Citizens Against Government Waste's ad against GE jet engine says GE rival paid for it

WASHINGTON — For America's No. 1 taxpayer watchdog, as Citizens Against Government Waste calls itself, the jet engines seem easy prey.

The federal government is already spending billions for Pratt & Whitney to develop engines for the F-35 Joint Strike Fighter. Why spend billions more for General Electric to do the same?

"The alternate engine not only qualifies as procedural pork, it is also a waste of money on the merits," Tom Schatz, president of Citizens Against Government Waste, said in July in announcing an advertising campaign.

But when a video was posted on YouTube, it showed that it was paid for by GE's competitor in the long-running, $100 billion war over the F-35 engine: Pratt & Whitney.

The slip — Pratt & Whitney and CAGW say it was a mistake — is a reminder of the cozy relationship between the legions of supposedly independent watchdog and public interest groups in Washington and corporate interests.

CAGW, which was the subject of a 2006 St. Petersburg Times investigation called "Lobbying Under Disguise," has been linked to other corporate interests despite using its nonprofit status to avoid naming its donors.

Increasingly the lines between advocacy and lobbying are harder to decipher, as media and organizing efforts become more sophisticated. Lurking amid the current debate over health care and energy policy are corporate interests that funnel money to feel-good-sounding nonprofits and grass roots organizations.

This summer, corporate interests have been linked with rambunctious rallies at health care town halls. The oil industry has been busing employees to talks on an energy bill, another battle awaiting lawmakers when they return next month from vacation.

The House is currently investigating a "strategic grass roots" firm that sent letters to members of Congress opposing the energy bill. The letters came from far-flung places such as the Slippery Rock Senior Center in Pennsylvania, where the writer fretted about higher electricity bills.

"Many of our seniors, as you know, are on low fixed incomes. Some of our seniors have even received decreases to their Social Security payments," reads a letter to U.S. Rep. Kathy Dahlkemper, D-Pa.

But the letters were fakes.

And the firm behind them, Bonner & Associates, was working on behalf of the American Coalition for Clean Coal Electricity, a group of coal producers and users. Bonner says it has fired the responsible employee.

"It's the corporations' jobs to protect their bottom line," said Diane Farsetta, senior researcher for the Center for Media and Democracy, which studies phony public relations and news manipulation. "It's fine for them to do that using their own name and their own lobbyists.

"But when they funnel it through nonprofits or supposedly grass roots rallies, it's just inherently deceptive."

• • •

As for Citizens Against Government Waste, Farsetta calls it a "watchdog for hire."

CAGW would not say whether it gets funding from Pratt & Whitney, the lead company developing the F-35 engine. Pratt & Whitney also would not reveal which nonprofits it supports. But both began using the same advertising firm around the same time, and CAGW's YouTube ad railing against General Electric's alternative engine listed Pratt & Whitney as a client.

That was an error by a production company that was handling a spot for Pratt & Whitney at the same time, the two contend. The mistake was corrected.

"They labeled the videos incorrectly," said Lathi de Silva, a vice president at advertising firm Sullivan Higdon & Sink, based in Wichita, Kan. "It was a clerical error."

The production company did not return messages seeking comment.

De Silva acknowledges that the fact her firm is handling both CAGW and Pratt & Whitney advertising raises questions, but said it is just coincidence.

CAGW asserts that the questions about its relationship with Pratt & Whitney are a distraction from the legitimate issue of engine funding for General Electric. GE, which has teamed with Rolls-Royce, got congressional funding in 1997 to produce a backup engine but the funding has come under attack for years. About $2.5 billion has been spent.

The House currently continues funding for GE but the Senate does not, in part due to work by Sen. Joe Lieberman, an independent from Connecticut, where both Pratt & Whitney and GE are based, and President Barack Obama has threatened to veto funding for GE. Top military officials have also spoken out against the funding.

"It's unfortunate that we are discussing process issues, but clearly the proponents of the alternate engine would rather not talk about the issue on the merits," Leslie Paige, media director for CAGW, said in an e-mail to the Times.

GE counters that there should not be a monopoly on a project that could be worth $100 billion once the F-35s are produced. It also notes that the Pratt & Whitney project is running over budget — about $1.9 billion, according to a congressional report.

"Those numbers were future cost projections if we made no improvements or took any steps to reduce the costs," said Pratt & Whitney spokeswoman Erin Dick. She said the first seven production engines will be delivered this year and as more are made, savings will be achieved.

• • •

CAGW does get credit even from its critics. The group, formed in 1984, has long railed against government waste and gone after both Republicans and Democrats.

"They do do pork busting," Farsetta acknowledged.

"But they prioritize based on who is giving them money," she added. "The Pratt engine, I don't see how that qualifies as a top issue right now."

Numerous ties between corporate donors and CAGW have been established. The Times' 2006 investigation revealed how the group traded on its good name by taking money to lobby. (Nonprofits, which do not pay income taxes, get around disclosure requirements by setting up separate lobbying arms.)

The group received about $100,000 from Mexican avocado growers for a campaign urging the Department of Agriculture to allow more avocados from Mexico. CAGW took $245,000 from tobacco companies while urging the government not to regulate tobacco, and it received thousands from a health club association while promoting tax breaks for health club memberships.

The convicted lobbyist Jack Abramoff got CAGW to write press releases and articles on behalf of his clients.

And during last year's presidential election, the Washington Post reported that Sen. John McCain's campaign reached out to CAGW for help. Democrats were raising questions about McCain's support for a $40 billion tanker refueling contract for Northrop Grumman and its European partner.

A CAGW media campaign defended the contract. It denied any coordination with McCain.

Alex Leary can be reached at leary@sptimes.com.

Citizens Against Government Waste's ad against GE jet engine says GE rival paid for it 08/23/09 [Last modified: Tuesday, August 25, 2009 4:16pm]

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