President Obama’s pick to oversee export controls at the Commerce Department is a trade lawyer whose recent clients include two companies on a government watch list and a shipping business that agreed to pay millions of dollars last year to resolve a federal probe into shipments to Iran, Sudan and Syria.
All three companies have had recent interests before the government office that Eric Hirschhorn would oversee if he is confirmed as undersecretary of commerce for industry and security.
Under Mr. Obama’s ethics rules, appointees are prohibited from working on matters involving recent clients unless they obtain a special waiver. Administration officials say there are no plans to give Mr. Hirschhorn a waiver, nor has he requested one.
“If confirmed, Mr. Hirschhorn will be required to recuse himself for two years on all matters in which his former clients are parties or represent parties,” Commerce Department spokeswoman Shannon Gilson said.
Mr. Hirschhorn’s nomination has languished even as Mr. Obama makes a public push to double American exports over the next five years. In a trade speech Thursday, Mr. Obama called for “broader export control reform efforts.”
Mr. Hirschhorn would oversee the Commerce Bureau of Industry and Security, which controls exports of technology, software and dual-use items that can be used for both commercial and military purposes. The bureau processed more than 20,000 licenses in 2008.
Another top export official at the department, Kevin J. Wolf, a trade lawyer recently confirmed by the Senate as assistant secretary for export administration, is recusing himself from matters involving 36 former clients, including major exporters such as Raytheon and Boeing.
Mr. Hirschhorn’s financial disclosure form lists more than two dozen recent law clients, including railroad company Pan Am Systems Inc., telecommunications manufacturer TranSwitch Corp. and Philip Morris. But three clients in particular appear to have strong interests in activities at the Commerce Department.
According to the ethics form, Mr. Hirschhorn provided legal services for the company previously known as DHL Holdings, a U.S.-based unit of the international shipping company. Last year, DHL agreed to pay $9.4 million to settle a federal investigation into shipments to Iran, Sudan and Syria.
Under the settlement, the company also agreed to comprehensive audits this year and next year in compliance with export laws to be sent for review to the Commerce Department.
Two other recent clients of Mr. Hirschhorn’s are TLG Electronics and United Sources Industrial Enterprises, both of Hong Kong. They’ve been placed on the Commerce Department’s “entity list” of companies subject to strict export licensing rules.
According to government records, both companies were put on the list because of suspected ties to Dubai-based Mayrow General Trading, a company that federal officials tied to manufactured parts found in improvised explosive devices (IEDs), roadside bombs used in Iraq.
Commerce Secretary Gary Locke singled out Mayrow in a speech last fall on export controls, saying that through work with the United Arab Emirates, “we successfully targeted Mayrow General Trading, which was forwarding U.S.-made goods to Iran that ended up in bombs in Iraq.”
Administration officials said Mr. Hirschhorn’s work for TLG and United Source began after the companies were placed on the entity list.
“Mr. Hirschhorn, like every other lawyer in private practice, represents a broad range of clients, some of whom stand accused of violating the law,” Ms. Gilson said. “His job is to represent them effectively and within the bounds of the law, period.”
Christopher Wall, a trade lawyer who until last year was assistant secretary of commerce for export administration, in an interview called the entity list an export enforcement tool that stops short of placing companies on a denial list.
“The entity list regulation establishes a process for companies to ‘come clean’ and bring themselves into compliance,” he said.
Of Mr. Hirschhorn’s work for companies on the entity list, Mr. Wall said, “It shouldn’t be seen as a negative at all. In fact, it should be seen as a positive. In order to get off the entity list, companies need to show that they are complying with U.S. export controls. Advising companies on how to comply with U.S. export controls is what lawyers do.”
He said Mr. Hirschhorn’s situation involving former clients happens frequently when someone takes a government position after working in the private sector.
Mr. Hirschhorn referred questions to the Commerce Department, but he referred to his private legal work in testimony before the Senate.
“I have spent a good deal of my time advising clients whose activities are subject to United States export control and regulations,” he said.
Mr. Hirschhorn’s nomination has languished in the Senate since last fall. It was one of dozens held up last month by Republican Sen. Richard C. Shelby of Alabama, who reportedly placed a blanket hold on the nominations over concerns about an unrelated Air Force refueling tanker program. He’s since lifted most of the holds, but Mr. Hirschhorn’s nomination remains pending.
Former Federal Aviation (FAA) Administrator Marion Blakey, now president and chief executive of the Aerospace Industries Association, which includes major defense and aviation manufacturers that export overseas, said she hopes the Commerce Department post is filled soon.
“It’s very important to fill this particular position, which is key to modernizing our export control system,” she said.