By John D. McCown
I’ve written many articles over the years on Cato’s relentless lobbying campaign against the Jones Act. The time I’ve spent following its activities has resulted in views on both Cato’s role and it’s primary goal. With that, the identification of the parties likely funding their multiyear campaign became apparent to me and my analysis named three foreign corporations that top my list. My view that Cato’s Jones Act efforts are anything but objective and independent has been corroborated with numerous facts. Now comes further proof with the recent disclosure in a FARA (Foreign Agents Registration Act) filing that the pay-to-play network that I’ve seen Cato at the center of also extends beyond foreign corporations and actually includes foreign governments seeking to thwart the Jones Act.
For some seven years, one person at Cato has focused exclusively and persistently on the Jones Act. The latter is underscored by the fact that his favorite way of communicating is the social media platform formerly known as Twitter, where a previous analysis over several months showed that he averaged 11 posts per day. All related to the Jones Act. Who would have ever thought that “research” involves so many 128 character tweets? Longer versions of what he posts on Twitter find their way into articles, interviews and podcasts in what is a multimedia effort. Despite Colin Grabow’s title of Research Fellow at Cato, it is unclear what actual research on the Jones Act Cato does, but Grabow certainly beats the tambourine constantly on social media against the Jones Act. Indeed, his Twitter page shows 38,800 total posts and when compared to the 87 months Grabow has been on his crusade that is 446 tweets per month or 15 per day. He’s been even busier than I thought.
By virtue of my career experience with U.S. flag container carriers I bring an historical bias to the Jones Act issue, but that also comes with knowing the facts. I have no financial interest in the sector now and that has given me the ability to detail those facts without favor or prejudice. That has been the situation throughout my criticizing Grabow’s writings where the catalyst is one misstatement or another. This has created a large target zone over the years, as Grabow’s modus operandi is to cherry-pick and trumpet selected work of others out of context in his daily attacks on the Jones Act via short drive-by postings. Nobody has to tell him that if you repeat lies often enough, that repetition and its echo effect may just have something sticking, as that seems to be what he is counting on. I’ll defer to previous articles on the manifold factual inaccuracies and misleading statements by Cato as here my main focus is on how it disseminates this balderdash.
Despite the nonsense that Cato has written about the Jones Act, they have managed to co-opt and get articles in mainstream publications like The Atlantic and Forbes to parrot what they are putting out. I imagine the publications, like me when I first encountered Cato’s writings on the topic, assumed it was acting as a real think tank. However, instead of the systematic investigation into and study of materials and sources in order to establish facts and reach new conclusions, Cato’s work here is devoid of the primary research typically associated with think tanks. Grabow’s activities are more consistent with those of a public relations professional. From a communications standpoint, Grabow is like a Three-card Monte maestro who is constantly shuffling selected talking points so fast that the real facts always manage to be hidden in everything he presents. He is the only person associated with Cato’s Center for Trade Policy Studies where despite the broad name the only output since 2017 has been about the Jones Act. It has nothing to do with studies and everything to do with lobbying. This is supported by the fact that Cato’s percent of contributions from corporations spiked to more than twice the historic level coinciding with Grabow joining Cato. They went from 1.32% of total contributions for the year ended March 31, 2018 to 2.13%, 2.71%, 2.67%, 2.78% and 2.96% for the years ending on the same date in 2019, 2020, 2021, 2022 and 2023. My analysis of corporate contributions to Cato points to the last six fiscal years averaging $1,171,000, an amount that is $705,000 more and 2.51 times the $466,000 average for the two years before Grabow was at Cato.
In the FARA filing with the Department of Justice on October 17, 2024, a Washington DC based video contractor registered that it was hired to “produce two catching, informative short videos (ex Tik-Tok-style videos) on the effects of the Jones Act.” The contract disclosed is with Brussels based IBF Connect SA whose website shows that the European Commission and its affiliates are its primary clients. The FARA filing stated that the European Commission was financing the project and it would be implemented by the EU delegation in the U.S. In the section asking about the business of the foreign principal, IBF Connect SA’s activity is described as “development of the European Union, European Commission, European Parliament, European Directories and European Agencies.” In other words, it’s the EU’s main outside lobbyist.
The filing states “A partnership with CATO was developed for executing this activity” and details Cato’s involvement in each stage of the project. The partnership referred to involves EUDEL and it goes on to say “EUDEL wants to illustrate the Jones Act has negative effects in coastal communities” in a background section of the filing. EUDEL is understood to mean the EU delegation in Washington, DC that is also referred to as the “Contracting Authority” in the filing. “CATO’s lead researcher on the Jones Act, Dr. Colin Grabow, and CATO’s team, will cooperate with the following activities” and then shows a list including mapping stakeholders, coordinating with EU companies, organizing closed-door seminars, writing op-eds and giving scientific advice. Cato’s involvement was detailed down to it providing “input on the scientific content of the videos” as well as organizing and hosting “a closed door brainstorming lunch seminar with local and national stakeholders” at its Washington, DC headquarters. However, it looks like Grabow has misstated his credentials to his new European Commission partners, as he does not actually hold a PhD in a scientific or non-scientific field. Neither Grabow’s biographical summary on the Cato website nor his LinkedIn profile page show that he has a PhD and the highest academic degree shown on both is an MA from George Washington University.
In an earlier article in gCaptain on this situation, Cato denied any involvement and stated, “The Cato Institute is not involved with IBF Connect and has never met or worked with them.” The same article, however, quoted Adriana Brassart, a spokesperson for the EU delegation, as saying “We regularly work and have contact with think tanks throughout Washington, DC, on policy issues relevant to EU — U.S. relations, including with the Cato Institute.” Based on my experience with Cato and the mendacity I see on almost everything from it on the Jones Act, it is easy for me to go with the EU account as being more accurate. If Cato has no connection with IBF Connect, why was it included so extensively in the plans outlined in the FARA filing, which explicitly mentions “a partnership with Cato was developed for executing this activity? Is Cato working through an intermediary to create plausible deniability? What other activities might Cato be engaging in with the EU, its member countries, or other foreign entities, and to what end? I’ve long thought that based on the foreign corporations that I believe are funding Cato’s Jones Act efforts that it should make a FARA filing itself. This latest evidence of its involvement with the EU reinforces that view.
Saying the quiet part out loud, the FARA filing states “The specific objective of this action is to facilitate the participation of companies from the European Union in the US market” and went on to say “The strategy to obtain these results is working alongside interested US stakeholders.”
The central role of Cato envisioned by the EU’s lobbyist is underscored with the filing saying, “The CATO Institute is at the forefront of the battle against the Jones Act. Its #endtheJonesAct work aims to shine a spotlight on the Jones Act’s myriad of negative impacts and expose its alleged benefits as entirely hollow. In doing so, the CATO Institute’s project on Jones Act Reform is meant to raise public awareness and lay the groundwork for its repeal or reform.”
The FARA filing laid out a comprehensive program to achieve the stated objectives, with the “catching, informative short videos” expected to be unveiled in early 2025 when the plan is to hold public outreach events in three coastal cities. The first event would be in Houston on the Gulf Coast followed by events at coastal cities in the Southeast and the Northeast. The choice of those coastal areas in that order has Cato’s fingerprints all over it and further corroborates my view on its primary goal. And I’m certain the Northeast public outreach event will be held in Boston. Exempting LNG shipments from the Jones Act has always been in my view Cato’s key priority. All three of the foreign corporations that I believe are funding those efforts have commercial interests related to LNG. Two of them are large European corporations.
Boston and San Juan are the only U.S. points receiving LNG by ship because that can not get natural gas by geometrically more cost efficient pipelines. My October 2021 article went into detail on the cost economics of moving LNG by ship and what those facts and geography mean for LNG movements to both U.S. points. Even if the Jones Act did not apply to LNG moves, these cost factors dictate that it would likely still come from Trinidad, albeit at a lower commodity price. The only parties clearly getting economic benefits would be those foreign corporations.
Putting aside the myriad of laws that are meant to preclude foreigners from getting involved in domestic U.S. affairs, it’s not nice for the EU to be underwriting an initiative aimed at changing one of our laws. Because the Jones Act is part of a larger legislative act passed more than one hundred years ago, any change to it requires an act of Congress. It is certainly inappropriate for one government to attempt to change the laws of another government to enrich its own corporations. But what moves this into being reprehensible is that the sought after commercial advantage by countries that are allies would bring with it quantifiable national security risks for America. That is no way for an ally to treat another ally. This is hardly a time when we should be looking at dismantling any existing parts of our merchant marine. Instead, the focus should be on strengthening it across the board with tangible goals and initiatives.
Coincidentally, last week Cato released a wish list of items it sent to DOGE (Department of Government Efficiency) to consider. DOGE is the planned new group to be headed up by billionaire Elon Musk that is tasked with improving governmental efficiency. In Cato’s submission, repeal of the Jones Act was not just a bullet point, but it had a large subheading followed by a full paragraph. Putting aside the inconsistency with the expected Jones Act policy of the next administration, while Colin Grabow’s 38,000 posts on Twitter would no doubt be well received by Mr. Musk, one particular social media post he made would be less well received. In that June 18, 2013 tweet, Grabow said, “Elon Musk has been suckling off the taxpayer for a while.”
The Nobel Prize-winning economist Milton Friedman is quoted in a Cato annual report saying, “Cato has really been remarkable in maintaining itself as a bastion of principle.” I’ve always admired this brilliant economic thinker, but he made that comment decades ago. If he was alive today and saw the piffle Cato pumps out daily in its lobbying campaign against the Jones Act, I believe he would think differently and ask Cato not to use that quote. He’s not the only one who had a mistaken view of Cato’s adherence to principles. Around the same time he made that statement, I was among Cato’s contributors. My positive view of it had much to do with it taking longer than it should have for me to realize that as it related to the Jones Act, it wasn’t acting as a think tank but was acting as a lobbyist. Shame on Cato. I know that there are real researchers there doing the solid work that think tanks do and Cato’s lobbying actions related to the Jones Act must be an embarrassment to them.
This piece originally appeared on Medium on December 28, 2024.
John D. McCown is a shipping expert with over four decades of operating and investing experience, primarily in the container shipping sector. That experience includes CEO of a U.S. flag container shipping company he co-founded and managing worldwide transport investments at a $20 billion hedge fund. He currently advises lectures and writes about maritime issues that interest him. Mr. McCown worked on a daily basis for more than twenty years with Malcom McLean, the inventor of container shipping, and holds an MBA from Harvard Business School as well as two maritime related U.S. patents.
