Defense, Middle East, New in Lobbying

Turkish defense company revamps lobbying as US sanctions loom

A major Turkish arms contractor is revamping its lobbying operations amid a growing number of threats from Washington.

Turkish Aerospace Industries (TAI) recently hired bipartisan Washington lobbying firm Capitol Counsel for help overcoming congressional impediments to its ability to export weapons containing US technology. Now new State Department sanctions on the Turkish defense sector could further complicate that effort.

Capitol Counsel began working for the Turkish company in July as a subcontractor for Greenberg Traurig. The firms were tasked with helping unblock a $1.5 billion sale of 30 Turkish-made T-129 attack helicopters.

TAI struck a deal with Pakistan in 2018 to replace its aging fleet of Vietnam-era Bell AH-1F Cobra gunships, which are outmatched by rival India’s new Boeing AH-64 Apaches. The Turkish gunships’ CTS800 engines are jointly made by Rolls-Royce and Honeywell, a US company, giving the federal government a say in who gets to buy them.

TAI’s contract with Greenberg Traurig was terminated on Oct. 29. Days earlier, the firm had stopped representing the Turkish Embassy in Washington amid pressure from Armenian-American groups upset at Turkey’s support for Azerbaijan in the conflict with Armenia over Nagorno-Karabakh.

A new lobbying filing shows Capitol Counsel has since filled in the void and is now working directly for the Turkish company. The initial contract ran from Oct. 31 through Nov. 15, with the option to renew it for seven-month increments for $25,000 per month.

Neither Capitol Counsel nor Turkish Aerospace Industries responded to requests for comment. But a Dec. 14 lobbying filing with the Department of Justice signed by Capitol Counsel founding partner John Raffaelli says the firm has a new agreement with TAI as of Dec. 8.

“The registrant continues to provide lobbying services to the foreign principal with regard to executive and legislative review under the Arms Export Control Act by engaging members of Congress and their staffs, executive branch officials, and various third-party thought leaders,” the filing says.

The lobbying push is being led by Capitol Counsel partner Towner French, a former deputy staff director for Rep. Pete Sessions (R-Texas). Also registered as foreign agents on the account are former Rep. Charles Boustany (R-La.) and firm principal Allegra Han. Sessions is returning to Congress in January after a two-year hiatus.

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Capitol Counsel’s efforts are centered around outreach to the top Democrats and Republicans on the House and Senate foreign affairs panels. The lawmakers have blocked the helicopters’ export for the past couple of years, Defense News reported in August. They are seeking to pressure Turkey into rescinding its purchase of a Russian air-defense system that the US says could compromise NATO technology.

Capitol Counsel is notably tasked with “engaging directly with the executive branch of the US government, including the White House, Department of State, Department of Defense and Department of Commerce” in order to clear the sale of the helicopters to the Pakistan Army Aviation Corps “or to any other third party.” The firm is also supposed to meet with labor unions “in order to make them speak about the employment opportunities which will be created as a result of issuance of engine re-export license.”

The lobbying mission may have just gotten more complicated.

On Monday, just as Capitol Counsel was filing its lobbying disclosure, Secretary of State Mike Pompeo announced that the United States was sanctioning Turkey’s Presidency of Defense Industries (SSB), the government office that manages Turkey’s defense industry. The sanctions are being imposed under the Countering America’s Adversaries Through Sanctions Act (CAATSA), a 2017 law aimed at Russia, Iran and North Korea. Turkish Aerospace Industries is owned by SSB and the Turkish Armed Forces Foundation.

Russia is “knowingly engaging in a significant transaction with Rosoboronexport, Russia’s main arms export entity, by procuring the S-400 surface-to-air missile system,” Pompeo said in a statement. “The sanctions include a ban on all US export licenses and authorizations to SSB and an asset freeze and visa restrictions on Dr. Ismail Demir, SSB’s president, and other SSB officers.”

It remains unclear if the export license ban applies to Turkish Aerospace Industries or the specific helicopter sale to Pakistan. It’s also unclear if the ban will make it harder for US companies such as Honeywell to participate in TAI projects such as the T-129 going forward. A spokesman for Honeywell Aerospace did not respond to a request for comment.

The Turkish Embassy in Washington referred to the State Department for clarification. The State Department’s Bureau of International Security and Nonproliferation, which has the lead on CAATSA sanctions, did not respond to a request for comment.

Regardless of the State Department’s ultimate interpretation, the sanctions should be a wake-up call to companies doing business with Turkey’s defense sector, said Jonathan Schanzer, the senior vice-president for research at the Foundation for Defense of Democracies, a right-leaning think tank critical of Turkey’s support for Islamist groups.

“It’s a sign that the US government no longer trusts the Turkish military, and that has significant ramifications for NATO,” Schanzer told Foreign Lobby Report. “And then more broadly it’s a sign to the markets that Turkey is a damaged asset, and that you’re going to begin to see banks and financial institutions begin to distance themselves, not knowing what may come next.”

Meanwhile a defiant President Recep Tayyip Erdogan today vowed to wean the Turkish arms industry off its reliance on US components.

“US sanctions aim to prevent Turkey’s developments in the defense sector and make the country dependent once again; this decision is an attack on Turkey’s sovereign rights,” Erdogan said in an appearance via videoconference. “We will work twice as hard to make our defense industry fully independent.”