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Contractor political donations unscathed by sequester

Mar. 22, 2013 - 12:38PM   |  
By JIM McELHATTON   |   Comments
Defense contractor Honeywell expects at least a slight drop in defense revenue because of the sequester. But it is still hosting fundraising events for members of Congress.
Defense contractor Honeywell expects at least a slight drop in defense revenue because of the sequester. But it is still hosting fundraising events for members of Congress. (Charly Triballeau / AFP)

Members of Congress continue raising campaign cash from the defense industry at fundraisers across Washington, even as military contractors brace for revenue losses from sequestration’s deep federal spending cuts.

“Yes, we still ask our friends to help us out and to prepare for the next campaign,” said Rep. David Price, D-N.C., as he exited a fundraiser held for him at the Washington offices of Honeywell, a major defense contractor. “That is a part of life in Washington.”

Like many contractors, Honeywell expects at least a slight drop in defense revenue because of the sequester.

The company’s sales to the federal government dipped by $245 million from 2010 to 2012, with overall contracts totaling just under $4.2 billion last year, according to Securities and Exchange Commission filings.

Meanwhile, Honeywell’s political action committee gave nearly $3.2 million to federal candidates during the 2012 election cycle, which is up from nearly $1.4 million during the 2010 election cycle and $2.5 million in 2008, according to the nonpartisan Center for Responsive Politics.

A company spokeswoman, Victoria Streitfeld, declined to say whether the sequester would affect the company’s political giving.

“Honeywell’s political action committee supports those who support the policies that are most important to our business and will help the American economy grow and add new American jobs over the long term,” she said.

Northrop Grumman has warned investors of “serious negative consequences” for the company and its suppliers because of the sequester. Citing the current budget environment, the contractor also announced plans recently to close a facility in California that employs more than 700 workers.

But the company’s political action committee isn’t cutting back — at least for now.

“Northrop Grumman does not have any plans to change the direction of its political action committee at this time,” spokesman Randy Belote III wrote in an email.

The company’s political action committee spent $2.2 million in the 2012 election cycle, compared with $1.7 million in 2010, according to data from the Center for Responsive Politics.

During the same period, the company’s sales to the federal government dropped from $25.5 billion in 2010 to $22.7 billion last year, Securities and Exchange Commission filings show.

Viveca Novak, spokeswoman for the Center for Responsive Politics, said defense companies probably aren’t likely to cut back significantly on their lobbying expenses and political donations.

“I think many of these companies view cutting back on political giving as something that would be pennywise but pound foolish,” she said.

“They want to still be able to lobby against defense cuts as well as on other issues, so cutting back on their lobbying expenses or political contributions might not enhance their ability to do that.”

The political action committee for General Dynamics, another big defense contractor, dispensed $1.2 million in donations to federal candidates during the 2012 cycle, with 46 percent going to Democrats and 54 percent going to Republicans.

Rob Doolittle, a General Dynamics spokesman, declined to say what, if any, impact the sequester would have on the company’s political giving.

“We don’t wish to comment on future plans,” he wrote in an email.

Defense-related fundraisers have been organized for Democrats and Republicans throughout March, according to data from the Sunlight Foundation, which relies on invitations passed along from lobbyists, contractors and others to monitor congressional fundraising activities. While the group cautions that such data is incomplete, the foundation has compiled fewer fundraising invitations during January and February of this year compared with the same period in 2011.

Still, Kathy Kiely, managing editor for the Sunlight Foundation, said defense contractors may be “doubling down” on their fundraising efforts since they have the most to lose through the sequester.

“The fundraising never ends,” she said.

For his part, Price, who serves on the House Appropriations Committee, said he’s all in favor of a comprehensive campaign finance overhaul. But to help make that happen as a lawmaker, he’ll have to remain in office. And that takes lots of money.

House members spent an average of nearly $1.7 million to keep their jobs during the 2012 election cycle, or about $2,300 per day, according to a recent study by MapLight.org, a nonpartisan group that tracks money in politics.

“There are ways to do it that are honorable and aboveboard, and that’s the way we do it,” Price said. “If you’re asking me would I like to change the system, the answer is yes.”

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