Study: Tax­pay­ers fund re­search for pow­er­ful com­pa­nies

Most of cash went to goods, ser­vices

The Washington Times Weekly - - National - BY JAMES VARNEY

For­tune 100 com­pa­nies are among the most ag­gres­sive at lob­by­ing Wash­ing­ton — and col­lect nearly $100 bil­lion a year in fed­eral con­tracts and grants, ac­cord­ing to a watch­dog report that sug­gests tax­pay­ers are feed­ing the bot­tom line.

Most of the $399 bil­lion col­lected from 2014 to 2017 went to buy goods or ser­vices, es­pe­cially the com­plex and ex­pen­sive weaponry upon which a mod­ern mil­i­tary re­lies, OpenTheBoo­oks found.

But the watch­dog’s report did find bil­lions in grant money, too.

IBM com­po­nents in New York and Cal­i­for­nia, for in­stance, got more than $103 mil­lion for “us­ing high-res­o­lu­tion scan­ning tun­nel­ing mi­croscopy to ex­plore the use of atomic spins on sur­faces as quan­tum bits.”

Mean­while, be­tween fis­cal 2014 and 2017 the En­ergy De­part­ment gave more than $63 mil­lion to Gen­eral Elec­tric di­vi­sions in New York and Texas for, among other things, “model-based ex­tracted water de­sali­na­tion sys­tem for car­bon se­ques­tra­tion,” and “cy­ber­at­tack de­tec­tion and ac­com­mo­da­tion for the en­ergy delivery sys­tem.”

In other words, U.S. tax­pay­ers were sub­si­diz­ing the re­search of the rich­est and most pow­er­ful com­pa­nies on Earth.

“A lot of this stuff has a le­git­i­mate pub­lic pur­pose, that’s true, be­cause if you need a fighter jet or a nu­clear sub­ma­rine you have to buy them from the peo­ple who make those things,” said Adam An­drze­jew­ski, founder and CEO of OpenTheBoo­ks.

“But these are some of the most wealthy, con­nected, elite com­pa­nies in the world,” he said. “Es­pe­cially with the grants, these amount to give­aways for a myr­iad of projects, none of which the U.S. tax­payer has any eq­uity in­ter­est in the fu­ture.”

The report pro­files 10 giants in par­tic­u­lar — AT&T, Boe­ing, Cater­pil­lar, Fed­eral Ex­press, Ford, Gen­eral Dy­nam­ics, GE, IBM, Lock­heed Martin, McKee­son — which spent more than $220 mil­lion on lob­by­ists from 2014 to 2017, and raked in al­most $295 bil­lion in fed­eral money.

The Wash­ing­ton Times sought com­ment from the com­pa­nies, but they did not re­spond to ques­tions about con­nec­tions be­tween lob­by­ing and fed­eral largesse.

Jor­dan Li­bowitz, a spokesman with Cit­i­zens for Re­spon­si­bil­ity and Ethics in Wash­ing­ton, said OpenTheBoo­ks’ data paints a pic­ture of Wash­ing­ton as a place where Big Busi­ness has its hands on the gov­ern­ment wheel.

“It’s un­for­tu­nately not that sur­pris­ing,” Mr. Li­bowitz said. “With all this money com­ing in it’s fair for the peo­ple to won­der if de­ci­sions are be­ing made with the best in­ter­est of the pub­lic, and if you can trust elected of­fi­cials to make those de­ci­sions. There’s a le­git­i­mate pub­lic per­cep­tion that it isn’t.”

OpenTheBoo­ks’ report of­fers one of the most com­pre­hen­sive, cur­rent ex­am­i­na­tions of where For­tune 100 and tax­payer money min­gle.

All told, in the four years the report stud­ied, For­tune 100 com­pa­nies spent roughly $2 bil­lion on their lob­by­ing ef­forts.

DowDupont led the way with $75.6 mil­lion. Other big spenders were Home De­pot at $62.8 mil­lion, Com­cast at $62.3 mil­lion and Al­pha­bet, the par­ent com­pany of Google, at $50.8 mil­lion.

Not all of that lob­by­ing money is spent in a dash for tax­pay­ers’ cash. The com­pa­nies are also try­ing to shape the le­gal field on which they play, fend­ing off new bur­den­some reg­u­la­tions or en­sure con­tin­u­a­tion of key tax breaks.

The lob­by­ing ran the gamut through hun­dreds of bills. Sev­eral of the com­pa­nies who ben­e­fit from its poli­cies lob­bied in sup­port of the Ex­port-Im­port Bank and other multi­na­tional lend­ing agen­cies that chiefly con­ser­va­tive econ­o­mists re­gard as crony cap­i­tal­ism corner­stones.

Spe­cific pro­posed bills also caught com­pa­nies’ eyes. Ford, for ex­am­ple, lob­bied against a “Burma Hu­man Rights and Democ­racy Act,” that popped up in Congress just months af­ter Ford be­came the first Amer­i­can car com­pany to open a show­room in Yan­gon, Myan­mar, the coun­try’s largest city. Burma is the old name for Myan­mar.

Other lob­by­ing ef­forts de­tailed in the report make sense, such as FedEx work­ing with some seafood com­pa­nies that rely on fresh crab and other prod­ucts, or AT&T work­ing politi­cians en­gaged in telecom­mu­ni­ca­tions bills.

“There’s noth­ing in­her­ently wrong with cor­po­rate lob­by­ing,” noted Chris Ed­wards, a bud­get pol­icy ex­pert at the Cato In­sti­tute. “Cor­po­ra­tions have got a right to de­fend them­selves and look af­ter their and their share­hold­ers’ in­ter­ests.”

He also chal­lenged the no­tion that the fed­eral gov­ern­ment was prop­ping up market losers.

“Look at the bil­lions peo­ple have been will­ing to risk in thus far los­ing propo­si­tions like Uber and Lyft; look at Elon Musk who, yes, is sub­si­dized but has also got­ten piles of pri­vate money,” Mr. Ed­wards said.

Yet Mr. An­drez­jew­ski ar­gued that ar­gu­ment also cuts against the no­tion For­tune 100 com­pa­nies need fed­eral tax­payer grants and should in­stead rely on market-based cor­po­rate fi­nance.

“If Gen­eral Elec­tric, say, thinks it has a great idea for a new bat­tery, then it’s a big, elite com­pany, let it go to Wall Street and raise the money,” he said.

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