Why We Shouldn’t Pay for the Political Spending of Federal Contractors

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President Obama is said to be considering an executive order requiring government contractors to disclose their political spending. He should sign it immediately.

He should go further and ban political spending by federal contractors that receive more than half their revenues from government.

Ever since the Supreme Court ruled in Citizens United that corporations can contribute unlimited amounts to “independent” election efforts, big businesses have been funneling huge amounts of cash – often secretly – into American politics.

That’s bad enough. But when government contractors do the spending, American taxpayers foot the bill twice over.

Our tax dollars are spent on their lobbying and campaign contributions. And if their lobbying and contributing is successful, our tax dollars are spent on federal contracts we often don’t need.

A study by St. Louis University political scientist Christopher Witko reveals a direct relationship between what a corporation spends on campaign contributions and the amount it receives back in government contracts.

Reviewing campaign contributions and contracts from 1979 to 2006, Witko found that even after controlling for past contracts, companies that contributed more money to federal candidates subsequently got more and bigger contracts.

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.

But it’s hard to say American taxpayers have got a good deal from Lockheed.

For example, Lockheed is the main contractor for the F-35 Joint Strike Fighter. It’s been the single most expensive weapons program in history, and also one of the worst – plagued by so many engine failures and software glitches that Lockheed and its subcontractors practically had to start over this year.

Why do we keep throwing good money after bad?

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), Chair 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.

Government officials who deal with the firm know that when they’re ready to leave government Lockheed is likely to offer them a generously-paid lobbying job.

Remarkably, 73 out of Lockheed’s 109 lobbyists are former Pentagon officials, congressional staffers, White House aides, and former members of Congress.

When they were public servants, we taxpayers paid them directly. Now we pay them indirectly, inside the government contracts Lockheed obtains.

Yet when we paid them before, they were acting in the public interest. Now, they’re acting in the interest of Lockheed’s shareholders.

There’s no reason you and I and other taxpayers should pay Lockheed to lobby Congress. All it buys us are white elephants like the trillion-dollar F-35.

Yet we’re footing the bill because such lobbying costs are built into the overhead Lockheed charges the government in its federal contracts.

Nor is there any reason we should pay Lockheed to bribe members of Congress to keep the contracts coming.

But we’re doing it because here, too, the costs of Lockheed’s campaign donations are covered in the overhead the firm charges on federal contracts – including the salaries of executives who are expected to donate to Lockheed’s Political Action Committee.

Lockheed is hardly alone. The ten largest federal contractors are all defense contractors. And you and I and other taxpayers are indirectly paying all of them to lobby Congress and buy off politicians.

Fifty six years ago, President Dwight Eisenhower, who had also been a five-star general during World War II, warned of the dangers of an unbridled “military-industrial complex,” as he called it.

Now it’s a military-industrial-congressional complex. And afterCitizens United, it’s less bridled than ever.

That’s why President Obama shouldn’t stop with an executive order requiring government contractors to disclose their political contributions.

He should ban all political activities by corporations getting more than half their revenues from the federal government.

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Robert Reich
Robert B. Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley and Senior Fellow at the Blum Center for Developing Economies. He served as Secretary of Labor in the Clinton administration, for which Time Magazine named him one of the ten most effective cabinet secretaries of the twentieth century. He has written fourteen books, including the best sellers "Aftershock", "The Work of Nations," and"Beyond Outrage," and, his most recent, "Saving Capitalism." He is also a founding editor of the American Prospect magazine, chairman of Common Cause, a member of the American Academy of Arts and Sciences, co-founder of the nonprofit Inequality Media and co-creator of the award-winning documentary, Inequality for All.

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