There’s a lot more influence peddling in Washington than is ever disclosed to the public. As my colleague Peter Olsen-Phillips demonstrated in a piece on Tuesday, defense giant Northrop Grumman employs dozens of people, many of whom came from prominent positions in government service, whose titles and online biographies indicate that their jobs involve interaction with government officials — but do not register as lobbyists. Included in that list are not one but two former generals who led missile commands for the Army and Air Force and now oversee the sale of Northrop Grumman’s missiles to their old units; a former head of the Defense Counterintelligence and HUMINT Center of the Defense Intelligence Agency who now sells Northrop Grumman spy technology and tradecraft to Fort Meade, home of both the National Security Agency and the United States Cyber Command; and several other former high ranking soldiers who manage their company’s sales, annually totaling billions of dollars, to their former colleagues.
As Olsen-Phillips’ piece points out, the legal definition of who’s a lobbyist and who isn’t doesn’t require these individuals to lobby, but that doesn’t mean that company officials acting in a similar capacity don’t use their powers of persuasion to influence the government. In fact, a pair of inspector general reports shows just how effective company officials seeking federal dollars can be in cutting deals that benefit their bottom lines, arguably leaving taxpayers with less bang for their buck.
A 2013 General Services Administration inspector general’s investigation found that executives from three companies went over the head of contracting officers, the specialists in federal agencies who are charged with getting the best price for taxpayers when buying goods and services from the private sector, to find more favorable terms. Deloitte Consulting LLP officials met with managers in the General Services Administration’s Federal Acquisition Service (FAS) in 2012 trying to get better terms on a contract up for renewal. They succeeded, winning labor rates for some jobs as much as 18.5 percent higher. Not one of Deloitte’s lobbying disclosure forms in 2012 list the General Services Administration as an agency it lobbied.
The same investigation found executives for Carahsoft, a major vendor of IT services, also met with FAS managers in 2011 when a contract officer determined that it wasn’t in taxpayers’ best interest to renew a contract worth $432 million to the firm in 2011. The pressure worked, netting the firm an agreement that resulted in “the lengthy extension of a contract with inflated pricing and other terms and conditions unfavorable” to taxpayers. Carahsoft disclosed lobbying Congress in 2011, but not GSA.
According to the GSA inspector general’s report, only Oracle used a registered lobbyist to promote the software giant’s case with FAS managers; it disclosed lobbying GSA on “General issues regarding government procurement policy. General issues related to IT procurement. Matters surrounding cybersecurity and procurement.” Oddly enough, it was the only of the three that ultimately did not have its contract renewed.
An even more tangled affair resulted when a Veterans Affairs (VA) official froze the contract of reverse-auctioneer FedBid over concerns that the company was charging the government exorbitant transaction fees. The company mounted a temporarily successful full-court press to reverse the decision. Its then-CEO, Ali Saadat, sent a company-wide email thanking several big names for their efforts to persuade Congress and top officials at the VA, including Edward Shinseki, then the head of the agency, for helping the company “come out victorious, untainted and, in fact, in a much better position than we were before this issue began.” People praised included Steve Case, the AOL founder and a major investor in the company; retired Gen. George Casey, a company board member; advisor and procurement expert Steve Kelman, who wrote op-eds praising the company; Jim Noone, a lobbyist at Mercury Clark & Weinstock; and former Rep. Chet Edwards, D-Texas.
But Saadat spoke too soon. A scathing inspector general report released in June 2014 found that a VA official had improperly intervened on behalf of FedBid, which was in fact charging high transaction fees. In January of this year, the Veterans Administration announced it would no longer award new business to the firm; the company, under a new CEO, told The Washington Post at the time it is cooperating with the government and is responding to the concerns raised by the inspector general. As for the supporters who pushed VA officials and members of Congress singled out by Saadat for high praise, only one — James Noone — was registered to lobby the federal government at the time.
So we end where we began: There’s a lot more influence peddling in Washington than is ever disclosed to the public.