Thursday, September 27, 2007

Lobbying Pays

The September 17th BusinessWeek has a fascinating look Inside The Hidden World Of Earmarks. The tell the story of how the Navy got itself an executive jet that the Pentagon didn’t ask Congress for. Gulfstream lobbied heavily, and the Navy got special funding, known as an earmark. The Georgia Congressional delegation, and Senator Saxby Chambliss in particular, were very helpful - no surprise, since the Gulfstream is built in that state.

BusinessWeek concludes that on average, companies generated roughly $28 in earmark revenue for every dollar they spent lobbying. The top twenty in this game in $100 or more for every dollar spent. For context, the magazine provides these factoids: companies in the Standard & Poor's 500-stock index brought in just $17.52 in revenues for every dollar of capital expenditure in 2006.

In Gulfstream’s case, that exec jet deal was worth $53 million. It was just one of 29 earmarks valued at $169 million given to General Dynamics (its parent) or its subsidiaries that year; a nifty 30:1 ROI given that the company spent only $5.7 million on lobbying in 2004.

No comments: