Defense Contractors Reap Windfall in 2005 Earmarks


By Larry Makinson and Anupama Narayanswamy

The nation’s top defense contractors were also the biggest beneficiaries of congressional earmarks in 2005, an analysis by the Sunlight Foundation has found. Boeing, Northrop Grumman, Lockheed Martin and General Dynamics led the pack. Those four corporations collected a combined $1.09 billion in earmark awards. Overall, the top 20 corporate recipients of 2005 earmarks were all defense contractors.

The analysis was based on the database of earmarks from 2005 produced, and posted online, by the federal government’s Office of Management and Budget. OMB collected the data from the agencies responsible for dispensing the money. The database does not include the names of members of Congress who asked for specific earmarks to be inserted onto the books, since members were not required to disclose this information.

The Sunlight Foundation standardized the data, linking subsidiaries to parents. Sunlight Labs developed its own interface for searching and analyzing the improved data, and also offers visualizations of the information using Many Eyes, part of IBM’s Collaborative User Experience research group.

Of the $18.9 billion in earmarks that were awarded, just under half — $9.3 billion — paid for Defense Department projects. The Department of Transportation was a distant second, with $3.2 billion in earmarks. Most of the transportation earmarks were passed on to state highway departments.

Seven major defense contractors collected over $100 million apiece in the earmarks sweepstakes, in which members of Congress short circuit the federal government’s competitive bidding process and award funds directly to firms, specifying the winners in the language of bills, committee or conference reports, letters or other communications sent by members to federal agencies, and even statements made by members on the floor of the House or Senate.

Until 2007, members could insert earmarks anonymously. In January, the House adopted rules intended to improve public disclosure of earmarks, while the Senate rule to do the same has yet to be passed. (For a comparison of the House and Senate earmark reforms, click here. For recent information on how the House has applied its own rules, click here.)

Top Recipients of 2005 Earmarks

Boeing Co. $457 million
Northrop Grumman $232 million
Lockheed Martin $206 million
General Dynamics $201 million
Raytheon Co. $163 million
BAE Systems $142 million
L-3 Communications $124 million

Those figures are conservative, since information, including the recipient, for millions in earmarked funds was withheld for security reasons. In other cases, earmarks specifying multiple recipients had a dollar amount listed, but the allocation of dollars among each recipient was not. For this analysis, those figures were not included.

All the top recipients — and many others further down the list — helped pave the way for their earmark awards through extensive lobbying efforts and campaign contributions. Each of the big seven is a well-established player in Washington’s industry of influence, spending millions a year to lobby on a wide variety of issues ranging from federal tax and trade policy to health care to appropriations. The companies’ employees and family members and political action committees donate hundreds of thousands of dollars each election cycle to members of Congress.

In 2004-the year in which the earmarks in the Office of Management and Budget’s database were approved-Boeing reported spending almost $8.7 million lobbying the government. The PAC, employees and their family members of the aerospace giant contributed nearly $1.8 million to political campaigns in the 2004 election cycle. Northrop Grumman reported spending almost $12.6 million on lobbying, and kicked in $2 million to the coffers of federal candidates seeking office in 2004.

Because lobbying disclosure forms do not require filers to specify how much they spent lobbying on each specific issue, it is impossible to determine how much they spent seeking earmarks.

All lobbying and campaign contribution amounts are from the Center for Responsible Politics; for a fuller list and more details on the top for profit, nonprofit, university and state recipients of earmarks, download this spreadsheet.

Reported 2004 Lobbying Expenditures by Top Earmark Recipients

Boeing Co. $8.7 million
Northrop Grumman $12.6 million
Lockheed Martin $8.3 million
General Dynamics $5.8 million
Raytheon Co. $5.1 million
BAE Systems $1.6 million
L-3 Communications $1.8 million

According to Sunlight’s analysis of the earmarks, some $5.6 billion went to for-profit corporations. Federal government agencies received a combined $2.8 billion followed by state agencies ($2.3 billion) and local governments ($2.2 billion). Public educational institutions, including state universities received about $1.7 billion, as did nonprofit groups. Nearly $1 billion was classified as “other” by OMB, while $408 million went to private educational institutions.

Campaign Contributions in 2004 Election Cycle by Top Earmark Recipients

Boeing Co. $1.8 million
Northrop Grumman $2.1 million
Lockheed Martin $2.0 million
General Dynamics $1.6 million
Raytheon Co. $1.1 million
BAE Systems $0.5 million
L-3 Communications $0.5 million

Leading the academic list was the University of Hawaii, with over $109 million in awards. Other top recipients were Penn State University and the University of Nevada. Some 19 universities collected $20 million or more. That list includes two universities based in Mississippi.

The top two earmark recipients among the non-profits, Concurrent Technologies Corp. and the Henry M. Jackson Foundation, have received a combined total of close to $200 million in contracts in 2005, of which more than 30 per cent have been acquired through earmarks. Both these non-profits have received funding mainly from the Defense Department.