Thursday, April 2, 2015

When Lockheed Came to Town

Progressive Eclipse - Chapter Two

The chances were never great that Vermont’s popular US Senator, widely known as an Independent, a socialist and a congressional hero of the left – would run for President in 2012. But that didn’t stop people from talking about it – and not for the first time. In Bernie Sanders’ old political stomping grounds, however, populist anger was aimed at the overtures he and Mayor Bob Kiss were making to Lockheed Martin and Sandia Laboratories.

On August 8, 2011 after six months of debate, the City Council had voted 8-6 in favor of nonbinding community standards for proposed climate-change partnerships, prompted by an agreement between the mayor and Lockheed. The resolution called for standards which, if they were followed, would exclude working with weapons manufacturers and environmental polluters. 

After the vote Kiss was defiant. Discussions with the corporation would continue, he announced. The city attorney added that the mayor wasn’t bound by the Council’s decision in pursuing such an executive-level agreement. Nevertheless, a few weeks later the talks ended. Apparently aware of the local mood, the defense contractor backed out of the deal in an e-mail message to the Burlington Free Press.

As Lockheed spokesman Rob Fuller put it politely, “While several projects showed promise initially and we have learned a tremendous amount from each other, we were unable to develop a mutually beneficial implementation plan. Therefore Lockheed Martin has decided to conclude the current collaboration.”

It sounded like a Dear John letter – and a bow to public pressure. In reality, the courtship was just beginning.

Sanders refused to comment. But his typical view of corporate criminals and wasteful military spending was well known; in fact, it was part of what had made him a compelling figure. Consider his fiery speech in October 2009 on the floor of the US Senate, taking on Lockheed Martin and other top military contractors for what he called “systemic, illegal, and fraudulent behavior, while receiving hundreds and hundreds of billions of dollars of taxpayer money.”

Among the crimes he mentioned were these: Lockheed Martin had defrauded the government by inflating the cost of several Air Force contracts, lied about the costs when negotiating contracts for the repairs on US warships, and submitted false invoices for payment on a multi-billion dollar contract connected to the Titan IV space launch vehicle program. Sanders called the corporation a “repeat offender” that rarely faced serious penalties.

“It is absurd that year after year after year, these companies continue doing the same things and they continue to get away with it,” he proclaimed.

And yet he had invited Sandia Laboratories, which is managed by Lockheed Martin for the Department of Defense, to establish a satellite lab in Vermont. In fact, he’d been working with Vermont utilities, energy enterprises, the university and business leaders on the plan for more than two years. Sanders also accepted the proposal that Lockheed-built F-35s be based in the future at the Burlington International Airport. If the fighter jet, widely considered a massive boondoggle, was going to be built, Sanders argued that some of the work should be done by Vermonters (Rutland’s GE plant had contracts to build an engine) and Vermont National Guard jobs should be protected. In other words, he was just bringing home some “bacon” for his state.

Sanders first visited Sandia’s headquarters in New Mexico in 2008. “At the end of the day,” recalled Les Shephard, Sandia vice president for energy, resources and nonproliferation, “he turned to the laboratory director and said, ‘I’d really like to have a set of capabilities like Sandia in New England — and very much so in Vermont.’ And that’s how it all evolved.”

Sanders listens to Sandia's Stulen at the lab's launch.
Despite concerns about Lockheed’s consistently bad behavior Sanders didn’t think inviting a subsidiary to the state would help them get away with anything. Rather, he envisioned Vermont transformed “into a real-world lab for the entire nation” through a strategic public-private partnership. “We’re at the beginning of something that could be of extraordinary significance to Vermont and the rest of the country,” he predicted.

It was a highly optimistic picture: Businesses, ratepayers and researchers would get a boost, a Department of Energy planning grant would jump start the research, and more government support would follow as the project gained steam. Sandia Vice President Richard Stulen meanwhile confirmed Sanders’ pledge that no weapons development work would be involved. The focus, they promised, would be cutting edge research on cyber security, “smart grid” technology and stopping hacker attacks.

Sandia’s motivation? As Stulen explained it, Vermont’s small, compact energy infrastructure was an “ideal place” to create a model for the rest of the country. The Feds were impressed with the work underway on forward-looking renewable energy technology and a willingness to “tinker with related policies and regulations.” Sandia defined the lab’s mission as energy “security.” For Vermont, the carrot was the prospect of jobs and a chance for local enterprises to get a “global competitive edge.”

The letter of cooperation between Mayor Kiss and Lockheed made a similar argument. Lockheed Martin Senior Vice President and Chief Technology Officer Dr. Ray O. Johnson stressed national security and “the economic and strategic challenges posed by our dependence on foreign oil and the potential destabilizing effects of climate change.” A local partnership, he said, would “demonstrate a model for sustainability that can be replicated across the nation.”

Kiss insisted that the climate crisis required radical action, while Sanders felt comfortable simply ignoring his critics. Yet both claimed, remarkably, that they never discussed or coordinated their positions.

Cracks in the Coalition

Mayor Kiss claimed that his introduction to the idea of a partnership with the corporate giant began in Richard Branson’s “Carbon War Room.” The result was a Dec. 20, 2010 “letter of cooperation” signed with Lockheed Martin to address climate change by developing green-energy solutions. The plan was vague, mentioning only “sustainable business models” and analysis, and “energy and transportation technologies.” Yet Kiss envisioned future fuel efficient vehicles, improving the use of steam from the city-owned generating station, and generally turning “swords into ploughshares.”

Despite years of anti-corporate, peace movement rhetoric the two main elected leaders of the state’s progressive movement had both decided to make research and development deals with a powerful corporation – one that many people considered a war profiteer and a corporate criminal. It was no shock that this policy "coincidence" set off a local revolt and a period of self-assessment.

Military contracts represent less than five percent of Vermont GDP, but substantially more in the Champlain Valley, home base for the two largest recipients, General Dynamics and Simmonds Precision. Between 2000 and 2011 around 600 companies received $7 billion in contracts. Chittenden County was the big winner but there were smaller businesses employing people in almost every Vermont County, producing guns, ammunition, “quick reaction” equipment, explosive components, missiles and aircraft parts. The main Congressional booster for military contract jobs was Vermont’s senior US senator, Patrick Leahy, who frequently made appearances at factories to announce big contracts.

On the other hand, Burlington also had a rich history of social activism. In fact, over three decades it developed a series of progressive foreign policy initiatives. As Ken Picard explained in the weekly Seven Days, the debate over Lockheed Martin touched on “a bigger issue about Burlington identity and the corporations with which it chooses to associate: Given the dire predictions about imminent and catastrophic climate change, should the city accept Lockheed Martin’s technical help, and ample dollars, in the interest of achieving the greater good?

“Or, should Burlington refuse to lend its name and reputation to help burnish the image of the world’s largest maker of weapons of mass destruction? In short, is Lockheed Martin ‘beating swords into ploughshares,’ as Mayor Kiss had characterized it, or engaging in corporate greenwashing at Burlington’s expense?”
Jonathan Leavitt addresses Mayor Kiss
at August 2011 review of the Lockheed deal
Those weren’t easy questions to answer, or even discuss. But an early opportunity came on February 7, 2011. City Hall’s Contois Auditorium was crowded that night as the Council considered the mayor’s deal with Lockheed. In a scene reminiscent of the early days of the Sanders era, dozens of local residents told their leaders why they didn’t like the idea. An August follow up attracted a similar audience and the same concerns.

The proposed arrangement reinforced emerging questions about Progressive leadership. After Kiss was re-elected in 2009 major financial trouble was uncovered in the financing and operation of Burlington Telecom. Without public notification $17 million had been borrowed from city coffers to build the system. The apparent plan was to get new commercial financing that would allow repayment, then announce the violation of the utility’s license to the Department of Public Service.

BT also borrowed $33.5 million from CitiBank, and wasn’t able to handle the payments. By September, 2011 the municipal enterprise was under interim management and actively looking for a private partner. But the prospects for finding a “white knight” while holding onto a public stake weren’t bright, and the scandal had meanwhile damaged the mayor’s reputation, not to mention the future prospects of his Party.

With that backdrop, left-leaning residents and younger activists were shocked and upset that the administration also wanted to partner with a corporation that Sanders himself considered one of the biggest corporate predators – number one in contractor misconduct with 57 violations and $577 million in fines and settlements.

In February, the City Council had instructed Kiss to put the deal on hold until they had more information and a public hearing was held. Their resolution also called for serious effort on climate change and local standards for companies hoping to work with the city. The mayor ignored them.

At the same time Sanders flatly refused to discuss the situation, avoiding interviews about Lockheed, F-35s or his alliance with Sandia. And when he was finally caught off-guard at a speech in Boston a few days after the February City Council vote and asked about local objections in Burlington, he testily told the inquiring journalist he was just misinformed. There was simply no opposition in Burlington, the senator said.

In any case, the City Council had voted to set standards for partnerships that clearly excluded a corporation like Lockheed Martin. And opposing that policy were a coalition of conservative Democrats and Republicans, including mayoral candidate Kurt Wright. That put the city’s Progressive mayor and the movement's de facto leader on the same side as hawks and other conservatives.

The anti-Lockheed resolution was proposed by another Progressive, Mulvaney-Stanak, and was backed by the only other Council Progressive and several Democrats, including Ed Adrian, a frequent critic of the Kiss administration who proposed outright rejection of Lockheed. The overall dynamic dramatized a developing rift between the base of both parties and their leadership.

By October, it looked as if Kurt Wright might actually win the upcoming mayoral race. Even if Kiss opted not to run again – or was rejected at a Progressive Caucus – his party needed to heal some serious divisions and find a way forward. Once again, some Progressive "thought leaders" were coming to the conclusion that their best hope was a sympathetic Democrat. If they didn’t find the right one, the coalition that had launched Sanders and changed Vermont politics could lose control of local government, perhaps permanently. 

Others were more cynical, speculating that it might be better for progressives -- at least in the long run -- if in the short run a Republican ran City Hall.

NEXT: Burlington Gets Occupied

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