Who Won When Boeing Won? Tony Podesta

Posted March 1, 2011 at 6:52pm

For Democratic lobbyist Tony Podesta, the past few weeks have been champagne time. His firm, the Podesta Group, represents the winners of two of the most high-priced and fiercely fought lobbying battles in years.

The firm’s clients include the Boeing Co., which last week beat out EADS North America for a $35 billion defense contract to build a new generation of aerial tankers.

Podesta also lobbies for United Technologies Corp., the parent company of Pratt & Whitney, which won a crucial Congressional battle when the House voted to deny funding for a competing fighter jet engine bid by General Electric and Rolls-Royce.

While there could be several more twists before the contracts are finalized, experts already are tallying up the victors and losers.

“Happy days are here again for Tony Podesta. He happens to be winning in all of the big controversies,” said Loren Thompson, a defense analyst at the Lexington Institute. The Podesta Group was paid almost half a million dollars last year by both Boeing and United Technologies, according to lobbying disclosure filings with Congress.

Podesta did not return a phone call. Even though he is known for his Democratic political contacts, one defense lobbyist said that Podesta’s firm has tried to develop an expertise in more arcane defense issues in recent years.

These long-running defense brawls may not be completely over. EADS has until the weekend to decide whether it will appeal the Pentagon decision. It’s possible, too, that the Senate could restore the funding for the GE/Rolls-Royce alternative engine when that chamber takes up the budget.

But Thompson suggested it was unlikely that EADS could win an appeal on the tanker contract that he said was awarded to the lower-cost proposal. He and others also say there is less sentiment in the Senate than the House to fund the alternative engine at a time when lawmakers are under pressure to cut spending.

If the decisions hold, two of the longest lobbying fights in recent history will be over. And Podesta won’t be the only winner. Also coming out on top will be Washington state and Kansas, where Boeing intends to build the tanker, as well as Connecticut, the home of Pratt & Whitney. Rep. Norm Dicks, (D-Wash.) the ranking member on the House Appropriations Subcommittee on Defense, has been a particularly vocal supporter of Boeing, as have the state’s two Democratic Senators, Patty Murray and Maria Cantwell.

The tanker decision is of particular relief to Boeing. Originally, Boeing won the tanker contract only to have the Pentagon withdraw it in the wake of a corruption scandal. The Pentagon later awarded the contract to a joint EADS-Northrop Grumman venture, but that decision was appealed by Boeing, which succeeded in getting the contract award blocked.

The Chicago-based Boeing, which spent $17.9 million on federal lobbying last year, has amassed a powerful team in Washington that includes not only the Podesta Group but other well-connected firms such as the Gephardt Group, led by former House Democratic Leader Dick Gephardt (Mo.); McBee Strategic Consulting; and the law firm of Akin Gump Strauss Hauer & Feld.

Boeing spokesman Dan Beck said it was company policy not to comment on its lobbying team or policies.

He said the company’s lobbying involved more than just the tanker but added, “certainly there were elements of the tanker competition that were political in nature.” Both Boeing and EADS engaged in extensive paid advertising as well as outreach to lawmakers and communities affected by the decision.

Boeing has had close ties with Podesta. In 2009 the airplane maker hired David Morrison, then a principal at the Podesta lobbying firm, to be its vice president of government relations. Morrison had previously been Democratic staff director for the House Appropriations Subcommittee on Defense.

John Shank, also a former Podesta senior strategist, is now a Boeing lobbyist. Prior to working at Podesta, Shank was the lead staff member for the House Republicans on the Appropriations Subcommittee on Defense.

According to lobbying disclosure filings, the Podesta team working on the Boeing and United Technologies accounts last year included Podesta as well as John Scofield, a former communications director for the House Appropriations Committee; Paul Brathwaite, former executive director of the Congressional Black Caucus; and David Marin, former GOP staffer to the House Oversight and Government Reform Committee.

The losing defense firms also tapped some high-powered help to sway Congress. Last year EADS hired the boutique firm of Roberts, Raheb & Gradler, whose lobbyists include John Donald, a former staffer for Alabama Republican Sens. Richard Shelby and Jeff Sessions and Republican Rep. Jo Bonner, in whose Mobile district the company planned to assemble the tanker.

EADS and General Electric hired Senators-turned-lobbyists John Breaux (D-La.) and Trent Lott (R-Miss.) who merged their firm last year with law giant Patton Boggs.

Although they ended up on the losing side, a number of firms working with EADS still collected tidy sums for their efforts. The Livingston Group, headed by former Rep. Robert Livingston (R-La.), collected $280,000 last year while Quinn Gillespie & Associates received $360,000 in 2010. The Republican firm Fierce Isakowitz & Blalock, also working for EADS, received $320,000.

While the lobbying on these two contracts may be winding down, defense lobbyist Michael Herson, president of American Defense International Inc., said there will still be ample work for K Street as companies seek to protect big weapons programs in budget-tightening times. Herson’s firm was hired at the beginning of this year by United Technologies Corp.

“Those are two big fights,” he said. “But there are always more fights to fight.”