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Conflict of interest: Contractors and their political spending

Robert Reich

Tess Vigeland: President Obama met with Congressional Republicans at the White House today. The agenda: coming to an agreement on the government's ability to borrow. Yes, the debt ceiling. The big sticking point, of course, is whether spending cuts will be attached to that legislation.

But commentator Robert Reich wants another policy topic front and center. And he says, it too, has a lot to do with your taxpayer dollars.


Robert Reich: President Obama is mulling an executive order requiring that big government contractors disclose their political spending. He should stop their political spending altogether.

Take Lockheed Martin, the nation's largest contractor. The company has received nearly $20 billion in federal contracts so far this year. It's already spent more than $4 million lobbying Congress.

Lockheed has also been spending more than $3 million a year on political contributions to members of Congress that vote its way. And an undisclosed amount to the Aerospace Industries Association to lobby for a bigger Defense budget.

But wait a minute. You and I and other taxpayers are Lockheed's biggest customer. As such, we are financing this political activity. It's one of the most insidious conflicts of interest in American politics.

And Lockheed is hardly unique. The 10 biggest government contractors are all defense contractors. Every one of them gets most of its revenues from the federal government. And everyone uses a portion of that money to lobby for even more Defense contracts.

That's one reason the Defense procurement budget keeps growing like topsy. Next year's expected drawdown of troops from Afghanistan and Iraq was supposed to save money. But Lockheed and other giant defense contractors have made sure all anticipated savings will go to new weapons systems.

In the wake of the Supreme Court's decision in Citizens United -- extending First Amendment rights to corporations -- there's no limit on what Lockheed and other defense contractors can spend on politics.

This is nonsense. It's our money.

Over a half century ago, President Dwight Eisenhower warned of the dangers of an unbridled military-industrial complex, as he called it. It's now a military-industrial-congressional complex. And after Citizens United, it's more unbridled than ever.

The president should issue his executive order requiring government contractors disclose their political contributions. But he should go further and ban political activities by all corporations getting more than half their revenues from the federal government.


Vigeland: Robert Reich served as secretary of labor under President Clinton. His most recent book is called Aftershock: The Next Economy and America's Future. Next week, David Frum. Send us your comments -- click on the contact link.

About the author

Robert Reich is chancellor's professor of public policy at the University of California, Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton.
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Mr. Kettle, meet Mr. Black. This practice is not uncommon. When Bin Laden was found in Pakistan there was an immediate reaction to stop foreign aid to Pakistan. In NPR's coverage, you even indicate that Pakistan uses some of its foreign aid money to lobby for more foreign aid. That's not to say I support it. I just find it funny that the reaction is so vehement about military contractors. What would the reaction be if President Bush has proposed an order to have contributors to or officers of non-profits disclose their politcal activity? I doubt Mr. Reich or the fine folks at Marketplace would think that a fine idea. And to bring the point home, NPR - recipient of federal fundings - spends some of its money doing the unthinkable - "lobbying." Their position as stated on air is that they don't use the federal money for lobbying, they use donations for lobbying. If that's a valid argument, then I'm sure Lockheed only spends the money it generates from soda machine sales on lobbying; never the money received from a contract. That argument is flawed however. If you used the donations for operating expenses instead of lobbying, you would require less federal funding and wouldn't need to lobby as much. The issue as I see it is that we need politicians more worried about the country than about re-election. We also need media outlets that don't practice what they preach against.

I am so glad that Mr. Reich brought up this important point, and I'm sure that it's merely an oversight that he forgot to mention the money and influence of labor unions, in particular public labor unions who derive not only 50% of their income from the government, but virtually 100%. Equally concerning to Mr. Reich should be the relationship that Fannie Mae and Freddie Mac --we've all seen how well that story played out-- enjoyed with a key member of their oversight committee, Barney Frank. Surely, Mr. Reich shares equal concern about all sources of contractor waste, not just those that fall on the other side of his political spectrum.

I agree with Mr. Reich. The ruling by the Supreme Court recognizing monetary political contributions as free speech was definitely not in the interest of maintaining a true representative democracy (funny, but when my money is stolen it is called property by the court?) I would support his proposal IF he extended it to ALL organizations doing business with government agencies. No more labor unions (teachers, prison guards, etc.)contributing to political causes. The same for the unions that represent labor for the companies that cannot give political contributions. Also, no non-profit's that use large scale government resources.

Put all that on the table and we can start talking.

The story on Obama's move to cut off political contributions from defense contractors fails to mention that the majority of the contributions would go to Republican politicians. Meanwhile contributions from labor unions mostly, if not exclusively, go to Democrat politicians. Exemptions to the provisions of the new Obama-care law were given to unions and to a great many in former Speaker Pelosi's district. This is just more Chicago style dirty tricks. Reward your friends, punish your enemies. I can't wait for the 2012 election.

Robert Reich makes a point that should be aired daily until it sinks in. The Military-Industrial-Intelligence Complex, as it should be properly titled and was in Eisenhower's early drafts, also includes a domestic and international spying and covert operations network that consumes 85% of the intelligence budget and runs the Director of National Intelligence office. The 13 over trillion dollars drained from the national budget and taxpayer benefits since WWII, with no end in sight in a permanent warfare economy that provides profits but nowhere near the same jobs per dollar as civilian investments in the economy, has gutted the industrial base and social standards of living of all Americans. It might interest Robert Reich, who mentions Lockheed Martin as the leading "defense" contractor, that when I served as a Congressional staffer in 2006-7, I discovered at the end of the term that the company contracted as the internet service provider for all the desk computers on the Hill was Lockheed Martin. In other words, every email in and out went through them. Maybe that's what their motto means: "We Never Forget Who We Are Working For". A legitimate Congress, less compliant to their needs and more interested in real democracy and popular control, would probably not contract out such a function at all. There is also a revolving door between Congress, the Pentagon and these contractors, with key personnel cycling through it at all times. Former VP Richard Cheney would be a perfect, but by no means an isolated example.

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