|
ARMS
TRADE RESOURCE CENTER
REPORTS
- Peddling Arms, Peddling Influence Update
April 1997
For further information:
William D. Hartung,
212-229-5808, ext. 106
or Frida Berrigan,
212-229-5808, ext. 112
New Data Reveals
a Record $10.8 Million in Contributions
by Arms Merchants During 1995/96 Election Cycle;
Lockheed Martin Remains "Leader of the PACs"
by William D.
Hartung
Table of Contents
Introduction
Giving Money, Getting Favors
Influencing Votes
Winning Corporate Subsidies
Quid Pro Quos
The Helms/McCollum letters
Friends in High Places
Recommendations
Tables
Table I
Table II
Table III
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Introduction
New York -- If money talks, then the nation's largest weapons exporting
firms made their voices heard loud and clear during the 1996 elections.
According to a new analysis by the World Policy Institute at the
New School for Social Research, the top 25 arms exporters gave a
record $10.8 million in Political Action Committee (PAC) and soft
money donations during the 1995/96 election cycle. Nearly 40% of
these funds, $4.3 million in all, poured in during the last few
months of the two year cycle, between September and December of
1996. This analysis, which updates the Institute's October 1996
report, Peddling Arms, Peddling Influence, is drawn from Federal
Election Committee data analyzed by the Center for Responsive Politics.
The $10.8 million
in contributions by top arms exporters represented a 56% increase
over their recent peak of $6.9 million during the 1991/92 election
cycle. The contributions for 1995/96 consisted of $6.6 million in
Political Action Committee (PAC) donations and $4.2 million in soft
money. Arms exporter PAC funding was up by 12% from its recent peak
of $5.9 million in 1991/92, while soft money donations by arms merchants
increased by a whopping 346% over their previous high of $943,000
in 1993/94.
Lockheed Martin
was the "leader of the PACs" among arms exporters -- its constituent
companies donated $1.4 million in PAC funds and $928,585 in soft
money during 1995-96 for a total of more than $2.3 million in political
giving during the election cycle. Lockheed Martin accounted for
more than one out of every five dollars contributed by major weapons
exporting firms for the 1996 campaign.
"Lockheed Martin
and its fellow arms merchants received billions of dollars in new
subsidies from the 104th Congress. Their record contributions during
1995/96 are a clear sign that they will do everything in their power
to keep these corporate welfare payments flowing," said William
D. Hartung, a Senior Research Fellow at the World Policy Institute.
For the arms
export lobby, the 104th Congress will go down as one of its most
successful sessions ever. From 1994 to 1995, total subsidies for
arms exports increased by 8.5%, from $7.0 billion to $7.6 billion.
Arms export subsidies have stabilized at roughly $7.5 billion per
year since that time. President Clinton's F.Y. 1998 budget request
retains the same mix of grants, subsidized loans, tax breaks, and
promotional activities that have made subsidies for the arms export
sector the second largest source of corporate welfare spending in
the federal budget, after agricultural subsidies. For 1995, the
most recent year for which full statistics were available, more
than half of the $15 billion in arms sales made by U.S. companies
were paid for by U.S.-government-backed grants, loans, and cash
payments, not foreign arms purchasers like Saudi Arabia or Taiwan.
Arms exporter
PACs favored Republicans over Democrats by a margin of more than
two to one, with 69% of their donations going to Republican candidates
($4.6 million) versus 31% for Democratic candidates ($2.2 million).
Soft money donations were more evenly distributed, with weapons
exporting firms donating 54% of their contributions to Republican
party committees ($2.3 million) versus 46% to Democratic party committees
($1.9 million). The Loral Corporation was the top giver of soft
money among arms exporters, with total donations of $632,000 during
1995/96; contrary to the general industry trend, 95% of Loral's
soft money contributions ($601,000) went to Democratic party committees.
Loral merged with Lockheed Martin in 1996, thereby helping to ensure
that the nation's top Pentagon contractor and the world's largest
arms exporting firm will maintain solid ties among both Republican
and Democratic officials.
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Giving
Money, Getting Favors
Major donors routinely play down the impact of their political contributions
by arguing that they ensure "access, not influence." But however
one chooses to describe the lobbying clout of the arms industry,
there is no question that their political "investments" (in the
form of campaign contributions to key lawmakers) have paid off many
times over in the form of legislation and regulations favorable
to the industry.
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Influencing
Votes: The Code of Conduct Bill
One way to measure the impact of arms exporter campaign spending
is to see how members supported by this sector voted on key pieces
of legislation affecting the industry's bottom line. The most important
piece of arms export policy legislation dealt with by the 104th
Congress was the Code of Conduct bill, which was co-sponsored by
Rep. Cynthia McKinney (D-GA) and Sen. Mark Hatfield (R-OR). The
Code -- which would sharply curtail U.S. arms sales to dictatorships
and human rights abusers -- is bitterly opposed by U.S. weapons
exporting firms. The Code of Conduct bill went down to defeat in
its initial votes in the House and Senate, in part due to generous
campaign contributions by the arms exporting companies to members
of Congress who voted against the measure. As the House prepares
for a second vote on the Code of Conduct in late April or early
May of 1997, the influence of arms exporter political spending on
this critical arms sales policy measure bears watching.
In July of 1996,
the Senate defeated the Code of Conduct proposal by a vote of 65
to 35. Senators who voted with industry to block the Code received
five times as much PAC money from arms exporters during 1995/96
as Senators who voted for the Code of Conduct, for an average of
$18,928 per Senator voting with industry to $3,840 per Senator voting
against industry. The leader of the floor fight to defeat the Code
of Conduct bill in the Senate was Mitch McConnell (R-KY), who received
$73,305 from arms exporter PACs during the 1995/96 election cycle.
McConnell, an adamant opponent of campaign finance reform who chairs
the Republican Senatorial Campaign Committee, is the author of a
recent fundraising letter which alleges that President Clinton took
"illegal foreign cash" from a "Communist regime" (China); while
it has yet to be proven that Chinese government money was used to
contribute to the 1996 campaign, Senator McConnell clearly has no
qualms about accepting tens of thousands of dollars from arms exporting
firms that have been putting U.S. weaponry in the hands of repressive
regimes throughout the world, including potential U.S. adversaries.
When the House
of Representatives voted on the Code of Conduct on May 25, 1995,
it went down to defeat by a margin of 262 to 157. The House vote
showed a similar pattern of arms exporter money favoring members
who voted industry's way. House members who voted with industry
against the Code received an average of more than 2 and * times
as much PAC funding from arms exporters during 1995/96 as members
who voted for the arms sales Code of Conduct. House members who
voted with industry to block the Code received an average of $13,132
per member, while the members who voted for the Code of Conduct
received an average of $5,109 per member.
top
Winning
Corporate Subsidies: The $15 Billion Arms Export Loan Guarantee
Fund
On an issue of more immediate financial interest to arms exporters,
on August 3, 1995, Sen. Dale Bumpers (D-AR) introduced an amendment
to strip provisions creating an arms export loan guarantee fund
from the Department of Defense authorization bill for F.Y. 1996.
On average, Senators who voted in favor of the arms industry's position
on this critical issue received more than twice as much PAC money
from arms exporting companies in the 1995/96 election cycle as those
Senators who voted against industry. The 58 Senators who voted with
industry to sustain the loan fund received an average of $18,113
per Senator from major arms exporting companies. The 41 Senators
who voted to kill the loan fund received an average of $7,731 per
Senator from arms export industry PACs. The loan guarantee fund,
which may be used to authorize up to $15 billion in U.S. government-backed
loans to foreign arms purchasers, represents a boon to arms exporters,
who will receive the bulk of these funds in the form of new weapons
orders; but it is a bane to taxpayers, who could be on the hook
to cover billions in bad loans if financially unstable foreign governments
default on their loan payments (as has happened frequently with
similar arms sales loan programs in recent years).
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Quid
Pro Quos: Actions by Specific Lawmakers on Behalf of the
Arms Industry
In addition to rewarding members who vote with them, arms exporters
have cultivated a powerful grouping of individual members who take
a leadership role in securing funding or favorable regulations,
making it easier (and more profitable) to sell U.S. weaponry overseas.
As Tables I and II demonstrate, industry contributions are heavily
concentrated among key committee chairs and ranking members on armed
services, appropriations, foreign relations, and budget committees;
members in leadership positions (including House Speaker Newt Gingrich);
and members from states with clusters of major weapons manufacturing
facilities (most notably California and Texas). A few examples are
presented below.
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The
Helms/McCollum letters and fighter plane sales to Latin America:
Lockheed Martin and McDonnell Douglas have been vigorously lobbying
to reverse a 25 year-old U.S. ban on exporting advanced fighter
planes to Latin America, and the Clinton Administration took a giant
step in that direction in late March when it authorized the firms
to provide technical data U.S. combat aircraft to the Chilean Air
Force. At a pivotal point in their campaign to lift the fighter
ban, in the spring of 1996 the companies prevailed upon Senate Foreign
Relations Committee chairman Jesse Helms (R-NC) and Rep. Bill McCollum
(R-FL) to send letters to Secretary of State Warren Christopher
urging him to reverse U.S. policy and open the way for sales of
U.S. combat aircraft to Latin America. Taken together, Helms and
his 37 Senate co-signers and McCollum and his 77 Senate co-signers
received over $1 million in campaign contributions by Lockheed Martin,
McDonnell Douglas, and other major prime and subcontractors for
the F-16 and F-18 aircraft.
Jane Harman (D-CA)
and the $15 Billion Arms Export Loan Guarantee Fund: In June of
1995, Jane Harman led a successful fight in the House to preserve
one of arms export industry's pet projects, a $15 billion government-backed
loan fund (see above). Harman received $66,750 in arms exporter
PAC funds in 1995/96.
Norm Dicks (D-WA),
Randy "Duke" Cunningham (R-CA), Duncan Hunter (R-CA) and the B-2
Bomber brigade: These West coast lawmakers, whose districts are
close by Northrop Grumman's B-2 facility in Southern California
and Boeing's B-2 subcontracting work in Seattle, spearheaded the
fight to keep the B-2 alive during 1995/96. All three made the top
10 list of arms exporter PAC recipients (see Table II, below), and
they were richly rewarded by B-2 contractors Northrop Grumman, Boeing,
and General Electric: Dicks received $19,500 from the three firms
during 1995/96, Cunningham got $18,211, and Hunter received $10,500.
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Friends
in High Places -- Newt Gingrich, William Cohen, and Fred Thompson:
Speaker of the House Newt Gingrich (R-GA) has received considerable
negative publicity for using funds raised by GOPAC, an educational
foundation, for partisan political purposes. Less attention has
been paid to the generous funding he has received from traditional
political action committees run by special interest groups. In 1995/96
arms export PACs gave Gingrich $52,000 in contributions. Lockheed
Martin, which has a major production facility just outside of Gingrich's
district in Marietta, Georgia, was so enthusiastic about supporting
him that they originally gave $12,200 in PAC funds for the 1995/96
election cycle, $2,200 more than the legal limit (the excess funds
have since been returned). Gingrich has gone to bat for Lockheed
Martin, both in public statements and behind the scenes in Washington,
in support of increased Pentagon funding for the firm's F-22 "stealth"
fighter and exports of modernized versions of the company's C-130
military transport. The speaker even touts Lockheed Martin as a
model of sound management in his controversial satellite-TV lecture
series "Renewing American Civilization," which was started in part
with a $10,000 contribution from Lockheed back in 1991.
While Gingrich's
political star has been falling of late, two rising powers in Washington
are equally indebted to the arms export sector. William Cohen, the
former Republican Senator from Maine who is now the Clinton Administration's
Secretary of Defense, received $42,600 in arms exporter PAC money
in 1995/96. Cohen returned the favor: not only did he vote against
the Code of Conduct bill and for the $15 billion arms export loan
guarantee fund, but in June of 1996 he pushed through a special
amendment that created a $100 million tax break for U.S. overseas
arms clients. The tax break comes about through the elimination
of "recoupment fees," a surcharge that used to be assessed against
foreign arms deals to reimburse the U.S. Treasury for the cost of
government-financed research and development of weapons that U.S.
firms later sell on the world market for a profit.
Another key Washington
player who is high on the arms exporter's donation list is Sen.
Fred Thompson (R-TN), the actor/lawyer/Republican presidential hopeful
who is heading up the Senate's investigation of improprieties in
campaign financing during the 1996 elections. Thompson, who received
$46,675 in arms exporter PAC funds in 1995/96, voted with industry
to block the Code of Conduct bill and approve the $15 billion arms
export loan guarantee fund.
Tables I and
II provide data on the top recipients of arms exporter PAC funding
in the House and Senate for 1995/96.
| Table
I: Top Recipients of Arms Exporters' PAC Money, U.S.
House of Representatives, 1995/96 |
| Recipient |
Committee/Position |
Amount Received |
| Robert Livingston
(R-LA) |
Chairman,
Appropriations |
$86,000 |
| John Murtha
(D-PA) |
Ranking Democrat,
Nat. Sec.
Subcom., Appropriations |
$81,500 |
| Norm Dicks
(D-WA) |
Member, Nat.
Sec. Subcom.,
Appropriations |
$67,750 |
| Jane Harman
(D-CA) |
Member, Nat.
Sec. Comm. |
$66,750 |
| Ike Skelton
(D-MO) |
Ranking Democrat,
Mil. Proc.
Subcom., Nat. Sec. Com. |
$62,000 |
| Randy Cunningham
(R-CA) |
Member, Nat.
Sec. Comm. |
$61,861 |
| Duncan Hunter
(R-CA) |
Chairman,
Mil. Procurement
Subcom., Nat. Sec. Comm. |
$58,950 |
| Bill Young
(R-FL) |
Chairman,
Nat. Sec. Subcomm.
Appropriations |
$58,500 |
| Jerry Lewis
(R-CA) |
Member, Nat.
Sec.
Subcom., Appropriations |
$58,500 |
| Martin Frost
(D-TX) |
Chairman,
Rules Committee |
$55,050 |
| Newt Gingrich
(R-GA) |
Speaker of
the House |
$52,000 |
| Floyd Spence
(R-SC) |
Chairman,
Nat. Sec. Comm. |
$54,000 |
| Curt Weldon
(R-PA) |
Chairman,
Military R&D
Subcomm., Nat. Sec. Comm. |
$53,500 |
| Tom DeLay
(R-TX) |
House Majority
Whip;
Member, Appropriations |
$53,000 |
Source for
Table I: Data on contributions by the top 25 arms exporting
firms was supplied by the Center for Responsive Politics, using
Federal Election Commission data released electronically as of February
2, 1997.
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| Table
II: Top Recipients of Arms Exporters' PAC Money, U.S.
Senate, 1995/96 |
| Recipient |
Position/Committee |
Amount Received |
| John Warner
(R-VA) |
Chairman,
Airland Forces Subcom.,
Armed Services |
$117,300 |
| Ted Stevens
(R-AK) |
Chairman,
Defense Subcom.,
Appropriations |
$103,500 |
| James M.
Inhofe (R-OK) |
Member, Armed
Services Comm. |
$91,500 |
| Strom Thurmond
(R-SC) |
Chairman,
Armed Services Comm. |
$82,500 |
| Mitch McConnell
(R-KY) |
Chairman,
Foreign Operations
Subcom., Appropriations |
$73,305 |
| Pete Domenici
(R-NM) |
Chairman,
Budget Committee |
$69,000 |
| Robert C.
Smith (R-NH) |
Chairman,
Acquisition Subcom.,
Armed Services |
$68,125 |
| Larry Pressler
(R-SD) |
Chairman,
Science and
Transportation Committee |
$56,675 |
| Carl Levin
(D-MI) |
Ranking Democrat,
Airland Forces
Subcom., Armed Services |
$53,000 |
| Thad Cochran
(R-MS) |
Member, Defense
Subcom.,
Appropriations |
$46,675 |
| Fred Thompson
(R-TN) |
Chairman,
Export/Trade Promotion
Subcom., Foreign Relations |
$44,675 |
| William Cohen
(R-ME) |
Chairman,
Seapower Subcom.,
Armed Services |
$42,600 |
Source for Table
II: Same as Table I, above.
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Boosting the
Bottom Line: Corporate Beneficiaries of U.S. Arms Sales
Increased subsidies for arms sales and increased U.S. government
promotion of these exports has benefited companies like Lockheed
Martin and McDonnell Douglas, earning them billions in revenues
in recent years. During F.Y. 1995, the most recent year for which
full statistics are available, Lockheed Martin ($2.7 billion) and
McDonnell Douglas ($1.8 billion) dominated the Pentagon's Foreign
Military Sales (FMS) program, accounting for 62% of all FMS sales
by U.S. companies during that year. The FMS program is the largest
channel for the export of U.S. weaponry, accounting for an average
of 75% of all U.S. arms sales in recent years. Given these impressive
sums, it is not surprising that major weapons manufacturers have
been using their political clout and campaign spending to insure
a pro-export policy on the part of the Clinton Administration and
the Congress. Table III provides data on campaign spending and FMS
revenues for major arms exporting firms.
| Table
III -- Giving Thousands, Getting Billions: Campaign
Spending and Arms Sales Contracts by Major U.S. Defense Firms
|
| Company |
Campaign
Spending, 1995/96 |
Total FMS
Contracts, FY93-95 |
Major Export
Items |
| 1. Lockheed
Martin |
$2,351,400 |
$5.6 billion |
F-16 fighter;
C-130 transport |
| 2. General
Motors/Hughes |
$1,047,200 |
$1.2 billion |
Saudi Peace
Shield; AMRAAM |
| 3. Northrop
Grumman |
$864,600 |
$388 million |
F-18 subcontractor;
F-5 parts |
| 4. General
Electric |
$816,500 |
$774 million |
F-110, F-108
engines |
| 5. Boeing |
$796,600 |
$551 million |
AWACs; Chinook
helicopter |
| 6. United
Technologies |
$737,900 |
$1.3 billion |
Black Hawk
hel., F-100 engine |
| 7. General
Dynamics |
$615,100 |
$1.4 billion |
M-1 tank |
| 8. Raytheon |
$526,900 |
$1.8 billion |
Patriot,
Hawk, AMRAAM missiles |
| 9. McDonnell
Douglas |
$505,500 |
$4.5 billion |
F-15, F-18
fighters; Apache hel. |
| 10. Rockwell |
$413,800 |
$65 million |
C-130, Hellfire
missile, cluster bombs |
Sources:
Data on Foreign Military Sales Contracts for FY 1993-95 are based
on Pentagon data tapes on prime contract awards analyzed by Eagle
Eye Services of Vienna, Virginia. Data on campaign spending is drawn
from FEC data released as of February 2, 1997, analyzed by the Center
for Responsive Politics.
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Leveling
the Political Playing Field: Reforms Recommended
In order to counter the special interest clout wielded by arms exporting
firms in Washington, the World Policy Institute recommends four
major reforms:
1) Passage of Code of Conduct legislation that would sharply limit
U.S. arms exports to dictatorships, human rights abusers, and aggressor
nations; 2) Sharp reductions in the current $7.5 billion per year
in U.S. government subsidies for arms exports;
3) Strict limits on campaign contributions and spending, tied to
a system of public financing of federal campaigns and the abolition
of soft money donations; and
4) An end to the "revolving door" that allows top officials to go
back and forth between arms exporting firms and arms policy positions
in government.
"Tough
questions have been raised recently about the role of foreign donations
in our political process," argues William Hartung, the author of
the Institute report. "We should be equally vigilant in ensuring
that U.S. arms exporting firms don't abuse their influence to promote
unnecessary subsidies for dangerous weapons exports."
Note:
Additional data on donations by arms exporting companies to specific
members of Congress is available from the World Policy Institute
on request.
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