Fri, Nov 27 2009

Published: June 29, 2008 04:00 am    PrintThis  

China trip cost taxpayers $236K/Patrick administration says trip pays dividends; others skeptical

By Edward Mason
Staff writer

BOSTON — They traveled more than 15,000 miles to stay at the luxurious Grand Hyatt Beijing and St. Regis Shanghai, and enjoy cocktails, spring rolls and pork dumplings at the private China Club Beijing — where the "privileged few ... step back in time to experience what China was like during the Qing Dynasty."

The self-described delights of the China Club ("fit for an emperor") and the sights of Beijing and Shanghai were incidental to the stated purpose of the trip to China by a delegation led by Gov. Deval Patrick.

The goal was to promote Bay State clean-energy companies and secure a coveted agreement for direct flights between Beijing and Boston, state officials say.

But the trip last December and Patrick's plans to travel to Israel and India are raising questions about the value of the international trips that officials call trade missions but critics call junkets.

Trade missions were all but eliminated under Patrick's predecessor, Gov. Mitt Romney, but are back on the agenda under Patrick.

The China trip cost a total of just over $312,000, with taxpayers paying $236,000 of that.

Expenses included $107,000 in airfare, $58,000 in hotel bills and $53,575 for "hospitality" and receptions, including $14,240 for the China Club shindig.

A $3,050 video crew documented the visit for posterity.

Patrick will travel to Israel in September to talk up the state's biotech industry and its new $1 billion life sciences initiative. And in 2009, he plans to visit India, bringing high-ranking officials and business executives with him.

The trade missions are part of Patrick's ambitious agenda to drum up business for Massachusetts.

But the value of these missions is hard to quantify, and state export data suggests they have had little impact on trade in the past.

Critics contend the trips are a waste of taxpayer dollars and are better left to private businesses.

"Most trade occurs between private entities," said Steven Poftak, research director with the Pioneer Institute, a conservative think tank based in Boston. "These trips typically culminate in government-to-government contacts that don't necessarily translate into revenue for private industry."

'Valuable visit'

After returning from China in December, Patrick declared the trip a success, saying it helped establish important relationships and opened the door to Massachusetts businesses.

"It was a very full, valuable visit on a lot of levels," the governor said.

Daniel O'Connell, the state economic development secretary who accompanied Patrick on the China trip, cited two specific examples.

After meetings between the Patrick delegation and Hainan Airlines and Chinese aviation regulators, Hainan applied for permission to fly directly to Logan Airport. Nonstop travel to Beijing will begin in 2009.

Also, Organogenesis Inc., a Canton company, struck a deal to export its artificial skin product to China. The company had been unable to break into the China market previously.

O'Connell said both of those deals will create local jobs. And he said Patrick's stature as governor made contacts between Massachusetts businesses and Chinese officials possible.

"The government is the architect of economic policy and directs business activity," he said. "You need to sit down and establish a contact, or you'll never get a meeting with the people who take directions (from government superiors)."

Kathleen Moloney, who led overseas missions for then-Gov. William Weld, said a governor leading a trade delegation signals respect to foreign leaders and results in critical, high-level contacts.

"When Weld met with the then (Chinese) finance minister and talked about specific companies, it's impossible to quantify how many dollars were generated versus (businesses) going on one's own," she said.

Weld participated in more than a dozen overseas trade missions during his first term, traveling to Canada, China, India, Japan, Taiwan and Vietnam, among other places.

As lieutenant governor, Paul Cellucci led a mission to Poland, and as governor, he traveled to China and Australia. Jane Swift traveled to Jordan as Cellucci's lieutenant governor and to Germany as acting governor.

'Boondoggles'

Romney dismissed trade missions as "boondoggles" when he was governor.

He didn't go on one until more than two years into his term, a trip to Israel that critics said was more about burnishing his presidential resume than improving trade.

While she believes trade missions are valuable, Moloney also understands the skepticism about overseas trips.

"The scrutiny is very just," she said. "Why are we going there? The 'J' word (junket). It's understandable a politician would tread very carefully."

Why Patrick wants to travel is clear, but whether it's worth the time and money is not.

The financial details of the China mission were obtained by the Sunday Eagle-Tribune through the state's public records law earlier this month, more than six months after the paper's initial request for the information.

Taxpayers paid more than $53,000 to fly Patrick and 20 other state officials on the nearly 16-hour journey to Beijing on Nov. 30, and back from Shanghai on Dec. 8, according to the state documents.

The governor was accompanied by more than a dozen business executives and private college officials, who paid approximately $73,000 to participate in the mission. No taxpayer money was spent on the private sector officials.

The group returned with agreements to cooperate on life sciences and clean-energy projects and to begin nonstop air travel between Boston and Beijing.

Trade up, trips down

But the link between trade missions and an increase in trade is not always clear.

Between 1996 and 2002, when Massachusetts governors engaged in regular overseas trade missions, total state exports did not rise more than two consecutive years, according to the World Institute for Strategic Economic Research at Holyoke Community College.

But in each year since 2002, total exports have increased, even as Massachusetts officials abstained from trade missions. During the same period, exports to China also increased each year.

The Patrick administration says one problem with previous trade missions was the way they were designed. They weren't focused on a single industry, but rather concentrated on a particular country with an expanding economy and were stocked with businessmen from a variety of sectors.

Patrick's missions will be laser-focused on one or two industries, said O'Connell, the state economic development secretary.

But in the end, global economics might have more to do with the ebb and flow of international trade than trade missions.

I.M. Destler, senior fellow at the Washington-based Peterson Institute for International Economics, said international trade is more likely affected by favorable exchange rates and one country having what the other wants than any state-level trade mission.

"It's hard for trade missions to play a big role," Destler said. "They can help a particular state or company by raising consciousness and maybe expanding a market. But if your question is, 'Do they make a substantial difference?' — the answer is probably not."

Poftak, of the Pioneer Institute, said that while trade accords between national governments can have an economic impact, deals between state officials and their local counterparts abroad likely won't.

"We're not unequivocally against (trade missions)," he said. "We're skeptical of the value of most of these missions, given that in the long run business is conducted between two private entities. That's where the real value is."

Curiously, the state does not appear to be measuring whether the costly missions deliver results.

O'Connell said the state measures a trade mission by its ability to create jobs.

But Christa Bleyleben, executive director of the Massachusetts Office of International Trade & Investment, which oversees trade missions, said the agency has not developed any criteria for gauging the trade missions' success, nor has it been asked to do so.

That's unacceptable, said Rep. Bradley Jones Jr., R-North Reading.

He said he is not against state-funded trade missions as a rule but believes they should be undertaken only when their goals cannot be achieved otherwise.

He is troubled that the Patrick administration has not developed criteria for trade missions.

"There has to be a standard," Jones said. "There needs to be some criteria to say whether they're successful or not."

><p>

China travelers

Administration

Gov. Deval Patrick

Bernard Cohen, Transportation secretary

Thomas Kinton, CEO of Massport

Daniel O'Connell, Housing and Economic Development secretary

Governor's staff

Brendan Ryan, Rebecca Deusser, Edwin Carr, Kenneth Brown, John Murray

Massachusetts Technology Collaborative

Mitchell Adams, Charles Yelen, Sudhir Joseph Nunes, Eustacia Reidy, Michael Baldino, Lisa Erlandson

Massport

Danny Levy, communications

><p>

State police (security detail)

John Cahill, Kevin Scaplen, Cleveland Coats Jr.

UMass

Jack Wilson, president, UMass

Dr. Allan Gua, UMass (Beijing only)

Dr. Craig Mello, University of Massachusetts Medical Center (Beijing only)

Private sector

Dr. Victor Zue, Massachusetts Institute of Technology Stata Center

Dr. Anthony Saich, faculty chairman of Asia Programs, Harvard University

Dr. Joshua Boger, CEO, Vertex Pharmaceuticals

Thomas J. Sommer, president, Massachusetts Medical Device Industry Council (Beijing only)

Gunther Winkler, vice president, Biogen Idec

Marc Baer, president and CEO, ViaCell

Thomas Foxx Taylor, vice president, Nypro

Jerry Gum Chung, Nypro

Geoffrey MacKay, president and CEO, Organogenesis

James Qun Xue, director of Genzyme China

Michael Glynn, senior vice president, Genzyme Asia Pacific, Canada, and South Africa

Jeffrey Elton, senior vice president of strategy and global CEO, Novartis Institute of BioMedical Research (Shanghai only)

Bruce Anderson, CEO, Wilson Turbopower

Mitchell Tyson, CEO, Advanced Electronic Beams

Leo Casey, vice president and chief technology officer, Satcon Corp.

Elbert McDaniel, vice president of sales and marketing, Satcon Power Systems

Dennis Duffy, vice president of government and regulatory affairs, Energy Management Inc. /Cape Wind

Hal Thrasher, director of new business ventures, Rohm & Haas Electronic Materials

Chia-Wen Hsieh, Rohm & Haas Electronic Materials (Beijing, some Shanghai)

Source: State records

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