Covington & Burling offices in Washington. Photo by Diego M. Radzinschi/THE NATIONAL LAW JOURNAL

Qualcomm Inc. made headlines last month when the company announced it had dropped its bid for Dutch semiconductor company NXP Inc., which makes computer chips for automobiles, after failing to win approval from Chinese regulatory authorities for the acquisition. The aborted deal was widely regarded as a casualty of the Trump administration’s escalating trade war with China.

Earlier this year, the San Diego-based chipmaker itself narrowly escaped a hostile takeover by the telecom company Broadcom, thanks to a novel strategy initiated by the Washington-based firm Covington & Burling.

Covington helped Qualcomm navigate a once-obscure but increasingly more visible regulatory agency that is focused on foreign ventures in the U.S.: the Committee on Foreign Investment in the United States. CFIUS is the multiagency committee within the U.S. Treasury Department that examines mergers and acquisitions for national security threats. Qualcomm, through Covington, voluntarily and unilaterally used the CFIUS national-security review to help secure President Donald Trump’s veto of the deal.

A review of public records shows that Covington has positioned itself well as Qualcomm has stepped up its lobbying efforts.

Covington, the 13th biggest lobbying firm in Washington by lobbying income over the last 20 years, has been a leading lobbyist for Qualcomm for more than a decade. The firm has reaped tens of millions of dollars through its reported lobbying advocacy for Qualcomm, according to an examination of U.S. lobbying disclosure forms and other records, including those compiled by the Center for Responsive Politics at OpenSecrets.org.

In the first half of this year, Covington received $2.2 million from the semiconductor manufacturer. The amount has exceeded this year’s other big clients at Covington, including the Teamsters Union ($640,000); the Pharmaceutical Research and Manufacturers ($600,000); the Coalition for American Retirement ($430,000); National Music Publishers Association ($330,000); and Microsoft ($240,000).

Qualcomm, which relies on a stable of lobby shops, has steadily increased its spending on Washington advocacy. Since 2004, Qualcomm’s federal lobbying expenditures have risen from $1.48 million to $8.26 million in 2017.

Qualcomm – Covington lobby chart

In the same period, Covington’s overall lobbying revenue also increased, from $6.09 million in reported income in 2004 to a total of $18.01 million last year. Qualcomm, over the past five years, has spent anywhere from 39 percent to 58 percent of its total lobbying dollars with Covington.

Representatives from Covington did not respond to requests for comment about the firm’s lobbying work.

In the first two quarters of this year, during the period when Broadcom’s bid for Qualcomm was pending and under review by CFIUS, Qualcomm spent more than $3.89 million lobbying, and Covington took in $2.2 million of that, or 56 percent.

Covington transportation partner Jack Schenendorf is listed among the lobbyists on the forms. Partner Holly Fechner and nonlawyer senior adviser William Wichterman were listed as lobbying for Qualcomm in the U.S. Senate, House and Department of Defense on CFIUS, according to disclosure forms filed under the federal Lobbying Disclosure Act.

Some other firms used by Qualcomm so far this year for lobbying include Akin Gump Strauss Hauer & Feld ($400,000, Tax Cuts and Jobs act, taxation of foreign earnings); Carmen Group ($160,000, patents and IP, Federal Trade Commission), Arent Fox ($160,000, Internet of Things, spectrum, 5G technology); and Brownstein Hyatt Farber Schreck ($120,000, IP and competition, and antitrust).

Covington’s lobbying for Qualcomm extends far beyond CFIUS. In 2017, the company paid Covington to represent it in lobbying on legislation and regulation involving patent reform, intellectual property and antitrust issues, cellphones, drones and aviation and general transportation and vehicle-to-vehicle transportation issues, as well as the North American Free Trade Agreement and tax repatriation.

Qualcomm spent 46 percent of its reported $8.26 million lobbying expenditures last year with Covington, or $3.84 million. Covington’s Qualcomm lobbying represented about 21 percent of Covington’s total lobbying income.

Covington’s other lobbying clients last year included Merck & Co., Microsoft Corp. and Coalition for American Retirement LLC, Pharmaceutical Research Manufacturers of America Inc., Walmart Inc. and Eli Lilly & Co., according to lobbying disclosures.

 

Read more:

Covington Lobbyist Richard Hertling Picked for Federal Claims Court Seat

How Lawyers Used CFIUS Review to Defeat Broadcom’s Takeover of Qualcomm

Hogan Lovells Lobbying Team Went to Bat for ZTE in Sanctions Row

CFIUS Reform Is Likely, but ‘Joint Venture’ Provision in Play, Lawyers Say

Cyber Risks and CFIUS: A Conversation With MoFo’s John Carlin

Morgan Lewis Trade Co-Leader: Get Ready for CFIUS Reform

 


Alexander Everett contributed reporting from San Francisco.