Become Chairman and the money flows and flows....

Arms makers change tune on John McCain donations
The defense industry ponies up despite its testy relationship.

By Jeremy Herb

John McCain has long railed against what he calls the “military-industrial-congressional complex,” taking aim at defense companies and their supporters in Congress for pushing what he considers ill-conceived and costly weapons programs.

The nation’s arms makers have mostly returned the favor, refusing to give him the kind of campaign cash they have lavished on other top defense lawmakers.

But that was before McCain took over as chairman of the Armed Services Committee earlier this year. Defense industry political action committees have given McCain nearly as much money in the first three months of this year as they did all of last year, when he ranked No. 190 among all members of Congress in defense industry donations, according to a POLITICO review.

While the overall numbers are relatively small — $66, 000 so far this year — they dwarf his earlier take from industry and are seen as the start of a new trend as the-78-year-old lawmaker builds a new campaign chest for what could be a difficult re-election campaign..

“It’s a matter of necessity: He’s the chairman,” said one defense lobbyist, who requested anonymity to discuss industry political strategies. “I don’t think they’ve been as aggressive as they can yet … I’m sure it’s coming.”

McCain’s PAC contributions this year, from defense giants such as Raytheon, Boeing and General Dynamics, are on par with those received by his House counterpart, Armed Services Chairman Mac Thornberry (R-Texas), who collected $75,000 from defense PACs in the first three months of the year.

The uptick in defense cash is explained in part by his fundraising apparatus kicking into high gear for the first time since his 2008 presidential bid. But for McCain, who has also been a leading advocate for campaign finance reform and reducing the role of money in politics, the cozier relationship with defense PACs makes for something of an awkward alliance.

Supporters say he’s the same man who declared in 2011 that frequent cost overruns, schedule delays, and failures to deliver as promised are “a massive windfall for [the defense] industry. But for the taxpayer and the warfighter, it has been an absolute recipe for disaster.” They say he still aims to kill troubled projects and rewrite the laws for how the Pentagon pays its contractors.

Indeed, McCain says he is not changing his approach.

“We’ve raised a lot more money from everybody, obviously, because I haven’t had to do that in a long time,” he told POLITICO.

Yet the contributions signal a new willingness for the defense industry to seek his favor, as he plays a key role in pushing for more defense spending than what is allowed under the 2011 Budget Control Act and is also drawing up a new plan of his own to reform the Pentagon’s weapons acquisition process.

With the gavel, McCain spearheads the Senate version of the National Defense Authorization Act, which sets policy and could signal cuts — or increases — to specific Pentagon programs. And he’s said he plans to make acquisition reform a priority in the new bill, stressing accountability for cost overruns as a key part of that effort.

The contributions highlight the industry’s desire to impact those deliberations.

“I don’t think the industry is expecting any favors from McCain, but they recognize that he has huge power over their fate,” said Loren Thompson, a defense industry consultant.

Nearly all of the largest defense contractor PACs gave to McCain in the first quarter, including $9,000 from Raytheon, $9,000 from Northrop Grumman, $5,000 from General Dynamics, and $2,500 each from Boeing and BAE Systems.

McCain also received donations from at least a dozen other defense PACs, including $5,000 each from Textron, AM General, Orbital ATK and Emergent Biosolutions, as well as $2,600 from Austal USA.

Defense CEOs also separately donated to McCain in the first quarter.

Northrop Grumman CEO Wes Bush gave $5,200. AM General President and CEO Charles Hall donated $2,000. And Jeffrey Immelt, chairman and CEO of General Electric, which has a defense sector, donated $5,400.

In addition, McCain received more than $22,000 in individual donations from Raytheon employees in March, including $5,400 from CEO Thomas Kennedy. Raytheon’s missile systems business is based in Tucson, Arizona.
Over the years, many of those contractors have been on the receiving end of McCain’s pointed criticisms of the defense industry.

Austal USA, for instance, is one of the two prime contractors for the Littoral Combat Ship, a program that has been in McCain’s cross hairs for years.

McCain fired a warning shot at shipbuilders earlier this year when he proposed repealing the 1920 Jones Act that aids the U.S. shipbuilding industry.

McCain’s campaign has also conducted more outreach to the defense industry, according to several industry officials. Defense PACs give to hundreds of candidates each year, spreading out their donations across a wide swath of candidates, but often it’s only after a campaign reaches out to seek contributions.

In total, McCain collected $1.6 million in campaign funds the first quarter.