Lockheed was in trouble. A few years earlier, the Air Force had started looking into replacing the Hercules with a new medium-sized transport plane that could handle really short runways, and Lockheed wasn't selected as one of the finalists. Facing bankruptcy due to cost overruns and cancellations of programs, the company squeezed Uncle Sam for a bailout of around $1 billion in loan guarantees and other relief (which was unusual back then, as William Hartung points out his magisterial Prophets of War: Lockheed Martin and the Making of the Military-Industrial Complex).
Then a scandal exploded when it was revealed that Lockheed had proceeded to spend some $22 million of those funds in bribes to foreign officials to persuade them to buy its aircraft. This helped prompt Congress to pass the Foreign Corrupt Practices Act.
So what did Lockheed do about the fate of the C-130? It bypassed the Pentagon and went straight to Congress. Using a procedure known as a congressional "add-on" -- that is, an earmark -- Lockheed was able to sell the military another fleet of C-130s that it didn't want.
To be fair, the Air Force did request some C-130s. Thanks to Senator John McCain, the Government Accountability Office (GAO) did a study of how many more C-130s the Air Force requested between 1978 and 1998. The answer: Five.
How many did Congress add on? Two hundred and fifty-six.
As Hartung commented, this must "surely [be] a record in pork-barrel politics."
Standard Operating Procedure
Lockheed made this happen by putting its lobbyists to work. They focused on legislators in key committee positions and in states where Lockheed, like others in the defense industry, had strategically located their operations and subcontracts. The company poured millions of dollars into lobbying and political donations.
Tracking lobbying is hard to do, but to give a sense of the scope of the numbers, Lockheed has reported $22,289,859 in political donations since 1990 and millions in lobbying expenses every year, peaking in 2008 at $16,181,506, according to the Center for Responsive Politics. And that doesn't include what it paid its PR people or the work of defense and aerospace industry advocacy groups or the think tanks those industries fund. As an example of the latter, consider the boldly titled "research study," C-130J: How the Best Military Aircraft Became Even Better, written by Lockheed consultant Loren Thompson and published by the Lexington Institute, which was founded by a Lockheed lobbyist. Of course, the puff piece mentions no affiliations with the company. For these reasons, Dina Rasor of the Project on Government Oversight, which ranks the company #1 on its Federal Contractor Misconduct Database, calls Lockheed "the ultimate pay-to-play contractor."
Most of the dollars the company spends on lobbying are tax dollars. According to its 2011 annual report, "82% of our $46.5 billion in net sales were from the U.S. Government, including 61% from the Department of Defense." And don't forget that a significant part of the 17% of its sales that went to international customers in 2011 were actually paid for by Uncle Sam under the rubric of foreign military aid. Only 1% of its sales that year were to "U.S. commercial and other customers." Its CEO made $20,538,981, while the company paid only $722 million in net federal and foreign taxes in that same year.
When it came to the C-130, the process worked like a dream. "By following this strategy from year to year," writes a team of scholars of lobbying, "Lockheed has been able to turn what was to be the C-130's doom in the 1970s into a regularly funded military spending program, all without a single request having been sent by the administration to Congress." Lockheed was so successful on Capitol Hill that its work even garnered a name in honor of the 50 planes bought for every one requested: "C-130 math."
John McCain complained that "we're going to have a C-130 for every schoolyard in America before this is over." The "add-on" legislators were unabashed. Senator Max Cleland of Georgia -- where Lockheed assembles the C-130 -- responded, "I'm for schoolyards being able to be moved anywhere in the world on a moment's notice."
I felt that way, too -- when I was five.
How to Win Friends in the States and Influence People in Congress
So what happened to those extra planes? The Air Force didn't have the space for them, so they retired some older models that still had plenty of life in them and shunted most of the rest off to the Air Force Reserves and Air National Guard. That's why I used to see them at O'Hare.
The reason I usually saw them parked in front of the hangars is that sufficient operating and maintenance funds didn't always come with the planes, which mattered even more after Lockheed introduced a new version, the C-130J Super Hercules, in the mid-1990s.
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