WikiLeaks cables: McDonald's used US to put pressure on El Salvador

[Judi Lynn]

WikiLeaks cables: McDonald's used US to put pressure on El Salvador
Burger giant tried to delay US legislation in order to aid lawsuit being fought in Central American country, cables reveal
Sarah Boseley guardian.co.uk,
Tuesday 21 December 2010 21.30 GMT

McDonald's tried to delay the US government's implementation of a free-trade agreement in order to put pressure on El Salvador to appoint neutral judges in a $24m (£15.5m) lawsuit it was fighting in the country. The revelation of the McDonald's strategy to ensure a fair hearing for a long-running legal battle against a former franchisee comes from a leaked US embassy cable dated 15 February 2006.

Five days earlier, the firms's vice- president for government relations, Dick Crawford, and general counsel for Latin America and Canada, Maria Legett, had briefed the US ambassador on their efforts to get the case settled, using the Central America-Dominican Republic-United States Free Trade Agreement (CAFTA-DR) essentially as a bargaining chip. "They explained that the company has engaged in a Washington-focused advocacy effort to put pressure on the Salvadorans to resolve the case according to the rule of law, suggesting that CAFTA-DR implementation should be delayed pending resolution of the case," the cable says.

Ambassador Hugh Barclay argued strongly that what McDonald's was doing "ran directly counter to US interests in seeing CAFTA-DR implemented as soon as possible". Embassy officials also noted that McDonald's invocation of CAFTA-DR in the lead-up to legislative elections would play into the hands of those who have resisted CAFTA-DR by alienating senior government officials who are already working to see that the case is resolved according to the rule of law and by complicating efforts to get additional CAFTA-related reforms through the legislative assembly".The diplomats also argued that the tactic would thrust the case against McDonald's further into the limelight, attracting the sort of negative publicity they did not want. "Crawford acknowledged these concerns and agreed to tone down, but not cease, his company's efforts on this issue."

The case against McDonald's was a long-running and expensive problem for the burger giant. It had been brought by a former franchisee, Roberto Bukele, whose company had opened the first McDonald's in El Salvador in 1972. In 1996, Bukele lost his franchise. McDonald's suggested to the embassy that he had not complied with conditions attached to its renewal, which included remodelling the three restaurants he, by then, owned, using McDonald's-approved sources for food products, establishing a staff hiring and training plan, and obtaining corporate approval of new restaurant sites and new menu items.

More:
http://www.guardian.co.uk/business/2010/dec/21/wikileaks-cables-mcdonalds-us-el-salvador