Det danske Fredsakademi
Kronologi over fredssagen og international politik 21. Mars 2013 / Time Line March 21, 2013
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03/21/2013
Lockheed Martin at the Trough
By Lawrence S.
Wittner
What do hungry children and the world’s largest
military contractor have in common? Not much, it seems. At the very
time when (thanks to sequestration) state governments are cutting
back aid to low-income women and their children, the government of
the State of Maryland seems en route to providing the Lockheed
Martin Corporation with a handout worth millions of dollars.
Lockheed Martin, which did $47 billion in business during 2012
– mostly weapons sales to the U.S. government – owns a
very large, luxurious hotel and conference center in Montgomery
County, Maryland. In 2010, the corporation succeeded in getting the
state to exempt it from paying the state lodging tax that all other
Maryland hotels paid.
Then it sought exemption from paying Montgomery County’s 7
percent lodging tax. But the County Council, realizing that this
would pull $450,000 per year out of its annual revenues –
revenues that it used to fund education and other public services
– refused to give way to corporate pressure. Indeed, it
pointed out that the lodging costs of the company’s employees
at the hotel, including taxes, were already subsidized through
Lockheed Martin’s contracts with the federal government. The
company readily admitted this, but stated: “The fact that
some percentage of those costs over time can be reimbursed by the
federal government doesn’t reduce the need to lower our
overhead costs whenever we can.”
Rebuffed on the local level, Lockheed Martin turned once more to
its friends in the state government, championing a bill that would
exempt it from Montgomery County taxes and, furthermore, force the
county to provide it with a $1.4 million refund for past tax
payments.
But this new company demand sparked a lively citizens’
campaign in opposition to what was dubbed the “Corporate
Welfare for Lockheed Bill.” Dozens of organizations threw
themselves into the battle, including advocacy groups (Common
Cause, Fund Our Communities, Progressive Neighbors, Progressive
Maryland, and the NAACP), labor unions (United Food and Commercial
Workers, SEIU, and unions representing teachers, police, and fire
fighters), and peace groups (Peace Action, Pax Christi, and
Maryland United for Peace and Justice). Articles started to appear
in the press. Local politicians began to speak out against the
legislation. The County Council again voted its opposition to
exempting Lockheed Martin from taxation.
Faced with an upsurge of popular resistance, the State Senate sent
the measure back to committee, where it was amended to eliminate
the provision for retroactive payment to Lockheed. This action
reportedly infuriated a Lockheed lobbyist and represented a small
victory for opponents of the legislation. Nevertheless, a bill
providing for the corporation’s future tax exemption went
forward, and was passed by the Senate on the night of March 13 by a
vote of 37 to 9. The large majority included all but one
Republican, as well as a substantial number of Democrats.
A counterpart bill is expected to reach the Ways and Means
Committee of the House of Delegates soon. Given the controversy
surrounding the measure, its fate remains uncertain. But the
corporation seems determined to press forward.
Actually, Lockheed Martin has a long track record when it comes to
enriching itself through government support. Its C-130 military
transport plane has been a major source of profit for the company.
Although, in the late 1970s, the Carter administration concluded
that the very costly plane was no longer necessary,
Lockheed’s friends in Congress saw to it that the U.S.
government purchased 256 of them over the next two decades. In
response to a request from Senator John McCain, the Government
Accountability Office did a study of how many of these planes the
U.S. Air Force had ordered. The answer was: five. Finding no use
for the hundreds of planes, the Air Force simply parked many of
them on airport runways, where they gathered dust.
And so it goes. Making vastly expensive weapons systems for the
government remains a lucrative business. Lockheed has already
forecast a record profit in 2013. A January 2013 article in
Bloomberg News reported: “Lockheed’s fortunes depend in
large measure on the F-35 jet fighter, its biggest program and the
Pentagon’s costliest weapon system, at an estimated
development cost of $395.7 billion.”
Of course, Lockheed keeps billions of dollars flowing into its
coffers by spending millions every year on lobbying and millions
more on campaign contributions. According to Dina Rasor of the
Project on Government Oversight, Lockheed is “the ultimate
pay-to-play contractor.”
In this context, it’s not surprising that Lockheed has
enormous influence in Maryland politics. Over the past year,
Lockheed contributed $25,000 to the Maryland Democratic Party, plus
thousands of additional dollars to the President of the Maryland
Senate, the Senate Democratic Majority Leader, the chair of the
Senate Budget and Taxation Committee, another member of that
committee, and a member of the House of Delegates. Four of the five
became co-sponsors of the Lockheed tax exemption legislation and
all four Senate members voted for it.
This coziness with Lockheed Martin can also become a source of
embarrassment now that the issue is hot. A day after the State
Senate voted to send the legislation to the House Ways and Means
Committee, a private dinner between Lockheed lobbyists and the
members of that committee was abruptly canceled.
Of course, it might well be asked why Lockheed Martin bothers with
getting itself exempted from Montgomery County taxes. After all,
$4.5 million over the next decade is small change to this giant
corporation.
One reason might be that most wealthy people genuinely believe that
they are entitled to keep every cent of their income. This
certainly explains why they resist paying taxes so ferociously.
Another possibility, though, is that Lockheed Martin, like most
other military contractors, has grown accustomed to thriving at
government expense. Thus, it just can’t resist going back to
the public trough for a little more corporate welfare.
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