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U.S. Politics Canadian steel magnate faces complaint to U.S. regulators over campaign donations to Trump

A Canadian steel magnate who supports American tariffs is accused of breaking U.S. campaign finance law after one of his companies donated US$1.75-million to a Super PAC backing President Donald Trump.

The Campaign Legal Center, a Washington-based watchdog group, has filed a complaint with the U.S. Federal Elections Commission against Barry Zekelman, chief executive and co-owner of Zekelman Industries. The company is based in Chicago with operations on both sides of the border. Mr. Zekelman is a native of Windsor, Ont.

At issue are three contributions by Zekelman subsidiary Wheatland Tube Co. to America First Action, a group that runs advertising campaigns promoting Mr. Trump’s agenda and attacking his opponents. Federal Election Commission records show donations of US$1-million, US$250,000 and US$500,000 between April and October of last year.

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The contributions came at the same time Mr. Trump was pushing ahead with 25-per-cent tariffs on imported steel. Mr. Zekelman has long argued that subsidized steel from countries such as China is flooding the market and creating unfair competition for U.S. producers.

Under U.S. campaign finance law, foreign-owned American companies are allowed to make political donations, but only if the foreign owners are not involved in the decision.

“There certainly were ways that Zekelman Industries or Wheatland Tube could have legally made these contributions. But the participation of Barry Zekelman in the decision was what rendered the contributions illegal,” Brendan Fischer of the Campaign Legal Center said in an interview.

In a New York Times profile earlier this week, which first reported Wheatland’s contributions, Mr. Zekelman was quoted as saying that he discussed the donations with others in his company and wanted to help out Mr. Trump. According to the Times, America First Action solicited donations from Zekelman Industries.

“They contacted our people; our people brought it to me. I said ‘Great, I would love to find a way to support him,’” Mr. Zekelman said in the Times story.

In the same story, however, Mr. Zekelman and Wheatland CEO Mickey McNamara said Mr. Zekelman was not involved in the decision to make contributions.

America First Action deployed a series of attack ads against Democratic candidates ahead of midterm congressional elections last year. Among other things, the Super PAC attacked candidates for being pro-choice on abortion and supporting universal health care.

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The Times also reported that Mr. Zekelman met with a high-ranking Trump trade official who had previously represented Zekelman Industries as a lawyer in his private practice. Mr. Zekelman told the Times that he urged the official, U.S. Trade Representative general counsel Stephen Vaughn, to clamp down on steel imports at the February, 2017, sit-down.

In a letter to the U.S. Office of Government Ethics, the Campaign Legal Center contends the meeting was a breach of the government’s code of conduct for political appointees. Under a federal ethics pledge, officials agree not to handle files directly involving former employers or clients for two years. Mr. Vaughn had left his private practice mere weeks before the meeting with Mr. Zekelman.

Neither Mr. Zekelman, Mr. McNamara, America First Action nor the U.S. Trade Representative’s office responded to requests for comment. Mr. Zekelman’s companies could face fines if the Federal Election Commission upholds the Campaign Legal Center’s complaint.

Mr. Zekelman has consistently backed Mr. Trump’s steel tariffs and criticized the Trudeau government’s efforts to negotiate with the U.S. President.

When Mr. Trump imposed tariffs on China, the European Union and South Korea in March of last year, Mr. Zekelman told The Globe and Mail he would give $1,000 bonuses to his employees. “I want the price to go up,” he said.

After the President expanded his tariffs to hit Canada and Mexico three months later, Mr. Zekelman told CTV Windsor that the levies would cost his company but he still supported them because they would press Canada to renegotiate the North American free-trade agreement. In the same interview, Mr. Zekelman criticized Justin Trudeau’s retaliatory tariffs against the United States and urged the Prime Minister to make concessions to Mr. Trump in the new trade talks.

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On another occasion last fall, Mr. Zekelman told a Canadian parliamentary committee that Ottawa should agree to Mr. Trump’s demand for export quotas on steel in order to end the trade war. He said Foreign Minister Chrystia Freeland, who was handling negotiations, was “way out of her league.”

Ms. Freeland reached a deal last week for the United States to lift steel tariffs without Canada agreeing to a quota.

Political donations from U.S. subsidiaries of foreign companies are already controversial in the United States. One bill currently before Congress would ban any company with 20 per cent or more of its voting shares owned by foreigners from making contributions.

The U.S. units and employees of several Canadian companies – including oil and gas company Encana Corp., gambling business the Stars Group Inc. and engineering firm WSP Global Inc. – gave money to U.S. Super PACs over the past two years.

Editor’s note: (May 24, 2019) The total of the third contribution has been corrected in the online edition of this story.
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