A season of giving

In the 2008 elections, federal contractors areshowing their political savvy by donating tocampaigns and strengthening their ties withthe candidates.Politics is becoming especially importantfor companies this year because they face aheightened legislative focus onproposals tightening contractingrules that coincide with the2008 election campaigns forCongress and the presidency,contracting executives andindustry advocates say."Federal contracting issueshave heated up in Congress inthe last few weeks," said StanSoloway, president of theProfessional Services Council(PSC), a trade association for service contractors.Soloway also is a columnist forWashington Technology. "These issues arevery hot right now."Sen. Hillary Clinton (D-N.Y.) introducedlegislation last month to create new disclosureand reporting requirements for federal contractors.The House also passed three pieces oflegislation designed to increase oversight offederal contractors, including one that wouldcreate a database for agencies to consult whenreviewing past performance.Although it is still early in the year, federalcontractors are actively raising money for candidatesand bolstering their political involvementthrough political action committees(PACs).A case in point: At SRA InternationalCorp. (No. 32), Chuck Brooks, formerlegislative director at the HomelandSecurity Department's Science andTechnology Directorate, was hired last yearto be vice president of government affairsand run SRA's PAC. ThePAC has raised $61,000 sofar in the 2008 electioncycle.Brooks said puttingresources into strengtheningthe PAC before the 2008national election is a logicalstep for a company that hopesto grow to $5 billion by 2012."As we get larger, and ourlarger competitors have PACs,it is important to level the playing field,"Brooks said. "If you don't have a PAC, you areat a disadvantage."In addition, the growth of SRA into newoffice locations worldwide has increased thenumber of lawmakers the company needs toknow and build relationships with, he added.Federal contractors that madeWashington Technology's Top 100 list thisyear are raising millions of dollars in PACmoney and contributing it to candidates. ThePACs receive donations from employees andgive the proceeds in the form of donations toselected candidates. PACs can contribute asmuch as $5,000 per candidate per electioncycle.The amounts raised and donated are expandingin this cycle because of the strong interest inthe presidential race, which is occurring as thecountry is experiencing economic stresses andis still deeply involved in the war in Iraq, saidSheila Krumholz, executive director of theCenter for Responsive Politics, a nonpartisangroup that tracks campaign financing."The size of donations is catapulting higherin the 2008 cycle because of the intensity ofthe presidential race," Krumholz said.At the same time, federal contractors donating substantial amounts to candidates for Congressand the presidency is a long-standing patternover decades that reflects the realities of politicalpower and access, she said."Political money is the grease thatWashington, D.C., runs on," Krumholz said. "Ifyou want to have my ear, you need to attend myfundraiser."This election, PACs from Top 100 companiesthat have donated a total of more than$400,000 to date to national candidatesinclude those associated with AT&T Inc. (No.38), Boeing Co. (No. 2), General DynamicsCorp. (No. 6), Lockheed Martin Corp. (No.1), Northrop Grumman Corp. (No. 3) andRaytheon Co. (No. 4), according to data fromthe Federal Election Commission publishedby the nonprofit Center for ResponsivePolitics.AT&T's and Northrop Grumman's PACsfavor Republican candidates, whileRaytheon's, Lockheed Martin's, GeneralDynamics' and Boeing's are leaningDemocratic. The Democrats hold majoritiesin the House and Senate, and campaignmoney traditionally tends to flow to themajority party.However, each PAC has its own strategicgoals to pursue."Boeing PAC contributions are decided ona bipartisan basis, with the overriding purposeof supporting candidates and committeeswho share Boeing's position on issues ofimportance to its business and its shareholders,"said Douglas Kennett, a Boeingspokesman.In addition to PAC donations, employeesof the Top 100 companies also are giving topresidential candidates on their own ? sometimes in large amounts.IBM Corp. employees, for example, havegiven more than $150,000 to Sen. BarackObama's (D-Ill.) presidential campaign thisyear, $83,000 to Sen. Hillary Clinton's (DN.Y.) campaign and $17,000 to Sen. JohnMcCain (R-Ariz.). In contrast, AT&Temployees have given $116,000 toMcCain; $70,000 to Obama and $62,000to Clinton.Such high levels of giving typically reflect acorporate culture in which being politicallyinvolved and building political networksand connections are regarded as virtues,Krumholz said."Some companies have a strong culture ofpolitical participation," she added. Such aculture tends to begin at the top ? at or nearthe chief executive suite ? and is manifestedby key players at a firm having strong politicalties and relationships, she said.At the same time, individual gifts by contractoremployees to candidates ? separatefrom the PACs ? often are not strategic,some observers say.Employees' contributions to presidentialcampaigns are personal and do not necessarilyreflect corporate views or priorities, saidLarry Allen, president of the Coalition forGovernment Procurement, whose membersare government contractors.A contractor who wants to be more strategicin cultivating political networks shouldundertake a number of activities, includingmaking campaign donations, conductingpolitical education and outreach, and workingwith advocacy groups, Allen said. Thecoalition is preparing a series of whitepapers on major contracting issues that itwill begin distributing soon.This year's campaigns are unusual insome ways. "I think we are seeing somenew trends in giving in this presidentialrace, with people involved whohave never been involved before,"Soloway said. "We are encouraging peoplein federal contracting to engage with thecampaigns."As part of its educational efforts, in April,PSC established a new Web site,Smartcontracting.org, to provide updatedinformation to the public and the media onvarious legislative initiatives that deal withgovernment contracting."The key is to be involved, and to developrelationships," said Brooks, who is planningemployee briefings and educational programs."It is a very dynamic year."