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HomeAnonymousShein’s lobbying spending soars amid supply chain probes •…

Shein’s lobbying spending soars amid supply chain probes •…

This photo taken on November 10, 2022 shows a woman walking inside the first permanent showroom of Chinese online fast fashion giant Shein, during a media preview in Tokyo. (Photo by Richard A. Brooks / AFP) (Photo by RICHARD A. BROOKS/AFP via Getty Images)

Amid scrutiny about possible forced labor in its supply chains, the fast-fashion retailer Shein more than doubled its lobbying spending last quarter. The company, known for advertising trendy, inexpensive clothing on social media apps like TikTok, spent $600,000 on federal lobbying during the second quarter of 2023, up from $230,000 during the first three months of the year.

The jump in spending comes as congressional lawmakers have begun to probe the now Singapore-based company over its supply chains, which flow through China, where Shein was originally based. In February, lawmakers questioned Shein about whether it sourced cotton from the Xinjiang region, where the United Nations said it found evidence of coerced labor and other human rights abuses in an August 2022 report.

Lawmakers also called on the company to increase transparency in its supply chains. A June interim report from the House Select Committee on the Chinese Communist Party claims Shein exploits import law loopholes to skirt tariffs and to avoid customs inspections, including for compliance with the Uyghur Forced Labor Prevention Act of 2021, which banned imports coming from the Xinjiang region in China. 

The report highlighted how parcels from fast-fashion companies sent directly to consumers worth under $800 aren’t subject to inspection under an exception in the Tariff Act of 1930. Shein sent a July 24 letter to the American Apparel and Footwear Association, stating the company would be “eager” to help the organization and Congress give the exception a “complete makeover.” The American Apparel and Footwear Association, a coalition of clothing brands, lists Shein as a sponsor.

The American Apparel and Footwear Association, along with three other apparel-industry groups, made a joint statement in September 2020, saying the Uyghur Forced Labor Prevention Act would contradict due process by “branding anything and everything” from the Xinjiang region as “made with forced labor.” The association spent about $726,000 on federal lobbying in 2022, and its disclosures have mentioned lobbying about Xinjiang since 2019’s fourth quarter. It has spent about $367,000 on lobbying so far in 2023.

A Bloomberg investigation found Shein garments used cotton from China’s Xinjiang region on at least two occasions in 2022. A Shein spokesperson told OpenSecrets that the company has “zero tolerance for forced labor,” has no contracts with Xinjiang manufacturers, and that the company uses a “code of conduct, independent audits, robust tracing technology and third-party testing” to ensure its products comply with the Uyghur Forced Labor Prevention Act.

The House select committee is also investigating Temu, an e-commerce app owned by PDD Holdings, for the same reasons. The company has not yet entered the U.S. lobbying world, unlike Shein, which began lobbying the federal government in the third quarter of 2022. Neither Shein nor Temu have reported lobbying in the 19 states where OpenSecrets tracks lobbying expenditures.

With Shein’s expenditures so far this year, the fast-fashion retailer is on track to best other clothing manufacturers as the industry’s top lobbying spender. The company’s $830,000 spent in the first six months of 2023 to influence federal policy makes up over 38% of the nearly $2.2 million that the entire clothing manufacturing industry spent. 

Clothing manufacturers in general spend small amounts on lobbying compared with other industries. In 2022, 30 different clothing manufacturers spent $5.1 million on federal lobbying, compared with the $58.3 million that 85 clients in the retail sales industry spent lobbying the same year.

Shein spent about $340,000 on in-house lobbying last quarter, reporting that its vice presidents of U.S. government relations, ​Mark Aitken and Sirat Attapit, lobbied federal lawmakers on trade, legislative and regulatory issues as well as “general education regarding Shein’s presence, operating footprint, and economic impact in the United States.”

Like the rest of Shein’s lobbyists, Aitken and Attapit have gone through the “revolving door.” Aitken worked as a legislative staffer for Rep. Frank LoBiondo (R-N.J.) until 2014. Attapit previously worked for the Biden administration during the first three months of 2022, after serving in the U.S. Trade Representative’s senior leadership team for 11 months in 2021. 

On top of Shein’s in-house lobbying expenses, the company also kept the same firms it hired in 2022 through the first half of 2023. For the last three quarters, Shein paid $90,000 to Akin Gump Strauss Hauer & Feld, which added Reginald Babin to its Shein lobbying team in April, joining four other former federal employees. Babin worked as chief counsel for Senate Majority Leader Chuck Schumer (D-N.Y.) as recently as 2022.

Shein also paid $170,000 to Hobart Hallaway & Quayle Ventures from April 1 to June 30, an increase from the $140,000 it paid the firm in the first three months of the year. Shein paid the firm its first-ever lobbying expenditure of $50,000 in 2022’s third quarter followed by $190,000 the next quarter. Former Rep. Benjamin Quayle (R-Ariz.) and two other former federal employees are on the firm’s team representing Shein.

Both outside firms reported lobbying the House and Senate about the same issues as the in-house lobbyists, but also reported lobbying about “supply chain and data privacy” issues.

Earlier this year, when it was rumored Shein was preparing for an initial public offering in the U.S., which Shein denies, 24 lawmakers wrote to the Securities and Exchange Commission to request the agency halt any Shein IPOs until the company could certify its supply chain did not use forced labor. The letter cited the Bloomberg report and the Uyghur Forced Labor Prevention Act.

This letter from lawmakers to the SEC came after Shut Down Shein, a coalition of anonymous brands and consumers, launched its own lobbying campaign. Shut Down Shein was registered as a client of the lobbying firm Actum I in April and its website’s domain was registered in March. 

The organization has paid Actum $30,000 each quarter for a combined $60,000 this year. Actum reported five of its lobbyists tried to influence the SEC about the “regulation of foreign-owned companies” and “unfair labor practices” on behalf of Shut Down Shein. Three of Shut Down Shein’s five lobbyists have held federal jobs before.

While neither Shein nor Shut Down Shein have reported lobbying about intellectual property issues specifically, Shein is catching flak for its design process, too. Three independent designers filed a federal lawsuit in July alleging not only that Shein stole their art, but that the company’s theft of artists’ intellectual property is so extensive that it amounts to racketeering.

Bloomberg also reported on July 24 that H&M, Shein’s Sweden-based fast-fashion rival, sued Shein for copyright infringement in Hong Kong courts in litigation that’s been ongoing since 2021. H&M entered the U.S. federal lobbying world in late 2022, registering its head of U.S. government and public affairs as a lobbyist. 

“We believe that Shein in multiple cases has infringed on our designs and have therefore filed this lawsuit. As it is still an ongoing case, we choose not to comment further,” a spokesperson for H&M told OpenSecrets. Shein declined to comment on the litigation.

H&M reported spending $19,000 in the first three months of 2023 but reported no lobbying activities. The company has not yet reported its lobbying expenditures for the second quarter and did not offer any comment about them.

Researcher Daniel Auble contributed to this report.

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