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  • Lockheed Martin Refuses To Admit Wrongdoing, Pays $4.7 Million Fine To Settle Illegal Lobbying Charges

    Lockheed Martin has agreed to pay a $4.7 million fine after using federal money to lobby for a federal contract.

    In other words, taxpayers paid for the privilege of allowing the world’s largest defense contractor to illegally persuade those in power to block off competitive bidding and renew a contract, The Washington Post reports.

    Illegally lobbying didn’t occur just once. It occurred continuously over a five-year period, starting in 2008. Executives at Lockheed Martin, who received a contract to run a nuclear laboratory, aggressively lobbied members of Congress and the Obama administration to renew the contract and also pushed for them to close off competitive bidding. The idea was to keep the contract running, as it brought in $2.4 billion annually.

    Accusations of illegal activity first erupted from a report conducted by the Department of Energy’s inspector general, who called the tactics employed by executives “highly problematic” and “inexplicable and unjustified.”

    The problem is that instead of using corporate funds to pay for the lobbying, executives relied on federal money directed to Sandia National Laboratories, a subsidiary of Lockheed Martin.

    “The money allocated by Congress for the Sandia National Laboratories is designed to fund the important mission carried out by our national laboratories, not to lobby Congress for more funding,” Principal Deputy Assistant Attorney General Benjamin C. Mizer said in a statement.

    But why did executives think it was permissible in the first place? According to a 2010 email sent out by a Sandia executive, the reason they felt comfortable aggressively lobbying Congress will taxpayer funds is that they had done it before to obtain contract extensions in 1998 and 2003.

    Still, Sandia executives haven’t admitted to any wrongdoing.

    “At the time of the activities, Sandia believed our actions for a contract extension fell within allowable cost guidelines,” spokeswoman Heather Clark said. “However, in looking back at the activities, Sandia acted too early and too independently in planning for a possible contract extension.”

    The Sandia contract runs out in 2017. It’s possible the Department of Justice may pursue criminal charges. In fact, that’s exactly what Jay Coghlan, executive director of Nuclear Watch New Mexico, is hoping for, referring to the fine as nothing more than a “slap on the wrist.”

    “Lockheed Martin clearly broke the law by engaging in illegal lobbying activities to extend its Sandia contract without competition, and earned more than 100 million dollars while doing so,” Coghlan added.

    Follow Jonah Bennett on Twitter

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