Satellite Reform Online Information: News & Editorials

Big-Money Washington
The Washington Post
Thursday, December 10, 1998
By Robert D. Novak

Super-lobbyist Peter Knight wears three hats. He is one of Vice-President Al Gore's political advisers, sits on the board of the Comsat Corp, as a presidential appointee and is a longtime lobbyist for the Lockheed Martin Corp.

What makes this so cozy is that Lockheed Martin, the nation's biggest defense contractor, wants to buy Comsat, the government-created private corporation that holds the U.S. monopoly on widespread global satellite rights. Since this transaction is fiercely opposed by competitors, Lockheed will need all the lobbying it can get to win required Federal Communications Commission(FCC) and congressional approval for the purchase. Millions will be spent on the city's most influential lobbyists, with ties to both Republicans and Democrats.

Knight's multiple hats, however improper, go largely unnoticed in the nation's capital today. Perhaps the biggest change in Washington since I arrived 41 years ago is its immersion in big money-like New York and Hollywood. The expansion and increased intrusiveness of government has been matched by a proliferation of million-dollar-a-year lobbyist.

The Legal Times newspaper recently reported that two dozen highly paid lobbyists met this autumn to device Lockheed Martin's strategy for the Comsat purchase, while Comsat itself has retained 12 lobbying firms. One source with close Lockheed connections guesses this effort will cost between 5$million and $10 million.

For that kind of money, Lockheed and Comsat get the best. Lockheed's list includes former Democratic representatives Beryl Anthony of Arkansas (a Clinton insider) and Marilyn Lloyd of Tennessee and veteran Democratic insider Tom Quinn. Comsat's roster shows Republican wise men Ken Duberstein and Tom Korologos. For good measure, former Democratic national chairman Charles Manatt-among Washington's most formidable lobbyist-is, along with Knight, one of the two Comsat directors named by the president.

The lobbying efforts of the two companies are joined. Indeed, Lockheed Martin and Comsat certainly are not at arm's length. Marcus Bennett, Lockheed's executive vice president and chief financial officer, sits on the Comsat board. Caleb Hurtt, the retired president and mastermind of Martin Marietta(one of Lockheed Martin's predecessors), also serves on both boards.

The stakes are huge. Lockheed Martin would pay $2.7 billion for Comsat, estimated at 40 percent above the stock's market price. Lockheed would obtain Comsat's exclusive rights to the world's satellite communications as the sole provider to other American companies of capacity on the Intelsat and Inmarsat systems. Competitors claim that Lockheed would end up with a government-mandated monopoly begun when Congress created Comsat in 1962.

If the deal is consummated, Comsat officials stand to pick up millions from bonuses (quite apart from stock options). Comsat CEO Betty Alewine alone will pocket more than $2 million.

The potential roadblock is Rep. Thomas Bliley, the plain-spoken Virginian who is chairman of the House Commerce Committee. He incurred the wrath of the Lockheed-Comsat combine this year when he pushed to the brink of final passage a proposal to end Comsat's statutory immunity from federal anti-bribery laws.

Losing that immunity would have diluted the $2.7 billion package Lockheed thinks it is getting from Comsat. So the giant defense contractor's high-priced lobbyists went to work. Republican Sen. Conrad Burns of Montana was persuaded to use a procedural device to block the anti-bribery proposal from being part of the session-ending appropriations bill.

In the last days of this year's session, Burns was joined by Democratic Sen. Paul Sarbanes of Maryland and Republican Sen. Alfonse D'Amato of New York in asking Senate Majority Leader Trent Lott to put a hold on further considerations. D'Amato, Burns and Lott all have been recipients from the pool of $1.3 million in political contributions by Lockheed Martin during this election cycle (as of Oct. 1, according to the Center for Responsive Politics).

Bliley was furious. "This is a last-minute, brazen attempt to preserve the special advantages of an intergovernmental satellite organization[Intelsat] and the U.S. affiliate: Comsat," he said in a statement issued Oct, 16, when he learned his proposal had been killed. "Why should these companies be immune from lawsuits and get special treatment while other American companies they compete against have no such advantages?"

The answer comes next year from the FCC and Congress. It will determine how loud money talks in Washington.

MONDAY, DECEMBER 14, 1998

My last column gave the impression that Lockheed Martin Corp. lobbyists this year succeeded in killing application of the anti-bribery law to the Comsat Corp. Actually, watered down legislation passed that retains partial immunity for Comsat, subject to Clinton adminstration enforcement.