Showing posts with label Commerce and Government. Show all posts
Showing posts with label Commerce and Government. Show all posts

January 22, 2018

Pepsi and Stolichnaya in Russian History 60's-90's Exchange of Warships for Pepsi


 This Russian General had Pepsi bottle the drink right on a warehouse by his house since it could not be imported. It is believed he was the original Russian drinker in Russia.

On April 9, 1990, American newspapers reported on an unusual deal. Pepsi had come to a three billion dollar agreement with the Soviet Union. The Soviet Union had long traded Stolichnaya vodka in return for Pepsi concentrate. But this time, Pepsi got 10 Soviet ships.
This wasn’t the first time that Pepsi sold soft drinks in return for a flotilla. The previous year, the company even received warships. This situation—a soft drink conglomerate briefly owning a fairly large navy—was the unusual result of an unusual situation: a communist government buying a product of capitalism from the country it considered its greatest rival.
It began with a rare exchange of culture. In the summer of 1959, the U.S.S.R. held an exhibition in New York, and the United States reciprocated. The American National Exhibition in Sokolniki Park, Moscow, featured American products: cars, art, fashion, and an entire model American house. A number of still-familiar brands sponsored exhibits and booths, including Disney, Dixie Cup Inc, IBM, and Pepsi.
That month, many Russians got their first taste of Pepsi. One of them was Soviet leader Nikita Khrushchev. On July 24, then-Vice President Richard Nixon showed Khrushchev the exhibition. It became the scene of the infamous Kitchen Debate. While standing in a mock-up of an American kitchen, Nixon and Khrushchev traded barbs about communism and a recent American resolution on “captive states” under Soviet power. Nixon also led Khrushchev towards a display booth that dispensed nothing other than Pepsi-Cola. Symbolically, the booth offered two batches: one mixed with American water, the other with Russian.
It was a set up. The night before, a Pepsi executive, Donald M. Kendall, had approached Nixon at the American embassy. As the head of Pepsi’s international division, he’d defied the company’s leaders in deciding to sponsor a booth and attend the exhibition. To prove that the trip was worthwhile, he told Nixon, he “had to get a Pepsi in Khrushchev’s hand.”

Kendall is at the front, pouring.

Nixon delivered. A photographer caught Nixon and Khrushchev together as the Soviet leader gingerly sipped his cup of Pepsi. Kendall stands to the side, pouring another cup. Khrushchev’s son later recalled that many Russian’s first take on Pepsi was that it smelled like shoe wax. But, he added, everyone remembered it, even after the exhibition was over.
 For Kendall, the photo was a triumph. He had big plans for the brand’s expansion, and the Khrushchev photo op catapulted him up the ranks at Pepsi. Six years after the American National Exhibition, Kendall became CEO.
A statue of Pushkin watching over the Pepsi signs.
The U.S.S.R. was Kendall’s land of opportunity, and his goal was to open it to Pepsi. In 1972, he succeeded, negotiating a cola monopoly and locking out Coca-Cola until 1985. Cola syrup began flowing through the Soviet Union, where it was bottled locally. It was a coup: As the New York Times put it, the soda was “the first capitalistic product” available in the U.S.S.R. Pepsi had become a pioneer. But there was one issue: money.
Soviet rubles were worthless internationally, with their value determined by the Kremlin. Soviet law also prohibited taking the currency abroad. So the U.S.S.R. and Pepsi resorted to barter. In return for cola, Pepsi received Stolichnaya vodka to distribute in the United States. By the late 1980s, Russians were drinking approximately a billion servings of Pepsi a year. In 1988, Pepsi broadcast the first paid commercials on local TV, starring none other than Michael Jackson. The bartering worked well—Stolichnaya was popular in the United States. An American boycott in response to the Soviet-Afghan war, however, meant that Pepsi wanted something else to trade.

So, in the spring of 1989, Pepsi and the Soviet Union signed a remarkable deal. Pepsi became the middleman for 17 old submarines and three warships, including a frigate, a cruiser, and a destroyer, which the company sold for scrap. Pepsi also bought new Soviet oil tankers and leased them out or sold them in partnership with a Norwegian company. In return, the company could more than double the number of Pepsi plants in the Soviet Union. (It also ignited jokes that Pepsi was taking the Cola Wars to the high seas.) “We’re disarming the Soviet Union faster than you are,” Kendall quipped to Brent Scowcroft, President George H.W. Bush’s national security adviser.
But that was nothing compared to 1990’s three billion dollar deal. (A figure based on Pepsi’s estimate of how much sales of cola in the Soviet Union and vodka in America would net them over the next decade.) It was the largest deal ever brokered between an American company and the Soviet Union, and Pepsi hoped it would spur more expansion. Pepsi even launched another American institution in the country: Pizza Hut. The future looked bright.

Instead, the Soviet Union fell in 1991, taking with it Pepsi’s deal of the century. Suddenly, their long balancing act turned into a scramble to protect its assets in a free-for-all made more complex by redrawn borders, inflation, and privatization. The LA Times described how the new Pizza Huts were hobbled—their mozzarella was sourced from Lithuania. The company had hoped to pivot from heavy glass bottles to cheaper plastic, but the plastic company was located in Belarus.
Similarly, Pepsi’s partially-built ships were stranded in newly-independent Ukraine, which wanted a cut of the sales. Kendall, who had since retired, lamented that the Soviet Union had essentially gone out of business. Over several months, Pepsi pieced parts of the deal back together. But instead of dealing with a single state, they had to broker with 15 countries. Worse, Coca-Cola aggressively entered the former Soviet Union, and Pepsi struggled to keep its advantage. Among other marketing strategies, it launched a giant, replica Pepsi can up to the Mir space station for a commercial and erected two iconic billboards over bustling Pushkin Square in Moscow.
Russia is still Pepsi’s second biggest market outside of the United States. But their pioneering luster has faded. It didn’t help that Pepsi had been around for so long that other sodas seemed novel by comparison. After only a few years, Coke beat out Pepsi as Russia’s most popular cola. And in 2013, even the billboards over Pushkin Square came down. Maybe Pepsi should have held on to that destroyer.
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September 7, 2017

USA Today Investigation Shows Trump's Lobbyists and Government Contractors are All Members of Trump's Gulf Clubs and They Put $ in His Pockets

USA Today investigation on Trump and His lobbyists found that dozens of lobbyists and government contractors are among the members of President Trump's private golf clubs

Dozens of lobbyists, contractors and others who make their living influencing the government pays President Trump’s companies for membership in his private golf clubs, a status that can put them in close contact with the president, a USA TODAY investigation found.
Members of the clubs Trump has visited most often as president — in Florida, New Jersey and Virginia — include at least 50 executives whose companies hold federal contracts and 21 lobbyists and trade group, officials. Two-thirds played on one of the 58 days the president was there, according to scores they posted online.
Because membership lists at Trump’s clubs are secret, the public has until now been unable to assess the conflicts they could create. USA TODAY found the names of 4,500 members by reviewing social media and a public website golfers use to track their handicaps, then researched and contacted hundreds to determine whether they had business with the government. 
The review shows that, for the first time in U.S. history, wealthy people with interests before the government have a chance for close and confidential access to the president as a result of payments that enrich him personally. It is a view of the president available to few other Americans.
Among Trump, club members are top executives of defense contractors, a lobbyist for the South Korean government, a lawyer helping Saudi Arabia fight claims over the Sept. 11 terrorist attacks and the leader of a pesticide trade group that sought successfully to persuade the Trump administration not to ban an insecticide government scientists linked to health risks.
Members of Trump’s clubs pay initiation fees that can exceed $100,000, plus thousands more in annual dues to his companies, held in a trust for his benefit.
The arrangement is legal, and members said they did not use the clubs to discuss government business. Nonetheless, ethics experts questioned whether it’s appropriate for a sitting president to collect money from lobbyists and others who spend their days trying to shape federal policy or win government business.
“I think we’re all in new territory,” said Walter Shaub, who recently resigned as director of the Office of Government Ethics after repeated clashes with the White House. “We never thought we’d see anyone push the outer limits in this way.”
Citing privacy and national security, the White House has moved to keep secret the president's interactions. Unlike the Obama administration, the Trump White House does not disclose the president’s golf partners, or whether he played. The Trump team also ended an Obama administration practice of releasing White House visitor logs. In July, a federal court ordered the government to release visitor records from Trump's Mar-a-Lago resort in Palm Beach, Fla., to a watchdog group. The deadline is Friday.
Trump’s U.S. golf clubs are among the most lucrative outposts in his empire, bringing in about $600 million in 2015 and 2016, according to his financial disclosure reports. It is unknown how much of that is profit because, unlike other recent presidents, Trump has not released his tax returns
Some members find themselves in close proximity to a president who has visited his golf clubs on about a quarter of the days that he has been in office. Many describe Trump as surprisingly approachable, welcoming advice on everything from the state of the tee boxes to the course of his administration.
Trump marked his 100th day in office by visiting a factory owned by a company run by a member of his New Jersey golf club.
Standing behind Trump as he signed two executive orders was Robert Mehmel, president of the company that owns the Harrisburg, Pa., factory and another company that sells radars and electronics to the military, including about $54 million worth of contracts last year.
Like millions of golfers, Mehmel registered his handicap on a public U.S. Golf Association website that golfers use to track their handicaps and check the scores of other players. The site requires golfers to sign up for a club and lists when and where they played. Only members are allowed to associate their handicaps with Trump’s clubs, said Kyle Littlefield, a pro at Trump National Golf Club-Bedminster.
Mehmel registered his handicap there. He posted scores from seven rounds of golf at the club this year. Five were in days in May, June, and August when Trump was visiting. Mehmel did not respond to phone calls or emails.
The White House and Trump’s companies did not respond to questions about members’ access to the president.
At the clubs, Trump visits most often, the list of members reflects a cross-section of wealthy suburbanites: corporate executives, investment bankers, real estate agents, doctors, and their families.
The list includes dozens of people who either seek to influence the federal government or sell it things. It includes the chief executives of defense and technology contractors, the head of the Dell unit that sells information technology services to the federal government, the chief of a trade group representing rural utilities and lobbyists who represent energy companies and foreign governments.
One lobbyist for U.S. and Canadian airports mentioned his membership to Trump at a White House meeting in February. “I’m a member of your club, by the way,” Kevin Burke said, in an exchange captured by C-SPAN. “Very good, very good” Trump replied.
Other club members work in industries closely regulated by the federal government, including the CEO of pharmaceutical maker Allergan and the chairman of the Estée Lauder cosmetics empire.
Trump has long afforded his clubs, and their members, a unique status.
Before he took office, Trump told guests at a dinner at his Bedminster club that they were “the special people” and joked they “might want to come along” as his team interviewed potential Cabinet secretaries. Guests at Mar-a-Lago snapped photos in February as he huddled around an open-air dinner table with security aides and the Japanese prime minister after a North Korean missile launch.
In interviews, several dozen members described a president who remains the chief host and resident celebrity during his visits. He speeds through 18 holes of golf, then lingers in the clubs’ restaurants and seldom refuses to shake a hand or pose for a photo, sometimes snapped by his Secret Service detail. Senior aides regularly accompany him. Advice flows freely.
“Access to this president has been different than it has been in the past, and everybody thinks they have an opportunity to provide information that could be helpful to the country,” said Ed Russo, a longtime member of the Bedminster club who has worked as an environmental consultant for several of Trump’s courses.
Others said the club was merely a place to play. “I’ve done zero business. I go there to play golf,” said Thomas Spulak, a member of the Trump National Golf Club in Washington’s suburbs and a partner at the law firm King & Spalding, who represents the Saudi government in its efforts to fight claims by families of victims of the Sept. 11 terrorist attacks.
Experts on government ethics and federal contracting said there’s no prohibition on executives from companies with federal contracts spending money at Trump’s golf properties, as long they pay the going rate for their memberships and don't hand over money to seek an official favor or to thank the president for taking action on their behalf.
Lobbyists face no legal restrictions on golf memberships.
Jay Vroom, CEO of the pesticide trade group Crop Life America, said he had encountered Trump once since he became president. The group sought for months to keep the Environmental Protection Agency from banning an insecticide called chlorpyrifos that the agency’s scientists linked to neurological delays in children and other health problems. EPA Administrator Scott Pruitt said in March that the government would not impose new restrictions on the insecticide’s use.
Vroom said in a statement that he had not spoken to Trump about the issue. Those fighting to ban the insecticide said they were troubled by the prospect of his having access to the president at all.
“Not surprising, I’m sad to say, especially with the current president. And I’m tempted to say — and oh, God help me — par for the course,” said Kristen Boyles, a lawyer for the environmental non-profit group Earthjustice, which is suing to force the EPA to ban chlorpyrifos.
Shaub, the former Office of Government Ethics director, said even conversations that have nothing to do with the government can raise ethics concerns. The Washington lobbying and contracting worlds are built on access, and that makes any opportunity to meet the president valuable, he said.
“Face time is everything when it comes to Washington,” Shaub said. “The president bopping around his properties gives them access to him.”
Presidents have long socialized with the wealthy and well-connected, including campaign donors. But although the Kennedys visited country clubs in Palm Beach and the Roosevelts “were hobnobbing with the moneyed rich in the Hudson Valley or in Manhattan, the very people (Trump) is hanging out with are paying to be there in that setting with him,” said Barbara Perry, director of presidential studies at the University of Virginia’s Miller Center.
“This is unprecedented on so many levels,” she said.
Contributing: Sara Wise in McLean, Va.; John Kelly in Melbourne, Fla.; Gregory Korte in Bedminster, N.J.
USA TODAY set out to identify as many members of Trump’s private clubs as possible. We found more than 4,500 names by scouring social media posts, news stories and a public website golfers use to track their handicaps.
Our reporters then reviewed many hundreds of members’ names and used information available online and public documents such as lobbying registrations, corporate records, property deeds and medical licenses to determine the members' jobs and if they make their living trying to influence the federal government or win contracts with it. Reporters also interviewed dozens of members, though much more declined to comment.
We prioritized reviewing and interviewing members at clubs where the President has spent the most time since taking office. Those are in Bedminster, N.J., Washington’s suburbs in Virginia; and in and around Palm Beach, Fla.

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