Military Lobbyists Feel Pressure of Pinched Budgets

Posted September 24, 2008 at 2:36pm

With troop strength in Iraq likely falling, an ongoing war in Afghanistan and once-bountiful earmarks now coming under heightened scrutiny, the defense industry will certainly have its hands full next Congress.

Even a Republican administration will have a more adversarial relationship with the industry, which means that the best defense lobbyists will have to be nimble.

“You really have to be prepared to fight anywhere, anytime,” said Mike Herson, head of defense lobby shop American Defense International. “With the financial crisis looming over us, there will be more pressure on the defense budget.”

For years big defense contractors and startups have relied on a small cadre of boutique defense lobby shops in Washington D.C. As the industry prepares for the expected budget cuts, the pressure for lobbyists to deliver will be even greater.

With 12 registered lobbyists, Herson’s ADI runs the gamut — focusing on military procurement, research and development funding, medical issues with the military, and energy projects. The firm also has numerous foreign interests, representing clients in 11 foreign countries.

“We spend a lot of time at the agency level, and we also spend time not only on earmarks, but also to protect money that is already in the budget requests,” Herson said.

Another go-to shop for clients looking to secure earmarks has been the PMA Group, which has a particularly close relationship with the top House appropriator, Rep. John Murtha (D-Pa.).

PMA was founded in 1989 by Paul Magliochetti, who spent a decade as Murtha’s aide on the Appropriations Subcommittee on Defense. Since then, the firm has steadily risen to the top of K Street’s shops. It counts companies such as Unisys Corp., Noble Fiber Technologies and National Center for Defense Robotics as clients.

Steve McBee of McBee Strategic Consulting has also had a meteoric rise among defense lobbyists. Starting his shop in 2002 with two employees, the firm now has more than 20 staffers, more than 70 clients and offices in D.C., Seattle and Palo Alto, Calif.

McBee, who honed his Washington state ties by doing defense and appropriations work for Rep. Norm Dicks (D-Wash.), has also broadened his practice to include public relations and capital markets as earmarks have come under scrutiny.

Several defense lobbyists say their practices are feeling the pinch of earmark reform, especially since the House in particular has reduced the number of awards.

Innovative Federal Strategies is a newcomer of sorts to the defense-lobbying world, a spinoff of Copeland Lowery, a firm that specialized in getting clients earmarks before coming under scrutiny for its close ties to then-House Appropriations Chairman Jerry Lewis (R-Calif.).

The reconstituted bipartisan firm is headed by former Rep. Bill Lowery (R-Calif.) and Letitia White, a former Lewis staffer. Along with municipalities, the lobby shop represents the gamut of defense clients, including General Dynamics, L-3 Communications and SET Corp.

In a tight budget environment, client wishes must be carefully vetted.

“We feel very strongly that any request that we take with our clients to a Member of Congress has high military utility and solves some problem for troops in the field,” White said.

When making the case on Capitol Hill for the need for defense spending or special projects, companies often call on former military officials, not just staffers.

The Spectrum Group, for one, has made that the firm’s calling card. The company is headed by Lt. Col. Gregory Sharp, its founding partner and chief operating officer. Half of the firm’s 80 associates are retired generals and admirals.

In addition to advising clients, Spectrum does its own bit of political giving. The firm has a political action committee, the Spectrum Group PAC, which is unusual among lobby shops. In the 2007-08 election cycle, Spectrum has contributed more than $28,000 to federal candidates, according to FEC records.

Ervin Technical Associates, another defense lobby shop, also boasts a military background. Jim Ervin, an Air Force lieutenant colonel, runs the firm along with six other lobbyists and works with clients such as General Dynamics, Lockheed Martin and Thales Group.

Not all clients are looking for a large shop to represent them.

Lawrence Grossman of Grossman & Associates has been working as a solo lobbyist since 2002. Grossman, a former staffer for House Armed Services Committee member Rep. Les Aspin (D-Wis.) and a former lobbyist at Cassidy & Associates, works for SAP America, General Dynamics Corp. and Bio-Energy Systems Inc., among others.

As clients look to next year, Grossman says the results of the upcoming presidential election are less important for the defense industry than what decisions are made for operations in Iraq and Afghanistan.

“The bottom line is how much money do you have to spend and what are you going to do with it,” Grossman said.