke, if seated, is a lingering dispute involving Boeing. The International Association of Machinists and Aerospace Workers last year asked the Commerce Department to suspend a new program allowing Chinese companies access to sensitive U.S. aerospace technology. The union thinks national security and U.S. jobs are both at risk. In a letter to Commerce, Tom Buffenbarger, international president of the 730,000-member union, said the program “will involve work on the Boeing 787 program that could have been performed by U.S. workers. We find it very difficult to believe that your actions are good for U.S. workers or the U.S. economy.”

“We had a good working relationship with Locke as governor,” Buffenbarger adds. “But we’ll want to sit down with him, as I’m sure Boeing will, if he’s confirmed. As long as China continues to manipulate currency while the U.S. looks the other way, we won’t have a level playing field for American workers.”

Microsoft will likely be on Secretary Locke’s agenda as well. Co-founder Bill Gates is a longtime supporter of Locke, having hosted one of his first gubernatorial campaign fundraisers in 1999. As governor, Locke supported tax breaks and signed legislation sought by the company, including tougher laws against software piracy. Today, Microsoft is seeking a similar strengthening of piracy laws in China, one of its biggest markets.

China has long been a forte of Locke, the first Chinese-American U.S. governor. He made repeated trade visits to China during his two gubernatorial terms, earning high marks from a government that values personal relationships, and has since revisited the country as a private consultant with Davis Wright Tremaine. For the past four years, Locke has co-chaired the Seattle firm’s China Practice division, and among those Davis Wright has privately represented in China is Microsoft.

Todd Tucker of Public Citizen’s Global Trade Watch group in D.C. says they’ve followed Locke’s career and are taking a cautious approach. “I think, especially given his [pro–free trade] record on NAFTA, China trade, and WTO demonstrations [Locke mobilized the National Guard against protestors], all fair-trade advocates will be watching him particularly closely. Obama made a series of commitments to overhaul current trade policies. We’re going to be looking for actual results.”

The UW’s Dobel thinks the 59-year-old Locke can likely skirt any ethical questions arising from his past political and personal affiliations with U.S. corporations. He’ll have to fully disclose any financial involvement, and reach an agreement with the Office of Government Ethics on which paths to take if conflicts arise.

“He can recuse himself from the decision-making process,” says Dobel, “which is a common occurrence in D.C.” Locke, who holds stock in a number of U.S. corporations, including Starbucks and Microsoft, might have to divest those holdings or put them in trust, adds Dobel.

Locke was making the rounds on Capitol Hill last week and did not respond to questions about what services he performed for Microsoft. Locke’s former Olympia press secretary and current transition spokesperson, Roger Nyhus, says the governor isn’t giving interviews, and Davis Wright Tremaine also chose not to comment. “If confirmed as Commerce Secretary,” Nyhus said in an e-mail, “Gov. Locke will carefully and thoroughly follow the ethics rules of both the federal government and the Commerce Department.”

According to Davis Wright’s Web site, Locke specializes in consulting and overseas lobbying. He handles “governmental relations,” aids clients “on a wide range of business, political, and legal issues,” and “has demonstrated a remarkable ability to gain access to top Chinese governmental officials.” In a 2006 interview with The Seattle Times, Locke said he flew to China five times a year for Davis Wright, and boasted of meeting with China’s top banking regulator to help a “large, multi-national company” skirt China banking laws. “I said we’d love to work with you in finding a creative way to achieve your objectives as well as help this company,” Locke said in that interview. “If you just go to a midlevel bureaucrat, they’re just going to go by the letter of the law and say no, no, no.”

His biggest lobbying triumph was persuading Chinese President Hu Jintao to drop in for a 2006 dinner at Bill Gates’ Medina mansion. Within days, Microsoft announced plans to spend $3.7 billion over five years on tech purchases and new partnerships in China. Last November, Microsoft said it would be spending another $1 billion in China through 2011 on research and development there.

Also on Locke’s China Practice client list are two other firms he boosted as governor: Starbucks and Boeing. Spokesperson Nyhus claims Locke has not done any work for either corporation while at the law firm. But Boeing was one of the stops the Chinese president made here on the trip arranged by Locke, and according to press reports Locke was invited by Starbucks to attend the 2005 opening of its new store at the Great Wall. Starbucks, despite recent cutbacks, plans to expand in Europe and Asia, and is buying coffee from growers in China. And Boeing, which is building a new $21 million parts facility in Tianjin, predicts China will spend $400 billion investing in new airplanes over the next 20 years.

The aerospace giant has been the biggest recipient of Locke’s governmental largesse. The $3.2 billion tax break he approved in 2003 was on top of an existing $1 billion in state tax incentives already given to Boeing, and came with another $24 million to hire, train, and pay Boeing 787 workers.

Locke never informed the public that Boeing was effectively calling the shots behind the scenes. The governor had quietly hired Boeing’s own consultant and outside auditor, Deloitte Touche Tohmatsu, to advise him, even though Deloitte had a vested interest in the outcome. When Seattle Weekly discovered the $715,000 contract [“Two-Timing Consultant,” March 17, 2004], Locke claimed Deloitte’s hiring was approved by then–attorney general Chris Gregoire, who denied the allegation. The Deloitte deal was drawn up as a subcontract, and such agreements aren’t vetted, a Gregoire spokesperson told SW at the time. Gregoire never openly questioned the ethics of the deal, and shortly thereafter replaced Locke as governor.

In a White House statement about Locke’s cabinet nomination, the new administration lauded his Boeing effort. There was no mention of the Deloitte deal or other ethical questions raised during Locke’s state tenure, including the favors he did for his brother-in-law’s company, which operated the state’s Web site [“Clean Harbor?,” SW, July 11, 2002].

Kenneth Winston, an ethics expert at Harvard’s Kennedy School of Government, says he doesn’t know enough about Locke to comment directly on his nomination. But “in general,” he says, “I applaud Obama’s efforts to rid the federal government of some of its corrupt practices. Like other challenges he is taking on, it’s a long-term struggle. It won’t happen all at once. And in the interim, some people will be selected for office who are not paragons of virtue.”