Bolshoi Biznes:
Interview with Peter Necarsulmer

How does the Russian lobbying system differ from that of the West?

First and foremost, there is no lobbying system in Russia. At least there is no code of laws or common rules. However, there is of course lobbying in Russia, and, in my opinion, it does not differ much from international lobbying efforts. In some countries lobbying is more civilized than in Russia, while in others it is less.

The main difference between Russian and Western lobbying is the following: in Russia the lobbying resources of groups are dependent directly on each group's financial stability. For example, in the West very strong social lobbies exist in the healthcare, consumer goods and insurance sectors. These structures are very well organized there and work effectively. There are very serious lobbyists in Europe and North America lobbying for society's interests to combat AIDS. These are extremely powerful groups, influential not because of their own money or financial investments into the state system, but because they use political instruments (lobbying) to influence government decisions.

Lobbyists do charge fees for their services, don't they?

In this case, the fees cannot be compared to the earnings made by lobbyists in the oil, gas, banking, insurance or pharmaceutical sectors. The figures are considerably different.

Let's continue with the differences. In Western nations, elected state officials treat non-business constituency's interests more seriously. Moreover, the systems of Western political parties are more understandable, efficient and well-established. Both the UK Labour Party and the U.S. Democratic Party have clear, elaborate and consistent platforms and are supported by certain social groups. One of the clear examples is trade unions in the UK.

In Russia all of these processes, you might say, are still in their early stages.

Is the Russian lobbying practice different from that of other nations?

For some reason, many people think that lobbying is applying pressure for money. This is how the international public understands lobbying: "he who pays the piper picks the tune." The sole difference is that in Russia this work is being done in the dark, and in the U.S. it is being done under a spotlight.

Speaking about lobbying in Russia, we must admit that it does exist in this country and it is diverse. The most common type of lobbying is using money, power and influence to make the government issue decisions. This is, however, not the only way to undertake lobbying in Russia.

Thirty years ago Jesse Unruh, a very famous political leader from California and a legend in American politics said, "Money is the Mother's milk of politics." He used those words to describe a rather transparent and controllable system of funding political institutions, which was applied in the U.S. already at that time. However, if by the word "money" you mean cash transferred from hand to hand, I think it would describe the Russian lobbying practice. Such a situation in Russia is a reality but not a vital necessity. We all have the right to choose how we are going to lobby.

Why do you think Russia has found itself in such a situation?

Russia is in the early stage of state construction. In general, the Russian lobbying system is not mature and developed, groups of interests are not formed and there are no adequate mechanisms to enforce anticorruption laws.

A certain role is played by some public figures willing to sell their votes or opinions for money. I'm not singling out any such parties or deputies. In every stage of the state process, there is someone from that category.

Is there any professional definition of lobbyism that is accepted in all countries?

Clarity is required here. First of all, lobbyism is a process, which takes a very long time. For instance, the U.S. holds elections every four years. Voting takes only one day, while lobbying efforts are made 365 days a year throughout those four years.

Our approach to these efforts described as "lobbyism" differs greatly from the way the public understands this term and from common practice in Russia. We prefer to talk about lobbyism as the concept established in developed democratic nations, where it is a system to promote and protect interests, not necessarily including secret mechanisms. This concept is a guiding principle for The PBN Company. Government relations are a key direction of our business. Therefore, we view lobbyism as a professional activity aimed at promoting the interests of a particular group in government structures engaged in making state decisions.

Could you give any examples of your lobbying activities in Russia?

Both local and international companies doing business in Russia need professional lobbyist services. Take, for example, the project that our company is now implementing to protect the interests of intellectual property owners. This project was launched several years ago. Among our achievements, I can name participation in the State Duma's working groups to improve legislation, in particular, the trademark law. We explain the details and effects of legislative amendments and cite examples of how the legislations of Western countries work.

The new Customs Code is also a part of this project, and we have submitted recommendations for it. We have drawn the attention of the presidential administration and government to the fact that the draft law does not currently meet the interests of intellectual property owners. We worked with members of the WTO. As a result of our efforts, the WTO announced that the draft customs code is not in compliance with the TRIPS agreement (Trade-Related Aspects of Intellectual Property Rights)

This is just one aspect of our work. There is no golden key. That only exists in countries where one person has absolute control over the government and, thus, has the key in his pocket.

If I understand you right, your work is transparent and fair. May I ask you how much you receive for this project?

The PBN Company is paid about $300,000 a year for the project on protecting the interests of intellectual property rights holders in Russia. This sum also includes the salaries of our specialists in Brussels, Geneva and Washington.

Who in Russia do you think has better chances in lobbying for this or that cause - professional structures or officials?

It depends on the level and scope of power. Take the president: he has more power than both government officials and professional lobbyists. Many government officials are engaged in pseudo-lobbying activities. This of course happens, but that does not mean that that is how it should be; we believe that this position is wrong and harmful to society.

But of course there are cases where at a certain level in a decision making process in a specific sphere, even a lower ranked official might secure very "favorable" results. However, professional lobbying organizations will always be more effective than that one official, as real lobbyists consider every aspect of situations, and not just administrative resources, taking numerous components and creating a unified program.

Do you mean that if "a rightly appointed official" is paid $300,000 [to make a decision against you], he won't be able to strike your recommendations?

He couldn't, and here is why: first, you will find that very few important decisions are now made by one person. Second, there are numerous legitimate activities that can concretely influence bureaucrats today. There are bosses and bodies that oversee their activities, and ultimately, there is the media and the Audit Chamber. Third, if a critically important decision is to be made, $300,000 won't be enough to make that happen. You may laugh, but I can tell you from my experience that there are many professional and honest officials working in the Russian Government today. I'm not saying that they are angels, but among them there are those who could not be swayed by money.

What are the characteristic traits of Russian lobbyists, besides the fact that they frequently conduct their lobbying activities through work with government structures?

It is hard to find a lobbyist in Russia who will say: "I can't do everything myself." The widespread concept here is "we can do whatever you need, it all depends on the amount of compensation." In more developed countries, people are aware that the political process is complex and that there are different methods of influencing it. There are numerous factors that may make it more difficult to achieve this, or that could help. To tell you the truth, no politician or lobbyist can effectively cooperate with all the organizations in a country, work with all the 400 deputies or influence the government or the presidential administration. It is physically impossible.

In the U.S. behind any controversial issue or legislative initiative, you will find three or four lobbying companies or law firms representing the interests of the different participants and upholding those interests. Moreover, not only lobbying companies work for the benefit of the client, but project teams also include political experts, public opinion organizations and professional associations. All of these help to direct decisions toward the defined lobbied objective.

In Russia the process of forming unions and associations to represent the interests of their members has only begun. But we can already talk about effective support organizations. For example, associations of pharmaceutical manufacturers already fulfill that role as "natural lobbyists."

Why are the majority of Russian companies thoroughly concealing the fact that they use lobbyist services?

Large Russian companies might even answer the question of "What time is it?" by saying that that is a commercial secret. If we speak seriously, it is possible for large companies to have information to hide. This is not because they are scared to say that they are influential or powerful (they never conceal this). Many simply think that any lobbying activities are illegal in Russia. Our position is different: everything is granted that isn't forbidden by law. As such, lobbying activities are not forbidden - of course, if they don't violate legislation.

Frankly speaking, it cannot be denied that decisions advocated by lobbyists are frequently made after a certain sum of money is paid. It is understandable why they pay - if among Russian highranking officials there are those ready to receive so-called unofficial compensation, why should large organizations not make use of that?

Do you think it is realistic that a law on lobbying will be passed in Russia in the near future?

It is unrealistic. Firstly, there is no real driving force on the part of society. Secondly, the Russian democratic system is still too young. Moreover, the following fact worries me: if now a law on lobbying begins to be worked out and adopted, people who possess power, influence or other resources might enact a law that is advantageous to them. With all due respect to our friends and colleagues, I would recommend that no one rush this issue, and instead mainly focus on mechanisms to disclose information in this area. This might make a good backlog for the future.

Peter B. Necarsulmer is founder, Chairman and CEO of The PBN Company, one of the leading international consulting companies in the area of professional lobbyism and corporate reputation management. He received a license for lobbying activities in California (U.S.) in 1983. Then he established The PBN Company in San Francisco. He worked as a manager of political campaigns in the interests of California's Democratic congressmen and also led campaigns on legislative initiatives. He represented the interests of industrial, tobacco, insurance and alcohol companies. Among his clients at that time were Philip Morris, Anheuser-Busch (producer of Budweiser beer) and PBS (Public Broadcasting Service). In 1990 he organized and supervised the visit of Mikhail Gorbachev to San Francisco, which sparked an interest in Russia. A year later, PBN opened a representative office in Moscow. PBN represents the interests of leading Russian and international companies in the Russian market.