A season of giving

Presidential races and critical procurement issues push companies to increase political contributions

Giving unto Caesar-To-Be

This election cycle, political action committees
from Top 100 companies that have donated
more than $400,000 to date to national candidates
include those associated with AT&T Inc. (No. 38),
Boeing Co. (No. 2), General Dynamics Corp. (No. 6),
Lockheed Martin Corp. (No. 1), Northrop Grumman
Corp. (No. 3) and Raytheon Co. (No. 4), according
to data from the Federal Election Commission
published by the nonpartisan Center for
Responsive Politics.

In the 2008 elections, federal contractors are
showing their political savvy by donating to
campaigns and strengthening their ties with
the candidates.

Politics is becoming especially important
for companies this year because they face a
heightened legislative focus on
proposals tightening contracting
rules that coincide with the
2008 election campaigns for
Congress and the presidency,
contracting executives and
industry advocates say.

"Federal contracting issues
have heated up in Congress in
the last few weeks," said Stan
Soloway, president of the
Professional Services Council
(PSC), a trade association for service contractors.
Soloway also is a columnist for
Washington Technology. "These issues are
very hot right now."

Sen. Hillary Clinton (D-N.Y.) introduced
legislation last month to create new disclosure
and reporting requirements for federal contractors.

The House also passed three pieces of
legislation designed to increase oversight of
federal contractors, including one that would
create a database for agencies to consult when
reviewing past performance.

BUILDING RELATIONSHIPS

Although it is still early in the year, federal
contractors are actively raising money for candidates
and bolstering their political involvement
through political action committees
(PACs).

A case in point: At SRA International
Corp. (No. 32), Chuck Brooks, former
legislative director at the Homeland
Security Department's Science and
Technology Directorate, was hired last year
to be vice president of government affairs
and run SRA's PAC. The
PAC has raised $61,000 so
far in the 2008 election
cycle.

Brooks said putting
resources into strengthening
the PAC before the 2008
national election is a logical
step for a company that hopes
to grow to $5 billion by 2012.

"As we get larger, and our
larger competitors have PACs,
it is important to level the playing field,"
Brooks said. "If you don't have a PAC, you are
at a disadvantage."

In addition, the growth of SRA into new
office locations worldwide has increased the
number of lawmakers the company needs to
know and build relationships with, he added.

Federal contractors that made
Washington Technology's Top 100 list this
year are raising millions of dollars in PAC
money and contributing it to candidates. The
PACs receive donations from employees and
give the proceeds in the form of donations to
selected candidates. PACs can contribute as
much as $5,000 per candidate per election
cycle.

The amounts raised and donated are expanding
in this cycle because of the strong interest in
the presidential race, which is occurring as the
country is experiencing economic stresses and
is still deeply involved in the war in Iraq, said
Sheila Krumholz, executive director of the
Center for Responsive Politics, a nonpartisan
group that tracks campaign financing.

"The size of donations is catapulting higher
in the 2008 cycle because of the intensity of
the presidential race," Krumholz said.

FEEDING CAMPAIGN COFFERS

At the same time, federal contractors donating substantial amounts to candidates for Congress
and the presidency is a long-standing pattern
over decades that reflects the realities of political
power and access, she said.

"Political money is the grease that
Washington, D.C., runs on," Krumholz said. "If
you want to have my ear, you need to attend my
fundraiser."

This election, PACs from Top 100 companies
that have donated a total of more than
$400,000 to date to national candidates
include those associated with AT&T Inc. (No.
38), Boeing Co. (No. 2), General Dynamics
Corp. (No. 6), Lockheed Martin Corp. (No.
1), Northrop Grumman Corp. (No. 3) and
Raytheon Co. (No. 4), according to data from
the Federal Election Commission published
by the nonprofit Center for Responsive
Politics.

AT&T's and Northrop Grumman's PACs
favor Republican candidates, while
Raytheon's, Lockheed Martin's, General
Dynamics' and Boeing's are leaning
Democratic. The Democrats hold majorities
in the House and Senate, and campaign
money traditionally tends to flow to the
majority party.

However, each PAC has its own strategic
goals to pursue.

"Boeing PAC contributions are decided on
a bipartisan basis, with the overriding purpose
of supporting candidates and committees
who share Boeing's position on issues of
importance to its business and its shareholders,"
said Douglas Kennett, a Boeing
spokesman.

In addition to PAC donations, employees
of the Top 100 companies also are giving to
presidential candidates on their own ? sometimes in large amounts.
IBM Corp. employees, for example, have
given more than $150,000 to Sen. Barack
Obama's (D-Ill.) presidential campaign this
year, $83,000 to Sen. Hillary Clinton's (DN.
Y.) campaign and $17,000 to Sen. John
McCain (R-Ariz.). In contrast, AT&T
employees have given $116,000 to
McCain; $70,000 to Obama and $62,000
to Clinton.

GETTING INVOLVED

Such high levels of giving typically reflect a
corporate culture in which being politically
involved and building political networks
and connections are regarded as virtues,
Krumholz said.

"Some companies have a strong culture of
political participation," she added. Such a
culture tends to begin at the top ? at or near
the chief executive suite ? and is manifested
by key players at a firm having strong political
ties and relationships, she said.

At the same time, individual gifts by contractor
employees to candidates ? separate
from the PACs ? often are not strategic,
some observers say.

Employees' contributions to presidential
campaigns are personal and do not necessarily
reflect corporate views or priorities, said
Larry Allen, president of the Coalition for
Government Procurement, whose members
are government contractors.

A contractor who wants to be more strategic
in cultivating political networks should
undertake a number of activities, including
making campaign donations, conducting
political education and outreach, and working
with advocacy groups, Allen said. The
coalition is preparing a series of white
papers on major contracting issues that it
will begin distributing soon.

This year's campaigns are unusual in
some ways. "I think we are seeing some
new trends in giving in this presidential
race, with people involved who
have never been involved before,"
Soloway said. "We are encouraging people
in federal contracting to engage with the
campaigns."

As part of its educational efforts, in April,
PSC established a new Web site,
Smartcontracting.org, to provide updated
information to the public and the media on
various legislative initiatives that deal with
government contracting.

"The key is to be involved, and to develop
relationships," said Brooks, who is planning
employee briefings and educational programs.
"It is a very dynamic year."

Alice Lipowicz (alipowicz@1105govinfo.com) is a
staff writer at Washington Technology.

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