By Robert Reich, Robert Reich’s Blog, July 5, 2015
“Ever since the Supreme Court’s shameful Citizens United decision, big corporations have been funneling large amounts of cash into American politics, often secretly. Bad enough. But when big government contractors do the funneling, American taxpayers foot the bill twice over: We pay their lobbying and campaign expenses. And when those efforts nab another contract, we pay for stuff we often don’t need.”
A case in point is America’s largest contractor- Lockheed Martin. More than 80 percent of Lockheed’s revenues come from the U.S. government, mostly from the Defense Department.
Follow the money behind the money. According to the Center for Responsive Politics,
- Lockheed’s Political Action Committee spent over $4 million on the 2014 election cycle,
and has already donated over $1 million to candidates for 2016.
- The top congressional recipient of Lockheed’s largesse is Mac Thornberry (R-Texas),
Chairman of the House Armed Services committee.
- Second-highest is Rodney Frelinghuysen (R-New Jersey),
Chairman of the Defense Subcommittee of the House Appropriations Committee.
- Third is Kay Granger, the Subcommittee’s Vice-Chair.
- Lockheed also maintains a squadron of Washington lawyers and lobbyists dedicated to
keeping and getting even more federal contracts. The firm spent over $14 million lobbying
Congress last year.
Remarkably, 73 out of Lockheed’s 109 lobbyists are former Pentagon officials, congressional staffers, White House aides, and former members of Congress. You and I and other taxpayers shouldn’t have to pay Lockheed’s lobbying expenses, but these costs are built into the overhead Lockheed charges the government in its federal contracts.
And we shouldn’t foot the bill for Lockheed’s campaign contributions, but these are also covered in the overhead the firm charges- including the salaries of executives expected to donate to Lockheed’s Political Action Committee.
The ten largest federal contractors are all defense contractors, and we’re indirectly paying all of them to lobby Congress and buy off politicians. To state it another way, we’re paying them to hire former government officials to lobby current government officials, and we’re also paying them to bribe current politicians- all in order to keep or get fat government contracts that often turn out to be lousy deals for us.
Now it’s a military-industrial-congressional complex
President Obama is said to be considering an executive order requiring federal contractors to disclose their political spending. He should sign it immediately. But he should go further and ban all political spending by federal contractors that receive more than half their revenues from government. That includes Lockheed and every other big defense contractor.
“Pay-to-play is for real.”- POGO’s General Counsel Scott Amey, in a blog post on Monday.
A report released last year by the Sunlight Foundation detailed how 200 corporations spent a total of $5.8 billion on lobbying and campaign contributions from 2007 to 2012. During the same period, the same companies received $4.4 trillion in federal business and support, the report found. Amey: “In other words, for every $1 the companies spent on political influence and access, they got $760 from the federal government.”
- Lockheed lobbying stats: OpenSecrets.org
- Obama considering executive order on contractor campaign spending: The Hill
- Sunlight Foundation report on contractor lobbying: The Hill
- More on Lockheed lobbying at First Street (2012)
Regarding the Lockheed F-35 Joint Strike Fighter contract:
In 2001, Lockheed landed the biggest defense contract in history when it was named the main contractor for the Joint Strike Fighter (est. $400 billion). 14 years on, in April of 2015, the GAO reported that:
“The F-35 Joint Strike Fighter program had to make unexpected changes to its development and test plans over the last year, largely in response to a structural failure on a durability test aircraft, an engine failure, and software challenges. At the same time, engine reliability is poor and has a long way to go to meet program goals. With nearly 2 years and 40 percent of developmental testing to go, more technical problems are likely. Addressing new problems and improving engine reliability may require additional design changes and retrofits.”
“An army of lobbyists is great. But an army of insiders who know how to navigate the halls of power, can socialize with politicians on weekends and ultimately play the system like a violin is so much better.”
-From Sheila Krumholz, executive director of the Center for Responsive Politics in “Obama Pledged to Reduce Nuclear Arsenal, Then Came This Weapon”.
Santa Fe, NM
In a notice given late Friday the Department of Justice announced a settlement with Lockheed Martin over alleged violations of federal anti-lobbying laws to extend its management contract of the Sandia Labs without competition.
Jay Coghlan, Director of Nuclear Watch New Mexico, commented:
4.7 million dollars is a slap on the wrist for the world’s biggest defense contractor to pay. Lockheed Martin clearly broke the law by engaging in illegal lobbying activities to extend its Sandia contract without competition, and earned more than 100 million dollars while doing so. Moreover, it engaged in deep and systemic corruption, including paying Congresswoman Heather Wilson $10,000 a month starting the day after she left office for so-called consulting services that had no written work requirements. There should be criminal prosecutions for clear violations of federal anti-lobbying laws, and Lockheed Marin should be barred from future competition for the Sandia Labs contract, expected next year. Holding the revolving gang of greedy politicians and contractors strictly accountable is essential as they get ready to fleece the taxpayer during the planned one trillion dollar “modernization” for what the nuclear weapons labs are now calling “The Second Nuclear Age.”
Washington, DC and Santa Fe, NM
Today, the Project On Government Oversight and Nuclear Watch New Mexico sent the Department of Energy Secretary a letter urging that the FY 2014 contractor incentive award fee for the Sandia National Laboratories be completely denied. The two watchdog organizations wrote to the Secretary earlier this month to urge him to cut performance incentive award fees at least in half for the Los Alamos Lab contractor because of substandard performance that led to the contamination of 21 workers at the Waste Isolation Pilot Plant and the indefinite closure of that multi-billion facility. As deplorable as the Los Alamos situation is, the Sandia case is arguably worse because it involves direct violations of federal law that prohibit contractor use of taxpayers’ dollars to lobby the government for further work.
The Sandia Labs are run by the for-profit Sandia Corporation, wholly owned by the country’s largest contractor, the Lockheed Martin Corporation. According to its current contract with the federal government, the Sandia Corporation could earn up to $9.8 million in FY 2014 performance incentive award fees (it also stands to receive $18.3 million in fixed fees). In addition, Lockheed Martin could receive $2.8 million for “Home Office And Other Corporate Support,” which includes the subcategory “Provision of Corporate Ethics.” The Department of Energy should refuse to pay both because of improper lobbying of Congress and federal officials and Lockheed Martin’s ethical failure while doing so.
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