How Companies Hide the Spoils of Winning Government Contracts

[xchrom]

http://www.theatlantic.com/business/archive/2014/12/how-companies-hide-the-spoils-of-winning-government-contracts/383425/

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General Electric spent about $150 million on lobbying between 2007 and 2012, and received $16 billion in government contracts over that same period. (David W. Cerny/Reuters)

General Electric, the venerable maker of light bulbs, refrigerators, and other appliances, recently announced that it was selling off its consumer products division because the profit margins are too low. While GE bids that division goodbye, it’s holding onto its highly lucrative government-contracting business, in which a less-demanding customer leaves room for higher margins. Between 2007 and 2012, GE secured more than $16 billion worth of federal contracts, which might have something to do with the fact that it spent $150 million on lobbying during that period.

How often do these sorts of contracts roll in for companies that spend heavily on political advocacy? Unfortunately, there's not enough public information to say.

Journalists and critics frequently bring up the dizzying totals that special interests put into elections—one estimate was that $3.7 billion was spent on last month’s midterms—but it's much less common to hear about the impact of that money on the government's decision making.

The Sunlight Foundation, where I work, recently examined 200 of the most politically active for-profit corporations between 2007 and 2012. We found that while they disclosed spending $5.8 billion to influence government—in the form of both their lobbying expenses and the campaign contributions from their PACs, employees, and their employees' family members—they got, as far as we can determine, more than $4.4 trillion in federal business and support. Which is not to say that their lobbying and campaign spending was the sole reason they got all that money; rather, when corporate business plans include getting a lot of federal money, contributing to candidates and hiring lobbyists will be part of the strategy.

[daleanime]

1. But SNAP is the problem with our budget....

K&R

[Scuba]

2. + Eighty Gazillion

[woo me with science]

5. ^^^^^^^^^

[Recursion]

3. Doesn't GE have the prime contract for the entire nuke arsenal? (nt)

[Octafish]

4. Whatever happened to Project HEAD START?

Seems if poor pre-school age children from impoverished homes need representation in Washington, they should hire lobbyists like every other corporation kick.

[L0oniX]

6. Obviously big companies like big government with big money contracts.

[Frustratedlady]

7. Add to that the negotiations GE has with city, state and unions to get their tax and wage breaks.

Someone needs to take their carrot away. If you let them have their way...dangle their carrot...they will give you all kinds of jobs and great contracts to keep your factory open.

Yeah, right.