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Inside a US lobbyist’s deal with NZ

A chance Washington encounter between a Kiwi diplomat’s Labrador and a US lobbyist with Donald Trump’s phone number made headlines around the world. It led to a six-month, $250,000 relationship - but did New Zealand know what it was getting itself into?

Newsroom looked into the deal our diplomats struck with Robert Stryk, and found a world of arms dealers, alleged fraud, and "uncomfortable" auditions for foreign allies.

Girl’s dog meets boy, boy meets girl, boy hands over phone number for the leader of the free world.

On an election night already stretching the bounds of fiction, the encounter seemed almost too good to be true.

When Caroline Beresford’s chocolate Labrador sniffed the crotch of lobbyist Robert Stryk outside a Washington hotel, New Zealand’s deputy head of mission to the United States can’t have imagined it would lead to a highly sought-after call between Prime Minister Bill English and President-elect Donald Trump.

Stryk may have been unable to believe his luck, either: the encounter led to New Zealand becoming the first foreign government to sign up with his lobbying firm Sonoran Policy Group (SPG), ultimately forking out nearly $250,000 for the company’s services.

Yet just as a Hollywood rom-com doesn’t quite match reality, the meet-cute Stryk shared with the New York Times in September 2017 is more rose-tinted than the real story.

Arms dealers, alleged fraud, and "uncomfortable" auditions for foreign clients: here’s what you may not know about Stryk and the deal he struck with New Zealand.

The scent of opportunity

When Beresford’s dog followed its nose on election night in 2016, Stryk caught a whiff of opportunity.

Discussing the encounter, the lobbyist told the New York Times talk moved from wine and cigars to Trump’s shock victory over Democratic candidate Hillary Clinton, and the fact that Prime Minister John Key had been unable to reach the President-elect.

“What if I said I could get you the number of someone to call the President?” Stryk asked Beresford.

The next day, Stryk met Tim Groser, New Zealand’s ambassador to the United States, equipped with a phone number obtained through a friend and former Trump operative Stuart Jolly.

Just over a month ago, Newsroom spoke to Stryk about his work on behalf of our Government (he initially got in touch through Twitter to share his defence of Beresford, via Politico, over a series of tweets asking Democrats to "please get your shit together").

Reminiscing about his time lobbying on behalf of the embassy, Stryk gushes about Groser’s “forward-thinking brilliance” and diplomatic skills.

“If you ever have a chance to sit with Tim sometime, you should sit with him, because he has a complete knowledge of history and his understanding of geopolitical politics is very interesting.”

Whether the number Stryk provided got through to Trump is unclear; while the New York Times reported Trump and Key connected within a week, a White House official told CNN the President had not spoken to Jolly since he left the campaign in April 2016 and he may have had an old number.

Nevertheless, the fact that Stryk got in the door gave him cause for confidence.

‘‘I said to myself: ‘This could be very, very interesting. The world’s going to change’,’’ he told the New York Times.

The key to New Zealand's leaders reaching Donald Trump appeared to be not MFAT, but private lobbying firm SPG. Photo: Getty Images

The relationship became formal on December 11, 2016, when Stryk registered SPG’s lobbying work for New Zealand under the US Foreign Agents Registration Act (FARA), citing Groser, Beresford and Trade Commissioner Vicky Whitlock as official points of contact.

Stryk checked a box confirming his company’s work with New Zealand was “the result of neither a formal written contract nor an exchange of correspondence between the parties”.

The path may have been smoothed by the fact Stryk initially offered his services for free, according to the New York Times.

His first initiative was to arrange a now infamous inauguration party hosted by Groser and New Zealand, littered with Trump insiders, government figures and even Hollywood actor Jon Voight.

Costing Kiwi taxpayers more than $80,000, the party was seen as well worth it by our diplomats, with Beresford touting the chance to build commercial relationships as well as ties with administration officials and “incredibly high net worth people”.

"We've got the early mover advantage I would say and it's been very, very lucky for us," she told the NZ Herald.

Speaking now, Stryk says criticism of the cost to taxpayers was misplaced given the connections that were made.

“Tim understood that this was going to be a new sort of Washington, and Washington is the vortex of power in the world and so it was very smart of him and it goes with his brilliance, he took a lot of heat on it back home in New Zealand when he shouldn’t have.”

The shindig led to a “quite robust” dinner series, he says, with senior Trump officials taking part in discussions about a range of issues.

'The honor of serving NZ'

Despite those early moves, the New Zealand Embassy and SPG did not put pen to paper until January 9, 2017, signing a three-month contract for “US government affairs work on bilateral visa matters”.

In a copy of the contract provided to FARA, SPG chief executive Christian Bourge said his company would “provide advisory [sic] and counsel in promoting New Zealand gaining access to the United States Treaty Trader (E-1) and Treaty Investor (E-2) visa program”.

Stryk says now that he felt passionately about the “hindrance” posed by New Zealand’s access to the visas, given its status as a close friend of the United States.

“As a guy who believes in exporting capitalism around the globe, I found it very disheartening that such an amazing ally of ours, one of our Five Eyes partners, didn’t have access.”

The contract said a monthly fee of US$25,000 would be paid by wire transfer.

“Thank you for the honor of serving you and the people of New Zealand,” Bourge concluded.

It appears the Embassy was equally satisfied: in April, SPG lodged another three-month contract with FARA, running from April 10 to July 10.

The contract broadened its work to cover “US Congressional and Executive Branch brand engagement (Lobbying), legislative tracking and advocacy on trade, commerce, and investment matters along with Washington engagement more broadly on an as-needed basis”.

In July 2017, SPG submitted another document which outlined in detail its correspondence on behalf of the New Zealand Embassy.

SPG Contract With Embassy by Sam on Scribd

It shows emails inviting White House staffers and officials, along with congressmen, to an April 25 dinner hosted by Fonterra, as well as discussions about E-1 and E-2 visas and trade and investment in New Zealand.

Intriguingly, the documents suggest New Zealand officials still had problems getting hold of Trump after Key passed on the baton to Bill English.

SPG’s Stuart Jolly disclosed two emails from late January to the innermost members of Trump’s circle - his son-in-law Jared Kushner and the now-exiled Breitbart founder Steve Bannon - requesting that the President “speak to NZ’s PM Bill English”.

In January this year, SPG confirmed its work for the New Zealand Embassy had ended on July 10.

Stryk suggests the failure to renew the contract was due to New Zealand’s looming election, followed by the election of a Trump-averse Labour-led government.

“We had hoped whatever government was in place would choose to extend our contract, and your government didn’t...

“A lot of the current government is kind of hostile towards Donald Trump, so I don’t think there’s lots of willingness to hire us.”

MFAT’s responses to written questions from a select committee about its use of contractors confirm it spent $237,830 in total on SPG’s work - nearly two percent of the ministry’s contractor spending for the 2016/17 financial year.

A fan of 'unfettered capitalism'

Who is Robert Stryk?

It was a question asked by the Eugene Daily News in an August 2016 profile, in which Stryk spoke about an Oregon mass shooting which killed one of the caretakers at his Pyrenees Vineyard winery.

The “vigorous supporter” of the Second Amendment said the shooting showed the need for aggressive mental health treatment, but argued the right to bear arms was “the only way to ensure personal peace and prosperity for every American”.

“I am a simply pro-life, anti-death penalty, and pro-human rights American who supports every person’s right to unlock their own individual genius.”

Stryk shunned “traditional [Washington] D.C. garb” in favour of v-neck shirts, jeans and cowboy boots - “What else does a man need?” he told the website.

Speaking to Newsroom, Stryk says his ethos is fuelled by “what I call unfettered capitalism”.

“I don’t believe capitalism is the sacred franchise of American people: I believe we’re nothing more than the guardian of its flame and it’s our responsibility and our duty as US citizens to export it around the globe.”

Unlike most firms, he says, “I don’t consider myself a lobbyist - I consider myself a private diplomat”.

“It was a long time ago: politics are a very dirty business, people will make up anything and make up fake stuff - it just happens.”

Older media reports on Stryk have been less glowing. 

A 2010 piece in the Napa Valley Register on Stryk’s (ultimately unsuccessful) bid to become mayor of Yountville said he had “ruffled more than a few feathers” since moving to the quiet town a year earlier.

The article raised two allegations of credit card fraud in Yountville - he was not charged in either case, with the Napa County Sheriff's Department deeming accusations "unfounded" - as well as a ban from the town’s Villagio Inn and Spa.

It also covered off other credit card disputes in Arizona and Washington DC, including a run-in with former business partner and Arizona state senate president John Greene who accused Stryk and an SPG bookkeeper of “collaborat[ing] to misappropriate, through various means, the money and property of SPG”.

Greene’s lawsuit against Stryk was reportedly dismissed in 2004, with a judge ruling that “Greene violated attorney-client privilege when he sued his former client-turned-business partner”.

A 2015 article from The Oregonian on Stryk’s involvement with failed Oregon Senate candidate Monica Wehby outlined his “long list of legal and financial entanglements”.

The piece - which was the subject of a legal threat from Stryk - claimed he had failed to pay his winery employees, sued and was countersued by the winery’s former owners, and was ordered by a court to pay $45,000 over a loan.

Asked by Newsroom why he has had so many tangles in his past, Stryk initially says he has “no idea”, before repeating previous lines about attempts to undermine his political prospects.

“It was a long time ago: politics are a very dirty business, people will make up anything and make up fake stuff - it just happens.”

SPG's contract with Saudi Arabia ended early when Crown Prince Mohammed bin Nayef (pictured) was deposed - but the firm still got the full $5.4 million value of its contract. Photo: Getty Images

For Stryk and SPG, New Zealand must have been quite a catch as their first foreign government: a stable, peaceful Western democracy, consistently ranked at the top of Transparency International’s anti-corruption index in 2016.

The countries which followed were somewhat less reputable: Saudi Arabia (62nd in the 2016 index), Bahrain (70th), Kenya (145th), the Democratic Republic of the Congo (156th), and Afghanistan (169th).

The sums paid by some of those countries dwarfed New Zealand’s payments, with Saudi Arabia alone paying SPG US$5.4 million despite the contract ending earlier than expected with the deposal of Crown Prince Mohammed bin Nayef.

Stryk tethers this willingness to work with unconventional “allies” to that of Trump’s, saying the President is giving every country the chance to “come into the light of the rule of law”.

"If you are willing to accept unfettered capitalism, then we'll [SPG] work with you.

“There really is no litmus test except for that if you’re going to pervade in terror, you’re not going to embrace democratic reforms, you’re not going to embrace capitalism, then we’re not going to work with you.”

It appears former SPG president Stuart Jolly, who initially provided Stryk with the phone number of Trump, had more reservations: in April 2017, he told the New York Times he had “grown uncomfortable with the firm’s auditions for foreign clients” and was going back to his own business.

Stryk says he didn’t take Jolly’s comments as a critique, but a sign he did not have enough passion for the work the firm was doing.

“It takes a very committed capitalist and a very committed person who believes in the rule of law to even put himself on the line - it’s a lot of work.”

Taking up arms for arms dealers

Another foreign client of SPG? Serbian arms dealer Slobodan Tesic, described by the US Treasury as “among the biggest dealers of arms and munitions in the Balkans”.

Tesic, whose lawyers Venable retained SPG to help remove him from a US sanctions list, reportedly spent nearly a decade on the UN’s travel ban list for violating sanctions against arms exports to Liberia, with the Treasury accusing him of “directly or indirectly provid[ing] bribes and financial assistance to officials”.

A reported visit by Stryk to Serbia to help remove Tesic from the sanctions list allegedly led to the arrest of travel companion, former Navy SEAL and military contractor Daniel Corbett, with rumours Corbett was a professional assassin.

Stryk says he does not know anybody by that name, but confirms he has been to Serbia.

Venable approached SPG for their help due to the company’s record of sticking up for victims of American bureaucracy, he says.

“One thing that SPG does, we are the voice for those who have been wronged by the overreaching US government.”

These deals were all signed after New Zealand came on board with SPG.

However, Tesic is not the first arms dealer that Stryk has gone in to bat for.

“This very corrupt woman wanted to put him away for many many years, took his whole life away from him, broke him, and it all turned out to be fake, all false ... all the charges were dropped and he got on with his life.”

In early 2016, American arms dealer Marc Turi faced federal charges over accusations he sold weapons destined for Libyan rebels.

In May that year, the US Justice Department dropped the case against Turi, with claims a trial would have embarrassed US presidential candidate Hillary Clinton by exposing CIA attempts to arm rebels fighting Libyan leader Moammar Qadhafi.

In a Politico story at the time, Stryk - described as a “close friend and Turi adviser” - accused the US government of using the arms dealer as a scapegoat to cover up Clinton’s Libya problems.

“The US government spent millions of dollars, went all over the world to bankrupt him, and destroyed his life - all to protect Hillary Clinton’s crimes,” he said, referring to the deadly Benghazi attack in 2012 which put her under scrutiny.

Stryk says Turi, from his hometown of Scotsdale, Arizona, was not an arms dealer but “an American citizen who to me was wronged by probably the most corrupt family this country has ever seen”.

“This very corrupt woman wanted to put him away for many many years, took his whole life away from him, broke him, and it all turned out to be fake, all false ... all the charges were dropped and he got on with his life.”

From struggling artist to the big stage

One thing is clear: Stryk owes a large part of his success to New Zealand’s willingness to take a chance on a company that had never before lobbied on behalf of foreign governments.

SPG is opening offices in Norway and London, he says, and is on track to become a US$100 million company before long.

There are two reasons for that, he says: the disruption caused by Trump, and “the risk that Tim and Caroline took”.

“I’m a big fan of country music, and my mother says I’ve been a struggling artist my entire life and I’ve been playing in small-town bars around the United States.

“All of a sudden I’ve got an opportunity to play at the biggest bar, Madison Square Garden - instead of sitting on my opportunity, I took advantage of it.”

But should New Zealand have given him the gig?

MFAT would not make either Groser or Beresford available to speak to Newsroom about their work with Stryk.

Instead, in a written statement a spokeswoman said the New Zealand Embassy had engaged SPG to make headway on the longstanding issue of winning more favourable visa access for Kiwi business travellers.

“Taking into consideration the added complexity of a new US administration, it was judged that a diplomatic approach on its own would be insufficient to make progress on the visa issue for New Zealand.”

MFAT acknowledges there were "concerns in relation to some SPG staff". Photo: Sam Sachdeva.

The spokeswoman said engaging lobbyists in D.C. was “standard practice for most countries”, and the contract with SPG followed the standard due diligence process and ministry guidelines.

MFAT acknowledged there were “concerns in relation to some SPG staff" the embassy considered during the due diligence process.

However, "it was assessed that SPG should be appointed given its established connections with the Republican-controlled Congress and Senate and the new US Administration – essential networks required to progress New Zealand’s interests".

The spokeswoman said SPG played a critical role in “facilitating access” with the Trump administration and politicians in Congress, leading to the introduction of legislation to boost Kiwi visa access - “a significant accomplishment”.

That would be the KIWI (Knowledgeable Innovators and Worthy Investors) Act, introduced to the House and the Senate last year.

A virtually identical bill, the Encouraging Trade and Investment from New Zealand Act, was introduced to the US Senate in February 2014, only to stall and be wiped from the books a year later; whether Stryk’s work makes the KIWI Act any more successful remains to be seen.

Given the Hollywood-esque nature of his entry into the world of foreign diplomacy, it’s unsurprising Stryk reaches for a similarly cinematic tale of redemption to brush off questions about his past.

“One of the geniuses of our American system of government and our capitalism is that we actually embrace failure: whether it’s the failure of losing an election or a failure in someone saying something about you that’s not true, or accusing you of something, is that you have the opportunity to really come back and redefine yourself.”

4.15pm: This article has been updated following an approach from Stryk to reflect the fact the Napa County Sheriff's Department found allegations of theft and suspected fraud against him in Yountville to be "unfounded", and that allegations of not paying his winery employees are disputed.

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