War is big business. By 2009 the Pentagon expects to need a budget 23-percent higher than the massive budgets of the Cold War years. With billions at stake, it was party time this week for defense contractors.

MITCHELL: We decided to take a look at the defense industry which has billions of dollars in government contracts at stake. Throwing parties for politicians is one of the few legal ways defense contractors can buy face time with the lawmakers who oversee those lucrative deals paid for with taxpayers' money.

WILLIAM HARTUNG: The military budget's gone from 300 billion to 450 billion in a few short years and that doesn't even count what's been spent on Afghanistan and Iraq - another $180 billion or so.

MITCHELL: Bill Hartung is a senior research fellow at the World Policy Institute, an expert on the arms trade and military spending. He says currying favor with lawmakers keeps defense programs alive like Boeing's Osprey or Lockheed Martin's F-22 fighter, the most expensive fighter plane ever built.

And at this week's convention, the defense industry walked a fine line between lavishing attention on lawmakers and avoiding the label of war profiteers.

HARTUNG: I think given the President's tone he wants to set here and the backdrop of wars in Afghanistan and Iraq it would be unseemly if the arms industry was in too in your face. They don't want to be seen as profiteering from these wars.

MITCHELL: That may be one reason why we couldn't get in to many of the parties.

The legendary Rainbow Room was the venue for a reception for Congressman Hal Rogers of Kentucky.

We ended up outside on the sidewalk - but we did manage to stop his colleague Congressman John Duncan of Tennessee on his way out. And we asked him why Lockheed-Martin and Nextel would foot the bill for such an elaborate event.

REP. JOHN DUNCAN, JR. (R-TN): Well, Congressman Rogers is one of the more powerful members of Congress; he's a senior member of the Appropriations committee and a possible future chairman of the Appropriations committee, so he's a very important man in the Congress and a very good friend of mine.

MITCHELL: And Rogers is also important to the growing business of homeland security where he oversees congressional funding and where Lockheed wants to be a big player.

HARTUNG: And so they have an exclusive event like that with the chairman of the committee is a way for them to really get in tight with him so that in the future, when things come up where perhaps it's between them and another company, they'll have that little edge.

MITCHELL: Another guest, lobbyist Gary Hopper says all kinds of firms are chasing those new homeland security dollars.

GARY HOPPER: Every company, it seems whether you do audio tapes or whatever your business is, cameras, you want to be involved in the homeland security defense business. Now that's how it's changed. There's more dollars available, there's more emphasis on it. But there's a lot more competition out there, too.

MITCHELL: More than half a dozen companies including defense contractor Northrop Grumman took over the ESPN zone in Times Square to throw a party for Congressman Roy Blunt and others. Blunt is the third most powerful Republican in the House. We managed to get pictures of the corporate schmoozefest before we were escorted out.

But we were allowed into this swank soiree in the landmark Chrysler Building put on by well-connected law and lobbying firm Blank Rome. While you may not have heard of Blank Rome, it represents major military contractors like Boeing and Raytheon. David Norcross is a partner.

DAVID NORCROSS: A convention is the only time we have every four years that we get the faithful together in one place. And, there might be a party or two but there's good communication and people from all parts of the country get to interact and talk to each other. You know, like Shriners get together every year we get together every four.

MITCHELL: Shriners, the international fraternity known for spending its money on children's hospitals, probably wouldn't serve the lobster cocktail, jumbo shrimp and $60 bottles of champagne that Blank Rome provided. But then again, Shriners aren't after the multi-million dollar government contracts Blank Rome helped secure for its clients.

And it may be just a coincidence but for the past year David Norcross has been a key convention organizer at the same time his firm has been lobbying the Bush administration.

HARTUNG: To have the person who's organizing your convention simultaneously lobbying for Raytheon, one of the top ten weapons contractors, normally would sort of set off a feeling, well, there's an appearance of a conflict here.

MITCHELL: And that potential conflict of interest was picked up on by THE NEW YORK TIMES.

MITCHELL: The article that came out in THE NEW YORK TIMES that said look - here's a guy - he's a chairman - he's organizing the convention and he's a lobbyist for companies like Raytheon - it's not illegal but…..

NORCROSS: He's so busy organizing the convention that he hasn't done much of anything else in the last year. Very little.

MITCHELL: So when people say ...Well, there's some question whether it's ethical or not.

NORCROSS: Well, I think they're dead wrong. I mean, we, actually the firms ethical, uh people looked at it and they're pretty difficult in my firm and the RNC too we looked at it and I for instance gave a client list over to the RNC before I even started.

MITCHELL: But since Norcross took the convention job, his firm has been hard at work lobbying. Norcross is registered with Congress as one of three lobbyists working on the Raytheon account this year.

HARTUNG: I think this administration - this Republican party sort of feels like, you know, We've got God on our side. We're doing the right thing. We don't need to worry about these sort of connections. You should just sort of trust us here.

MITCHELL: Well, come on, I mean, don't the Democrats also do the same thing? I mean, you've had instances of them blurring the lines as well.

HARTUNG: I think there's no question that both parties have ties to the defense industry. Both parties lobby. But I think there's-- a little sort of going over the line here, sort of a sense of, "We don't care how it looks--" just kind of almost sort of like lobbying on steroids.

MITCHELL: The public will never know what goes on in these exclusive get togethers. And it's not just defense firms hosting these parties. In New York this week, every industry where government makes policy. From energy to telecom to healthcare went all out to court GOP officials.

Back on the Intrepid late last night, more than a dozen military contractors were among the hosts of "Operation Victory" honoring Congressmen Jerry Lewis and Duncan Hunter. Together in the house the two oversee the nearly half trillion dollar Pentagon budget.

This time we didn't see any salute to veterans, just the Pointer Sisters and some of the same insiders we'd been running into all week.