General Electric Wages Never-Say-Die Campaign for Jet Engine Contract
CEO Immelt's push shows why GE is nation's top corporate spender on lobbying.
March 9, 2011 — -- In a never-say-die approach, General Electric's CEO Jeffrey Immelt has vowed to continue to fight for a high-priced military jet engine contract that President Obama, the Pentagon, the U.S. House of Representatives, and the U.S. Senate have all said they don't want.
"GE will continue to press our case in the U.S. Senate and elsewhere," Immelt wrote in a note to aviation workers after the recent House vote to eliminate funding for the company's controversial jet engine. The defeat in the House would not, he said, halt development of the Joint Strike Fighter engine, intended as an alternate for one already built for the futuristic fighter by rival firm Pratt & Whitney.
General Electric has already shelled out millions in relentless pursuit of the engine contract, and its vow to fight on is the latest evidence of the company's aggressive strategy for Washington influence. It is an approach that has helped GE become the nation's top corporate spender on lobbying, spending more than $238 million on lobbyists over the past 12 years, according to the Center for Responsive Politics -- money that has helped GE gain access to the corridors of power and some of the most remote crevices of the governing process.
"It shows what deep lobbying is all about in Washington," said Ellen Miller, a founder of the nonpartisan Sunlight Foundation, which monitors the influence industry. "It's lobbying members of Congress, it's being friendly to the administration, it's being all over the agencies."
While the U.S. Chamber of Commerce and the American Medical Association have spent more on lobbying over the past decade, GE sits high atop the list of corporate spenders. AT&T, the nearest competitor, spent $162 million, while Northrop Grumman and Exxon Mobil spent just over $150 million, according to the Center for Responsive Politics.
ABC News requested an interview with Immelt to talk about the company's lobbying strategy. Spokesman Rick Kennedy turned down that request, and did not respond to specific questions sent by email about the company's lobbying in general, and specifically about the effort to secure the lucrative jet engine contract. Last year, Kennedy told ABC News there was a reason Congress had agreed to fund the development of its engine for years, despite opposition from the Bush and Obama administrations.
"We have been reinstated year after year after year in the budget because the case for competition is simply too compelling for a program of this size," he said. "For this reason, we feel like we're standing on the side of the angels."
An ABC News review of General Electric lobbying found that the company has more than angels on its side -- it has an arsenal of former congressional leaders from both parties, including such well-known figures as former Sen. Trent Lott and former Rep. Dick Gephardt.
Last year, GE also hired Barack Obama's former campaign manager, David Plouffe, as a consultant, according to Plouffe's recently filed financial disclosure forms. It is unclear what Plouffe was hired to do, though his relationship with the president and senior White House staff is close to unparalleled. Plouffe is now back working as a senior advisor to Obama.
William Hughes also left a career as a senate staffer to take a lobbying job with GE. He worked there from February 2009 to April 2010 and was paid $320,000, according to his financial disclosure report. He told ABC News the payments covered both his salary and a bonus, and said "the one year bonus I received … was paid before I had any discussions about a hill job." In April, Hughes returned to the Senate to be chief of staff to Sen. Kay Bailey Hutchison, a senior member of the Defense Appropriations Subcommittee. According to legislative records, he was paid $52,179 for his first five months work, putting his new annual salary at roughly $125,000.
Hughes acknowledged he took a pay cut to return to the senate, telling ABC News that GE was "not for me."
"The job satisfaction is worth the cut in pay," he said.
Upon his return, he sought advice from the Senate's Ethics Committee on how to properly handle his return. In a letter from the committee's chief counsel, he was advised that "no Senate rules would prohibit you from having official contact with GE." But the letter also urged him to "avoid even the appearance of impropriety."
"I have completely followed their guidance," Hughes told ABC News. "To avoid even the appearance of impropriety, I can further state that I have not allowed myself to be lobbied by any GE or GE-hired lobbyists, instead directing any inquiries or lobbying to the appropriate staff for Senator Hutchison. Upon my hiring, I immediately divested myself of any GE-related financial assets. In addition, I have not advised Senator Hutchison on GE matters, including the Joint Strike Fighter second engine."
Kennedy also said that, while GE's critics have accused the company of capitalizing on the presence of an aviation facility just a few miles from the district of House Speaker John Boehner, parochial interests are also driving GE's opponents. He pointed to a recent report in the Palm Beach Post, where U.S. Rep Tom Rooney, a Florida Republican, boasted that the defeat of GE's alternate engine could bring back some 3,000 Pratt & Whitney jobs that have been lost in Palm Beach County over the past decade.
"I'm going to work very hard to try to bring those jobs back to Palm Beach County," he told the paper. "I'm not shying away from the fact that my allegiance to Pratt is just like [Boehner's] allegiance to GE."
The fate of the engine appears to be all but sealed. The House budget sliced funding, and senators working on the budget have likewise indicated that funding would not appear in their finished bill either. President Obama has maintained that he will veto any spending bill that includes money for the engine. Still, Kennedy, like Immelt, has remained defiant.
"It's not over," he told Reuters in an interview last week. "This is part of the budget process, but that process and the overall fate of the [engine] is just not over."
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