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The Interaction Between The Private, Public And Third Sector In The Defense Contract Award Process: Lobbying For Defense Contracts For Los Angeles County, 1952-1972

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The Interaction Between The Private, Public And Third Sector In The Defense Contract Award Process: Lobbying For Defense Contracts For Los Angeles County, 1952-1972

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Content INFORMATION TO USERS This material was produced from a microfilm copy of the original document. While the most advanced technological means to photograph and reproduce this document have been used, the quality is heavily dependent upon the quality of the original submitted. The following explanation of techniques is provided to help you understand markings or patterns which may appear on this reproduction. 1.The sign or "target" for pages apparently lacking from the document photographed is "Missing Page(s)". If it was possible to obtain the missing page(s) or section, they are spliced into the film along with adjacent pages. This may have necessitated cutting thru an image and duplicating adjacent pages to insure you complete continuity. 2. When an image on the film is obliterated with a large round black mark, it is an indication that the photographer suspected that the copy may have moved during exposure and thus cause a blurred image. You will find a good image of the page in the adjacent frame. 3. When a map, drawing or chart, etc., was part of the material being photographed the photographer followed a definite method in "sectioning" the material. It is customary to begin photoing at the upper left hand corner of a large sheet and to continue photoing from left to right in equal sections with a small overlap. If necessary, sectioning is continued again — beginning below the first row and continuing on until complete. 4. The majority of users indicate that the textual content is of greatest value, however, a somewhat higher quality reproduction could be made from "photographs" if essential to the understanding of the dissertation. Silver prints of "photographs" may be ordered at additional charge by writing the Order Department, giving the catalog number, title, author and specific pages you wish reproduced. 5. PLEASE NOTE: Some pages may have indistinct print. Filmed as received. Xerox University Microfilms 300 North Zeeb Road Ann Arbor, Michigan 48106 74 - 17,367 MILLER, Terry Jay, 1941- THE INTERACTION BETWEEN THE PRIVATE, PUBLIC AND THIRD SECTOR IN THE DEFENSE CONTRACT AWARD PROCESS: LOBBYING FOR DEFENSE CONTRACTS FOR LOS ANGELES COUNTY, 1952-1972. University of Southern California, Ph.D., 1974 Political Science, general University Microfilms, A X ERO X C om pany, Ann Arbor, Michigan © 1974 TERRY JAY MILLER ALL RIGHTS RESERVED THIS DISSERTATION HAS BEEN MICROFILMED EXACTLY AS RECEIVED. THE INTERACTION B E TW EE N THE PRIVATE, PUBLIC A N D THIRD SECTOR IN THE DEFENSE C O N TR A C T A W A R D PROCESS: LOBBYING FO R DEFENSE C O N TRA CTS FOR LOS ANGELES C O U N TY , 1952-1972 by Terry Jay M iller A D is s e rta tio n Presented to th e FA CULTY OF THE G R A D U A TE SC H O O L UNIVERSITY OF SO U TH ER N CALIFORNIA In P a r ti a l F u lfillm e n t of th e Requirem ents fo r th e Degree D O C TO R O F PHILOSOPHY ( P o litic a l Science) January 1974 UNIVERSITY O F SOUTHERN CALIFORNIA THE GRADUATE SCHOOL UNIVERSITY PARK LOS ANGELES. CALIFORNIA 9 0 0 0 7 This thesis, written by T er r y J a y M i l l e r under the direction of h.i.S...Thesis Committee, and approved by all its members, has been pre sented to and accepted by the Dean of The Graduate School, in partial fulfillm ent of the requirements for the degree of D o c to r o f P h ilo s o p h y ' y y i a -t- L ° Dean D ot n 1 i sri 4' THESIS, COMMITTEE To my w ife, Susie who a lso su ffe re d through th is endeavor ii TABLE OF CONTENTS Page LIST OF TABLES............................................................................. „............................ iv LIST OF ILLUSTRATIONS............................................................................................ v LIST OF A C R O N Y M S....................................................................................................... vi Chapter I . INTRODUCTION A N D REVIEW OF THE LITERATURE................................. 1 I I . THE RESEARCH APPROACH: ELITE INTERVIEWING............................... 28 I I I . THE POLITICAL A N D EC O N O M IC SETTING................................................ 49 IV. THE DEFENSE C O N TR A C T A W A R D PROCESS................................................ 91 V. PRIVATE A N D PUBLIC SECTOR PERCEPTIONS OF LOBBYISTS A N D GEN ERA L LOBBYING TECHNIQUES....................................................... 107 VI. W H O LOBBIED FOR LOS ANGELES DEFENSE CONTRACTS: THE C O M PO N EN TS OF THE DEFENSE INTEREST........................................ 130 V II. LOBBYING FOR DEFENSE CONTRACTS: TECHNIQUES A N D INFLUENCE............................................................................................... 156 V III. DECISION M A K IN G IN THE DEFENSE C O N TR A C T A W A R D PROCESS.... 210 IX. CONCLUSIONS A N D S U M M A R Y ........................................................................ 234 APPENDIX......................................................................................................................... 254 BIBLIOGRAPHY.................................................................... 267 i l l LIST OF TABLES T a b le P age 1. Number and Types In terv iew ed ............................................................ 34 2. Size D is trib u tio n of Major Defense C o n tracto rs, F isc a l 1965................. . ................................. 57 3. Prime Defense C ontract Awards to C a lifo rn ia and Los Angeles County, 1951-1972.......................................................... 59 4 . P riv a te Defense Firms in Los Angeles C o u n ty ........................... 73 5. C ongressional A ttitu d e s on P ast and P resen t Defense E x p e n d itu re s.................. 81 6. Examples of R oll C all V oting by Los Angeles Congressmen C la s s ifie d as A n tid efen se................... 82 7. Answers to Q uestions on L o b b y ists ......... 109 8. P ercep tio n s of L obbyists Held by Company E xecutives............. 114 9. C ongressional S ecto r Answers to Q uestions on Lobbying T ech n iq u es.............................................. 166 10. Answers to Q uestion on Old v s. New L o b b y ists............................ 168 11. In flu en ce of Defense L obbyists Compared to Nondefense L o b b y ists .......................... 196 12. W ho Makes D ecisions and Has In flu en ce in Major C ontract A w a rd s........................................................................................... 218 i v LIST OF ILLUSTRATIONS F ig u r e P age 1. T o tal Defense E xpenditures P er Years 1940-1972........................ 2 2. T o tal Defense E xpenditures as P ercentage of T o tal Budget: 1940-1972................ . '. ............... 4 3 . Defense E xpenditures as A P ercen t of Gross N ational P roduct: 1940-1972................................ 5 4 . Flow of P ressu re D irected a t P a r tic ip a n ts ................................... 7 5. Estim ated Number of Wage and S alary Workers in Los Angeles-Long Beach Area in C a lifo rn ia Aerospace and Defense I n d u s trie s , 1952-1972............................... 62 6. Level to Level Lobbying and I n te r a c tio n ....................................... 134 P la te I . Newspaper H eadline of Defense C ontract A w a r d ....................... 68 I I . Newspaper H eadline of Defense C ontract A w a r d ..................... 69 I I I . P o l i t i c a l A dvertisem ent A gainst Congressman Corman. 89 IV. Open L e tte r to P o litic ia n s from Small B usinessm en................ 90 v LIST OF ACRONYM S A B M — A n tib a llis tic M issile AIA — Aerospace In d u s trie s A sso ciatio n A M A — American Medical A sso ciatio n CPFF — Cost P lus a Fixed Fee C ontract D oO — Department of Defense FFP — Firm Fixed P ric e C ontract G N P — Gross N ational Product IC B M — In te rc o n tin e n ta l B a l l i s t i c M issile N A M — N ational A sso c ia tio n of M anufacturers N C M A — N ational C ontract Management A sso ciatio n N O A A — N ational Oceanic and Atmospheric Agency N R A — N ational R ifle A sso c ia tio n O M B — O ffice of Management and Budget PR — P u b lic R elatio n s PTA — P aren t-T each er A sso c ia tio n R & D — Research and Development SST — Supersonic T ran sp o rt ( a ir c r a f t) U SA F _ _ United S ta te s A ir Force v i CHAPTER I INTRODUCTION A N D REVIEW OF THE LITERATURE In 1939, th e United S ta te s had approxim ately 335,000 m ilita r y and naval personnel on a c tiv e duty and a defense budget of s lig h tly over $1 b i l l i o n . By th e end of World War I I , s ix y ears l a t e r , th e re were about tw elve m illio n men and women on a c tiv e duty w ith th e armed fo rc e s and th e c o st of defense had r is e n to $81 b i l l i o n , o r approxim ately 86 p ercen t of th e t o t a l fe d e ra l budget. A fte r th e war, as might be expected, many p o litic ia n s and in f lu e n tia l c itiz e n s c a lle d f o r d r a s tic red u c tio n s in th e s iz e of th e armed fo rc e s and in annual ex p en d itu res f o r d e fen se. As a r e s u lt, d efense budgets dropped to r e la tiv e ly low le v e ls in th e la te 1 9 4 0 's, averaging about $13 b i l l i o n p er f i s c a l y ear (See F igure 1 ). V arious in te rn a tio n a l in c id e n ts, however, soon helped to ag ain e s c a la te th e annual defense ex p en d itu res of th e United S ta te s . Among th e in c id e n ts were th e R ussian r e je c tio n of proposed in t e r n a tio n a l c o n tro ls on atom ic energy, th e outbreak of th e "Cold War" and subsequent c o n fro n ta tio n s between th e U.S. and U .S.S.R. over Ira n , G reece, Turkey, B e rlin , C zechoslovakia, and A u stria ; th e e n tran ce of R ussia in to th e n u c lea r weapons c lu b ; th e " f a l l " of China; and th e Korean War. By f i s c a l 1952, th e U.S. defense budget had grown to ap p ro x i m ately $46 b i l lio n , and du rin g th e follow ing tw enty y e a rs—th e p eriod under stu d y — i t ranged from a low of $41 b i l l i o n to a high of 1 F ig u r e I TOTAL DEFENSE EXPENDITURES PER YEAR: 1 9 4 0 -1 9 7 2 100 90. 00 Source: U.S. Department of Commerce S t a t i s t i c a l A b stract fo r the 00 United S ta te s 1958 and 1971 £ 50 £3Q_ 2Q l C M 10 « o FISCAL YEARS ro 1969- 3 $81 b i l l i o n . A lthough th e defen se budgets of th e 1950's and e a rly 1960's u s u a lly amounted to over o n e -h a lf o f a l l fe d e ra l government ex p en d itu res. F igure 2 shows th a t, except f o r d i s t i n c t in c re ase s in f i s c a l 1967, 1968, and 1969 (th e h e ig h t of th e Vietnam War), th e defen se budget as a percen tag e of th e e n tir e fe d e ra l budget gradu a lly d e c lin e d , from a f i s c a l 1952 high of 68 p e rc e n t, to a f i s c a l 1972 low of 33 p e rc e n t. In a d d itio n , F igure 3 shows a s im ila r p a tte r n w ith re sp e c t to th e annual d efen se budget as a p ercen t of th e Gross N ational Product (GNP), In t h i s c a se , defen se went from a f i s c a l 1953 G N P high of 14 p ercen t to a f i s c a l 1972 low of 7 p e rc e n t. During t h i s p e rio d , th e Department o f Defense awarded many c o n tra c ts to both la rg e and sm all defen se com panies, nondefense o rie n te d s u b c o n tra c to rs, and in s titu tio n s of h ig h e r ed u catio n and re s e a rc h . The m ajor sh are of th e se c o n tra c ts , however, were awarded to a com paratively sm all number of companies and in s titu tio n s .^ The co m p etitio n fo r defense c o n tra c ts was keen, and th e rew ards had s ig n if ic a n t economic impact on se v e ra l m e tro p o litan a re a s in th e United S ta te s . One of th e se a re a s was Los Angeles County, where defense firm s receiv ed b illio n s of d o lla r s in c o n tra c ts from 1952-1972. As a 1. For th e p a st f i f t e e n y e a rs, approxim ately seventy p ercen t of a l l prime m ilita r y c o n tra c ts have been awarded to one hundred c o n tra c to r s . Although th e se c o n tra c to rs have not always been th e same, th e v a st m a jo rity of th o se found in th e top 100 te n to f i f t e e n y e ars ago were a lso p re se n t in th e la te 1960’s . P E R C E N T O F T O T A L B U D G E T (OUTLAYS) F ig u r e 2 . TOTAL DEFENSE EXPENDITURES AS PERCENTAGE OF TOTAL BUDGET 100- Source; Economic Report of th e P re sid e n t, U.S. Government P rin tin g O ffice . Washington. D.C 1972,and U.S. Department of Commerce. S t a t i s t i c a l A b stract fo r th e United S ta te s 90- 80- 1958 and 1971 o o . vO 70- 60- 50- 40- c Y 30- 20- r- o o <o <o o > o > O ' © <-i C M * is O ' O ' O ' O ' O — I C M C O o vO vO O O ' O i O O ' vj ir» M 3 <0 O ' O ' O ' in O' O' o* O ' O ' O ' O ' O ' FISCAL YEARS P E R C E N T O F G R O S S N A T IO N A L PRO D U C T 5 0 - 45- 40- 35- 30- 25- 20- 15 io-| 5- 0- F ig u r e 3 . DEFENSE EXPENDITURES AS A PERCENT OF GROSS NATIONAL PRODUCT: 1 9 4 0 -1 9 7 2 Source: C alculated w ith th e a ss is ta n c e of fig u re s taken from Economic Report of th e P re sid e n t, U.S. Government P rin tin g O ffice , W ashington, D.C. 1972, 1T “ T " 1 t T r -—r — T~— r — T “ — r - r T T " T " T"“T“i 1 1 1 i 1 1 1 i i 1 1 i 1 1 o W C M s f in < o co O ' o pH c m in « £ > C O Ov o H C M n in lO r- C O O ' o p H C M C <r • O <r <r in m m m in in in m in in o O < £ > lO «o iO o < o 'O p- n* r* O ' O ' O ' o n O ' O ' O ' O ' O ' O ' O ' a o O ' O n O ' O N O ' O n O N O ' O ' O ' O ' O ' O ' O ' O ' O ' O ' O n O N H H H r-< H H f*4 H H H H H H H H * - 4 w — i • H H H H H f H H H H FISCAL YEARS U l 6 r e s u l t , many w orkers, fa m ilie s , sm all b u sin esses, and in s titu tio n s came to be d ir e c tly o r in d ir e c tly dependent upon th e defense in d u s try . O bviously, th e award of defen se c o n tra c ts can g e n erate co rp o ra te p r o f i t s , thousands of jo b s , and community expansion. E qually obvious is th e f a c t th a t th e lo ss o f, o r s ig n if ic a n t decrease in c o n tra c ts can produce lower c o rp o ra te p r o f i t s , th e lo ss of thousands of jo b s, and a stag n an t economy, u n le ss a lte r n a tiv e work i s c re a te d . To prev en t th is s itu a tio n from o ccu rrin g in Los A ngeles, c o n sta n t de mands and p re ssu re f o r d efen se c o n tra c ts were ex erted by ex ecu tiv es of lo c a l defense in d u s tr ie s , W ashington-based company " re p re se n ta t i v e s ," organized la b o r, s t a t e and lo c a l o ff ic e h o ld e rs. Chambers of Commerce, many members o f C a lif o r n ia 's c o n g ressio n al d e le g a tio n , 2 average c itiz e n s , and o th e r in te re s te d p a r t i e s . In th e follow ing c h a p te rs , th e se groups a re re fe rre d to as th e "defense in te r e s t" of Los Angeles County. As F igure 4 i l l u s t r a t e s , th e p re ssu re s and demands were d ire c te d m ainly a t d e c is io n makers in th e Department of Defense and th e m ilita r y s e r v ic e s , congressm en, th e White House, and various ex ecu tiv e branch p erso n n el. The prim ary o b je c tiv e of th is lobbying e f f o r t was to p e rp e tu a te an d /o r in c re a se th e la rg e p ro p o rtio n of defen se c o n tra c ts awarded on an annual b a s is to ttvs m ajor defense 2. "O ther i n te r e s t s " in clu d e new spapers, tra d e and p ro fe ssio n a l o rg a n iz a tio n s f o r such groups as aerospace en g in ee rs, c o n tra c t and procurem ent p e rso n n el; re p re s e n ta tiv e s from academia, r e a l e s ta te , and id e o lo g ic a l proponents of a stro n g n a tio n a l d efen se. PRIVATE SECTOR Figure 4 THIRD SECTOR Corporate Executives Management L obbyists ♦ I “I I t I Non Defense P riv a te In te r e s ts Labor Academia Research Chamber of Commerce T General P ublic PUBLIC SECTOR * -------- , Congress P resid en t S ta te I-— ) S ta ff Government In te ra c tio n w ith in * i i Department of Local > ” A i » ( ................... Government 1 1 Defense i 1 • (arrows sym bolize p ressu re and in te ra c tio n ) 8 c o n tra c to rs in th e County. Purpose The prim ary purpose o f t h i s d is s e r ta tio n i s to determ ine what lobbying tech n iq u es were employed by th e d efen se in te r e s t in i t s e f f o r t s to o b ta in c o n tra c ts fo r Los A ngeles County du rin g th e period under stu d y , 1952-1972. W ithin t h i s o v e ra ll o b je c tiv e , an attem pt is made to answer th e follo w in g q u e stio n s: (1) Were th e tech n iq u es used by d efen se lo b b y ists s im ila r to th o se used by nondefense in te r e s ts ? (2) Were defen se lo b b y is ts and th e methods they employed open, p ro fe s s io n a l, and " f a i r , " o r were they c o rru p t, " s i n i s t e r , " and d e trim e n ta l to our p o l i t i c a l system? (3) How e f f e c tiv e o r in f l u e n tia l were th e se techniques? (4) Were th e components o f th e defen se in te r e s t ( i . e . , c o rp o ra te e x e c u tiv e s, congressm en, lab o r le a d e rs, e t c . ) e q u ally e f f e c tiv e o r was one segment more in f lu e n tia l and co n sequently more su c c e ssfu l th an th e o th e rs? In r e la tio n s h ip to th e above, th e re a re two o th e r m ajor o b je c t iv e s . F i r s t , an attem p t is made to e x p la in how defense c o n tra c ts were awarded over th e y e a rs . Were c o n tra c ts f o r m ajor weapons system s awarded on th e b a s is o f m erit and o b je c tiv e m ilita r y ev alu a tio n , o r were they awarded on th e b a s is of p o l i t i c a l c o n sid e ra tio n s such as th e p o te n tia l v otes in a given a re a , campaign c o n trib u tio n s , and lo g -ro llin g ? Second, who a c tiv e ly lobbied fo r defense c o n tra c to rs? Toward whom was t h i s lobbying d ire c te d ? And what type of re la tio n s h ip e x iste d between th e lo b b y is ts and th e lobbied? To achieve th e se purp o ses, numerous in -d e p th in terv iew s were co n sidered e s s e n t i a l . The in terv iew ees re p re se n te d : (1) The p riv a te s e c to r : d efen se c o rp o ra tio n e x e c u tiv e s, middle-management p e rso n n el, lo b b y is ts , and bu sin ess c o n s u lta n ts ; (2) The p u b lic s e c to r : congressm en, co n g ressio n al s t a f f p e rso n n el, C a lifo rn ia s t a t e e le c te d o f f i c i a l s , mayors and c ity councilm en, r e tir e d and a c tiv e duty m ilita r y o f f ic e r s , and fe d e ra l government perso n n el s p e c ia lis in g in d efen se procurem ent and c o n tra c t n e g o tia tio n ; and (3) The " th ir d s e c to r" : a term used h e r e a f te r to id e n tify o th e r in te r e s t s and groups such as la b o r le a d e rs, academ icians, re s e a rc h e rs and c o n s u lta n ts , and ex ec u tiv e s of lo c a l Chambers of Commerce. S ig n ific a n c e and C o n trib u tio n This d is s e r ta tio n attem p ts to make two b a sic c o n trib u tio n s : F i r s t , group th e o r is ts o fte n in f e r th a t p o l i t i c a l r e a l i t y may be b e tte r grasped by an aly zin g in d iv id u a l, o r c o a litio n s o f, in te r e s t 3 groups in a c tio n . By an aly zin g th e methods u tiliz e d by lo b b y ists 3. See f o r exam ple: David B. Truman, The Governmental Process (2nd ed. r e v .; New York: A lfred A. Knopf, I n c ., 1971); H. R. Mahood, P ressu re Groups in American P o l i t i c s (New York: C harles S c rib n e r’s Sons, 1967); V. 0 . Key, J r . , P o l i t i c s . P a r tie s , and P ressu re Groups (5 th ed. r e v .; New York: Thomas Y. Crowell C o., 1964); Harmon Z e ig le r, I n te r e s t Groups in American S o ciety 10 in winning (o r lo sin g ) defense c o n tra c ts and th e amount and kind of in te r a c tio n th a t e x iste d between th e th re e s e c to rs under stu d y , a d d itio n a l in s ig h t and understanding o f th e ro le played by in te r e s t groups and lo b b y is ts in th e American p o l i t i c a l system in g e n e ra l, should be forthcom ing. This is im portant i f : ( l) we accept th e p o s itio n th a t Los Angeles defense in te r e s ts were su c c e ssfu l a t b e s t—and n e u tra l a t w o rst— in th e i r e f f o r t s in winning c o n tra c ts f o r lo c a l companies; and, (2) we assume th a t nondefense in te r e s t s (ed u catio n , environm ent, mass t r a n s i t , e t c .) a re eag er to p e rp e tu a te an d /o r in c re ase th e i r sh are of th e annual fe d e ra l budget. I f so, i t would be e s s e n tia l f o r th e l a t t e r to know what lobbying tech n iq u es were implemented by th e defense i n t e r e s t , and which tech n iq u es were p erceived by th e th re e s e c to rs under study to be th e most su c c e ssfu l in winning budget a llo c a tio n s . Second, as w ill be noted l a t e r in t h i s c h a p te r, much of the post-1950 l i t e r a t u r e on in te r e s t groups d e sc rib e s th e p ro fe s s io n a l ism, openness, and "non c o rru p tn e ss" of lo b b y is ts . T his is in con t r a s t to th e c h a r a c te riz a tio n of lo b b y is ts by v ario u s sc h o la rs p r io r to th e 1950°s, and a lso d i f f e r s from views o fte n found in c u rre n t magazine and newspaper a r t i c l e s . By fo cu sin g upon one s ig n if ic a n t (Englewood C lif f s , New J e rs e y : P re n tic e H all, In c ., 1964); and B etty H. Zisk ( e d .) , American P o li tic a l I n te r e s t Groups: Readings in Theory and R esearch (Belmont, C a lifo rn ia : Wadsworth P u b lish in g C o., In c ., 1969), p a r tic u la r ly th e a r t i c l e s by E arl Latham, "The Group B asis o f P o l i t i c s ," and Samuel E ld ersv eld , "American I n te r e s t Groups: A Survey o f Research and Some Im p licatio n fo r Theory and Method," 11 a re a - d efen se c o n tra c ts - we should be a b le to a s c e r ta in th e degree of p ro fe ssio n a lism and "non c o rru p tn e ss" th a t e x is ts w ith re sp e c t to lobbying on b e h alf o f th e d efen se i n t e r e s t . This is im portant i f we accept th e b a sic prem ise th a t p o l i t i c a l scie n c e as a d is c ip lin e is c o n tin u a lly s tr iv in g to e x p la in "how" and "why" th e American p o l i t i c a l system o p e ra te s , and what components of th e system should be changed o r reform ed in o rd e r to make i t more e q u ita b le , e f f e c tiv e , and re sp o n sib le to i t s c o n s titu e n ts . D e fin itio n of Terms To avoid p o ssib le m isunderstandings, th e fo llo w in g term s m erit d e f in itio n . O ther term s used le s s fre q u e n tly , o r considered more p re c is e in meaning, a re d efin ed in th e g en eral t e x t . I n te r e s t Group and F ressu re Group: These two term s a re g en erally co n sid ered to be in te rc h a n g e a b le , and th e use of one term ra th e r 4 th an the o th e r i s g e n e ra lly a m a tte r of p e rso n al p re fe re n c e . I n te r e s t group is d efin ed here as any group, a s s o c ia tio n , o r o rg a n iz a tio n th a t s tr iv e s to have In flu en c e in th e governm ental are n a. When broken down in to i t s sim p le st components, an in te r e s t group c o n s is ts of two o r more in d iv id u a ls who sh are a common o b je c tiv e o r purpose and who seek to in flu e n c e government fo r th e b e n e f it of th e group. These in d iv id u a ls in te r a c t bo th w ith in th e group i t s e l f and w ith in th e p o l i t i c a l system . This in te r a c tio n i s n ecessary i f in te r e s t 4 , See Truman, p. v i i ; and Donald C. B la is d e ll, American Democracy Under P ressu re (New York: The Ronald P ress C o., 1957), p. 3. 12 groups are to achieve an d /o r p e rp e tu a te t h e i r demands and o b je c tiv e s . L o b b y ist: An i n t e r e s t group g e n e ra lly has a paid re p re se n ta tiv e , known as a " lo b b y is t," who argues on i t s b e h alf b efo re v ario u s decision-m akers and th e g en eral p u b lic .’ ’ Some lo b b y is ts have s t a f f s th a t s p e c ia liz e in re s e a rc h , p u b lic r e la tio n s , and th e estab lish m en t of p ersonal c o n ta c ts . T h erefo re, when th e word lo b b y is t is used, i t does not n e c e s s a rily r e f e r to a s p e c if ic in d iv id u a l o r to a sm all number of paid re p re s e n ta tiv e s of a p a r tic u la r in te r e s t group. In some cases (e s p e c ia lly d efen se i n t e r e s t s ) , a m u ltitu d e of in d iv id u a ls may be involved in a d d itio n to th e re g is te r e d lo b b y is t. With re s p e c t to th e Los Angeles d efen se c o n tra c to r s , t h i s involvem ent was o fte n found among high management p e rso n n el; in some in s ta n c e s, much of t h e i r tim e was sp en t lobbying on b e h alf of th e company. P re s s u re : The a c t o f p re ssin g an in te r e s t g ro u p 's id e as, demands, p o s itio n s , and e x p e c ta tio n s upon governm ental d e c is io n makers, in f l u e n tia l c itiz e n s , and th e g e n eral p u b lic . When an in te r e s t group " p re ss u re s" a d e c is io n maker i t is attem p tin g to in flu en ce h is d e c is io n s and focus a tte n tio n on th e demands and e x p e c ta tio n s of th e group. T echnique: A method employed by a lo b b y ist an d /o r in te r e s t group fo r ach iev in g a d e sire d aim. 5 . O ther term s used to d e sc rib e th e re p re s e n ta tiv e of an i n te r e s t group in c lu d e : W ashington re p re s e n ta tiv e (o r " re p " ), l e g is la ti v e ad v o cate, p u b lic r e la tio n s manager, government a f f a i r s e x e c u tiv e , and government r e la tio n s c o u n se lo r. 13 C o n tra c t: An agreem ent between two o r more persons to do som ething. G enerally a c o n tra c t is w ritte n and le g a lly e n fo rc e a b le . Defense C o n tra c t: An agreement between th e U.S. Government and a p riv a te In d u stry o r in s t i t u t i o n . In t h i s stu d y , defense c o n tra c ts g e n e ra lly inv o lv e two p a r tie s : a major defen se c o n tra c to r such as Lockheed o r McDonnell-Douglas, and th e Department of D efense. Prime Defense C o n tra c t: T ech n ically , th e government d e fin e s a prim e c o n tra c t as one valued a t $10,000 o r more. As used in th is d is s e r ta tio n , prime o r major c o n tra c t is d efin ed as a c o n tra c t to purchase a major weapons system c o stin g many m illio n s of d o lla r s . (S p e c ific kinds of c o n tra c ts are d iscu ssed in Chapter 4 ). Prodefense and A n tid efen se: These two term s a re used to de s c r ib e an in d iv id u a l (u s u a lly an e le c te d o f f i c i a l ) who g e n e ra lly spoke out an d /o r voted f o r o r a g a in st such d e fe n se -re la te d item s as th e annual defen se budget, s p e c if ic weapons system s procurem ent program s, and th e need f o r p a r tic u la r weapons system s re se a rc h and developm ent. For example, a congressman who c o n s is te n tly voted a g a in s t DoD a p p ro p ria tio n s and procurem ent was c la s s if ie d as " a n ti- d e fe n se ." However, i t must be emphasized th a t th is la b e l does not n e c e s s a rily mean th a t th e o f f i c i a l was a g a in s t defense p er s e . In ste a d , th e congressman was g e n e ra lly a g a in s t la rg e ex p en d itu res, and u s u a lly did l i t t l e lobbying when compared to h is p eers on b eh alf o f th e Los Angeles d efen se in te r e s t . Weapons System : A m ajor d efen siv e o r o ffe n siv e m ilita r y in s tr u ment th a t may be implemented during war, o r to d e te r , lim it, o r 14 c o n tro l war. A weapons system may be used to d e stro y o r a s s i s t in th e d e s tr u c tio n o f y enemy m is s ile s , a i r c r a f t , s h ip s , in d u s tr ia l c e n te rs , and c i t i e s . A weapons system a lso may be used to defend a g a in st enemy m is s ile s , bombers, and o th e r o ffe n siv e weapons. Examples of p re sen t and fu tu re U.S. weapons system s in clu d e th e ICBM , A B M , F-4 f ig h te r j e t , C5A tr a n s p o r t, P o la ris subm arine, and B-l bomber. The C ontract Award P rocess The award of a defense c o n tra c t is a complex p ro cess in which c o n tin u a l in te r a c tio n occurs between and w ith in each of th e th re e s e c to rs involved. For purposes of "p u b lic consum ption," th e p ro cess is d escrib ed as one in which w ritte n ru le s and re g u la tio n s , s t r i c t pro ced u res, and an "above p o l i t i c s " a ttitu d e p r e v a il. I t is a h y p o th esis of th is d is s e r ta tio n , however, th a t much of th e d e c is io n making p ro cess w ith re sp e c t to major weapons system s is in fo rm al, c e n te rs around p erso n al r e la tio n s h ip s , "ra p p o rt b u ild in g ," and p o l i t i c a l d e c is io n s . I f th e inform al p ro cess is found to be more re p re s e n ta tiv e of th e award p ro c e ss, perhaps t h i s w ill e x p la in why c o n sta n t p re ssu re fo r c o n tra c ts is placed upon th e d e c is io n makers in W ashington. On th e o th e r hand, i f th e form al p ro cess is found to be more re p re s e n ta tiv e , and we fin d th a t o b je c tiv e m ilita r y e v a lu a tio n is th e b a sis f o r d e c isio n s on m ajor weapons system s, perhaps th e defense in te r e s t of Los Angeles is w asting much of i t s tim e and money by lobbying one an o th er and th e Department of Defense fo r c o n tra c ts . 15 In a d d itio n , i f th e form al p ro cess p re v a ils in regard to th e award of defen se c o n tra c ts , could i t not a ls o p re v a il in o th e r a re a s such as s o c ia l w e lfa re, urban renew al, e d u catio n , and p o llu tio n a b a te ment? I f th e answer is a ffir m a tiv e , o r th e tre n d is toward a form al p ro c e ss, then have lo b b y is ts seen t h e i r day in Washington? However, i f we accep t th a t f a c t th a t lo b b y is ts a re s t i l l very much a p a rt of th e system , and w ill rem ain so f o r th e immediate fu tu r e , i t th en is im portant to examine th e ro le defen se lo b b y is ts p lay in our system , and to determ ine what tech n iq u es they u se, and th e n a tu re of th e re la tio n s h ip between lo b b y is ts and government o f f i c i a l s . REVIEW OF THE LITERATURE A m ajor te x t would be re q u ire d to ad eq u ately review th e s i g n i f i can t l i t e r a t u r e on in te r e s t groups and lo b b y is ts and on th e p a r t i c i - p an ts and issu e s th a t make up th e d efen se c o n tra c t award p ro c e ss. This s e c tio n , th e re fo re , fo cu ses p rim a rily on th e l i t e r a t u r e th a t concerns defen se and nondefense lobbying tech n iq u es and th e i r e ffe c tiv e n e s s , and on th e two sch o o ls of thought in reg ard to the ingenuousness of defen se and nondefense lo b b y is ts . When embarking upon a review o f th e l i t e r a t u r e i t is perhaps b e st to o f f e r se v e ra l o th e r d e f in itio n s o f in te r e s t groups and lo b b y is ts held by recognized s c h o la rs in th e d is c p lin e . G en erally , an in te r e s t group i s d efin ed as an o rg a n iz a tio n th a t seeks to 6. B rief re fe re n c e to th e im portant works on th e c o n tra c t award p ro cess is made in th e fo llo w in g c h a p te rs . 16 in flu en ce p u b lic p o lic y . To David B. Truman, an in te r e s t group " r e f e r s to any group th a t, on the b a sis o f one o r more shared a t t i tu d es, makes c e r ta in claim s upon o th e r groups in th e s o c ie ty fo r th e e sta b lish m e n t, m aintenance, o r enhancement of forms of behavior th a t a re im plied by th e shared a ttitu d e s ." ^ Harmon Z e ig le r 's de f i n i t i o n is more s p e c if ic : an in te r e s t group " is an organised ag g reg ate which seeks to in flu en c e th e c o n ten t of governm ental de c is io n s w ithout attem p tin g to p la ce i t s members in form al govern- ..8 m ental c a p a c itie s . This d e f in itio n h elp s to d if f e r e n tia te in te r e s t groups from p o l i t i c a l p a r tie s , in th a t in te r e s t groups do not attem pt to have t h e i r members run f o r p o l i t i c a l o f f ic e . However, th e re is nothing th a t p rev en ts them from doing so , nor should we conclude th a t in te r e s t groups do not seek to in flu en c e th e p a rty ch o ices fo r 9 e le c te d o f f ic e . I n te r e s t groups a lso " c o n s titu te th e p rin c ip a l avenue o u tsid e of o f f i c i a l p u b lic government through which p o l i t i c a l power is m arshalled and a p p lie d ."* ^ L e ste r M ilbrath adds th a t i n te r e s t groups tr y to o b ta in (o r m aintain) s p e c ia l p riv ile g e s by 7. See Truman, p . 33. 8. Harmon Z e ig le r, I n te r e s t Groups in American S ociety (Englewood C lif f s , New J e rs e y : P re n tic e -H a ll, In c ., 1964), p. 30. 9. S everal resp o n d en ts m aintained th a t c e r ta in defen se in te r e s ts in Los Angeles tr i e d to d e fe a t v ario u s p a rty nominees in both prim ary and g en eral e le c tio n s . 10. Abraham Holtzman, I n te r e s t Groups and Lobbying (New York: The M acmillan C o., 1966), p . 1. 17 law o r o th e r governm ental a c t i v i t y . 11 And, f i n a l l y , v ario u s sc h o la rs have s ta te d th a t in te r e s t groups help to b rid g e th e gap between 12 government and i t s c itiz e n s . L obbyists are d efin ed as th e paid re p re s e n ta tiv e s of in te r e s t groups. T heir prim ary g o als a re to p e rso n a lly in flu en c e (by d ir e c t o r in d ir e c t methods) th e d e c isio n makers and to p rev en t d e c isio n s th a t may ad v ersely a f f e c t th e group. L obbyists o fte n serv e as l i a i son o f f ic e r s between p u b lic o f f i c i a l s and b u re a u c ra tic p erso n n el, and th e members of th e group o r o rg a n iz a tio n they re p re s e n t. L e s te r M ilbrath d e fin e s lobbying as th e " . . . s tim u la tio n and tr a n s m ission of a communication, by someone o th e r than a c itiz e n a c tin g on h is own b e h a lf, d ire c te d to a governm ental decision-m aker w ith 13 th e hope of in flu en c in g h is d e c is io n ." If lo b b y is ts a re to tr a n s m it t h is communication, i t is e s s e n tia l th a t they have access to d e c is io n makers and m id d le -le v e l c i v i l s e rv a n ts . Access p rovides th e lo b b y ist an o p p o rtu n ity to p re se n t h is d a ta , re s e a rc h , and 11. L e s te r M ilb rath , The Washington L obbyists (C hicago: Rand McNally and C o., 1963) p p .20-22. 12. See f o r example G ab riel A. Almond and Sidney Verba, The C ivic C u ltu re : P o l i t i c a l A ttitu d e s and Democracy in Five N ations (B oston: L i t t l e , Brown and Co., 1965), p . 245. Almond and Verba s t a t e : "V oluntary a s s o c ia tio n s a re th e prim e means by which th e fu n c tio n of m ediating between th e in d iv id u a l and th e s t a t e is perform ed. Through them th e in d iv id u a l is a b le to r e l a t e him self e f f e c tiv e ly and m eaningfully to th e p o l i t i c a l sy stem ." Also see C ongressional Q u a rte rly , The W ashington Lobby (W ashington, D .C .: C ongressional Q u a rte rly I n c ., 1971; and Z e ig le r, pp. 29-66. 13. M ilb rath , p . 8. 18 o p inions through th e p ro p er channels w ith in th e d e c is io n making a r e n a . L o b b y i s t s a lso "plead" t h e i r case to th e g en eral p u b lic , o th e r vested i n te r e s t s , and to whomever they c o n sid e r an in f lu e n tia l member of th e community. The tech n iq u es lo b b y is ts use f o r p re se n tin g in fo rm atio n and o pinions to d e c is io n makers have been th e source of much d eb ate, not only in th e l i t e r a t u r e , but a lso in th e news media, and in g en eral exchanges among concerned c i t i z e n s . H e n c e , a predom inant issu e c e n te rs around th e q u e stio n of w hether lo b b y is ts and in te r e s t groups are an a s s e t o r a l i a b i l i t y to th e American p o l i t i c a l system? Richard Gable and V. 0. Key both c a te g o riz e lo b b y is ts in to two groups: th e "old lobby" and "th e new l o b b y . R e p r e s e n t a t i v e s of th e "old lo b b y ," are d escrib ed as c o rru p t, p r a c titio n e r s of under- 14. In a re c e n t survey, B usiness Week concluded th a t "(k)now ing where to go - s p e c if ic a lly who to see - is what c o u n ts." Sever a l lo b b y ists interview ed by th e magazine concluded th a t access is th e key to su c c e ss. From "Why th e C orporate Lobbyist is N ecessary ," B usiness Week, March 18, 1972, pp. 62-65. 15. Recent examples of a r t i c l e s found in th e Los Angeles Times in clu d e : "L obbyist: Is He Menace o r Aid to Government," March 17, 1972; "24 L obbyists Get by w ith No B ack slap s," May 11, 1971 " I n te r e s t Groups Blamed fo r U.S. N u tritio n L ag," September 20, 1970; "C ap ito l L o b b y ists: How They O perate Behind th e S cen es," February 22, 1970; "P ressu re Pays Off on Lockheed Loan," (August 8, 1971; "How Highway Lobby Ran Over P ro p o sitio n 18," December 27, 1970; "R ails Accused of Mounting Lobby f o r Big S u b sid y ," March 30, 1971; and "Lobbies Cloud P o llu tio n B i l l ," September 6, 1970. 16. See Richard W . Gable, " P o litic a l I n te r e s t Groups as P o licy S h a p e rs," The Annals of th e American Academy of P o l i t i c a l S o cial S cience. CCCXIX (September 1958) pp. 84-93; and V. 0. Key, pp. 130-136. th e - ta b le t a c t i c s ; in sum, a l i a b i l i t y to democracy. The second sch o o l, th e “new lo b b y ," g e n e ra lly d escrib ed lo b b y ists in term s of p ro fe ssio n a lism , openness, and a d e f in ite a s s e t to our system . In a d if f e r e n t lig h t, B etty Zisk id e n tif ie s th re e " e ra s" in lobbying; "pre-1909, th e om ission of th e in te r e s t group from se rio u s co n sid e r a tio n ; 1910-1950, th e p e jo ra tiv e tre a tm e n t.. .a n d .,.1950 to p re s e n t, th e gradual replacem ent of a b s tr a c t moral judgem ents w ith fir s t- h a n d p re c ise a n a ly s is and e x p la n a tio n ." ^ For th e a u th o r's purposes, th e term s "old lobby" and "new lobby" w ill be used (1) to d if f e r e n tia te in g en eral term s between th e pre-1950 " p e jo ra tiv e " group l i t e r a t u r e and th e more em p irical p o st 1950 l i t e r a t u r e ; and (2) between th e u n d e r-th e -ta b le and b rib e o rie n te d lo b b y is ts and those lo b b y ists a sso c ia te d w ith honesty and p ro fe ssio n a lism as re p o rted by th e in te rv ie w e e s. The Old Lobby Many Americans b e lie v e th a t th e old lobby s t i l l predom inates a t a l l le v e ls o f governm ent. Donald Matthews o ff e rs an i l l u s t r a t i o n o f t h i s b e lie f provided by a Washington lo b b y ist who once o v er heard two women in th e Senate w aitin g room: 17. Z isk, p . 4. 18, David Truman re c e n tly w rote th a t th e in te r e s t group "has come to be regarded le s s fre q u e n tly as p o l i t i c a l p a th o lo g y ... th e fe a rs of c r i t i c s has s h ifte d to th e danger of ex cessiv e s t a b i l i t y in th e s h o rt ru n , to th e th r e a t of immobilism - an in c a p a c ity in th e system to accomodate new kinds o f demands in th e s o c ie ty " Truman, p . xxxix. 20 "T h at's Senator ________ ," the Washingtonian said in a stage whisper, "and th a t" - in d icatin g the man w ith whom the Senator was in earn est conver s a tio n - " is ___________, the lobbyist fo r w hat's- it's -n a m e ." "0-ohl" responded the v is ito r in awed tones, "Is he bribing him now?" 19 Matthews is quick to add th a t the a ttitu d e is not r e s tr ic te d to naive to u r i s ts . At the s ta te le v e l, Georgia, in 1877, wrote in to i t s c o n stitu tio n a provision s ta tin g th a t "lobbying was a 20 crim e." And even as la te as 1958, C a lifo rn ia 's C on stitu tio n had a sec tio n th a t s ta te d : "Any person who seeks to influence the vote of a member of the le g is la tu r e by brib ery , promise of reward, in tim i d atio n , or any o ther dishonest means, s h a ll be g u ilty of lobbying, which is hereby declared a f e l o n y ...." Since the 1950's , as w ill be discussed la te r in th is chapter, the c h a ra c te riz a tio n of lobbying at the fed eral level has changed, and is freq u en tly described as very b u sin esslik e, open, and proper. However, lobbying at the s ta t e and local level is s t i l l o ften de- 21 scribed as somewhat co rru p t, unprofessional, and "undem ocratic." For example, several congressmen and s t a f f personnel, and s ta t e 19. Donald R. Matthews, U.S. Senators and Their World ( Vintage Books; New York: A D ivision of Random House, 1960), p. 176. 20. See H. R. Mahood, Pressure Groups In American P o litic s (New York: Charles S c r ib r ie r 's Sons, 1967), pp. 295-301. 21. See fo r example Harmon Zeigler and Michael Baer, Lobbying: In te ra c tio n and Influence in American S tate L eg islatu res (Belmont, C alifo rn ia: Wadsworth Publishing Co., 1969); and Andrew Hacker, "Pressure P o litic s in Pennsylvania: The Truckers vs. the R ailro ad s," in The Uses of Power, ed. Alan F. Westin (New York: Harcourt, Brace and World, In c., 1962), pp. 323-376. 21 and local o f f ic ia ls c ite d the highway and wine lobbies of C alifo rn ia as contemporary examples of "pressure p o litic s " a t work, possessing many c h a r a c te ris tic s of the "old lobby." Harmon Z eigler and Michael Baer interviewed le g is la to r s and lo b b y ists in M assachusetts, North Carolina, Oregon, and Utah in order to determine (among o ther things) perceptions and frequency of in te ra c tio n between the two groups. They found th a t le g is la to r s having a low ra te of in te ra c tio n w ith lo b b y ists o ften had a negative a ttitu d e toward lo b b y ists. Those with a high r a te of in te ra c tio n , 22 however, g en erally thought of lo b b y ists in p o s itiv e term s. The authors also found th a t in Oregon and Utah, professionalism was s t i l l viewed with suspicion, and concluded th a t "lo b b y ists who appear too polished and adept can be a t a disadvantage"in these 23 two s ta t e s . Returning to the national le v el, much of the pre 1950 lite r a tu r e ch aracterized lobbyists as s i n i s t e r and detrim ental creatu res of the American p o litic a l system. Lobbyists were o ften used as "scapegoats," as examples of what was wrong w ith American government. 22. Harmon Z eigler and Michael Baer, Lobbying: In te ra c tio n and Influence in American S tate L e g islatu res (Belmont, C a lifo rn ia : Wadsworth Publishing Co., 1969), p. 82. Also see Wayne L. Francis, "A P ro file of L e g isla to r Perceptions of In te re s t Group Behavior R elating to L eg isla tiv e Issues in the S ta te s ," The Western P o litic a l Q uarterly. XXIV (December 1971), 702-712. 23. Ib id . . p. 202. I t is in te re stin g to note th a t the fe d e ral level interview ees of th is d is s e r ta tio n contended th a t "p ro fessio n al ism" was a necessary a ttr ib u te fo r success, and th a t th is type of lobbyist was well received. 22 S tu a rt Chase, w riting in 1945, concluded th a t in te r e s t groups and lo b b y ists "continually p re v e rt, tw ist and h a lt the path of progress 24 in the Republic." Chase also sta te d th a t lo b b y ists, esp ecially the "dangerous ones," worked in the "d ark ," through co ck tail p a rtie s , f l a t t e r y , dinners, and su b tle blandishments. Chase's remedy was fo r the government to "keep a tig h t leash on the pressure g ro u p s... (and) a ct p o sitiv e ly and aggressively in the in te r e s t of consumers, 25 who have no pressure group to represent them." Karl S c h riftg ie ss e r wrote th a t lobbying "for a ll i t s moral and legal rig h ts to existence has long been and w ill long remain one of the g reat problems of p ra c tic a l p o litic s , a continuous source of 26 s t r i f e and discord w ithin our democracy." Other warnings about in te r e s t groups and lo b b y ists have been issued. The la te J u s tic e Hugo Black, before h is appointment to the Supreme Court, said : Contrary to tr a d itio n , against the public morals, and h o s tile to good government, the lobby has reached such a p o sitio n of power th a t i t th reaten s government i t s e l f . I ts siz e , i t s power, i t s capa c ity fo r e v ilj i t s greed, tric k e ry , deception and fraud condemn i t to the death i t deserves. 27 24. S tu art Chase, Democracy Under Pressure (New York: The 20th Century Fund, 1945), p. 9. 25. Ib id .. p. 118. 26. Karl S c h riftg ie ss e r, The Lobbyists (Boston: L i t t l e , Brown & Co., 1951), p. 3. 27. Found in Z eigler, p. 34, c ite d in Thomas B. Mechling, "Washington Lobbies Threaten Democracy," V irginia Q uarterly Review. XXII (Summer 1946), p. 341. 23 And former Republican Senator S tyles Bridges sta te d in a magazine a r t i c l e in 1946: Do you want your government to be run by pressure groups ? I ask because there is a danger th a t our democratic processes w ill be thwarted unless something is done - by you, the voter - to put the pressure of public opinion on the pressure groups th a t in fe s t the h a lls of Congress. Now, you w ill agree th a t lobbying is wicked when i t goes beyond the le g itim ate expression of opinion as to public issu es; when i t seeks to sway members of Congress in the s e lf is h in te r e s t of a p a rtic u la r f a c tio n .. .you w ill concede th a t any Senator o r R epresentative who y ie ld s to the urging " le g is la tiv e agents" without consideration of the in te r e s ts of the people ought to be drummed out of o f f ic e . 28 In 1968, R epresentative Thomas B. C urtis (Republican, Missouri) in a n ew sletter to h is c o n stitu e n ts wrote th a t p riv a te pressure groups were "so a d e p t ...a t in d ire c t lobbying and with the power they possess over the small group of congressmen who have the power to make the decisio n in the area of th e ir concern th a t they, not 29 the key congressmen, make the re a l d e c is io n s ,..." The New Lobby Many contemporary p o litic a l s c ie n tis ts have concluded th a t, since the 1950's, a "new lobby" has gradually replaced the "old lobby" and i t s frequently unsavory methods. According to Lester M ilbrath, "contrary to popular b e lie f , entertainm ent, p a r tie s , g i f t s , 28. Quoted in Z eigler, p. 35, from Styles Bridges, "I Don't Like P ressu re," Pagent (September 1946), p. 17. 29, From the Congressional Q uarterly, L e g isla to rs and the Lobbyists (Washington, D.C.: Congressional Q uarterly In c ., 1968), p. 9. 24 and favors are of l i t t l e importance in developing or m aintaining 30 c o n ta c ts .” Charles L. Clapp concluded, on the b asis of interview s with congressmen, th a t "while most members of Congress can id e n tify individual lobbyists and organizations they find d is ta s te f u l and i r r i t a t i n g and whose methods they regard as u n fa ir, th e re is v ir tu a lly unanimous accord th a t the bribery and d ire c t approach, which 31 characterized an e a r lie r era, is p ra c tic a lly nonexistent today." B ellig eren t and crude attem pts to pressure a congressman may be e ffe c tiv e i n i t i a l l y , or even successful on a ra re and l a te r occasion, but such an approach, Clapp found, "tends to jeopardize or 32 destroy fu tu re re la tio n s h ip s and th is seldom is worth the gamble." The comments of Andrew Scott and Margaret Hunt are, perhaps, in d icativ e of a new and more o b jectiv e view of lobbying: "/lj7obbying is not bad in i t s e l f ; unfortunate decisions may re s u lt from lobbying but so many fo rtu n ate ones. Lobbying should c e rta in ly not be con demned wholesale because an observer disapproves of a p a r tic u la r 33 piece of le g is la tio n influenced by an in te r e s t group." 30. M ilbrath, p. 264. 31. Charles Clapp, The Congressman: His Work as He Sees It (A nchor Books; Garden City, New Jersey : Doubleday and Co., In c ., 1964), p. 185, 32. Ib id . . p. 187. 33. Andrew Scott and Margaret Hunt, Congress and Lobbies, (Chapel H ill: U niversity of North C arolina P ress, 1966), p. 18. 25 In th is context, i t is in te re stin g to note th a t M ilbrath, 34 35 Abraham Holtzman, and Lewis A. Dexter, found in th e ir resp ectiv e stu d ie s th a t lo b b y ists generally rated personal p resen tatio n of views, honesty, and o b je c tiv ity as th e ir most e ffe c tiv e techniques. I t is a t th is point th a t one of the basic questions th is d i s s e r ta tio n attem pts to answer comes in to sharper focus: namely, is the defense lobby a re p re se n ta tiv e of the old school, w ith i t s techniques of b rib ery , arm -tw isting, and corruption, or is i t a member of the new school—p ro fessio n al, straightforw ard, and above board? U nfortunately, the lite r a tu r e on th is su b ject is q u ite lim ited . As the new few pages w ill rev eal, the assessments of the defense lobby in e x istin g lite r a tu r e , frequently d if f e r from those th a t contemporary p o l i t i c a l s c ie n tis ts lik e M ilbrath and Holtzman have made about lo b b y ists in general. To some observers, the defense lobbyist e s s e n tia lly is lik e any o th er lo b b y ist. He is simply promoting the in te r e s ts of a p a rtic u la r group, as are those lo b b y ists who work on behalf of a b e tte r en vironment, an improved educational system, or continuation of the o il d e p letio n allowance, e tc . Professor Arnold Rose has contended th a t "th ere is nothing out of the ordinary about the reasons fo r various defense firm s attem pting to influence the amount and 34. See Abraham Holtzman, In te re s t Groups and Lobbying (New York: The MacMillan Co., 1966), pp. 75-80. 35. Also see Lewis A. Dexter, How O rganizations Are Represented in Washington (In d ian ap o lis: The Bobbs-Merrill Co., Inc., 1969), Chapters 1 and 7. 26 36 a llo c a tio n s of defense spending. Rose also believes th a t lobbying fo r defense during the 1960's was no d iff e r e n t than road co n tracto rs try in g to influence s ta t e and local o f f i c i a l s fo r co n tract awards. To o th er commentators, defense lo b b y ists are viewed as corrupt, nonprofessional, and wielding f a r too much power and in fluence a t the expense of other v ita l in te r e s ts . For example, Senator William Proxmire (Democrat, Wisconsin) stated several years ago: In every s ta te and in almost every Congressional d i s t r i c t , labor, public o f f i c i a l s , and management combine to convert many a congressman in to a fig h tin g advocate of more m ilita ry c o n tr a c ts ... The heaviest lobbying pressure and the most potent with Congress is to hold on to old weapons, keep old assembly lin e s r o llin g , and m aintain old jo b s ... The Army, Navy, and A ir Force q u ie tly and s k illf u lly lobby congressmen d a ily in what must be the most a ll encompassing lobby operation in h isto ry , with more than fiv e hundred Pentagon lo b b y ists, euphoniously called le g is la tiv e lia is o n men, attending members of Congress. There is now one armed forces lobbyist fo r every member of Congress. 37 More re c e n tly , Senator Proxmire said in a Senate speech th a t "we a l l know the pressures th a t come upon us to help d ir e c t defense p ro je c ts 36. Arnold M . Rose, The Power S tru ctu re (New York: Oxford U niversity P ress, 1967), p. 94. 37. Proxmire quoted in J u liu s Dusha, Arms. Money and P o litic s (New York: Ives Washburn, In c ., 1965), p. 50. Dusha also p o ints out th a t senators and re p re se n ta tiv e s have th e ir s ta f f members put pressure on the Pentagon to get more co n tracts fo r c o n stitu e n ts . Hence, i t ' s a two way s t r e e t - e sp e c ially fo r many C alifo rn ia p o litic ia n s in th a t i t was found th a t in some cases members of both the m ilita ry and Congress pressure one another fo r c e r ta in favors. into our s ta te s o r d i s t r i c t s and the e f f o r ts made to keep them 38 there once they have a r r iv e s ." U nfortunately, the Senator did not specify what these pressures were, nor how they were applied. One wondersi Were the pressures u n just and harsh? Were the p res sures d iff e r e n t from those exerted by o th er in te re s ts such as the American Medical A ssociation, the National R ifle A ssociation, or the American Federation of Teachers? Were the same pressures practiced by a l l the major defense c o n tra cto rs, or did each company have i t s own stra teg y and techniques, or did i t re ly on outside public re la tio n s s p e c ia lis ts , professional lo b b y ists and/or trade associations? J o u rn a lists Drew Pearson and Jack Anderson lis te d "booze, blondes and b rib es" as techniques used by defense lo b b y ists fo r obtaining c o n tra c ts. In The Case Against Congress, Pearson and Anderson strongly in fe r th a t the defense lobby is re p re se n ta tiv e of the old lobby. For example, the authors wrote th a t the president of Martin Company had a policy of "fun in the sun fo r the big brass 39 (m ilita ry o ffic e rs ) in the Bahamas." And " ( a ) l l too many m u lti- m illio n -d o lla r c o n tra c ts are awarded because of a b o u illa b a isse of 38. Quoted in N ational P r i o r i t i e s : M ilitary , Economics, and S o c ia l. (Washington, D .C .: Public A ffairs P ress, 1969), p. 133. 39. Drew Pearson and Jack Anderson, The Case Against Congress (New York: Simon and Schuster, 1968), see fo r example: "The Bay Window B rigade," pp. 331-339; and "The Art of Communications," pp. 339-345. Although Pearson and Anderson are considered by many to be s e n s a tio n a lis ts , th e ir comments are n ev erth eless c ite d , e sp e c ia lly since th ere has been a v ir tu a l void of lite r a tu r e in th is area. 28 p o litic a l p ressure, geographical appeal, corporate greed, old Army 40 t i e s and c o ck ta il p a r tie s ." U nfortunately, Pearson and Anderson fa ile d to rep o rt in any depth on corporate paid t r i p s fo r Department of Defense personnel, co ck ta il p a rtie s , or campaign co n trib u tio n s. L ester M ilbrath may well be c o rrect in h is conclusion, cited e a r lie r , th a t these s o rts of a c t i v i t i e s no longer are a p art of the Washington lobbying scene in any s ig n ific a n t way. However, as la te r chapters w ill show, personal and so cial in te ra c tio n remains very much a p art of the lobbying process. Responses to the a u th o r's questions by congressmen, executive branch o f f ic ia ls , and th e ir resp ectiv e s ta f f s in d icate th a t i t is s t i l l e ss e n tia l fo r lobbyists to personally present research data, general inform ation, and points of view to le g is la to r s and s ta f f personnel—and much of th is ex change takes place on a so cial b a sis . In 1970, Senator Proxmire made an attempt at some in-depth analysis of the pressure exerted upon congressmen by m ilita ry lia is o n men re fe rre d to as " lo b b y is ts," and by fellow congressmen who served on the Armed Services committees, and/or who had major co n tracto rs 41 located in th e ir d i s t r i c t s . However, Proxmire again fa ile d to spend any s ig n ific a n t time discussing sp e c ific lobbying techniques 40. Ib id . 41. See William Proxmire, Report from Wasteland (New York: Praeger P u b lish ers, 1970), pp. 97-122. For sim ila r accounts see Ju liu s Dusha, Arms. Money, and P o litic s (New York: Ives Washburn, In c ., 1965); Ralph Lapp, Arms Beyond Doubt (New York: Coweles Book Co., In c ., 1970); and J . William F u lbright, The Pentagon Propaganda Machine (Vintage Books; New York: A D ivision of Random House, 1971). 29 or the perceptions of those who were the object of defense lobbying. Conclusion In conclusion, the l i te r a tu r e is not only lim ited, but also almost t o ta lly without any s ig n ific a n t probing in to the overall lobbying techniques employed by the defense in te r e s t. In ad dition, the perceptions of those who were lobbied, as well as those who engaged in lobbying fo r defense c o n tra cts are absent from the l i t e r a - tu re . For these reasons, i t was necessary fo r the author to d e te r mine: (l) the methods and techniques employed by defense lobbyists in the o v e ra ll co n tract award process, and (2) how these methods and techniques were perceived by those involved. To accomplish these o b je ctiv es, i t was e s s e n tia l to obtain, through a s e r ie s of in-depth interview s, d ir e c t, first-h a n d inform ation from rep resen ta tiv e s of each of the th re e se c to rs th a t p a rtic ip a te d in the con t r a c t award process. The author b elieves th a t the following chapters w ill do much to f i l l the e x istin g gap in the l i t e r a t u r e and o ffe r answers to the questions raised in the preceding pages. CHAPTER I I THE RESEARCH APPROACH: ELITE INTERVIEWING What Is An Interview? Robert Kahn and Charles Cannell of the Michigan Survey Research I n s titu te o ff e r an e x ce lle n t o v erall d e f in itio n of interview ing: " . . . a sp ecialized p a tte rn of verbal in te ra c tio n in itia te d fo r a sp e c ific purpose and focused on some s p e c ific content area, with con sequent elim in atio n of extraneous m aterial."* Interviewing serves several basic fu n ctio n s: securing immediate and d ire c t inform ation, exchanging opinions, and gathering data from knowledgeable individu a ls . Hence, th is technique enables the interview er to discover and a t the same tim e, v e rify inform ation th a t w ill a s s is t in an aly sis, 2 concep tu alizatio n , and explanation. Proper interview ing e n ta ils the following c h a r a c te r is tic s : (1) the a b i l i t y to e s ta b lis h rapport w ith the respondents; (2) know- le d g e a b ility about the su b ject under d iscu ssio n ; (3) the a b ility to be a good lis te n e r ; and (4) the a b i l i t y to a n tic ip a te possible d i f f i c u l t i e s such as irrelev an cy and d is to r tio n . Charles Morrissey 1. Robert Kahn and Charles Cannell, The Dynamics of Interviewing (New York: John Wiley and Sons, In c ., 1957), p. 16. 2. See Raymond L. Gorden, Interview ing: S trategy. Techniques. and T actics (Homewood, 111.: The Dorsey P ress, 1969), Chapter 2; Walter Bingham, Bruce V. Moore, and John W . Gustad, How To Interview (4th ed. r e v .; New York: Harper B rothers, 1959), Chapter I; and Herbert H. Hyman, e t a l . , Interview ing in Social Research (Chicago: U niversity of Chicago P ress, 1954). 30 31 a p tly concluded th a t interview ing is "a very d i f f i c u l t business. Any one who does i t su cc e ssfu lly is probably so successful th a t he should 3 him self be interview ed." If an interview is conducted properly, the r e s u lts may serve the so cia l s c ie n tis t in h is attem pts to develop new th e o rie s, ideas, and so lu tio n s, or to b e tte r explain and analyze various questions, concepts, or problems. If th e interview is conducted improperly, or i f the interview er is unprepared, misinformed unduly biased, or incompetent, the r e s u lts can be both misleading and u s e le s s. W ho was Interviewed and W hy In order to analyze the questions raised in th is d is s e r ta tio n — the amount and type of in te ra c tio n between the th ree se c to rs, lobby ing and s tra te g y used by defense in te r e s ts , the defense co n tract award process, e t c . — i t was necessary to determ ine: (1) who had relev an t inform ation; (2) of those in d iv id u als w ith inform ation, which ones were a c c e ssib le ; (3) which in d iv id u als were most lik e ly , or w illin g , to provide inform ation; and (4) which respondents were lik e ly to give candid and o b jectiv e inform ation. With respect to the p riv a te se c to r, only the la rg e st defense co n tra cto rs were considered fo r interview purposes. U tiliz in g the Department of D efense's l i s t of the Top 100 C ontractors, a l i s t of those companies w ith f a c i l i t i e s and/or corporate o ffic e s in Los 3. Charles M orrissey, "On Oral H istory Interview ing," in Lewis A. Dexter, E lite and S pecialized Interview ing (Evanston: Northwestern U niversity Press, 1970), p. 118. Angeles County, was made. From corporate re p o rts, stock market data, and "p riv ate in v e s tig a tin g ," a number of in d iv id u als in various cor porate p o sitio n s were id e n tifie d as p o te n tia l interview ees. Indi viduals serving in s ig n ific a n t decision-making and leadership p o sitio n s were s p e c ific a lly sought, e .g ., corporate executives, vice p resid en ts, tre a su re rs , and c o n tra ct and procurement o f f ic e r s . A fter the i n i t i a l l i s t of p o te n tia l interview ees was drawn up, the author received suggestions fo r ad d itio n al interview s from individuals representing various backgrounds: professors of business management, independent business co n su ltan ts, professional a sso c iatio n s, other business executives, personal frien d s with contacts in and out of defense, and o th e rs. Many of the names they recommended also were 4 added to the interview l i s t . To assure a rep re se n ta tiv e sampling of viewpoints, the author selected executives of the "big th ree" in defense co n tracts fo r Los Angeles County: Lockheed, McDonnell- Douglas, and North American. Personnel from other companies in the Top 100 also were included; fo r example, a major subcontractor (G a rre tt), and a company prim arily engaged in non aero-defense sales and production (Westinghouse). Once the prelim inary l i s t was com p leted , ind iv id u als with both experience and in te ra c tio n with members of the public se c to r were given primary co n sid eratio n ; these included re p re se n ta tiv e s of "governmental a f f a ir s re la tio n s d iv is io n s ," A, A dditional respondents were added as the interview s were being conducted. For a p a r tia l l i s t of the respondents, see the Appendix. 33 “m ilita ry defense s a l e s ," "n eg o tatio n s," and marketing. Sim ilar l i s t s of p o te n tia l interview ees were drawn up fo r the public and th ird se c to rs. The author found th a t i t usually was e a s ie r to determine whom to interview in the public se c to r simply by v irtu e of th e ir elected or public p o sitio n and r e s p o n s ib ilitie s . At the fed eral le v el, U.S. congressmen and s t a f f personnel (f ie ld rep re se n ta tiv e s and ad m in istrativ e a s s is ta n ts ) , Department of Defense o f f ic ia ls , m ilitary and c iv ilia n procurement o ff ic e rs , and various executive branch o f f i c i a l s and co nsultants were considered e ss e n tia l to th is study and received primary co n sideration fo r interview s. A l i s t of a l l U.S. congressmen (past and present, 1953-1971) rep resen tin g Los Angeles County was made, and interview s were re quested. As Table 1 i l l u s t r a t e s , s ix were interviewed personally by the author. Congressman Barry Goldwater, J r . consented to an in te r view, but was h o sp italized on the scheduled d a te . Three of fiv e o th er congressmen, who had agreed to an interview i f th e ir schedules perm itted, had th e ir top Los Angeles aide respond because of other commitments. F in a lly , th ree congressmen e ith e r did not wish to grant an interview or pleaded ignorance on the su b jec t.^ Aside from George Brown, former Los Angeles congressmen e ith e r were not a ccessib le, had relo cated , o r were deceased. At the s ta te lev el, various elected o f f ic ia ls and members of th e ir s t a f f s were interview ed. Interview s a t the local lev el included 5. See fo r example the l e t t e r from Congressman Sm ith's secretary found in the Appendix. 34 TABLE 1 N U M B ER A N D TYPES INTERVIEWED: March 1971 - August 1972 PRIVATE SECTOR (Part Time to F ull Time Corporate Lobbyists)* Vice P residents in Los Angeles--------------------------------------------4 Vice P resid en ts in Washington-------------------------------- 1 M ilitary Sales-M arketing-----------------------------------------------------6 Research and Development------------------------------------------------------2 R etired M ilitary O ffice rs---------------------------------------------------- 2 D irector Level---------------------------------------------------------------------- 2 Defense Related Business C onsultants------------------------------------------ 2 Nondefense Lobbyists-------------------------------------------------------------------^6 su b to tal 25 PUBLIC SECTOR Federal Congressmen--------------------------------------------------------------------------- 6 Congressional S ta f f------------------------------------------------------------ 10 Department of Defense O ffice of the S ecretary-------------------------------------------------3 Contract A dm inistration-------------------------------------------------3 Procurement-——- —- —- — ------------------------ —- —2 Active Duty M ilitary O ffice rs---------------------------------------3 Other Executive Branch O f f ic ia ls ------------------------------ -2 su b to tal 29 S tate and Local City Councilmen---------------------------------------------------------------------2 S ta ff-------------------------------------------------------------------------------2 Mayor --------—----------—- — --------- —-----—- —1 Staff.------------------------------------------------------------------------------ 3 S tate L e g isla to r------------------------------------------------------------------- 1 S ta f f — --------------------------------------------------------------------------- 10 Governor---------------------------------------------------------------------------------1 S ta f f -------------------------------------------------------------------------— -4 su b to tal 24 *Note: As discussed in Chapter 6 the defense companies in Los Angeles do not have an individual who serves as “the" company lo b b y ist. Instead, lobbying is done by many high level executives on a s lid in g scale of p a rt time to f u l l tim e. Since the f u ll time lo b b y ists re sid e in Washington, access to th is group was lim ited . 35 TABLE 1 (continued) THIRD SECTOR Academia — ------------- 4 Business C onsultants (Nondefense)— ------------------------- 4 Research I n s titu tio n s --------------- 4 Labor—------------------------ —----------- 5 Chamber of Commerce-----------------------------—-------------------------------- -—4 su b to ta l 21 TOTAL 99 36 c ity councilman, various c ity and county o f f i c i a l s , and s t a f f personnel. G enerally, members of th is group f e l t th a t they had l i t t l e Information of value to co n trib u te, but, unlike those congress men who held a sim ila r opinion, they were w illin g to be interview ed. The th ird se c to r of interview ees included in d ividuals involved in academic and research p u rsu its, management and business co nsultants, re p re se n ta tiv e s of various c iv ic o rg anizations, and labor lead ers. In p a rtic u la r th is group consisted of respondents from the Los Angeles Area Chamber of Commerce, the R A N D Corporation, and the Southern C alifo rn ia Arms Control and Foreign Policy Seminar, pro fe sso rs a t the U niversity of Southern C alifo rn ia, the U niversity of C alifo rn ia, Los Angeles, and o ther u n iv e rs itie s and colleges in the s ta te ; and re p re se n ta tiv e s of organized labor. The th ird se c to r was considered e ss e n tia l because i t provided a means fo r v a lid a tin g the responses of the members of the o ther two groups, and i t also pro vided a means fo r obtaining inform ation and opinions from community leaders and a c ti v is ts who were e ith e r d ir e c tly or in d ire c tly involved in the defense co n tract process. No c le a r-c u t p a tte rn emerged in regard to the degree of a c c e ssi b i l i t y o r responsiveness of respondents from the various se c to rs. Generally, in the p riv a te and th ird se c to rs there was l i t t l e d i f f i c u lty in obtaining an appointment with the desired individual and/or h is a s s is ta n t. However, arranging meetings with several of the congressmen interviewed was q u ite d i f f i c u l t because of th e ir o th er commitments and th e ir long-term absences from Los Angeles. A fter d ilig e n t e f f o r ts to interview the respondents, i t was rewarding to 37 find many members of a l l th ree sec to rs providing candid, responsive, and h elpful inform ation to someone they had never met. Problems. S olutions, and Methods Upon completion of an interview , i t is e s s e n tia l to determine to the extent p o ssib le the v a lid ity of the statem ents made by the in te r viewee. Although i t is im possible to a sc e rta in the exact degree of tr u th or o b je c tiv ity of the responses, a general assessment can usually be conducted. D isto rtio n is one of the major dangers to the accuracy of an interview . William F. Whyte o ffe rs the following suggestions fo r avoiding d is to r tio n : ( l) compare the responses of each informant w ith o ther interview s and sources of inform ation,6 (2) obtain some knowledge of the respondent's background to determine his r e l i a b i l i t y as an accurate observer,^ and (3) remember th a t the "in fo rm an t's statem ent rep resen ts merely the perception of the in formant, f i l t e r e d and modified by h is cognitive and emotional re - g actio n s and reported through h is personal verbal usages." Paul L azarsfeld has w ritte n th a t an interview er must understand what he wants to know and then make sure th a t h is respondents provide 9 the c o rre ct answers. This author found th a t even when the interview er 6. William F. Whyte, "Interview ing in F ield Research," in Human O rganization Research, ed. Richard N. Adams and Jack J . P reiss (Homewood, 111.: The Dorsey P ress, In c ., 1960), p. 362-365. 7. Ib id . 8. John P. Dean and William T. Whyte, "How Do You Know The Informant Is T elling The Truth?" in Lewis A. Dexter, E lite and Specialized Interview ing, p. 120. 9. Paul L azarsfeld, "The Art of Asking Why," in Public Opinion and Propaganda, ed. Daniel Katz (New York: Dryden P ress, 1954, p. 682. knows what he is a f te r , i t can be d i f f i c u l t a t times to obtain a l l the answers th a t he needs. This is due mainly to two reasons. The f i r s t is the time fa c to r . When interview ing corporate execu tiv e s , congressmen, and h ig h -lev el o f f i c i a l s , one is ra re ly given more than an hour to conduct the interview . If the respondent s t a r t s to ramble on about something, i t takes a great deal of ta c t, proper tim ing, and a sense of "d o -it-n o w ," on the p a rt of the interview er to guide the conversation back to the su b je c t. Secondly, there is the problem fo r a high-ranking o f f i c i a l of discussing c e r ta in topics with a to ta l stra n g e r. He has to determine several th in g s: w ill h is remarks be held c o n fid e n tia l; w ill they be taken out of context; should he be tr u th f u l, or perhaps o ff e r responses th a t sound proper; and, f in a lly , should he t e l l the interview er what should or ought to be, instead of "what is?" Various scholars have concluded th a t people may never answer what they tru ly think, but instead attem pt to answer what they think you mean, or what you want to hear. What causes th is , and why is i t so d i f f i c u l t fo r a person to give d ir e c t and honest answers? Kahn and Cannel m aintain th a t we have developed h ab its of reactin g to one another in such a way as to make the so c ia l process very d i f f i c u l t and complex. This is "man's methods of defending him self against the p o s s ib ility of being made to look rid icu lo u s o r i n a d e q u a t e . O b v i o u s l y interview ers wish to appear knowledge able and i n te llig e n t. Therefore, they learn to a n tic ip a te what w ill 10. Kahn and Cannell, p. 6. 39 be asked, and in t h e ir a n tic ip a tio n may not re a lly hear the question, or may hear or perceive only what they wish to.** Perhaps th ere is some type of " f ilte r in g system" located in the b rain which blocks o ff u n p leasan tries and o ther m atters th a t are perceived as harmful to our psyche. To overcome th is p o te n tia l problem, the author tr ie d to convey to every respondent a t the beginning of each interview —and throughout the interview , as w ell—th a t unless so s ta te d , the in form ation received would not be associated w ith him personally, or with the in s titu tio n or organization he represented. I t was in te r e stin g to discover th a t, in some cases, these same assurances had to be extended to the interv iew ee's s e c re ta ry . Since the author was dealing with a very co n tro v ersial su b ject, one of the " b a rrie rs " placed before him was s e c re ta rie s , who had to be convinced (a t le a s t ta lk in g to them over the telephone) th a t he was not a "Ralph Nader," or a "ra d ica l an ti-estab lish m en t hippie ty p e ," or a member of the 12 p ress. The l ite r a tu r e on interview ing is abundant and d iv erse with resp ect to scope and method. However, most everyone in the f ie ld is in agreement on one p o in t: there are too many people conducting 11. See P lato , The Republic, tra n s . Francis MacDonald Cornford (New York: Oxford U niversity P ress, 1967), "The Allegory of the Cave," p p .227-235; and Walter Lippmann, Public Opinion (New York: The Free Press, 1922). 12. Fcr an in te re s tin g account of the b a rrie rs present see Robert Townsend, Up The O rganization (New York: A lfred A. Knopf, Inc.) p. 31. 4 0 interview s (from m an -in -th e-street types, to one hour in-depth interview s with senators and corporate executives, e tc .) and too many instances in which the confidence and anonymity of the respond- 13 ent is broken e ith e r by design or accid en t. In cases where the author was able to e s ta b lis h good rapport, the respondents reported th a t they were constan tly barraged by req u ests fo r interview s. One aerospace executive said : "Any w ritte n request from someone out of s ta te , or from somebody I don’t know, i s f i l e d —in the waste basket I" Another respondent said : "I get req u ests from th ird graders to f u l l professors fo r interview s. Generally I have someone r e fe r said req u ests to o ther people, or t e l l the person: sorry, w e're busy." Therefore, the author tr ie d to convey to the p o te n tia l interview ee th a t: (1) he had useful and needed Inform ation, (2) the interview would not exceed 30-40 minutes, (3) h is anonymity would be respected, and (4) he had been highly recommended by h is colleagues and other interview ees. Anonymous Research. Brief mention is made here of the pros and cons of anonymous interview ing. The primary "pro" in th is type of interview ing is q u ite simple, without i t th ere would not have been very many interview s! A m ajority of th e respondents in th is study in siste d upon anonymity, and several went so f a r as to say th a t they would deny th a t they had ever been interviewed i f quoted by name. Another "pro" cen ters around th is a u th o r's in tu itio n th a t 13. See Lewis A. Dexter, "The Good Will of Important People: More on the Jeopardy of the In terv iew ," Public Opinion Q uarterly. XXVII (Spring, 1964), 556-563. 41 anonymity encourages s tr a ig h t forward answers to se n s itiv e questions and issu e s. For example, several hig h -lev el respondents, a f te r being reassured of anonymity, were very open to s p e c ific questions and ad d itio n al probing about th e ir own p o sitio n and/or profession which could prove both embarrassing and damaging to th e ir careers if they were id e n tifie d by name. An anonymous interview perm its a corporate or public o f f ic ia l a chance to express h is " re a l" opinions and perhaps get a "load o ff h is c h e s t." The major drawback, or "con", to th is type of research a ris e s from the issue of c r e d i t i b i l i t y . The reader must accept statem ents th a t are made by a " re lia b le source," or a "very high o f f i c i a l . " All too o ften , news re p o rts, journal a r t i c l e s , and d is s e rta tio n s id e n tify an "informed source" with a c o n tro v ersial or questionable piece of inform ation. Obviously, the r e l i a b i l i t y of the inform ation depends upon the r e p o r te r 's in te g r ity , ra th e r than upon an id e n tifia b le source who would be su b ject to debate or questioning. P rofessor Dexter contends th a t i t helps to have people open 14 doors fo r you when you are try in g to conduct interview s. With resp ect to obtaining interview s with activ e members of the p riv a te se c to r, and r e tir e d members of the public arena, D ex ter's view was found to be accurate. There is a major p i t f a l l th a t one may en counter in using th is technique: i t is p o ssib le th a t once the f i r s t door has been opened, and the respondent may have the key to o th er 14. Dexter, E lite and Specialized Interview ing, pp.32-36. 42 doors, Che problem of a "stacked deck" or too many people with the same a ttitu d e s , ideas and answers may r e s u lt. To avoid th is , the author used a v ariety of individuals as "door openers"—e .g ., college p ro fesso rs, business co n su ltan ts from non-aerospace back grounds, p o litic a l p arty notables of d iff e r e n t philosophies, and 15 o th e rs. Another handicap to e ffe c tiv e interview ing can be the in te r viewer him self; fo r he may possess the same idiosyncracies, b iases, value judgements, and predetermined "co rrect answers" as the r e spondent. There is much debate in the l ite r a tu r e on the importance of the in te rv ie w er's p e rso n ality . Several scholars have concluded: " . . . t h e p e rso n ality of the interview er is a t or near the heart of the problem of the i n t e r v i e w . I n the view of many, perhaps the most important components of p erso n ality are empathy and an o b jectiv e a ttitu d e . Others contend th a t stra te g y ta c tic s , and proper technique, are as important or more important than in sig h t, under standing, and rap p o rt. One group of s o c ia l s c ie n tis ts has sta te d 15. I t was found th a t a l i t t l e name dropping as to important people already interview ed—e sp e c ia lly people who were of a d iff e r e n t philosophy, p arty , o r corporation—helped in arranging ad d itio n al interview s. Perhaps th is was because the person f e l t th a t h is "10 cents worth" should be heard in order to balance the "o p p o sitio n ." I t also helps the interview er to be nice to s e c re ta rie s , and make them fe e l important by le ttin g them know how much the interview er would ap preciate an interview . 16. Walter Bingham, e t a l . . p. 51. 43 th a t although one obviously needs some degree of ta c t and empathy, these a ttr ib u te s are not th a t important nor are they the only means fo r successful interview ing. More important is the use of common sense, concentration on obtaining accurate inform ation, and probing fo r ad d itio n al inform ation.*^ Although Raymond Gorden s tre s s e s the need fo r the interview er to emphasize, he does so p rim arily in order to " se le c t the techniques and ta c tic s most appropriate to 18 the circum stances." He concludes: "An e x ce lle n t interview er need not conform to the popular image of a pleasing p e rso n ality . The sparkling p e rso n ality is sometimes a valuable a sse t in making the i n i t i a l contact or g e ttin g in the door, but the same q u a litie s might in te rfe re w ith communication by s te a lin g a tte n tio n from the respondent. With respect to th is study, the author found th a t a t times he had to ad ju st h is own p e rso n ality to obtain a meaningful interview . In many cases, respondents were somewhat h e sita n t to "open up" and provide candid inform ation. When th is occurred, the author tr ie d to p ro je c t an image of both understanding and accepting the so -called re a l world of p o litic s , i . e ., a system of personal re la tio n s h ip s, checks and balances, fav o rs, f l e x i b i l i t y , and compromise. In 17. See Hyman e£ a l . , pp.282-293. 18. Gorden, p. 27. 19. Ibid. 44 ad d itio n , the interview er should ask him self: "Would 1 be w illin g to answer a l l of these questions i f I were being interviewed under the same conditions?" If the answer is negative, then the interview e r should not be too su rp rised if the responses are vague, d is to rte d , or b rie f, and e ffe c tiv e ly discourage ad d itio n a l probing and d is cussion. Retaining the Inform ation. There are several o ther problems an interview er may encounter. If more than two in-depth interview s are conducted in one day, the problem of fa tig u e and boredom may se t in. The obvious so lu tio n to th is problem is to lim it the number of interview s to two per day and, i f p o ssib le, schedule both before lunch. However, when interview ing congressmen and business execu tiv e s , one cannot be p a r tic u la r as to the time and place of the interview . A second problem is how to record th e inform ation being given. The main problem fo r the interview er who uses a tape recorder is 20 the time th a t must be allo cated fo r tra n scrib in g a taped interview . The author employed a tape recorder on sev eral occasions and found th a t most respondents did not mind being "on ta p e ," or the presence of a microphone. Note taking is a second method av ailab le to the interview er. The main problem is deciding when to take notes and when to lis te n in order to get the f u ll context of the response. G enerally, note taking proved more advantageous than tape recording 20. To tra n sc rib e a one hour tape, allow four to seven hours. 45 because of the time fa c to r mentioned above and because of the fa c t th a t several aerospace firm s did not allow recorders inside th e ir b u ild in g s. Lewis Dexter*s observation about "most United S tates e l i t e interview ees expect notes to be ta k e n .. .rap id recording, plus a look of i n t e r e s t . . . " by the interview er proved to be a p p li- 21 cable to th is study. Some interview ers fe e l th a t pure lis te n in g is the best technique because the interview er is fre e from the d is tra c tio n s of a tape re corder or rapid note taking, which can prevent him from hearing everything th a t was sa id . However, th is author found th a t note taking was the most conducive to objective re p o rtin g . Because if an interview er f a i l s to take notes, or to employ a tape recorder, he may discover a f te r the interview th a t he remembers only those things th a t he "thought" the respondent had said , or those comments th a t tend to support h is own opinions. The Q uestionnaire Two s e ts of qu estio n n aires were made, one fo r respondents of the p riv a te sec to r and one fo r members of the public sec to r (see Appendix fo r the actu al q u e stio n s). With respect to the th ird se c to r, questions were drawn from both questionnaires and submitted to the respondents. The f i r s t sec tio n of both questionnaires centered around the personal a ttitu d e of the respondent with respect to the need fo r n atio n al s e c u rity and the amount required fo r annual 21. Dexter, E lite and S pecialized Interview ing, pp. 56-57. 46 defense budgets. These questions were asked in order to b e tte r understand the in terv iew ee's basic frame of reference on the su b ject of defense. In ad d itio n , i t was f e l t th a t the more probing and fa c t finding type questions should be asked la te r in the interview . This was done in order to le t the respondent relax and gain some degree of confidence in the interview er. Members of the p riv a te sec to r were then asked to respond to questions concerning th e ir respective company, the co n tract award process, methods used fo r obtaining c o n tra c ts, and lobbying in general. In ad d itio n to the above, public se c to r respondents, e sp e c ially members of the congressional group, were asked to comment on th e ir c o n stitu e n ts , outside pressure, defense and non-defense lobbying techniques. All three secto rs were asked to explain who has the influence in the co n tract award process. Although these questions were d ir e c t and ra th e r b lunt, none of the respondents objected to them, nor did anyone fe e l th a t they were loaded or u n fa ir. In fa c t when asked a f te r the interview to comment on the question n a ire , several interview ees maintained th a t they p referred d ire c t questions of th is type and actu ally enjoyed "fie ld in g " so -called " p o litic a l" or p o te n tia lly "embarrassing" questions. Conclusion In conclusion, interview ing can produce very p o sitiv e r e s u lts fo r obtaining inform ation from d ecision makers and many p a rtic ip a n ts involved in the su b ject under in v e stig a tio n ; an opportunity to check and/or te s t ideas, concepts, and processes th a t are found in the 47 lite r a tu r e or in d a ily conversation; and, as one w rite r te rs e ly 22 concluded, interview ing o ffe rs us a "so cio lo g ical digging to o l." The primary b e n efits th is author gained from conducting n in ety - nine in-depth and b rie f/in fo rm a l interview s were: (1) obtaining in formation from people who played a d ire c t ro le in the defense con tr a c t process; (2) te s tin g th is inform ation with o ther sources— i . e . . books, public records, newspaper a r t i c l e s , o th er respondents, and o th er sources of inform ation; (3) a b e tte r understanding of the p o litic a l arena and the many fa c to rs th a t make up our complex system; and (4) an opportunity to in te ra c t w ith a group of individu a ls who made policy, placed and/or received demands upon the system, and who, fo r b e tte r or worse, were involved in the re a l world of p o litic s and policy execution. The reader should bear in mind th a t interview s, lik e any other research to o l, are not in f a l l i b l e . Raymond Gorden o ffe rs an ex cellen t observation: "The in te llig e n t in terv iew er r e a liz e s th a t interview ing can never be a magical process by which the 't r u t h , the whole tru th , and nothing but the tr u t h ' can be e f f ic ie n tly ex tracted 23 from any respondent." To minimize the problems of d is to rte d and misleading inform ation and, consequently, fa u lty g e n eraliz a tio n s, i t was necessary fo r the author to interview re p re se n ta tiv e s of many 22. P eter K. Manning, "Problems in In te rp re tin g Interview D ata," Sociology and Social Research| X V (April 1967), p. 309. 23. Gorden, p. 365. Also see John P. Robinson, Je rro ld G. Rusk, and Kendra B. Head, Measures of P o litic a l A ttitu d e s (Ann Arbor, Michigan: Survey Research Center, I n s titu te fo r Social Research, The U niversity of Michigan, 1969), pp. 14-15. 48 d if f e r e n t in s titu tio n s , o rg anizations, and backgrounds. Each respondent's answers were compared and analyzed both during and a f te r the interview s, with those of o ther respondents in order to te s t the objectiveness of each interview ee. If a question arose as to the v a lid ity of a p a rtic u la r response, e ith e r a follow-up interview took place, or o ther respondents were asked to comment on the statem ent in question. CHAPTER II I THE POLITICAL A N D ECONOM IC SETTING The primary purpose of th is chapter is to explore the p o litic s and economics of defense spending as i t r e la te s to Los Angeles County. This e n ta ils a d iscu ssio n of why the County was a major re c ip ie n t of annual Department of Defense procurement awards, the ro le of p riv ate e n te rp rise in the production of weapons systems, the ro le of the County's congressional d elegation in the defense co n tract award pro cess, and p e rtin e n t local p o litic a l and economic c h a r a c te ris tic s which i l l u s t r a t e the o v erall impact of defense co n tracts on the County. To c le a rly understand the extent of th is impact, i t is f i r s t necessary to understand the economic ram ificatio n s of defense spend ing at the n ational lev el and to examine b r ie f ly the re la tio n sh ip between the federal government and p riv a te in dustry. The Economics of Defense Spending Whenever large sums of money are spent on a p a rtic u la r item, be i t education, p o llu tio n c o n tro l, urban renewal, or w elfare, some in d iv id u als and groups w ill c r i t i c i z e both the purpose and the expendi tu re s , while others w ill defend and/or support them. Such is the case with defense expenditures, as the following examples show. The la te C. Wright M ills contended th a t large defense expendi tu re s in the United S tates were maintained by a m ilita r y -in d u s tria l complex. M ills believed th a t a "conspiracy" b u ilt upon money and power was responsible fo r creatin g the m ilita r y -in d u s tria l complex 49 50 during World War I I . His explanation of the continuating power and influence of th is group following the war was sim ple: The coming to g eth er of the corporations and the m ilita ry was most d ram atically revealed in th e ir agreement upon the tim ing and the ru le s of "recon v ersio n ." The m ilita ry might lose power; the corporations would no longer produce under the prime co n tracts they held; reconversion, i f not handled c a re fu lly , could e a s ily d is tu rb th e p a tte rn s of monopoly p re v a ilin g before war production began. The generals and the d o lla r-a -y e a r executives saw to i t th a t th is did not happen. 1 In a somewhat sim ila r vein, a respondent who was a vigorous pro ponent of p riv a te e n te rp ris e s ta te d : "The major aerospace companies are merely an extension of th e government, and they accept th is con cep t. The government s e ts the c r i t e r i a , q u a lity c o n tro l, inspections, e tc . This extension enables the government to pay higher s a la r ie s 2 and get men to work fo r the government." Another p riv a te se c to r interviewee added: Aerospace and defense firm s do not think in terms of the commercial world, instead they expect the government to put up the money even fo r nondefense re la te d p ro je c ts . For example, a t a recent community meeting a Hughes A irc ra ft executive remarked th a t h is company would develop a rapid tra n s p o rta tio n system, once the government put up the money. And a former high lev el government o f f i c i a l remarked: 1. C. Wright M ills, The Power E lite (New York: Oxford U niversity Press, 1956), p. 213. 2. Also see John Kenneth G albraith, "The Role of M ilitary Power," in National P r i o r i t i e s : M ilita ry , Economics and S o cial, William Proxmire et a l . (Washington, O.C.: Public A ffa irs P ress, 1969), p. 117. 51 A fter World War II th ere was a sp ecial e f fo rt to m aintain defense oriented companies. These companies were asked how much business do you need in order to stay a liv e . If too many companies go under, then the defense base becomes narrowed, if th is r e s u lts what happens i f an emergency develops? In 1970, Deputy S ecretary of Defense David Packard, who before h is appointment headed a major defense c o n tra cto r, said to a corporate audience: L e t's face i t - the fa c t is th a t th ere has been bad management of many defense programs in the p a st. W e spend b illio n s of the taxpayers d o lla rs ; sometimes we spend i t badly. Part of th is is due to basic un c e r ta in tie s in the defense b u s in e s s .. .However, most of i t has been due to bad management, both in the Department of Defense and in the defense in d u s tr y ... Overruns are the end product of our m ista k e s... 3 Packard also stated th a t the Department of Defense was "led down the garden path on so p h istica te d systems th a t you ^ c o n tr a c to r s promised would do a l l kinds of th ings fo r some o p tim istic c o st. Too frequently we have been wrong in lis te n in g to you, and more frequently you have been unable to d e liv e r on e ith e r of these promises - what i t would 4 do or what i t would c o s t." And f in a lly , in 1971, the Senate Armed Services Committee, ra re ly a c r i t i c of the Pentagon, issued the following statem ent: "The e le c tro n ic s package in some types of new m ilitary a ir c r a f t w ill alone weigh two or more tons and cost several m illion d o lla r s ; at over $1,000 per pound; th is is about twice as 3. David Packard, "Dinner Address," Defense Management Journal, XIV (Summer 1970), p. 61. (Address given in Los Angeles, August 20, 1970). 4. Ib id .. p. 62. 52 ..5 c o stly as gold. On the o ther hand, others contended th a t the need fo r national se c u rity was the primary reason fo r high defense budgets, and fo r the close re la tio n sh ip between the m ilita ry and in d u stry . Proponents of large defense expenditures reason th a t th is is a world of power- seeking men, who use th e ir nation, and/or p o litic a l, s o c ia l, or economic philosophies to o b tain power, by force if necessary; th e re fo re, the strong defense posture th a t is necessary to preserve the independence of th is nation co sts (and is worth) b illio n s of d o lla rs annually.^ However, the money th a t is spent does not only produce a superior m ilita ry and weapons systems fo rce; the fie ld s of medicine, science, a g ric u ltu re , industry, and research and development also b en efit from annual defense expenditures. For example, Henry S. Rowen, a former p resid en t of Rand Corporation once wrote: "the m ilita ry serv ices perform a l i t t l e noticed but q u ite large educational and tra in in g function fo r so c ie ty ."^ Rowen pointed out th a t the m ilita ry tr a in s people in e le c tro n ic s , mechanics, management, and 5. Quoted by Robert Keatley and Richard J . Levine, "Increasing Complexity of Weapons Worries Some U.S. S tr a t e g is ts ," The Wall S treet Journal, December 27, 1971, p. 1. 6. See Senator Margaret Chase Smith, "Defense Spending: Changing A ttitu d e s ," Defense Management Jo u rn a l.XIV (Winter 1970), pp. 2-5. Senator Smith c ite d a remark once made by George Washington: "There is nothing so lik e ly to produce peace as to be well pre pared to meet an enemy." 7. Henry S. Rowen, "Defense and the Economy," in American Defense Policy, ed. A ssociates in P o litic a l Science, U.S.A.F. Academy (Baltimore: The Johns Hopkins P ress, 1965), p. 126. 53 o ther professions th a t b e n efit the c iv ilia n s e c to r. He also argued th a t the annual defense budget s ta b iliz e s the economy and decreases swings in the business cy cles, pointing out th a t "the reduction in g defense spending in 1953 helped to worsen the 1953-54 re c essio n ." In 1970, Robert Moot, A ssista n t S ecretary of Defense, contended th a t the budget of th e Department of Defense had undergone a s i g n i f i cant reduction since f is c a l 1969, but at the same time adm itting th a t the defense budget fo r f is c a l 1971 would t o t a l more than the combined sale s of the fiv e la rg e st in d u s tria l corporations and th a t the Department of Defense would employ over four m illio n people, ex ceeding the combined employment of America's twenty la rg e st corpor- 9 at i ons. The Role of P riv ate E n terp rise P rio r to the World War II , the United S tates did not provide government support to p riv a te arms companies, as was th e p ra c tic e in Western E u r o p e . I n s t e a d the Army operated i t s own arsen als and the Navy i t s own shipyards. One author has concluded th a t "except fo r a irp la n es th ere was almost no size a b le peace-time weapons procurement in the nation."** However, during the war, ordnance (tanks, tru ck s, guns, ammunition, e t c .) was produced in the midwest and east by the 8. Ib id .. p. 127. 9. See Robert C. Moot, "The Defense Budget," Defense Management Journal. XIV (Spring 1970), pp. 14-19. (In 1969, the Department of Defense employed more people than the t h i r t y la rg e st corpor a tio n s .) 10. John C. Tompkins, The Weapons of World War I I I (Garden City, N .J.J Doubleday and Co., In c ., 1966), p. 247. 54 automobile, machine, and metal work in d u s trie s . By the 1960's approximately 98 percent of ordance production in the United S tates was being done by p riv a te e n te rp ris e , and about 92 percent of the a irc ra ft-a e ro sp a c e industry was dependent upon defense c o n tra c ts. In ad dition, 60 percent of American shipbuilding, 36 percent of the e le c tr ic a l equipment industry (radio and o th er communications-related in d u s trie s ), and 10 percent of the iron and s te e l fab ricated metals 12 in d u strie s were dependent upon defense expenditures. G eographically, c e r ta in s ta te s experienced a s ig n ific a n t change in th e ir ro le as defense m anufacturers. For example, Michigan, Ohio, I l l i n o i s , Indiana, and Pennsylvania lo s t up to 35 percent of th e ir defense co n tract business between the mid 1940's and the 1960's. C alifo rn ia, on the o ther hand, re g iste re d a dramatic gain in defense co n tract a llo c a tio n s , going from 8.7 percent of the business during 13 World War I I , to an average of 21 percent in the 1960's. 11. Ib id . (noted on previous page) 12. Figures from J u liu s Dusha, Arms. Money, and P o litic s (New York: Ives Washburn, In c ., 1965), p. 74; and Murray L. Weidenbaum, "Defense Expenditures and the Domestic Economy," in Defense Management, ed. Stephen Enke, (Englewood C liff s , New Jersey: P ren tice H all, In c ., 1967), pp. 47-48. 13. See Tompkins, Chapter 18, and fo r sp e c ific inform ation on regional defense m anufacturing; see Roger Bolton, Defense Purchases and Regional Growth (Washington, D.C.: The Brookings I n s titu tio n , 1966); and Murray L. Weidenbaum, "Defense Expendi tu re s and the Domestic Economy," in Defense Management, ed. Stephen Enke. 55 For the p ast t h i r t y years, th ere have been l i t e r a l l y hundreds of defense co n tracto rs p a rtic ip a tin g in the production of weapons systems* The companies th a t receive the most a tte n tio n are , of course, the major co n tra cto rs, fo r they are the ones th a t get the i n i t i a l m u lti- m illio n d o lla r c o n tra c ts. However, th e re are many companies c l a s s i fied as subcontractors th a t also get m illio n -d o llar-an d -u p c o n tra c ts. These companies may be in d u s tria l g ia n ts with a d iv isio n sp e c ia liz in g in defen se-m ilitary s a le s , or small to medium-size companies th a t obtain defense work from o rig in a l award winners w ith p rio r approval by the Department of Defense. Since the 1950's, approximately 70 percent of a l l prime defense c o n tra cts have gone to one hundred corporations and in s titu tio n s . However, with defense needs o ften being highly te ch n ica l, complex, sp ec ia liz ed , and "b u re au c ra tic ," only a few corporations are ab le, or want, to provide the s c ie n tis ts and engineers needed fo r research, development, design, and in d u s tria l knowhow. Many of the companies c u rre n tly doing business w ith the Department of Defense have been urged (and consequently subsidized) by the Department of Defense to b u ild sp ecialized f a c i l i t i e s , and to purchase and/or use tech n ical 14 equipment. Therefore, th is small number of companies th a t receive most of th e ir business from the government are experienced in working with and accepting the fr u s tr a tio n s of b u reau cratic "red tape" 14. Apparently th is arrangement does not always work to the taxpay e r 's b e n e fit. The General Accounting O ffice issued a rep o rt in 1968 s ta tin g th a t "a number of companies improperly used govern ment machinery fo r p riv a te commercial production or had c o stly government equipment in s ta lle d which was unnecessary fo r the job 56 (complex and d e ta ile d re g u la tio n s, s p e c ific a tio n s , and rig id proce d u re). This author was to ld by several nondefense business executives and co n su ltan ts th a t working with or fo r the government is "pure h e l l ." One respondent sta te d th a t "they w ill have a thousand-page re g u la tio n and sp e c ific a tio n s book fo r a small component, and the p r o f it s tin k s b esid es!" Therefore, contrary to the b e lie f , held by some, th a t a few s e le c t companies have a monopoly on defense co n tracts many p o te n tia l Department of Defense customers in Los Angeles County did not wish to p a r tic ip a te in the com petition fo r c o n tra c ts. On the o th er hand, as long as the Department of Defense continues to spend up to one-half or more of i t s annual budget on purchases of m aterials and serv ices from the p riv a te s e c to r, many large and small companies and in s titu tio n s w ill seek defense c o n tra c ts, and i t is in te re s tin g to note th a t the p riv a te s e c to r 's "share" has not changed much since the e arly 1950's. For example, in 1953 the defense budget was $44 b illio n , of which $23 b illio n went to the p riv a te s e c to r. In 1968 the defense budget was $75 b illio n , and $39 b illio n went to the n a tio n 's corporations and in s titu tio n s . It should be pointed out th a t the g iant corporations of America do not dominate the defense market. As Table 2 i l l u s t r a t e s , in f is c a l 1965 the corporations with a sse ts of less than $1 b illio n , received the la rg e st share of defense c o n tra c ts. Of those 27 firm s with a ss e ts of $1 b i l l i o n or more, defense co n tracts accounted fo r less a t hand." From Robert L. Jackson, "21 Firms Named as Misusing U.S. D evices," Los Angeles Times. January 6, 1968, P art I, p. 8. 57 TABLE 2 SIZE DISTRIBUTION OF M AJOR DEFENSE CONTRACTORS, FISCAL 1965 Asset Size Number of Companies Percent Share of Defense Contracts $1,000,000,000 and o v e r ......... ............ .. 17% $ 250,000,000 to $999,000,000 ........... 39 Under $250,000,000 11 Nonprofit In s titu tio n s ............................ 2 100 69% Source: U.S., Congress. Senate. Subcommittee on A n titru st and Monopoly of the Committee on Ju d ic ia ry . Competition in Defense Procurement. 90th Cong., 2nd s e s s ., 1967, p. 16, than 25 percent of t h e i r to ta l s a le s , and in most cases i t was le ss than 10 p ercent. Of those companies with $250 m illio n to $999 m illio n in a s s e ts , only th ir te e n had over 25 percent of t h e ir sale s from defense, and of th is group, only s ix had over 50 percent. In the 1970's the trend fo r many of the major co n tra cto rs has been one of d iv e r s if ic a tio n , and, consequently, much le ss dependence upon de fense c o n tra cts and o th er government work. Los Angeles County: The Economic S ettin g During World War I I , Los Angeles County became a major in d u s tria l cen ter fo r the defense e f f o r t . Numerous companies manufactured weapons systems; small components of these systems; in d iv id u ally o rien ted weapons and supplies such as r i f l e s , communications, and v eh icu lar p a rts ; and o ther basic components v ita l to the functioning 58 of a complex and tech n ical war machine. A fter the war, the County continued to be a p rin c ip a l cen ter fo r developing and manufacturing defense re la te d equipment and su p p lies. As the 1950's and 1960's emerged, the County's defense in d u strie s expanded not only in physical siz e and production c a p a b ility , but also in terms of th e ir labor fo rce , tech n ical e x p ertise , and dependence upon the continuation of several b i l l i o n d o lla rs in co n tract awards per year.*'* The large labor pool was e ss e n tia l fo r the e ffe c tiv e output of Department of Defense requirem ents, and i t caused a "rip p le e ffe c t" throughout many segments of the County's economy, in local governmental serv ices (e .g .. p o lice, schools, and highways), and of course in p o l i t i c s . In a d d itio n to i t s emergence as a major cen ter of defense re la te d industry during and a f te r World War II , the author selected Los Angeles County as the subject fo r th is study fo r several more sp e c ific reasons. Since the Korean War C alifo rn ia has been the leading re c ip ie n t of prime defense c o n tra cts and, as Table 3 i l l u s t r a t e s , Los Angeles was the major re c ip ie n t of those awarded w ithin the s ta t e . Because Los Angeles received as much as $3 b i l l i o n per year in c o n tra cts, the companies located th e re had a vested in te r e s t in m aintaining th e ir large s lic e of the defense p ie . On the b asis of these and other 15. The labor force included such d iv erse elements as engineers (trad e school train ed to P h .D .'s), s c ie n tis ts with various tech n ical and a n a ly tic a l a b i l i t i e s , economists, accountants, and numerous ind iv id u als with managerial and tra in in g backgrounds in production, personnel, labor re la tio n s , procurement, public re la tio n s , law, marketing, and s a le s . 59 TABLE 3 PRIME DEFENSE CON TRA CT A W A R D S TO CALIFORNIA A N D LOS ANGELES COUNTY, 1951-1972. C alifo rn ia F iscal Year Amount (in thousands) Percent of U.S. 1951 $3,897,915 13.2 1952 4,907,845 12.8 1953 4,161,835 15.4 1954 2,761,574 26.0 1955 2,813,676 20.1 1956 3,311,203 20.1 1957 3,381,927 18.8 1958 4,457,666 21.4 1959 5,282,659 24.0 1960 4,839,252 23.7 1961 5,276,760 23.9 1962 5,993,244 23.9 1963 5,835,670 23.1 1964 5,100,650 21.0 1965 5,153,639 22.1 1966 5,813,078 18.3 1967 6,688,812 17.9 1968 6,471,875 17.4 1969 6,824,493 19.4 1970 5,823,799 19.6 1971 5,292,653 18.5 1972 6,015,505 18.7 Los Angeles Percent of C alifo rn ia 1951 to 1966 Information not av ailab le 1967 2,984,854 44.8 1968 2,885,000 44.6 1969 2,990,520 44.1 1970 2,636,630 45.5 1971 2,615,130 49.4 1972 3,206,000 53.3 Source: U. S. Department of Defense. 60 fa c to rs , the author concluded th a t the County would be re p re se n ta tiv e of the nation a t large with respect to the su b ject of lobbying fo r defense c o n tra cts. A second reason fo r se le c tin g Los Angeles County was th a t many of the key p a rtic ip a n ts in the defense co n tract award process e ith e r resided in, or commuted frequently to Los Angeles and, th e re fo re , were accessib le fo r in-depth interview s. Among the key acto rs in the co n tract process were executives of several of the n a tio n 's la rg e st defense companies, a fifteen-member congressional d elegation, c iv ilia n and m ilita ry o ffic e rs with the Department of Defense, former p re s id e n tia l appointees, re tir e d m ilita ry o f f ic e r s , labor leaders, and local and s ta t e p o litic ia n s . F in a lly , the County was a convenient lab o rato ry , and well-known to the author, whose graduate work was done in Los Angeles and who had d ir e c t access to some of the key p a rtic ip a n ts and frien d sh ip s with people who knew others involved or fa m ilia r w ith the defense c o n tra ct award process. Los Angeles County Defense C o n tractors. Los Angeles County has the la rg e st concentration of major defense co n tra cto rs in the n atio n . The following companies e ith e r have t h e i r headquarters and/or s ig n ific a n t p lan t f a c i l i t i e s located in the County* McDonnell- Douglas, Lockheed A irc ra ft, North American Rockwell, Westinghouse E le c tric , Hughes A irc ra ft, General Dynamics, Honeywell, Northrop, Uniroyal, L itto n In d u strie s, Standard O il, Texaco, TR W and Signal. Throughout the period under study, these corporations were usually 61 among the n a tio n 's "top 50" defense co n tracto rs each year. In 1958, Lockheed, North American, Douglas (merged w ith McDonnell in 1968), Hughes, General Dynamics, McDonnell, Northrop, and Westinghouse were in the top 20. In 1968, McDonnell Douglas, Lockheed, North American, Hughes, General Dynamics, and Northrop were in the top 21, And in 1970, Lockheed, McDonnell Douglas, North American Rockwell (merged with Rockwell in 1969), L itto n , Hughes, General Dynamics, Westing house, and Honeywell were in the top 20. These defense co n tracto rs are located in a l l p a rts of the County: For example, McDonnell Douglas is located in Long Beach and Santa Monica; North American Rockwell has p lan ts in Downey, El Segundo, and Los Angeles; and Lockheed is in Burbank. The defense c o n tracto rs employed l i t e r a l l y thousands of workers during the period under study, and although no data e x ists with respect to the number of employees who worked s p e c ific a lly on defense re la te d c o n tra cts, Figure 5 shows the estim ated number of aerospace and defense re la te d jobs in the Los Angeles-Long Beach area fo r 1952 through 1972. Figure 5 also shows the employment peak of 1966-1969, the s ig n ific a n t decline since 1970, and Los Angeles' major share of the e n tire C alifo rn ia aerospace-defense labor force. As mentioned e a r l i e r , C alifo rn ia (because of Los Angeles) was the leading re c ip ie n t of prime co n tracts awarded by the Department of Defense. For example, during the 1960's C alifornia never received le ss than 17 percent of the e n tire prime co n tracts awarded on an annual b a sis . And from f is c a l 1961 through f is c a l 1965, C alifo rn ia 62 FIGURE 5 ESTIMATED N U M B ER OF W A G E A N D SALARY W O RK ERS IN LOS ANGELES-LONG BEA CH AREA A N D CALIFORNIA AEROSPACE A N D DEFENSE INDUSTRIES, 1952-72 Employees (in thousands) C alifo rn ia Los Angeles- Long Beach 1952 53 54 55 56 Source: Aerospace Employment: C alifo rn ia and Areas (Sacramento: C alifo rn ia Department of In d u s tria l R elations, 1971), p. 1 and 3. And S ecurity P a c ific Bank, Los Angeles, Research Department• 63 averaged approximately 23 percent of a l l Department of Defense prime c o n tra c ts, or about $5,5 b illio n per y e a r ,16 Many people may wonder why a s ta t e with approximately 10 percent of the n a tio n 's population o fte n received 20 percent or more of the defense co n tract awards, and why Los Angeles County became the major m etropolitan cen ter fo r defense re la te d production. Several reasons have been offered: (1) Thomas C, Werbe, J r . , a former Deputy A ssistan t Secretary of Defense, in a l e t t e r (dated Ju ly 15, 1960) to Congressman David King (Democrat, Utah) sta te d w ith respect to the unprecedented and expand ing volume of prime co n tract awards to C alifo rn ia th a t th is was: ...p r im a r ily a product of the upward trend in m ilita ry procurement of a i r c r a f t , m issile s, a sso c i ated e le c tro n ic s , and re la te d research and develop ment work, and the existence in C alifo rn ia of sub s t a n t i a l research, development and production f a c i l i t i e s th a t are able to compete su ccessfu lly fo r t h i s work. 17 (2) The emphasis on science and technological education at the various branches of the U niversity of C alifo rn ia, C alifo rn ia I n s titu te of Technology, Stanford U niversity, and the U niversity of Southern C alifo rn ia produced a highly s k ille d group from which to draw. (3) Several aerospace executives to ld th is w rite r th a t C alifo rn ia, e sp e c ia lly the Los Angeles area, had ideal weather conditions fo r the 16. During the la te 1960's C a lifo rn ia 's share f e l l to about 19 percent of the market, and i t received approximately $5.2 b i llio n in c o n tra cts per year. 17. Found in James L. Clayton, "Defense Spending: Key to C a lifo rn ia 's Growth," in Components of Defense Policy, ed. Davis B. Bobrow (Chicago: Rand McNally and Co., 1965), pp. 179-180. 64 past t h i r t y years fo r f li g h t te s tin g , and th e re was open land av ailab le fo r large defense oriented co rp o ratio n s. (4) The Department of D efense's policy in the 1950's of rewarding many c o n tra cts to a sin g le prime co n tracto r favored large a i r c r a f t firm s located in the County. (5) Some believe th a t because of the many re tir e d m ilitary o ffic e rs working fo r Los Angeles defense c o n tracto rs w ith th e ir assumed "co n tracts" in the Pentagon, th a t Los Angeles County and X 3 C alifo rn ia were a n a tu ra l choice fo r c o n tra c ts . (6) A congression al f ie ld deputy contended th a t Los Angeles County received i t s con tr a c ts because of one sp e c ific reason: "we have the f a c i l i t i e s . " (7) An executive of North American said th a t "the award procedure has been based upon Los Angeles' equal or b e tte r tech n ical e f f o r t ," and a McDonnell-Douglas o f f ic ia l reported th a t " i t ' s equal or lower cost th a t makes Los Angeles co n tra cto rs so su c c e ssfu l." Most p riv a te sec to r respondents stre sse d the fa c t th a t the Los Angeles area had q u a lifie d companies with experience, e x p e rtise , good management and labor, and an a b ility to get the job done. And (8) Professor James Clayton offered the follow ing conclusion as to why C alifo rn ia (with Los Angeles County receiv in g up to 61 percent of the s t a t e 's to ta l) ranked number one in defense s a le s : . . . i t was n e ith e r 'p o l i t i c s ' nor piracy but an in e v ita b le process of expansion reinforced by competent leadership which has made C alifo rn ia the defense industry colossus of the n a tio n ... the C alifo rn ia in d u s tria l base was best prepared 18. See Clayton, p. 181. Chapters 6 and 7 of th is d is s e r ta tio n go in to some d e ta il as to the amount of influence re tire d m ilita ry o ff ic e rs had in the defense c o n tra ct award process. 65 to accept th is increased em phasis.. .and c re d it must also be given to C a lifo rn ia 's a le r t and progressive management, research, and tech n ical personnel en gaged in defense production fo r t h e ir e f f o r ts in meeting th is new and v ita lly important management challenge. 19 F iscal Impact Upon Los Angeles County. During the 1950's and u n til approximately mid 1967 the Los Angeles defense industry was f a i r l y sta b le , with employment generally increasing on a yearly b a sis . However, fo r the next four years the industry was in a downward swing, and approximately 74,000 aerospace and defense workers lo st th e ir jobs. This represented a 21 percent drop in employment in three years, and had a considerable impact upon o v erall employment in the County. In 1971 in p a r tic u la r , unemployment fig u res fo r the Los Angeles-Long Beach m etropolitan area averaged 9.3 percent, a much higher fig u re 20 than the national average. The defense in d u s try 's loss of co n tracts and i t s basic vulner a b i l i t y —the source of much of th is unemployment (see decline in Figure 5 )—may be a ttrib u te d to four fa c to rs : (1) The Nixon A d m in istratio n 's p ro p o rtio n ally lower defense budgets fo r the 1970's; (2) A sluggish economy and unstable corporate p r o f its from 1968 to 1972; (3) The in a b ility of nondefense companies to absorb many d is placed defense workers; and (4) a lack of d iv e rs ific a tio n among many of the la rg e st defense c o n tra c to rs. 19. Ib id . 20. U.S., Department of Labor, Bureau of Labor S ta t i s t i c s , Geographic P ro file of Employment and Unemployment, 1971, p. 18. I t must be emphasized th a t unemployment fig u res are based upon 50,000 sample surveys, and th e re fo re subject to e rro r. (Technically, 66 With the defense in dustry employing close to 12 percent of the t o t a l c iv ilia n labor foce and about 40 percent of a l l manufacturing employees in the Los Angeles-Long Beach area since 1960, i t should be obvious why County (and s ta te ) p o litic ia n s , businessmen, union leaders and average c itiz e n s sought to : (1) c u r ta il any sudden loss in de fense employment; (2) m aintain large defense budgets; and (3) m aintain large co n tract awards to local co n tracto rs fo r the period under 21 study, and, of course, in the immediate fu tu re . Without a s ta b le and viable defense industry, the o verall f is c a l impact upon the County was severe as evidenced by the following a r t i c le s found in the Los Angeles Times: (1) "The Aerospace Jobless Seek Work Abroad" (November 20, 1970); (2) "Defense Should Get P r io rity , P oll Shows" (June 17, 1971); (3) "Defense Cuts Hurt Black Capitalism" (December 13, 1970); (4) "Defense Firms Told to Convert or Suffer" (September 24, 1970); and (5) S tate Program Aids Attempts to Place 22 Aerospace Jo b less" (August 27, 1970). However, i t is in te re stin g the Bureau of Labor S ta t i s t i c s recorded the Los Angeles-Long Beach unemployment at 8.9% to 9.7%). For d e fin itio n s of unem ployment, and fo r inform ation on the methods and procedures used by C alifo rn ia to make estim ates of employment and unemployment, see How C alifo rn ia Measures Employment and Unemployment (Sacra mento: C alifo rn ia Department of Human Resources and Development, 1972), pp. 1-5. 21. For ad d itio n al data on defense employment, defense expenditures, and leading in d u s trie s in Los Angeles, see Security P a c ific Bank, The Southern C alifo rn ia Report: A Study of Growth and Economic S ta tu r e . (Los Angeles: March 1970), Exhibit number 27, 80 and 99. 22. S ecurity P a c ific Bank recen tly concluded: "There are no in dica tio n s in the forseeable fu tu re th a t (previous) heights can be regained" in the aerospace-defense in dustry. See S ecurity P aci f ic Bank, "The Aerospace Industry in Southern C a lifo rn ia ," in 67 to note th a t the dependence on defense is not new. One author s a r c a s tic a lly wrote: The sto ry is to ld of Rosie the Rivetor, working in a West Coast shipyard in World War I I , who, during a luncheon break, expressed decided reserv a tio n s about the then Pope. When challenged, she explained th a t she and a l l her fam ily had been unemployed fo r years, u n til the defense boom had suddenly provided them with w ell-paying jobs. She said she found i t hard to under stand how the Pope, who was supposed to be a good C h ristian , could be praying rig h t out in public fo r peace. 23 In clo sin g , the economic s e ttin g of Los Angeles County perhaps can best be illu s tr a te d by u t iliz in g the following front-page headlines from the Los Angeles Herald Examiner and the Los Angeles Times (P lates I and I I ) . Los Angeles County: The P o li tic a l S etting C alifo rn ia p o litic s have long been ch aracterized as chaotic, unpredictable, and beyond reasonable a n aly sis. Life magazine once labeled C alifo rn ia "The Land of Looney Schemes and P o litic a l 2a Extremes." Much of the in s t a b i l i t y is a ttrib u te d to the s t a t e 's population explosion—from about 5.7 m illio n people in 1930 to approximately 20 m illio n by 1970. Los Angeles County's population Monthly Summary of Business Conditions (Los Angeles: February 1973), p. 4. 23. From Emile Benoit, "A ltern ativ es to Defense P roduction," in Disarmament and the Economy, e d s., Emil Benoit and Kenneth Boulding (New York: Harper and Row, 1963), p. 76. 24. Found in Bernard L. Hyink, Seyorn Brown, Ernest W . Thacker, P o litic s and Government in C alifo rn ia (New York: Thomas Y. Crowell Co., 1967), p. 54. O n Voting Foulup — — Story in Cols. 4-5 — 1 £burt Suit Filed ssstJrtj; m m m United Press International • A ssociated Press • ' Dow Jo n is C lA SStfW ABVK TtSIN CIM w w J K I H : A l O ll»r Ccfc IM h im 4 H J 1 1 «r I M m r i VOL C NO. 71 FRIDAY, JUNE 5, 1970 * PRICE TEN CENTS ' S U N S E T RACE RESULTS C O M PLETE ST O C K S BILLION LA. JOB Award to North American U.S. Goal 200 New Super-Jets By PAT SLOYAN - t f » U I x i w l t f W M tiM N t WASHINGTON — North American. Rockwell's Los Angeles division was named today as ijrime con- tractoroMhcBlA bomber, a new strategic manned aircraft that raay evejrtuaJ- ly cost ?12 billion.. The decfekm to select North Amen can over Boeing Co. and General Dynamks was confirm ed by the office of Sen. George Morphy. K*CaUr.t ;efter disca* CHICAGO (UPI>— A federal court Jnry Frld^r found ‘10 aobwar protesters guilty - of T ) H 10 Guilty of Ransacking Draft Board ■ " v - * NiiniTfjiirr i ~ i UCtA— expUxtoe bomb'ipfdleAittd ttoad$$ V * ROTC room in West lo t Angrier Page A$ ** * . JH LA VUffA-^A ipolr of UC atetotfr (A Soafa -Sar-'^ 1 ~- • :f e a r a b r o k e windotu aadsetoaatlftresiPogeA ^i,^ i ' ^ jnry with- only iev eir b f/jh e ■ defendants hi Jhe-coitrt^DDm. r h HotoM jarw s ihaltfireeA WOL q q L L U SE ST CIK U U TIO N IN Wt WUt. 1B&I Mlir. IJI7420 WNOil 7 4 PAGES VOL. IXXXIX fOUK PARTS— PART ONE SATURDAY MORNING, JUNE 6 , 1970 DAILY W , w » ________ * " AUENS.AT tSSUE I « I P I Vhflfrnaidg X £ M \ N. American ProjectMigfft Lead to Additional $12 Billion BT JAMES FLANIGAN nwM wmr A J v tH - * ' 5 - - ^ bomber caUed Brl. The contract 1b the first step oT ivpragraiB th a f oraldf j lead eventually to more than 112 billion wohh of business. The victory means that North ' — " ■ ''■ * gundo headquarters and aircraft plant. Hiring on B-l ’ will commence I I l H M l l g l l U l j p i g i p the a i of 1972 when work on the time 4 * ~ •rt, =«*k -*^‘ e—sv^-jaa& fRrZ-: SM Sflg^EJ?* — 'M . & Plate II 70 went from 2.2 m illio n in 1930 to over 7 m illio n by 1970. P o litic a l commentator Theodore H. White made a very in te re stin g observation which perhaps is too o ften overlooked by many o ther p o litic a l obser vers of C alifo rn ia : The S ta te 's rapid "growth has resu lted in one of the most triumphant dem onstrations of American democratic achieve- 25 m e n t...." White went on to s ta t e : ...n o o ther p o l i t i c a l community in the world has undergone so v io len t a population explosion in so short a period of time and sim ultaneously provided great schools fo r i t s ch ild ren , great roads fo r i t s cars, good houses, s h e lte r , h o s p ita ls, and u n iv e rsi t i e s fo r a l l who need them w hile, throughout the up heaval, always preserving the d ig n itie s of law and order in freedom. I t is remarkable th a t th ere is any s t a b i l i t y at a l l to th is vast community of quivering, inrushing, ever-changing system of human atom s." 26 The p o litic a l p arty s tru c tu re went through several eventful p erio d s. Around the beginning of the century the p a rtie s were domin ated by sp ecial in te r e s t groups th a t were considered "sin fu l" by a reform group known as P rogressives, headed by Hiram Johnson. In 1910, Johnson became governor, and he tr ie d to destroy p o litic a l 27 p a rtisan sh ip in the s t a t e . This contributed in large p art to the p a rtie s becoming ill-o rg a n iz e d , impotent, and o ften based upon inform a l a llia n c e s b u ilt around the p e rso n ality of a candidate ra th e r than 25. Theodore H. White, The Making of the P resident 1964 (New York: Atheneum P u b lish ers, 1965), p. 116. 26. Ib id . 27. For a more in-depth d iscu ssio n of the Progressive legacy, see Eugene P. Dvorin and Arthur J . Misner (e d s .), C alifo rn ia P o litic s and P o lic ie s (Palo A lto, C alifo rn ia : Addison-Wesley Publishing Co., 1966), pp. 15-27. 71 an e ffe c tiv e p arty org an izatio n . During the 1950's and 1960's , i t is iro n ic to note th a t in te re s t group influence, which the reform ers sought to destroy, was very much a p a rt of the C alifo rn ia p o litic a l s e ttin g . Without strong and viable p o litic a l p a rtie s to tap fo r large campaign funds, many p o litic ia n s 28 accepted large co n trib u tio n s from sp ecial in te r e s t s . Hence, most of the elected o f f i c i a l s who represented Los Angeles County were re c ip ie n ts of large sums of money (and in many cases "volunteer" work such as p re c in ct walking, telephone banks, e t c .) from various components of the Los Angeles defense in te r e s t, and many nondefense businesses, in s titu tio n s , and o th er in te r e s ts . Hence, the defense in te r e s t and prodefense c o n stitu e n ts both demanded and expected th e ir elected o f f i c i a l s , e sp e c ia lly congressmen who were considered more re p re se n ta tiv e (and fa m ilia r) of a p a r tic u la r c o n tra cto r than a U.S. Senator or Governor, to look out fo r the defense in te r e s t in Washington. City councilmen, mayors, and o th er elected o f f ic ia ls w ithin the County were a lso expected to express a prodefense "philosophy" in t h e i r public announcements, re so lu tio n s, open l e t t e r s to federal d ecisio n makers, and p o litic a l rh e to ric . In ad d itio n , the same support was g en erally expected of the le g is la to r s who represented the 28. Although the p a rtie s contributed to t h e i r can d id ates' campaign funds, a large and widely dispersed population o ften made i t d i f f i c u l t fo r the p arty to provide an e ffe c tiv e p o litic a l war c h est. Congressional d i s t r i c t races have cost over $600,000 and even S ta te Assembly primary races have cost over $100,000 which are well beyond p arty c o ffe rs . 72 County in the S tate C apitol, and of course th e governor and h is s t a f f . However, s ta t e and lo cal o f f ic ia ls were not subjected to nearly the amount of pressure th a t congressmen got, nor were they perceived by the p riv a te se c to r as major p a rtic ip a n ts in the defense co n tra ct award process. Therefore, the remaining po rtio n of th is sec tio n w ill focus upon the Los Angeles congressional d eleg atio n . The Los Angeles Congressional Delegation As Table 4 i l l u s t r a t e s , every member of the deleg atio n had a t le a s t one defense co n tra cto r in his d i s t r i c t , and a m ajority of the members represented a prime c o n tracto r, fo r example, Congressman Bell (North American Rockwell and TRW), Corman (L itto n and North American Rockwell), Clawson (North American Rockwell and A erojet G eneral), Goldwater (Lockheed), and Rees (Hughes and Bendix). Therefore, i t was assumed th a t the voting records and perceptions of congressmen would serve as useful sources of data to i l l u s t r a t e the importance defense c o n tra cts had on an area lik e Los Angeles County. In order to emphasize the impact defense can have on a given community and i t s p o litic ia n s , the follow ing comments are offered from both the l i t e r a tu re and interview s. Congressman Jamie L. Whitten (Democrat, M ississippi) once s ta te d : "W e have reached the point where the tenure of o ffic e of a congressman or senator is co n tro lled to a g reat degree by how many 29 defense c o n tra cts he may get back in h is own a re a ." 29. Found in J u liu s Dusha, Arms, Money and P o litic s (New York: Ives Washburn, In c ., 1965), p. 14. City (Congressman) TABLE 4 PRIVATE DEFENSE FIRMS IN LOS ANGELES Name of Company C O U N TY Employment Range Product Azusa (Wiggins) General Tire & Rubber Co. Aerojet-General Corporation 1000-4999 M issile components 6 c Research Burbank (Goldvater) Bendix Corporation Lockheed A irc ra ft Corp., Lockheed-California Co. Textron, In c., Bell Aerospace Corp., Hydraulic Research & Mfg. 100-499 5000 6 c over Not Available (N.A.) A irc ra ft Services A irc ra ft, m issiles A irc ra ft Components Canoga Park (Corman) Hughes A irc ra ft Corp., M issile Systems D ivision L itto n In d u stries In c., Guidance & Control Systems D ivision North American A viation, Inc. N.A. 100-499 1000-4999 M issiles E lectronics Nuclear Reactors Source: The congressional Q uarterly, Weekly Report (May 24, 1968), pp. 1168-1171; and Economic Conversion in C alifo rn ia. A Progress Report of the Jo in t Committee on Economic Conversion, (Sacramento: January 1971), Appendix, B-5 to B-8. Table 4 - Continued City (Congressman) Name of Company Employment Range Product Canoga Park (Corman) North American A viation, In c., Rocketdyne D ivision 5000 & over A irc ra ft fit m issile research, m issile components Cudahy (Clawson) McDonnell-Douglas Corporation, Aircomb D ivision 100-499 A irc ra ft, m issiles Culver City (Rees) Hughes A irc ra ft Co. 5000 fit over Home o ffice Downey (Clawson) General Tire fic Rubber Co., Aerojet-General Corp. North American A viation, Inc. Space fit Information Systems D ivision 1000-4999 5000 fit over Explosives, m issile components M issiles, spacecraft El Monte (Wiggins) General Tire fit Rubber Co., Space-General Corp. 100-499 E lectronics El Segundo (Bell) Hughes A irc ra ft Corp., El Segundo D ivision Hughes A irc ra ft Corp., Space Systems D ivision 1000-4999 1000-4999 M issile components M issile components fit research, communica tio n s equipment Glendale (Smith) General P recisio n Equipment Corp., Librascope Group N.A. M issile component City (Congressman) Table 4 - Continued Name of Company Employment Range Product Hollywood (Rees) Bendix Corp., P a c ific Division 1000-4999 A irc ra ft, m issiles m ilita ry vehicle components Eastman Kodak Co. N.A. M ilitary Photo supplies Long Beach (Hosmer) McDonnell-Douglas Corp., A ircraft D ivision 5000 & over A ircraft Los Angeles (Roybal) Eastman Kodak Co. N.A. M ilitary photo supplies (Rees, GoIdwater, Bell, Anderson, & WiIson) Hughes A irc ra ft Corp., In d u stria l Systems & Electron Dynamics Div. N.A. E lectronics Hughes A irc ra ft Corp., Microwave Tube D ivision N.A. M issile components (Royba1, Corman) ITT-ITT G ilif ilia n Inc. 1000-4999 E lectronics (WiIson, Clawson) Lockheed A irc ra ft Corp., Lockheed E lectronics Co. 100-499 E lectronics (Clawson, H olifield) Norris-Thermador Corp., M ilitary Products D ivision 1000-4999 Ammunition (Goldwater, B ell, Wilson North American Aviation, Inc. 5000 & over A irc ra ft, m issile and Clawson) Los Angeles D ivision components (Roybal) P a c ific A rchitects & Engineers, Inc. { N.A. Engineering re p a ir & u t i l i t y work (Rees, Anderson) Radio Corp. of America 100-499 E lectronics (Anderson) AiResearch Aviation Service Div. 100-499 A irc ra ft services Table 4 - Continued City (Congressman) Name of Company Employment Product ________________________________________________________________________ Range_____________________ Malibu (Bell) Hughes A irc ra ft Co., Research Laboratory 100-499 M issile research Manhattan Beach (Bell) F airch ild H ille r Corp., S tratos Division 100-499 Electronics Monrovia (Wiggins) McDonnell-Douglas Corp., Hycon Mfg. Co. N.A. Radar Palmdale (Goldwater) Northrup Corp., Norair D ivision N.A. A irc ra ft Pomona (Rousselot) General Dynamics Corp., Pomona D ivision 5000 & over E lectronics, m issiles Redondo Beach (Bell) TRW , In c., T R W Systems Group 5000 6 c over Rockets, rocket coi ponents 6 c research San Fernando (Corman) ITT Federal Laboratories Div. 100-499 M issile research Santa Monica (Bell) Lear S ieg ler, Inc. A stronautics Divison McDonnell-Douglas Corp. M issile 6 c Space Systems Div. 100-499 5000 6 c over E lectronics M issiles, space c ra ft components South Pasadena (Rousselot) McDonnell-Douglas Corp., Tridea E lectronics Co. N.A. Radar, e lec tro n ics Torrance (Anderson, Bell) Harvey Aluminum Inc, N.A, Magnavox Co., Torrance Div. N.A. Air Research Aviation Services Div. N.A, Ammunition, rockets Electronics A irc ra ft services Citv (Congressman) Table 4 - Continued Name of Comoany Employment Range Product Van Nuys (Corman) L itto n In d u stries, Inc. Data Systems D ivision 1000-4999 E lectronics Radio Corporation of America 1000-4999 E lectronics W hittier (H olifield) Eastman Kodak Co. N.A. M ilitary photo supplies Textron In c., Accessory Products Co. N.A. A irc ra ft & m issile components 78 R epresentative Ken Hechler (Democrat, West V irg in ia) to ld the House of R epresentatives in 1959: I am firm ly against the kind of lo g ro llin g which would subject our defense program to narrowly se c tio n a l or s e lf is h p u llin g and hauling. But I am g e ttin g p re tty hot under the c o lla r about the way my s ta te of West V irginia is shortchanged in Army, Navy, and A ir Force i n s t a l l a t i o n s . . . ! am going to stand up on my hind legs and ro ar u n til West V irginia g ets the f a i r treatm ent she deserves. In 1968, P resident Johnson spokes at a ro llo u t ceremony fo r the C5A in M arietta, Georgia: "I would have you good fo lk s of Georgia know th a t th ere are a lo t of M arietta, Georgias, sc a tte re d throughout our 50 s t a t e s . . . A l l of them would lik e to have the p ride th a t comes from th is p ro d u c tio n .. .But a l l of them d o n 't have the Georgia d e le- g atio n . Congressman George Brown (one of four re p re se n ta tiv e s who voted ag ain st the 1968 defense budget) stated th a t: "I d o n 't lik e the large emphasis on defense, but I was ju s t as concerned fo r my c o n s titu en ts as anyone e ls e . A ctually I was more concerned w ith poor defense p o lic y . I voted against larg e expenditures, but I was s t i l l fo r 32 reasonable budgets and favored trimming the budget." 30. From Congressional Q uarterly, L e g isla to rs and the Lobbyists (Washington, D. C .: Congressional Q uarterly, In c ., 1968), p. 52. 31. Ib id ., p. 53. Congressional Q uarterly also reported th a t Johnson s p e c if ic a lly c ite d the influence of the Armed Services Committee Chairman Senator R ussell and former R epresentative Vinson of Georgia. 32. Interview with Congressman George Brown, Los Angeles, June 27, 1971. 79 Congressman Thomas Rees s ta te d : " I t ' s a dangerous world. W e cannot have u n ila te r a l disarmament. W e have to be r e a l i s t i c , things are d i f f i c u l t . Although I am a c r i t i c of defense budgets and V ietnam ...I am not against the defense e sta b lish m e n t.. .and I am 33 no le f t wing n u t." Another Los Angeles congressman offered h is reasons as to why he f e l t annual co n tract awards were important to the County: "The people of th is d i s t r i c t go fo r a strong defense p o stu re. Our q uestionnaires show over 60 percent in favor of high defense ex- penses. Now how can I overlook th a t? " With these comments in mind i t was not su rp risin g to find th a t, in general, most incumbent congressmen, and th e ir opponents as w ell, promoted both the Los Angeles defense in te r e s t and th e ir own re sp e c t ive defense accomplishments and e f f o r t s . Therefore, the ty p ical p o litic ia n : (1) a c tiv e ly campaigned on what they had done or would do fo r the d i s t r i c t with resp ect to voting fo r large defense budgets; (2) both demanded and voted fo r new weapons systems; and (3) promoted the q u a lific a tio n s of a p a r tic u la r c o n tra cto r in h is d i s t r i c t . For example, Democratic Congressman James Corman, has a c tiv e ly campaigned on his prodefense record and the things he did fo r defense in te re s ts in h is d i s t r i c t (e .g ., h is voting record on annual defense budgets and 33. Interview w ith Congressman Thomas Rees, Los Angeles, August 11, 1971. 34. Congressman Barry Goldwater, J r . conducted a p o ll in May 1971, and found th a t 35 percent of the re sid e n ts in h is d i s t r i c t f e l t th a t defense spending should be given f i r s t p r io r ity by the fed eral government. 80 weapons systems, and annual small business defense procurement m eetings). However, in the 1970 congressional race, Corman's Republican opponent campaigned on the issue th a t the congressman did not do enough fo r the defense and space workers in the d i s t r i c t . Another example involves Republican Congressman Alphonzo Bell and Barry Goldwater, J r . who represented two of the la rg e st defense co n tra cto rs in the nation, North American Rockwell and Lockheed A ir c r a f t re sp e c tiv e ly . Although Bell and Goldwater, lik e most of the other congressmen from Los Angeles, had "prodefense" voting records, and o ften promoted the co n tracto rs w ithin th e ir d i s t r i c t s , they were subjected to c ritic is m by those claiming th a t they did not do enough fo r defense, and also by those who believed th a t they did too much fo r defense co n tracto rs and defense per se, and not enough fo r o ther in te r e s ts . P o litic a l R eality and Personal Conviction. During th e period under study, Los Angeles County congressmen were, fo r the most p a rt, strong advocates of natio n al s e c u rity and large defense budgets. This "prodefense" stance was su b sta n tia te d by th e ir voting records and th e ir public announcements. As Table 5 i l l u s t r a t e s , only two con g ressio n al respondents believed th a t our past and present defense budgets were "too much." It was in te re stin g to find th a t much of the so -c alle d "antidefense" rh e to ric often a ttrib u te d to Congressmen Brown, Rees, and Roybal was the cre atio n of th e ir opponents. Brown, Rees, and Roybal were not r e a lly antidefense in the sense of a b o lish ing the m ilitia , or d r a s tic a lly c u ttin g the defense budgets. Instead, these th re e would best be described as " f is c a l conservatives" when i t 81 came to defense budgets. In other words, lik e o ther f is c a l conserva tiv e s (e sp ec ia lly th e vocal ones on w elfare and education), they wanted the '‘f a t" trimmed from the defense budgets of the 1960's. TABLE 5 CONGRESSIONAL ATTITUDES O N PAST A N D PRESENT DEFENSE EXPENDITURES Too Much Enough—But Need Enough Not Enough— to Cut Waste Spend More 2 3 5 1 (Both (Two Democrats, (Two Democrats, (Republican) Democrats) One Republican) Three Republicans) With respect to the hypothesis th a t p o litic a l r e a l i t y is as im p o rtan t as personal conviction to congressmen when voting fo r large defense budgets and lobbying fo r c o n tra cts, the following conclusions were reached: F ir s t, in the case of the "antidefense" congressmen, i t appears th a t personal conviction ra th e r than p o litic a l r e a l i t y was the primary reason fo r th e ir voting reco rd s. As Table 6 i l l u s t r a t e s , i t was not u n til the mid 1960's th a t several congressmen began to semi- c o n siste n tly vote ag ain st defense budgets and procurement req u ests. However, the antidefense congressmen might have had a more n eu tral voting record i f th e ir votes had been needed fo r passage of various defense b i l l s , or i f th e ir c o n stitu en ts had been more inclined to be "prodefense" and dependent upon the defense industry fo r employment. Congressman Roybal s ta te d : "I am not the best person to interview because of my d i s t r i c t . I have no ^majo^7 defense in d u strie s in i t TABLE 6 EX A M PLES OF ROLL CALL VOTING B Y LOS ANGELES CO N G RESSM EN CLASSIFIED AS "ANTIDEFENSE" Year B ill Los Angeles Congressmen Total Antidefense Vote Voting Against The in The House of Defense In te re st* R epresentatives 1966 $13.1 b illio n supplemental appropriations fo r Department of Defense, prim arily fo r a ssistan ce to South East Asia Brown (Hawkins, Rees, and Roybal)** 3 1968 $1.8 b illio n fo r m ilitary construction Brown, Rees (Hawkins) 13 $21.6 b illio n fo r m ilita ry pro curement au th o rizatio n , and R & D Brown, Rees, Roybal (Hawkins) 15 1969 $69.9 b illio n Department of Brown, Hawkins, Rees, and 33 Defense appropriation. Roybal $21.3 b illio n Department of Brown, Hawkins, Rees, and 44 Defense procurement au th o ri Roybal zation, and R & D $76 m illion supplementary m ilita ry a ir c r a f t procurement Brown, Hawkins, Rees, and Roybal 21 $1.4 b illio n fo r m ilitary construction Brown, Hawkins, Rees, and Roybal 32 TABLE 6 -C o n tin u ed Year 1970 1971 B ill Los Angeles Congressmen Voting Against The Defense In te re s t. Total Antidefense Vote in The House of R epresentatives $20.2 b illio n fo r m ilitary procurement au th o rizatio n and R & D Brown, Hawkins, Rees and Roybal 69 $19.9 b illio n m ilitary pro curement au th o rizatio n and A B M construction Brown, Roybal (Hawkins) 11 $2 b illio n fo r m ilitary construction Brown, Hawkins, Rees, and Roybal 47 $66.8 b illio n Department of Defense appropriation Brown, Hawkins, Rees and Roybal 31 $71 b illio n Department of Defense appropriation Hawkins, Rees, and Roybal 51 $21 b illio n Department of Defense procurement au th o ri zation Hawkins, Rees, and Roybal 58 Defense procurement authoriza tio n , amendment lim itin g to ta l procurement and R 6c D authoriza tio n to FY 1971 appropriated level Anderson, Corman, Hawkins, Rees, and Roybal 118 TABLE 6'•Continued Year B ill Los Angeles Congressmen Total Antidefense Vote Voting Against The in The House of Defense In te re st R epresentatives 1971 cont. Defense appropriation, amendment d eletin g $802 m illion fo r purchase of F-14 a ir c r a f t Corman, Hawkins, Rees and Roybal 76 Defense appropriation amendment reducing to ta l appropriation by $3.8 b illio n Roybal (Rees) 74 * Years in o ffice fo r the above congressmen: Anderson (1969-), Brown (1963-1971; 1973-), Corman (1961-), Hawkins (1963-), Rees (1967-), and Roybal (1963-). ** Members whose names are in parenthesis generally voted against defense, but in th is case voted fo r defense. Source: Congressional Q uarterly, Congressional Roll Call (Washington, D.C.: The Congressional Q uarterly, In c ., 1972); and Congressional Q uarterly, Congress and the Nation. 1945-1964 and 1964-1969. 85 35 ^ B is tric t7 , but th ere are su b co n tracto rs." Statements lik e th is , and several o th ers from "prodefense" congressmen—e .g ., "the people of th is d i s t r i c t go fo r a strong defense p o stu re ," and "our question n a ire s show over 60 percent in favor of high defense expenses"— in d i cate th a t in Los Angeles much of the p o l i t i c i a n 's "personal conviction" rested upon p o l i t i c a l r e a l i t y . In o ther words, Brown and Roybal would have had a very d i f f i c u l t task in winning o ffic e in d i s t r i c t s which house Lockheed, McDonnell Douglas, or North American Rockwell. Mr. Brown would probably have voted fo r the defense budgets of the 1960's and been a strong champion of co n tracts fo r h is d i s t r i c t if i t had been a prodefense industry d i s t r i c t . This is not th a t speculative when one considers the following remark made by the former Congress man: "I am a proponent of c o lle c tiv e se c u rity , not u n ila te ra l d is armament. And I see the need fo r d e fe n se .. .but I am more fo r reason- 36 able ex p en d itu res." Therefore, with the so -called antidefense conu gressmen o ften coming to bat fo r local co n tra cto rs, i t was not su r p risin g to learn th a t the prodefense congressmen believed th a t help ing defense in d u strie s obtain c o n tra cts was a very important function of th e ir o ff ic e . Second, p o l i t i c a l r e a lity appears to be the primary reason why Los Angeles congressmen were so concerned about the economic impact of p o te n tia l major c o n tra c ts . This concern was not r e s tr ic te d to 35. Interview with Congressman Edward Roybal, Los Angeles, May 11, 1971. Without g e ttin g " in to a deeper, and consequently non- germane d iscu ssio n , i t appears on the surface th a t major "de fense" b i l l s perm itted c e r ta in congressmen to exercise th e ir conviction by voting against defense programs. This was larg ely 86 t h e i r own d i s t r i c t , because of the economic rip p le e ffe c t of a con t r a c t , and the fa c t th a t many c o n stitu e n ts of one d i s t r i c t worked fo r a defense co n tra cto r in a neighboring d i s t r i c t . Hence, i t was found th a t every congressman interview ed, whether he was a " p a c if is t" (as one respondent ch aracterized him self), or an " a ll out hawk" (as another viewed him self), g en erally placed p o litic a l r e a lity above personal conviction when i t came to the subject of g e ttin g co n tracts fo r Los Angeles County and/or h is own d i s t r i c t . And th ir d , although on the surface p o litic a l r e a lity appeared to be more important to the congressmen of the 1950's and 1960's, p er sonal conviction must, in some in stan ces, be given equal b illin g when analyzing defense voting and lobbying. This conclusion is based on the fa c t th a t the vast m ajority of congressional respondents conveyed an image of believing in the concept of a strong America. For ex ample, several congressmen c ite d Pearl Harbor as reason enough fo r a w ell-balanced and su p erio r armed fo rce s; others mentioned the aggressive nature of our enemies; and a l l were aware th a t thousands of jobs depended upon a co n tin u atio n of defense c o n tra c ts . One congressman's response to the question Is your d i s t r i c t too depend ent upon defense re la te d companies? was re p re se n ta tiv e of a l l his colleagues: because of the type of d i s t r i c t s these men represented, and probably more im portant, because th e ir votes were not needed. 36. /Prom previous page7 Interview w ith Congressman Brown. 87 Sure w e're overly dependent upon defense c o n tra cts, but things c a n 't change overnight, and a l l th is reconversion ta lk is ju s t th a t—ta lk ! You c a n 't change over from making airp lan es and m issiles in a m atter of days, i t would take years to switch over to manufacturing nondefense goods such as t r a n s i t systems, p o llu tio n reduction equipment, and o th er so -called domestic n e c e s s itie s . 37 F in a lly , i t is in te re s tin g to note th a t of those congressional respondents who could give a yes or no answer to the question Do your c o n stitu e n ts g en erally endorse your a ttitu d e on defense spending and natio n al s e c u rity ?, seven answered "yes"; no one answered "no"; O O and two had "no id e a." Conclusion During the 1950's and 1960's i t was p o l i t i c a l l y expedient and o ften necessary fo r p o litic ia n s to be strong advocates of natio n al defense. If a p o litic ia n wanted to be elected to a fe d e ra l, s ta te , or local o ff ic e , he ra re ly denounced e x istin g defense budgets or questioned the need fo r a su p erio r fig h tin g fo rce. Even those few who appeared to be an tid efen se were never r e a lly the " tr a ito r s " th e ir prodefense c r i t i c s claim ed. A ntidefense congressmen and p o litic ia n s from Los Angeles g en erally advocated a s lig h t reduction in the Department of Defense budget (perhaps ten percent or at le a s t some "cu ttin g of the f a t " ) , and g re a te r emphasis on o ther p r i o r i t i e s , e sp e c ially the need fo r more money fo r the c i t i e s . 37. The answers to th is question were as follow st 5 "yes"; 2 "no"; 1 "no opinion"; and 3 were not asked the question due to lack of tim e. 38. Two respondents did not answer the question due to a lack of tim e. As w ill be discussed in Chapter 7, a l l the members of th e Los Angeles congressional d eleg atio n found themselves a t one time or another and in varying degrees, e ith e r promoting or looking out fo r a defense re la te d firm w ithin th e ir d i s t r i c t s . The reason fo r th is was simple: the congressmen re a lize d th a t they had to acknowledge and advance the requests of important c o n stitu e n ts i f they wanted to be re -e le c te d . Since every congressman from Los Angeles County had defense co n tra cto rs or subcontractors w ithin h is d i s t r i c t , and numerous c o n stitu e n ts working fo r, or dependent upon th e ir con tr a c to r s , supporting the defense in te r e s t was simply a p a rt of the job of rep resen tin g the in te re s ts of c o n stitu e n ts . The two newspaper advertisem ents on the following pages (P lates I I I and IV) o ffe r an e x ce lle n t summation of the economic and p o litic a l r e a l i t y found in Los Angeles County. Plate III WE ARE OUT OF WORK! You Let Us Down Congressman Jim Corman W HY DID YOU: * Quit your position and seniority on all the important Aerospace Committee * Vote against the B-1 contract—Largest California contract in a decade * Oppose measures to protect American workers from cheap foreign labor Vote against authorization for research and military construction for fiscal year 1971. We Have Had Enough We Are Voting For TOM HAYDEN IN 1970 (S ponsored b y COMMITTEE OF UNEMPLOYED AEROSPACE AND DEFENSE WORKERS) TrfR w cbla IdlefcSk# M a r y C f e a a l a y I — l a f l i i a t a a N a r f t a a D o r f a U M s r y U a c a t i a f 0 — h h S w i m P a u l B r a a o a O w n D o v f a d t s r i a t D . W a l d e n t . O « b # f n a R o y I . O w a c a a t a b M a a r f y M a y S t f c U a a d H o r r y M . W a t f W . L C l a y I . L -lu, SSifEi. T b a a w t I . V a f l i D w i g b t D . M a t a k O a a w a r t f b t i a c k a r M . I U J a A m M u H i H n r y M c N o y I t k i K M t A A a d a e d W l l f l a m T . C a y a a a y H a a w r S . N r t a a a S3SE fife K E & l a b a t f C Z s a H e w e w l l e c * M l t a a f. t a y y a r t T . f a t f l a y J a a a y h D a d Jahn^Mfar S . M . H e r r t o t f J U a m H o r r i a Z 2 £ 5 2 L * . M l. L J . P a y a u r K a l y b O m U I I M n . r — ~ • t k b a r i W . O a a r f a , U. P . H . Q r i d t w a r t f t y W nilem A . C a r a b v m P a d A . Lafax HAYDEN IN 1970 John Wayne Chairman * Gordon Del Faro, Finance Chairman Plate IV 90 A LETTER TO THE FOLLOWING: T in Honorable Spiro Agnew Vice-Pres. of the United States United States Senate Washington, D.C; The Honorable Ronald Reagan Governor of California State Capitol Sacramento, Ca. 95814 President Richard M. Nixon The White House Washington, D.C, The Honorable Melvin R. Laird Secretary of Defense Pentagon, Room 3E880 Washington, D.C. 20501 The Honorable George L.' Murph; 452 Senate Office Building Washington, D.C. The Honorable David Packard Deputy Secretary of Defense Pentagon, Room 3E921 Washington, D.C. 20501 The Honorable Allan Cranston 4241 New Senate Offiee Building Washington, D.C; The Honorable Robert Seamens, Jr. Secretary of the Air Force Pentagon, Room 4E871 Washington, D.C, 20330 The Honorable Samuel Yorty Mayor of Los Angeles, City Hall Los Angeles, California WHERE DID WE FAIL? We did our belt to produce the greatest aircraft on earth. We helped to place men on the moon. We competed with each other for the lait nickel We filled the technology gap* when they exnted. We hired minority employee, without Federal and State help became we needed them and they needed in. We spent our own money on plant equipment to itay modern. Now we are empty shop., reduced to tkeleton crew., little or no backlog, many already bankrupt employen. We are, and were, the mull buuneues that supported the giant aerospace industry in California. We are aware of your need for reduced budget.; *oma cancellation* were necessary. But, i* anyone concerned about our existence or tlie exiitence of the California aerospace industry and the thousand* of jobs it provide*? ALL RECENT PROCUREMENTS HAVE GONE ELSEWHERE: FORT WORTH hai th e. . . F-lll ATLANTA ha. the. . . C-5A SEATTLE ha. the. . . SST NEW YORK baa th e ... F-14 ST. LOUIS ha. th e. . . F-15 Wo often cannot compete on a sub-contract basis in tbese distant places because of sales and skipping expenses. Now, we are about to lose one of tbe giants in our in dustry; a giant that bra recognized, fos tered, and benefited from our existence; a giant that has been a definite measurable link to the strong defense of our country many times in die past We will miss this giant Our hope lies in the last, and what many believe the final major aircraft award for the next ten years— the B-1 Strategic Air craft We hope, and pray, the Defense Depart ment's procurement policy will be made on the basis of technology and perform ance; not upon the accountant directed executive decisions that have plagued the past decade. We would not ask if we did not believe that the best technology is within our area; that the best manufacturing capability lies within our area. ■ We can again build the best aircraft in the world. Most of all, we need your support. This, to assure us that our story is presented truth fully and effectively. Whether or not jour business if related to tssao* facturing, whether jron ere employed or mem- ployed, we believe everyone in California is ef fec ted . We urge yon to participate. Sign copies of thin eolire ad now and tend one copy to each of the above mentioned officials, or to any other official of your choice. Do not delay. Act nook Dated this_______day of_______1970 Citv Sf.t* -Zip----------- Signed, Written and paid for by more than one hundred small businesses ^ CHAPTER IV THE DEFENSE CON TRA CT A W A R D PROCESS Introduction An understanding of the process by which defense co n tracts are awarded is a p re re q u is ite to any adequate study of defense lobbying. The primary purpose of th is chapter is to introduce and describe the formal and informal co n tract award processes hypothesized in Chapter 1. The chapter also discusses the d iff e r e n t types of defense c o n tra cts th a t have evolved over the years, and includes b rie f com ments on the much publicized problem of cost overruns.* As defined in Chapter 1, a co n tract is an agreement, usually le g a lly enforceable, between two or more persons to do something. With respect to defense c o n tra cts, the two p a rtie s generally are the Department of Defense and a p riv a te company. Since the 1950's, defense con tractin g has become q u ite complex, and i t has often r e quired p rofessional n e g o tia to rs whose function is to sim plify and work with the legal and tech n ical verbiage th a t has become id e n tifie d with prime defense c o n tra c ts. Many respondents interviewed fo r th is study maintained th a t entering in to a contract with the government 1. For more in-depth inform ation on co n tracting see Dean F. Pace, Negotation and Management of Defense Contracts (New Yorks John Wiley and Sons, 1970); Clarence H. Danhof, Government Contracting and Technological Change (Washington, D.C.j The Brookings In s titu tio n , 1968); National Contract Management A ssociation, National Contract Management A ssociation Anthology (Inglewood C alifo rn iat National Contract Management A ssociation, 1970); and numerous papers and booklets published by the R A N D Corporation, U.S. Air Force, Department of Defense, and o ther re la te d i n s t i tu tio n s . 92 was very d i f f i c u l t and cumbersome, and as one executive observed: "The red tape and unbelievable sp e c ific a tio n s o ften scared away many q u a lifie d companies from con tractin g w ith the Department of Defense," If drawing up a co n tract was considered complex, winning one, or even try in g to find out about possible c o n tra cts, was o ften con sidered ju s t as d i f f i c u l t and fr u s tr a tin g to many p riv a te secto r re p re se n ta tiv e s. Dean Pace, a former co n tract n eg o tiato r fo r Douglas A irc ra ft, and a le c tu re r at the Defense Contract Management Seminars a t UCLA, concluded: "Both the government and the defense industry should remain d is s a tis f ie d w ith the s ta tu s quo of any con- 2 t r a c t methodology." Pace and several other respondents maintained th a t defense co n tract n eg o tiatio n was a complex a r t which needed new innovations and advances to sim plify a process which has become over ly complex, confusing, and o ften in need of c la r if ic a tio n , both during and a f te r the development of the contracted product. One attem pt at resolving t h is problem was in itia te d in 1959 when the National Contract Management A ssociation (NCM A) was founded in Los Angeles. The o rg a n iz a tio n 's primary purpose is to a s s is t i t s members (rep re sen ta tiv e s of the p riv a te and the public secto rs) in "improving th e ir co n tract management s k i l l s . . .e sta b lis h in g a uniform code of e t h i c s . . . introducing new lite r a tu r e , ideas and improvements in the a r t of co n tract management. . . and providing a forum fo r the in te r- 2. Pace, p. v i i . 93 ..3 change of ideas. The N C M A has over 4,000 members, and publishes a q u a rte rly journal dedicated to co n tract management and n e g o tiatio n . Another attem pt to sim plify co n tract procedures is Congressman James Corman's annual defense co n tract opportunity meetings which are d is cussed in Chapter 6. Types of Contracts P rio r to World War II th ere were two basic types of defense con t r a c t s : The Firm Fixed Price Contract (FFP), which has been in use since the 1930's, req u ires a co n tra cto r to produce a weapon or other 4 item fo r a s p e c ific cost in the c o n tra c t. The Cost Plus a Fixed Fee Contract (CPFF) covers a l l of the c o n tra c to r 's co sts in designing and producing a weapon, and assures him a predetermined p r o f it. There has been a continuing debate fo r many years over the question of which type of co n tract is b e st. The main c ritic is m s of CPFF is the "tendency fo r co sts to e s c a la te ," and the charge th a t th ere are 3, From the N C M A Fact Finder (Inglewood, C alifo rn ia : National Contract Management A ssociation, 1971), p. 1, brochure. Among those serving on the Board of Advisors of N C M A in 1971 were: Lt. General W . Austin Davis, USAF (R et.) V ice-President, North American Rockwell, J . Ronald Fox, A ssista n t Secretary of the Army, J . M . Malloy, Deputy A ssistan t Secretary of Defense, Louis Spector, Commissioner, U.S. Court of Claims, and Harry R. Van Cleve, Regional Council, General Services A dm inistrations. Membership includes many government o f f i c i a l s , which o ffe rs both secto rs an opportunity to in te ra c t a t meetings, through w ritte n a r t i c l e s , and in " l e t t e r s to the e d ito r ." 4. P ro fit is based upon the d ifferen c e between the fixed p ric e and the actu al c o st. Since the 1950's Fixed P rice C ontracts have not been used to any g re a t ex ten t, e sp e c ia lly w ith resp ect to major c o n tra c ts. 94 "few, if any, in cen tiv es fo r the co n tra cto r to a ct e f f ic ie n tly ." ^ I t s c r i t i c s also contend th a t although "CPFF con tractin g has resu lted in the best tech n ical p r o g r e s s .... It has created an environment in which poor cost c o n tro l, underestim ated co stin g , and in e ffic ie n t management may be rewarded by placing a co n tra cto r in the p o sitio n of being the only source capable of performing a major government pro ne gram. Conversely, th e re are many c r i t i c s of FPP, They claim th a t a FPP co n tract does not assure proper performance or success; ra th e r, i t allows a company to do only the minimum necessary to produce the product a t the fixed p ric e . U nfortunately, in many instances where major weapons systems are needed, th ere is a problem of building something th a t has never been b u ilt before. Hence, cost cannot be estim ated accu rately , nor can an exact d eliv ery date be estab lish ed under any type of c o n tra c t.^ 5. Frederick T. Moore, "Incentive C o n tracts," in Defense Management. ed, Stephen Enke (Englewood C lif f s , New Jersey : P ren tice H all, Inc., 1967), p. 215. 6. Thomas E. Bahan, "Fixed Cost C o n tracts," in National Contract Management A ssociation Anthology, p. 63. 7. Lewis E. G oldstein, Member Procurement Committee, Space and M issile Systems O rganization, USAF, Paul F, Weisend, A ssociate Professor Business Management, C alifo rn ia S tate Polytechnic College, and Gerald F. Keeling (see Appendix), were among the members of a panel which also found th a t "actu al c o sts w ill almost in ev itab ly exceed the o rig in a l budget estim ates, so these e s t i mates should not be used as a rig id baselin e fo r maximum cost d eterm ination." Panel Report, Sub-Topic 6.2 S o lic ita tio n and Proposal Process. (Los Angeles: By a p riv a te group, June 17, 1971 —above quote granted fo r th is d is s e r ta tio n p rio r to actu al p u b licatio n of the f in a l re p o rt). 95 Since the war, and e sp e c ially during the 1960's, two ad d itio n al types of defense c o n tra cts have developed Z the Firm Fixed P rice - Incentive Fee Contract and the Cost Plus Incentive Fee C ontract. The former o ffe rs monetary bonuses on top of the fixed p rice i f the con tr a c to r meets the d e liv ery date and performance s p e c ific a tio n s . The l a t t e r covers a l l company c o sts, and again o ffe rs bonuses fo r good performance. Incentive co n tracts involve n eg o tiatio n of a ta rg e t cost (reasonable co st) and p r o f it, which combined make up the "ta rg e t p ric e ." A sharing formula is negotiated which p rescrib es the terms f o r sharing p ossible cost savings between the government and the con t r a c to r . For example, in some cases an "80/20" agreement is made in which any savings are divided, with 80 percent going to the govern ment and 20 percent to the c o n tra c to r. In o th er words, the con tr a c to r can earn an ad d itio n al 20 percent above h is actu al production cost i f the weapons are completed fo r le ss than the o rig in a l ta rg e t p ric e . However, if the co n tracto r cannot meet the ta rg e t p rice and an "over-age" r e s u lts , 'the government absorbs 20 percent, and the c o n tra cto r 80 percent of the a d d itio n a l c o st. Former Secretary of Defense Robert McNamara believed th a t incentive co n tracts saved the taxpayer ten cents fo r every defense d o lla r spent, or almost $1 0 b i llio n per year. 8. See U.S., Congress, Senate, Subcommittee on A n titru st and Mono- poly, Hearings on Competition in Defense Procurement. 90th Congress, 2nd Session, 1968, p. 2, and Frederick T. Moore, p. 214. Like the c r itic is m of CPFF and FFP c o n tra c ts, th a t d irected at incentive c o n tra cts focuses on the areas of e ffic ie n c y , co st, and ta rg e t p ric e . Questions a ris e as to what prevents co n tracto rs from subm itting an in fla te d bid (in terms of ta rg e t p rice) and subsequent ly producing the weapon a t a lower c o st, while claim ing efficien cy ? F urther, can the government re a lly determine the accuracy of a con t r a c t o r 's cost estim ate? In o th er words, can a m u lti-m illio n d o lla r weapons system have a r e a l i s t i c ta rg e t p rice even though i t may not be completed fo r three to fiv e years? In response to th is question, the vast m ajority of the interview ees contended th a t i t was very d i f f i c u l t , if not im possible, to estim ate the actu al co st of a major weapons system. A number of v ariab les prevented many o rig in a l "ta rg e t p ric e s" from being achieved during the period under study. The major v ariab les of the 1950's and 1960's were in fla tio n , ris in g labor c o sts, technological advances which were added to weapons systems during i t s development, and in te rn a tio n a l in cid en ts th a t were unforseen in the i n i t i a l stages of development. The Defense Contract Award Process Competition fo r defense c o n tra cts is very keen and the " o b je c ti- 9 v ity " of the decisions on c o n tra ct awards is su b ject to debate. I t was the view of some interview ees—namely, a c tiv e and re tire d m ili ta ry o f f ic e r s , Department of Defense procurement o ff ic e rs a t the 9. The term " o b je c tiv ity " was chosen to d if f e r e n tia te between p o li t i c a l and n o n p o litic a l decisio n making. Many p riv a te and public se c to r respondents, e sp e c ially Department of Defense personnel and r e tir e d m ilita ry o f f ic e r s , used th is term fo r describing what 97 middle level and most defense company executives—th a t s t r i c t ru le s and re g u la tio n s, in ad d itio n to elab o rate checks and balances, kept p o litic s and fav o ritism out of a l l defense co n tract d e c i s i o n s . F o r lack of a b e tte r term, th is "n o n p o litic a l" and "by-the-book" process is re fe rre d to as the formal co n tract award process. Another view expressed by many respondents - e sp e c ially elected o f f i c i a l s and re p re se n ta tiv e s from academ ia-research, organized labor, and several defense company executives - was th a t many major weapons systems co n tracts were awarded prim arily on the basis of p o litic a l co n sid eratio n s. These "considerations" included the number of votes a p a r tic u la r geographic area could d e liv e r, the economic consequences to an area of winning or losing a major c o n tra c t, and back scratching and lo g ro llin g . I t must be emphasized however, th a t most of the members of th is group contended th a t p o litic s and economics became a p art of the award process only when the competing companies were judged to be equally q u a lifie d . In o ther words, when two or three c o n tra cto rs were considered acceptable to the decisio n makers (m ilita ry e v a lu a to rs), then, and only then, was i t possible fo r p o l i t i c s to become a major fa c to r in the f in a l award. For the a u th o r's purposes, th is process is known as the informal co n tract award process. was behind a defense co n tract d e cisio n . To th is group, an o b je ctiv e d ecisio n was one th a t was honest, f a i r , based upon m erit, and devoid of p o l i t i c s . 10. When probed, interview ees of these groups did (grudgingly) admit th a t some exceptions e x is t . Most noted was the TFX or F - l l l ( a i r c r a f t ) , awarded in 1962 to General Dynamics over Boeingt 98 The Formal C ontract Award Process*'* There are two ways in which the Department of Defense procures V weapons systems, su p p lies, and se rv ic e s. The f i r s t , known as formal a d v ertisin g , accounted fo r approximately 95 percent of a l l government defense c o n tra c ts p r io r to 1941. A fter World War II, Congress en acted the Armed Services Procurement Act of 1947, which s tip u la te s th a t purchases and c o n tra cts fo r supplies and serv ices sh a ll be made 12 by formal a d v ertisin g whenever fe a sib le and p ra c tica b le to do so. However, the act has seventeen "exceptions" which permit the Depart ment of Defense to award a co n tract through n eg o tiatio n , the second method of procurement. The negotiated co n tract is perm issable i f : (l) i t is determined th a t such a ctio n is necessary to p ro te c t the public in te r e s t during a natio n al emergency declared by Congress or the P resid en t; (2) the co n tract is fo r property or serv ices fo r which 11. For a d d itio n a l inform ation on the formal co n tract award process see: A ir Force Regulation No. 70-15 Proposal Evaluation and Source S e le ctio n Procedures. (Washington, D.C.: Department of the A ir Force, May 1968); A ir Force Manual No. 70-10 Source S electio n Procedures. (May 1968); A viation Week and Space Technology Marketing D irectory Issue (annually); Clarence H. Danhof, Government Contracting and Technological Change (Washington D.C.: The Brookings In s titu tio n , 1968); Dean F. Face, N egotiation and Management of Defense C ontracts: U.S., Congress House, S elect Committee on Small Business, Small Business in Government Procurement-Before and A fter Defense Cut backs. 91st Congress 2nd Session, 1970; and Armed Services Procurement Regulations, and Department of Defense D irectiv es (Department of Defense annual p u b lic a tio n s). 12. For a te r s e explanation of th is a c t, and proper c itin g s with resp ect to p rovisions th e re in , see the Statement of Elmer B. S ta a ts, Com ptroller General of th e U.S. in U.S., Congress, Senate Subcommittee on A n titru st and Monopoly, Hearings on Competition in Defense Procurement, pp. 97-107; and Pace, Chapter 2. 99 i t is im practicable to o b tain com petitive b ids; (3) the procurement should not be disclo sed p u b lic ly ; and (4) i t is in the in te re s t of n atio n al defense. Negotiated c o n tra cts accounted fo r approximately 87 percent of a l l defense c o n tra cts awarded during the 1960's. The primary reason fo r the sharp decline in formal advertised contract awards was explained by Comptroller General Elmer B. S taats in h is testimony a t a U.S. Senate Hearing in 1968: Probably the g re a te s t d e te rre n ts to the use of formal ad v ertisin g are the requirements fo r well defined and s ta b le design s p e c ific a tio n s and the complex, highly so p h istica te d nature of weapon systems used in the n a tio n 's d e fe n s e ... Another d e te r r e n t.. . is the lack of enough companies who are able or are w illin g to place themselves in a p o s itio n to bid on the ite m s ...I n a survey we have underway we noted a t one a c tiv ity th a t about one-fourth of the advertised c o n tra cts awarded during a three-month period were awarded to sole bidders. 13 In order fo r the reader to b e tte r understand the two formal c o n tra cts procurement procedures, the basic step s followed in both the adver tis e d and negotiated c o n tra ct processes are described b rie fly below. Advertised C o ntracts. The ad v ertisin g method of procurement general ly is used fo r c o n tra ct re la te d to basic items such as clo th es, lumber, p a in t, and petroleum products. In c o n tra st to major weapons systems, these products are made and supplied by many d iff e r e n t companies. A ty p ic a l adv ertised c o n tra ct is awarded in the following 13. S ta a ts, Hearings on Competition in Defense Procurement, pp.99- 100. S ta a ts also said th ere is an apparent lack of in te r e s t on the p a rt of prospective su p p lie rs in seeking defense c o n tra c ts. This view was a lso expressed by various interview ees (See Chapter 3 ) . If we accept th is as f a c t, then more com petition fo r defense c o n tra c ts, and hence a "spreading" of defense d o lla rs w ill not come to pass in the near fu tu re . manner: ( l) A company thaC wishes to do business with the govern ment w ill fill out a “bidders l i s t , " which req u ires the company to record i t s number of employees, technical c a p a b ilitie s , and areas of s p e c ia liz a tio n . (2) When a branch of the armed forces receives an au th o riz atio n to buy a p a rtic u la r product, i t w ill send out 14 in v ita tio n s to q u a lifie d companies fo r b id s. If a company did not submit a formal “bidders l i s t , " or i t was not informed by the re spective serv ice of the l a t t e r 's in te n t to purchase, i t can consult the Commerce Business Daily, (a Department of Commerce p u b licatio n with a d a ily l i s t of government procurement in v ita tio n s , subcon tra c tin g p o s s i b i l i t i e s , co n tract awards, sale s of surplus property and foreign business o p p o rtu n ities) to discover what items or s e r vices the government needs. (3) In terested companies then submit "quotes" (bids or p ric e s) on the item to the g o v e r n m e n t . (5) The branch of the m ilita ry fo r which the item is being co ntracted, has a "Source S election Panel" th a t evaluates the companies competing fo r the c o n t r a c t . T h e panel analyzes the companies seeking the co n tract 14. There are a c tu a lly two types of advertised methods. For the past ten years "Two-Step Formal A dvertising" has been used. Normal advertised procurement involves request fo r and evalu a tio n of bids, and then an award. Two-Step A dvertising has req u est, evaluation, se le c tiv e request of q u a lifie d companies, renewed submissions and bids, evaluation, and then award. 15. A bid is o f f i c i a l l y defined as an o ffe r submitted in response to an in v ita tio n fo r b id s. This is a tech n ical expression; how ever, i t is used in d a ily procurement jargon. 16. The term "Source S electio n Panel" was chosen to sim plify the more tech n ical terms used by the Air Force, and fu ll-tim e p a r t i cip an ts in the defense procurement process. This term (used henceforth) was offered by Mr. Robert E. Best, Deputy D irector 101 w ith the o b jectiv e of "im p a rtia l, e q u itab le, and comprehensive evaluation of com petitors and th e ir proposals to insure of th a t source which w ill provide optimum s a tis f a c tio n of the government's basic o b jectiv es including the required performance and schedule a t the best co st."* ^ Department of Defense pub licatio n s and in te r viewed procurement o f f i c i a l s point out th a t evaluation is conducted by assigning points to such fa c to rs as the company's management, p ast performance, soundness of approach, q u a lity assurance, and pro duction plans. Whenever p o ssib le, a code number is used in place of the company name to avoid p o ssib le changes of " c o n flic t of in te r e s t , " "payola" and "fa v o ritism ." (6) As the f in a l step in the of Procurement and Production, Space and M issiles Systems O rganization, USAF. Department of Defense reg u latio n s generally r e fe r to the ev aluation bodies as Source S electio n Advisory Council (SSAG), Source S electio n Evaluation Board (SSEB), and Source S electio n A uthority (SSA). The general d e fin itio n fo r source s e le c tio n is "the process wherein the requirem ents, fa c ts recommendations, and government policy relev an t to an award decisio n in a com petitive procurement of a system, subsystem, or p ro je c t are examined and the d ecision made." Components of these e n t i t i e s include: "ad v isers" (government personnel o f f i c ia l ly assigned as p a r tic ip a n ts ) ; "co n su ltan ts" (nongovernment experts to advise in the source se le c tio n p ro cess); a group of sen io r m ilita ry and/or government c iv ilia n s (procurement, re search and development, and lo g is tic s s p e c ia lis ts ) ; and sen io r o ff ic e rs leading up the chain of command to the Secretary of each m ilita ry serv ice , and eventually to the Secretary of Defense. 17. A ir Force Regulation No. 70-15, p. 1. 102 award process the co n tract is assigned to the company judged best q u a lifie d and generally lowest in p ric e . In se le c tin g the lowest bidder, i t is necessary to consider not only fin a n c ia l resources, but also the b id d e r's judgement, s k i l l , in te g rity , and o v erall 18 a b ility to complete the assignment. Negotiated Contract Procedure. Negotiated co n tracts are u su ally employed in the procurement of weapons and more complex and ex- 19 pensive equiment. Negotiated procurement involves the following step s: (1) Proposals are requested from p o te n tia l su p p lie rs. (2) A prelim inary evaluation is made of the design, speed of d e liv ery , c o n tra cto r c a p a b ility , and p ric e . (3) Next, n eg o tiatio n s are con ducted between the government and the co n tracto rs who "pass" the i n i t i a l evaluation. The n eg o tiatio n s cover d iscussions on p ric e , d e liv ery date, and the s tru c tu re and functions of the weapon. And, (4) following the n e g o tia tio n s, the c o n tra cto rs are requested to 20 submit th e ir f in a l proposals to the Source S electio n Panels. As is 18. Lloyd Z. Remick, "A Primer on Government C ontracting," National Contract Management A ssociation Journal. IX (F a ll, 1967), 72. 19. Elmer S ta a ts has te s t i f i e d th a t, whereas advertised c o n tra cts were generally awarded to the lowest bidder, "fa cto rs o ther than p rice tend to have a much g re a te r influence on the award" of a negotiated c o n tra c t. These fa c to rs are tech n ical design, management c a p a b ility , speed of d eliv ery , size and nature of a c o n tra c to r 's org an izatio n , the company personnel, and o v erall p lan t f a c i l i t i e s . Hearings on Competition in Defense Procure ment. p. 100. 20. In some cases the fo u rth step may be "replayed" two or th ree tim es. The n eg o tiatio n process can be narrowed to two or th re e companies, and the d ifferen c es between what the government 103 the case in advertised procurement, ev alu atio n is done by means of a weighted p o in ts system, check l i s t s , and coding. However, when a m u ltim illio n d o lla r co n tract is under co n sid eratio n , past per formance of the competing firm s and th e ir cu rren t engineering, s c ie n tif ic , and tech n ical c a p a b ilitie s are Important, as is the con t r a c t o r 's o v erall w illingness to devote h is resources to the proposed 21 work with "appropriate d ilig e n c e ." In the opinion of those respondents who held th a t the formal procedures governed the award of defense c o n tra c ts, the process was much too complex fo r pressures from Congress, the Secretary of Defense, and the White House, to a ffe c t the d ecisio n s on co n tract awards. These respondents also stre sse d the point th a t our system is seeking and what the c o n tra cto r has proposed are sometimes never resolved - even though o f f i c i a l l y (or fo r a sh o rt period of time) they appear to be. I t appears to t h i s w rite r th a t h erein li e s one of the major problems of the defense co n tract process. N egotiation o ften term inates w ith compromise. How ever, e ith e r during the i n i t i a l development of the weapon or during actu al production, the c o n tra c to r is not able to meet the o rig in a l c o st, and co st overrun soon develops. Short-term compromise or optimism, poor planning, and one-year defense budgets, o ften cause long-term co st overrun and in e ffic ie n c y . For example see: Robert A rt, The TFX D ecision: McNamara and the M ilitary (Boston: L i t t l e Brown and Co., 1968); and A llan C. Enthoven and K. Wayne Smith, How Much is Enough: Shaping the Defense Program 1961-1969 (New York: Harper and Row, P ublishers, 1971), pp. 262-266. 2 l. See Danhof, p. 161; and the l e t t e r s exchanged between John M . Malloy, Deputy A ssista n t Secretary of Defense Procurement, and Senator P h ilip Hart, Chairman, Subcommittee on A n titru st and Monopoly, in U.S., Congress, Hearings on Competition in Defense Procurement, pp. 165-176. 104 of checks and balances prevented one p a r tic u la r segment(s) from o v er-rid in g the n o n p o litic a l and o b jectiv e decisions reached by m ilita ry source ev alu ato rs. Hence, adherents of the formal school m aintain th a t the defense c o n tra cts awarded during the period under study were the end product of a very n eat, ord erly , and "by-the- book" process. The Informal Contract Process As indicated e a r lie r , many respondents stated th a t an informal process was evident in the awarding of many major weapons systems c o n tra c ts. The formal award process only involved w ritten ru le s, and m erit fo r s e le c tin g c o n tra c to rs. This was considered to be un r e a l i s t i c to the supporters of the informal school who contended th a t the process also involved p o l i t i c s , economic considerations to a given community, and personal re la tio n s h ip s and in te ra c tio n . One of the more s ig n ific a n t d iffe re n c e s between the informal and formal processes lie s in the i n i t i a l step of each method. According to the formal process, companies learn of p o te n tia l con tr a c ts through w ritte n announcements and/or advertisem ents (e .g . , Commerce Business Daily and trad e jo u rn a ls ). This is subject to question, since several Department of Defense m ilita ry and c iv ilia n o f f i c i a l s reported th a t many defense company re p re se n ta tiv e s con tin u a lly sought inform ation about p o te n tia l c o n tra cts long before they became a m atter of public knowledge. For example, a highly placed procurement o f f ic ia l sta te d th a t "company reps are a l l around the place try in g to find out what w e're up to . This is 105 before bids are mailed out, and a 'w ith i t ' company knows in advance what c o n tra cts w ill be a v a ila b le ." A former Pentagon o f f ic ia l added: "Lobbyists roam around the Pentagon. They are in te llig e n c e gath erers and they try to get co n tract inform ation as soon as p o ssib le ." And another Department of Defense o f f ic ia l sta te d th at "Washington reps find out what the (government) agencies want, and keep th e ir companies informed where the money is going, and when and what to b id ." Several respondents from both the public and p riv a te s e c to r ’s in ferred th a t c e r ta in co n tract awards were based upon anything but ob jective ev alu atio n . A congressman sta te d th a t many of h is colleagues had an a ttitu d e of "the next big defense co n tract w ill not go to the s ta t e which won the la s t big one." An executive of a major c o n tra cto r reported th a t "many of us believe th a t the Pentagon and the p o litic ia n s merely say 'Whose tu rn is i t th is tim e?"' And a former executive of A erojet-G eneral expressed a sim ila r view: "During the 1960's i t was generally f e l t by our people th a t major c o n tra cts were awarded on a ro ta tio n b a sis . W e would get our next co n tract a f te r the others had each won o n e ...." Conclusion As noted both above, and as w ill be shown in Chapter 8, a s ig n ific a n t number of the respondents who played an a c tiv e ro le in the defense co n tract award process took the p o sitio n th a t even with th is formal system, not a l l of the major c o n tra c ts were awarded on a n o n p o litic a l and purely "objective" b a sis . Rather, many major 106 weapons systems c o n tra ct awards were based on a combination of formal process c h a r a c te r is tic s (m erit, p ast records, e tc .) and informal process c h a r a c te r is tic s ( p o litic a l and economic consider a tio n s) . If we accept the p o sitio n th a t many of the defense co n tracts awarded between the years 1952 and 1972 were based on more than ju s t o b je ctiv e ev aluation, then the lobbying e f f o r ts of the Los Angeles defense in te r e s t played a s ig n ific a n t ro le . The next three Chapters explain the p riv a te and public se c to r perceptions of lo b b y ists, general lobbying techniques, who lobbied fo r Los Angeles co n tra cto rs and the degree of in te ra c tio n between the three se c to rs, and the techniques and influence of the Los Angeles defense in te r e s t . CHAPTER V PRIVATE A N D PUBLIC SECTOR PERCEPTIONS OF LOBBYISTS A N D GENERAL LOBBYING TECHNIQUES Public Sector Perceptions To determine what perceptions respondents held with respect to lo b b y ists in general, and the type of school which best describes the post Korean War lo b b y ists, the author put several questions to the members of the public s e c to r. 1. Do you come in to contact with re p re se n ta tiv e s of special in te r e s ts such as doctors, labor, insurance, environment, education, e t c . ? All six te en congressional respondents (congressmen and s ta f f members), answered "y es," with many q u a lifie d responses such as "I have constant in te r a c tio n ," and "there is much c o n ta c t." The t h i r t y - seven "other public sec to r" members also had contact with sp ecial in te r e s t re p re se n ta tiv e s. However, the amount of contact fo r each noncongressional member varied from "a l i t t l e " to a "great d e a l." The great m ajority of the public se c to r respondents maintained th a t they were recep tiv e to lo b b y ists, with most rep o rtin g th a t they had an "open door" p o licy and were w illin g to li s t e n to the views of divergent in d ividuals or groups.* A very small number of respondents 1. The "open door" policy must not be taken l i t e r a l l y . A ll of the congressmen were quick to point out th a t an appointment was necessary (unless, of course, the lobbyist had become a close frien d over the y e ars), and in many cases the in te ra c tio n was between the lobbyist and a s ta f f member. The congressmen who were personal frie n d s, or had close re la tio n s h ip s with lobby i s t s , did not see anything wrong w ith t h i s , nor did they see 108 considered themselves somewhat nonreceptive, or le ss open with respect to providing lo b b y ists an opportunity to present th e ir case. Two interview ees best exem plified th is m inority! "I make up my own mind," was the remark of one Congressman, and a local p o litic ia n said th a t "lo b b y ists are fo r th e ir own in te r e s ts , not the o verall community." 2. P o li tic a l S c ie n tis ts , jo u rn a lis ts , and p o litic ia n s o ften re fe r to the re p re se n ta tiv e s of in te re s t groups as lo b b y ists. When th is word is mentioned, what c h a r a c te r is tic s or g en eralizatio n s stand out in your mind? The responses of the congressional group were mixed. As Table 7 i l l u s t r a t e s , s ix members sta te d th a t lobby i s t s were g en erally honest and p ro fessio n al. However, four said th a t the old school c h a ra c te riz a tio n s t i l l applied to c e r ta in lobby i s t s , while new lobby c h a r a c te r is tic s b est described o th e rs. And one interview ee f e l t th a t lo b b y ists g en erally matched the negative d e sc rip tio n s applied to members of the old school. With respect to the four respondents who maintained th a t lobby i s t s may be re p re se n ta tiv e of both schools, a l l of them refe rre d to a s ig n ific a n t number of C alifo rn ia s ta te lo b b y ists as examples of th e old school. This group g en erally described lo b b y ists at lower le v els of government as le ss pro fessio n al and e th ic a l than those found in Washington, D.C. any c o n flic t of in te r e s t . TABLE 7 Question Contact with Lobbyists Perceptions of Lobbyists Have Lobbyists Changed Over the Years? Any Difference between Company R epresentatives and Lobbyists? What Word do you Prefer? ANSW ERS TO QUESTIONS O N LOBBYISTS Response „ Total Yes 40 No 0 No Opinion 0 Not Asked 13 New School 20 Old School 4 Both (some good, some bad) 16 No comment 1 Not Asked 12 Yes (improved) 15 No Change 22 No Opinion 3 Not Asked 13 Yes 6 No 34 No Opinion 0 Not Asked 13 32 Number of Responses Lobbyist L egislative Advocate 2 Company/Washington Rep 6 Not Asked 13 Congressional 0 0 5 6 1 4 1 4 5 3 3 5 0 11 0 5 1 5 Other Public 29 0 0 8 14 3 12 0 8 10 19 0 8 6 23 0 8 23 5 8 110 Members of the "other public" group were also s p l i t over the question of what stereo ty p es apply to lo b b y ists. As Table 7 shows, twelve respondents f e l t th a t lo b b y ists belong to both schools, and one interview ee s p e c ific a lly named several t e x t i l e company lo b b y ists as " p ra c titio n e rs" of the old school. To i l l u s t r a t e , th is respondent reported th a t, on various occasions, one company offered c a ll g i r l s to several key d ecision makers. Another respondent sta te d th a t the old lobby was also found in the defense co n tract award process. He noted, fo r example, th a t "various Department of Defense o f f ic ia ls have accused General E le c tric of p ra c ticin g ta c t ic s such as providing women at c e rta in so cia l events, and "excessive entertainm ent." 3. Has lobbying changed over the years—fo r the b e tte r or worse? Five congressional members said th a t lobbyists have changed fo r the " b e tte r" during the past twenty years. Of the th ree r e spondents 'who stated th a t lo b b y ists have not changed, two of them were r e la tiv e ly new members to Congress and had not yet witnessed any s ig n ific a n t change. It is important to note th a t a m ajority of the o th er public group saw no change in lobbyists over the years. Of those who did see p o s itiv e change, most said i t had occurred since the la te 1950's. Respondents from both groups who c ite d p o sitiv e change in the lobbying e f f o r ts during the 1960's generally described lo b b y ists as ex h ib itin g "more pro fessio n alism ," "more in te llig e n c e " and "more a le r tn e s s ," than th e ir counterparts of the I930*s and 1940's . Several respondents also added th a t many lobbyists of the la te 1960's appeared to be younger and b e tte r educated than th e ir predecessors. J 111 4. Various defense and nondefense executives lik e to r e fe r to th e ir lo b b y ists as “Washington r e p s .” or "company re p s .*' Is th ere any d ifferen ce between a company or Washington rep and a lo b b y ist? The overwhelming m ajority of both groups rep lied th a t th ere was no d iffe re n c e . One congressional s t a f f member sta te d th a t "companies generally p re fe r the term rep or advocate due to the fa c t i t sounds b e tte r and gives the company a b e tte r image." As shown in Table 7, six other public members believed th a t th ere is a d ifferen ce between the two term s. When asked why, several respondents said th a t many company reps (e sp ec ia lly from defense companies) o ften had a tech n ical background and did not f i t the basic c h a r a c te r is tic s of the ty p ic a l lo b b y ist. 5. What word do you p r e f e r ? (fo r id e n tify in g in te r e s t group re p re se n ta tiv e s). The vast m ajority (80 percent) of the respondents prefered "lo b b y ist" and maintained th a t th e re is no d ifferen ce between a "company rep" and a lo b b y ist. Several respondents who served in the Department of Defense chose "Washington" or "company rep" due to the b e lie f th a t they meet w ith technocrats not lo b b y ists. The s ig n ific a n t finding th a t emerged from these questions is th a t the old lobby concept has not disappeared from the minds of the public secto r respondents interviewed fo r t h is study. Although the old lobby image appears to be g re a tly dim inished, the reappearance of old lobby school ta c t ic s from time to time continue to ta rn is h lo b b y is t's image. An equally in te re s tin g , though le ss s ig n ific a n t, finding was th a t Washington based o f f i c i a l s believed th a t lo b b y ists in C alifo rn ia were more prone to engage in old lobby techniques than 112 those in Washington, D.C. Some C alifo rn ia o f f i c i a l s denied th is charge, and others (when assured, and in some cases "reassu red ," th a t they would not be quoted) confirmed the old lobby c h a r a c te r is tic s th a t surround many le g is la tiv e advocates in Sacramento. P riv ate Sector Perceptions Defense executives from the p riv a te se c to r were asked the following questions! 1. Do you have c e r ta in in d ividuals who are responsible fo r advancing company p o sitio n and q u a lific a tio n s to government o f f i c i a l s ? Every respondent sta te d th a t h is company had sele c ted personnel to represent the company in Washington. The number and type of in d i viduals advancing each company's p o sitio n was found to d i f f e r w idely. For example, several respondents sta te d th a t many defense oriented corporations u tiliz e d executives in ad d itio n to t h e i r fu ll-tim e Washington based personnel to in te ra c t w ith public se c to r o f f i c i a l s . As discussed in Chapter 7, because most of the respondents perceived defense lobbying as a "team e f f o r t ," the Washington lobbyist was not only "a ssiste d " in h is e f f o r ts by Los Angeles based executives, but also was involved a c tiv e ly in o ther corporate functions and d u tie s . This p ra c tic e d if f e r s from many nondefense in te r e s t s , which re ly mainly upon fu ll-tim e lo b b y ists who do not have o th er major corporate re s p o n s ib ilitie s or fu n ctio n s. 2. What t i t l e is given to ind iv id u als who promote the company? I t was su rp risin g to learn th a t not one defense executive used the word, "lobbyist*" As Table 8 i l l u s t r a t e s , almost 60 percent 113 of th e respondents said th a t th e ir companies used th e t i t l e , "Washington rep" or "company re p ." The o ther interview ees stated th a t the t i t l e , Vice President (in charge of) M ilitary or Government A ffa irs , was used to id e n tify corporate advocates. A ty p ic a l p riv a te se c to r response was offered by an executive of North American Rockwell! "Our reps do not lobby." Another corporate executive sta te d ! "W e d o n 't lobby. That is done, i f any is done a t a l l , by the Aerospace A sso ciatio n ." However, several respondents were more candid, and to t h i s author more r e a l i s t i c , when they simply said th a t the word "lo b b y ist" o ften is associated w ith brib ery and fav o ritism , and th e re fo re , fo r public re la tio n s purposes the term "advocate" or "rep" was company p o licy . 3. Does the word lobbyist produce any stereotypes or g e n e ra liz a tio n s? Four executives placed to d a y 's lo b b y ists in the new lobby school. However, when questioned fu rth e r, i t appeared th a t the executives were thinking only in terms of re p re se n ta tiv e s of aerospace-defense companies. F urther probing also revealed th a t two of these executives believed th a t the old school lobbyist was very much in evidence p rio r to the 1950's fo r both defense and nondefense in te r e s t s . Seven respondents perceived defense lo b b y ists as f a i r and b a sic a lly "good," while nondefense lo b b y ists were viewed as re p re se n ta tiv e of both schools. Three executives in th is group stated th a t old lobby ta c t ic s s t i l l e x is t in c e r ta in nondefense in te r e s t campaigns. And two said th a t th e re have been recent examples of good and bad lo b b y ists in both defense and nondefense in te re s t 114 TABLE 8 PERCEPTIONS OF LOBBYISTS HELD B Y C O M PA N Y EXECUTIVES Question 1. Individuals responsible fo r advancing company p o sitio n ? Response and Number Yes 12 No 0 2. T itle given. Lobbyist 0 Company/Washington Rep 7 Vice P resid en t, Government A ffa irs __2 Vice P resident M ilita ry R elations/ __3 D ivision 3. Lobbyist* stereo ty p es or Old lobby 2 g e n e ra liz a tio n .? Bo(;h SchooU New 4 No Comment 2 2 groups. One executive concluded} "There is good and bad in any pro fessio n . The 'o ld days' d e f in ite ly had corrupt and payola-type lo b b y ists." General Lobbying Techniques Lobbyists u t i l i z e many techniques to promote the in te r e s ts of 2. Unfortunately, th e two respondents would not c ite any s p e c ific defense or nondefense cases. When probed fo r a d d itio n a l in sig h t or opinion, they e ith e r changed the su b ject o r p o lite ly avoided the question. 115 the groups they re p re se n t. Some of the more favored techniques used by lo b b y ists in general are discussed b r ie f ly in the follow ing pages. Personal I n te ra c tio n . Respondents from the th ree secto rs stre sse d the importance of a lo bbyist being able to meet with d ecision makers and th e ir re sp ec tiv e s t a f f s . Personal in te ra c tio n can take the form of a telephone c a l l , an o ffic e v i s i t , a so c ia l function, an in tro d u ctio n through a frie n d , or whatever i t req u ires to achieve a one-on-one meeting or conversation w ith a d ecisio n maker. A ll of the public se c to r interview ees said th a t the best way to see them was simply to c a ll fo r an appointment. However, several in d iv id u als said th a t they do not enjoy meeting lo b b y ists on a so c ia l b a s is . In many cases th is has nothing to do with the lo bbyist per se, but is due to the fa c t th a t these o f f i c i a l s spend many hours at th e o ffic e and in committee h earings. As one congressman so ap tly remarked: "My g re a te st pleasure is ju s t being home, away from a m ultitude of people, and enjoying myself w ith my fam ily ." The public se c to r interview ees l e f t the author with the impres sion th a t in the " re a l w orld," one in te ra c ts with various lo b b y ists, company executives, and/or members of in te r e s t groups in many d i f f e r ent ways. As is tru e in academia, business, or any o ther walk of l i f e , government decisio n s are o fte n discussed and/or made during a cup of coffee; over the telephone, or a t a s o c ia l fu nction (g o lf, boating, dinner, lunch, c o c k ta il p a rty , e tc .) ra th e r than in a room fre e of human b ia s, greed, or so c ia l in te ra c tio n . Hence, in order fo r the lo bbyist to meet with various decisio n makers, i t is important th a t he be a good salesman, s o c ia lly adept, and acceptable 116 to as many in d iv id u als as p o ssib le. Personal in te ra c tio n between lo b b y ists and members of the execu tiv e and le g is la tiv e branches is not a continuous process. According to L ester M ilbrath, i t is a myth to assume th a t lo b b y ists spend most of th e ir time in c o rrid o rs and h a lls , or in e n te rta in in g , or in some other form of personal or so cial c o n tact. He concluded th a t "lobby i s t s spend most of t h e i r time receiv in g and sending communications. 3 Most of th is they do from the seclu sio n of t h e i r own o f f ic e s ." I t should also be noted th a t, while lobbyists spend much of th e ir time preparing and c o lle c tin g inform ation, congressmen, bureaucrats, and ranking governmental o f f i c i a l s do not have much "fre e time" to analyze the inform ation given to them by lo b b y ists. Although they tr y to be open and recep tiv e to various organized in te r e s ts and individual viewpoints, most of the public secto r in te r viewees reported th a t unless they have the time (or chose to make time fo r someone) they e ith e r w ill re fe r a lobbyist to a s t a f f member or some other agency, or simply refu se an appointment. Therefore, lo b b y ists seem to have an advantage i f : (1) they know the decisio n maker, or know someone who knows him; (2) they have spent sev eral years in Washington, and have been able to meet and s o c ia liz e and/or in te ra c t with the d ecisio n makers and th e ir s t a f f s ; 3. L ester M ilbrath, The Washington Lobbyists (Chicago: Rand McNally and Co., 1963), p. 121. 117 (3) they are b rie f and to the p o in t. (Generally t h i r t y minutes to an hour is considered s u ffic ie n t time to present th e group's p o sitio n . However, if th e decisio n maker is on the lo b b y is t's sid e, ad d itio n al time w ill be g ran ted ; (4) they spend most of t h e i r time on n e u tra l to favorable congressmen and o f f i c i a l s in the executive branch. (Lobbyists usually fe e l th a t i t is a waste of time t r y ing to influence those d ecision makers who are unfavor able or h o s tile to the group's i n te r e s t ; and (5) they are fle x ib le , do not get discouraged, c u ltiv a te a favorable c lie n te le , and learn to get along. A former lobbyist o ffered an ex cellen t point to remember: "Lobbying is a tough job, th e re is tremendous p ressu re. You have to produce, and even when you do get favorable r e s u lts , you are expected to con tin u e g e ttin g r e s u lts . I t is not an easy occupation, those who d o n 't bend, snap I" There is some d ifferen c e of opinion with respect to the e f f e c t iveness of personal in te ra c tio n . In a recent magazine a r t i c l e , Bryce Harlow, an aide to both P resid en ts Eisenhower and Mixon and now a lobbyist fo r P ro cter and Gamble, s ta te d : "Knowing the way the government works is more important than knowing th e people. People 4. The former lobbyist quoted here did not consent to having h is pro fessio n lis te d a f te r h is name in th e Appendix because of h is cu rren t p o sitio n . 118 change; the mores don't.""* On the o ther hand, G ilbert E. Dwyer, lobbyist fo r Kennecott Copper Corporation, m aintains th a t knowing where to go and s p e c if ic a lly whom to see is what counts. Dwyer re ported th a t the Washington lobbyist must "m aintain activ e re la tio n ships with the widest number of people" and know the "people who are making th ings happen.** Roy J . W inchester, Pennzoil United, Incorpor ated, addst "Over the y ears, we tr y to develop frien d s on a l l the committees th a t are charged with r e s p o n s ib ilitie s in areas th a t would a ffe c t th is company."^ The public se c to r interview ees who had in te r acted with lo b b y ists g en erally put more emphasis on knowing the "rig h t people" ra th e r than being fa m ilia r w ith the way government works. In general, lo b b y ists on both the s ta t e and fed eral le v e ls, in terviewed in th is study gave equal importance to knowing the rig h t people in government and where to go fo r inform ation as e ss e n tia l components of t h e i r e ffe c tiv e n e s s. Providing Inform ation. During the interview s, many public se c to r members re p re se n tin g Los Angeles emphasized the fa c t th a t they received a g reat deal of inform ation from lo b b y ists, which varied as to the degree of o b je c tiv ity and co n ten t. Several congressmen 5. Quoted in Gerald R. Rosen, "Washington's Corporate Ambassadors," Duns Review (April 1971), p. 49. 6. Found in "Why the Corporate Lobbyist is N ecessary," Business Week. March 18, 1972, p. 64. 7. Ibid. 119 remarked th a t th e " re al pros" among the lo b b y ists presented both sid es of an issu e, yet as would be expected, the emphasis usually was g on the m erits or needs of the lo b b y is t's employer. The le ss pro fe ssio n a l and "sem i-b ellig eren t" lo b b y ists generally presented only th e ir employers sid e, e ith e r ignoring the opposition or c h a ra c te riz ing them as "bad guys." Some congressmen also contended th a t the flow of inform ation also went in the opposite d ire c tio n . For example, one in flu e n tia l Democratic congressman sta te d th a t on several occasions he provided inform ation to a lobbyist on a p a rtic u la r issue or problem. The lo b b y ist, in tu rn , tr ie d to resolve, or at le a st offered a ssista n c e in dealing with the issue or problem. Several respondents who had served in Washington as p re s id e n tia l appointees also sta te d th a t lo b b y ists had come to them not to lobby but to c o lle c t inform ation as to the a ttitu d e s and opinions of other decision makers or learn about p o te n tia l government p o lic y . This " i n t e l l i gence gathering" also involved such ta c t ic s as "snooping around," and picking up so -called " in sid e" inform ation at so cia l functions. The purpose, of course, was to keep the c lie n t (group) up-to-date on current p o licy , p o ssib le tre n d s, and m iscellaneous d ata. Lobbyists have proved to be very activ e researchers and useful 8. S tate government respondents generally concurred w ith the con gressmen on th is p o in t. However, several respondents maintained th a t many s ta t e and lo cal in te r e s t groups do not have the r e sources to produce so p h istic a te d and well researched p o sitio n papers. This was in sharp c o n tra st to what fed eral respondents reported to be the case in Washington. 120 sources of inform ation. However, i t appears from the conversations held with the six te en members of the congressional group th a t a con gressman and h is s t a f f must have some degree of rapport and t r u s t in the lobbyist before they w ill re g u la rly receive inform ation from him or go d ire c tly to him fo r i t . The inform ation provided by a lobbyist is not lim ited to a p a r tic u la r su b ject or to a b i l l which seeks to enhance the p o sitio n of the in te r e s t group. Several congressmen were q u ite frank in rep o rtin g th a t lo b b y ists a ssiste d them by preparing speeches, o fferin g p ro fessio n al advice, providing ideas and opinions on d iffe re n t issues and pending le g is la tio n , and preparing b i l l s and re so lu tio n s which e ith e r concerned th e ir own in te r e s t group, or, at 9 tim es, something t o t a l l y u n related . Hearings. Lobbyists and in te r e s t group members are a major com ponent of a le g is la tiv e committee hearing and the in te ra c tio n between lo b b y ists and le g is la to r s is very extensive at these hearings. I n te r e st groups present th e ir cases at public hearings, which enable con gressmen to lis te n to various fa c ts , opinions and points of view and to probe, question, and/or "push the group re p re se n ta tiv e s hard fo r ju s ti f i c a t i o n of t h e i r p o s i t i o n ." ^ A study by Andrew Scott and 9. Harmon Zeigler and Michael Baer found th a t at the s ta te level th ere were a small number of le g is la to r s who looked to in te re s t groups as primary sources of inform ation instead of committee hearings. See Harmon Z eigler and Michael Baer, Lobbying* In te r actio n and Influence in American S tate L e g is la tu re s . (Belmont, C alifornia* Wadsworth Publishing Co., 1969), p. 165. 10. See V. 0. Key, J r . , P o li tic s . P a rtie s , and Pressure Groups (5th ed. r e v .; New Yorks Thomas Y. Crowell Co., 1964), p. 133. I n te r views with public se c to r respondents in Sacramento confirmed Key's conclusion. 121 Margaret Hunt involving le ss than 10 percent of the membership of the House of R epresentatives, showed th a t of those members interview ed, 71 percent believed th a t lo b b y ists te s tif y in g at committee hearings were "moderately" to "very e f f e c t i v e ."** This same study also con cluded th a t congressmen considered testim ony at committee hearings to be the sin g le most e ffe c tiv e lobbying technique. On th e o th er hand, L ester M ilbrath, and the lo b b y ists he interview ed, rated personal p re sen ta tio n of a group's p o sitio n as more e ffe c tiv e than committee hearings. Although the subject of the e ffe c tiv e n e ss of hearings vs. p er sonal p resen tatio n s was not a formal question put to the interview ees in th is study, i t was found in d ir e c tly th a t personal in te ra c tio n and rapport ranked very high with many of the public se c to r respondents. In many in stan ces, one-to-one in te ra c tio n was considered the most e ffe c tiv e technique a lo b b y ist could u t i l i z e , committee hearings simply perm itted ad d itio n a l questioning, or a c la r if ic a t io n of e a r l i e r conversations. L e tte r s . Another technique o fte n used, although considered to be f a i r l y in e ffe c tiv e by the congressmen and o th er public respondents, is massive l e t t e r w ritin g campaigns. This technique o ften involves the members of an in te r e s t group (and, a t tim es, the frien d s and 11. Andrew Scott and Margaret Hunt, Congress and Lobbies (Chapel H illi U niversity of North Carolina P ress, 1966), pp. 77-78. 12. See M ilbrath, The Washington Lobbyists. Chapter 11. 122 re la tiv e s of the members) w ritin g l e t t e r s endorsing or opposing a p a r tic u la r b i l l before Congress. The main problem w ith t h i s te c h n i que is th a t much too o ften the l e t t e r s are very s im ila r, or at tim es, id e n tic a l in wording or content. Both the respondents and much of 13 the p o litic a l science lite r a t u r e downplay th is technique. The respondents did concede, however, th a t a l e t t e r which looks " in d i v idually in sp ired " w ill probably get more a tte n tio n than one which is s t r i c t l y group-backed or w ritten . T h reats. Perhaps the most c o n tro v ersial technique used on con gressmen and o ther public sec to r members, and one th a t is o ften associated with the "old lobby," is promising to d e liv e r, or withhold v otes. Charles Clapp re fe rre d to a remark made by a congressman which i l l u s t r a t e s one of the problems th a t th is author thought might be present in Los Angeles County: When you measure pressure, you measure i t in terms of what the groups do in an e le c tio n perio d . In my area, railw ay la b o r's P o litic a l League is one of the most aggressive and activ e campaign o rganizations I know. I t r e a lly does a job of informing i t s members of who has been frie n d ly to ra ilro a d labor. Their a c tiv ity , of which they give you ta n g ib le evidence during a campaign, is c e rta in ly a fa c to r to think about when you look a t the group's p o sitio n on a b i l l a ffe c tin g i t . 14 13. See fo r example, L ester W , M ilbrath, "Lobbying as a Communication P ro cess," The Public Opinion Q uarterly, XXIV (Spring, 1960), 32-53; Scott and Hunt, pp. 72-77; and Charles Clapp, The Congress man: His Work as He Sees I t ( Anchor Books; Garden City, New Jersey : Doubleday and Co., 1964), p. 185. 14. Clapp, The Congressman, p. 187. 123 I t was found in Los Angeles, however, th a t members of the elected public sec to r showed l i t t l e i f any concern about the p o s s ib ility of in te re s t groups or p o l i t i c a l opponents using th e ir voting records and public statem ents on defense, or nondefense m atters, as campaign issu e s. With respect to defense issu e s, the congressmen and th e ir s ta f f members said th a t they ra re ly encountered s ig n ific a n t e f f o r ts by local defense in te r e s ts to defeat them. Several p o litic ia n s who * had been in o ffic e fo r over f if te e n years stated th a t p rio r to the 1960's th ere were crude but unsuccessful attem pts by nondefense groups, such as labor, education, and highways, to defeat them. Since the la te 1960*s, th ere have been several in cid en ts where small ideological groups have attempted to defeat or "reform" Los Angeles congressmen. For example, since 1968, Republican Congressman Alphonzo Bell has been under pressure from members of h is own p arty fo r "being too l i b e r a l ," and "voting fo r too many Democratic b i l l s . " There have been attem pts to defeat him in primary e le c tio n s , but they have f a ile d . Democratic Congressman Ed Roybal (Mexican American) has also encountered p ressu re, mostly from m ilita n t Mexican Americans, fo r not advocating " ra d ic a l" causes and b i l l s . As in the case of Congressman B ell, attem pts to defeat Roybal have not been su ccessfu l. F in a lly , a few le g is la to r s encountered token opposition from 15. Both V. 0. Key, P o l i t i c s , P a rtie s , and Pressure Groups, pp. 136- 138, and Donald Matthews, U.S. Senators and Their World ( Vintage Books ; New York: A D ivision of Random House, 1960), pp. 190-196 concluded th a t lo b b y ists were not th a t powerful with resp ect to "pushing" congressmen around. 124 "peaceniks" and " u ltra " an ti-d e fe n se candidates during the p ast six years. However, whenever a Los Angeles congressman was threatened by one s p e c ific in te r e s t group, or a small an ti-d efen se group, another major group (or groups) g en erally came to the support of the pro defense candidate or incumbent. This support was more than enough to cancel out the e f f o r ts of an opposition th a t employed the th re a t technique. Public R elatio n s. Public re la tio n s campaigns—or as some r e s pondents p referred , "propaganda" and "educational" e f f o r t s —are imple mented by many large in te r e s t groups. These campaigns are designed to mold both government and public opinion. The technique is some what in d ire c t, in th a t in many instances the decisio n maker is not d ir e c tly confronted by or involved with the lobbyist or in te r e s t group, as is the case w ith many of the techniques mentioned previous ly . The p o litic a l campaigns of th e American Medical A ssociation (AM A) over the past tw enty-three years are good ill u s t r a t i o n s of in d ire c t lobbying. For example, in 1949, the A M A u tiliz e d the C alifo rn ia public re la tio n s firm of Whitaker and Baxter to warn the n ation about the p ro b a b ility of "so c ia liz ed medicine" i f a p a r tic u la r b i l l became law. Sim ilar campaigns were waged during the 1950's and e arly 1960's; and, in 1965, th e A M A reported spending $1.2 m illio n in opposing another h ealth care b i l l . ^ Public re la tio n s campaigns o fte n e n ta il massive a d v ertizin g on 16. See Congressional Q uarterly, L e g isla to rs and the Lobbyists. (Washington, O.C.: Congressional Q uarterly In c ., 1968), p. 79. 125 te le v is io n and rad io , and in newspapers, magazines, and tra d e journals* In some cases, the voting records of elected o f f i c i a l s are published and sent to the v o te rs. In a d d itio n , in te r e s t groups may tr y to en l i s t the frien d s and c o n stitu e n ts of various elected o f f ic ia ls to in fluence the decisio n makers through l e t t e r s , telephone c a ll s , and p er sonal v i s i t s . Opinion v aries as to the o v erall e ffe c tiv e n e ss of such campaigns. Several contemporary American Government textbooks have concluded th a t th is method is probably the le a s t e ffe c tiv e means of influencing d e c isio n s . ^ An observation of the la te V. 0. Key is s t i l l very much tru e today: “The c u ltiv a tio n of public opinion occupies an important place only in the programs of organizations able to finance the c o stly 18 task of manipulating mass a t t i t u d e s ." And Harmon Z eigler added th a t, although i t is d i f f i c u l t to measure the e ffe ctiv en e ss of a public re la tio n s campaign, " i t is very lik e ly th a t the consequences of propaganda e f f o r ts are n e g lig ib le . I t is one thing to s e l l a p a r tic u la r brand of soap through ad v ertizin g ; i t is q u ite another m atter to s e l l a candidate o r a le g is la tiv e proposal by the same 19 tech n iq u es," 17. See fo r example Stephen V. Monsma, American P o li tic s : A Systems Approach (New York: Holt, Rinehart and Winston, In c ., 1969) p. 353; and Milton C, Cummings and David Wise, Democracy Under Pressure (New York: Harcourt Brace Jovanovich, In c ., 1971), p . 215. 18. V. 0. Key, J r . , P o li tic s . P a rtie s , and Pressure Groups, p. 130. 19. Harmon Z eigler, In te re s t Groups in American Society (Englewood C lif f s , New Jersey : P ren tice H all, In c ., 1964), p. 235. 126 On the o ther hand, Samuel Eldersveld, a strong proponent of the in d ire c t method, wrote: F ir s t, i t has become apparent th a t the in d ire c t approaches to power may be more e ffic a cio u s than the d ire c t approaches. Manipulation replaces domination or o u trig h t demands. Whereas in the past emphasis was on 'a l l or none* demands, th is is now no longer o v ertly the case at le a s t. Second, g reat emphasis is placed on the stra te g y of proper public p re sen ta tio n of demands, of s e llin g the group and i t s ob je c tiv e to the p u blic, of m obilizing a long-run mass support. The o b jectiv e is to p ic tu re the group in a favor able lig h t, a task req u irin g important persuasive s k i l l s . 20 M ilbrath learned from some of the lo b b y ists he interviewed, p a r tic u la rly in a g ric u ltu re and labor, th a t mass membership organiza tio n s gave a higher ra tin g to public re la tio n s campaigns than other 21 groups. However, no o v erall conclusion can be made with respect to the ro le public re la tio n s plays fo r defense co n tracto rs in Los Angeles. Respondents from a l l th re e sec to rs said th a t defense in d u strie s do en gage in such public re la tio n s campaigns as advertisem ents, speaking engagements, c h a rity d riv e s, and statem ents about the need fo r a "strong natio n al d efen se," or "the Russians are building more m issiles than u s ." But the e ffe ctiv en e ss of these campaigns was unknown to the p riv a te se c to r respondents, and generally perceived by the public se c to r as not being one of the more successful techniques. It was in te re s tin g to find th a t several defense company executives believed th a t th e ir company's e f f o r ts at public re la tio n s were am ateurish and 20. Samuel E ldersveld, "American In te re s t Groups: A Survey of Re search and Some Im plications fo r Theory and Method," in American P o litic a l In te re s t Groups, ed. Betty Zisk (Belmont, C alifo rn ia : Wadsworth Publishing Co., In c ., 1969), pp. 74-75. 21. See L ester M ilbrath "Lobbying as a Communications P ro cess," p. 45. 127 in e ffe c tiv e . And as one executive noted, in some cases public re la tio n s campaigns were "more damaging than p o s itiv e , a waste of time, e sp e c ially since some of our speakers and PR men are not re a lly pro- 22 fe ssio n a l Madison Avenue ty p e s." Conclusion There appears to be a se t of unw ritten ru le s which to d ay 's successful lobbyist obeys in order to avoid being tagged an old school lo b b y ist. Perhaps the most important ru le th a t the lobbyist must remember is th a t he is being co n tin u ally observed by p o litic ia n s and th e ir s t a f f s , c iv il serv ice bureaucrats, p o litic a l appointees, and the news media. Hence, he must p ro ject a favorable, or at le a st a n e u tra l, image to those from whom he is try in g to obtain inform ation, in te ra c t w ith, and eventually influence. In ad d itio n , the lobbyist must bear in mind th a t his profession is s t i l l o ften characterized as being somewhat suspect and detrim ental to the so -called public 23 good. Therefore, he must build a high degree of resp ect, co n fi dence, and tr u s t on the p art of the d ecision makers and other 22. Andrew Hacker also concluded from a study th a t i t is extremely d i f f i c u l t to determine what e ffe c t public re la tio n s campaigns have on the minds of m illions of c itiz e n s . He added th a t one of the problems th a t has ris e n from public re la tio n s campaign cen ters around the concept of c r e d ib ility , in other words are these campaigns tr u t h f u l, or do they s tr iv e to deceive the gen e ra l public? See Andrew Hacker, "Pressure P o litic s in Pennsyl vania: The Truckers vs. The R ailro ad s," in The Uses of Power, ed. Alan Westin (New York: Harcourt, Brace and World, Inc., 1962), pp. 323-376. 23. Business Week re c en tly observed: "Lobbying too o ften s h if ts in to a tw ilig h t zone of e th ic s ." "Why the Corporate Lobbyist is Necessary," Business Week. (March 8, 1972), 62. 128 p a rtic ip a n ts w ithin the system. The successful lobbyist also must present an image of d ep en d ab ility , o b je c tiv ity , and s in c e rity to the 24 newsmedia and general p u b lic . The successful lo b b y ist, as perceived by the public sec to r, should a lso : (l) have a p leasant p e rso n a lity ; (2) possess the a b ility to make a succinct and organized p re se n ta tio n ; (3) be w ell-prepared and informed about h is own group and government a t larg e; (4) be a m aster of the s o ft s e l l , i . e . , avoid pressure p o l i t i c s ; and (5) show a w illin g n ess to discuss h is p o s itio n or cause when called upon. Another very important fin d in g centered around the fa c t th a t the vast m ajority of the public se c to r respondents f e l t th a t there was nothing wrong w ith public o f f i c i a l s and lo b b y ists In te ra c tin g on a so cia l b asis (lunch, g o lf, v i s i t s to the in te r e s t group's headquarters, e tc .) in order to d iscu ss p e rtin e n t business m atters, or even non business m atters i f they so d e sired . In sum, the successful lo b b y ist, as perceived by members of a l l th re e s e c to rs , is a very f le x ib le individual with a well-rounded p e rs o n a lity . He is also adept a t employing various appropriate techniques in h is dealings with d iff e r e n t decisio n makers in order to advance the in te r e s ts of h is group. In o th er words, a technique which may be successful on one or two congressmen, may be u seless on 24. This same conclusion was reached by Donald R. Hall who noted th a t as in te r e s t groups became in s titu tio n a liz e d , they became "more in te re ste d in e sta b lis h in g sustained re la tio n sh ip s with govern mental lead ers; they have also s h ifte d emphasis from 's u r v iv a l' and 'p re s s u re ' to 'e f f e c tiv e n e s s ' and 'c o n s id e ra tio n '." Donald R. H all, Cooperative Lobbying - The Power of Pressure (Tucson, Arizona: U niversity of Arizona P ress, 1969), p. XI. another congressman and what works today may not tomorrow. CHAPTER VI W H O LOBBIED FOR LOS ANGELES DEFENSE CONTRACTS: THE COM PO N EN TS OF THE DEFENSE INTEREST Introduction Numerous individuals and groups lobby a c tiv e ly fo r a viable defense system. Many of them also lobby on behalf of s p e c ific de fense co n tracto rs and/or the need fo r a p a r tic u la r weapons system. The purpose of th is chapter is to id e n tify the groups (the defense in te r e s t) th a t lobby on behalf of Los Angeles County defense con tr a c to r s . A tten tio n also is given to those groups th a t in d ire c tly a s s is t Los Angeles co n tra cto rs by advocating the continuation of large defense budgets and the production of new and e x istin g weapons systems needed to m aintain a w ell-balanced m ilita ry machine. C ertain members of the Los Angeles defense in te r e s t were much more a ctiv e and c o n siste n t in th e ir lobbying e f f o r ts than o th e rs. As expected, defense company lo b b y ists and management personnel were the most a c tiv e and v is ib le . Several Los Angeles congressmen also lobbied a c tiv e ly fo r c o n tra c ts, e ith e r on behalf of a co n tracto r w ithin th e ir resp ectiv e d i s t r i c t s , or fo r one located in the County. Organized labor lobbied fo r c o n tra cts too, but as the following pages w ill d iscu ss, labor was a r e la tiv e newcomer w ith respect to lobbying activ ely and openly fo r defense c o n tra c ts. The o th er members of the defense in te r e s t lobbied le ss in ten siv ely and le ss freq u e n tly . Although the lobbying e f f o r ts of s ta t e and lo cal p o litic ia n s , the Los Angeles Area Chamber of Commerce, and lo cal businesses were found to be g en erally supportive in nature, 130 131 t h e ir ro le was of secondary importance. Many o u t-o f -s ta te congressmen and sen ato rs. Department of Defense o f f i c i a l s , a ctiv e and r e tir e d m ilita ry o f f ic e r s , rep resen ta tiv e s of economic in te r e s ts such as banking and re a l e s ta te , aero space a sso c iatio n s, and p riv a te c itiz e n s in d ire c tly a ssiste d the de fense c o n tra cto rs of Los Angeles County. As brought out in Chapter 3, Los Angeles was a major re c ip ie n t of major defense c o n tra c ts during the 1950's and 1960's. The defense in te r e s t of the County worked hard fo r m aintaining a s ig n ific a n t p er centage of these c o n tra c ts . The follow ing pages present an in-depth d iscu ssio n of the major and minor p a rtic ip a n ts involved in the Los Angeles defense in te r e s t . The s ig n ific a n t groups a s s is tin g the County on an in d ire c t b asis are also b r ie f ly mentioned. Defense C ontractors Lobbyists and Management. The most a c tiv e and v is ib le lobby i s t s were, of course, the defense c o n tra c to rs. Generally, there were two groups w ith in each co rporation which lobbied both the decision makers and the general p u b lic . The f i r s t group consisted of the f u l l time corporate lo b b y ist and h is s t a f f . Corporate lo b b y ists usually were located in Washington, D.C, and g en erally were long-time "company men" serving as vice p resid en ts or sen io r level managers. The defense lo b b y ists from Los Angeles also had d if f e r e n t backgrounds some were g e n e r a lis ts with lib e r a l a r ts or business ad m inistration degrees, o th ers were more te c h n ic a lly train ed in such areas as engineering, accounting, or physical scien ce. I t was in te re stin g to 132 find th a t, whereas many nondefense lo b b y ists located in Washington, D.C., and in Sacramento represented more than one c lie n t, the lobby i s t s fo r defense co n tra cto rs in Los Angeles were fu ll-tim e employees of the company they re p re se n te d ,1 Therefore, the Los Angeles manage ments a t Hughes, Lockheed, McDonnell-Douglas, and North American Rockwell were able to m aintain constant contact with th e ir Washington-based lo b b y ists. As a r e s u lt of th is contact and in te r a ctio n , the defense lo bbyist was an in te g ra l member of the corporate executive team, while a t the same time serving as the " lia is o n man" between Los Angeles-based executives and selected members of the public s e c to r. Since a primary re s p o n s ib ility of the Washington lobbyist was to keep in constant touch with the Los Angeles o ffic e , i t was not un usual fo r defense lo b b y ists and high management personnel to m aintain contact through d a ily telephone c a l l s . I f a major co n tract was to be awarded in the near fu tu re , lo b b y ists and management o f f ic ia ls met in person to form ulate s tr a te g ic plans fo r winning the c o n tra c t. These meetings took place on a monthly basis or, i f necessary, on a weekly or d a ily b a sis . Another major re s p o n s ib ility of the defense lobbyist was to in te ra c t with various government d ecisio n makers and th e ir s ta f f s 1. In C alifo rn ia and Washington, D.C., a nondefense lobbyist may have sev eral c lie n ts , e .g .. liq u o r, highways, d airy , e tc . This is evident in C alifo rn ia where i t is not unusual fo r lo b b y ists to lobby fo r d if f e r e n t in te r e s ts fo r several years and then switch over to some o th er i n t e r e s t ( s ) . 133 and w ith c i v i l serv ice b u reaucrats. I t was e ss e n tia l fo r defense lobbyists not only to in te ra c t w ith Department of Defense personnel and c e rta in congressmen, but also to arrange meetings between Los Angeles-based executives and p u b lic -se c to r o f f i c i a l s who might have some influence on the awarding of major weapons systems c o n tra c ts. The second group of lo b b y ists was made up of high lev el, de fense company executives, and even middle management personnel. Usually, the sen io r executives and the Washington-based lo b b y ists did most of the lobbying w ith hig h -lev el Department of Defense o f f ic ia ls , Los Angeles congressmen, C a lifo rn ia 's U.S. Senators, and o ther elected o f f i c i a l s a t the s ta te and n atio n al le v e ls. However, i t also was found th a t middle lev el managers and executives, such as d iv isio n and department heads and sen io r engineers, lobbied th e ir counterparts w ithin the public se c to r fo r co n tract awards. Hence, as illu s tr a te d in Figure 6, co rp o rate-p resid en ts, vice p re sid en ts, and board members lobbied the more v is ib le and well known public o f f ic ia ls such as congressmen, the S ecretary of Defense, and generals. And middle management lobbied middle level Department of Defense o f f i c i a l s , colonels, and c iv il serv ice bureaucrats. The in te ra c tio n between m iddle-level personnel was prim arily te c h n ic a lly o rien ted , whereas the in te ra c tio n between h ig h er-lev el personnel was e s s e n tia lly p o l i t i c a l, economic, and s o c ia l. In sum, the "higher ups" discussed general policy and broad- range impact, and those a t lower level were more n u ts-an d -b o lts minded. As a re s u lt of th is dual e f f o r t , the corporations were able to p ro ject a team approach to lobbying ra th e r than rely in g on a Figure 6 Level to Level Lobbying and In teractio n P rivate Sector Middle Management (Section Heads, Contract n eg o tiato rs, e tc .) Top Management (P resident, Senior Vice President, D ivision Vice President, e tc .) Lower Upper and Upper Middle Management (Division Heads, Research and Development Managers, S c ie n tis ts, P roject D irectors e tc .) Public Sector Middle Level-C ivil Service Contract N egotiators, Majors, Captains, Technicians e tc .) High Level (P resident, Vice President, Secretary of Defense, Top Ranking Generals and Admirals a t the Pentagon, e tc .) Lower Upper and Upper Level DoD O ffic ia ls (A ssistant Deputies, P roject Coordinators, Generals, Admirals, Colonels, Research and Development types, e tc .) 134 135 concentrated e f f o r t by one or two lo b b y ists who may have been d is associated from corporate headquarters in terms of geography and corporate philosophy. An executive a t North American Rockwell best described the p re v a ilin g a ttitu d e and p ra c tic e of Los Angeles defense co n tra cto rs in th e ir approach to lobbying: "The policy is one of everybody from Rockwell on down s e llin g the company and i t s p roducts." Retired M ilitary and Naval O ffic e rs. There has been consider able controversy over the ro le r e tir e d o ff ic e rs play in the co n tract award process, and the amount of influence they have with activ e duty o f f ic e r s . The c e n tra l issue b o ils down to th is : does a c o n flic t of in te r e s t e x is t when r e tir e d m ilita ry o ff ic e rs work fo r a major de fense co n tra cto r or subcontractor? Although Congressional Q uarterly once sta te d th a t " i t is known th a t co n tracto rs re ly heavily on former m ilita ry personnel to 'keep in touch' with top ranking o ff ic e rs s t i l l in the s e rv ic e s ," i t is d i f f i c u l t , if not im possible, to a sc e rta in the value of re tire d o f f ic e r s to a co n tracto r w ith respect to in flu - 2 encing c o n tra ct award d e cisio n s. In 1959, an in v e stig a tio n conducted by the House Armed Services Special In v estig atio n s Subcommittee, headed by F. Edward Hebert (Democrat, Louisiana) who is c u rre n tly the Chairman of the Armed Services Committee, released the following inform ation: 1. General Dynamics Corporation, headed by former 2. See Congressional Q uarterly, "The 'M ilita r y - I n d u s tr ia l' Lobby," in L eg islato rs and the Lobbyists, Congressional Q uarterly (Washington, D .C .: Congressional Q uarterly Service, 1968), p. 55. 136 S ecretary of the Army Frank Pace, had the la rg e st number of re tire d o f f ic e r s (majors and above - 137) of any defense c o n tra c to r. The company also ranked f i r s t on the top 20 l i s t fo r 1960. 2. Over 1,400 re tire d o ff ic e rs , including 261 generals and adm irals were em ployed by the top 100 defense co n tracto rs of 1960. 3. Most of the a c tiv e duty o ffic e rs who te s t i f i e d a t the hearings stated th a t they did not receive pressure from defense in d u strie s and/or re tire d o ff ic e rs employed by the companies. However, Vice Admiral H.G. Rickover te s t i f i e d th a t the jobs l e f t open by the r e t i r i n g o ffic e rs were f i l l e d "by people who are th e ir dear frie n d s, or even by people whom they have been in flu e n tia l in appointing, and n a tu ra lly they w ill 3 be liste n e d to ." Because of the controversy about r e tir e d o ff ic e rs working fo r defense c o n tra cto rs, th e ir sp e c ific ro le with Los Angeles co n tracto rs was included in th is se c tio n . Members of the p riv a te sec to r, p a rtic u la r ly defense corporation executives, maintained th a t re tir e d m ilita ry o f f ic e r s played a very minor ro le in t h e ir company's e f f o r ts to obtain defense c o n tra c ts . According to them t h is was due to the fa c t th a t companies wanted to avoid p o ssib le charges of c o n flic t of in te re s t or v io la tio n of fed eral laws th a t p ro h ib it e x -m ilitary personnel from 3. Congressional Q uarterly, "The 'M ilita ry Lobby's I ts Impact on Congress and the N ation," in American Government, ed. Peter Woll (Boston: L i t t l e , Brown and Co., 1969), p. 233. For an in form ative account of what happens to re tir e d m ilita ry o ff ic e rs , see A lbert D. Biderman, "Where Do They Go From Here? — Retired M ilitary in America," The Annals. X CD V (March 1973), 146-161. Biderman concludes th a t s t a t i s t i c s from the la te 1960's in d icate th a t re tire d o ff ic e rs have very l i t t l e , i f any, influence in the c o n tract award process. 137 engaging in such work fo r th ree years a f te r discharge o r retirem en t. Several r e tir e d o ff ic e rs said th a t th ere is an unw ritten code of e th ic s th a t p ro h ib its personal favors fo r e x -o ffic e rs formerly con nected w ith the Department of Defense/Pentagon. A former lobbyist fo r one of the major defense companies added th a t h is company, and o ther co n tra cto rs in Los Angeles, "do have a few e x -m ilitary types serving in Washington o ff ic e s . But most of the o ffic e is made up of people 4 with engineering and co n tract re la te d backgrounds." And an executive a t North American pointed out th a t, although r e tir e d m ilita ry o ff ic e rs working fo r defense co n tracto rs had some business and so c ia l in te r a ctio n with activ e-d u ty m ilita ry o ff ic e rs , " th is is minimal, and 'n o t th a t big a d e a l .'" He also said th a t " re tire d m ilita ry personnel - not a d ir ty word - can (and do) work in finance, adm in istratio n , equal opportunity, and various o th er management p o sitio n s in our company." Members of the public se c to r acknowledged the presence of re tir e d m ilita ry o ff ic e rs in the lobbying process. Although re tire d o ff ic e rs received a g reat deal of a tte n tio n from the media about th e ir p o te n tia l influence on and t i e s w ith the Pentagon, i t was in te re s tin g to find th a t th e ir ro le was b a sic a lly the same as th a t of o ther executives in lobbying fo r defense c o n tra c ts . In o th er words, re tir e d o ff ic e rs were members of the corporate team, in te ra c tin g w ith th e ir resp ectiv e counterparts in the Department of Defense and the branches 4. Many high ranking o f f ic e r s , e sp e c ia lly in the A ir Force, have m aster's degrees in management, accounting, and economics from u n iv e rs itie s such as Harvard, Michigan, and Stanford. 138 of the s e rv ic e . R etired o ff ic e rs did have one s ig n ific a n t advantage in th a t they o ften knew whom to see, who made the d ecisio n s, and how and why the Department of Defense evaluates and determ ines a co n tract winner. In sum, i t was found th a t some re tir e d o ff ic e rs were q u ite a c tiv e and v is ib le in the lobbying process, while others e ith e r stayed behind the scene or did very l i t t l e , i f any, lobbying fo r defense c o n tra c ts. Los Angeles County Congressmen A m ajority of the congressmen and s t a f f personnel who were interviewed lobbied fo r defense c o n tra cts fo r Los Angeles County and fo r s p e c ific defense co n tra cto rs in th e ir d i s t r i c t s . Congressmen B ell, Clauson,Corman, Goldwater, H o lifie ld , and Wiggins played, an a ctiv e ro le , and were c alled upon by the defense in te r e s t more o ften than were Congressmen Brown, Rees, and Roybal. Much of th is is probably due to the fa c t th a t the l a t t e r three had a less "pro defense" voting and campaign record. However, a f te r interview ing these congressmen the author discovered th a t Brown and Rees were ju s t as re cep tiv e, o r considered themselves as a cc e ssib le , to defense lo b b y ists and Los Angeles defense in te r e s ts as th e ir colleagues. One member of th is group had an in te re s tin g a n aly sis as to why he was o ften "by-passed" by defense in te r e s t s : "Perhaps the lo b b y ists take the easy way out and decide not to see *a n tid e fe n se ' congressmen. Instead, maybe i t is e a s ie r seeing only those p u b licly 'pro* th e ir c a u s e ...th e y should see me, to o ." Congressmen had a very s ig n ific a n t ro le to play in the defense 139 c o n tra ct award process. Yet, unlike defense company executives, Los Angeles congressmen could not devote as much time to lobbying because of o th er p r i o r i t i e s and demands from nondefense groups. When the congressmen did lobby however, th e ir e f f o r ts generally were q u ite in ten siv e as those of many defense company lo b b y ists and execu tiv e s . Much of the lobbying th a t took place during the past few years was done prim arily on the b asis of the economic rewards th e ir d i s t r i c t s would receive ra th e r than on the m erits of or need fo r a p a r tic u la r weapons system. This is in c o n tra st to the 1950's and 1960's when many congressmen who lobbied fo r defense co n tracts did so (a t le a s t fo r public consumption) because of the need fo r a p a r t i c u lar weapons system to b o ls te r the n atio n al defense. Economic r e wards were (again, a t le a s t fo r public consumption) secondary b e n efits to th e ir d i s t r i c t ( s ) and county. The degree of a c tiv ity a congressman decided to exert on behalf of a local co n tra cto r u su ally depended upon the congressman's d i s t r i c t and on h is philosophy on defense budgets and m ilita ry pre paredness. As might be expected, the most activ e and v is ib le con gressmen were those w ith major co n tracto rs in th e ir d i s t r i c t s and/or those with vivid memories of Pearl Harbor and World War II and of Korea. Democratic Congressman James Corman, San Fernando Valley, is f a i r l y ty p ic a l of the Los Angeles congressman who worked activ ely fo r defense c o n tra cts during the 1960's and early 1970*s. The following example perhaps best i l l u s t r a t e s what an a c tiv e congressman could do fo r both h is d i s t r i c t and county w ith resp ect to lobbying fo r defense c o n tra c ts . 140 Mr. Corman has held an annual conference fo r small businessmen called Business O pportunities in Federal Procurement. The defense agencies th a t usually p a rtic ip a te d in these conferences included: The Departments of the Air Force, Army, and Navy; the Defense Supply Agency; and the Defense Contract A dm inistration S ervices. These con ferences have helped companies in the San Fernando Valley in bidding fo r business from the government, and in in te ra c tin g w ith o th er con tr a c to r s and procurement o f f i c i a l s . Corman u tiliz e d Department of Defense personnel "to a s s is t business firm s in th e ir search fo r new markets";'* a t the same time, " i t is our purpose to make known the opportunity, ta le n t, source, and good management th a t is a v ailab le in Southern C a lifo rn ia ."^ Actual c o n tra cts were w ritte n up a t these meetings, and many small companies were able to compete in the con t r a c t process on a d ire c t "one on one (company and government) basis'.'^ Corman and h is s t a f f reported th a t these conferences, which were open to a l l in te re ste d ind iv id u als and in s titu tio n s , were well received by h is c o n stitu e n ts. During the past several years th e re were numerous o th er cases of Los Angeles congressmen and C a lifo rn ia 's U.S. Senators lobbying fo r sp e c ific defense c o n tra cto rs, as well as defense per s e . For example, during the 1970 Senate race in C alifo rn ia , the incumbent, George 5. From News B u lle tin from R epresentative Corman (October, 1970), p. 1. 6. Ib id . , page 2. 7. Interview w ith Congressman James Corman, Los Angeles, A pril 17, 1971. 141 Murphy, and h is Democratic opponent, Representative John Tunney, en gaged in p o litic a l rh e to ric as to which man would do the most to ob tain defense c o n tra cts fo r C alifo rn ia companies in the 1970's. In May 1970, Tunney to ld an audience in Los Angeles County th a t the $7,7 b i llio n F-15 j e t fig h te r a ir c r a f t co n tract was not awarded to North American Rockwell p a rtly because "Mjrphy did p ra c tic a lly nothing in Q C a lifo rn ia 's b e h a lf," Tunney also sta te d th a t Murphy should have "worked harder" on P resident Nixon to get the co n tract fo r C alifo rn ia. The very next day, North American Rockwell issued a news re le ase s ta tin g th a t i t "has always received e ffe c tiv e and earnest cooperation 9 from Sen. Murphy." North American fu r th e r contended th a t McDonnell- Douglas Corporation (S t. Louis, Mo.) won the co n tract on the basis of m erit. The news re le ase also added: "Sen. Murphy has evidenced g reat in te r e s t in the F-15 co n tract as well as the B-l (bomber) con t r a c t and a keen understanding of the importance which those programs could have in Southern C a lifo rn ia ." L ater in the Senate campaign, the Los Angeles Times c arrie d these ad d itio n a l headlines: "Democrats caused Defense Cutbacks - Sen. Murphy says,"*** and "Murphy Vows to Seek Defense Spending Hike,"** 8. Richard Bergholz, "Tunney Blames P art of S ta te 's Loss of Plane Pact on Murphy," Los Angeles Times, May 7, 1970, P art 1, p. 3, 9. "A ircraft Firm Disputes Tunney, Defends Murphy on J e t P a c t," Los Angeles Times. May 8, 1970, P art 1, p. 3. 10. Richard Bergholz, October 17, 1970, P art 2, p. 1. 11. Richard Bergholz, October 23, 1970, Fart 1, p. 21. 142 There are instances of non-C alifornia congressman o fferin g "advice" on what defense equipment to purchase and from where. One such example involved Democratic R epresentative John Brademas of Indiana, who sta te d th a t the purchase of 50,000 trucks from General Motors by the Army could r e s u lt in $150 m illio n of "unnecessary and u n ju s tifie d " spending. He a lso suggested th a t the Army should pur chase a modified version of the M-715 truck produced by Kaiser Jeep Corporation. Perhaps i t was a coincidence, but Brademas represented 12 a d i s t r i c t in which K aiser produces the M-715. Another instance occurred in June 1970, when, w ithin hours a f te r North American Rockwell was awarded the B-l s tr a te g ic bomber, Republican R epresentative Thomas M . P elly of Washington, in whose d i s t r i c t Boeing's S e a ttle headquarters were located, demanded an in v e stig a tio n of the B-l award. Congressman P elly s ta te d : Boeing's proposal was "su p erio r in every respect and lower in cost to the governm ent."^ F in a lly , th ere is the case of the la te Democratic Congressman L. Mendel Rivers of C harleston, South C arolina, which is perhaps one of the most famous examples of b en efitin g the fo lk s back home. In 12. "A Congressman attacked an Army plan to buy 50,000 G M Trucks," Los Angeles Times, June 14, 1969, P art 3, p. 8. 13. Robert E. Wood, "Air Force Defends Awarding B-l Pact to North American," Los Angeles Times, June 9, 1970, Part 3, p. 8. One of the leaders of the C alifo rn ia d eleg atio n who worked hard fo r North American Rockwell,was Congressman Alphonzo B ell. See James Flanigan, "N. American Gets $1 B illio n O rder," Los Angeles Times. June 6, 1970, P art 1, pages 1 and 23. 143 1970, according to the C harleston Chamber of Commerce, the m ilita ry d ir e c tly accounted fo r a $329 m illio n annual payroll in m etropolitan Charleston, or 35.3 percent of the c i t y 's payroll fo r a l l occupations. This large payroll generally has been c ite d as an example of the power and influence Congressman Rivers had as Chairman of the House Armed 14 Services Committee. The la te Carl Vinson, Democratic congressman from Georgia, once said to Mr. Rivers: "Mendel, i f you put another thing down in th a t d i s t r i c t , i t ' s going to s in k ." These few examples should give the reader an understanding of the intense com petition fo r defense co n tracts and the need fo r the constant lobbying e f f o r ts by Los Angeles defense in te r e s ts . Labor Los Angeles labor unions played a s ig n ific a n t ro le in the lobbying fo r defense c o n tra c ts fo r lo cal companies. O ffic ia ls of the In te rn a tio n a l A ssociation of M achinists, Local 727, a t Lockheed A irc ra ft, and of the United Automobile, Aerospace and A griculture Implement Workers of America (UAW), Local 6, at North American Rockwell, as well as leaders from o th er unions - e sp e c ially the AFL-CIO, were very a c tiv e and v is ib le lo b b y ists during the la te 14. Examples of what C harleston had in 1970 include: defense co n tract p la n ts, an Air Force base, a Naval base, a P o la ris m issile maintenance c en ter, a Naval shipyard and b a l l i s t i c m issile submarine tra in in g s ta tio n , a Naval supply c en te r and weapons s ta tio n , a Marine a i r s ta tio n , a Coast Guard s ta tio n , a mine warfare c en ter, and the S ixth Naval D is tr ic t Headquarters. For an in te re s tin g account of what Mendel Rivers did fo r h is d i s t r i c t see Marshall Frady, "The Sweetest Finger This Side of Midas," Life (Feb. 27, 1970), 52-60. 144 1960's and e arly 1970's. However* during the 1950's and up to approximately 1968* organized labor was not as a ctiv e and v is ib le ; more important* labor was not openly accepted as a member of the de fense in te r e s t by defense company executives. Much of la b o r's recent a c tiv ity is the re s u lt of sm aller defense budgets as compared to thoseof the 1950*s and 1960's and, consequently, in la b o r's judgement* le ss valuable defense co n tract awards to Los Angeles County. With resp ect to la b o r's ro le as a lobbyist* and i t s acceptance as a p a rtn e r in the o v e ra ll defense in te r e s t by corporate leaders* i t is important to note th a t, whereas defense company respondents o fte n sta te d th a t they were proponents of weapons systems co n tracts p rim arily because of the need fo r a strong natio n al defense, labor leaders tended to d isp u te th is p o sitio n s ta tin g th a t defense con tr a c to r s wanted weapons systems fo r the same reasons labor did — economic s t a b i l i t y and p ro sp e rity . Several union o f f ic ia ls contended th a t defense company executives were in te re ste d in high s a la r ie s and p r o f its f ir s t* with natio n al defense coming in a d is ta n t second. On the o th er hand* the executives sta te d th a t labor cared only about jobs and incomes, but th a t the co n tracto rs thought in terms of pro te c tin g the nation from p o te n tia l aggressors. As these d ifferen c es of opinion illu s tr a te * labor and defense co n tra cto rs in Los Angeles s t i l l m aintain a c e r ta in degree of " h o s t ility " toward each o th e r. However, i t appears th a t the h o s t i l i t y w ill soon disappear since both groups need each o th er to lobby fo r defense c o n tra c ts. From 1968 to 1971, an a llia n c e developed between labor and management because of Los Angeles County's 145 depressed defense market and a ris in g unemployment r a te . The labor leaders openly confirmed the a llia n c e , but about one h alf of the defense executives were s t i l l re lu c ta n t to e ith e r admit to i t or to give labor i t s due c re d it fo r a c tiv e ly lobbying fo r defense con t r a c t s . The other h a lf generally welcomed the support of local labor lead ers, and f e l t th a t labor added a p o sitiv e sign to the o v erall image of the County's defense in te r e s t. Sigmund Arywitz, the Executive Secretary of the Los Angeles County Federation of Labor AFL-CIO, s ta te d : "W e have in te ra c tio n with defense executives as issues a r is e . This year has seen much in te ra c tio n and jo in t e f f o r t s . Business needs our support. W e backed programs such as the SST, and the LlO ll."*^ Another labor leader reported th a t at the company where h is union is represented, he suddenly found th a t, not only were h is personal e f f o r ts being s o lic ite d by management, but also th a t the support of rank and f i l e union members was "warmly accepted and encouraged." As w ill be discussed in Chapter 7, most of the a c tiv ity and v is ib le lobbying by labor was executed by the leadership. Top union o f f i c i a l s at the company lo cals were considered to be very useful when they lobbied Los Angeles congressional re p resen tativ es and the U.S. Senators from C alifo rn ia and, in a few cases, rep re se n ta tiv e s and senators from other in d u s tria l s ta te s , esp ecially p o te n tia l Democratic candidates fo r the presidency. 15. Interview with Sigmund Arywitz, Los Angeles, August 11, 1971. 146 The a llia n c e between labor and defense co n tracto rs Is a very im p o rtan t one to watch. If i t continues—and at th is time th e re is no reason to doubt th a t i t w ill not—several key observations should be noted. F ir s t, can one expect new a llia n c e s a ris in g between o ther so- c alled frie n d ly enemies, e sp e c ia lly i f t h e i r resp ectiv e in te r e s ts are threatened by o ther groups? Second, do economics - i . e . , jobs, employment, high wages and s a la r ie s , and p r o f its have p r io r ity over h is to r ic a l d ifferen c es in philosophy and p ra c tice ? If th is is the case, how much longer w ill h is to r ic a l opponents have to continue to c r i t i c i z e each o ther p u b licly in response to e ith e r the expectations of the rank and f i l e , and/or preconceived expectations of the leadership? And th ir d , i f the a llia n c e between labor and defense con tr a c to r s found in Los Angeles is present in o th er m etropolitan areas, perhaps new a llia n c e s between nondefense companies and t h e i r unions may emerge in order to balance or dim inish the influence and p o te n tia l p o l i t i c a l power of a defense co n tra cto r and organized labor a llia n c e . Los Angeles Area Chamber of Commerce The Los Angeles Area Chamber of Commerce generally lobbied fo r the defense industry as a whole; however, on several occasions i t lobbied on behalf of a s p e c ific c o n tra c to r. For example, in 1971, Lockheed received support fo r i t s government-backed guaranteed loan, and, in 1971, North American had the Chamber's support fo r the B-l bomber c o n tra c t. The Chamber of Commerce has an o ffic e and a re g iste re d lobbyist 147 in Washington, D.C.*^ Unlike the defense company lo b b y ists, the Chamber's lobbyist had many functions and r e s p o n s ib ilitie s to perform in ad d itio n to lobbying fo r defense co n tracts fo r Los Angeles County, T herefore, h is ro le , as well as the Chamber's, was lim ited to a very secondary p art of the co n tract award process. Although lim ited to a minor lobbying ro le , the Chamber did have some p art in the o v erall award process. B asically i t sought to promote Los Angeles County, the defense industry at la rg e —or in c e r ta in cases, a sp e c ific con tr a c to r —and to help present a united front on behalf of the defense i n t e r e s t 's e f f o r ts to win c o n tra cts fo r local co n tracto rs.* ^ S tate and Local O ffic ia ls P o litic ia n s elected to s ta te level p o sitio n s, i . e . , le g is la to r s and c o n stitu tio n a l o f f ic e r s , played a more important and a c tiv e ro le in the lobbying process than did Los Angeles County and c ity p o l i t i cian s. At the s ta te le v el, th e most a ctiv e proponent of defense co n tracts fo r Los Angeles during the 1960's and early 1970's were Govenors Edmund Brown and Ronald Reagan. As described in th e follow ing chapter on lobbying techniques, Brown and Reagan were much more 16. The Chamber p referred the word "advocate'* ra th e r than " lo b b y ist." 17. The Chamber of Commerce was never c ite d by a member of the public sec to r as an a c tiv e or aggressive proponent of the County's defense industry a t larg e, or even of a s p e c ific c o n tra c to r. Instead, i t was viewed as a secondary a cto r serving to promote and/or speak out fo r the defense in te re s t ju s t as i t would fo r any o ther commercial member. This same b e lie f was a lso expressed by the p riv a te secto r respondents and th e Chamber interview ees them selves. 148 v is ib le lobbyists than any o ther s ta t e or local o f f i c i a l , with the p ossible exception of Los Angeles Mayor Sam Yorty. The author was su rp rised to find th a t defense co n tracto r execu tiv e s , congressmen, and Department of Defense o f f ic ia ls never men tioned the ro le played by c ity councilmen, mayors, or county super v iso rs. When probed as to whether local p o litic ia n s were part of the defense in te r e s t, most of the p riv a te secto r and congressional respondents sta te d th a t, except fo r Mayor Yorty and one or two other in d iv id u als, local p o litic ia n s g en erally abstained, or did very l i t t l e lobbying. This same opinion was expressed by members of the public secto r who were e ith e r lo cal o f f ic ia ls a t the time of the interview or were so at one time p rio r to higher o ff ic e . B rie fly , these o f f i c i a l s believed th a t they usually had no ro le to play in the de fense co n tract award process, th a t they had no influence, and th a t local m atters concerning tax es, p o lice, f i r e , zoning, and p o llu tio n were more im portant. Of those who did become involved, most did so on th e ir own time and more as p riv a te c itiz e n s , or, once in awhile, they voted fo r a c ity or County re so lu tio n th a t promoted a p a rtic u la r company's a b i l i t y to produce a given weapons system or th a t set fo rth the need fo r economic a ssista n c e in the form of a major defense c o n tra c t. A ssociations The Aerospace In d u strie s A ssociation, formerly known as the A irc ra ft In d u strie s A ssociation, is the major o rganization rep resen t ing defense o riented co rp o ratio n s. I t is made up of approximately 149 60 large a v ia tio n and space co n tracto rs and concentrates " i t s lobbying e f f o r ts on b i l l s a ffe c tin g Department of Defense procurement X 8 procedures." This organization has i t s headquarters and i t s re g i stered lo b b y ists in Washington; however, when compared to other re g iste re d (nondefense) groups, the AIA's reported expenditures since th e Korean War have been very minimal. The A sso ciatio n 's basic policy is to promote the manufacture and sale of a i r c r a f t and a stro n a u tic a l v eh icles; i t does not engage in sp e c ific lobbying th a t might be in te rp re te d as favoring one member company over another. The respondents did not consider the AIA to be a useful or e ffe c tiv e lobbyist fo r Los Angeles c o n tra c to rs. The A ssociation generally was viewed in a somewhat negative lig h t; defense executives f e l t th a t th e ir company could do much of i t s own lobbying, e n lis tin g the support of Los Angeles and key n ational congressmen, as well as the other segments of the defense in te r e s t, instead of u tiliz in g the AIA's lo b b y ists fo r a sp e c ific c o n tra c t. Hence, the main co ntribu tio n th e Aerospace In d u strie s A ssociation made to the Los Angeles co n tra cto rs was the in d ire c t lobbying i t did on behalf of national defense and the industry in general. Department of Defense! O ffice of the Secretary, Active Duty O ffic e rs, and C iv ilian s It was not su rp risin g to find th a t the members of th is group g en erally perceived defense m atters in a broader, more natio n al frame 18. Congressional Q uarterly, Weekly Report, X X V (November 1, 1968), p. 3016. 150 of reference than did the other groups. The Department of Defense respondents were not concerned about which c ity won a major c o n tra ct, or the economic consequences to a given area if i t won or lo st a s p e c ific c o n tra c t. Instead, they projected an image of p ro fessio n als adm inistering the co n tract award process, and being above the p o litic a l b a ttle s and lobbying th a t existed in many major weapons systems contract awards. On the o ther hand, several members of th is group when probed, and several respondents from other groups, did admit th a t c e r ta in individuals of the Department of Defense, p a r t i c u la rly activ e-d u ty m ilita ry o ff ic e rs , in d ire c tly lobbied on behalf of Los Angeles c o n tra c to rs. In d irect lobbying on behalf of a sp e c ific co n tracto r sometimes occurred because an a ctiv e duty o ff ic e r had a personal preference fo r th a t p a r tic u la r c o n tra c to r. This preference generally was based on the o f f i c e r ’s experience with the company's past weapons systems. A Department of Defense o f f ic ia l sta te d th a t "some present day colonels and generals w ill favor a c e r ta in company th a t b u ilt weapons they used, or depended upon, as ju n io r o ff ic e rs in World War II or K orea." In d irect lobbying fo r the Los Angeles defense in te re s t also took place when a c tiv e duty o ff ic e rs and o th er Department of Defense employees advocated continuation of large defense budgets before con g ressio n al hearings and a t various public forums. Much of the armed serv ices lobbying was done by m ilita ry le g is la tiv e lia is o n personnel assigned to many congressional members. If the lia is o n o ff ic e rs needed " a ss ista n c e ," generals or adm irals would also lobby congressmen, or o th er executive branch personnel. B rie fly , opinion v aries as to how proper i t is fo r the m ilita ry to lobby Congress. Congressman Thomas B. C urtis (Republican, Missouri) sta te d fo r example th a t the "Armed Services Committees are a patsy fo r the Pentagon.. .every member needs an up-check from the Pentagon. 20 This is a locked-in d e a l." Along the same lin e , a former govern ment o f f i c i a l , l a t e r employed as a lobbyist fo r p riv a te industry, to ld the Congressional Q uarterly th a t Pentagon lo b b y ists "have 21 Congress organized lik e a Marine Corps landing." He also said th a t the m ilita r y 's le g is la tiv e lia is o n personnel had been assigned congressional members to pressure and, if they fa ile d or the issue was "extremely c r u c ia l," top Pentagon o f f ic ia ls or a general or admiral would do the lobbying. However, Michael Armacost and Arnold Rose contend th a t even though the m ilita ry t r i e s to influence de c isio n s th ere is nothing wrong with t h i s , because w ithin our p l u r a l i s t i c system, every group "promotes" i t s own in te re s t and 22 and s p e c ific programs. Most of the respondents from the public 19. See fo r example, Congressional Q uarterly, "The 'M ilita ry - I n d u s tr ia l' Lobby," in L e g isla to rs and th e Lobbyists, Congress ional Q uarterly (Washington, D.C.s Congressional Q uarterly Service, 1968), p. 55. 20. Found in Ju liu s Dusha, Arms, Money, and P o litic s (New Yorks Ives Washburn, In c ., 1965), p. 85. 21. Congressional Q uarterly, L e g isla to rs and the Lobbyists, p. 55. 22. See Michael Armacost, The P o litic s of Weapons Innovations The T h o r-Ju p iter Controversy (New Yorks Columbia U niversity Press, 1969)} and Arnold Rose, The Power S tru ctu re (New Yorks The Oxford U niversity P ress, 1967). Also see Roger Hilsman, The 152 and th ir d sec to rs a lso believed th a t th ere was nothing wrong in the m ilita ry lobbying fo r i t s own budget and sp e c ific weapons systems, e sp e c ially since o th er fed eral agencies have done the same th in g fo r the past 100 years. Conclusion As might be expected, defense company lo b b y ists and management personnel were the most a c tiv e and v is ib le members of the Los Angeles defense in te re s t during the period under study. G enerally, th ere were two groups w ithin each corporation which lobbied both the d ecision makers and the general p u b lic. The f i r s t group consisted of the fu ll-tim e corporate lobbyist and h is s t a f f . The corporate lo b b y ists, who usually were located in Washington, D.C., were fo r the most p art long-time "company men" who served as vice p resid en ts or sen io r level managers. It was in te re stin g to find th a t, whereas many nondefense lo b b y ists represented more than one c lie n t, defense c o n tra c to r lo b b y ists were fu ll-tim e employees of the companies they rep resented. They were, in e ff e c t, an in te g ra l part of an o v erall corporate team, who at the same time served as " lia iso n " men fo r Los P o litic s of Policy Making in Defense and Foreign Policy (New York: Harper and Row, P ublishers, 1971), pp. 48-56; Samuel P. Huntington, "Power, Expertise and the M ilitary P ro fe ssio n ,"in American Defense Policy, ed. A ssociates in P o litic a l Science, U.S.A.F. Academy (Baltim ore: The Johns Hopkins P ress, 1965); and Robert Ginsburgh, "The Challenge to M ilita ry P rofessionalism ," Foreign A ffa irs , XL (January, 1964). Huntington and Ginsburgh conclude th a t the influence of the m ilita ry is not what many be lie v e i t to be, and various "think tanks" (e .g ., RAND, Hudson, Stanford, e tc .) gained influence in what used to be m ilita ry spheres of in te r e s t (defense policy, weapons a lte rn a tiv e s , s tr a te g ic planning) in the 1950's and 1960's . 153 Angeles based executives and selected members of th e public s e c to r. The second group of corporate lo b b y ists was made up of high and m iddle-level management executives. The sen io r executives and the Washington based advocates lobbied h ig h -lev el Department of Defense o f f i c i a l s , Los Angeles congressmen, C a lifo rn ia 's U.S. Senators, and o th er elected o f f ic ia ls at the s ta t e and n atio n al le v e l. M iddle-level managers and executives, such as d iv isio n and department heads and sen io r engineers, lobbied t h e i r counterparts w ithin the public s e c to r. As a re s u lt of th is dual e f f o r t, the corporations were able to present a strong united fro n t when lobbying ra th e r than having to re ly on the e f f o r ts of one or two lo b b y ists who may have been d isasso ciated from the home based corporate headquarters in terms of geography and corporate philosophy. I t a lso was found th a t most of the Los Angeles County congress ional deleg atio n were a c tiv e members of the defense in te r e s t, and played a very s ig n ific a n t ro le in the defense co n tract award process. Unlike defense company executives, however, they could not devote as much time to lobbying because of other p r i o r i t i e s and demands from nondefense groups. N evertheless, when congressmen did lobby, th e ir e f f o r ts were as a c tiv e and as in ten siv e as many defense company lo b b y ists and managers. The degree of a c tiv ity which a congressman undertook on behalf of a local co n tracto r usually depended on (l) the congressman's d i s t r i c t , and (2) h is philosophy on defense budgets and m ilita ry preparedness. The most a ctiv e and v is ib le congressmen were those w ith major c o n tra cto rs in t h e i r d i s t r i c t s , and/or vivid memories 154 of Pearl Harbor and World War II and of Korea. Labor was another major p a rtic ip a n t of the Los Angeles County defense in te r e s t. During the 1950's and up u n til about 1968, how ever, organized labor was not as activ e as i t has been fo r the past fiv e y ears. Most of i t s recent a c tiv ity is the re s u lt of sm aller defense budgets and a d eclin e in defense employment. It is evident th a t, although defense c o n tracto rs and labor became p artn ers in the defense in te re s t c o a litio n , the two groups s t i l l m aintain a c e r ta in degree of h o s t i l i t y toward each o th er. However, i t appears th a t th is h o s t i l i t y w ill have to be se t asid e, fo r both groups need each o ther to lobby fo r defense co n tracts in the decade ahead. In sum, the emerging labor and defense co n tracto r re la tio n sh ip w ill be an in creasin g ly important a llia n c e to watch. I ts continu a tio n gives r is e to two p e rtin e n t q uestions: Can we expect new a l l i ances a ris in g between o ther h is to r ic a l "enemies?" Will employment and p r o f it receive p r io r ity over group d ifferen c es in philosophy and p ractice? If th is new re la tio n sh ip found in Los Angeles is also present in o th er m etropolitan areas, w ill sim ila r a llia n c e s between nondefense companies and th e ir unions emerge to balance or dim inish the p o te n tia l influence and p o litic a l power of a defense co n tracto r and organized labor a llia n c e . F in a lly , th is chapter also considered the le ss a ctiv e members of the Los Angeles defense in te r e s t, who included: (1) the Los Angeles Area Chamber of Commerce, which ra re ly lobbied on behalf of a sp e c ific c o n tra cto r; (2) s ta t e and local o f f i c i a l s , with higher 155 level p o litic ia n s such as the Governor and the Mayor of Los Angeles overshadowing a l l o th ers in a c tiv ity ; (3) the Aerospace In d u stries A ssociation, which unlike various nondefense a sso c iatio n s, was con sidered by th e industry to be nearly u sele ss; and (4) the Department of Defense, which a t times had c e r ta in employees in d ire c tly lobbying fo r Los Angeles County. In the next chapter, the actu al lobbying techniques employed by the defense in te re s t are analyzed fo r th e ir e ffe c tiv e n e ss. As the chapter unfolds, the re la tio n sh ip s th a t existed w ithin the Los Angeles defense in te re s t w ill become c le a re r, and the reader w ill find th a t the defense in te re s t was dependent upon continual in te r a ctio n and rapport building of i t s p riv a te , public, and th ird se c to r members. CHAPTER V II LOBBYING FOR DEFENSE CONTRACTS: TECHNIQUES A N D INFLUENCE Introduction As reported in the previous chapter, fiv e groups lobbied d i r e c t ly fo r defense c o n tra cts fo r Los Angeles County, and two groups lobbied in d ire c tly fo r the County or sp e c ific c o n tra c to rs. Most activ e of the lo b b y ists were U.S. congressmen, defense company per sonnel, and organized labor. S tate and lo cal p o litic ia n s and the Los Angeles Area Chamber of Commerce also lobbied, but t h e i r e f f o r ts were le ss intense. C ertain members of the Department of Defense and the Aerospace In d u stries A ssociation a s s is te d Los Angeles by t h e ir pro defense a ttitu d e and demands fo r continued high defense budgets. The primary purpose of th is chapter is to : ( l) examine and discuss the lobbying techniques and s tr a te g ie s implemented by the above groups which lobbied fo r defense c o n tra c ts ; (2) determine the effe ctiv en e ss or influence of these techniques; (3) determine the degree of in te ra c tio n th a t existed between the major a c to rs in th e con tr a c t award process; and (4) a s c e rta in the perceptions the p riv a te and public secto r respondents had of each o th er. Defense Contractors During the period under study, th e defense co n tra cto rs of Los Angeles County employed many lobbying techniques in th e ir campaigns fo r winning c o n tra c ts. I t was apparent from the interview s th a t the co n tracto rs spent much of th e ir time and e f f o r t try in g to convince 156 157 p o litic ia n s , bureaucrats, and various o ther groups th a t large defense budgets should be continued fo r national se c u rity , th a t the re sp ec tiv e co n tra cto rs were q u a lifie d to produce major weapons systems, and th a t they could produce a given weapon w ithin a reasonable period of time and a t a f a i r p ric e . The c re atio n and maintenance of a p o s itiv e image was, th e re fo re , the re s p o n s ib ility of both the corporate lobbyist and high and middle level management. The ty p ic a l defense co n tra cto r lobbyist had many years of exper ience with the company, and a t i t l e of vice p resid en t. The lo b b y is t's s ta f f ranged from f if te e n to f i f t y members and, lik e the lo b b y ist, many s ta f f members maintained constant contact w ith the sen io r execu tiv e s of the Los Angeles area home o ffic e and key government o f f ic ia ls ^ The lobbyist and h is s t a f f also maintained reg u lar contact with v a ri ous lower level personnel in the home o ffic e , in branch o ffic e s in o th er c i t i e s and s ta te s , and, of course, in government. The Washington lobbyist g en erally was the type of person who could mix well with a l l kinds of people, was respected, received re a d ily by many d ecisio n makers and bureaucrats, and had earned a re p u ta tio n of being e ffe c tiv e , honest; and, in b rie f, as several respondents con cluded, he had an a b i l i t y to "get things done." To be e ffe c tiv e , the Washington re p re se n ta tiv e , and any o ther corporate executive in te r a ctin g with government personnel, had to build meaningful re la tio n - 1. A s ta f f consisted of government a f f a ir s personnel, tech n ician s, lawyers, marketing people, re tire d m ilita ry o ff ic e rs , and ordinary o ffic e worker support. 158 ships w ith Department of Defense personnel, congressmen, and White House ad v isers. Once a degree of rapport had developed between the lobbyist and a decisio n maker, or a f a i r l y s ig n ific a n t member of the co n tract award process, the o b jectiv e of c re atin g and maintaining a favorable corporate image became much e a s ie r. Vern Johnson, Lockheed's rep re se n ta tiv e in Washington, was o ften c ite d by respondents from both the p riv a te and public sec to rs as an ex cellen t example of the e ffe c tiv e Washington based corporate lobby i s t . An executive of another company s ta te d : "Johnson a t Lockheed has a good re p u ta tio n fo r g e ttin g things done." In order to determine how "things get done," the author asked a former lo b b y ist, who was 2 considered very e ffe c tiv e when he was in Washington, and several o th er corporate executives who had lobbied on a p art time b asis to d escrib e: (l) the techniques used by corporate lobbyists and person nel to build a favorable corporate image; (2) the techniques used to win c o n tra c ts; and (3) the most e ffe c tiv e techniques fo r influencing the decisio n makers. The former fu ll-tim e lobbyist was q u ite candid and inform ative in h is response to th is inquiry. To preserve both the content and persp ectiv e of h is response, the following account is quoted 3 verbatim . 2. Technical note: the respondent used to serve in Washington so lely fo r lobbying purposes. In 1971, he was in Los Angeles serving in a dual ro le : high level corporate executive, and when necessary, a s s is tin g the Washington o ffic e in important lobbying assignments. 159 One of the major door openers In Washington is the congressman. I t is our policy to donate money fo r the p o litic a l canpaigns of various congressmen. Congressmen over the years remember who donates, and how o ften —th is helps us. C ertain congressmen in the C alifo rn ia d eleg atio n can open doors at the White House. Therefore, i t is important to build up re la tio n sh ip s w ith them, and be open, nothing is hidden today w ith resp ect to what we want. If we are competing fo r a p a r tic u la r c o n tra c t, I w ill c a ll ^U.S. Congressman Chet H o lifield f o r a meeting of the C alifo rn ia d eleg atio n to be held in Craig Hosmer's o ffic e ( th is is done fo r protocol since H o lifield is the sen io r man, and a Democrat, and Hosmer is a sen io r Republican). Generally 25 to 30 congressmen atten d - we ra re ly get the a n t i establishm ent ones to the meeting - and c o c k ta ils are served and we present our p o sitio n as to why we should have the c o n tra c t. Films, f l i p cards, s lid e s , and e tc . are a lso used. W e ex p lain why our company is q u a lifie d . Another th in g we do is to find out inform ation at Burning Tree ^Country C luljJ.• .Whenever p o ssib le, we tr y to demonstrate the weapon, or show o ff the plant to c e r ta in in f lu e n tia ls . I t is a lso very important to see generals, adm irals, cabinet members, and executive department heads. I t is not wrong or amoral being close frien d s with congressmen, th is is the re a l world, and we must build up re la tio n s h ip s . Most of the other respondents rep resen tin g major defense con tr a c to r s a lso had a great deal of in te ra c tio n w ith d ecisio n makers in the co n tract award process. However, unlike the lobbyist quoted above, none of them served as a lobbyist or Washington rep fo r as long, or engaged in lobbying on a fu ll-tim e b a s is . Yet, most of th ese defense executives had e ith e r lobbied fo r p a r tic u la r weapons 3. Several congressmen and high ranking public se c to r o f f i c i a l s l a t e r in d iv id u ally concurred with what was said in the above passage. 160 systems, which were being developed under t h e i r d ire c tio n , or p a rt icip ated in co n tract n eg o tiatio n and/or government re la tio n s fo r the corporation a t one time or another during t h e i r c a re e rs. Hence, in c o n tra st to many nondefense in te r e s ts , many high level defense company executives in Los Angeles served th e ir company in a dual capacity as manager and salesm an-lobbyist. This group of Los Angeles defense con tr a c to r s offered the following lobbying techniques as the most e ffe c tiv e both fo r obtaining c o n tra cts and fo r m aintaining a p o sitiv e image with the decision makers. Lobbying Techniques Building R elatio n sh ip s. The successful lobbyist must be sociable fle x ib le , and t a c t f u l ; in o ther words, he must have the a b i l i t y to get along with as many people as p o ssib le. In order to build la s tin g re la tio n sh ip s with decisio n makers and bu reau crats, the defense lobby i s t must learn as much about a public o f f i c i a l as he can, and th is learning process is a never-ending assignm ent. An executive a t North American offered t h i s advice * "Analyse who you are going to see, and learn h is lik e s and d is lik e s , —does he lik e g o lf, g i r l s , e t c . —ta lk on h is le v e l." A m ajority of the p riv a te se c to r respondents shared t h i s view. They a lso believed th a t a one-to-one conversation away from the more formal s e ttin g of a corporate or government o ffic e was conducive to building la s tin g re la tio n s h ip s , or "rapport b u ild in g ."^ 4. "Rapport building" was a term o fte n expressed by p riv a te se c to r respondents which meant the a r t of developing p o s itiv e r e la tio n ships with o th ers. 161 As the i n i t i a l step in e sta b lish in g such re la tio n s h ip s, the respondents believed th a t the lobbyist should u t i l i z e personal contacts or frien d s in order to meet those ind iv id u als considered to be e ith e r in flu e n tia l or knowledgable about the co n tract award pro cess. A personal in tro d u ctio n to a decisio n maker and h is s t a f f was b e tte r than walking in cold off the s t r e e t . Proper introductions were usually made a t a formal meeting (such as an a sso c iatio n or trad e meeting) or in an o ffic e s e ttin g . In some instances, i t was considered q u ite proper to meet a decisio n maker a t a dinner party or on the golf course. Visual A ides. Once the i n i t i a l contact was made, ad d itio n al meetings were arranged e ith e r fo r public re la tio n s purposes (keeping the company name and q u a lific a tio n s on the minds of the decision makers) or fo r discussions of an impending weapons system award. In p rep aratio n fo r these meetings, the successful lobbyist would prepare v isu al aides such as c h a rts, brochures, s lid e p re sen ta tio n s, corporate to u rs, e t c . , th a t would provide inform ation to congressmen, Department of Defense and White House personnel, s ta te and local o f f i c i a l s , and various c itiz e n s and organizations in the community. Since the mem bers of the public se c to r expected concise, accurate, and reasonably o b jectiv e inform ation, ra th e r than book-length manuscripts th a t were overly biased in favor of the company, the successful defense lobbyist took g reat care to make sure th a t h is p re sen ta tio n met the expecta tio n s of h is audience. Being A vailab le. Company personnel must be a v ailab le to the d ecision makers to provide ad d itio n al inform ation, answer questions, 162 and o ffe r a ss is ta n c e . Several of the more experienced executives who had played a dual ro le (manager and salesm an-lobbyist) stre sse d the importance of "being around." In o th er words, lo b b y ists should main ta in constant contact with Department of Defense personnel at a l l le v els, m ilita ry o ff ic e rs , congressmen and t h e i r s t a f f s , and executive branch o f f i c i a l s . A Lockheed executive made an in te re s tin g comment: "One must see people a t the lower le v e ls. You are o ften wasting your time with the top people. Often the re a l a c tio n and work, and conse quently the d e cisio n s, are found in the colonel rank of the m ilita ry and lower Department of Defense le v e ls ." U tilis in g Other Groups in the Defense I n te r e s t. In th e ir lobbying e f f o r ts , major co n tra cto rs e n lis te d the help of organized labor, U.S. R epresentatives and Senators, Chambers of Commerce, s ta te and local o f f i c i a l s , and p riv a te c itiz e n s . These groups and individu a ls were urged to w rite l e t t e r s on the company's b eh alf, make personal v i s i t s and telephone c a ll s to d ecisio n makers and o thers with in flu ence and to ex ert whatever influence they could.^ The basic premise of t h is technique is th a t the support of o th e r groups and individuals rep resen ts a united community e f f o r t fo r a major weapons system con t r a c t . The c o n tracto rs striv e d to e s ta b lis h favorable public r e l a t ions v is -a -v is o ther groups involved in the defense in te r e s t; and 5. An example of one le tte r - w r itin g technique is found in the Appendix. In August 1971 the D irector of M aterial a t North American Rockwell mailed a l e t t e r requesting c e r ta in people to "w rite Senators Cranston and Tunney e n lis tin g t h e i r support of the B-l Program." The th ir d page of th e l e t t e r was so poorly done th a t th e person who received the l e t t e r wondered "what kind of competence ( i f any) ex isted a t North American." As a r e s u lt, 163 corporate o f f i c i a l s would d e liv e r speeches a t high school graduations, c iv ic meetings, and a t open houses a t the company p la n t. In re tu rn , th e companies o ften received laudatory speeches on th e ir behalf and re so lu tio n s and endorsements from p o litic ia n s and community lead ers. Appointments fo r corporate executives from th e home o ffic e u su ally were arranged by the Washington lo b b y ist. In e ffe c tiv e lo b b y ists (or s t a f f members) could well have made i t d i f f i c u l t fo r the executives to meet w ith key people in Washington.^ Obviously, the e ffe ctiv en e ss of the Washington o ffic e depended on the lobbyist in charge. Both p riv a te and public se c to r respondents agreed th a t the successful Washington based defense lobbyist must have many co ntacts and frien d s both in and out of government,^ L e g isla tiv e Hearings. Many defense executives believed th a t having w itnesses favorable to t h e i r cause a t congressional hearings was e ffe c tiv e and e s s e n tia l. This technique is lik e ly to become even more important to defense c o n tra cto rs in the 1970's if they want to counter the e f f o r ts of "an tid efen se" le g is la to r s and w itnesses who promote lower defense budgets and a red u ctio n in weapons procurement. he never wrote on th e company's b eh alf, and gave the l e t t e r to t h i s w rite r as an example of "how not to get things done." 6. One corporate vice p resid en t o ffered th e follow ing advice to a p o te n tia l Washington rep: "Meet s e c re ta rie s and learn th e ir names, be nice to them, they are th e door openers to th e boss, be so ciab le, see as many people a t various le v els as you can, and b u ild r e la tio n s h ip s ." I f th is advice is followed, the respondent said th a t "appointments with the rig h t people w ill be e a s ily made',' 7. The lo b b y is t's length of time in Washington apparently had a s ig n ific a n t re la tio n s h ip on th is requirem ent. 164 Informal V i s i t s * Telephone c a ll s , luncheons, and informal "get to - gethers" were also considered to be necessary and e ffe c tiv e lobbying techniques. To paraphrase several executivest "Just be seen a lo t, get to know the rig h t people (colonels, g en erals, congressmen, s t a f f personnel, e tc .) and drop in and see them." These "drop in" v i s i t s g en erally consisted- of two ty p es. The f i r s t type th e "mission v i s i t , " was made when the company was seeking a c o n tra c t, inform ation, or something fo r the immediate fu tu re . The second type, the "protocol v i s i t , " took place re g u la rly during th e 1950's and 1960's. Protocol v i s i t s meant dropping by the public o f f i c i a l 's o ffic e simply to say " h e llo ," s e t up a game of g o lf, or a luncheon d ate, or to extend a birthday or anniversary greetin g . D ifferences Between Defense and Nondefense Lobbying Techniques As Table 9 shows, one h alf of the congressional respondents f e l t th a t th ere was a d ifferen ce between the lobbying techniques of defense and nondefense in te r e s ts . To them, the major d ifferen c e centered around th e issue of professionalism . Defense lo b b y ists generally were perceived as s o f t - s e l l salesmen. As one congressman concluded: "the defense lo b b y ists are more so p h isticated and f le x ib le . They do not engage in smear-type campaigns lik e the National R ifle A ssociation. The A M A /American Medical A ss o c ia tio n and th e National A ssociation of Manufacturers are also somewhat unprofessional, they cannot com prom ise." And a congressional aide reported th a t defense lo b b y ists are "much b e tte r prepared with respect to b r ie f s , d ata, and general inform ation." 165 Another d ifferen c e between defense and nondefense lo b b y ists was the p ra c tic e of massive l e t t e r w ritin g campaigns. A congressional aide s ta te d th a t "the Los Angeles and Washington o ffic e s of the congressman come under paper b liz z ard s from the S ierra Club and National R ifle A sso ciatio n ." whereas the defense in te re s t "does not engage in l e t t e r w riting campaigns." Several o th er congressmen and s t a f f personnel sta te d v ir tu a lly th e same th in g . However, t h i s gen e ra liz a tio n is somewhat m isleading i f applied to the e n tir e defense in te r e s t . A dditional probing and interview ing revealed th a t, although defense company lo b b y ists and executives put l i t t l e emphasis during the 1950's and 1960's on l e t t e r w ritin g campaigns by t h e i r employees and " frie n d s ," th a t by la te 1970 several co n tra cto rs began to encour age "o rig in a l le t t e r s " to congressmen advocating the need fo r a sp e c ific weapons system th a t was e ith e r being bid fo r or b u ilt by a local c o n tra cto r. As w ill be noted l a t e r , labor also began to en courage i t s members (and frie n d s and r e la tiv e s of the members) to w rite "personal" l e t t e r s to congressmen. However, the union l e t t e r s were much more apt to resemble the stereotyped form l e t t e r th a t was long associated w ith many nondefense in te r e s t e f f o r ts of the 1950's and 1960*s. The e n tire congressional se c to r s ta te d th a t the defense lobby d iffe re d from nondefense in te r e s ts in th a t defense did not re s o rt to th r e a ts during the 1950's and 1960's . I t was in te re s tin g to note th a t none of the congressmen (including s ta f f ) reported th a t he had ever received th re a ts from defense company lo b b y ists, although several Democratic and Republican congressmen commented on th e use of th is 166 technique by various nondefense in te r e s ts . F avorite ta c t ic s of non defense groups th a t employed th re a ts included promises to d e liv e r or withhold votes and campaign co n trib u tio n s (u sually in th e form of money, but a lso volunteer work), and public and p riv a te verbal a tta c k s and l i e s . Although major nondefense groups were c ite d fo r issuing th r e a ts —e .g ., American Medical A ssociation, AFL-CIO, and the American Federation of Teachers—most of the attem pts to influence th e decisio n makers by t h i s technique were reported to be done by both le s s e r known and newer in te r e s t groups. However, two respondents p red icted th a t th re a ts and o th er "old lobby" ta c t ic s may emerge in defense lobbying e f f o r ts of th e 1970's i f the current "an tid efen se mood continues, and defense budgets (e sp e c ia lly fo r procurement) are reduced in comparison to past budget a llo c a tio n s . F in a lly , b rie f mention is made of the fa c t th a t th ree congress men f e l t th a t defense lobby techniques have changed fo r the b e tte r during the past twenty years, w ith the lo b b y ists having more p ro fes sionalism and employing th e s o f t - s e l l approach (see Table 1). Table 9 Congressional Sector Answers Question: Is th e re any d ifferen c e in the techniques employed by defense and nondefense lobbyists? Answers: Yes________ No_____ Could Not Answer th e Question No Time 5 5 0 1 Question: Have you noticed any d iffe re n c e in defense lobbying (techniques) over the years you have been in o f f ic e /p o litic s ? Answers: Yes________ No_____ Could Not Answer the Question No Time 3 4 2 2 167 Defense Lobbyists: Old or New Lobby? As Table 10 i l l u s t r a t e s , none of the public se c to r respondents f e l t th a t defense lo b b y ists were rep re se n ta tiv e of the old school. An activ e-d u ty m ilita ry o ff ic e r sta te d th a t "th ere is ju s t too much government in tru sio n fo r d irty lobby ta c t ic s to be used by defense lo b b y ists." He also said th a t defense lo b b y ists were "clean ," whereas some nondefense lobbyists were " d ir ty ." As noted e a r lie r , one basic c h a r a c te r is tic of the old lobby was the p ra c tice of o fferin g expensive g i f t s and donations to decision makers and to p o te n tia lly in flu e n tia l o ffic e holders and th e ir a l l i e s . With reference to t h is technique, a procurement o f f ic e r remarked fa c e tio u sly : "W e sure get some g reat g i f t s from defense lobbyists! Sometimes we get a calendar around Christmas or M ew Years. W e also receive free meals when inspecting a c o n tra c to r's p la n t." A former Department of Defense executive maintained th a t the "old school" lab el does not apply to the defense in dustry. However, he added, " th is does not always apply to nondefense in te re s ts , e sp e c ially a t the lo cal le v e l." And f in a lly , a very high public o f f ic ia l remarked: "the old lobby stereotype does not apply to de fense. I t is a s e llin g job (by defense lo b b y ists and executives) and i t is a natu ral th in g ." 168 T a b le 10 Questiont Are defense lo b b y ists an a s s e t, or are they a detrim ent to our system? (Old vs. New Lobby). Answers Sector Asset Detriment Both No in te r - No No ___________ (new)________(old)____________ action* Time Comment Congressional 5 0 3 0 1 2 Other Public , n n / i o (Federal Level) *Respondent did not have any in te ra c tio n with nondefense lo b b y ists. The author found it very in te re stin g th a t two congressmen with an "antidefense" r o ll c a ll voting record stated th a t defense lobby i s t s had been b a sic a lly good. One of the congressmen said th a t de fense lo b b y ists were an a sse t to our system, and the other remarked th a t defense lo b b y ists were "good in the sense th a t they present both s id e s. But, u n fortunately, a l l segments in the system are not represented equally, yet I would say defense is good." An admini s tr a tiv e a s s is ta n t to a th ir d congressman stated th a t both he and the congressman "have not seen bad ta c t ic s by defense lo b b y ists. But we have in others - N RA /N ational R ifle A ss o c ia tio n fo r ex ample." Two o ther congressmen a lso f e l t th a t defense lo b b y ists were an a sse t to our system. However, one of them f e l t th at a more com p le te d isclo su re of a l l expenses, g i f t s , and o ther "frin g e b e n e fits" should be required. Three congressional respondents maintained th a t the defense lo b b y ists were sim ila r to other lo b b y ists in th a t some were good, while others were c h a r a c te r is tic of the old school. Two o ther 169 congressional interview ees did not feel q u a lifie d to answer the question because they were r e la tiv e ly new, and one informant never r e a lly answered the question. Congressional and (fed e ra l) public sec to r respondents were of the opinion th a t i f a defense lobbyist was considered su ccessfu l, the chances of h is success being a ttr ib u ta b le to old lobby ta c t ic s were v ir tu a lly n i l . From th is group, and the many other interview s conducted during th is study, the author concluded th a t (with one or two possible exceptions) defense lo b b y ists g en erally did not engage in old lobby methods. New lobby techniques were usually the ru le , and w ill probably continue to be so in the immediate fu tu re . The major reason fo r th is was the fa c t th a t the defense co n tract process, being based on a combination of fa c to rs —p o litic s and m ilita ry source s e le c tio n boards (o b je c tiv e n ess)—does not lend i t s e l f to old lobby t a c t i c s , nor were members of th e public se c to r recep tiv e to such t a c t i c s . The many components underlying the decisio n of a contract award (e . g . , c o n tra cto r q u a lific a tio n s , votes, jobs, economic s t a b i l i t y , e tc .) were q u ite complex and involved numerous in d ividuals who did not condone or respond to pressure p o l i t i c s . Hence, defense lo b b y ists employed such new lobby techniques as providing ob jectiv e inform ation, being w illin g to answer questions candidly, building long-term re la tio n s h ip s with elected o f f i c i a l s and career c iv il servants on the b a sis of honesty, t r u s t , and professionalism . This conclusion does not mean th a t defense lo b b y ists did not use c e r ta in techniques th a t are o ften asso ciated with the old lobby. Cocktail p a r tie s , d in n ers, and golf games were c ite d by many 170 respondents as t a c t i c s included in the lo b b y is t's re p e rto ire . How ever, the public se c to r considered such a c t i v i t i e s to be normal and acceptable. Since everyone in th is country p a rtic ip a te s to some de gree in so cial a c t i v i t i e s (and accepting the view th a t man is a so cial animal and, th e re fo re , does not operate in a vacuum) why should, or would, defense lo b b y ists and government o f f ic ia ls only in te ra c t in a nonsocial s e ttin g ? When so c ia l functions become the main c r ite r io n fo r the overwhelming ra tio n a le behind, an in te re s t receiving an award, the techniques of the old lobby have come into play. With respect to the defense lobby, too many o ther ta n g ib le s — company q u a lific a tio n s , the economy of a given area, p o litic a l con sid e ra tio n s, and the personal whims of the P resident on down to the Lt. Colonel s i t t i n g on the Source S election Board—cancel out what ever p ossible p e tty and r e la tiv e ly in s ig n ific a n t old lobby te ch n i ques th a t may or may not have been employed by a given c o n tra cto r. In conclusion, the fa c t th a t defense lo b b y ists from Los Angeles County employed new lobby t a c t i c s , was a ttr ib u ta b le prim arily to the arena in which they were competing. If t h is arena had encouraged or accepted old lobby t a c t i c s —namely, pressure p o litic s , brib ery , and "immoral" so cial events— i t is not inconceivable th a t the defense lobby would have re so rte d to them—fo r in the long run, the name of the game is to win! Los Angeles Congressmen As expected, Los Angeles County congressmen were constan tly lobbied by the o th er members of the defense in te r e s t . However, a 171 very in te re stin g fa c t began to emerge as more interview s were com p leted] namely, th a t the Los Angeles congressmen spent as much, if not more, time lobbying fo r defense c o n tra cts as they spent lis te n in g to the lo b b y ists fo r the defense in te r e s t. With respect to the ways in which they lobbied fo r defense c o n tra c ts, a l l of the congressmen and t h e i r resp ectiv e s t a f f a s s is ta n ts were open and h e lp fu l. Several congressmen were q u ite candid as to how they lobbied on behalf of a p a r tic u la r co n tracto r or the defense industry in general. Based on these interview s (generally considered to be off the record with respect to personal id e n tific a tio n ) the following accounts i l l u s t r a t e the lobbying techniques employed by most Los Angeles congressmen during the 1950's and 1960's . Lobbying O thers. One of the most widely used techniques was the p ra c tic e of speaking to other congressmen and sen ato rs, the P resident and h is top a id es, and other high-ranking members of the executive branch on behalf of a Los Angeles co n tra cto r competing fo r a major c o n tra c t. For example, a Republican congressman with a major defense c o n tra cto r in h is d i s t r i c t reported th a t he lobbied on behalf of the company in the following manner. Several executives of the corporation made appoint ments with me in Los Angeles and Washington. They presented t h e i r p o sitio n as to why th e (weapons) system was e s s e n tia l to our n atio n al se c u rity and secondly, the economic impact upon my d i s t r i c t , i t was the number of jobs and economic impact th a t per suaded me more than anything to see Mr. X /name withheld per respondent’s request^ in th e Department of Defense. I p ersonally know Mr. X, and I pre sented th e company's p o sitio n to him, and why I f e l t the co n tract should go to the company ra th e r than another company in another c ity and s ta t e . Mr. X asked fo r a d d itio n a l inform ation of which I 172 obtained from the company. I r e a lly believe I was of s ig n ific a n t a ssista n c e to the company, and had some influence in th e f in a l award. Although th e congressmen rep resen tin g Los Angeles County were not re lu c ta n t to speak d ir e c tly (and at g reat length) with the P resident (e sp ec ia lly if he were of the same p arty or i f he and the congressman were personal or p o l i t i c a l frien d s) most congression a l lobbying of P resid en ts during the past twenty years was r e s tr ic te d to b rie f and somewhat formal remarks and endorsements of a p a r tic u la r c o n tra cto r. Most congressional lobbying of the executive branch was d ire c ted a t th e Secretary of Defense, top lev el o f f ic ia ls in the Department of Defense, and Pentagon based adm irals and generals. Another i l l u s t r a t i o n of how congressmen lobbied other decision makers on behalf of Los Angeles companies was offered by a Republican congressman who sta te d th a t he w ill lobby fo r a local company if he fe e ls th a t "non-C alifornia congressmen are try in g to influence the d ecisio n in favor of a company in t h e i r s t a t e ." The congressman said he does t h is only when a Los Angeles company is equally q u a lifie d to produce the weapons system. He added: I w ill push fo r the Los Angeles company. Some out of s ta t e congressmen are too pushy, and try to exert too much Influence. I d o n 't lik e t h is , and when t h is takes place, I w ill focus a tte n tio n on the Los Angeles company on the proper agencies. I w ill f i r s t see the agency th a t is awarding the c o n tra c t. If th in g s are not f a i r - too much p o litic s and not enough m erit co n sid eratio n - then I ' l l suggest White House p ressu re. I also ta lk to o ther congressmen and sen a to rs. I w ill a lso see Laird /S e c re tary of Defense7 and Packard /Former Deputy Secretary of Defense7 because we are good frie n d s and I s t i l l have personal rapport w ith Laird because of Congress. 173 A congressman and two ad m in istrativ e a s s is ta n ts to two o ther con gressmen s ta te d th a t sen io r le g is la to r s and committee and subcommittee chairmen can be in f lu e n tia l w ith respect to which company w ill win a contact and, th e re fo re , these le g is la to r s are lobbied by members of the Los Angeles d eleg atio n . Much of th is lobbying was informal and su b tle , and i t came in varying degrees of lo g ro llin g , power p o litic s , and "g ettin g along." In o th er words, if a powerful congressman want ed something w ith respect to defense procurement fo r h is constituency, or fo r some o th er member's d i s t r i c t , t h e chances of h is being turned down continuously were very remote. Several respondents sta te d th a t i f a powerful member were turned down too o fte n , pet p ro je c ts of o ther congressmen were soon cut back, elim inated, or s ta lle d in committees. Democratic Congressman George Brown s ta te d th a t defense company lo b b y ists and corporate executives "may ask a congressman to w rite a g l e t t e r to fellow le g is la to r s supporting the company p o s itio n ." He also said th a t congressmen also were asked to speak to o th er public o f f i c i a l s , attend meetings, and a s s is t in any way p o ssible so th a t a company might receiv e a c o n tra c t. Congressmen of both p a rtie s re p o rt ed th a t they also did much of what Brown described on behalf of major co n tra cto rs in the County. Several congressmen and s ta f f members in dicated th a t during the p ast few years the Los Angeles d eleg atio n had lobbied f o r defense c o n tra cts p rim arily because of the economic con sequences, and secondly because of the m erits of, or need fo r a p a r t i c u l a r weapons system. This is in c o n tra st to the 1950's and e arly 1960's; during th a t period, many of these same in d iv id u als and former 8. Interview w ith Congressman George Brown, Los Angeles, June 27, 197L 174 congressmen often found themselves speaking in terms of weapons systems and national defense f i r s t , and economic impact second when lobbying fo r local companies. Generating Constituent Support. Congressmen o ften used monthly n ew sletters to th e ir c o n stitu e n ts to p u b licly endorse both the need fo r a strong natio n al defense and the need fo r defense co n tracto rs in the d i s t r i c t and County to continue to win c o n tra c ts . Sometimes a new sletter asked a congressman's c o n stitu e n ts to w rite to other elected o f f ic ia ls expressing th e ir support fo r a p a r tic u la r weapons system. Congressmen also u tiliz e d the media and public speeches to show local voters and members of the defense in te r e s t th a t they sup ported a local c o n tra c to r. In sh o rt, Los Angeles congressmen, a f te r lobbying o th ers, notably other d ecisio n makers, tr ie d to generate lo cal support and actio n by openly supporting a p a rtic u la r company or companies in th e ir d i s t r i c t or County. This, in tu rn , supposedly r e represented united community support fo r DoD outlays in the County. Organized Labor Although organized labor lobbied fo r c o n tra cts during the 1950*s and early I960*s, i t was n e ith e r as a ctiv e nor as v is ib le as defense company lo b b y ists and executives and congressmen. How ever, since the la te 1960'sr labor has been a very a c tiv e member of the defense in te r e s t, and i t must now be c la s s if ie d as one of the most activ e defense lo b b y ists in Los Angeles County. Union o f f i c i a l s used many of the same techniques fo r winning c o n tra cts as did defense company executives and Washington based lo b b y ists. For example, a labor leader gave the following account of one of h is 175 u n io n 's most recent defense lobbying campaigns: In th e /name of plan%7 s e le c tio n , we wrote l e t t e r s , sent telegram s, and called congressmen. W e applied p ressu re. W e also had to convince non-C alifornia congressmen of our need. W e worked hard on congress men, and kept them informed. I walked the h a lls of Congress, even 'b u tto n holed* in a few of them. Our union spent a lo t of money fo r news ads, telephone c a ll s , and personal v i s i t s to Washington. W e le t C alifo rn ia congressmen know th is is Important to us, we elected you and expected your support. Organized labor a lso used the technique of c a llin g meetings of the C alifo rn ia d eleg atio n in order to present i t s p o sitio n and to provide inform ation as to why a given co n tract should be awarded to a Los Angeles company. Another o ften used technique was th a t of in forming the union membership th a t th e ir company was competing fo r a 9 c o n tra c t. Members were then urged to w rite l e t t e r s , ta lk to frie n d s, and jo in " c i t i z e n 's committees" (made up of re p resen tativ es from in dustry, labor, local Chambers of Commerce, and small busi nesses) to generate, w ithin t h e ir communities and throughout the County, public support fo r the award of a major co n tract to a p a r t i c u la r company. In a d d itio n to w ritin g l e t t e r s , making telephone c a ll s , and sending telegram s, committee members went in to the com munity to inform o th er groups about the importance of the c o n tra c t. 9. Local aerospace unions a lso used semi-monthly newspapers such as the American Aeronaut (Lockheed) and th e P ro p eller (North American Rockwell) to keep t h e i r members informed about defense m atters th a t could a ffe c t Los Angeles. Examples of some of the a r t i c l e s include: "How they voted from C alifo rn ia on the Lockheed loan"; "Congress Holds Key to 42,000 North American Jobs"; "Q u illin Sends P ro test Wire to P resident Nixon"; and "Local 887 O utlines Plan to Aid Aerospace Workers." 176 Another t a c t i c used by labor was to have local members send l e t t e r s to r e la tiv e s and frien d s in o th er counties and s ta te s urging them to w rite to t h e i r s ta te and fed eral le g is la to r s on behalf of a Los Angeles company or in support of the need fo r a p a r tic u la r weapons system. This technique appears to be very new and is lik e ly to continue to be used in to the 1970’s, or fo r as long as defense budget ap p ro p riatio n s fo r weapons systems are challenged by a grow ing number of le g is la to r s and o ther in te r e s t groups. F in a lly , labor a lso employed the technique of presenting to as many d iff e r e n t ind iv id u als and groups as p o ssib le i t s arguments as to why a major weapons system should be b u ilt in Los Angeles. To i l l u s t r a t e , one union leader s ta te d : "We inform groups lik e the PTA about the need fo r jobs, and th e economic rip p le e f f e c t. W e a lso tr y f o r re so lu tio n s from the S tate le g is la tu r e and c ity and County o f f i c i a l s . " Another o f f i c i a l said th a t in 1971 h is union presented i t s "p o sitio n a t le a s t once if not more to P resident Nixon, Vice P resident Agnew, Senators Humphrey, Bayh, Cranston, and Tunney, former Cabinet member and P re s id e n tia l Adviser Robert F inch," and numerous C alifo rn ia le g is la to r s in Sacramento and Washington, O.C. Other Public Sector Respondents Los Angeles County defense co n tra cto rs received support fo r t h e ir lobbying e f f o r t s from statew ide elected o f f i c i a l s , including assemblymen and sen ato rs, local mayors, c i t y councilmen, and various o ff ic e rs and bureaucrats of th e Department of Defense and o ther executive branch departm ents. This support was in the form of local 177 and s ta t e le g is la tiv e re so lu tio n s, l e t t e r s from local o f f i c i a l s to fe d e ral decisio n makers, and many of the same techniques p racticed by c o n tra c to rs, congressmen, and labor lead ers. This sectio n w ill discuss b r ie f ly the techniques used by lo cal and s ta t e p o litic ia n s and a c tiv e and r e tir e d Department of Defense personnel. S tate and Local P o li tic i a n s . An ex cellen t i l l u s t r a t i o n of lobbying by lo cal p o litic ia n s fo r defense co n tracts occurred in 1970 when North American Rockwell was bidding fo r the 8-1 s tr a te g ic bomber c o n tra c t. Los Angeles Mayor Sam Yorty wrote President Nixon urging h is support fo r North American's bid because of the economic slump in the C ity. Mr. Yorty wrote I Not since th e end of World War II has a c r i s i s of to d a y 's proportions ex isted in C a lifo rn ia 's aero space i n d u s t r y ...I t is threatened with a staggering loss of engineering and production ta le n t due to p ro jected la y -o ffs n e ce ssita te d by the severe c u t back in defense spending, 10 The use of re so lu tio n s is another technique favored by local o f f i c i a l s . The Los Angeles City Council, and o th er c ity councils in the County, adopted re so lu tio n s urging Congress or the President to consider the q u a lific a tio n s of a p a r tic u la r c o n tra cto r. Resolutions and l e t t e r s a lso expressed th e need fo r co n tract awards to Los Angeles County industry a t large to stim u late the lo cal economy.** 10, "Mayor Yorty urged P resident Nixon to back North American's B-l b id ," Los Angeles Times, March 17, 1970, P art 3, p. 9. 11. I t appears th a t the Los Angeles City Council, and the c ity councils of Burbank, Long Beach, and Santa Monica o fte n reso rted to re so lu tio n s and l e t t e r s s t r i c t l y fo r p o litic a l reasons and a "perhaps we should do something" a ttitu d e ra th e r than a d e sire to express the need fo r national se c u rity . 178 P o litic ia n s a lso praised the m erits of local c o n tra cto rs, as evidenced in September 1971 when more than 400 c iv ic leaders attended a b reak fast meeting and heard various notables laud Lockheed as a "Good C itizen of Burbank." Burbank Mayor Robert A. Swanson said! "Lockheed has given fr e e ly of i t s resources and ta le n t to aid the community. I ts o f f i c i a l s have served on our boards and commissions and have never demanded fav o rs. In the l a s t 25 years the company has 12 paid more than $25 m illio n in c ity taxes alo n e." Although local p o litic ia n s p u b licly promoted a sp e c ific company and the County, th e ir e f f o r t s were q u ite lim ited in comparison to those e f f o r ts of c o n tra c to rs, congressmen, and organized labor. The interview s l e f t t h is w rite r with the impression th a t c ity councilmen and County supervisors did not believe th a t they played a s ig n ific a n t ro le in influencing the s e le c tio n of defense c o n tra c ts. Local p o li tic ia n s (aside from Mayor Yorty) who wanted to help defense con tr a c to r s were probably much more e ffe c tiv e when they a s s is te d some o ther more esta b lish e d group w ithin the defense in te r e s t which had co n tacts o r influence in Washington, P o litic ia n s elected to statew ide p o sitio n s and the C alifo rn ia S tate L e g isla tu re appeared to play a more important and a ctiv e ro le in the co n tract award process than local o f f i c i a l s . Several S tate le g is la to r s , and members of t h e i r s t a f f s , reported th a t they had 12, "Burbank has P raise fo r Lockheed Corp," Los Angeles Times. September 15, 1971, P art 2, p. 7. w ritte n personal l e t t e r s to frien d s in Congress or the executive branch urging favorable co n sid eratio n of a defense company in C alifo rn ia or in Los Angeles. For example, on several occasions former Governor Edmund G. Brown (Democrat) telephoned key decision makers in Washington and presented a “sale s p itc h " on behalf of major co n tra cto rs in Los Angeles County. His successor, Governor Ronald Reagan (Republican), a lso made use of th e telephone, personal l e t t e r s , and personal in te ra c tio n with high o f f ic ia ls in Washington on behalf of defense companies. Both Brown and Reagan u tiliz e d t h e i r p o sitio n as Governor and p arty leader to promote the q u a l i f i c atio n s of local co n tra cto rs and the n ecessity of Los Angeles County g e ttin g i t s so -c alle d f a i r share of defense c o n tra cts with several P resid en ts (Brown w ith Kennedy and Johnson; Reagan with Nixon). One in te re s tin g observation should be notedi namely, th e d iff e r e n t reasons advanced by Governors Reagan (and Republican L t. Governor Reinecke) and Brown fo r lobbying fo r defense c o n tra c ts. Governor Brown sought c o n tra c ts fo r C alifo rn ia firm s on the b asis of economic co n sid e ra tio n s. Reagan and Reinecke o ften c ite d "national s e c u rity ," in ad d itio n to economic impact, as t h e ir reasons fo r lobbying on behalf of the Los Angeles defense in te r e s t. However, i t is d i f f i c u lt to a ttr ib u te t h i s d ifferen c e in terms of "Republicans are pro defense" and "Democrats are n o t," e sp e c ially when one understands th a t Governor Brown was in o ffic e during a period (1959-1967) when both n ational p a rtie s were strong advocates of large defense budgets 180 13 in the name of natio n al s e c u rity . A former Department of Defense o f f i c i a l sta te d th a t when a major co n tract was to be awarded, many th in g s were taken into co n sid eratio n . A primary co n sid eratio n was the p o litic a l b e n e fits a President could gain by becoming involved in the se le c tio n of a co n tracto r in one s ta t e over a co n tracto r in another s ta t e . In the case of the TFX (f ig h te r a ir c r a f t) fo r example, th is o f f i c i a l said th a t " if i t was b u ilt by Boeing, then the p lan t in Wichita (Kansas) would have been chosen, and i t was a Republican s ta t e . For Kennedy, General Dynamics' Forth Worth p lant was p o l i t i c a l l y b e tte r —many more votes /b o th in Texas and in Congress7 and o ther p o litic a l fa v o rs." As a re s u lt of th is " p o litic a l r e a l i t y ," the o f f ic ia l believed th a t "governors, large c ity mayors, and U.S. senators and re p re se n ta tiv e s of the P re s id e n t's p arty can play a large p art in the d ecision making of defense c o n tra c ts ." Three public se c to r respondents, Robert Best, Deputy D irector of Procurement and Production, U.S. Air Force; Fred Hoffman, A ssistan t D irecto r, Bureau of the Budget, and Deputy A ssistan t Secretary, Department of Defense; and Theodore Parker, D irector of S trateg ic S tudies, Rand Corporation, and former DoD co n su ltan t, who had served with the executive branch in the 1960's did not re c a ll any lobbying 13. For a d d itio n al inform ation on Democrats and n ational se c u rity during th e 1960's see Carol Goss, "Congress and Defense Related Constituency B en efitst An In te rp re ta tio n of Recent Research," (Paper d eliv ered a t the Twenty-sixth Annual Meeting of the Western P o li tic a l Science A ssociation, March 1972). 181 e f f o r ts by local p o litic ia n s except fo r "civ ic boosterism " - i . e ., Chamber-of-Commerce-type campaigns p ra isin g Los Angeles County. In ad d itio n , t h is group f e l t th a t very few s ta te p o litic ia n s played an a ctiv e ro le in lobbying fo r defense c o n tra cts fo r Los Angeles. In conclusion, based on inform ation gained from the interview s, i t is probable th a t the more highly placed the elected o f f i c i a l , the g re a te r h is individual ro le in lobbying on behalf of Los Angeles and C alifornia-based defense c o n tra c to rs. Whereas c ity councilmen and mayors from o ther c i t i e s in the County had a very lim ited ro le in the lobbying e f f o r t , Mayor Yorty, and Governors Brown and Reagan were f a i r l y a c tiv e lo b b y ists. Department of Defense If a member of th is group chose to lobby fo r a p a rtic u la r con tr a c to r , or sought to influence the co n tract award d ecision, there were two primary ways in which he could do so; (l) he could inform other Department of Defense personnel and executive branch o f f ic ia ls of the company's q u a lific a tio n s ; and (2) he could give information to defense company lo b b y ists which might a s s is t the company in i t s e f f o r ts to win the c o n tra c t. This inform ation could concern what the Department of Defense was looking fo r in weaponry, what i t would be w illin g to spend, and when i t would begin development. A high ranking Department of Defense o f f ic ia l explained a ty p ic a l lo b b y is t's ta c t ic s fo r obtaining inform ation: Defense lo b b y ists drop in about once a month ju s t to say h e llo , and of course, develop rapport and long time frie n d sh ip s. On some occasions they w ill pre sent the company sid e, and tr y to get inform ation 182 from me. They come fo r guidance, help, and long- range plans of t h is o ffic e . Another DoD respondent said th a t defense in te r e s ts would ask him M fo r advice and how to b e tte r approach problems" re la te d to winning con t r a c t s . Since the members of th is group were more apt to be lobbied instead of doing the lobbying themselves, i t is important to note th e ir perceptions as to what makes an e ffe c tiv e defense lo b b y ist. As sta te d e a r lie r , one of the most important things a lobbyist must do is to build re la tio n sh ip s with members of Congress (esp ecially sen io r members and the s t a f f of the Armed Services Committees, and the A ppropriations Committees) and key personnel w ithin the Depart ment of Defense. All of the DoD Respondents stressed the importance of b u ilding re la tio n s h ip s, and most of them were aware th a t defense lo b b y ists and executives were using th is technique on them. The interview ees reported th a t "rapport building" was o ften accomplished by taking o f f ic ia ls to lunch or dinner, in v itin g them to asso c iatio n meetings, playing g o lf, and by taking them on v i s i t s to company p la n ts . Other methods included telephone conversations, "dropping in to say h e llo ," and jo in t p a rtic ip a tio n in c iv ic functions and n atio n al events - e . g . . c h a rity d riv es, space launchings, e tc . The Department of Defense respondents, fo r the most p a rt, agreed th a t corporations made use of r e tir e d m ilita ry and naval o ffic e rs in th e ir quest fo r winning c o n tra c ts. They sta te d th a t some re tire d o ff ic e rs with co n tract and n eg o tiatio n experience served as in te llig e n c e g ath erers and advised th e ir c iv ilia n employers on the 183 overall procurement process. Several respondents reported th a t r e tir e d colonels, generals, and admirals a ss is te d th e ir employers with inform ation on who to see, when to see him, and what to say. Another Department of Defense respondent sta te d th a t the e ffe c tiv e defense lobbyist kept h is company advised at a l l times on present and fu tu re budget problems, lim ita tio n s, and p r i o r i t i e s : The Washington rep should keep a close tab on the budget. This is done in order to see where the money is , and where i t w ill be spent. The good ones find out what the serv ices want, and they keep th e ir company informed where the money is going. Today's lobbyist is somewhat of a specu lato r with a lo t of know-how. And f in a lly , b rie fin g s , flip -c a rd p resen tatio n s, c h a rts, s lid e s , movies, meetings, ad v ertisin g in the trad e jo u rn a ls, and public re la tio n s campaigns to c re ate a favorable corporate image were also recognized as lobbying techniques used by the defense in te r e s t. How ever, these techniques were considered to be le ss important than building rapport and gathering in te llig e n c e . Active Duty M ilita ry O fficers The armed serv ices themselves u tiliz e d several s ig n ific a n t lobbying techniques in th e ir e f f o r ts to convince other decision makers, in s titu tio n s and org an izatio n s, and the general public of the n ecessity fo r adequate defense budgets and sp e c ific weapons systems. Because such e f f o r ts in d ir e c tly helped the Los Angeles defense in te r e s t—the co n tin u atio n of large defense budgets, and new weapons systems u su ally re su lted in new defense co n tracts fo r local companies—they were warmly supported by the p o te n tia l b e n e fic ia rie s . 184 Public R elatio n s. One of the most v is ib le techniques used by a ctiv e duty o ffic e rs were the public re la tio n s campaigns designed to convince various groups of the n ecessity of developing and producing modern weapons systems. Senator J . William Fulbright has w ritten th a t the m ilita ry d ire c ts these campaigns at audiences ranging from "school ch ild ren and teach ers to ranchers and farm ers, from union leaders to defense c o n tra c to rs, from Boy Scouts to American L egionnaires."*^ He a lso contended th a t the "p rin cip al ta rg e t for the m ilita ry PR men, however, is the media."*^ F ulbright, Senator William Proxmire, and CBS te le v is io n , have furnished examples of the m ilita ry supplying the news media with press re le a se s, p ic tu re s, tap es, and film s produced by the Department of Defense.*^ Radio and te le v is io n s ta tio n s received s p e c ia lly produced tap es, and speakers were av ailab le to organizations and the media throughout the country. I t must be pointed out, however, th a t many newspapers and radio s ta tio n s receive and use news re le ase s supplied by nondefense re la te d groups such as s ta te and lo cal p o litic ia n s and c h a rita b le and so cial o rg an izatio n s. These news re le a se s are o ften used as program f i l l e r s and fo r community (serv ice) re la tio n s . Therefore, Department of Defense media serv ices were viewed in many cases as no d iff e r e n t than 14. J . William F u lb rig h t, The Pentagon Propaganda Machine ( Vintage Books; New York! A D ivision of Random House, 1971), p. 28. 15. Ib id . 16. See fo r example William Proxm ire.Report from Wasteland (New York Praeger P u b lish ers, In c ., 1970), pp. 19-22; and "The S ellin g of the Pentagon," C.B.S. te le c a s t, October 14, 1971. 185 those supplied to local papers and radio s ta tio n s by nondefense groups. Tours * Another freq u en tly used technique was th a t of taking in f lu e n tia l people on to u rs of various m ilita ry bases and c i t i e s throughout the world. For example, a Los Angeles congressman sta te d th a t " e x tra c u rric u la r side t r i p s to various fun spots are not unus u a l." And Lewis Dexter was to ld by a congressman: " . . . i f they were re a lly to study 'c o r ru p tio n ', a l l th a t (o il business) is peanuts in my judgement; the people who are re a lly try in g to b ribe and p res sure Congress are from the Department of Defense. They learn you want to go somewhere, and they c a ll you up and say how about tra v e lin g on one of our planes?; and i t ju s t so happens th e re is rid in g along with you a p leasan t, agreeable o f f ic e r from the serv ice which gives you the rid e ; he does not argue with you at a l l , but he does c a ll your a tte n tio n to things from th e ir stan d p o in t." 17 These "to u rs" were not r e s tr ic te d to congressional personnel alone. Defense company executives, bankers, c iv ic lead ers, s ta te and local p o litic ia n s , and anyone e lse considered lik e ly to promote the need fo r a strong defense or a p a rtic u la r weapons system, was urged to a tte n d . L e g isla tiv e L iaison O ffic e rs . L e g isla tiv e lia is o n o ff ic e rs are 17. Lewis Dexter "Congressmen and the Making of M ilitary P o lic y ," in New P erspectives on the House of R epresentatives, ed. Robert Peabody and Nelson Polsby, (Chicago: Rand McNally and Co., 1969), p. 189. Another member of the public se c to r gave an example of ju s t how much serv ice m ilita ry aides can provide: "The la te R epresentative Mendel Rivers was once saved embar rassment when he was somewhat 'in to x icated * in a P a ris night club. One of h is m ilita ry e sc o rts fo rc e fu lly 'convinced' a photographer to tu rn over h is r o l l of film th a t included several p ic tu re s of the in to x icated Congressman." 186 found in each branch of the armed serv ice s. For example, the Air Force has an O ffice of L e g isla tiv e Liaison which operates under the au th o rity of the O ffice of the Secretary of the A ir Force. This o ffic e s e le c ts o ff ic e rs to t e s t i f y before congressional hearings and keeps a se n sitiv e ear to the p rev ailin g moods of Congress. In ad d itio n , the o ff ic e rs gather needed in te llig e n c e fo r the Air Force. The lia is o n o ff ic e rs , or " e s c o rts ," also s tr iv e to build p o sitiv e re la tio n s h ip s with congressmen and key members of the executive branch. To fu rth e r th is o b jectiv e, lia is o n o ff ic e rs are permanently attached to the armed serv ices committees and are always a v ailab le 18 to advise and a s s is t congressmen. In 1959, Congressional Q uarterly a p tly concludeds "Locked in com petition fo r la rg e r shares of a defense budget th a t has not kept pace with the soaring c o sts of new weapons systems, the services t o i l co n sta n tly to ' s e l l ' th e ir p a r tic u la r d o ctrin es, programs, and re - 19 quirements to the p u b lic, industry and Congress. Updating th is to 1972, many public se c to r respondents reported th a t the "sales p itch " by the m ilita ry increased during the years 1967 through 1971. This was not su rp risin g p a r tic u la r ly since the vast m ajority of p riv a te 18. Also see Arnold Rose, The Power S tructure (New Yorks Oxford U niversity P ress, 1967), p. 137; and Herbert W . Stephens, "The Role of the L e g isla tiv e Committees in the A ppropriation Process: A Study Focused on the Armed Services Committees," Western P o litic a l Q uarterly. XXIV (March 1971), pp. 146-162. 19. Congressional Q uarterly, "The 'M ilitary Lobby's I t s Impact on Congress and the N ation," in American Government, ed. P eter Woll (Bostons L i t t l e , Brown and Co., 1969), p. 240. 187 se c to r and m ilita ry o f f ic e r respondents sta te d th a t 1967-1972 budget a llo c a tio n s fo r s tr a te g ic weapons, and research and development from 1967-1972 were inadequate. They strongly believed th a t th is s i t u a tio n m erited the a tte n tio n of congressmen and the nation at la rg e . Although le g is la tiv e lia is o n o ff ic e rs were very a c tiv e during the past th ir te e n years, i t was in te re stin g to find th a t the con g ressio n al se c to r generally agreed th a t they lobbied in a p ro fessio n - 20 al manner. Their lobbying e f f o r ts were viewed in much th e same way as those of any other group; namely, th a t when a group has a vested in te re s t in the annual budget a llo c a tio n process, the p re sen ta tio n of i t s p o sitio n and program through selected lobbying techniques is leg itim a te so long as the group does not apply undue pressure or demand undue amounts of time and a tte n tio n at the expense of counter v a ilin g groups. Los Angeles Area Chamber of Commerce The Los Angeles Area Chamber of Commerce and the Chambers of Commerce of sm aller c i t i e s in the County did not play a primary ro le in the lobbying e f f o r ts fo r sp e c ific defense c o n tra c to rs. However, 20. One of the congressmen sta te d th a t "many of these e sc o rts are o fte n hired by defense companies to help influence congressional d e cisio n s. They have b u ilt up rap p o rt, and re la tio n s h ip s over the years, and serve a useful purpose." Also see Weldon V. Barton, "The Procurement, R and 0 A uthorization Process in the House Armed Services Committee," Paper d eliv ered a t the Sixty- s ix th annual American P o li tic a l Science A ssociation Convention, September, 1970; Congressional Q uarterly, Guide to Current American Government. (Washington, D .C .: Congressional Q uarterly In c ., 1969), pp. 98-104; and Adam Yarmolinsky, The M ilitary Establishm ent: Impacts on American Society (New York: Harper and Row, In c ., 1971), pp. 38-53. 188 Che Los Angeles Chamber did a c tiv e ly engage in promoting the q u a l i f i catio n s of the e n tire defense industry in the County, and, th e re fo re , must be included among those who in d ir e c tly a s s is te d individual de fense c o n tra cto rs by advocating both c o n tra cts fo r Los Angeles County and the need fo r a strong natio n al defense. The Chamber of Commerce used many of the same methods as o ther defense in te r e s ts . These included using brochures, l e t t e r s , speeches, and news re le a s e s; providing inform ation to i t s members and asking fo r t h e ir a ssista n c e ; adopting re s o lu tio n s ; e sta b lish in g "good rapport with the Southern C alifo rn ia congressional d eleg atio n "; contacting and working with s ta te o f f i c i a l s (Governor, s ta t e le g is la to rs , e t c . ) , appearing before congressional committees; meeting with the C alifo rn ia d eleg atio n ; and, as one Chamber respondent r e ported, "a l i t t l e d ire c t contact with people in the Pentagon" in order to present and obtain inform ation. Although these e f f o r ts were much more lim ited than those of defense company executives, congress men, and labor lead ers, the Chamber contributed to the o v erall de fense i n t e r e s t 's goals of promoting co n tra cto rs in Los Angeles and the n ecessity of m aintaining a strong n atio n al defense through adequate budgets. A ssociations The most important finding about industry-w ide defense a sso c i atio n s was the negative a ttitu d e defense company executives had to ward them. Most of th is negativism was focused on the Aerospace In d u strie s A ssociation (AIA), the la rg e st and best known of the 189 a sso c iatio n s. As a group, corporate executives considered the AIA as a very in e ffe c tiv e lo b b y ist, and one e x ec u tiv e 's comment proved to be re p re se n ta tiv e of the in d u s try 's o v erall a ttitu d e : "The AIA is next to damn near u s e le s s." It was also su rp risin g to learn th a t defense asso ciatio n s were never c ite d as having a ctiv ely lobbied decision makers on behalf of sp e c ific defense c o n tra cto rs, the industry in general, or large defense budgets. Therefore, the interview s did not shed any addi tio n a l lig h t on the lobbying techniques of defense asso ciatio n s 21 th a t have already been reported in the l i t e r a t u r e . In te ra c tio n Between Members of th e Three Sectors Congressmen and the P riv ate Sector: The amount of in te ra c tio n th a t took place between congressmen and defense corporation execu tiv e s was not uniform. Congressmen with major co n tracto rs and sub co n tracto rs in th e ir d i s t r i c t g en erally had more frequent contact with corporate o ff ic e rs than those from nondefense d i s t r i c t s . How ever, th e re were exceptions. For example, one re p re se n ta tiv e w ith a considerable amount of defense industry in h is d i s t r i c t said : "I 21. Aside from e d ito r ia ls supporting Pentagon budget requests and l e t t e r w riting campaigns to Congress (which apparently took place only s p o ra tic a lly ) , a sso c iatio n s such as AIA, the Air Force A ssociation, the Arnold Society, and the Air D ivision of the American Legion National S ecurity Commission, played a very lim ited ro le in the co n tract award process. For ad d itio n al reference, see Al T o ffle r, "Salesmen in Uniform," The Nation, (November 30, 1957), 27-36; and Jack Loosbrock, "The Aerospace Industry and M ilitary P o lic y ," in The P o litic s of M ilitary Policy Security Studies P ro je c t, (Los Angeles: U niversity of C alifo rn ia, Los Angeles, 1965), pp. 33-34. 190 ra re ly see people from the defense in d u stry . They spend most of th e ir time with committee chairmen and those th a t have a prodefense image. I wish they would come around more o fte n ." The m ajority of congressmen and s t a f f personnel who had s ig n i fic a n t in te ra c tio n (an average of a t le a s t three times per year, and in some cases, monthly) reported th a t meetings usually were held at the request of the company. The more common reasons fo r th is in te r a ctio n were the d e sire of the company (l) to present i t s p o sitio n as to why i t deserved a c o n tra ct, or (2) to complain about not g e ttin g a c o n tra ct, or subcontract. The remarks of a congressional aide i l l u s t r a t e what was l a t e r found to be ty p ic a l fo r Los Angeles congressmen: "We encourage business and defense executives to le t us know what is going on." Defense executives met with congressmen from a low of once a year to a maximum of once or twice a month, and 22 the median was about fiv e times per year. An ex cellen t d e sc rip tio n of what happens was provided by William McClain, Field Deputy to Republican R epresentative Barry Goldwater, J r . : " In te ra c tio n r e s u lts as problems a ris e and th ere is no reg u lar schedule. W e w ill see 23 company o f f i c i a l s whenever th ere is a need," 22. These fig u res represent a ty p ic a l year. However, th ere have been cases of almost d a ily in te ra c tio n during short " c r is i s " periods such as the North American Rockwell quest fo r the B -l; and Lockheed and the C5A, and i t s recent e f f o r t to obtain govern ment-backed loans. 23. Interview with William McClain, A pril 18, 1971. This appeared to be the case fo r most of the congressmen, e sp e c ially Gold water, B ell, Corman, H o lifield , and Clauson. 191 Congressmen usually met w ith defense executives in Los Angeles or Washington, D.C, As reported e a r lie r , occasional meetings and "get to g eth ers" also took place at a sso c ia tio n meetings, fu n d -raisin g p a r tie s , and such events as m issile launchings. Congressional o ffic e s and company p la n ts were frequent meeting sp o ts. In addi** tio n , luncheons, dinners, and personal v i s i t s to one anothers homes were not unusual fo r some congressmen due to th e close re la tio n sh ip s th a t had b u ilt up over the years. Other so cial functions included c o c k ta il p a rtie s and g o lf. In Washington, D.C., fo r example, th ere is a group known as the C alifo rn ia Society. This group is made up of C alifo rn ia congressmen, t h e ir resp ectiv e s t a f f s , lo b b y ists rep resen tin g C alifo rn ia in te r e s ts , and anyone in Washington who is from C a lifo rn ia . Several public o f f i c i a l s said th a t th e Society has "get to g e th e rs ," namely so cial functions such as p ic n ic s and p a r tie s , A congressional aide remarked "I c a n 't prove i t , but th ere are strong rumors c irc u la tin g th a t the lo b b y ists pick up the f u ll tab , and defense companies do c o n tri- 24. In Ju ly 1972, the Society had a p icnic and many am enities were provided by p riv a te in d u stry . Congressman Robert L, Leggett barbecued lamb and o ffered th is example of what industry pro vides: "H ere's my re c ip e i t serves 800. You s t a r t with fiv e w ell-fed fa tte d , C alifo rn ia lambs. You f l y them in from my d i s t r i c t , courtesy of TWA,..." The S o c ie ty 's h is to ria n , Candy Duncan has s ta te d : The p ic n ic s and so cia l events are "a pleasant way fo r these businessmen to c asu a lly approach a Congressman, ra th e r than in a C apitol H ill o ffic e , to ta lk about le g is la tio n or pick up a few t i p s . " See Marlene Cimons, "When in D.C., P icnic as C alifo rn ian s Do," Los Angeles Times (July 4, 1972), P art 4, pages 1 and 4. 192 Comparing the so c ia l a c t i v i t i e s of defense lo b b y ists with those of nondefense lo b b y ists, Congressman George Brown said th a t "the defense c o n tra cto rs and defense in te r e s ts of C alifo rn ia were not as so cia l or as apt to have expensive o r sp ectacu lar functions as were ..25 other in te r e s ts such as the motion p ic tu re and wine in te r e s ts . When i t came to "wild p a r t i e s ," and obvious "wining and d in in g ," th e defense lo b b y ists did not score very high with the congressional respondents. In f a c t, several congressmen and s t a f f personnel said th a t the defense lobby was ra th e r q u ie t. This s itu a tio n could change, of course, as evidenced by the follow ing comment of an ad m in istra tiv e a s s is ta n t to a congressman w ith a major co n tra cto r in the d i s t r i c t s "Defense lo b b y ists do not use co n fro n tatio n p o l i t i c s . However, with the decrease in defense funds, pressure p o litic s could e a s ily r e s u l t ." By pressure p o l i t i c s , the respondent meant th a t defense in te r e s ts "could soon s t a r t 'b u tto n h o lin g ,' throwing more p a r tie s , and in je c tin g large fin a n c ia l campaign co n trib u tio n s, along with o th er le ss p ro fessio n al ta c t i c s and methods, c u rre n tly in use by some nondefense groups." Social in te ra c tio n between the two sec to rs took place a t formal din n ers, e . g . , th e White House, h o te ls, and p riv a te residences, or informal meetings at the company p lan t (where coffee and doughnuts were s e r v e d ...) , or a lo cal co ffee shop in Los Angeles or Washington. Fund ra is in g dinners fo r a congressman, or other p o litic ia n s o r p o litic a l p a rty , o fte n served as places where 25-. Interview w ith Congressman George Brown, June 27, 1971. 193 congressmen and defense executives were able to s o c ia liz e and ex change v ie w s .^ Congressmen and the Public S ecto r. Congressional in te ra c tio n was not lim ited to members of the p riv a te s e c to r. Most of the con gressmen interviewed in th is study also in te ra cted with o ther con gressmen. o f f ic ia ls of the Department of Defense, and m ilita ry o ff ic e rs on activ e duty. This in te ra c tio n took place f o r several reasons: (l) lobbying fo r. or promoting a p a r tic u la r Los Angeles defense c o n tra cto r; (2) presen tin g inform ation and d ata about a p a r tic u la r company, and/or weapons system to other d ecisio n makers; and (3) gathering inform ation fo r a defense co n tra cto r, or fo r the congressman's own personal use. The degree of in te ra c tio n was e s s e n tia lly the same as th a t between congressmen and defense company executives. In sum, in te ra c tio n took place as o ften as necessary. G enerally, th is was bimonthly; however, during c e r ta in c r i s i s periods (e . g . , co n tract award d ead lin es), in te ra c tio n took place on a d aily or twice-a-week b a sis. In te ra c tio n Between the Other Public Sector Respondents, Labor and the P riv ate S ecto r. There was much in te ra c tio n among members of the o th er public sec to r, labor, and the p riv a te se c to r. As reported e a r lie r , th ere has been a s ig n ific a n t change in the type and amount of in te ra c tio n between labor and in d u stry . Whereas defense 26. The defense executives did not in d icate any preference fo r Democrats or Republicans, instead preference fo r in te ra c tio n centered around the "man" who would represent t h e i r in te r e s ts best in Washington. 194 executives, congressmen, and various other components of the defense in te r e s t in te ra cted co n tin u ally during the I950*s and through the mid-1960's, th is was not the case with labor and in dustry. However, during the past four to fiv e years, th ere was a steady r is e in labor and management meetings and cooperation. As the 1970's unfold, the defense companies w ill need a l l the support they can g et, and organized labor w ill become a v ita l and close a lly to individual c o n tra c to rs. Much in te ra c tio n was also found between defense executives and Department of Defense personnel. Unless i t was during a period of c r i s i s , defense executives u su ally met with members of the Department of Defense on a monthly b a sis. Many of these meetings were inform al, and they were held fo r the purpose of "keeping in contact" with the many p a rtie s involved in the co n tract award process. In te ra c tio n between s ta te and lo cal o f f i c i a l s and the p riv a te secto r was not as system atic or as frequent as with Washington based o f f ic ia ls , and n e ith e r group f e l t th a t th ere was a need fo r continual in te ra c tio n . Therefore, in te ra c tio n only took place when a defense executive was lobbying fo r a p a r tic u la r weapons system and f e l t th a t a s ta te or local p o litic ia n could o ff e r ad d itio n al support, or contact with fed eral o f f i c i a l s . This g e n eraliz a tio n can also be applied to the type and frequency of in te ra c tio n th a t took place between the o ther public sec to r o f f i c i a l s and s ta t e and local government o f f i c i a l s . In o th er words, most of th e y e a r-in and year-out in te ra c tio n was between defense ex ecu tiv es/lo b b y ists and U.S. congressmen and members of the executive branch (Department of Defense c iv ilia n o f f ic ia ls , the 195 Pentagon* White House staff* et a l . ) . Influence C o n tracto rs. In order to determine how much influence defense company lo b b y ists had as compared to nondefense company lobbyists* the author put the same question to two groups: How much influence do you think defense lo b b y ists have compared to nondefense lo b b y ists? To o b tain the answer from the members of the p riv a te s e c to r, the author asked them to rank the degree of influence they f e l t th e ir lo b b y ists had in the award process on a o n e-to -fiv e scale (very much to very littl e /n o n e at a l l ) . As shown in Table 11 two respond e n ts f e l t th a t defense lo b b y ists had "very much" influence; seven respondents believed th a t th e ir company reps had some influence* or at le a s t as much as nondefense in te r e s t s ; and four in d ividuals con tended th a t defense lo b b y ists had l i t t l e or no influence a t a l l . There are two p o ssib le reasons fo r the four corporate executives ra tin g th e ir defense lo b b y ists so low: (l) the respondents were th inking in terms of what had happened to the industry since 1970* ra th e r than the 1950's and 1960's, and (2) th ere is a t r a i t found in many of us to play down our own accomplishments, and to ra te ourselves as ju s t average "middle Americans." In o ther words* i t is q u ite p o ssib le th a t the four executives f e l t th a t the "other guy" (the nondefense lo b b y ist) g ets what he wants but not the de fense company lo b b y ist. 196 T a b le 11 INFLUENCE OF DEFENSE LOBBYISTS C O M PA RED TO NONDEFENSE LOBBYISTS Sector Degree of Influence 1 2 3 4 5 * Congressional Sector 1950 only 2 's 1960's only 1 4 5 2 0 2 Other Public (Federal) 0 1 8 2 0 2 P riv ate Sector 2 7 0 1 3 0 (Only those respondents who had played an a ctiv e ro le in the con- t r a c t award process were asked to comment on the question) Note: 1 ■ much Influence; 2 = some; 3 ■ n eu tral (as much as o ther i n t e r e s t s ) ; 4 - l i t t l e ; 5 ■ very l i t t l e to no influence; * ■ could not, or would not answer th e question. Members of the public sec to r were asked to make the same rank ing. As Table 11 also shows, the congressional group was divided: four of the eleven respondents who answered the question reported th a t defense lo b b y ists had more influence than nondefense lo b b y ists. Five respondents f e l t th a t the amount of influence was about the same fo r both defense and nondefense in te r e s t s . Two respondents refrain ed from comparing the two groups. However, when fu rth e r probed, one of the two respondents sta te d th a t defense lo b b y ists had l i t t l e in flu ence in the c o n tra ct award process. I t was in te re s tin g to learn th a t none of the respondents f e l t 197 th a t defense lo b b y ists had "no influence" in the o v e r-a ll process, and two congressional respondents maintained th a t the defense in te r e s t had "much influence" during the 1950's, but th a t most of th is influence died out during the 1960's. A veteran congressman f e l t th a t the defense in te r e s t s t i l l had "much in flu en c e," but he also f e l t th a t " th is was due more to the influence of c e r ta in congressmen, not defense company lo b b y is ts ." Four o ther congressmen (two with a "prodefense" voting record, and two with an "antidefense" record) believed th a t the o v e ra ll defense in te r e s t might not have as much influence in the 1970's as i t had in the 1950's and 1960's. One of the "prodefense" congressmen made an in te re stin g comment concerning the p o ssib le d eclin e in the defense i n t e r e s t 's influence: Defense lo b b y ists do not have more influence nor power, fo r example, Edith Green, a known l i b e r a l . . . once to ld me 'th e m ilita ry in d u s tria l complex is not th a t big. Educational in te r e s ts and th e ir lo b b y ists are ju s t as big, i f not more a g g re ssiv e .' Educational lo b b y ists can get very unprofessional. And Congressman George Brown (antidefense) added: "As the 1970's s ta r te d , the f a t days (fo r defense) decreased, and some of the big lobby jobs of the 1960's were c i v i l r i g h t s . . . . " As the responses show, the vast m ajority of the p riv a te and p u b lic se c to r respondents f e l t th a t during the period under study defense lo b b y ists were a t le a s t as in flu e n tia l as th e ir nondefense colleag u es. It is in te re s tin g to note th a t, as compared to the congressional se c to r, the p riv a te se c to r respondents were more apt to perceive th e ir lo b b y ists as having more influence than nondefense lo b b y ists, yet they were also more apt to b eliev e th a t th e ir lo b b y ists 198 had le ss influence than nondefense in te r e s ts . From the congressional respondents, the following account describes how both the defense company lo b b y ists were able to exert as much and, in many instances more influence than nondefense lo b b y ists. The defense company lo b b y is ts ' major key to success was h is a b i l i t y to convince most Los Angeles congressmen, C a lifo rn ia 's U.S. sen ato rs, and many powerful non-C alifornia congressmen and senators of th e ir companies' q u a lific a tio n s and a b i l i t y to get the job done. However, since the major defense c o n tracto rs in Los Angeles employed many workers who resided in, or near the d i s t r i c t of one or more congressmen, the defense lo b b y ists q u ite n a tu ra lly received much support and a ssista n c e from a congressional d elegation th a t was usu a lly on t h e i r sid e before the actual lobbying even began. This was due to both an understanding of c o n stitu en t dependence upon defense c o n tra c ts, and a general fe e lin g th a t a strong natio n al defense was 27 e s s e n tia l. A veteran congressman offered an ex cellen t summation of why most of h is colleagues supported the concept of large defense budgets and the con tin u atio n of new weapons systems: You must remember th a t most of us in Congress remember Pearl Harbor! And we d o n 't want the country to ever be su rp rised or unprepared again. 27. I t should be pointed out again th a t the defense co n tracto rs looked upon t h e i r lobbying a c tiv ity as a "team e f f o r t ." In many in stan ces, the team included congressmen, labor leaders and mem bers, Chambers of Commerce, re a l e s ta te re la te d businesses, e tc . With resp ect to the question of Do you fin d the defense re la te d lo b b y ists and the "defense in te r e s t" in general having more a l l i e s , or proponents from diverse backgrounds, than nondefense in t e r e s t s ? Nine of the eleven congressional respondents answered "y es." 199 W e cannot be in th a t p o sitio n again and t h a t 's why most of us support a strong armed forces with u p -to -d ate weapons. Maybe th is fe e lin g w ill change as younger men come in to o ffic e , but fo r now, we must be prepared. An “a n tid efen se" congressman who o ften supported major weapons systems development (when Los Angeles companies were lik e ly co n tract candidates) offered h is reasons as to why defense company lobbyists were s u c c e ssfu l: Defense lo b b y ists have heavy influence. The defense lobby touches many fa c to rs of so cie ty . These fa c to rs are jobs, growth, and the County's dependence upon defense c o n tra c ts. W e /congressm en understand th is dependence and th e re fo re , we usu a lly find ourselves lis te n in g to , and supporting the co n tra cto rs quest fo r prime c o n tra c ts. If our area was dependent upon some o th er type of industry, we would probably make th e ir lo b b y ists in flu e n tia l a lso . 28 And a congressional aide reported th a t the defense lobby, esp eci a lly corporate lo b b y ists, "probably has had more influence than non defense lo b b y ists because they have done a good job at presenting inform ation. B asically , they apply themselves q u ite well and th e y 'r e much b e tte r prepared." He added th a t many nondefense lo b b y ists were not well prepared when presenting th e ir p o sitio n , and in many instances th e ir case was not considered to be a bread-and- b u tte r issu e—e sp e c ia lly when compared to defense c o n tra c ts. 28. Members of the "other pub lic" se c to r also sta te d th a t during the 1950's, and throughout the early 1960's, congressmen o ften c ite d the company q u a lific a tio n s and o ther Chamber-of-Commerce-type reasons as th e underlying ra tio n a le as to why local co n tracto rs deserved defense awards. However, during the mld-1960's and continuing in to the 1970's , the most o ften repeated argument fo r c o n tra c ts was one of economics; namely, jobs, "p ro g ress," and the County's dependence upon defense. 200 As noted in Table 11 most of the "other public" interview ees sta te d th a t defense company lo b b y ists had about the same degree of e ffe c tiv e n e ss or influence as nondefense in te re sts* Only one re spondent said th a t defense company lo b b y ists had "more influence" than nondefense lo b b y ists, and two respondents stated th a t defense company lo b b y ists had " l i t t l e influence" when compared to other non defense groups. On th e o th er hand, c e r ta in congressmen were c ite d as 29 having a lo t of influence in the co n tract award process. This in fluence was considered s ig n ific a n t when two companies judged equal in a b i l i t y and cost were competing fo r a p a r tic u la r c o n tra c t. A m ilita ry procurement o f f ic e r on a c tiv e duty said th a t the reason why "congressmen have influence is because of Congress' power of the p u rse ." And a former high lev el Department of Defense executive s ta te d : " If Mendel Rivers was on a lo b b y ists sid e, then you would have to say the lobbyist had in flu en ce." R etired M ilitary O ffice rs. Simply because company X had ten or f i f t e e n r e tir e d o ff ic e rs working fo r i t when a major co n tract was awarded to the company, one should not conclude th a t a l l of these o ff ic e rs engaged in c o n tra ct n e g o tia tio n or lobbying or th a t they gave the company undue influence in the award process. On the o th er hand, i t should be recognized th a t some r e tir e d o ff ic e rs may have been a d e f in ite a sse t to defense c o n tra c to rs. When queried about 29. The White House was also c ite d by several respondents as a p o te n tia l major influence upon th e award system. See Chapter 8 fo r a much g re a te r a n aly sis of t h i s e n tire area of congressional and p re s id e n tia l in flu en ce. 201 th is p o s s ib ility , one congressman s ta te d th a t "defense lo b b y ists are not neophytes. Many of them are out of the Department of Defense and the Pentagon and have been in Washington many years and are o ften well lik e d ." He continued: Some Pentagon people who are now lo b b y ists had lia is o n work in Congress, and also had known the defense companies. The Pentagon had e sco rts fo r congressmen when going on t r i p s —colonels and Navy cap tain s went along. These men are very personable, and are o ften hired by defense com pan ies. They had b u ilt up rapport and r e la tio n sh ip s, th e re fo re , they are of use to defense c o n tra c to rs. U nfortunately, the interview s revealed no s e t p a tte rn as to the amount of influence r e tir e d m ilita ry o ffic e rs had w ith the decisio n makers. Several respondents f e l t th a t re tir e d o ff ic e rs s t i l l had frie n d s in in f lu e n tia l p o sitio n s, which may have a s s is te d a company because these "frie n d s" desired a well-paying c iv ilia n job upon re tirem en t. Others f e l t th a t the d ecision making process was so com plex th a t one or two r e tir e d generals would not help a company win c o n tra c ts . And most of the respondents e ith e r did not have any s p e c ific opinion on the su b jec t, or sta te d th a t they simply did not know what influence r e tir e d o f f ic e r s had in the co n tract award pro cess. In the opinion of the author, however, r e tir e d generals and adm irals were c e rta in ly not a detrim ent to defense c o n tra c to rs. They could have served several very useful fu n ctio n s: F ir s t, they would be able to a s s is t in the o v e ra ll process of determ ining whom to see, and what to say, e sp e c ia lly i f some of th e ir former colleagues were 202 s t i l l in Washington; F urther, if a company employed a former o ff ic e r who had served as a source se le c tio n evaluator, or a con t r a c t n eg o tiato r, or in some area of procurement, he was bound to know c e r ta in "d o 's" and "d o n 'ts" th a t could have helped a defense c o n tra c to r. For example, the o ff ic e r could advise the corporate lobbyist and executives on who to p ressure, when to pressure, how to submit inform ation, and how to find out what the m ilitary needs or is lik e ly to need. F in a lly , re tire d o ff ic e rs had various management s k i l l s and up-to -d ate knowledge and p ra c tic a l experience to c o n tri bute to the company. Labor# Labor's e ffe ctiv en e ss must be measured in terms of how much influence i t had with congressmen and high level o f f ic ia ls in the executive branch. As might be expected, most of th is in te ra c tio n in the 1950's and 1960's was with Democrats. However, during the past four years labor has experienced increased contact with Republican le g is la to r s and the Nixon A dm inistration. Since the labor leaders in Los Angeles County u su ally emphasized th e employment fa c to r when they lobbied fo r c o n tra c ts, elected o f f i c i a l s at a l l lev els generally found themselves not only recep tiv e to la b o r's arguments, but also supportive of la b o r's demands fo r co n tract awards to County based c o n tra c to rs. Consequently, labor leaders, corporate executives, and elected o f f ic ia ls o ften found themselves lobbying one another fo r the same reward from the system—defense co n tracts fo r Los Angeles. Los Angeles Area Chamber of Commerce. The public se c to r ra re ly mentioned the Los Angeles Chamber of Commerce. When respondents were asked to comment on the Chamber's influence, none f e l t th a t i t had 203 any s ig n ific a n t influence, e sp e c ially when compared to defense com pany lo b b y ists, labor lead ers, and c e rta in veteran congressmen. In b r ie f , the public se c to r viewed the Chamber of Commerce in much the same way as i t did the numerous nondefense in te re s t groups: i t was a group to l is te n to ; i t s p o sitio n and inform ation was d igested, and sometimes taken in to con sid eratio n ; but with respect to the defense co n tract award process, the Chamber was s t r i c t l y a secondary or support in te re s t with no sp ecial influence. Defense A sso ciatio n s. As discussed e a r lie r , the Aerospace In d u stries A ssociation and the other le s s e r known defense oriented groups were never c ite d as a c tiv e ly lobbying fo r defense c o n tra c ts. The overriding consensus of the public se c to r was th a t many nondefense asso ciatio n s had much more influence than the AIA. The p riv a te sec to r generally concurred with th is observation and usually described the AIA and other defense asso ciatio n s as in e ffe c tiv e , poorly organized, and having very l i t t l e i f any, d ire c t or in d ire c t influence. A former defense company lobbyist best summarized the AIA's p o sitio n with the Los Angeles defense industry: "The AIA is weak, and i t s public re la tio n s program is poor. Los Angeles c o n tracto rs generally re ly on th e ir own org an izatio n fo r g e ttin g things done." Conclusion This chapter p rim arily examined the lobbying techniques employed by the Los Angeles defense in te r e s t . In a d d itio n , the effectiv en ess of these techniques, and the degree of in te ra c tio n between the various components of the defense in te r e s t were also analyzed. With 20 4 respect to the lobbying techniques implemented by the defense in te r e st several important g en eralizatio n s can be made fo r each of the following groups. Defense C o n tractors. Building la s tin g re la tio n s h ip s with decisio n makers and bureaucrats was e s s e n tia l to the successful de fense company lo b b y ist. This required th a t the lobbyist be so cia b le , f le x ib le , and ta c t f u l, and possess the a b ility to get along w ith as many people as p o ssib le . Once the defense lobbyist had achieved some degree of rapport with a decisio n maker, e . g . . congressman, general, or high level Department of Defense appointee, the use of c e r ta in techniques required fo r e ffe c tiv e lobbying became e a s ie r. The following techniques were found to be most o ften p racticed by defense company lobbyists and management: (l) using p ro fessio n al contacts and/or frien d s, who knew major p a rtic ip a n ts of the defense co n tract award process, to gain access to d ecision makers; (2) re c ru itin g o ther groups in the defense in te r e s t to lobby on a co n tra cto rs be h a lf ; (3) u tiliz in g visual aids (c h a rts, brochures, s lid e presen ta tio n s , corporate to u rs, e tc .) to provide inform ation to d ecision makers, bureaucrats, and various community o rg an izatio n s; (4) assu r ing th a t they were av ailab le to d ecision makers at a l l times fo r inform ation, but avoiding.the danger of appearing overly aggressive and in tru s iv e ; (5) co n tin u ally meeting new co n tacts and decisio n makers both in and out of Washington; and (6) having favorable w itnesses appear at congressional hearings. Congressional respondents, when comparing the average nondefense lobbyist with the defense lobbyist generally perceived the l a t t e r 's 205 techniques as more pro fessio n al and based on a “so ft s e l l " approach. I t was also in te re s tin g to discover th a t none of the public se c to r interview ees f e l t th a t defense lobbyists were re p re se n ta tiv e of the "old lobby" school. Instead, the ty p ic a l defense company lobbyist was considered to be honest, ob jectiv e, inform ative, and c o rd ia l. The use of "new lobby" techniques by the defense in te r e s t can be a ttrib u te d in large p art to the fa c t th a t many of the old techniques, e sp e c ia lly th re a ts and bribery, were taboo in government c ir c le s during the period under study. This does not mean, however, th a t de fense lo b b y ists refrain ed from using c e r ta in old lobby techniques such as co ck ta il p a r tie s , luncheons, g o lf, and o ther so cia l events in order to in te ra c t with decision makers. Such techniques were p er m issible because the public secto r viewed them as a normal p a rt of the so cia l scene. If b ribery, weekend p a r tie s , and $20,000 g i f t s had not been le g a lly or p o l i t i c a l l y forbidden, i t is conceivable th a t these techniques also would have been used by the defense company lo b b y ists, simply because they would have been deemed e s s e n tia l to winning major c o n tra c ts. Congressmen* Congressmen proved to be a s ig n ific a n t a lly of the County's defense c o n tra c to rs. Los Angeles congressmen spent as much, if not more, time lobbying fo r defense co n tracts as they spent being lobbied by defense re la te d groups. Their basic techniques included: (l) lobbying o th ers, e sp e c ially fellow congressmen and high-ranking executive branch o f f i c i a l s ; and (2) generating c o n stitu en t support through new sletters and the media. C onstituents were to ld th a t c o n tra cts not only had a favorable economic impact upon the d i s t r i c t , 206 but a lso th a t n atio n al se c u rity required up-to -d ate weapons systems. Labor» Union o f f i c i a l s used many of the same techniques meet ing with congressmen, v isu al a id s, constant co n tact, e tc .) fo r win ning c o n tra cts as did defense company executives and Washington- based lo b b y ists. Organized labor also used the method of c a llin g meetings of the C alifo rn ia d eleg atio n where i t presented i t s p o sitio n and provided inform ation as to why a given co n tract should be awarded to a Los Angeles company. Another often-used technique was th a t of informing the union membership th a t i t s company was competing fo r a c o n tra c t. Rank and f i l e members were urged to w rite l e t t e r s , ta lk to frie n d s, and jo in " c i tiz e n 's committees" in order to generate public support w ithin the communities and throughout the County fo r major c o n tra c ts . Another ta c t ic was to have lo cal members send l e t t e r s to r e la tiv e s and frien d s in o ther counties and s ta te s urging them to w rite to th e ir s ta t e and fed eral le g is la to r s to support a p a r tic u la r Los Angeles c o n tra cto r and/or weapons system. Other Public Sector Respondents* S tate and local o f f ic ia ls reso rted to l e t t e r w ritin g and re so lu tio n s. High elected o f f i c i a l s — Governors Brown and Reagan, and Mayor Yorty—because of th e ir a b ility to d e liv e r votes and th e ir p arty p o sitio n , p erso n ally in te ra cted with high level fe d e ral d ecisio n makers, including the P resid en t. As a general ru le , however, the average s ta t e or local o f f ic ia l was more e ffe c tiv e when he a s s is te d one of the above th re e groups by serving as a member of the team supporting the community's quest fo r defense c o n tra c ts. A ctive duty m ilita ry o ff ic e rs also were found to be activ e 207 lo b b y ists. Although they lobbied in d ir e c tly fo r Los Angeles County, t h e i r e f f o r ts were viewed in much the same way as those of any o ther in te r e s t group; namely, when a group has a vested in te r e s t in the annual budget a llo c a tio n process, the p re se n ta tio n of i t s p o sitio n through acceptable lobbying techniques is le g itim a te . This chapter also discussed the in te ra c tio n which took place between the members of the three s e c to rs . B rie fly , i t was found th a t the amount of in te ra c tio n between congressmen and defense corp o ra tio n executives was not uniform. Congressmen with major con tr a c to r s and subcontractors in th e ir d i s t r i c t g en erally had more contact with corporate o ff ic e rs than those from nondefense o riented d i s t r i c t s . I t was also found th a t the reasons co n tracto rs sought in te ra c tio n were the d e sire of a company to ( l) present i t s p o sitio n as to why i t deserved a c o n tra c t, and (2) to complain about not win ning a c o n tra ct, or subcontract. Congressmen also in te ra cted with o th er public se c to r o f f ic ia ls fo r th re e basic reasons: (1) to promote a Los Angeles defense con tr a c to r s ; (2) to present inform ation and data about a company, and/or weapons system; and (3) to o b tain defense re la te d inform ation fo r a defense co n tra cto r or fo r the congressman's own use. In sum, in te ra c tio n between congressmen and members of the p riv a te and public sec to rs took place as o ften as deemed necessary by one or another of the p a r tie s . Usually th is was on a bimonthly b a sis ; however, during c e r ta in c r i s i s periods, e .g ., co n tract award dead lin e s , in te ra c tio n was on a d a ily or twice-weekly b a sis . A dditionally, th ere was much in te ra c tio n among members of the 208 o ther public sector* labor, and th e p riv a te s e c to r. In th is regard, the most s ig n ific a n t finding was the increased amount of in te ra c tio n between labor and in dustry. Considerable in te ra c tio n between defense executives and Department of Defense personnel was also discovered. Meetings of these two groups u su ally were held on a monthly b a sis , or more o ften if th ere was an urgent need. With respect to s ta te and local o f f ic ia ls and the p riv a te se c to r, in te ra c tio n was n e ith e r as reg u lar nor as freq u en t. In sum, most of the y e ar-in and year-out in te ra c tio n was informal and occurred between and among defense execu tiv e /lo b b y is ts and U.S. congressmen and members of the executive branch (DoD c iv ilia n o f f i c i a l s , the Pentagon, White House s t a f f , e tc .) . Limited in te ra c tio n also ex isted with the o th er groups mentioned, but th is was on sp ecial occasions and on a more formal b a sis. F in a lly , the author attem pted a very d i f f i c u l t , i f not impossible ta sk : namely, to determine the amount of influence enjoyed by the members of the Los Angeles defense in te r e s t . The following conclu sions were reached concerning the two groups with the most a t stak e, co n tracto rs and labor. Of those respondents who were both q u a lifie d to answer, and did answer, the question concerning Influence, 77 p er cent sta te d th a t defense company lo b b y ists had as much or more in flu ence than th e ir nondefense colleagues. Forty percent s p e c ific a lly sta te d th a t the defense in te r e s t enjoyed more influence, while only 23 percent thought nondefense in te r e s ts had more influence. P riv ate sec to r respondents were more apt to perceive th e ir lo b b y ists as having both more and le ss influence than nondefense in te r e s ts . With respect to the congressional se c to r i t was found th a t much 209 of the contractors* influence was based on the fa c t th a t many of the congressman's c o n stitu e n ts were dependent on defense c o n tra cts and on the fa c t th a t most congressmen advocated a strong system of natio n al defense. This in tu rn aided the defense industry, because Los Angeles congressmen worked hard to inform o ther decisio n makers and groups of the importance to the County of continuing to win prime c o n tra c ts. With respect to labor, i t was found th a t, since the County's labor leaders u su ally emphasized the employment fa c to r when lobbying fo r c o n tra c ts, many elected o ffic e holders a t the lo c al, s ta t e , and natio n al le v els, and government o f f i c i a l s in general, found them selv es both recep tiv e to labor arguments, and supportive of la b o r's demands fo r co n tract awards to County based c o n tra c to rs. CHAPTER VIII DECISION M A K IN G IN THE DEFENSE CO N TRA CT A W A R D PROCESS It is now time to reconsider the defense co n tractin g decisio n process in i t s t o t a l i t y . As descrip ted in Chapter A, the in te r viewees in t h is study held d iffe re n t views w ith respect to who actu a lly makes the fin a l decisions on the award of defense c o n tra c ts. Therefore, the purpose of th is chapter is to determine: (l) W ho makes th e fin a l decisions on major defense c o n tra c ts; (2) The degree of objectiveness behind these d ecisio n s; and (3) The amount and kind of p o litic s th a t surrounds the co n tract award process. Individuals and In s titu tio n s Involved Numerous individuals and in s titu tio n s are involved in the over a l l defense co n tract award process. The most s ig n ific a n t i n s t i t u tio n s include: the Pentagon, and the Department of Defense; the O ffice of Management and Budget (OMB), form erly known as the Bureau of the Budget; Congress, e sp e c ia lly the A ppropriations and Armed Services Committees and th e ir sen io r members; c e r ta in members of the P re s id e n t's "inner c ir c le " and the Cabinet; and, of course, the P resid en t.* Within each of these in s titu tio n a l groups, individuals 1. The "Inner C ircle" includes high ranking p o litic a l appointees serving as key ad v isers, high echelon executive personnel such as the Chairman of the National S ecurity Council, the Vice P resid en t, the D irector of the Bureau of the Budget (O ffice of Management and Budget) and o ther in d ividuals who may have a personal and/or p o litic a l re la tio n s h ip with the P resid en t. 210 211 w ith varied backgrounds and degrees of d ecision making au th o rity p a rtic ip a te in the co n tract process. I t should be noted, however, th a t many of these same in d ividuals cannot devote too much of th e ir time to i t . For example, members and s t a f f personnel of the con gressio n al committees, as well as many executive branch personnel, have other functions th a t are o ften ju s t as important or time con suming as the defense co n tract process. There are, of course, several important areas where the defense co n tract process does take up most, i f not a l l , of an in d iv id u a l's tim e. Examples of these areas include c iv ilia n and m ilita ry posi tio n s w ithin the o ffic e of the Secretary of Defense, Defense Con t r a c t A dm inistration Services D is tr ic ts , Space and M issiles Systems O rganizations, and Air Force Contracts Management D ivisions. Like most large in s titu tio n s and businesses, the components of the defense co n tract process u t i l i z e many individuals in various p o sitio n s. These p o sitio n s vary in terms of re s p o n s ib ility , work load, and e x p e rtise . There are people with tech n ical and broad-range s k i l l s in accounting, economics, engineering, procurement, research and development, mathematics, physics, fu tu re weapons innovation, and management. When the defense in te r e s t lobbied fu ll-tim e Department of Defense employees, the lo b b y ists who had been in the business a long time, or who were more p o l i t i c a l l y a stu te , attempted to in flu ence not only top o f f i c i a l s (the Secretary of Defense and his dep u ties, generals, adm irals, e& a K ) , but also those in middle management p o sitio n s (Department of Defense c iv ilia n and m ilita ry 212 personnel) who possessed various tech n ical s k i l l s and had inform ation about the d a ily ro u tin es and functions of th e ir p a r tic u la r area of e x p ertise . In order to p ro ject a p o sitiv e image to government per sonnel, several major defense co n tract executives reported th a t they u tiliz e d th e ir own middle and upper management lev el personnel to in te ra c t with personnel at corresponding lev els w ithin the Pentagon and the Department of Defense. An executive and p art-tim e lobbyist fo r one of the major co n tracto rs offered th is advice to fellow de fense in te re s t lo b b y ists: One must see people at lower lev els because although the top people lis te n to you and th e y 'r e p o lite , they la te r forget you and your ^company/ p o s itio n . There fore, there is a need to see lower people, m ilita ry evaluators fo r example. You are wasting your time by only ta lk in g to top men. You need to ta lk to colonels in order to get your point across. Conversely, another executive said th a t "you c e r ta in ly c a n 't go below colonels because they ^Jbelow co lo n el/ are a fra id of saying no to superiors because they d o n 't want black marks on th e ir re c o rd s." He contended th a t " i t ' s best to see g en erals—four s ta r types if p o ssib le — if a company wants to be heard" by the major d ecision makers. Several other executives also voiced the same opinion. The general a ttitu d e was expressed by an executive of North American. "W e want to see the big boys f i r s t , i f time perm its w e 'll see the o th e rs ." To maximize th e ir chances of success, defense c o n tracto rs (as well as nondefense in te r e s ts ) should keep these two d iffe rin g opinions in mind. It is evident th a t some defense lo b b y ists and th e ir s ta f f s p racticed the technique of in te ra c tin g with top 213 o f f i c i a l s , while others in te ra cted with in d iv id u als at the lower, middle, and higher lev els of government in th e ir p u rsu it of major c o n tra c ts. To the author, the more e ffe c tiv e technique is th a t of approaching and in te ra c tin g with as many people at a l l lev els of government as p o ssib le . However, as of la te 1972, not a l l of the major defense co n tracto rs in Los Angeles (and elsewhere) p racticed th is technique to th e ir best advantage. In view of the lower de fense budgets of the 1970's , defense c o n tracto rs whose goal i t is to continue winning major c o n tra cts might be well advised to have th e ir lo b b y ists and other defense in te re s t supporters (labor, Los Angeles p o litic ia n s , and o thers) seek access to in d ividuals at various lev els of d ecision making a u th o rity and influence. In other words, i t would appear best to have corporate tech n ical personnel in te ra c t w ith th e ir peers in government, research and development people of both secto rs meet to g eth er, and corporate p resid en ts and vice p resid en ts in te r act w ith Cabinet s e c re ta rie s , d eputies, generals and adm irals, and the P re s id e n t's "inner c i r c l e ." For example, a high level government respondent, who had served in the la te 1960's, sta te d th a t he was "a re c ip ie n t of the more tech n ical types of lo b b y ists who were responsible fo r seeing execu tiv e branch d ecision makers in and out of th e Pentagon." He added th a t many defense companies "had lo b b y ists on the 'H i l l ' fo r con gressmen and other nontechnical ty p e s." And sev eral p riv a te and public se c to r respondents maintained th a t, although a company should not spread i t s forces too th in by try in g to lobby too many middle and upper management re p re se n ta tiv e s in Washington, the c o n tra cto r 214 must s t i l l tr y to influence as many a cto rs in the o v e ra ll process as p o ssib le . Therefore, the e ffe c tiv e defense lobbyist must place primary a tte n tio n upon the ind iv id u als he decides are the most im portan t acto rs in the award process. I t is at th is point th a t the c o n tra c to r 's stra teg y must be mapped out, and a c ru c ia l d ecisio n must be made as to how and whom the company w ill tr y to in flu en ce. Should the emphasis be on those who play a fu ll-tim e ro le in the decisio n making process of the weapons system co n tract they are seeking? Or should the emphasis be placed on the P resident (and h is s ta f f ) and/or key congressmen who are lim ited to a p art-tim e ro le in the co n tract award process? U nfortunately, some defense co n tracto rs in Los Angeles County fa ile d to determine who was making the d ecisio n s, as well as who influenced or advised them. To i l l u s t r a t e , one corporate executive remarked th a t fo r the p ast two or th ree years he tr ie d to t e l l h is peers "who to see and who to spend time with and why." However, he sta te d th a t "several of our executives keep on seeing a bunch of nobodies and 'n o n - in f lu e n tia ls ' who have l i t t l e i f any influence and/or 2 d ecisio n making a u th o rity ." 2. Many of these "nobodies" turned out to be very high level p o l i t i c a l appointees and generals in th e Johnson A dm inistration who on the su rface appeared to have much influence and power in the award process. As c ite d e a r l i e r , several key congress men and s t a f f personnel concluded th a t various defense lo b b y ists and proponents put too much emphasis on Los Angeles County congressmen. 215 I An I ll u s tr a tio n of One C o n tra c to rs S trategy to Influence the December Makers. During a very candid interview w ith the author, an executive w ith a major defense co n tra cto r described the following stra te g y he employed in winning a prime co n tract fo r his company. Several years ago a rep o rt e n title d , Our Nation and the Seas, was presented to P resident Nixon. The rep o rt o u tlined the n a tio n 's oceanographic goals and proposed programs fo r achieving these goals. One of the programs centered on the concept of very so p h isticated buoy and sensor systems planned fo r the e arly 1970's. The o v erall system is to be known as the National Data Buoy System, and i t w ill be adm inistered by the Coast Guard. In the la te 1960's, the Coast Guard sent separate requests to various companies to bid fo r the sensor and buoy systems. Bendix, Lockheed, and Westinghouse bid on the sensor system; General Dynamics, Lockheed, and Raytheon were the major companies bidding on th e buoy system. The i n i t i a l co n tract fo r each system was approximately $5 m illio n , with a p o te n tia l of at le a s t $150 m illio n more over eight years. The respondent fu r th e r reported th a t, since he believed at the o ffs e t th a t the f in a l d ecisio n would be based upon both objective (formal process) and p o l i t i c a l considerations (inform al process), he implemented a "marketing stra te g y " fo r obtaining the c o n tra c t, and subsequently a "task fo rce w ith one thing in mind - 'to win* - was put into o p e ra tio n ." This marketing stra te g y was "divided in to two basic t a c t i s : (l) an a ctiv e arena, and (2) an influence ^ p o lit ic a l/ aren a." Active arena t a c t i c s applied to the company's e f f o r ts to 216 win the contract by staying within the rules and regulations of the formal process, i.e., providing information to the customer (at his request) concerning "the operations, finance, and engineering departments of the company." The influence arena, (or lobbying) was implemented because the respondent knew that although the "Coast Guard General Program Manager was to make the final £Cormal7 decision, he had to justify his selection to the Director of NOAA ^National Oceanic and Atmospheric Agency7» anc* we knew that because NOAA was a new agency that Congress, particularly Congressman Garmatz ^Democrat, Baltimore, Maryland^, would probably have influence on the Director." When questioned as to why Congressman Garmatz had influence, the respondent replied: "White ^the Director of NOA/$ needs security in Congress because of his new agency. There is a big game involved, and you must do your homework, or you don't win. The Merchant Marine and Fisheries Committee is responsible for the Coast Guard's and NOAA's money, and Garmatz chairs it." Congressman Garmatz's district included part of Baltimore and surrounding areas, with Bendix and Westinghouse as major constitu ents. According to the respondent, because several recent contract awards that were "headed toward defense contractors in Garmatz's district had been lost, he /Garmats7 was determined to get an award for his constituents." Therefore, since "White ^Director, N0AA7 was somewhat subservient to Garmatz, we knew that the Congressman would have a lot of influence with White, and since we're located in Garmatz's district we made sure that he was aware of the situation." The respondent concluded by stating that "even though three companies 217 were evaluated about equally, two of these, Bendix and Westinghouse, were in Baltimore and this is probably why our company received a portion of the initial contract... And yes, I do feel that our strategy was essential, especially because we kept Garmatz and his staff aware of our position and needs." Although the above represents just one specific case, the re spondent stated that "from other friends in industry this was not that unusual in the contract award process." Other respondents con curred, and as will be found shortly, many elected officials and staff members contended that politics and economic considerations (unemployment, stagnant economy, etc.) also played a major role in the contract award process. Three Theories As to Who Decides In order to determine who actually made the final decisions on major defense contracts during the period under study, the author asked the respondents who played a significant role in the award process the following question: Who makes the decisions and has the influence in major contract awards? With reference to this question, the respondents fell into three schools of thought: (l) purely military (objective) decision making; (2) strictly political decision making; and (3) a combination of the first two, or a "it all depends upon the contract, contractors, and other things" attitude. Each theory had backers from the three sectors, but as Table illustrates, 67 percent of the qualified interviewees believed that some degree of politics was present in 218 major co n tract award d ecisio n s. Members of the f i r s t school contended th a t major defense con tr a c ts were awarded on the basis of m erit; hence, o b je c tiv ity was the sole c r i t e r i a fo r these d e cisio n s. They considered m ilitary source evaluators to be the f in a l decisio n makers, and such fa c to rs as a c o n tra c to r 's p ast experience, labor and management a b ility , cost estim ates, d elivery schedule, and engineering and production c a p a b ility were c ite d as the primary components of the decisio n . Table 12 W ho Makes the Decisions and Has The Influence in Major Contract Awards? SECTOR MILITARY OBJECTIVE POLITICAL-WHITE COM BINATION SCHOOL HOUSE SCHOOL SCH O O L P riv ate 7 2 4 Public 6 9 6 Third 1 6 1 Total 14 17 11 (33%) (40%) (24%) (The o th er respondents e ith e r had no opinion, or did not respond to the question because they f e l t unqualified to comment.) Proponents of the second theory maintained th a t major co n tracts generally were awarded on the b asis of p o litic a l co n sid eratio n s. Congressmen, e sp e c ia lly sen io r members and committee chairmen, were seen as in f lu e n tia l a cto rs in the award process. The presidency was also viewed as an in flu e n tia l fa c to r, and some members of the p o litic a l school believed th a t the P resident was the most in flu e n tia l 219 a cto r— if and when he chose to play th a t r o le . A ssistin g the President in the decisio n making process were the top men in the o ffic e of the Secretary of Defense, the Pentagon, Bureau of the Budget (OMB), and in n e r-c irc le co n fid an ts. Such things as the lo catio n of the competing companies, the number of p o te n tia l votes, the e x istin g labor market and i t s needs, the economic impact of a c o n tract upon the community and the s ta t e , and the company th a t la s t received a major co n tract were considered to be important considerations taken in to account. The th ird school p ostulated th a t the decisions on major defense co n tracts were based upon both p o litic a l and o b jectiv e considera tio n s . To several members of th is school, p o litic a l considerations were the primary fa c to r behind the f in a l award of some co n tra cts, while m ilita ry evalu atio n was of primary importance in o ther awards. In o ther words, i t a l l depended upon the co n tract under review with respect to the degree of o b je c tiv ity or the p o l i t i c a l impact on the f in a l d ecisio n . Other proponents of th is school believed th a t i t was nearly impossible to make g en eraliz a tio n s concerning the question of who makes the f in a l d e cisio n s, or to determine ju s t what considerations go in to each co n tract award. However, th is l a t t e r group agreed with the f i r s t in th a t every major weapons system award is unique, and th a t decisions were based upon what th is author has coined a "combination" of f a c to rs . Hence, the two predominant components of the combination school were p o litic s and m ilita ry ev aluation, with p o litic s c ite d as the primary co n sid eratio n in some co n tracts and 220 m ilita ry evaluations (objectiveness) c ite d as the major consider a tio n in o th e rs. 3 F ir s t Theory» O bjective - M ilitary Decision Making R epresentatives of both the p riv a te and public secto rs were found in th is school, but th ere was only one respondent from the th ird se c to r who believed th a t the m ilita ry made the f in a l decisions on major weapons systems. The basic th e sis of th is group was th a t not only major but also minor and medium-sized defense co n tract awards were o b je ctiv ely decided by m ilita ry source evaluation boards. Although one or two exceptions (these were said to be "extremely rare exceptions") to the ru le ex isted , members of th is school stre sse d the n o n p o litic a l ro le played by evaluation board members 4 and the f i n a l i t y of t h e i r d ecisio n s. To i l l u s t r a t e , two Department of Defense procurement o f f ic ia ls said th a t "there are ju s t too many things th a t prevent the awarding of c o n tra c ts by p o l i t i c a l means." Proponents of th is theory gen e r a lly accepted the "checks and balance" concept, and used i t to explain why defense c o n tra cts were not based upon p o l i t i c s . Two congressional s t a f f members emphasized the point th a t most decisions 3. Again, the read er is reminded th a t the term "ob jectiv e" was used by Department of Defense personnel, re tir e d m ilitary o f f ic e r s , and p riv a te se c to r respondents to mean th a t defense c o n tra ct decisions were beyond p o litic s , personal frien d sh ip s, and o ther non-merit co n sid eratio n s. 4. As c ite d in Chapter 4, "exceptions" have been found in the major c o n tra cts (TFX, C5A), but fo r sm aller c o n tra c ts, generally con sidered to be le ss than $30 m illio n , no exceptions were men- t i oned. 221 were based on m ilita ry ev alu atio n s. However* when probed, they admitted th a t exceptions e x isted , and th a t th ere have been c e rta in decisio n makers outside of the m ilita ry who have had considerable 5 influence on the f in a l choice. One of the congressional aides sta te d th a t "most co n tractin g is done on cost and m erit. If these are not the case, then we step in and ask what was the ra tio n a l fo r the award. For the most p a rt, ev aluation boards have the in flu ence." This respondent did add, however, th a t "the Department of Defense may depend too much on the same old companies, thus making i t hard fo r new ones to break in. In fa c t not enough new companies get i n . . . . " An elected o f f ic ia l who had personally in te ra cted with P resident Johnson on many occasions contended th a t he too had won dered if p o litic s played a s ig n ific a n t ro le in the awarding of con t r a c t s . He said th a t Johnson to ld him th a t "the answer was no, and he made a point of t h i s ." Johnson also to ld the respondent th a t the "appropriate agencies" and m ilita ry evaluators - not Johnson - made the d e cisio n s. The interview ee said he believed the P resid en t, and concluded by s ta tin g : "th ere is no p o litic a l influence in the awarding of defense c o n tra c ts ." Gerald Keeling, a r e tir e d Air Force major general, of Hughes A irc ra ft, and a former member of the Air Force source se le c tio n system, sta te d th a t "th ere are no predetermined p o litic a l aw ards... 5. The la te re p re se n ta tiv e Mendel Rivers and h is d i s t r i c t was c ite d by one a s s is ta n t as a case in p o in t. Another aide added th a t "a person in procurement may have a frien d in in d u s tr y ..." but when probed, the respondent would not comment any fu rth e r. 222 The source s e le c tio n system was designed to prevent th is £rom occurring.^ Keeling went on to o ffe r an ex cellen t discourse with resp ect to the question before us: namely, who has the influence and a b i l i t y to make the decisions? He maintained th a t source s e le c tio n decisions are im portant, and th a t these decisions "are not made by the White House, or the Department of Defense or p o l i t i c s " ; in stead , decisions are simply those made by m ilita ry board members.^ With respect to congressional influence, Keeling said th a t defense co n tra cto rs are lik e o ther c o n stitu e n ts, in th a t congressmen "look out fo r them, but th is a l l balances out and thus cancels out p o l i t i - g cal d e c isio n s." Keeling concluded by m aintaining th a t p o litic s may be involved in the o v erall process, but th a t compromise and o ther p o l i t i c a l demands tended to elim inate p o litic s from the f in a l d e cisio n s. In sum, proponents of the f i r s t theory stre sse d the important ro le played by the m ilita ry source evaluation boards. The m ilita ry evaluators were seen as a very objective and q u a lifie d group of high ranking o ff ic e rs whose decisions were based so lely upon m erit, and past and p o te n tia l co n tra cto r performance. P o litic s were not seen as a fa c to r because of our checks and balance system and because 6. Keeling said th a t in h is twenty plus years of m ilita ry serv ice, the only p o ssib le exception was the TFX. Interview with Gerald Keeling, Los Angeles, August 17, 1971. 7. In re fe rrin g to the Department of Defense, Keeling meant th a t the Secretary, or one of h is ch ief deputies did not in te rfe re with the formal process. 8. Keeling was re fe rrin g to the checks and balances found in our 223 of p o te n tia l adverse consequences ( p o litic a l and natio n al secu rity ) which could re s u lt from a bad p o litic a l decisions th a t reversed the f in a l choice of th e source ev alu ato rs. Second Theory: P o litic a l Decision Making As Table i l l u s t r a t e s , the la rg e st number of respondents f e l l in to th is school and re p resen tativ es of a l l th ree secto rs were p re sen t. Their opinions varied as to who decided which company would be awarded a defense c o n tra c t. To some, th ere was only lim ited p o litic a l influence by congressmen and/or the P resident in the awarding of c o n tra c ts; to o th ers, the White House was the fin a l decisio n maker. Generally, the respondents in th is group f e l t th a t p o litic s entered the p ictu re when two or th ree companies were 9 judged equal by the source se le c tio n boards. With respect to the P resident, several respondents sta te d th a t P resid en ts Kennedy, Johnson and Nixon made the f in a l decisions on major weapons system s. For example, a labor leader commented: "What President w ill s i t around and allow unemployment? The P resident makes the decisions and has the in flu en ce." An executive of the Los Angeles Chamber of Commerce concurred with th is statem ent, and added: "^r7he P resident makes the big decisions and we w rite to the P re sid e n t." F in a lly , another labor leader s ta te d : "The o v erall system and contended th a t th is also applies to the de fense co n tract award process. 9. " P o litic s " was usually defined as congressional or executive branch pressure on behalf of a p a r tic u la r company which may or may not have coincided with the m ilita r y ’s f i r s t choice. 224 White House does horse trad in g and i t is looking fo r the best deal. But the President must take in to consideration how his decision w ill a ffe c t in flu e n tia l congressmen." With respect to Congress, most of the respondents believed th a t only a few congressmen influenced f in a l d ecisio n s. Those with in fluence included sen io r members, the members on Armed Services and A ppropriations Committees, and those individuals who had p o litic a l or personal re la tio n s h ip s with the P resident, or with his p o litic a l appointees in the Department of Defense. A procurement o ff ic e r con firmed what the author suspected a t the o f f s e t; namely, th a t "the President cannot go too f a r because Congress has the power of the p u rse." As the Garmatz case illu s tr a te d , i t is th is f is c a l power th a t gives c e r ta in congressmen influence in the o v erall decision making process. The following comments exemplify the ro le congress men play in the decisio n making process and th e ir degree of in flu ence. A Republican congressman reported th a t some of his colleagues from o ther s ta te s were "very pushy fo r the co n tracto r in th e ir d i s t r i c t and try to use th e ir influence too much," He f e l t th a t th is was beyond the public in te r e s t and caused him t o . . . "although I don*t lik e t h i s —but I w ill then have to focus a tte n tio n on our /Los Angeles/ companies, if they are q u a lifie d , on the proper ag en cies," The congressman offered ad d itio n al in sig h t into a congressman's ro le when he s ta te d : I w ill go to see the agency f i r s t th a t is awarding the c o n tra c t. If things are equal and com petitive, "o .k ." But if things are g e ttin g 225 p o l i t i c a l , then I w ill suggest White House p ressu re, e sp e c ia lly i f the co n tract may go beyond a deserving Los Angeles c o n tra cto r. I w ill then also ta lk to o th er congressmen, sen ato rs, e tc . I w ill also see Laird and/or Packard. I am good frien d s with Laird, w e're old frien d s in Congress. In fa c t I was ju s t on the P r e s id e n t's boat with Laird and Packard yesterday, we have a personal rap p o rt. . . Concern ing who has influence, both evaluation boards and p o litic s , i t s a combination. When a l l things are equal, p o litic s may e n te r. Johnson and Kennedy, and a l l to some ex ten t, are involved with p o litic s . White House pressure, d ire c t or in d ire c t may be involved, i t ' s hard to t e l l . . . . Congressman George Brown reported th a t "major co n tracts are e s s e n tia lly p o litic a l decisio n s, and even some minute co n tracts had an element of p o litic s w ithin i t . " Brown f e l t th a t "congressmen do not have the u ltim ate say so, but they are an e le m e n t..." He also said th a t "most large co n tracts are not simple decisions be cause many conditions, terms, and the a b ility fo r a company to pro duce must be taken in to c o n sid e ra tio n ." The Congressman concluded by s ta tin g th a t the "P resident and h is s t a f f , Cabinet, e tc . are consulted. They can decide if a co n tract should go to Boeing and Washington, or Texas and General Dynamics, th is is p o l i t i c a l . The Secretary of Defense c le a rs th is with the highest le v e l," i . e . , the P resid en t. Labor leader Sigmund Arywitz s ta te d : "Congressmen fig h t fo r th e ir resp ectiv e a re as. This could be fo r a l t r u i s t i c purposes or fo r money, kickbacks, e tc." However, as to the question of who sp eci f i c a l l y decided and/or r e a lly had th e influence, Arywitz gave a very 10. Interview with Congressman George Brown, Los Angeles, June 27, 1971. 226 candid and in te re s tin g answer: Ju st about anyone could have in flu en ce. For example, a bank p resid en t could place a c a ll to the Secretary of Defense, or the P resid en t, and request a Company to get i t /c o n tra ct^ due to the fa c t the bank wants a re tu rn of i t s money... Pressure p o l i t i c s is involved. It* s a stinky system, but the whole world s tin k s . Wheeling and dealing is p resen t, but th is is th e re a l world. 11 The respondents placed g re a te r emphasis on the ro le the P re s i dent played in the decisio n making process than th a t played by s p e c ific congressmen, or the Congress is gen eral. The p o litic a l school contended th a t when two or th ree companies were judged equally q u a lifie d by the m ilita ry (or were very close in the f in a l ev alu atio n ), the P resident and h is advisers had to decide which geo graphic area (e .g ., Los Angeles, Houston, or S e a ttle ) should receive the c o n tra c t. However, a defense company lobbyist sta te d th a t "when the source s e le c tio n board ra te s one company su p erio r to the other com petitors, e sp e c ia lly in i t s cost estim ate, the f in a l d ecision is usually th a t of the m ilita ry evaluators and not the White House." Other respondents expressed a sim ila r b e lie f , and a f te r fu rth e r q u e stio n in g ,th e author concluded th a t no P resid en t, or Secretary of Defense, would be w illin g to r is k going against a strong recommenda tio n by the m ilita ry e v alu ato rs, u n less, of course, he f e l t th at the p o litic a l gains would be g re a te r than the p o ssib le p o litic a l 11. Interview with Sigmund Arywitz, Los Angeles, August 11, 1971. 227 12 losses th a t might re s u lt from a poor d ecision upon h is p a rt. A very high o f f ic ia l in government held a s im ila r view: I have no d ire c t evidence to support th is - i t s what I'v e heard - but p o litic s does en ter, but i t s lim ited, a l l things being equal, or if things are p re tty close p o litic ia n s or p o litic s may e n te r. But does he (p o litic ia n ) want to r is k the decision going against a c le a r cut " v ic to r" of the se le c tio n board? There are p o litic a l forces on both sid e s, and to some degree they cancel each other out. He went on to make what l a t e r proved to be a most important and r e a l i s t i c observation concerning the p o l i t i c a l school of thought: "Two companies may both have influence, one may have the P resid en t, the other a committee chairman. Would the P resident want to oppose the committee chairman?" Consequently, the degree of p o litic s probably v aries because of p ossible charges of "playing p o litic s " by the opposition, p o te n tia l problems in weapons design re s u ltin g from overriding the m ilita r y 's o rig in a l choice based on m erit, and the p o litic a l power of other in s titu tio n s and p o litic ia n s . In conclusion, the respondents of the p o litic a l school generally endorsed the idea th a t when two or th re e c o n tracto rs were considered equally (or almost equally) acceptable by a m ilita ry or naval source se le c tio n board, then and only then did p o l i t i c s become a primary fa c to r in the f in a l decision making process. The P resident and his p o litic a l appointees, e . g . , Secretary of Defense, one or two tru ste d Cabinet members, and in n e r-c irc le a d v isers, were judged the most 12. For example, the TFX d ecision is s t i l l causing much debate and second guessing. In th is case the m ilita ry recommended Boeing, and of course, McNamara overruled the m ilit a r y 's d ecisio n and 228 in f lu e n tia l. And only a few congressmen, such as sen io r members of the Armed Services and A ppropriations Committees, were c ite d as in flu e n tia l forces with whom both the P resident and armed forces p er sonnel had in te ra cted and fo r whom they had re sp e c t. Third Theory; The Combination School R epresentatives of th is school maintained th a t sp e c ific answers cannot be offered w ith respect to the question of who makes the fin a l decisions and who has influence on major weapons systems. Instead of committing themselves to g en eraliz a tio n s, as did those in the f i r s t two schools, they contended th a t i t a l l depended upon the p a r tic u la r defense co n tract up fo r award. Hence, some co n tract decisions were considered to be: (l) ob jectiv e (m ilita ry ), especi a lly when one company was rated su p erio r to the other bidders; (2) p o litic a l (White House and/or congressional p ressu re), e sp e c ially when two companies were rated f a i r l y equal in a b i l i t y ; and (3) both o b jectiv e and p o l i t i c a l , in th a t much in te ra c tio n took place between the Department of Defense and White House/Congress before the f in a l 13 decisio n was made, with the end re s u lt being a compromise. As one can e a s ily conclude, members of th is school believed th a t a combin a tio n of fa c to rs should be used to describe the decisio n making pro cess underlying defense c o n tra ct awards. The following comments chose General Dynamics. 13. By ‘"compromise" the respondents and th is author mean th a t addi tio n a l n e g o tiatio n s between the government and the two leading c o n tracto rs take p lace, and adjustm ents in the requirements and p o litic a l whims of the m ilita ry and the p o litic ia n s emerge re sp e c tiv e ly . 229 from several respondents best i l l u s t r a t e the basic premise of the combination school. A labor leader s ta t e d . "During the 1950's and early 1960's the decisions were based more on the excellence of a company. Where as in the mid to la te 1960's th e re was more 'pork b a r r e lin g l' To day, decisions are p o l i t i c a l , economic, te c h n ic a l, and d esig n ." A business executive added: "There is no s e t ru le , i t a l l depends upon the c o n tra ct, the p o l i t i c a l and economic s e ttin g , and the tim e." B asically the proponents of th is school argued th a t there were too many v ariab les involved—employment p o te n tia l, economic impact on the community, in te rn a tio n a l tension and the arms race, p a rty p o l i t i c s , and the individual p e rs o n a litie s and d e sire s of the many people d ir e c tly or in d ir e c tly involved in the overall process— which prevented most c o n tra cts from being awarded so le ly on m erit or on p o litic a l muscle alone. Based upon h is fin d in g s, the author has also concluded th a t a s ig n ific a n t number of c o n tra cts were awarded on the b asis of a com- 14 b in atio n of f a c to rs . As sta te d e a r lie r , the major co n tra cto rs in Los Angeles, as well as in o ther defense orien ted areas, were gen e ra lly considered to be f a i r l y equal in t h e i r a b ility to produce major weapons systems. Therefore, when the m ilita ry source s e le c tio n boards were able to " liv e with" two companies with respect 14. I am unable to q u a lify " s ig n ific a n t number" in terms of a sp ec i f ic number or percentage. This is due to the fa c t th a t i t would be purely conjecture on my p a rt as w ell as the respondents who p a rtic ip a te d in th is d is s e r ta tio n . If pressed, I would have to estim ate th a t approximately 50% of a l l th e major c o n tra cts were 230 to the eventual co n tract winner, p o l i t i c a l and economic fa c to rs were o ften involved in the f in a l d ecisio n . Several fa c to rs support the "combination" school. F ir s t, the delegation of a u th o rity must begin somewhere, and with respect to co n tract awards, i t is probable th a t p o litic ia n s were w illin g to leave the decisions on sm aller and le ss p ublicized c o n tra cts to the m ilita ry . One wonders what President or executive branch o f f ic ia l was w illin g to take the re s p o n s ib ility fo r deciding against a m ili ta ry source se le c tio n b o ard 's d ecision when a small in s ig n ific a n t co n tract was at stak e. What had he to gain, e sp e c ia lly , i f the con tr a c to r produced a poor product? On the o th er hand, although the ris k s may be g re a te r when p o litic ia n s make a f in a l decisio n on a major weapons system th a t is contrary to the one recommended by the m ilita ry , by the time the weapon is completed and ready fo r use (th ree to seven years in the fu tu re ), sev eral sh ort-term p o litic a l b e n efits may have accrued. These include re -e le c tio n , votes fo r o th er p arty nominees, and o v e ra ll p o l i t i c a l support from a metro p o lita n area which received m illio n s of d o lla rs and numerous jobs through a major c o n t r a c t . T h e r e is also the question of how many times did the decisions of the P resident and/or key congressmen decided by a combination of fa c to rs , e sp e c ia lly p o l i t i c a l , economic, and corporate m erit. 15. One high placed Department of Defense o f f i c i a l said th a t Kennedy had th is in mind when the TFX was awarded to General Dynamics in Texas instead of Boeing's p lan t in Kansas. Governor Ronald Reagan has c ite d the fig u re of 60,000 jobs being created (or continued) fo r every b i l l i o n d o lla rs spent via defense con tr a c ts in C a lifo rn ia . See Jack Jones, "M achinists and Space 231 a c tu a lly d i f f e r from those of the source se le c tio n boards? In o ther words, what may have looked lik e a p o litic a l d ecision to o u tsid e rs, may in r e a lity have been a decisio n th a t was id e n tic a l to th a t reached by the source se le c tio n board, and only made to appear p o li t i c a l fo r " p o litic a l" reasons. And second, since a m u ltim illio n -d o llar co n tract can generate thousands of jobs and monetary gains fo r a given area, why would p o litic s be removed from defense co n tract decisions? If we accept the premise th a t p o litic s involves the a llo c a tio n of f is c a l rewards, then i t should not be su rp risin g to find th a t a m ajority of the re spondents f e l t th a t many large defense co n tracts were awarded to various co n tracto rs throughout the nation fo r p o litic a l reasons. Bearing in mind th a t we are discussing equally q u a lifie d co n tracto rs fo r a given weapons system, why would p o litic ia n s (p a rtic u la rly the P resident) re ly only upon source se le c tio n board decisions? I t appears th a t o ther things were taken into co n sid eratio n by government o f f ic ia ls when major weapons systems were being awarded. Such things as which company was awarded the la s t major c o n tra ct, the primary area to which i t was assigned (e . g . , Los Angeles or S e a ttle) , ^ which area needed the economic b e n e fits, and what would be the Workers Union Opens L.A. Convention," Los Angeles Times. September 6, 1972. P art 1, p. 3. 16. A corporate executive sta te d th a t " if we knew th a t i t was C a lifo rn ia 's tu rn (fo r a c o n tra c t), then we were ra rin g to get involved. But i f i t was Washington's or Texas' tu rn , then we ju s t made a formal bid, and l e f t the re a l actio n (lobbying) to the o th er companies." 232 p o litic a l b e n e fits, and what would be th e p o litic a l b e n e fits, were considered, in a d d itio n to the more o b jectiv e fa c to rs . Consequently, assuming th a t two companies were judged equally q u a lifie d , or even i f one company was rated a few p o ints lower than the o th er, was i t "wrong*' fo r the P resid en t, or the Secretary of Defense to s e le c t the evaluation board's second choice in order to prevent economic hard ship fo r a p a r tic u la r c ity , or a co n tracto r and h is employees? Conclusion In conclusion, the p o litic a l decision makers, namely the P resident and members of his "inner c ir c le " (top o f f i c i a l s of the Department of Defense, O M B, the Cabinet, e tc .) and sen io r members and committee chairmen in Congress obviously understood the counter balances, r e s tr a in ts , and p o ssib le adverse consequences of hasty or purely p o litic a l decisions in the award of defense c o n tra c ts. Re stra in ts included not only the various checks and balances formalized in the C o n stitu tio n and numerous government s ta tu te s , but also in formal r e s tr a in ts such as cou n terv ailin g pressure groups (e .g ., other competing c o n tracto rs and c i t i e s , and nondefense in te r e s t s ) , and the o v e ra ll system which finds career bureaucrats, p o litic a l appointees, and elected o f f i c i a l s a l l serving th e ir resp ectiv e c o n stitu e n ts . Al though 42 percent of the respondents who passed judgement on the question of "who decides" sta te d th a t p o litic s was behind most major defense decisio n s, i t is the a u th o r's contention th a t h is "combin a tio n " theory o ffe rs the best explanation of the workings of the defense co n tract award process. This conclusion stems from the b e lie f th a t American government is based la rg ely upon personal re la tio n sh ip s 233 t r u s t , and "give and ta k e ." Hence, a purely p o litic a l d ecision th a t ignores equally q u a lifie d com petitors and the opinions of estab lish ed m ilita ry advisers, not only w ill upset o ther p o litic ia n s , but also w ill destroy many of the before-mentioned elements of government. To conclude th a t the defense co n tract system is based mainly upon p o litic s is much too sim ple. On the other hand, to accept the p o sitio n th a t the decisions a ffe c tin g major co n tracts are based so le ly upon m ilita ry evaluators is much too naive. It ignores the p o litic a l r e a l i t i e s faced by elected o f f ic ia ls , namely, compromise, give and take, and the d e sire to be re -e le c te d , and the power to influence f in a l decisions th a t a ffe c t thousands of fam ilies in a given area. P o litic ia n s want a piece of the defense budget fo r th e ir own c o n stitu e n ts , an important fa c to r of which the m ilita ry is well aware, e sp e c ia lly when i t must re ly upon Congress fo r annual ap p ro p riatio n s, and the P resident fo r policy d ire c tiv e s . In ad d itio n , since approximately one-half of the p riv a te sec to r respondents stated th a t the source se le c tio n boards made the d ecisio n s, which were considered o b jectiv e and based upon m erit, one wonders why most of these same respondents e ith e r a c tiv e ly engaged in, or supported the constant lobbying th a t confronts many p a rtic ip a n ts of the co n tract awai- process. If co n tracts were awarded on m erit, then why did the major de fense corporations bother to have Washington o ff ic e s , encourage oth ers to speak out on th e ir b eh alf, and hold congressional d e le g atio n meetings and dinners during the p ast twenty years? CHAPTER IX CONCLUSIONS A N D SU M M A R Y The primary purposes of th is d is s e r ta tio n were to id e n tify the components of the Los Angeles defense in te r e s t and to determine what lobbying techniques were used fo r winning co n tracts fo r Los Angeles County c o n tra c to rs. To achieve these o b je ctiv es, i t was necessary to answer s ix major q u estio n s: (l) Were defense lobbyist techniques sim ila r to those employed by nondefense in te re s ts ? (2) Does the "old" or "new" school of lobbying best describe the technique of the defense lobby? (3) How e ffe c tiv e or in f lu e n tia l were the tech niques used by defense lobbyists? (4) Were the components of the de fense in te r e s t equal in influence, or was one segment more e ffe c tiv e than the others? (5) Were major defense c o n tra cts awarded on the basis of m erit, or did p o litic s play the leading ro le in the overall process? (6) What degree of in te ra c tio n took place between the mem bers of the three s e c to rs . In ad d itio n , the author put forward two hypotheses which would apply not only to the period under study but also to the immediate p ast and fu tu re . F i r s t , p o l i t i c a l r e a l i t y is as important as per sonal conviction with resp ect to a Los Angeles congressman's defense campaigning, lobbying, and voting record. Second, an inform al, as well as a formal process, takes place in the award of major defense co n tra c ts. This in fo rm ality cen ters la rg e ly around personal re la tio n ships and p o litic a l and economic co n sid eratio n s, and i t deserves equal b illin g with th e formal process. As a r e s u lt, th e e n tire 234 235 defense co n tract award process is more su b ject to the demands of the Los Angeles defense in te re s t because of the personal re la tio n sh ip s th a t e x ist w ithin the o v erall system. The Los Angeles Defense In te re s t With the Los Angeles defense-aerospace industry accounting fo r up to 40 percent of a l l manufacturing employment in the County, i t is c le a r why many groups believed th a t the co n tin u atio n of large annual defense procurement a llo c a tio n s was e s s e n tia l to the County's economic well being, and were very activ e and aggressive in th e ir e f f o r ts to obtain defense co n tracts fo r the County. These groups were the major components of what was termed the “defense in te r e s t" a t the o u tset of th is study. In ad d itio n to such major co n tracto rs as Lockheed, McDonnell Douglas, and North American Rockwell, the components included Los Angeles' congressional dele g atio n ; labor unions rep resen tin g employees at various defense re la te d companies, and major s ta t e and local o f f i c i a l s . To a le s s e r degree, lo cal and s ta t e o f f i c i a l s (c ity councilmen and s ta t e le g is la to r s ) ; the Los Angeles Area Chamber of Commerce; economic in te r e s ts such as banking, insurance, and re a l e s ta te ; p riv a te c itiz e n s in te re ste d in t h e i r own personal livelihood and/or n atio n al s e c u rity ; and various p ro fessio n al a sso ciatio n s also made up the Los Angeles defense in te r e s t . These components of the defense in te r e s t were the primary lobby i s t s or proponents of defense co n tracts fo r Los Angeles c o n tra c to rs. However, two important groups in d ire c tly aided Los Angeles defense 236 co n tracto rs by th e ir prodefense public re la tio n s e f f o r ts and demands fo r large defense budgets. The two were: ( l) the m ilita ry and various Executive branch personnel in the Department of Defense, and (2) members of the P r e s id e n t's immediate inner c i r c l e . Because of th e ir a c t i v i t i e s , these groups were included as "honorary members" of the Los Angeles defense in te r e s t . I t was found th a t the defense industry in Los Angeles had a much broader base of support fo r i t s e f f o r ts than the County's nondefense in te r e s ts . Whereas many nondefense in te r e s ts re lie d upon fu ll-tim e lo b b y ists and a few key in f lu e n tia ls from e ith e r labor or the Los Angeles congressional d eleg atio n , the defense industry enjoyed a "team" lobbying e f f o r t on i t s b e h alf. And unlike many of th e ir non defense c o u n terp arts, defense company lo b b y ists were fu ll-tim e cor p orate executives w ith no alleg ian ce to (or stipends earned from) o th er c lie n ts . Aside from the ro le played by th e ir own lo b b y ists, the defense co n tra cto rs received most of t h e i r support from the p o litic ia n s and labor leaders w ithin the defense in te r e s t. I t was found th a t during the 1950's and 1960's, i t was o ften necessary fo r p o litic ia n s to be advocates of a strong national de fense. If a p o litic ia n wanted to be elected to a fed eral or s t a t e wide p o sitio n , he ra re ly denounced e x istin g defense budgets or questioned the need fo r a su p erio r fig h tin g fo rce. Even those few congressmen who were ch aracterized as antidefense were never re a lly the " tr a ito r s " th e ir prodefense c r i t i c s claimed. Instead, these con gressmen g en erally advocated a s lig h t reduction in the Department of Defense budget (perhaps 10 percent, or a t le a s t some "cu ttin g of the 237 f a t " ) , and more emphasis on other p r i o r i t i e s , which were o ften found in the p o l i t i c a l rh e to ric of many so -called f is c a ll y conservative p o litic ia n s . Thus, with respect to the f i r s t hypothesis, Los Angeles congress men, as a ru le , were indeed p o litic a l r e a l i s t s who did not h e s ita te to support the defense in te r e s t . The prodefense stance of many congressmen stemmed from th e ir memories of Pearl Harbor and Korea, as well as from co n stitu en t ex p e cta tio n s and demands fo r large defense budgets and co n tract awards to local companies. Therefore, a combination of personal conviction and p o l i t i c a l r e a l i t y led the members of the Los Angeles congressional deleg atio n , at one time or another and in varying degrees, to promote or look out fo r a defense re la te d firm w ithin t h e i r d i s t r i c t s . The p o l i t i c a l reasons fo r t h is a ttitu d e are c le a r: Los Angeles congress men re a liz e d th a t they had to acknowledge and advance the leg itim ate in te r e s ts of important c o n stitu e n ts if they wished to be re -e le c te d . And since every congressman from the County had defense co n tracto rs w ith in h is d i s t r i c t , and numerous c o n stitu e n ts working fo r, or de pendent upon these c o n tra c to rs, th e ir support of the defense in te r e s t was a n atu ral fu nction of what a congressman is , in theory, supposed to do: rep resen t and p ro te c t the in te r e s ts of h is c o n stitu e n ts. Needless to say, most of the d eleg atio n performed th is function very w ell. However, some of them (including sen ato rs) went too f a r , in th a t they in fe rred to t h e i r c o n stitu e n ts th a t they could get con tr a c t s fo r local c o n tra c to rs. This was done by announcing in advance of p u b lic n o tif ic a tio n th a t company X had ju s t been awarded a m ulti 238 m illio n d o lla r c o n tra c t. According to several highly placed sources, such announcements created the illu s io n among many voters and sp ecial In te re s ts th a t congressmen had a g reat deal of influence in the con t r a c t award process. And th is in tu rn produced even g re a te r p res sures fo r C a lifo rn ia 's U.S. le g is la to r s to lobby fo r the defense in te r e s t, even at the expense of t h e i r personal convictions. Labor was th e o th er major p a rtic ip a n t of the Los Angeles County defense in te r e s t . However, during the 1950's and up to about 1968, organized labor was not as a ctiv e as i t has been fo r the past fiv e years. Most of la b o r's recent a c tiv ity was the re s u lt of sm aller defense budgets and the re s u ltin g d eclin e in defense employment. Although defense co n tra cto rs and labor became p artn ers in the defense in te r e s t c o a litio n , they s t i l l retain ed a c e r ta in degree of suspicion and h o s t i l i t y toward each o th e r. However, th is h o s t i l i t y w ill have to be s e t aside since both groups need each o ther to lobby fo r defense c o n tra cts in the 1970's . The emerging labor and defense co n tracto r re la tio n sh ip is a very important a llia n c e to watch. If i t continues, several key observations should be noted. F ir s t, can we expect new a llia n c e s a ris in g between o ther h is to r ic a l "enemies?" Second, w ill employment and p r o f it have p r io r ity over group d ifferen c es in p h ilo sophy and p ra c tice ? And th ir d , i f the labor and defense co n tracto r a llia n c e which emerged in Los Angeles is also present in other m etropolitan areas, perhaps new a llia n c e s between nondefense companies and th e ir resp ectiv e unions w ill evolve in order to balance, or dim inish the p o te n tia l influence and p o litic a l power of a defense 239 c o n tra cto r and organized labor a llia n c e . Another s ig n ific a n t finding centered around the defense in d u s t r y ^ f a ilu r e to use i t s industry wide a sso c iatio n , the Aerospace In d u strie s A ssociation, to lobby e ith e r on i t s behalf or fo r sp e c ific members. Whereas nondefense groups such as the American Medical A ssociation, the National A ssociation of E le c tric Companies, the American Farm Bureau F ederations, and the American Trucking Associ a tio n have been among the top spenders fo r lobbying since World War I I , and very o fte n carry the major p o rtio n of the lobbying on behalf of the p ro fessio n or group they re p re se n t. The defense co n tracto rs of Los Angeles gave the Aerospace In d u stries A ssociation (AIA) l i t t l e , i f any, c re d it fo r obtaining c o n tra c ts, and the AlA's lobbying expen d itu re s were minimal. The major reason fo r th is d ifferen ce is th a t many members of the nondefense a sso ciatio n s did not have th e ir own lobbying org an izatio n and, as a r e s u lt, most of the members f e l t th a t t h e ir goals and in te r e s ts were e s s e n tia lly the same and best served by an a sso c ia tio n . On the o th er hand, Los Angeles co n tra cto rs, with t h e i r own lobbying o rg an izatio n s, had but one in te re s t to p ro te c t— th e ir own—and the industry a t large was perceived as of secondary importance. Defense In te re s t Lobbying Techniques As discussed in Chapter 7, th e members of the defense in te re s t employed a number of lobbying techniques in th e ir p u rsu it of major defense c o n tra c ts . I t is important to note th a t the defense con tr a c to r s spent much of th e ir time and e f f o r t in building la stin g 240 re la tio n s h ip s with the decisio n makers and bureaucrats with whom they in te ra cted in the c o n tra ct award process. To achieve th is o b jective the successful lobbyist had to be so ciab le, fle x ib le , ta c t f u l, and possess an a b ility to get along with as many people as p o ssib le. Once he gained some degree of rapport with a decisio n maker ( i . e . , con gressman, general, or high level Department of Defense appointee) h is job became much e a s ie r . The following techniques were those most freq u en tly p racticed by defense company lo b b y ists and management: (1) P rofessional co n tacts and/or frien d s who knew major p a rtic ip a n ts of th e defense co n tract award process were u tiliz e d to gain access to key decision makers; (2) Other groups in the defense in te re s t were used to lobby on behalf of a co n tracto r and/or the County, (3) Visual aid s such as c h a rts, brochures, and s lid e p resen tatio n s a t congres sio n al d eleg atio n m eetings, and corporate to u rs were used to provide inform ation to d ecisio n makers, bureaucrats, and various community o rg an izatio n s; (4) Lobbyists made themselves a v ailab le to the decision makers fo r in s ta n t inform ation. ( I t was e s s e n tia l fo r defense lobby i s t s to stay in constant contact with various decisio n makers, while a t the same time avoiding the danger of wearing out th e ir welcome); (5) Lobbyists co n tin u a lly c u ltiv a te d new co n tacts and met w ith de c isio n makers both in and out of Washington. And (6) Favorable w itnesses were u tiliz e d at congressional hearings and other public g ath erin g s. Most of the members of the Los Angeles congressional deleg atio n spent a s ig n ific a n t p o rtio n of t h e i r a llo tte d lobbying time and e f f o r t on behalf of lo cal defense c o n tra c to rs. Two primary lobbying 241 techniques were employed by congressmens (l) lobbying o th ers, e sp e c ia lly fellow congressmen, and high ranking o f f i c i a l s in the executive branch; and (2) generating c o n stitu e n t support through new sletters and the media. I t should be noted th a t whereas Los Angeles congressmen o ften asked th e ir colleagues to back a lo cal c o n tra c to r on the b asis th a t the County deserved i t s so -called f a i r share of defense co n tract a llo c a tio n s , or because non-Los Angeles congressmen had asked them to back t h e ir own pet p ro je c ts (p a rtic u la rly nondefense p ro je c ts such as highway and building c o n stru ctio n ), th e ir c o n stitu e n ts were to ld th a t c o n tra c ts had a favorable economic impact upon the d i s t r i c t , and th a t the co u n try 's natio n al defense depended on up-to -d ate weapons systems. Like t h e ir defense company management co u n terp arts, labor o f f i c i a l s used the method of holding meetings with the C alifo rn ia congressional d eleg atio n to present inform ation as to why a given c o n tract should be awarded to a Los Angeles Company. Another frequent ly used technique was th a t of informing union members th a t th e ir com pany was competing fo r a major c o n tra c t. The members were urged to w rite l e t t e r s , ta lk to frie n d s , and jo in " c i tiz e n 's committees’' to generate public support w ithin th e ir resp ectiv e communities, and throughout the s ta te , fo r the c o n tra c t. Another ta c t ic was to have local members send l e t t e r s to r e la tiv e s and frien d s in o ther counties and s ta te s urging them to w rite to t h e i r s ta t e and fed eral le g is la to r s in support of a p a r tic u la r Los Angeles co n tra cto r and/or weapons system. S ta te and local o f f i c i a l s wrote l e t t e r s and adopted reso lu tio n s 242 in support of Los Angeles c o n tra c to rs. More well-known p o litic ia n s such as Governors Brown and Reagan and Mayor Yorty, because of th e ir resp ectiv e o ffic e and p arty p o sitio n , personally in te ra cted with high lev el fed eral d ecisio n makers on behalf of the c o n tra c to rs. As a ru le , however, the ty p ic a l s ta t e and lo cal o f f ic ia l was more e ffe c tiv e and useful when he p riv a te ly a s s is te d e ith e r a s p e c ific co n tra c to r or supported a group of congressmen and/or union leaders who were a c tiv e ly lobbying fo r a major weapons system. Since the membership of the Los Angeles Area Chamber of Commerce was q u ite d iv erse and included many companies w ithin the defense in dustry, the Chamber was not expected to . nor did i t . make a p ra c tic e of lobbying on behalf of a sp e c ific c o n tra c to r. Instead, the Chamber, lik e the Aerospace In d u strie s A ssociation, lobbied on behalf of the e n tire aerospace-defense in d u stry . The techniques of the two groups were found to be sim ila r to those used by nondefense lo b b y ists. Department of Defense o f f i c i a l s in d ir e c tly lobbied or a ssiste d the Los Angeles defense in te r e s t by o ffe rin g advice and inform ation to corporate o f f i c i a l s and congressmen. This inform ation generally re la te d to what the Department of Defense was looking fo r in weaponry, what i t would spend fo r the weaponry, and how the defense in te re s t might p o ssibly resolve problems re la te d to winning c o n tra c ts. Whereas DoD o f f i c i a l s g en erally remained in the background, a c tiv e duty o ff ic e rs were found to be more in clined to lobby a c tiv e ly fo r a s p e c ific c o n tra cto r, in a d d itio n to lobbying fo r the continu a tio n of large procurement budgets. Various public se c to r respond en ts f e l t th a t many a c tiv e duty o ff ic e rs who may have served on 243 source s e le c tio n boards, or occupied some o th e r in f lu e n tia l s lo t in the award process, were favorably biased toward one or two defense c o n tra c to rs. This b ias usually developed because the o ff ic e rs ex p eri enced p o s itiv e re s u lts with the weapons systems produced by these companies during World War II and/or Korea. Therefore, many of these same o ff ic e rs were prone to e ith e r lobbying fo r a p a r tic u la r con tr a c to r , or subtly convincing other in f lu e n tia ls th a t company X produces top q u a lity weapons. In b rie f, public re la tio n s e f f o r ts such as speeches; news re le a s e s; tours fo r congressmen, c iv ic n o t a b les, and s ta te and lo cal o f f i c i a l s ; and providing le g is la tiv e lia is o n o ff ic e rs fo r congressmen were the predominant techniques em ployed by the armed serv ices in lobbying both the decisio n makers and the public at larg e. Defense Lobbyist Techniques Compared to Nondefense Lobbyist Techniques Although both defense and nondefense lo b b y ists used many of the same techniques during the period under study, sev eral basic d i f f e r ences stood o ut. F ir s t, defense in te re s t lo b b y ists and t h e ir a l l i e s used much more of a team e f fo rt when lobbying the decisio n makers and the general public than did nondefense in te r e s t s . This team e f f o r t involved more than ju s t the corporate lo b b y ist, which was o ften the case with many nondefense in te r e s ts , and equal emphasis was placed upon the p a rtic ip a tio n of corporate executives, congressmen, r e tir e d m ilita ry o ff ic e rs , and union leaders in influencing major decisions th a t affected the defense in te r e s t. A dditionally, as reported e a r l i e r , whereas many nondefense lobbyists represented more than one 244 c lie n t, defense co n tra cto r lobbyists were fu ll-tim e employees of the companies they represented. Therefore, th e defense lobbyist was an in te g ra l p art of the o v e ra ll management team while, at the same time, serving as a " lia is o n man" between the Los Angeles based corporate executives and selected members of the public s e c to r. Second, when th re a ts or undue pressure were used by lobbyists during the 1950's and 1960's, such ta c t ic s were a ttrib u te d only to nondefense in te r e s ts . Several congressmen s p e c ific a lly c ite d various nondefense in te re s ts which reso rted to th re a ts , and although most of these were crude attem pts by r e la tiv e ly in s ig n ific a n t groups, such major in te r e s ts as the American Federation of Teachers, the American Medical A ssociation, and the Teamsters Union were offered as examples of groups which threatened congressmen with the lo ss of campaign c o n trib u tio n s, votes, and support in the next e le c tio n . The defense in te r e s t , and in p a r tic u la r the defense industry, was cred ited with being above these t a c t i c s . In sum, defense lo b b y ists were p r a c titio n ers of the so ft s e l l . A comment by Congressman George Brown perhaps b est symbolized the mood of the public s e c to r: " . . . a t no time was I ever threatened by loss of votes or c o n trib u tio n s, or pressured by anyone in the executive or le g is la tiv e branches, or any o ther group, due to my opposition to the defense ap p ro p riatio n s."* Third, the defense in te r e s t—and, again, p rim arily the defense in dustry—re lie d more heavily on the technique of seeing as many people as p ossible a t as many d iff e r e n t le v els of power as p o ssib le. 1. Interview with Congressman George Brown, Los Angeles, June 27, 1971 245 Whereas many nondefense lo b b y ists spent most of th e ir lobbying time with a few d ecision makers and s t a f f , the defense company lo b b y ists spent a g reat deal of time lobbying nonm ilitary d ecision makers and s t a f f , bureaucrats, Department of Defense executives and Pentagon o f f i c i a l s , middle and low er-level tech n ician s, and the general p u b lic. And fo u rth , except fo r recent e f f o r ts by organised labor, the defense in te r e s t u su ally did not re s o rt to the massive le tte r - w r itin g campaigns o ften used by many nondefense in te r e s ts . However, if the defense budgets are fu rth e r reduced in the near fu tu re, th is tech n i que, as well as the a p p lic atio n of more pressure in the form of w ith holding campaign c o n trib u tio n s and votes, may also be used by the Los Angeles defense in te r e s t . Defense Company Lobbying Techniques? Generally "New Lobby” For Now As a ru le , the members of the public se c to r perceived the lobbying techniques implemented by the defense c o n tracto rs as pro fessional,, o b je ctiv e, inform ative, and s o ft s e l l in n atu re. Addi tio n a lly , the personal t r a i t s of the lo b b y ists (including management personnel) were viewed in a p o sitiv e manner - i . e . . honest and c o rd ia l. Defense company lo b b y ists were considered to be no d iff e r e n t than any o ther sp ecial in te r e s t re p re se n ta tiv e s whose primary function was to promote the in te r e s ts of the group they rep resented. Conse quently, i t was not s u rp risin g to find th a t when the public se c to r respondents were asked to id e n tify which school of thought c h arac te r ized defense company lo b b y ists, the overriding m ajority f e l t th a t defense lo b b y ists represented the new lobby, not the old. Defense company lo b b y ists employed "new lobby" techniques be cause the government arena in which they worked demanded th is approach. Many of the old lobby techniques, e sp e c ially th re a ts and brib ery , were considered taboo during the period under study. How ever, th is does not mean th a t defense lo b b y ists refrain ed from using c e r ta in techniques long associated with the old lobby such as cock t a i l p a r tie s , luncheons, g o lf, and o ther so cia l events in order to in te ra c t with and influence the decisio n makers. These techniques were "accepted" because the public se c to r considered them to be a normal p art of our system. As pure sp ecu latio n , if brib ery , weekend p a r tie s , and $20,000 g i f t s were not ille g a l or p o l i t i c a l l y unaccept able to the public sec to r, i t is not inconceivable th a t such ta c tic s would also have been used by the defense company lo b b y ists, simply be cause they might have been judged e ss e n tia l techniques fo r winning major co n tra cts. Influence Enjoyed by the Defense In te re st A s ig n ific a n t m ajority of public se c to r respondents stated th a t defense company lo b b y ists had more influence than nondefense lobby i s t s . It was found th a t congressmen were u su ally recep tiv e to cor porate lo b b y ists, and th a t many of th e ir colleagues were recep tiv e to the Los Angeles congressional d e le g a tio n 's lobbying e f f o r t s , due la rg e ly in response to appeals to preserve a su p erio r natio n al de fense, p o litic a l "log r o ll in g ," and the County's economic dependence upon major c o n tra c ts. With respect to labor, the an aly sis showed th a t because the County's labor leaders u su ally emphasized the 247 employment fa c to r when lobbying fo r c o n tra c ts, elected o f f i c i a l s at the lo cal, s ta te and natio n al le v els g en erally were recep tiv e to and supportive of la b o r's demands fo r co n tract awards to local co n tracto rs. Unfortunately, one cannot to t a l l y measure the e ffectiv en ess or influence of the defense in te re s t and i t s lobbying techniques. How ever, we can assume th a t some degree of influence was enjoyed by the defense in te r e s t; or at the very minimum, th e defense i n t e r e s t 's lobbying e f f o r ts were not damaging to th e ir cause. For if the defense i n t e r e s t 's techniques were in e ffe c tiv e or detrim ental to th e ir cause, why did the defense in te r e s t a ctiv ely lobby, and consequently use so much manpower and money, fo r twenty years if i t was a l l fo r nothing? As to the question of which components of the defense in te re s t had the most influence, i t was not d i f f i c u l t to conclude th a t the same th ree groups - industry, congressional, and labor - th a t were the most activ e and aggressive lo b b y ists, were also the most e f f e c t ive members of the Los Angeles defense in te r e s t . Much of th e ir success was due to the fa c t th a t the th ree groups realized th a t lobbying fo r defense c o n tra cts was a complex and d e lic a te task re q u ir ing a long-term ra th e r than sho rt-term lobbying stra te g y . Therefore, re la tio n sh ip s were b u ilt up over the years, and a "have to liv e with each other" a ttitu d e emerged between and among the defense in te re s t and those who in te ra cted with each o ther in the o v erall co n tract award process. This long-term lobbying stra te g y was best executed by the p a rtic ip a n ts who were more apt to remain in th e ir resp ectiv e ro le s over a long period of time and who also were d ire c tly affected by any dramatic change in annual Department of Defense co n tract awards. 248 The Contract Award Processt Formal and Informal Coexistence In ad d itio n to the formal process th a t was followed in co n trast awards, the author hypothesized th a t an informal process was also at work. A sizeab le m ajority of the respondents who played a ro le in the award of defense co n tracts provided support fo r th is hypothesis. Evidence from the respondents pointed d e fin ite ly to an informal pro cess b u ilt larg ely upon personal re la tio n sh ip s between the members of the three sec to rs under study. These re la tio n sh ip s were reported to be q u ite strong, and in most cases, had developed over a period of about th ree to fiv e years. Consequently, such old lobby ta c t ic s as withholding campaign c o n trib u tio n s and votes were rejected as counter productive. Therefore, the lo b b y ists who b est served the defense in te r e s t were those who understood the importance of building p o sitiv e re la tio n s h ip s, and who also re a lize d th a t most of the people they lobbied would s t i l l be in Washington "next y e ar." Although the informal process was present during the e n tire award process, i t s re a l importance emerged when two competing com panies were judged to be equally acceptable by a source s e le c tio n board. When th is occurred, economic consequences, p o te n tia l votes, lo g ro llin g , f a i r share, and unemployment were considered by the top decisio n makers. Because of these p o litic a l fa c to rs , the success of the defense lobbyist o ften depended upon h is a b i l i t y to determine not only whom to see, but when, how o ften , where, and fo r how long. In ad d itio n , i t was important fo r the lobbyist to be aware of the problems and issues facing th e decisio n makers during the time they were being lobbied and try in g to reach a decisio n . 249 From the evidence gathered fo r th is study, i t appears th a t as long as an informal process continues to occur w ithin the defense co n tract award process—and in the nondefense arenas, as w ell— lobbyists w ill continue to play an activ e and acceptable ro le w ithin the system. The lobbyist w ill continue to serve as a broker in th a t he w ill bring to g eth er the important p a rtic ip a n ts from a l l three secto rs which need to in te ra c t with each o ther in order to b e tte r understand th e ir mutual p r i o r i t i e s , problems, and b e lie fs . Defense Contract Awards Were Based Upon Merit and P o litic s Three d is tin c t schools of thought emerged with respect to the bases on which defense c o n tra cts were awarded. A to ta l of forty-tw o respondents answered the question of who makes the decisions and has the influence in the award of c o n tra c ts. Of these respondents, 33 percent were adherents of the ob jectiv e school, which held the posi tio n th a t major c o n tra cts were awarded on m erit by m ilita ry source e v alu ato rs. P o litic s was not seen as a fa c to r because of our b u ilt- in system of checks and balances, and because of p o te n tia l adverse consequences th a t could a ris e if a poor p o litic a l decision overrode an ob jectiv e m ilita ry d e cisio n . Forty percent of the respondents belonged to the p o litic a l school. They stre sse d the importance of the d ecision making ro le of the P resident and/or a few key congressmen when two or th ree con tr a c to r s were considered equally q u a lifie d by the m ilita ry . F in a lly , the remaining 26 percent of the respondents, and the author, concluded th a t a combination of the above two schools more 250 accu rately described what took place in the co n tract award process. This conclusion stems from the a u th o r's b e lie f th a t American govern ment is based larg ely upon personal re la tio n s h ip s, tr u s t, and "give and ta k e ." Hence, a purely p o litic a l d ecision th a t ignored equally q u a lifie d com petitors and e stab lish ed m ilita ry advisers would not only upset o ther p o litic ia n s , but also would destroy many of the before mentioned elements of government. The p o sitio n th a t decisions a ffe c tin g major co n tracts were based s o le ly on o b jectiv e m ilitary evaluation was considered much too naive. This concept ignores p o litic a l r e a l i t y ; namely, the need fo r compromise and give and take and the very basic human d e sire s of a p o litic ia n to be re -e le cte d , to have influence in f in a l decisio n s which economically a ffe c t thou sands of fam ilies in a given area, and to have a piece of the defense budget fo r h is own c o n stitu e n ts . One f in a l observation should be made. With approximately one-half of the p riv a te se c to r respondents s ta tin g th a t m ilita ry source s e le c tio n boards made the f in a l d ecision in co n tract awards, one wonders why most of these same respondents e ith e r a c tiv e ly engaged in or supported the constant lobbying th a t confronted many p a rtic ip a n ts of the co n tract award process. If con tr a c ts were awarded s o le ly on m erit, why did the major defense cor porations bother to m aintain Washington o ff ic e s , encourage others to speak out on th e ir behalf, and hold congressional deleg atio n meetings and dinners during the past twenty years? In te ra c tio n Between the Three Sectors The amount of in te ra c tio n th a t took place between the members of 251 the th ree secto rs varied widely. I t was found th a t the in te ra c tio n between congressmen and defense corporation executives was not uni form. Congressmen who had major co n tracto rs and subcontractors in th e ir d i s t r i c t s g en erally had more contact with corporate o ffic e rs than did congressmen from d i s t r i c t s which were le ss defense company o rie n te d . C ontractors sought in te ra c tio n because of th e ir d e sire to present th e ir arguments as to why they deserved co n tracts or to com p la in about not g e ttin g c o n tra c ts, or subcontracts, e sp e c ially when companies f e l t t h e ir com petitors had won because of p o litic a l con s id e ra tio n s, or u n r e a lis tic a lly low bids. Congressmen in te ra cted with other public se c to r o f f ic ia ls fo r th ree reasons: (1) to promote a Los Angeles defense co n tracto r; (2) to present inform ation and data about a company, and/or weapons system; and (3) to o b tain inform ation fo r a defense co n tracto r or defense re la ted data fo r the congressman's own use. In sum, the degree of in te ra c tio n between congressmen and p riv a te and other public se c to r members was as o ften as deemed necessary by one of the p a r tie s . Each group re a lize d the importance of m aintaining large Department of Defense a llo c a tio n s fo r the County, and the congressional sec to r looked upon the defense industry as a major c o n stitu en t whose demands and needs had to be attended to on a constant b a sis . In ad d itio n to the in te ra c tio n between congressmen and p riv a te and o th er public se c to r p a rtic ip a n ts , there was considerable in te r actio n among members of the o th er public se c to r, labor, and the p riv a te se c to r. The most s ig n ific a n t finding in t h is area centered around the recen tly increased In te ra c tio n between labor and in dustry. 252 Much contact was also found between defense executives and Department of Defense personnel a t various levels of power and influence. With respect to in te ra c tio n between s ta t e and lo cal o f f ic ia ls and the p riv a te sec to r (and public secto r a lso ), meetings were much less freq u en t. In sum, most y e ar-in and year-out in te ra c tio n was informal and took place both w ithin the defense in te re s t (prim arily between the industry, labor, and congressional components) and with the members of the executive branch (Department of Defense c iv ilia n o f f ic ia ls , the Pentagon, White House s t a f f , e tc .) and non-C alifornia congress men. Limited in te ra c tio n also ex isted with the other groups w ithin the defense in te r e s t, but th is was usually on sp ecial occasions and on a more formal b a sis. In clo sin g , the Los Angeles defense in te re s t operated w ithin a governmental system whose members accepted the ro le played by lobby i s t s as long as they lived by the ru le s inform ally enforced by the members. Defense lo b b y ists enjoyed p o sitiv e re la tio n sh ip s with many d ecisio n makers and t h e ir support personnel who were responsible fo r deciding which co n tracto r would be awarded a major weapons system c o n tra c t. If the d iff e r e n t lobbyists fo r the defense in te r e s t, and in p a r tic u la r the industry lo b b y ists, were well informed on such m atters as ( l) whom to see; (2) the company's q u a lific a tio n s ; (3) the County's economic needs; and (4) the lobbying techniques viewed in a favorable lig h t by the public se c to r, then they served th e ir employer and/or the defense in te re s t w ell. Nondefense lo b b y ists are advised to heed the major finding of th is studyi build p o sitiv e re la tio n sh ip s with as many d iff e r e n t in flu e n tia l people as p o ssib le. These re la tio n sh ip s should cen ter around people at various lev els w ithin a l l th re e s e c to rs—e sp e c ially the fed eral level in the public se c to r. F urther, i t is important f o r an in te r e s t group to have public endorsements from d iff e r e n t groups and o f f i c i a l s in order to make a p o sitiv e impression upon both the d ecisio n makers and the general p u b lic. And f in a lly , if lobbyists fo r the nondefense in te r e s ts understand and operate w ithin the re s t r a i n t s and "do's and d o n 't 's " of the governmental process, and re a liz e th a t the more long-term nonpressure oriented ta c t ic s are g en erally well perceived by the decision makers, then t h e i r chances fo r success, or a " f a ir hearing should be enhanced. APPENDIX P a r tia l L ist of Respondents Anonymous. Former lobbyist fo r one of the top fiv e defense c o n tra c t ors in the United S ta te s, Los Angeles County. Arywitz, Sigmund. Executive Secretary, Los Angeles County Federation of Labor AFL-CIO. Avila, Edward. Field Secretary, United S tates Congressman Edward R. Roybal, 30th D is tr ic t, Los Angeles County. B ell, Alphonzo. United S tates Congressman, 28th D is tr ic t, Los Angeles County. Best, Robert E. Deputy D irector of Procurement and Production, Space and M issiles Systems O rganization, U. S. Government, Los Angeles Air Force S ta tio n . Bierderman, Harry R. Senior Economist, Corporate Development Planning, Lockheed A irc ra ft Corp., Burbank, C alifo rn ia . Bordelon, Vince. Manager, Government R elations, Los Angeles Area Chamber of Commerce. Braude, Marvin. Los Angeles City Councilman. Brown, Edmund G. (P at). Governor of C alifo rn ia, 1959-1967. Brown, George. United S tates Congressman, 29th D is tr ic t, 1963-1971, 1973-. Los Angeles County. Burr, Robert M. C onsultant, Jo in t Committee on the O rganization and Financing of Local Government, C alifo rn ia L eg islatu re. Formerly, Contract Coordinator, A erojet General Corp., Sacramento, C alifo rn ia . Cann, William. Vice P resident and Secretary, North American Rockwell, El Segundo, C alifo rn ia . Carder, Al B. D irector, Program Management and A dm inistration, M ilitary Systems D ivision, Douglas A irc ra ft Co., McDonnell Douglas Corp., Long Beach, C alifo rn ia . Clauson, Del. United S tates Congressman, 23rd D is tr ic t, Los Angeles County. Corman, James. United S tates Congressman, 22nd D is tr ic t, Los Angeles County. 254 255 Davis, W . A ustin. L t. General, U.S.A.F. ( r e t . ) , Vice P resid en t, Urban A ffa irs, North American Rockwell, El Segundo, C alifo rn ia. Enthoven, A lain C. Deputy Comptroller and Deputy A ssistan t Secretary of Defense, 1961-1965; A ssistan t Secretary of Defense fo r Systems A nalysis, 1965-1969. Farnsworth, John L. Chief of Contract A dm inistration D ivision, Defense Contract A dm inistration Services D is tr ic t, Department of Defense, Los Angeles. F itch , Alma. A ssistan t to Los Angeles City Councilman Edward Edleman. Frain, Frank L. Senior Vice President of Finance, Lockheed A irc ra ft Corp., Burbank, C alifo rn ia. Glass, Henry. A ssistan t to the Secretary of Defense, 1966 to November 1969. Special A ssistan t to the Comptroller, Depart ment of Defense, 1955-1965, Grace, Thomas P. Consultant, Sales Engineer, and Contract S p e c ia list fo r small business firms dealing w ith the United S tates Government, Los Angeles County. Green, Harland. Executive D irector, Contract N egotiation, North American Rockwell, El Segundo, C alifo rn ia. Haener, Al. In te rn a tio n a l R epresentative Education Department, United Automobile, Aerospace and A g ricu ltu ral Implement Workers of America, Los Angeles County. Hoffman, Fred. A ssistan t D irector, Bureau of the Budget, 1967-1969; Deputy A ssistan t Secretary fo r Systems A nalysis, Department of Defense 1965-1967. L ancaster, William. D is tr ic t R epresentative, United S tates Congress man Charles E. Wiggins, 25th D is tr ic t, Los Angeles County, Former Mayor of Durante, C alifo rn ia, 1962-1965, and member of the Durate City Council, 1958-1965. Lawrence, Louis I. L t. C ol., U.S.A.F., A ssistan t to the Deputy fo r Launch Vehicles fo r Procurement and Production, Space and M issiles Systems Organization, U.S. Government, Los Angeles A ir Force S ta tio n . Keeling, Gerald F. Major General, U.S.A.F. ( r e t , ) , D irector, Program and Inform ation Management, Hughes A irc ra ft Co., Culver City, C alifo rn ia . LaMothe, Je rry . D irector of Public R elations, United Automobile, Aerospace and A g ricu ltu ral Implement Workers of America, North American Rockwell Local 887, El Segundo, C alifo rn ia . McClain, William. F ield Deputy, United S tates Congressman Barry Goldwater, 27th D is tr ic t, Los Angeles County. Marinick, Jack. Vice P resid en t, Contracts and Q uotations, G a rre tt, In c ., Los Angeles. M arshall, James C. Executive A ssista n t, United S tates Congressman Alphonzo B ell, 28th D is tr ic t, Los Angeles County. O'Donnel, William. D is tric t A dm inistrator, Congressman Chet H o lifield , 19th D is tr ic t, Los Angeles County. Former lobby i s t fo r the American Federation of Teachers. Pace, Dean Francis. P resident of United S tates Management, In c ., Los Angeles. Formerly in co n tract n eg o tiatio n with In te r national Telephone and Telegraph, System Development Corp., and McDonnell Douglas Corp., Los Angeles County. Parker, Theodore M . D irector of S trateg ic Studies fo r P roject RA N D , and Head of Systems Sciences Department, Rand Corporation, Santa Monica, C a lifo rn ia . Peterson, John. D irector, Executive Programs, Graduate School of Business A dm inistration, U niversity of Southern C alifo rn ia . Q u illin , James. D is tr ic t P resid en t, In te rn a tio n a l A ssociation of M achinists, Los Angeles County. Rees, Thomas M . United S tates Congressman, 26th D is tr ic t, Los Angeles County. Rieke, William. Executive Vice P resid en t, Lockheed A irc ra ft Corp., Burbank, C alifo rn ia . Formerly, A ssistant A dm inistrator fo r Industry A ffairs and A dm inistration, and Deputy Associate A d m in is tr a to r f o r Manned Space F lig h t, NASA, 1966-1967. Ross, Robert. Government R elations, Deputy to the P resid en t, Douglas A irc ra ft Co., McDonnell Douglas Corp., Long Beach, C alifo rn ia. Roybal, Edward R. United S tates Congressman, 30th D is tr ic t, Los Angeles County. S chairer, Robert S. Corporate D irector of Development Planning, Lockheed A irc ra ft Corp., Burbank, C alifo rn ia . Seebo, Howard. In d u stria l Development Consultant, Los Angeles Area Chamber of Commerce. 257 Simpson, H. W . Captain, Supply Corps., U. S. Navy. Commander of Defense Contract A dm inistration Services D is tr ic t, Department of Defense, Los Angeles. S la te r, Irene. F ield Secretary, United S tates Congressman James Corman, 22nd D is tr ic t, Los Angeles County. Soucer, Romus. Special Headquarters R epresentative (national and in te rn a tio n a l), Defense Products, Westinghouse E le c tric Corp., Los Angeles. Sparks, William L. Manager, Western Zone, Defense Marketing, Westinghouse E le c tric Corp., Los Angeles. Thornton, James H. Colonel, U.S.A.F. Vice Commander, Air Force Contracts Management D ivision, U. S. Government, Los Angeles Air Force S ta tio n . T u ttle , Roderic D. Senior consultant to C alifo rn ia L eg isla tiv e, Assembly Committee on Natural Resources and Conservation. Former L e g isla tiv e Aid to Speaker Robert T. Monagan, C alifo rn ia S tate Assembly. Walen, Thomas. E d ito r, P ro p eller newspaper, United Autobobile, Aerospace and A g ricu ltu ral Implement Workers of America, North American Rockwell Local 887, El Segundo, C alifo rn ia. Yost, Robert C. P rin cip al of Yost and A ssociates, Los Angeles, and formerly Chairman and Coordinator, Department of Business Economics and Q u an titativ e A nalysis, U niversity of Southern C alifo rn ia . 258 Q uestionnaire Administered To The Respondents From The Three Sectors The following questions were put to a l l respondents. Respondent’s Background 1. Present (and p ast) p o sitio n , and General P o litic a l Philosophy. Personal A ttitu d e on Defense. Defense Budgets, and National Security 1. For the past te n years the U.S. has been spending approxi mately $40-80 b i llio n per f is c a l year on defense. What is your personal fe e lin g as to our expenditures on past and present defense budgets? Enough,, not enough, or what? 2. Has your a ttitu d e on defense expenditures and national se c u rity changed during the past te n years? If so, why? 3. C ertain defense c r i t i c s contend th a t at le a s t $3-5 b illio n is wasted per year on u seless weapons and cost overruns. What is your re a c tio n to th is ? 4. Do you believe th a t the leaders w ithin the p riv a te , public, and th ir d (defined fo r interview ee) secto rs share your a ttitu d e s on defense spending and natio n al secu rity ? The following questions were put to elected o f f ic ia ls (p a rtic u la r ly congressmen) and/or th e ir resp ectiv e s t a f f s . C onstituents. Business. Labor, and In flu e n tia ls : Their A ttitu d es and B e lie fs . 1. Do your c o n stitu e n ts generally endorse your a ttitu d e on defense spending and n ational secu rity ? a. About what percent share your a ttitu d e _______ oppose ___________ have no idea ___________ 2. How do you seek to determine the a ttitu d e s of your c o n stitu ents? a. P o lls ______ b. N ew sletter^ q u estio n n aires ___________ c. Personal in te ra c tio n __________ d. Other __________ 3. Of those c o n stitu e n ts, groups, e tc . th a t have a d iffe re n t viewpoint, what p o sitio n do they take? Do you see any merit in th e ir arguments? 259 4. Do your c o n stitu e n ts (including labor, business, defense c o n tra c to rs, average v oters, e tc .) ever pressure or th re a ten you with "v o te s," "money," adverse ads, campaigns to defeat you, e tc .? If so, who? a. Have any groups or individuals ever been successful in changing your mind/vote with respect to a p a rtic u la r weapon, defense budget, e tc .? 5. Approximately what percent of your c o n stitu en ts are d ir e c tly or in d ire c tly involved in defense re la te d employment? a. Has th is increased or decreased during the p ast 10-15 years? b. Do you th ink th a t the area you represent is too dependent upon defense re la te d companies? 1. If so, what has been done to co rrect th is situ a tio n ? 2. What could be r e a l i s t i c a l l y accomplished w ithin 5 to 10 years to lessen the dependence? 3. Do you advocate any change with respect to the depend ence upon defense co n tracts found in Los Angeles, C alifo rn ia, or the nation? 6. Moving to s p e c ific in d iv id u als, groups, and in te re s ts w ithin your c o n stitu en t body . . . a. How o ften do you have in te ra c tio n w ith executives of defense re la te d companies? 1. Often—once a week ________ 2. About two o r th ree times per month ________________ 3. Sometimes—perhaps once a month _________ b. How o ften do you have contact with labor leaders con cerning the need fo r defense c o n tra cts fo r Los Angeles Co.? (same sca le as above— 1 through 5). c. Do you ever meet with members of the Los Angeles Chamber of Commerce, various c ity planners, developers, e tc . concerning the need fo r defense co n tracts? If so, please e lab o rate . 4. Rarely—once a year _______ 5. Never ______ 260 The following questions were put to most public sec to r respondents. Lobbying Techniques Used by Defense In te re s ts fo r Obtaining C ontracts. 1. Do you come in to contact w ith re p re se n ta tiv e s of sp ecial in te re s ts such as d o cto rs, labor, insurance, environment, education, e tc .? 2. P o litic a l s c i e n t i s t s , jo u r n a lis ts , and p o litic ia n s o ften re fe r to the re p re se n ta tiv e s of these groups as lo b b y ists. When th is word is mentioned, what c h a r a c te ris tic s or g en eralizatio n s stand out in your mind? a. Has lobbying changed over the years—fo r the b e tte r or worse? Do you n o tice any difference? 3. Various defense and nondefense executives lik e to r e fe r to th e ir lobbyists as "Washington reps" or "company re p s ." Is th ere any d ifferen c e between a company or Washington rep? 4. What word do you p refer? _____________________. 5. Have you ever been v is ite d o r approached by a lobbyist (or whatever word respondent chose fo r question 4) fo r a defense co n tra cto r, o r someone advocating defense co n tra cts, national se c u rity , or weapons systems? a. If " y e s " ... 1. When? __________ How often . . . 1___ 2___ 3___ 4____ 5___. (Same scale as previously used) 2. Who? (Lobbyist, company executive, e tc .) 3. Where? (Your o ff ic e , p arty , meeting, e tc .) 4. What do the lo b b y ists have to say, o ffe r, e tc .? b. If the respondent had no c o n ta c t... 1. Do you believe th a t t h i s is because you are a c r i t i c of defense budgets, and/or weapons, systems, i . e . . Do lobbyists th in k you are a " lo s t cause?" 2. Have any o th er methods been used in order to present defense in te r e s t or defense company p o sitio n s? If the Respondent had In te ra c tio n w ith Lobbyists, the remaining questions were asked. 6. You sta te d th a t you have been v is ite d by re p re se n ta tiv e s of various groups and th a t they were c alled lo b b y ists or term 261 supplied by question 4, What methods or techniques were used by th is individual to see you, or at le a s t to give you information? 7. If th ere any d ifferen c e in the techniques employed by defense and nondefense lobbyists? If so, please comment, 8. Have you noticed any d ifferen ce in defense lobbying techniques during the years you have been in o f f ic e /p o litic s ? Any d ifferen ces in nondefense lobbying techniques? 9. Do you find the defense re la te d lo b b y ists and the "defense in te re s t" in general having more " a l l i e s ," or proponents from diverse backgrounds (e .g ., labor, small business, c iv ic leaders, e tc .) than nondefense in te r e s ts (NAM , NRA, AFL-CIO, e t c . ?) 10. What functions does a defense lobbyist perform? 11. What functions does a lobbyist in general perform? Are lobbyists an a ss e t, or are they a detrim ent to our democratic system? 12. How recep tiv e are you to defense lobbyists? To nondefense lobbyists? 13. Is th ere any a lte rn a tiv e to lobbying or in te r e s t group demands upon the system? (This question was asked i f the respondent took a detrim ent p o sitio n on question #11.) Influence and Decision Making 1. How much influence do you think defense lo b b y ists have com pared to nondefense lobbyists? (S pecific examples were en couraged) , 2. W ho makes the decisions regarding what company w ill be awarded a major weapons system co n tract? a. What about sm aller (le ss c o stly ) c o n tra c ts —how are they decided? 3. W ho has the re a l influence in the defense co n tract award process? 262 Miscellaneous questions 1. Are lev els of domestic spending affected by our defense budgets? If "y es," to what degree? 2. Do you believe th a t C alifo rn ia, e sp e c ially Los Angeles County, has received i t s " f a ir share" of the defense con tr a c ts awarded over the past twenty years? The following questions were put to a l l defense company respondents. Many of these questions were a lso put to th ir d secto r respondents—without the "your company" wording. The Corporation and Defense Contracting 1. Your company receives a s u b sta n tia l percentage of i t s b u si ness from the Department of Defense (DoD); is i t f a i r fo r me to assume th a t i t is in your company's s e lf in te re s t to a c tiv e ly seek prime m ilita ry co n tracts? or does the govern- ment/DoD a c tiv e ly seek or encourage your company's business? 2. Elmer B. S ta a ts, U.S. Comptroller General, sta te d in 1968 (a t a Senate Hearing): Department of Defense stu d ie s showed th a t, because many years of valuable production were at stak e, there was a tendency fo r c o n tra cto rs, when competing fo r the i n i t i a l co n tract fo r new programs, to promise overly o p tim istic performance and to underestim ate what th is per formance would c o st. What is your re a c tio n to the above statem ent? 3. How does your company go about presenting i t s side of the argument in order to answer well known defense c r i t i c s , and newspaper and magazine a r tic le s th a t are negative both to defense budgets and c o n tra c ts. 4. Do you believe th a t C alifo rn ia, e sp e c ially Los Angeles County has received i t s " f a i r share" of th e defense co n tracts over the p ast twenty years? 5. To what extent has your company tr i e d to a l t e r i t s dependence upon defense co n tracts? 6. Are le v els of domestic spending affe cted by our defense budgets? If "y es," to what degree? 263 Process and Personnel Used in Obtaining Defense Contracts 1. How does your company go about obtaining defense contracts? (Other in te r e s ts , p a r tic u la rly labor, were included in th is s e t of q u e stio n s), 2. Do you have c e rta in in d ividuals who are responsible fo r advancing company p o sitio n and q u a lific a tio n s to government o f f ic ia ls ? a . What t i t l e is given to individuals who promote the company? 3. Does the word lobbyist produce any stereotypes or g e n e ra li zations? 4. Are your company re p re se n ta tiv e s f u l l time employees? a. Do you know anything about t h e i r backgrounds? b. How o ften do they communicate with company o f f ic ia ls ? c. Is the rep p re tty much on h is own, or is he merely a member of a la rg e r "team?" 5. What in d iv id u als, groups, in s titu tio n s , e tc . does your company rep(s) see to promote the company? 6. What process or techniques are used by the company rep (s) fo r advancing company policy, p o sitio n , ideas, and in te re s ts to defense re la te d o f f i c i a l s and/or d ecisio n makers? 7. How does the rep get to see or a t le a s t leave inform ation with decisio n makers and in d ividuals who are in the co n tract award process? 8. Are th ere o th er means/methods your company employs in e ith e r competing fo r c o n tra c ts, or s triv in g fo r a favorable image with government, labor, nondefense re la te d industry, and the general public? 9. Have you ever had contact with in d iv id u als connected with DoD, Congress, Los Angeles labor lead ers, o th er business lead ers, or local in f lu e n tia ls concerning defense co n tracts weapons systems, n ational se c u rity , e tc .? If "y es," why? 264 Influence and Decision Making 1. How In f lu e n tia l do you fe e l your re p re se n ta tiv e s are? Are they as in f lu e n tia l as other defense and nondefense In te re s ts? (Same question put to labor leaders and the Chamber of Commerce). 2. W ho makes th e d ecisio n s regarding what company w ill be awarded a major weapons system co n tract? 3. W ho has the re a l influence in the defense co n tract award process? 265 L os A n g eles Division North American Rockwell International A irport L os A ngeles, C alifornia 90009 (213) 670-9151 August 27, 1971 Dear Mr. Thank you for coming by NR and permitting us to show you our 2-D Mockup of the B-l. W^hope that the displays as well as the hand-out material made available served to provide you with a clearer concept of the B-l Program. Like most defense oriented programs these days, we can expect some loud opposition to the B-l. We have some powerful critics who are not inhibited by facts and proof of their charges; therefore, it is of utmost importance to relay to the citizenry of this country the facts concerning the need for a new bomber if we are to maintain a credible strategic deterrent force. With this in mind I have included with this letter an editorial from the August 2, 1971, issue of Aviation Week. I believe this article points out most vividly the task ahead of us. Presenting the facts to the right people, as mentioned in my video taped appearance during the open house, is where persons like yourself can assist us a great deal.' Between us, telling the B-l story "like it is," we should be able to keep the B-l Program a viable one. The next hurdle for the B-l in the Congressional cycle is the Senate floor debate of the Military Authorization Bill. We expect this debate to start shortly after Congress reconvenes on September 8. So now is the time to write Senators Cranston and Tunney enlisting their support of the B-l Program. Following the Authorization cycle,^the Military Bill returns to the House for the Appropriation cycle. In that regard, I have enclosed the record of vote of the California Representatives on a proposed amendment to the Authorization Bill wherein Representative Pike (D. N.Y.) proposed to delete all funds for the B-l. We are taking every opportunity possible to insure that the California Congressional delegation gets the "real story" on the B-l and lt is hoped that you might do the same. Thanks again for your interest in our program. I am confident that despite the efforts of the opposition we can build this country the best airplane possible at the least cost possible. Sincerely, D. Peitzke Director of Material 266 H . A L L E N S .'v li'V 2 0 t h D i c v i '^ c r , C a* _ :fc -.; (< 3a.47T H A C itM 3 L Y C lS T i?: LOS A N C SL E S CCJN TV ) COM M ITTEES: RULES SMALL BUSINESS ' . % c z $ & of tfje tEmtefc liiottbt of l\eprcsentati'bc£ C - i r . S l j i l l D t o n , 5 3 . C. A ugust 4 , 1971 Mr. T erry M ille r 5352 Texhcma Avenue E ncino, C a lifo r n ia 91316 Dear Mr. M ille r : I gave Congressman Sm ith your m essage regard in g a p o s s ib le in te r v ie w . He has asked me t o t e l l you •that he i s v ery so rry b u t he w i l l n o t have any tim e when he i s back in th e d i s t r i c t during th e R ecess and, fu r th e r , th a t t h is i s n o t a su b je c t about w hich he would have th e m ost in form ation fo r you and th e r e fo r e would n o t w ant to ta k e your tim e u n n e c e ssa r ily . He thanks you , how ever, fo r your in t e r e s t and w ish es you w e ll on your d is s e r ta t io n . 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"C o rrectin g For S o cial D e s ir a b ility Responses S ets in O pinion - A ttitu d e Survey R esearch ," P u b lic Opinion Q u a rte rly . XXXI (S pring 1967), 87-94, Smith, M argaret Chase. "D efense Spending: Changing A ttitu d e s ," Defense Management Jo u rn a l, XIV (W inter 1970), 2 -5 . Stephens, H erbert W , "The Role of th e L e g is la tiv e Committees in th e A p p ro p riatio n P ro cess: A Study Focused on th e Armed S erv ices C om m ittees," W estern P o l i t i c a l Q u a rte rly . XXIV (March 1971), 146-162. Sudman, Seymour. "Q u antifying In te rv ie w e r Q u a lity ," P u b lic Opinion Q u a rte rly . X X X (W inter 1966), 664-667. Uhl, Edward G. "B reaking w ith T r a d itio n ," A v iatio n Week and Space Technology, (August 2, 1971), 10. 278 "What Makes Proxm ire Run?" Aerospace D aily , (March 31, 1971), 181-183. "Why th e C orporate Lobbyist is N ecessary," B usiness Week. (March 18, 1972), 62-65. Wood, Robert E, "A ir Force Defends Awarding B -l P act to North A m erican," Los Angeles Times, June 9, 1970, P a rt 3, p . 8. P u b lic Documents C a lifo rn ia . C a lifo rn ia S t a t i s t i c a l A b s tra c t. Sacram ento, 1971. C a lifo rn ia L e g is la tu re . J o in t Committee on Economic C onversion. Economic Conversion in C a lifo rn ia . Sacram ento, January 1971. C a lifo rn ia . How C a lifo rn ia Measures Employment and Unemployment. Sacram ento: Department of Human Resources and Development, February, 1972. S c h a ire r, George S. "The Role of C om petition in A e ro n a u tic s," in C om petition in Defense Procurem ent - 1969, U. S. Congress. S enate. Subcommittee on A n titr u s t and Monopoly of th e Committee on th e J u d ic ia ry , (S.ReS.40), 9 1st Cong. 1 st s e s s . 1970, 125-142. S ta a ts , Elmer B. "S ta te m en t," in C om petition in Defense Procurem ent - 1969. U. S. C ongress. S en ate. Subcommittee on A n titr u s t and Monopoly of th e Committee on th e J u d ic ia ry , 90th Cong. 2nd s e s s ., 1969. 97-119. U. S, A ir F orce, H eadquarters Space and M issile Systems O rg an izatio n Los Angeles A ir Force S ta tio n . SA M SO R eg u latio n . No. 70-10. Procurem ent, Source S e le c tio n P ro ced u res. Department of th e A ir Force, J u ly 1970. ________________ . R egulation No. 70-15, P roposal E v alu atio n and Source S e le c tio n P ro ced u res. Department of th e A ir Force, May 1968. . Manual No. 70-10. Source S e le c tio n P ro ced u res. Department of th e A ir F orce, May 1968, and A p ril 1970. ________________ . Systems Command Manual, O ffice o f Aerospace Research Manual, AFSCM /OARM 80-10. Department o f th e A ir F orce, O ffice o f Aerospace R esearch, November 1969, U. S, C om ptroller G eneral. E v alu atio n of Two Proposed Methods For Enhancing C om petition in Weapons System Procurem ent. A re p o rt 279 to th e U. S. C ongress. Ju ly 1969. U. S. C ongress. House of R e p re se n ta tiv e s. House S elect Committee on Small B u sin ess. Small B usiness in Government Procurem ent - Before and A fte r Defense C utbacks. 91st Cong. 2nd S e ss., 1970. _______________ . The Armed S erv ices Committee Statem ent of S ecretary of Defense Robert S. McNamara Before th e House Armed S erv ices Committee on th e F is c a l Year 1968-72 Defense Program and 1968 Defense Budget. 89th Cong., 1 st s e s s ., 1967. U. S. C ongress. S enate. Committee on Armed S e rv ic e s. H earings on A u th o riz a tio n For M ilita ry Procurem ent. Research and Develop ment, F is c a l Year 1969. and Reserve S tre n g th . 90th Cong. 2nd s e s s . , 1968. _________________________ • Subcommittee on A n titr u s t and Monopoly of th e Committee on J u d ic ia ry . C om petition in Defense P rocure ment. 90th Cong., 2nd s e s s . , 1969. U. S, Department of Commerce. S t a t i s t i c a l A b stra ct fo r th e United S ta te s . 1958 and 1971. _______________________________. Bureau of th e Census. Defense In d ic a to rs . Annual re p o rts 1950-1971. U. S. Department of D efense. Armed S erv ices Procurem ent R eg u latio n s. Department of D efense, Annual re p o rts , 1967-1971. _____________________________ . Department of Defense D ire c tiv e s . W ashington, D. C .: Department of D efense, Annual re p o rts 1965-1971. U. S. Department of L abor. Bureau of Labor S t a t i s t i c s . Geographic P r o f ile of Employment and Unemployment, 1971. U. S. P re s id e n t, Economic Report o f th e P re s id e n t. 1972. Unpublished M aterial Evered, Roger. Trends In th e F unctions of Government. Los A ngeles: Aerospace Systems A n aly sis, I n c ., September 1969. (P re lim in ary d r a f t ) . G o ld stein , Lewis E ., et_ a l . " S o lic ita tio n and Proposal P ro c e s s." Panel R eport, Sub-Topic 6 .2 . Los Angeles (June 1971). (Panel re p o rt of Los Angeles County based c o rp o ra te , academ ic, and government re p re s e n ta t i v es. ) . P re se n t, P h il. "The R elatio n sh ip Between Community P o li tic a l Systems and Defense C o n tra c tin g ." Unpublished Ph.D. d is s e r ta tio n , U n iv ersity o f Southern C a lifo rn ia , 1967. O ther Sources Bahan, Thomas E. "Fixed Cost C o n tra c ts," in N C M A News L e tte r A nthology. Inglewood, C a lifo rn ia : N ational C ontract Manage ment A sso c ia tio n , 1970. N ational C ontract Management A sso c ia tio n . N C M A News L e tte r A nthology. Inglewood, C a lifo rn ia : N ational C o ntract Management A sso c ia tio n , 1970. "The Paper A irp la n e ," K N B C (Los Angeles) te l e c a s t , March 7, 1970. N a rra to r, Roy N eal. "The S e llin g of th e P entagon," C. B. S. te l e c a s t , October 14, 1971. INFORMATION TO USERS This material was produced from a microfilm copy of the original document. 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Xerox University Microfilms 300 North Zeeb Road Ann Arbor, Michigan 48106 MORTON, James Rodney, 1938- THE COMMUNICATION EFFECTIVENESS OF FOOTNOTES IN PUBLISHED CORPORATE FINANCIAL STATEMENTS. University of Southern California, D.B.A., 1974 Accounting * ■ ■ ■ ■ i University Microfilms, A X ERO X C om pany, Ann Arbor, Michigan © 1974 JAMES RODNEY MORTON ALL RIGHTS RESERVED THIS DISSERTATION HAS BEEN MICROFILMED EXACTLY AS RECEIVED. THE COMMUNICATION EFFECTIVENESS OF FOOTNOTES IN PUBLISHED CORPORATE FINANCIAL STATEMENTS by James Rodney Morton A Dissertation Presented to the FACULTY OF THE GRADUATE SCHOOL OF BUSINESS ADMINISTRATION UNIVERSITY OF SOUTHERN CALIFORNIA In Partial Fulfillment of the Requirements for the Degree DOCTOR OF BUSINESS ADMINISTRATION January 1974 This dissertation, written by JAMES RODNEY MORTON under the guidance of the Faculty Committee, and approved by all its members, has been presented to and accepted by the Faculty of the Graduate School of Business Administration in partial fulfillment of the requirements for the degree of DOCTOR OF BUSINESS ADMINISTRATION Date Approved: Chairman ACKNOWLEDGMENTS My deepest thanks go to the individuals who responded to the questionnaire. Without their participa tion this study could not have been brought to fruition. A special thanks goes to Engelhard Minerals & Chemicals Corporation for permitting the use of their financial statement in the questionnaire, and also to the Los Angeles office of Peat, Marwick, Mitchell & Company for their assistance with the reproduction of the questionnaire materials. I would like also to thank my colleagues at California State University, Los Angeles: George Gustafson, Harry Kerrigan, Dennis Murphy, and Bob Zahary for their comments and timely contributions to the study; and Don Garner and Pete Lockett for taking care of the details of its publication after my departure from Los Angeles. My committee, Dr. E. John Larsen, Dr. William K. Harper, and Dr. C. J. Pounders, of course, deserve much credit for bringing the study to its final form, as does Mrs. M. Okino who did a fantastic job in shaping the final draft into a dissertation. ii Lastly, during the course of this research, there are four people to whom I have incurred an immeasurable debt which I cannot begin to repay. They are, Sharon, to whom I've not been much of a husband, and Doug, Scott, and Craig, to whom I've not been much of a father. TABLE OF CONTENTS Page ACKNOWLEDGMENTS .................................... ii LIST OF TABLES................................... ix LIST OF EXHIBITS.................................. xii Chapter I. BACKGROUND, HYPOTHESES, AND IMPORTANCE OF RESEARCH................................ 1 Introduction Statement of the Problem Importance of the Research- Hypotheses Methodology Organization of Remainder of the Research II. ADEQUATE DISCLOSURE AND FOOTNOTES IN PUBLISHED FINANCIAL STATEMENTS .......... 23 Introduction Disclosure: An Historical Perspective The Federal Reserve Bulletins The New York Stock Exchange The Meaning of Financial Disclosure Relevance and Financial Disclosure Materiality and Financial Disclosure Adequacy and Financial Disclosure Footnotes and Financial Disclosure The Need for Footnote Disclosures Types of Footnotes Summary III. INFORMATIVE FINANCIAL DISCLOSURE AND COMMUNICATION............................ 52 Communication Theory and Information The Communication Process Financial Reporting and Communication The Financial Communication Process iv Chapter Page Disclosure and Communication Footnotes and Communication Summary IV. RESEARCH ANALYSES AND FINDINGS ............ Statistical Methodology Hypotheses Tested Hypothesis 1.0 Hypothesis 1.1 Hypothesis 1.2 Hypothesis 1.3 Hypothesis 2.0 Hypothesis 2.1 Hypothesis 2.2 Hypothesis 2.3 Hypothesis 3.0 Hypothesis 4.0 Hypothesis 5.0 Summary V. CONCLUSIONS AND RECOMMENDATIONS ............ Limitations of the Study Practical Significance of Research Findings Relevance Understandability Bearing of Footnotes on Investment Decision Footnote Characteristics and Decoder Ratings Conclusions Relevance of Footnotes Understandability of Footnotes Bearing of Footnotes on the Investment Decision Recommendations Appropriateness of Footnotes as a Channel of Communication Message Distortion Understandability of Footnotes 83 146 v Chapter Page Relevance and Bearing of Footnotes Summary APPENDICES........................................ 180 A. Covering Letter............................... 181 B. Questionnaire................................ 183 C. Sample Annual Report ......................... 187 D. Sample of Published 1972 and 1973 Annual Reports for Footnote Disclosure Practices . . 193 E. Notes on Appendices F-Q...................... 195 F. Summary of Security Analyst Responses on the Relevance of Footnotes.................. . 197 G. Summary of Security Analyst Responses on the Understandability of Footnotes ............ 198 H. Summary of Security Analyst Responses on the Bearing of Footnotes on the Investment Decision.................................. 199 I. Summary of Credit Analyst Responses on the Relevance of Footnotes .................... 200 J. Summary of Credit Analyst Responses on the Understandability of Footnotes ............ 201 K. Summary of Credit Analyst Responses on the Bearing of Footnotes on the Investment Decision.................................. 202 L. Summary of Auditor/Accountant Responses on the Relevance of Footnotes .................... 203 M. Summary of Auditor/Accountant Responses on the Understandability of Footnotes ............ 204 vi Chapter Page APPENDICES N. Summary of Auditor/Accountant Responses on the Bearing of Footnotes on the Investment Decision.................................. 205 0. Summary of Management Responses on the Relevance of Footnotes .................... 206 P. Summary of Management Responses on the Under standability of Footnotes.................. 207 Q. Summary of Management Responses on the Bearing of Footnotes on the Investment Decision . . . 208 R. Encoder and Decoder Mean Ratings of Footnotes for Relevance . .......................... 210 S. Encoder and Decoder Mean Ratings of Footnotes for Understandability .................... 211 T. Encoder and Decoder Mean Ratings of Footnotes for Bearing................................ 212 BIBLIOGRAPHY ...................................... 213 vii LIST OF TABLES Table Page 1. Questionnaire Responses by Survey Group ... 83 2. Usable Questionnaire Responses Classified in Accordance with Respondents' Primary Capacity................................ 85 3. x2 Analysis of Financial Statement Decoder Responses to the Question of Relevance . . 90 4. x2 Analysis of Financial Statement Decoder Responses to the Question of Understand ability 91 5. x2 Analysis of Financial Statement Decoder Responses to the Question of the Bearing of Footnotes on the Investment Decision ... 91 6. Calculation of Kendall Rank Correlation Coefficient for Financial Statement Decoder Perceptions Concerning Footnote Relevance . 96 7. Calculation of Kendall Rank Correlation Coefficient for Financial Statement Decoder Perceptions Concerning Footnote Understand ability .................................. 98 8. Calculation of Kendall Rank Correlation Coefficient for Financial Statement Decoder Perceptions Concerning Bearing of Footnotes on Investment Decision................... 101 9. x2 Analyses of Financial Statement Encoder Responses to the Question of Relevance . . 104 10. x2 Analysis of Financial Statement Encoder Responses to the Question of Understand ability 105 viii Table Page 11. x2 Analysis of Financial Statement Encoder Responses to the Question of the Bearing of Footnotes on the Investment Decision . . . 105 12. x2 Analysis of Financial Statement Encoder and Decoder Responses to the Question of Relevance................................ 107 13. x2 Analysis of Consolidated Encoder and Decoder Responses to the Question of Relevance................................ 108 14. Calculation of Kendall Coefficient of Concor dance for Encoder and Decoder Perceptions Concerning Footnote Relevance ............ 112 15. Calculations of Kendall Rank Correlation Coefficient for Consolidated Encoder and Decoder Rankings of Footnotes for Relevance 114 16. Calculation of Kendall Rank Correlation Coefficient for Financial Statement Encoder Perceptions Concerning Footnote Understand- ability.................................. 117 17. Kendall Coefficient of Concordance for Credit Analyst and Encoder Group Ratings on Footnote Understandability .............. 118 18. Kendall Coefficient of Concordance for Security Analyst and Encoder Group Ratings on Footnote Understandability ............ 119 19. Fog Index Ratings for Footnotes Rated by Questionnaire Respondents ................ 122 20. Kendall Rank Correlation Analysis of Fog Index and Security Analyst Rankings of Footnotes for Understandability .......... 124 21. Kendall Rank Correlation Analysis of Fog Index and Credit Analyst Rankings of Footnotes for Understandability .......... 125 ix Table Page 22. Kendall Rank Correlation Analysis of Fog Index and Auditor/Accountant Rankings of Footnotes for Understandability .......... 126 23. Kendall Rank Correlation Analysis of Fog Index and Management Rankings of Footnotes for Understandability .................... 127 24. Calculation of Kendall Rank Correlation Coefficient for Financial Statement Encoder Perceptions Concerning Bearing of Footnotes on Investment Decision.................... 130 25. Kendall Coefficient of Concordance for Auditor/Accountant and Decoder Group Ratings for Bearing of Footnotes on Invest ment Decision............................ 132 26. Kendall Coefficient of Concordance for Management and Decoder Group Ratings for Bearing of Footnotes on Investment Decision................................ 133 27. Contingency Coefficient for Questionnaire Responses Concerning the Understandability and Bearing of Footnotes on the Investment Decision................................ 136 28. Contingency Coefficient for Questionnaire Responses Concerning the Bearing and Relevance of Financial Statement Footnotes 139 29. Contingency Coefficient for Questionnaire Responses Concerning the Relevance and Understandability of Financial Statement Footnotes................................ 141 30. Relationship of Footnote Length and Decoder Rankings for Relevance, Understandability, and Bearing.............................. 157 x Table Page 31. Relationship of Footnote Function and Decoder Rankings for Relevance, Understandability, and Bearing.............................. 159 32. Relationship of Technical Nature of Footnotes and Decoder Rankings for Relevance, Under standability, and Bearing................ 160 xi LIST OF EXHIBITS Exhibit Page 1. Selected APB Opinions Requiring Footnote Disclosure.............................. 47 2. Selected Contemporary Footnote Disclosures . 49 3. The Communication Process.................. 56 4. The Financial Reporting Process ........ 61 CHAPTER I BACKGROUND, HYPOTHESES, AND IMPORTANCE OF RESEARCH Introduction Published financial statements, according to the American Institute of Certified Public Accountants, " . . . are the means by which the information accumulated and processed in financial accounting is periodically communi cated to those who use it."^ The communication aspect has long been recognized as a vital concern of accounting; yet the above definition of published financial statements is somewhat unique in that the communication function of accounting reports is made explicit. In much of the accounting literature the communication dimension is merely implied by the use of such terms as "provide," "present," and "supply" in ^Accounting Principles Board, "Basic Concepts and Accounting Principles Underlying Financial Statements of Business Enterprises," Statement of the Accounting Princi ples Board No. 4 (New York: AICPA, October, 1970), p. 6. (Hereinafter referred to as Statement No. 4.)

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Pay Utility In The Public Sector

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Creator Miller, Terry Jay (author)

Core Title The Interaction Between The Private, Public And Third Sector In The Defense Contract Award Process: Lobbying For Defense Contracts For Los Angeles County, 1952-1972

Degree Doctor of Philosophy

Degree Program Political Science

Publisher University of Southern California (original), University of Southern California. Libraries (digital)

Tag OAI-PMH Harvest,political science, general

Language English

Contributor Digitized by ProQuest (provenance)

Advisor Lammers, William W. (committee chair), Anderson, Totton J. (committee member), Van Cleave, William R. (committee member)

Permanent Link (DOI) https://doi.org/10.25549/usctheses-c18-689702

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Document Type Dissertation

Rights Miller, Terry Jay

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