Fortune 100 companies are successful because they care about return on investment (ROI). They’ve learned that the Washington D.C. system is built on pay-to-play – and it’s now part of the corporate business model.
The more you pay, the easier it is to play.
Last week, our organization at OpenTheBooks.com released our oversight report, Federal Funding of Fortune 100 Companies. We launched this report on C-SPAN’s Washington Journal.
Our auditors quantified a four-year period during which Fortune 100 companies spent $2 billion lobbying Capitol Hill and received $3.2 billion in federal grants (2014-2017). These grants, or subsidies, are funded by the American taxpayer.
Additionally, Fortune 100 companies received $393 billion in federal contracts. This amount is equivalent to all federal student loans each year; all aid to the state government of California; or eighty percent of the entire payroll of the executive federal agencies, i.e. Homeland Security, Veterans Affairs, Health & Human Services, Internal Revenue Service, etc.
We also found that in September 2018, the final month of fiscal year, Lockheed Martin and Boeing received $14 billion in federal contracts in a use-it-or-lose-it spending-spree. This was probably the largest government largess in history ever doled out in a 30-day period to private-sector businesses.
Here are five ways Fortune 100 companies swamped-the-system:
1. A $325 million investment in lobbying returned $338 billion in federal contracts and grants
Lobbying persuades and influences, and it works. The top ten Fortune 100 companies receiving the most federal funding saw an ROI on lobbying of 1,000 to 1. In other words, $1 invested in lobbying returned $1,000 in federal contracts and grants. These companies included Lockheed Martin, Boeing, McKesson, General Dynamics, Humana, Centene, United Technologies, Unitedhealth Group, Honeywell, and General Electric.
UnitedHealth Group spokesperson L.D. Platt responded to our request for comment:
UnitedHealth Group engages in activities to advance solutions on health care issues with elected officials and other stakeholders to help inform public policy decisions that have the potential to affect our customers, employees, consumers, and the communities we serve, and aligned with our mission of helping people live healthier lives and helping make the health system work better for everyone.
2. $3.7 million in lobbying spent on each member of Congress
There are 535 members of Congress – 100 U.S. Senators and 435 members of the U.S. House of Representatives. In the aggregate, $2 billion was spent by the Fortune 100 on lobbying during this period. Therefore, on average, each member of Congress faced $3.7 million in attempted influence and persuasion by these large corporations. The top 10 Fortune 100 companies spending the most on lobbying include DowDuPont, Boeing, Alphabet/Google, AT&T, Comcast, Lockheed Martin, General Electric, FedEx, ExxonMobil, and Verizon.
AT&T responded to our request for comment:
One of the many ways we encourage a dynamic public policy debate is by supporting a wide range of political candidates and organizations who are addressing the issues that impact our business, our employees and our customers. Every action we take is in strict compliance with local, state and federal law, but that is only the beginning. We publicly disclose U.S. political contributions twice yearly via this report. We also identify organizations that report using some or all of our contributions for lobbying activities.
3. Avoided income taxes – and collected billions of dollars in federal contracts and grants
Last year, eight Fortune 100 companies who received $16.9 billion in contracts and nearly $1 billion in grants paid $0 in income taxes. However, they spent $190 million in lobbying. These companies included Amazon, Chevon, Delta Airlines, General Motors, Honeywell International, IBM, Prudential Financial, and Tech Data.
An Amazon spokesperson provided this statement to our request for comment:
Amazon pays all the taxes we are required to pay in the U.S. and every country where we operate, including paying $2.6 billion in corporate tax and reporting $3.4 billion in tax expense over the last three years. The government has designed corporate tax law to encourage businesses of all sizes to invest in the U.S. economy to drive growth and create jobs.
4. Taxpayer subsidies funded the research and development (R&D) costs of the Fortune 100 companies
Taxpayers are spending billions of dollars to fund the research and development divisions of the most well-connected and wealthy U.S. corporations. At least with a contract, taxpayers received the benefit of a nuclear warhead or a ship. With a grant, it’s a giveaway.
If the project is such a good idea, shouldn’t private companies fund the innovation privately? Why are taxpayers footing the bill? Public funding should mean public gain. Publicly funded projects should reside in the public domain – for the public good.
5. Corporate welfare programs – big companies go after every dime
Boeing was the #1 Fortune 100 recipient of federal grants receiving $770 million plus $70 million in sub-grants. On top of this, Boeing received $81.3 billion in federal contracts. Boeing is also dialed in to the Export-Import Bank of the U.S. government, with $60 billion in taxpayer-backed lending and insurance supporting overseas airplane sales (2007-2014). In a ten-year period ending in 2017, Boeing didn’t even pay income taxes in five of those years.
In days past, companies hired lobbyists to keep government out of their businesses. Today, these corporations hire lobbyists to get government into their businesses. They strive to partner with the public-sector and then cheerlead the growth of government.
Where is the Republican on Capitol Hill armed with the legislation to kick Daddy Warbucks off the dole?
Where are the Democrats who are looking out for the little guy?
Both President Donald Trump and House Speaker Nancy Pelosi vowed to drain the swamp:
"I’m draining the Swamp, and the Swamp is trying to fight back. Don’t worry, we will win!"
President Donald Trump, Twitter, September 5, 2018
"That was ours [drain the swamp]. [Trump] stole it from us. 'End the culture of cronyism, incompetence and corruption.' That was our thing."
House Speaker Nancy Pelosi, Rolling Stone interview, July 2018
Despite the campaign rhetoric, the taxpayer-funded corporate gravy train rolls on.