Top defense contractors spend millions to get billions

Introduction

The Pentagon’s top contractors sent an army of more than 400 lobbyists to Capitol Hill this spring to press their case for increasing the nation’s spending on military hardware, in a massive effort costing tens of millions of dollars of their own funds from April to June alone, according to an analysis of public lobbying data by the Center for Public Integrity.

The contractors are upset in part because most military spending has been capped for the past few years under budget controls meant to rein in government debt. So far, the caps have forced a decline in main defense budgets from about $528.2 billion in fiscal 2011 to $496.1 billion in fiscal 2015, instead of a previously projected increase to roughly $598 billion. Mounting frustration with the caps was evident in the administration’s submission this year of a military budget that exceeded the limits by about $38 billion, followed by moves by both branches of Congress to add even more billions.

The caps remain the law of the land, however, and they won’t go away until Congress votes to lift them. The issue has so far been tangled up in a dispute between the parties over whether to also increase spending on social welfare programs. But several lobbyists said in interviews that they were optimistic that this could finally be the year that lawmakers agree to let defense contractors return to their historic pattern of ever-higher revenue from the federal treasury.

This could explain in part why total lobbying expenditures by the 53 top defense contractors that reported paying for such work in the second quarter of 2015 were more than 25 percent higher than the amount they spent in the same quarter of 2014 — $58.5 million instead of $45.7 million. But not all of the lobbying was related solely to military spending.

Boeing, a $100 billion corporation that makes military aircraft and other lethal hardware, as well as civilian aerospace goods, reported to the clerk of the House and the secretary of the Senate that it spent almost $13.2 million on lobbying in the first two quarters of this year. Its filing said some of this expenditure was related to expanding its “Commercial Aircraft Sales/Services” and supporting the Export-Import Bank, among other issues. The aerospace contractor’s commercial aircraft division receives billions in financing from the bank, and so it has a large stake in this year’s continuing congressional skirmish over renewing the bank’s charter.

Gayla Keller, a Boeing communications director, declined to comment specifically on their lobbying activities in an emailed response to questions.

Parsing the lobbying reports to sort out just the defense-related expenditures for these contractors is not easy, because the lobbying reporting requirements have some ambiguity baked into them. Lobbying expenses are only reported on an overall basis for an organization, and aren’t tied to specific issues or associated with the agencies that lobbyists target. And for some of the top defense contractors, the Pentagon is only one of many customers, albeit an outsized one.

Still, 40 of the 53 top contractors that lobbied during the last quarter reported that one target of their efforts was the National Defense Authorization Act, the main legislation authorizing defense spending each year. Some of these firms — including Boeing, General Dynamics, Northrop Grumman, and Raytheon — said that their efforts were aimed at budget controls.

General Electric — which makes washing machines and light bulbs and has a major healthcare division — lobbied on the Export-Import Bank, Medicare, passenger and freight train safety and natural gas production, according to its latest disclosure. It also lobbied on several defense weapons programs, including the B-1 Bomber, the CH-53K Super Stallion helicopter, the F-18 Fighter and the F-35 Joint Strike Fighter.

General Electric responded to the Center’s requests for comment with an emailed statement that its “[e]mployees educate officials on our Company’s operations, emerging technologies and markets, as well as on our views on public policy issues.”

Boeing and General Electric had the largest increases in lobbying spending compared with the same period in 2014, among the 15 defense contractors that spent $1 million or more to lobby in the quarter. General Electric almost tripled its lobbying spending compared with the earlier period, from $2.8 million to almost $8.5 million. Boeing more than doubled its spending for the quarter, from almost $4.2 million in the second quarter of 2014 to $9.3 million in the most recent quarter of this year.

Industry experts the Center spoke with said that while there were probably multiple reasons for the heightened lobbying, lifting the budget caps has been the industry’s central ambition. “People are concerned about the sequester,” said retired Maj. Gen. Arnold Punaro, the chairman of the National Defense Industrial Association, the country’s main defense industry association. “For the industry as a whole, that may be the top issue,” said a veteran defense lobbyist, who asked not to be named.

Of the total 655 lobbyists employed by the contractors, 423 of them specifically lobbied on defense, in some cases along with other issues, according to the lobbying reports.

General Dynamics paid for 74 lobbyists, more than any other contractor, for example, and 70 of these lobbied on defense, part of its $2.7 million lobbying tab. Lockheed Martin Corp., the world’s largest defense contractor, spent $3.5 million and enlisted 64 lobbyists to press government officials, including 56 who lobbied on defense as well as other issues.

“The defense budget is capped at a level that neither the industry nor the Pentagon wants,” said Gordon Adams, a fellow at the Stimson Center and a senior White House budget official for national security during the Clinton administration. “The industry has been active on that, company by company, and by the industry as a whole,” Adams said. Companies “either want to raise the caps or get rid of them all together.”