Defense budget cuts aren’t shrinking Northrop Grumman’s political giving

NASA and Northrop Grumman workers stand in front of a Global Hawk, the unmanned aerial vehicle built by Northrop Grumman

Northrop Grumman seeks foreign customers for Global Hawk.

The end of two wars, the sequester and deep cuts in military spending proposed by the Obama administration have threatened profits for defense contractor Northrop Grumman, but cuts haven’t hurt the company’s cash flow into Washington.  Northrop Grumman’s PAC has so far contributed to 294 candidates running in 2014 races. That’s just 23 congressional candidates shy of the 314 they supported with donations over the whole 2012 cycle. The PAC has given $2.6 million so far — already more than the $2.3 million it contributed to federal candidates, PACs and parties in all of 2012.

Among the few who didn’t receive contributions was Sen. Al Franken, D-Minn., who has pushed for cutting “bloated programs” and “parochial spending” from the Pentagon’s budget.

The outpouring of influence wasn’t limited to its political action committee. In its lobbying filing, Northrup Grumman disclosed spending $3.5 million in lobbying-related expenses for the first quarter of 2014. That amount included more than $300,000 paid to outside firms. Northrop’s lobbying army pushed on issues related to defense spending and appropriations, funding for NASA programs and the implementation of the Patient Protection and Affordable Care Act.

The spending actually represents a drop from its lobbying expenses in the first quarter of 2013 — when it ramped up by spending $5.8 million. At that time, The Hill reported the increase was unique among the defense firms.

On April 17, when Wes Bush — Northrop Grumman’s chairman, CEO and president — came to D.C., to discuss the future of the defense industry, his talking points might have indicated Northrop Grumman’s future political plans. Interviewed before members of the Economic Club in Washington, D.C. by its president, David M. Rubenstein, Bush didn’t reveal any earth-shattering predictions for the future. But he did touch on some of the options the company has, while noting that some require Congress and the administration to align with the company’s interests.

Rubenstein reminded the discussion attendees that 86 percent of Northrop Grumman’s business last year was conducted with the federal government, while 10 percent was conducted with foreign governments. Bush predicts the company will continue to “take a broader view“ of what can be exported overseas. Last month, the company announced it would sell Global Hawks to South Korea. Northrop Grumman has been lobbying for the overseas sale since at least 2011. Bush noted that foreign sales require the company to win the support of the Pentagon, the State Department and Congress. Export control reform, foreign military sales and international sales opportunities are among the issues the company listed on its most recent lobbying disclosure form.

While Bush wouldn’t give details of any other plans, he indicated that the company was involved in cybersecurity efforts, saying he felt current budgets were already large but that legislation should be “more effective.”

And while he didn’t raise it, the company’s own effectiveness turned up in last January’s Consolidated Appropriations Act. Section 8118 of the act requires the Air Force to keep buying and flying the Global Hawk, the unmanned aircraft that the company spent billions of dollars developing and will spend billions more upgrading. Air Force brass wanted to scrap the drone, and Gen. Michael Hostage said in an interview with Defense News the decision to keep it was driven by politics.

Northrop Grumman may also be joining forces with the tech sector to lobby for immigration reform.  Mark Zuckerberg’s and other interests in Silicon Valley have recently campaigned for an increase in visas granted to STEM graduates.  Some researchers have argued that granting visas would keep wages low for U.S. graduates.

When Rubenstein asked if visas and immigration reform had impacted hiring practices, Bush confirmed that Northrop Grumman struggled with visa clearances and finding the right talent. He said he did not feel the company was losing potential job candidates to the tech sector but said the U.S. lacked enough qualified STEM graduates to fill positions. The company has their own education outreach in the United States. They have not publicly sided with Silicon Valley or begun lobbying on the issue.

As their campaign giving shows, they’ll have plenty of members of Congress they can reach out to if they do take up immigration.