Defense Firms Were Key Donors to Harman Races

In her first year in Congress, Rep. Jane Harman--now a Democratic contender for governor--established herself as a champion of the defense industry, and was rewarded with substantial campaign contributions.

Top executives of Hughes Electronics were so appreciative that they allowed Harman to hold a fund-raiser in the company’s corporate dining room and urged their senior vice presidents to contribute $500 each, and lower level executives $100 to $300.

In an invitation to the 1993 event, the company’s chairman spelled out ways that Harman had “specifically been helpful to Hughes”--and about a hundred officials attended.

The letter provides a rare glimpse into the close relationships that can develop between an influential elected official and a private corporation with a strong presence in her district.

Hughes’ executives and the company’s political action committee have contributed more than $70,000 to her congressional campaign committee--part of $441,000 donated by large aerospace and defense firms from 1991 through 1997, according to an analysis prepared for The Times by the private, Virginia-based Campaign Study Group.

Harman’s campaign ledgers reveal the closeness of her ties to defense companies and offer a road map to many of the other interests that she has served in her three terms in Congress.

Her strong views on abortion rights have won Harman the financial backing of feminists; gay rights groups backed her because she wants to end discrimination against gays in the military; her support for Israel has won her contributions from pro-Israeli organizations.

Major Defense Projects Backed

Since she arrived in Congress and successfully sought appointments to key defense and space committees, Harman has energetically supported major defense expenditures: the B-2 bomber, the C-17 cargo plane and space-based missile defense systems.

Standing up for these interests, Harman says, protects jobs in her South Bay district, which she describes as the “aerospace center of the universe.” But her critics complain that her advocacy of defense spending is excessive in the post-Cold War era and that the money is needed for other government programs.

Moreover, her largest contributor except for herself is an aerospace company that is not located within her district. Records show that Loral Space & Communications--a New York-based company with Northern California facilities--donated $95,350 to her federal campaigns.

Loral, along with Hughes, has been under investigation by a federal grand jury amid allegations that the two companies illegally transferred technology to China that could improve the performance of China’s long-range missiles--a charge denied by both companies.

Another supporter is TRW Inc., whose employees contributed $40,500 to Harman and which also helped her husband Sidney after his company’s Northridge plant sustained major damage in the 1994 earthquake. Later that year, the FBI examined the arrangement as a possible attempt to improperly influence a congresswoman but concluded that no law had been broken, according to sources familiar with the matter.

The sizable contributions, along with her personal wealth, helped the Rolling Hills Democrat to far outspend opponents in previous races. The Harmans, who have a net worth of about $200 million, loaned almost $900,000 to her three congressional campaigns and later forgave all but $100,000.

Her campaign war chest enabled her to do what few House members can afford: buy broadcast time in a major media market like Los Angeles. And that may have been critical to winning in a volatile district that almost swung into the Republican column in 1994.

The Harmans have reported loaning her governor’s campaign $4.25 million--and, the congresswoman said, “It’s going up from there.” The loan accounts for the bulk of the $4.5 million that she reported raising through mid-March.

The blend of personal financing and special interest funding leaves Harman doubly vulnerable to criticism: Like other wealthy candidates, she has been accused of buying her way into political office. And like less affluent politicians, she has been accused of pandering to special interests.

Harman said she dislikes the current system of campaign financing and supports limits on personal contributions and loans from candidates. She also has backed restrictions on fund-raising by candidates outside of their own states. But The Times’ analysis found that about half of Harman’s $2.1 million in individual contributions came from outside California--the most raised out of state by a member of California’s congressional delegation.

Her campaign manager, Kam Kuwata, said her out-of-state contributions are the result of her leadership on defense issues; the endorsement of Emily’s List, a national group that supports women candidates, and the backing of friends outside California.

Harman said that, while she has tried to keep the United States strong militarily and staunch the flow of high-paying defense jobs from her district, she also has encouraged civilian aerospace and other industry. “I have viewed it as a major part of my job to [help] my district transition from defense-dependence, which was a dead-end strategy, to the robust diverse economy it now enjoys,” she said.

John Pike of the Federation of American Scientists complains that Harman is one of the members of Congress who have succeeded in keeping defense spending at unnecessarily high levels. “It’s about the care and feeding of contractors in her district rather than defending America,” Pike said. “But that’s easy for me to say because I’m not running for election in her district.”

Her stands have won her the admiration of the industry. Said one early Harman supporter, TRW Space & Electronics Group General Manager Timothy W. Hannemann, who contributed $7,500 to her gubernatorial campaign: “She has been an extraordinarily quick study on how fast technology moves and how that development of technology affects the economy and can be used for a unique advantage for the people. . . .”

Harman’s husband, who is chairman and chief executive of audio equipment manufacturer Harman International Industries, turned to Hannemann when the company’s Northridge plant suffered serious damage after the 1994 earthquake. “I called him. He’s a friend,” Sidney Harman said in a recent interview. “I knew I needed structural engineering help.”

Hannemann provided seismic safety experts to do a quick assessment of the damage, and the audio company subsequently hired away a TRW engineer, Sidney Harman said. He said the arrangement was proper, expressed surprise that the FBI had looked into it, and said his wife “had nothing to do with it.”

An FBI spokesman had no comment. However, sources said that after checking allegations from an informant, federal agents found no evidence of a criminal violation.

Hughes Got Harman’s Help

Early in her congressional career, Harman became a leading advocate for Hughes’ interests in Washington.

In an October 1993 letter to his top managers, then-Hughes Chairman C. Michael Armstrong said Harman had supported the company in a multimillion-dollar dispute with the U.S. Justice Department over a critical defect in the Hubble Space Telescope’s mirror. And he said she arranged a meeting for Hughes with Vice President Al Gore to discuss the company’s difficulties winning approval to launch two satellites on Chinese rockets.

Harman acknowledged that she met with Armstrong, but said that after seeking legal advice, she decided not to intervene in the Hubble dispute. The matter was settled when Hughes agreed to pay part of a $25-million settlement. The repairs cost the government $90 million.

Harman said that she cannot recall setting up a meeting for Hughes officials with Gore but that she did arrange a session with Gore for representatives of eight aerospace firms in her district, including Hughes. “We didn’t discuss any specific issue of Hughes,” she said.

About a hundred Hughes employees attended the 1993 Harman fund-raiser, according to Ted G. Westerman, who recently retired as Hughes’ chief administrative officer.

Several months after the event, Harman introduced legislation to ease the way for Hughes and other manufacturers to launch satellites from China.

Hughes is one of several satellite manufacturers that became concerned when the new Clinton administration threatened to block the launching of U.S.-made communications satellites from Chinese rockets. Under rules put into place by President Bush in response to the crackdown on Tiananmen Square pro-democracy demonstrators in 1989, each satellite launch had to be approved by the president.

To persuade Clinton to allow Hughes to resume its launches in China, Harman organized a congressional letter to then-Secretary of State Warren Christopher, personally wrote to White House Chief of Staff Leon Panetta and talked to Samuel R. Berger, then a top deputy at the National Security Council, records and interviews show. She said she also lobbied Commerce Secretary Ron Brown and Foreign Trade Representative Mickey Cantor to help Hughes win the licenses it needed.

“The [Hughes] satellites were totally made in California, representing thousands of jobs,” Harman recalled in a recent interview. There were, she said, safeguards in place to keep the finished satellites out of the hands of the Chinese until the launch. “Yet we had an export policy that imagined that somehow they could be disassembled and that some know-how from the satellite could be learned.”

Under pressure from Harman and other California political leaders, including Gov. Pete Wilson, Clinton allowed the launches to proceed.

Union Groups Also Contribute

Another company to benefit from that decision is Loral Space & Communications. Loral’s chairman and chief executive officer, Bernard L. Schwartz, is one of several Harman supporters co-chairing a $2,500-a-person fund-raiser for her gubernatorial campaign this month in New York.

Unlike federal campaigns, there are no limits on individual or corporate contributions in state races.

Harman said Schwartz has been a family friend for two decades.

As reported earlier, a federal grand jury has been investigating allegations that Loral and Hughes provided technical information to the Chinese that could improve the reliability of China’s long-range missiles. The probe centers on a technical report that the American companies provided after the 1996 explosion of a Long March missile carrying a Loral satellite. Both companies deny violating restrictions on technology transfer to China.

Harman acknowledged that Loral has benefited from her support for the aerospace industry. “But to my knowledge, I have never made a particular, focused effort to help Loral on any specific project,” she said.

Harman also received $454,000 from union political action committees for her congressional campaigns, most it from unions representing defense and aerospace plants in her district.

“She has always supported the interest of that industry, which bottom line means jobs for our people,” said Bruce Lee, the former regional director for the United Auto Workers, which represents about 20,000 aerospace workers in her district.

In Congress, Harman stood by labor in voting against the North American Free Trade Agreement, despite appeals from President Clinton and from her own defense industry contributors.

Harman said she has received less union backing than others in Congress and has not won labor support in her gubernatorial bid.

“I have voted my conscience,” she said. “I made independent . . . decisions for six years, and I have taken knocks for not fitting in any little slot.”

*

Times researchers Janet Lundblad and Paul Singleton contributed to this story.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

The Contributors

Between 1991 and 1997, Rep. Jane Harman collected more than $4 million to fund three successful races for Congress. Here are some of her top contributors, many from the defense and aerospace industries.

*

Loral Space & Communications

$93,350

Headed by Harman friend Bernard Schwartz; benefited from Harman support for Chinese satellite launches.

*

Jones, Day, Reavis & Pogue

$89,650

Harman worked at this lawn firm; one client is Harman International Industry, chaired by her husband.

*

Norhtrop Grumman

$77,999

Harman is backer of B-2 bomber and F/A-18 fighters.

*

Hughes Aircraft

$70,650

Satellite maker, Harman pushed Chinese satellite launches.

*

McDonnell Douglas

$50,200

Produces the C-17 cargo plane, championed by Harman.

*

TRW Inc.

$40,500

Aerospace and defense company; close ties to Harman and her husband.

*

Walt Disney Co.

$33,750

International entertainment company with many issues before Congress.

*

Human Rights Campaign Fund

$30,000

Organization backs gay and lesbian rights; Harman defends rights of gays in the military.

*

United Auto Workers

$30,000

Union represents 20,000 workers in aerospace and defense in Harman’s district.

*

Hollywood Women’s Political Committee

$22,000

Group dissolved in 1997; was a backer of liberal causes and candidates

*

Women’s Alliance for Israel

$16,500

Promotes U.S.-Israeli ties, as does Harman

Where the Money Comes From

The following is a breakdown of all contributions.

Personal (Jane and Sidney Harman): $799,000

Professional (lawyers, accountants, etc.): $538,862

Unions: $453,672

Defense / aerospace: $440, 884

Ideological (feminists, pro-Israel, etc.): $270,421

Financial (banks, brokerages): $219,100

Entertainment: $170,000

Manufacturing: $163,300

Health care: $124,544

All other: $1,164,204

Source: Campaign Study Group based on Federal Election Commission records