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ARMS CONTRACTORS SPEND TO PROMOTE AN EXPANDED NATO

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March 30, 1998, Section A, Page 1Buy Reprints
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American arms manufacturers, who stand to gain billions of dollars in sales of weapons, communication systems and other military equipment if the Senate approves NATO expansion, have made enormous investments in lobbyists and campaign contributions to promote their cause in Washington.

The end of the cold war has shrunk the arms industry and forced it to diversify.

But expansion of the North Atlantic Treaty Organization -- first to Poland, Hungary and the Czech Republic, then possibly to more than a dozen other countries -- would offer arms makers a new and hugely lucrative market.

America's six biggest military contractors have spent $51 million on lobbying in the last two years, according to an analysis prepared for The New York Times by the Campaign Study Group, a research company in Springfield, Va.

If lobbying costs were included from all companies that perform military-related activities, like computer and technology firms, they would dwarf the lobbying effort of any other industry.

Not all of the lobbying has been for NATO expansion. The contractors have billions of dollars worth of other business before Congress. But NATO expansion has been a central concern because it offers so many opportunities.

The military industry also remains the most generous contributor to Congressional candidates, the study group said, giving nearly equally to Democrats and Republicans.

The four dozen companies whose main business is arms have showered candidates with $32.3 million since the collapse of Communism in Eastern Europe at the beginning of the decade. By comparison, the tobacco lobby spent $26.9 million in that same period, 1991 to 1997.

The top six American military companies increased their contributions to Federal campaign committees as well, to $2.4 million in 1997 from $1.5 million in 1991.

In the last six years, those six companies -- Lockheed Martin, Northrop Grumman, Textron Inc., Raytheon, Boeing and McDonnell Douglas -- have given the committees more than $15 million.

''Like any other American manufacturer, they are looking for markets abroad,'' said Senator Daniel Patrick Moynihan, a New York Democrat who opposes the proposed NATO expansion. ''Most every other customer they can think of, we have forbidden them to sell anything to.''

Under NATO rules, new members are required to upgrade their militaries and make them compatible with those of the Western military alliance, which oversees the most sophisticated -- and expensive -- weapons and communication systems in the world. The companies that win the contracts to provide that ''inter-operability'' to the aging Soviet-made systems in Eastern Europe will benefit enormously from NATO's eastward expansion.

Thus the sums spent on lobbying and for campaign contributions are relatively small compared with the potential benefits in the new markets provided by a larger NATO, particularly from the sale of big-ticket items like fighter aircraft.

A single F-16, made by Lockheed Martin, costs about $20 million; a single F-18, made by Boeing, costs $40 million to $60 million. Poland alone wants to buy 100 to 150 fighter planes and is weighing offers from Lockheed and Boeing as well as from companies in Britain, France and Russia.

''It's a big deal,'' said a Polish official who spoke on condition of anonymity.

''They are doing their best,'' he said of the companies, which appear to be lobbying more heavily abroad than in Washington. ''They are very active. They are already introducing some business to Polish industries, not necessarily connected to this plane business.''

No one contends that NATO is being expanded for the benefit of military contractors. President Clinton committed himself more than four years ago to broadening the alliance as a way to unite and stabilize Europe, and his Administration has worked tirelessly to promote the expansion as the cornerstone of his legacy in foreign policy.

Nor are the military contractors alone in their support for expansion, although few other constituencies in the United States care as much. There has been virtually no organized opposition to NATO expansion, and the public has not been engaged.

As one Senate aide put it, ''The only people who care about this are the think-tank folks and the academics -- not much of a voting constituency.''

The arms makers quickly latched onto the idea and over time helped the Administration sell it. ''It's not a case of whispering in Clinton's ear and saying, 'Expand NATO because we want to sell arms,' '' said William D. Hartung, author of a recent report for the World Policy Institute, a private arms control group that opposes expansion. ''But they've become one of Clinton's most energetic allies in promoting it.''

The chief vehicle of support for NATO expansion is a group called the U.S. Committee to Expand NATO, which is backed by the arms industry. The committee president is Bruce L. Jackson, who is also director of strategic planning for Lockheed. Corporate sponsors are also supporting ethnic groups that have championed NATO membership for their native countries.

This has led to some skepticism in the Senate. Senator Tom Harkin, Democrat of Iowa, said the lobbyists had been so effective that the expansion amounted to ''a Marshall Plan for defense contractors who are chomping at the bit to sell weapons and make profits.'' A top Republican aide in the Senate joked that the arms makers were so eager for NATO expansion that ''we'll probably be giving landlocked Hungary a new navy.''

That zeal by the contractors, the extensive spadework by the Administration and the support of Senator Jesse Helms, the North Carolina Republican who is chairman of the Foreign Relations Committee, have led to the virtual certainty that the Senate will approve the treaty to admit the Poles, Hungarians and Czechs.

Debate started two weeks ago but was postponed until later this spring when the subject could receive a more focused hearing. Several senators said they expected that the treaty would easily win the two-thirds vote needed, although some said they favored slowing future expansion of the alliance to other countries, a move that could bring the industry back to Capitol Hill in force.

Several senators said they had been lobbied by the industry, but not excessively so.

The industry is also concentrating its efforts abroad, setting up partnerships in Eastern Europe to give the companies a foothold.

The arms makers have other important business before Congress for which they are lobbying heavily, including the fate of the B-2 bomber and the deployment of a full-scale ''Star Wars'' antimissile defense system by 2002, worth more than $4 billion. But NATO expansion has loomed as a rare new source of revenue.

''We've taken the long-term approach to NATO expansion, establishing alliances,'' said Charles Manor, a spokesman for Lockheed based in Bethesda, Md. ''When the day arrives and those countries are in a position to buy combat aircraft, we certainly intend on being a competitor.''

He said the Eastern Europeans could not afford the aircraft now and had other priorities. For the immediate future, Lockheed will focus on supplying information systems, telecommunications and infrastructure, he said.

Doug Kennett, a spokesman for Boeing, said his company had not cemented any military deals yet. But, he said, ''we are working with a number of the companies in Eastern Europe in partnering arrangements.'' These include a $30 million investment in Aero Vodochody, a Czech manufacturer of light airplanes.

Without NATO membership, Poland, Hungary and the Czech Republic have little incentive to spend their scarce money on arms. Recognizing that problem, the arms industry succeeded in lobbying Congress to establish a loan program in 1996 under which the Pentagon will guarantee loans for defense exports.

The top individual giver to the Democratic Party last year was Bernard L. Schwartz, chairman of Loral Space and Communications, which is partly owned by Lockheed.

He gave $366,000 to Democratic Party committees in 1997, a non-election year. That included $50,000 to the Democratic Senatorial Campaign Committee, made shortly after he appeared at a briefing for several senators that was sponsored by the U.S. Committee to Expand NATO.

A correction was made on 
March 31, 1998

An article yesterday about efforts by American military contractors to lobby the Senate in favor of NATO expansion referred imprecisely to the relationship between the arms industry and the U.S. Committee to Expand NATO. While the committee has the political support of the industry, its by-laws forbid it to accept corporate contributions.

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