Plain Dealer

LaTourette attributes flip-flop on CAFTA to tariff no one pays By Stephen Koff August 10, 2005

Washington - KraftMaid builds kitchen Free Trade Agreement was crucial to cabinets in Middlefield, and for that it helping President Bush and Republican needs wood. leaders win a hard-fought victory.

So when U.S. Rep. Steve LaTourette He was a critical swing vote in a tight said he suddenly learned that the House vote - 217-215 - that came after a company had been socked with tariffs on night of arm-twisting and deal-making. Central American plywood - and that they jeopardized the company's jobs in For months, the Lake County - he decided to vote for a Republican had said he was against controversial trade pact to eliminate CAFTA because he saw little in recent those tariffs. trade deals that helped American workers. "Absolutely," he said after the vote two weeks ago, confirming that his But in the afternoon before the final motivation was solely to protect vote, LaTourette got a phone call from KraftMaid jobs. KraftMaid's president, Tom Chieffe.

One problem: No U.S. company has to Chieffe said the tariffs on Central pay tariffs on plywood from Central American plywood, used to make America, according to trade records cabinets, was making it harder for the reviewed by The Plain Dealer and company to stay viable, according to an interviews with industry and trade interview with LaTourette after the vote. officials. Chieffe is not a player in the world of Plywood, and almost every other wood Washington power politics, and product from Central America, is exempt LaTourette has said he didn't know him from tariffs under arcane but long- well. standing trade rules. But KraftMaid is owned by a larger "He's either been duped or is not being corporation, Masco Corp., whose honest," Lori Wallach, a Washington Michigan-based chairman is a major trade lawyer, said of LaTourette. Republican donor. Richard Manoogian donated $115,000 to the Republican LaTourette's last- minute decision on National Committee and its affiliates July 28 to back the Central American between 2002 and 2004, as well as $4,000 for Bush's re-election, records that the congressman got no special from PoliticalMoneyLine show. He has treatment -- no bridges, roads, or stayed overnight at the White House as a promises of a future presidential guest of Bush, according to the Center appointment -- in exchange for his vote. for Responsive Politics. "The head of KraftMaid spoke to Chieffe, KraftMaid and Masco would wanting to expand the company and add not comment for this article. workers in Geauga and Ashtabula counties and said he did not want to have Government records show that, when it to manufacture cabinets in Central came to plywood, chump change was at America or China in order to stay stake in the CAFTA debate. In the last competitive," said LaTourette's 3½ years combined, tariffs paid on all statement. plywood from Central America have totaled just $4,700 -- hardly an amount Chieffe, in his phone conversation with that puts a crimp on American the congressman, "was very clear that businesses, government records show, the current tariffs were harming his and a sum that experts say was probably business," the statement said. paid by accident. Those tariffs were 8 percent, LaTourette And CAFTA would not alter the had said. His office repeated that figure equation: The plywood would remain this week. exempt from tariffs. After his conversation with Chieffe, That's why LaTourette's sudden change LaTourette asked U.S. Trade of heart mystified organized labor, trade Representative 's office activists and , the Lorain about the issue, according to County Democrat who led the U.S. LaTourette's statement. Portman's office House opposition to CAFTA. sent over a document listing plywood products, enumerating their 8 percent "Several people voted differently from "base" tariffs and stating that CAFTA what I expected," Brown said. "And it's would eliminate those tariffs. up to them to explain it to their districts." But that list is misleading, according to LaTourette was unavailable this week both a private and a government trade because he is on vacation, his office lawyer. It cites the tariffs charged under said. Attempts to reach him last week the ' normal trade relations were also rebuffed because he was in program but fails to note a crucial fact: Alaska on a congressional trip and, his "Base" tariffs on most Central American office said, could not be reached. exports -- including wood and wood products -- do not have to be paid In a prepared statement, his office said because of other exemptions already the congressman relied on what given by Congress. KraftMaid and President Bush's trade office told him about the tariffs. So there was almost no risk that LaTourette's office has said repeatedly companies would lose their breaks even if CAFTA failed, trade experts said. "And this locks in the benefits and therefore locks in the supply" of That explains why wood importers, trade plywood, said Matt Niemeyer, Portman's associations and industry analysts were congressional affairs liaison. surprised that the import tariff issue came up. Yet figures from the International Trade Commission, an independent panel, and "We've never paid any kind of tariff on the Census Bureau, citing tariff any wood product coming in from collections, show that to be an Central America," said Sam Robinson, unnecessary distinction in the claim that executive vice president of Robinson tariffs were jeopardizing a big Lumber Co, a Louisiana-based wood corporation. importer. "And as far as plywood is concerned, frankly I don't know of much Plywood was exempt before CAFTA -- plywood production in Central America and still will be exempt when CAFTA coming into the states." eventually goes into effect.

Wallach, a trade lawyer who directs Although LaTourette had said KraftMaid Public Citizen's Global Trade Watch, was at risk of reducing or closing U.S. which lobbied against CAFTA, said she operations because of the purported was so certain that neither KraftMaid nor tariffs, Chieffe in February announced any other company was paying the that the company was building a $106 tariffs that she told her staff she would million production facility in Utah -- "walk on my hands from the Capitol to having just completed a $25 million the White House if there's a tariff." expansion in Ohio, including at its complex in Ashtabula County's Orwell, She doesn't accept LaTourette's also in LaTourette's district. explanation that he was only following what he was told. In an e-mail to The Plain Dealer, KraftMaid marketing manager Kim "He is, after all, a member of Congress Boos stated why the company will not who has at his hands the staff and the comment for this article: "Tom Chieffe resources to receive the Congressional was only one of several business Research Service to find out if that's true executives who spoke with Congressman or not," she said. LaTourette during his research for the CAFTA bill. This was a conversation Portman's office acknowledges giving between a congressman and one of his LaTourette a paper that made it appear constituents and Mr. Chieffe doesn't plan CAFTA would eliminate the 8 percent to comment on their conversation." 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.