COLUMN ONE : PACs Give Little Firms Big Clout : Mention of the defense lobby might call to mind Boeing or TRW. But some of the minor military suppliers have won major victories in Congress.

For a tiny defense contractor, KMS Fusion Inc. of Ann Arbor, Mich., has had enormous success with Congress.

In each of the last five years, KMS executives have persuaded lawmakers to give their firm more money for fusion energy development than Administration budget-makers wanted. Last year, in fact, Congress spelled out KMS’ $17-million contract--which accounted for about two-thirds of the company’s revenues--in a rare line item of the fiscal 1990 Defense Authorization Act.

One possible key to this little-known company’s success: Campaign contributions. Since 1987, KMS’ political action committee has poured $36,800 into the campaign coffers of 13 House members closely involved with military spending. That sum rivals the political contributions of many far larger defense contractors.

Indeed, a computer-assisted study conducted by The Times has disclosed that small defense contractors like KMS are a major source of campaign contributions for key members of Congress who make Pentagon budget decisions--a source of political money that until now has gone largely unnoticed.

The Times study has identified nearly 250 political action committees seeking to influence defense spending. And previous assessments, the study found, have vastly underestimated the amount of money that defense-oriented members of Congress receive from corporations that do business with the Pentagon.

Since the start of the current 1989-90 campaign cycle, PAC reports filed with the Federal Election Commission show that the 65 members of the two House panels that shape the military budget--the Armed Services Committee and the Appropriations defense subcommittee--have received $1.7 million in contributions from defense contractors.

This review of defense-related PAC contributions found also that numerous weapons systems, such as the V-22 Osprey helicopter and the F-14D fighter jet, have been saved from extinction by some members of Congress who solicited contributions from their manufacturers--at a time when the Administration is trying to slash military spending.

Most members of Congress minimize the extent to which defense industry campaign contributions influence their decision-making, but House Appropriations defense subcommittee member Charles Wilson (D-Tex.) said that members of Congress are, in fact, tacitly agreeing to vote in favor of contractors from whom they accept campaign money.

“I think any fair-minded person knows that, when anybody gives you $10,000 in PAC contributions, they’re not doing it because your breath smells good,” Wilson said. “When you actively solicit money from special interest groups, you are implying you support them.”

The Times study found that it is obscure companies such as KMS Fusion--whose contracts are too small to attract much attention--that seem to be most effective at persuading Congress to approve spending they have failed to win directly from the Pentagon.

“The smaller it is, the easier it is to lobby for. It is the $2-million research project that can be influenced most easily,” one Armed Services Committee source said.

Members of Congress have always challenged military spending priorities--sometimes because of differing tactical or strategic visions, sometimes to protect jobs back in their home districts, sometimes for other reasons.

Until now, however, without computers able to sift through mountains of data, it has been difficult to examine the flow of campaign money from individual contractors to the representatives and senators who are most directly involved in Pentagon spending decisions.

The top 27 defense PACs alone, which contributed a record $6.8 million to all members of Congress for the 1988 elections, have already donated nearly $3.9 million this time, with five months to go before the November election. Of that, $929,820 has gone to members of the two House defense committees.

Headed for a Record

At this rate, there is little doubt that defense industry contributions to members of Congress will set a record. All this, critics say, could make it more difficult for Congress to trim the Pentagon budget.

The flood of defense dollars has not flowed evenly to all members, however. While some committee members got little from the industry, others got a lot. Wilson, a prominent member of the Appropriations Committee’s defense subcommittee, pulled in $94,000--making him the biggest beneficiary of defense PAC dollars.

And PAC dollars alone do not tell the whole story. Many members also receive sizable personal contributions from top defense industry executives and lobbyists. Wilson, again, got $17,750 in such personal contributions--bringing the total defense receipts for his campaign organization since January of 1989 to a whopping $111,750.

In addition, defense contractors pay key members of Congress thousands of dollars in honorariums. This money, unlike PAC campaign contributions, may largely be kept as personal income. According to records made public on May 29, members of the Armed Services Committee and Appropriations defense subcommittee got $391,611--or 47% of all their honorariums--from defense contractors.

Wilson collected $12,000 in six days in Southern California last year, touring facilities of Aerojet-General, Rockwell, Northrop, TRW, Marquardt and Singer, which also paid for his air fare, lodging and meals.

The ability of defense contractors to influence Capitol Hill is particularly relevant this year. While Administration officials try to cut back or kill programs in order to meet budget goals, the affected contractors are doling out thousands of campaign dollars to persuade members of Congress to preserve the programs.

PAC contributions have become an integral part of modern American politics for obvious reasons. Members of Congress need money to support their campaigns; defense contractors--like other businesses and special interests--hasten to supply the money because they believe it advances their ends.

Public criticism of this system has grown so loud, however, that both Democrats and Republicans in the Senate have recently put forth proposals to ban PAC contributions to members of Congress. There is still no real sentiment for such action in the House, where members are far more dependent on PACs to finance their campaigns.

PACs, which are quasi-independent entities set up by companies, unions and trade groups to make campaign contributions, were created by a post-Watergate law that sought to clamp down on the large contributions that corporate executives were making to political campaigns. Ironically, many PACs are supported largely by top executives.

As for the contractors, they insist they do not demand that members of Congress vote their way in exchange for campaign contributions. “We don’t expect them to vote 100% our way,” said Al Spivak, Washington spokesman for General Dynamics.

Industry sources did admit that members of Congress who frequently vote against defense companies do not receive continued support from their PACs. That is why a military critic such as Rep. Ronald V. Dellums (D-Berkeley), a member of the Armed Services Committee, received only $2,526 in defense-related PAC money.

“When you see PAC money going to members of Congress who don’t need it for their reelection, it demonstrates all the more that the money is going to curry favor,” said Fred Wertheimer, president of Common Cause, a longtime critic of PAC financing.

In the past, major studies of defense contractors’ PAC spending have focused primarily on the contributions made by 10 of the biggest manufacturers of military equipment: Boeing, General Dynamics, General Electric, Grumman, Hughes Aircraft, Lockheed, McDonnell Douglas, Raytheon, Rockwell and United Technologies.

In a 1987 survey, Common Cause found that gifts from those firms’ PACs to members of the Armed Services Committee and the Appropriations defense subcommittee had gone from $152,550 in the 1979-80 election cycle to $757,590 during the 1985-86 cycle.

Big 10 Giving Is Up

The Times’ review of more recent FEC reports found that congressional campaign giving by those same 10 PACs has continued to escalate--reaching $842,425 in the 1987-88 election cycle and amounting to $536,150 so far for this time around.

Nevertheless, contributions from the largest contractors clearly represent only part of the defense-related PAC money that members of the House Armed Services and the Appropriations defense subcommittee receive for their reelection war chests.

Not only do dozens of other big weapons producers, such as Tenneco and Martin Marietta, give money to members of these panels, but committee members receive contributions from a variety of other firms whose business is affected by the committee’s decisions.

These include technology and computer software firms, weapons research laboratories, builders of defense installations, oil companies that supply fuel to the military, textile factories that supply fabric for uniforms and cigarette and liquor manufacturers who sell their products at military bases under rules established by Congress.

Not surprisingly, most of the contributions from this diverse group wind up in just a few campaign coffers. Of the nearly $1.7 million that defense-related PACs have given the 65 members of the two committees since January, 1989, nearly half went to just 15 members.

These include the committee chairmen, the ranking minority party members, key subcommittee chairmen and a few particularly outspoken men such as Wilson.

Interestingly, the top three recipients of defense PAC money--Wilson, Rep. W. G. (Bill) Hefner (D-N.C.) and Rep. John P. Murtha (D-Pa.)--are not members of the Armed Services Committee, the preeminent panel that sets broad policy regarding U.S. military strategy.

They are all members of the Appropriations defense subcommittee, the lesser-known panel that fine-tunes military procurement decisions.

Hefner has received $86,250--or 53% of what came from PACs--from defense contractors, and Murtha, the subcommittee chairman, has received in $83,350--or 54% of his PAC donations--from them.

Other top recipients of defense-related PAC money include: Rep. Les Aspin (D-Wis.), chairman of the Armed Services Committee, who got $65,150--40% of his PAC money--from these groups; Rep. William L. (Bill) Dickinson (R-Ala.), the top GOP member of Armed Services, who got $61,000, or 78%, from defense-related PACs, and Rep. Joseph M. McDade (R-Pa.), top Republican on the Appropriations defense subcommittee, who got $53,250, or 56%.

Aspin is relatively new to this elite club. In his early years on the Armed Services Committee, he was known as a Pentagon watchdog who made a big issue of military waste. Only after he became committee chairman and shed his gadfly image did he begin to receive large PAC contributions from contractors.

The five other top recipients have long had reputations as pork-barrel politicians with close ties to the defense industry. Both Dickinson and McDade are subjects of House Ethics Committee investigations into allegations of receiving improper donations from military contractors in their home districts.

However, of the top six recipients of defense industry PAC money, only Dickinson is believed to have serious opposition in next November’s election. The others are simply padding their campaign war chests, as incumbents frequently do, to discourage anyone challenging them in the future.

The biggest contributors are the large contractors, some of whose programs have been marked for extinction by the Administration. These include McDonnell Douglas, with $76,250 in contributions to members of the two defense-related House committees during the 1989-90 election cycle; General Dynamics, $63,550; Raytheon, $58,550; Lockheed, $62,550; Hughes Aircraft, $67,500; Grumman, $60,250; Textron, $56,300, and Northrop, $54,900.

Some Generous Gifts

Although some contractors never give more than $1,000 or $2,000 to any member of Congress, others are far more generous. Wilson, for instance, received sums of $5,000 from five different contractors, $4,500 from another and $4,000 from three others.

Typically, members of Congress solicit contributions by inviting people to fund-raising receptions. Invitations are sent not only to PAC representatives but also to corporate officers, lobbyists and the law firms that represent defense firms in Washington. That is how the contributions come to be from individuals as well as from PACs.

Although Wilson received the most money from defense contractor PACs, for instance, Murtha surpassed him in total defense industry dollars received because he also took in $31,850 from individuals working with contractors.

In fact, these individual contributions have become so commonplace in the industry that one small contractor, Diagnostic/Retrieval Systems Inc. of Oakland, N.J., which manufactures naval communications equipment, has no PAC but relies entirely on its top corporate officers to give money directly to members of Congress. So far this year, Diagnostic/Retrieval’s two top officers and their wives have given $18,800 to members of the two committees.

Individual contributions to Rep. Ike Skelton (D-Mo.), which totaled $20,550, demonstrate how contractors frequently are called on to make both PAC and individual contributions to a single member of Congress. Although Skelton received PAC contributions of only $1,500 from General Dynamics and $5,500 from McDonnell Douglas, both of which are headquartered in his home state, he got $15,500 in individual contributions from officers and lobbyists for the two corporations.

When PAC and individual donations are added together, it becomes clear that industry executives can be a primary source of election funds for many members of these two committees.

Consider the case of Rep. C. W. (Bill) Young (R-Fla.), a member of the Appropriations defense subcommittee currently sitting on a $320,564 war chest although he has no announced opposition in November. Young has raised $74,335 from PACs so far in this election cycle--$41,250 of it from defense-related PACs. And all of his $4,725 in individual contributions came from 11 Washington lobbyists, six of whom represent military contractors.

Few members of these committees would be interviewed on the subject of PAC contributions, and most who did comment insisted that the money does not influence their votes. Rep. Norm Dicks (D-Wash.), a member of the Appropriations defense subcommittee, said that the members’ decisions on weapons systems are based primarily on ideological and parochial considerations.

But Wilson, whose reputation for outspokenness is legend on Capitol Hill, said that contractors’ PACs give more money to the members of the Appropriations defense subcommittee and Armed Services Committee because these members actively solicit contributions from the industry.

With each solicitation, Wilson added, there is an implicit commitment on the part of the congressman to support the giver’s program.

“The idea that you announce your candidacy and these people come running to you because of your splendid record of public service--well, if you believe that, you ought to talk to somebody about buying a bridge,” Wilson said.

“If you go out and aggressively solicit Jewish money, it’s clearly implicit that you’re going to support Israel. If you vigorously solicit money from wheat farmers, it’s implied you’re going to support wheat subsidies. And it’s the same with defense contractors. People who say differently are not telling it like it is.”

Even though the biggest contractors dominate this system, it is usually the smaller contractors who benefit most from making generous PAC contributions, committee sources said.

“It is sometimes on the very obscure program where members may be influenced by a PAC contribution,” said a member of the Appropriations defense subcommittee who requested anonymity.

Such a project may have been KMS Fusion’s research contract with the government.

Last year, the Administration requested $15.3 million for KMS Fusion, which, since the early 1970s, has been involved in laboratory research toward developing fusion energy. Bush Administration officials strongly opposed increasing the KMS appropriation.

In an unusually blunt letter to Aspin last June, Troy Wade, then acting assistant secretary for defense programs at the Energy Department, said that KMS should get no additional funds because its “performance during the past two years has not met program expectations.”

Despite such pleas, however, members of the Armed Services Committee--13 of whom have received campaign contributions from the KMS PAC since 1987--voted to give the company an additional $2.5 million in the current fiscal year. Rep. Robert W. Davis (D-Mich.) led the fight to give the company more money. He has received $6,000 in campaign contributions from KMS since 1987. In addition, KMS paid him $2,000 in honorariums and gave him a trip from Washington to Michigan and back last year.

Extraordinary Focus

What made the decision to increase KMS’ allocation even more extraordinary was that the Armed Services Committee spent perhaps half an hour debating the matter--more time that it devoted to many multibillion-dollar weapons systems. It was so unusual that Dickinson at one point remarked: “I don’t know when I have had more interest raised in a small (increase) than this.”

KMS’ generosity with campaign contributions and honorariums has helped to obtain committee support for the company, particularly among members who do not represent Michigan, according to Rep. John M. Spratt Jr. (D-S.C.), who is chairman of the Armed Services energy subcommittee.

Indeed, KMS has a long history of political activism in Washington. Its founder, Kelve M. Siegel, collapsed and died when testifying before Congress in 1975. Company officers routinely contribute $250 every quarter to the KMS Fusion PAC, creating a generous war chest from which to distribute campaign contributions. In addition, the firm paid out $5,000 in honorariums last year and financed trips for both Davis and Rep. James V. Hansen (R-Utah).

KMS officers would not discuss their political activities. Terence C. Liddy, senior vice president responsible for the corporation’s PAC activities, refused to be interviewed.

Big contractors also get some benefit from their PAC contributions, but the system works in a different way for them.

“PAC contributions gain the (big) contributor access,” Spratt said. “A contributor gets his telephone calls returned, he gets an office visit with the congressman and he gets serious consideration. In that sense, it has an impact. Usually, they’ve got a case to make. You know it’s biased, but it’s information you would not get out of the Department of Defense.”

Just One of Tools

But, in most cases, PAC contributions are just one of the leverage tools that the largest contractors use when they set out to persuade members of Congress to save a program marked for cuts or extinction by the Administration. They also rely heavily on lobbying by the congressmen who represent the districts where the economic impact will be felt.

An example of how that system works occurred last year, during consideration of the future of the M-1 tank, currently manufacturered by General Dynamics at plants in Ohio and Michigan. The Administration’s reduced budget request for M-1 tanks would have required General Dynamics to shut down its plant outside Detroit.

By all accounts, the congressman who led the battle to let General Dynamics keep the Michigan plant open was Rep. John D. Dingell (D-Mich.), powerful chairman of the Energy and Commerce Committee. Although Dingell does not serve on the defense-related committee, he prevailed on members of the Appropriations defense subcommittee to save the Michigan plant.

General Dynamics, meanwhile, gave PAC contributions of $5,000 to the top two members of the panel, Murtha and McDade.

Appropriations subcommittee Chairman Murtha had made up his mind by the time he opened hearings on the matter in March, 1989. He told Army officials: “We are not going to close this plant down if there is a chance we will need it down the road.”

His decision was ratified by the Armed Services Committee, which specifically ruled out shutting down the Michigan plant in the 1990 Defense Authorization Act. Forty-four Armed Services Committee members have received contributions ranging from $250 to $4,500 from General Dynamics during the current election cycle.

Murtha was unavailable to comment.

According to congressional sources, PAC donations also played a role--although a lesser one--last year in the more visible battles over weaponry such as the V-22 Osprey and the F-14D aircraft. Although the Administration proposed ending both programs, Congress agreed to a compromise whereby both would continue to receive some funds for another year.

The F-14 is manufactured by Grumman on Long Island, N.Y.; the V-22 is a joint project of Bell Helicopter Textron in Texas and Boeing Helicopter in Pennsylvania. Although these projects had strong support within the Long Island, Pennsylvania and Texas delegations, the three companies did not rely entirely on parochial concerns to carry the day.

Since 1987, Textron’s PAC has contributed $657,556 to all members of Congress; Grumman, $439,725, and Boeing, $494,217. Rep. George J. Hochbrueckner (D-N.Y.), who led the fight on behalf of the F-14 because it is produced in his district, received $4,000 from Grumman toward his 1990 election. He also got $5,000 from the Machinists Union, which represents workers at the plant.

Nor did all the contributions go to allies of these contractors. Quite frequently, PAC money goes to the opponents of the endangered program as well as to the supporters. In that way, contractors hope to persuade members of Congress to change their minds.

Dickinson, who led the opposition to the V-22 and the F-14, received $5,000 from Grumman and $2,000 from Textron a few days before the House was scheduled to vote on the matter. He later abandoned his effort to eliminate funds for the two weapons, saying the programs were simply too popular in the House. Dickinson was unavailable to comment.

Textron gave him a further $3,000 two months later.

PACS: WHERE DEFENSE INDUSTRY MONEY GOES House military panel members are receiving most defense industry money.

Total Defense-Related Representative State Campaign Contributions 1. John P. Murtha PA. $115,200 2. Charles Wilson TX. 111,750 3. W.G. Bill Hefner N.C. 93,050 4. Les Aspin WI 79,995 5. Bill Dickinson AL 65,500 6. Joseph M. McDade PA 63,250 7. Ike Skelton MO 54,500 8. Ronald K. Machtley RI 47,865 9. Robert W. Davis MI 45,800 10. Herbert Bateman VA 45,450 11. Robert C. Smith NH 45,250 12. Bob Livingston LA 45,250 13. Dave McCurdy OK 43,500 14. Roy Dyson MD 43,150 15. C.W. Bill Young FL 43,050 16. Duncan Hunter CA 42,719 17. Les Aucoin OR 40,330 18. Dennis M. Hertel MI 40,140 19. Marilyn Lloyd TN 39,150 20. George J. Hochbrueckner NY 38,300 21. Martin Olav Sabo MN 37,550 22. James V. Hansen UT 37,200 23. Norm Dicks WA 36,650 24. George Darden GA 35,875 25. Curt Weldon PA 31,250

Contributions by Defense PACs 1. $83,350 2. 94,000 3. 86,250 4. 65,150 5. 61,000 6. 53,250 7. 33,950 8. 42,600 9. 39,300 10. 41,850 11. 45,250 12. 41,500 13. 40,300 14. 43,150 15. 41,250 16. 27,095 17. 34,000 18. 33,240 19. 36,650 20. 32,400 21. 34,300 22. 35,900 23. 31,800 24. 32,000 25. 30,250

Contributions % of Total by Individuals Campaign Contributions Representative State w/Defense Interests by Defense 1. John P. Murtha PA. 31,850 50 2. Charles Wilson TX. 17,750 42 3. W.G. Bill Hefner N.C. 6,800 45 4. Les Aspin WI 14,845 19 5. Bill Dickinson AL 4,500 46 6. Joseph M. McDade PA 10,000 58 7. Ike Skelton MO 20,550 23 8. Ronald K. Machtley RI 5,265 11 9. Robert W. Davis MI 6,500 29 10. Herbert Bateman VA 3,600 41 11. Robert C. Smith NH 0 10 12. Bob Livingston LA 3,750 28 13. Dave McCurdy OK 3,200 24 14. Roy Dyson MD 0 18 15. C.W. Bill Young FL 1,800 58 16. Duncan Hunter CA 15,624 21 17. Les Aucoin OR 6,330 11 18. Dennis M. Hertel MI 6,900 27 19. Marilyn Lloyd TN 2,500 25 20. George J. Hochbrueckner NY 5,900 17 21. Martin Olav Sabo MN 3,250 27 22. James V. Hansen UT 1,300 41 23. Norm Dicks WA 4,850 44 24. George Darden GA 3,875 26 25. Curt Weldon PA 1,000 21