For years, Lockheed Martin and the Boeing Company have been significant benefactors of the federal appropriations process, ranking as the top two recipients of government contracts since at least 2006—the earliest year for which contractor ranking data is available. This trend does not appear likely to change anytime soon. The two companies stand to benefit generously from the Fiscal Year 2018 federal spending bill signed by President Trump in March, which not only increased the Pentagon’s budget by $61 billion, but also approved the acquisition of more of some of their products than the Pentagon requested.
For example, the spending bill appropriated for 24 new Boeing F/A-18 Super Hornets for the Department of the Navy, despite the Pentagon requesting only 14. Similarly, the legislation approved 20 more Lockheed F-35 Joint Strike Fighters—across the board— than were requested. The FY 2019 defense appropriations bills that recently passed the House and the Senate also would see both companies achieve similar gains.
So, how is it that these defense juggernauts—Lockheed received more than $48 billion in obligated funds through Defense Department contracts and authorizations in fiscal year 2017 while Boeing received more than $21 billion—continue to dominate? At least part of the answer lies in their political spending strategies.
Since 2017, Boeing has spent over $24 million on lobbying and Lockheed has spent over $21 million. The two companies and their employees are also very active funders of political campaigns. In the 2018 election cycle, Lockheed and its employees have spent over $2.5 million on federal candidate campaign contributions while Boeing and its employees have spent well over $2.3 million, as of August 6, according to data compiled by the Center for Responsive Politics and the Federal Election Commission.
Reflecting the fact that defense policy cuts across multiple congressional jurisdictions, members on committees like House Appropriations, Armed Services, Energy and Commerce, Financial Services, and Ways and Means benefit from the defense contractors’ largesse. The work of these committees directly or indirectly affect the defense industry’s interests by legislating how much money will be allocated to the federal government to purchase their products and services, what products of theirs the government may acquire, what weapons grade materials the companies have access to, what limits are placed on the companies regarding foreign sales, and how the companies are taxed and incentivized.
A notable focus of the two companies’ political spending is on politicians with significant sway over how the government spends taxpayer money. For instance, according to an analysis by CREW of campaign contribution data compiled by the Center for Responsive Politics, Lockheed Martin and its employees contributed to 52 out of 53 of the members on the House Appropriations Committee during the 115th Congress, giving a combined total of $524,380 to them so far in the 2018 cycle. Overall, about 20.8 percent of Lockheed’s contributions to federal candidates for the cycle went to members of the House Appropriations Committee. Likewise, Boeing and its employees contributed to 50 of the House appropriators, giving them a combined total of $420,770. Roughly 17.9 percent of Boeing’s federal candidate contributions went to House appropriators.
Both companies made contributions to the vast majority of House appropriators, but Lockheed’s spending targeted influential subcommittee leaders with significantly more money. While the top recipient on the committee of Boeing’s contributions this cycle, Rep. Martha Roby (R-AL), received $15,500 from Boeing and its employees, Lockheed and its employees have contributed $123,360 to Rep. Kay Granger (R-TX) and $49,800 to Rep. Peter Visclosky (D-IN), who are, respectively, the chair and ranking member of the House Defense Appropriations Subcommittee.
A likely reason for Lockheed giving such significant sums of money to Reps. Granger and Visclosky is the duo’s leadership of the most powerful subcommittee on appropriations when it comes to the federal government’s discretionary budget. The defense subcommittee oversees the extent to which weapons contracts, including the most expensive one in American history — Lockheed’s F-35 Joint Strike Fighter project (estimated end-price-tag: over $400 billion) — get funded. Specifically, as the chairwoman of the subcommittee, Rep. Granger can set the its agenda, determine which bills will or will not be considered for a vote, call the committee together, supervise and direct the committee staff, and whip votes. Though unable to set the subcommittee’s agenda, Rep. Visclosky can whip minority member votes, and shape minority members’ priorities; and very importantly, Rep. Visclosky could find himself chairing the subcommittee some day.
For Rep. Granger, beyond her powerful position, there’s another obvious reason why Lockheed and its employees are so generous. She represents the district where Lockheed’s primary F-35 production facility is located, and the company is an important source of jobs for her constituents. A review of USAspening.gov shows that over $20.5 billion in obligated funds have been allocated to Granger’s district since 2017. Not surprisingly, Rep. Granger has been a serious proponent of the controversial F-35 program — which has come under fire for delayed delivery, technology failure, and excess costs — putting out supportive press quotes on it when it faces major criticism, and working to ensure its domestic and foreign procurement. Rep. Granger, who formed and co-chaired the (F-35) Joint Strike Fighter Caucus, and may have even informally referred to herself and Lockheed as a pair, “us,” when discussing a review of the F-35.
Rep. Visclosky, on the other hand, does not appear to have as close a relationship with Lockheed. From 2017 to the present, no Lockheed projects with obligated funds were carried out in his district, suggesting its economy is not directly dependent on the company and that his influential position in Congress may better explain the campaign contributions.
Fiscal year 2019 defense spending is still being finalized in Congress. On June 28, the House passed legislation, sponsored by Rep. Granger, that appropriates $145.7 billion for defense equipment procurement, including $9.4 billion for the acquisition of 93 F-35s, 16 more than requested by both the Pentagon and the recently signed-into law NDAA. The bill would also appropriate $1.9 billion for 24 Boeing F/A-18 Super Hornets, the exact number requested by the Pentagon. The Senate passed an amended version of the House’s defense appropriations bill on August 23, which would fund 12 more F-35s than the Pentagon requested, and 24 F/A-18 Super Hornets — the exact number requested — if the House approves their changes.
Overall, the amount of money that Lockheed Martin and Boeing pour into the campaigns of members of Congress, particularly those sitting on committees relevant to their interests, appears to be worth its value, even if it doesn’t completely explain their success. Both contractors regularly secure major acquisition of their products, sometimes in excess of the Pentagon’s requests and guidelines set out in defense authorization bills. Their positions as the top recipients of government contracts do not appear to be at risk anytime soon.