Friday, September 2, 2011

Lockheed Loses Burlington Showdown

Deal Derailed by People Power;
Reveals Prog Identity Crisis

By Greg Guma

As progressives around the country salivate at the possibility that Bernie Sanders, US Senator and Independent Socialist, might consider running for president in 2012, residents of the Vermont city where he made his political breakthrough have roundly rejected the approach he and his local allies have been taking to military contractor Lockheed Martin. On Sept. 2, the defense contractor backed out of a deal signed with the mayor in an e-mail message to the Burlington Free Press.

City Hall Auditorium was packed.
On Monday August 8, after more than six months of local debate, Burlington’s City Council voted 8-6 in favor of nonbinding community standards for proposed climate-change partnerships, prompted by an agreement between the city and Lockheed Martin. The resolution calls for standards which, if followed, would exclude working agreements on climate change with weapons manufacturers and polluters. 
Three weeks later, Rob Fuller, a spokesman for Lockheed Martin, explained, "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 read like a Dear John, and a silent bow to public pressure.

The latest developments represent a rejection of the deal signed with Lockheed by Mayor Bob Kiss last December. Kiss defied public pressure and the City Council, whose authority over such partnerships was called into question. After the Council vote the mayor's response was defiant. Discussions with the corporation would continue, he said. A few weeks later they were over.
Throughout the dispute Sanders refused to comment on the deal. Yet his typical views on corporate criminals and wasteful military spending are part of what makes him such a compelling potential alternative for the 2012 presidential race. 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 their “systemic, illegal, and fraudulent behavior, while receiving hundreds and hundreds of billions of dollars of taxpayer money.”

Among other crimes, he mentioned how Lockheed had defrauded the government by fraudulently 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 labeled the corporation a “repeat offender” that rarely faces 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 said.

Yet he and Mayor Kiss both invited the company to Vermont. For two years Sanders has been working with local energy companies and the University of Vermont to bring a satellite of the Lockheed subsidiary Sandia Laboratories to the state, while simultaneously welcoming the prospect that Lockheed-built F-35s might be bedded at the Burlington International Airport.  As Sanders has put it, if F-35s are going to be built and deployed, he prefers to see the work done by Vermonters.

Sanders visited Sandia headquarters in New Mexico in 2008. In January 2010 he took the next major step – organizing a delegation of Vermonters. The group included Green Mountain Power CEO Mary Powell; Domenico Grasso, vice president for research at the University of Vermont; David Blittersdorf, co-founder of NRG Systems and CEO of Earth Turbines; and Scott Johnston, CEO of the Vermont Energy Investment Corporation, which runs Efficiency Vermont.

Despite concerns about Lockheed’s bad corporate behavior Sanders apparently doesn’t think that inviting a subsidiary to Burlington means helping them to get away with anything. Rather, he envisions Vermont transformed “into a real-world lab for the entire nation” through a partnership. “We're at the beginning of something that could be of extraordinary significance to Vermont and the rest of the country,” he said.
Sanders painted a rosy picture. Businesses, ratepayers and researchers would get a boost. A $1 million DoE planning grant was arranged. More support from the Department of Energy is expected as the project gains steam. Sandia Vice President Richard Stulen has confirmed Bernie’s pledge that no weapons development work will be involved. The focus, he promises, will be cutting edge research on cyber security, specifically a “smart grid” and stopping hacker attacks.

Sandia sees Vermont’s energy infrastructure as an “ideal place” to create a model for the rest of the country. The Department of Energy is reportedly impressed with work underway in the state on forward-looking renewable energy technology, as well as a willingness to “tinker with related policies and regulations.” True to the Lockheed playbook, Sandia has defined the lab’s mission as energy “security.” But the big carrot is the prospect of not only some jobs but a chance for Vermont businesses to get a “global competitive edge.”

The letter of cooperation between the city and Lockheed backed up this argument. Lockheed Martin Corporation 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.” The Burlington partnership, he said, would “demonstrate a model for sustainability that can be replicated across the nation."

On December 20, 2010 the Burlington mayor’s office announced the results of Mayor Kiss’s negotiations, begun at billionaire Richard Branson’s Carbon War Room. It was a “letter of cooperation” with Lockheed Martin to address climate change by developing green-energy solutions. The plan is vague, mentioning “sustainable business models” and analysis, and “energy and transportation technologies,” but Kiss envisions more fuel efficient vehicles, improving the use of steam from the city-owned generating station, and generally turning “swords into ploughshares.”

Anti-Lockheed organizer Jonathan Leavitt testifies.
The conflict between years of anti-corporate, peace movement rhetoric in the city and the decision by the two main elected leaders of the state’s progressive movement to make research and development deals with a powerful corporation – especially one that activists considered a war profiteer and corporate criminal – has since set off a local revolt and a moment of self-assessment.

Defense contracts represent less than five percent of state GDP, but substantially more in the Champlain Valley, home base for the two largest companies, 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 county, producing guns, ammunition, “quick reaction” equipment, explosive components, missiles and aircraft parts. The main Congressional booster for military jobs is Vermont's senior US senator, Patrick Leahy, who frequently makes appearances at factories to announce major contracts.

On the other hand, Burlington has a rich history of social activism, and has developed a series of foreign policy initiatives over the last three decades. As Ken Picard has explained in Seven Days, the city’s successful left-leaning weekly, the debate touches 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?”

Those questions have not yet been resolved. The initial opportunity to discuss them came on February 7, 2011. City Hall Auditorium was crowded that night as the City Council considered the mayor’s arrangement with the company. In a scene reminiscent of the early days of the Sanders era, dozens of local citizens told their leaders why they didn’t approve of the deal. The August 8 meeting attracted a similar audience and the same sort of concern.

UPDATE: Corporate Person Martin Lockheed's speech at a Burlington Public Forum / "...Don’t be swayed by prejudice against corporate people. We deserve rights, just like everyone else. And we have so much to offer. Of course, we can’t talk about some of it. You know, National Security."

Bob Kiss is considerably less popular as mayor than he was two years ago. Major financial trouble have been uncovered in the financing and operation of Burlington Telecom, one of the major initiatives of the city’s Progressive administration. City government spent $17 million to build a system to deliver Internet, Cable TV and telephone services in the city. It also borrowed $33.5 million. But it hasn’t been able to handle the payments and the lender is threatening to repossess millions in equipment.

The city has defended Chief Administrative Officer Jonathan Leopold, first appointed to local office by Sanders more than 25 years ago, and itself in state investigations and a lawsuit filed by two taxpayers who want the enterprise sold off to help retire the debt.* Burlington Telecom is under interim management and actively looking for a private partner. But the prospects for finding a “white knight” while holding onto a minority stake aren’t bright, and the scandal has badly damaged the mayor’s reputation, not to mention the future prospects of the local Progressive Party.

The arrangement with Lockheed reinforced local anger. Left-leaning residents were shocked and angry that the city administration wanted to partner with a corporation that Sanders himself considers one of the biggest corporate perpetrators. In various speeches he has noted, for example, that it is number one in contractor misconduct, having engaged in 57 instances since 1995 and paid $577 million in fines and settlements.

In February, after more than an hour of public comments, the City Council instructed Mayor Kiss to put his arrangement on hold until they had more information and a public hearing was held. The resolution also called for serious effort on climate change and city standards for companies hoping to work with the city. However, a city attorney argued that since the mayor didn’t need Council approval to sign the agreement, he isn’t bound by its decision.

Sanders declined to be interviewed about Lockheed, the F-35s or his work with Sandia on a regional lab, except to say that any work done in Vermont will not involve weapons research or development. But when caught at a speech in Boston a few days after the February City Council vote and asked about local objections in Burlington, he told a journalist testily that he was misinformed. There was no opposition in his home town, Sanders said.

Mayor Bob Kiss and Kurt Wright.
Be that as it may, the City Council had voted to set standards that would clearly exclude Lockheed. Opposing the decision were a coalition of conservative Democrats and Republicans, including potential mayor candidate Kurt Wright. That puts a leading local Republican on the same side of the issue as Mayor Kiss, a Progressive at the end of his second term. But the anti-Lockheed resolution was proposed by another Progressive, Emma Mulvaney-Stanak, and was backed by the only other City Council Progressive and most Democrats, including Ed Adrian, a leading critic of the Kiss administration who had earlier proposed outright rejection of Lockheed.

The dynamic dramatizes the rift that has developed between the grassroots progressive movement in Burlington and its own political leadership. Sanders’ name never came up at the August City Council showdown, but most people in the room were aware that their famous Senator has helped Sandia get a Vermont foothold, and also backs F-35 deployment at the airport despite substantial community opposition.

Mayor Kiss has insisted that the climate crisis requires radical action, while Sanders feels comfortable ignoring local opponents. According to recent polls, the 70-year-old Independent Senator is a prohibitive favorite for re-election next year – unless, of course, he’s serious about a possible presidential bid. He is, after all, a great admirer of Eugene Debs.

The outcome in Burlington, central base of the Vermont progressive movement for more than 30 years, is less certain. After experimenting with instant runoff voting, city residents repealed that initiative in 2010, largely at the urging of Wright, who almost defeated Kiss in 2009. Now that the old system has been restored, a mayoral candidate only needs to run first with at least 40 percent to win. That’s how Sanders did it in 1981, becoming mayor with slightly over 40 percent and a 10-vote margin.  

Based on his past performance Wright is within reach of victory, especially now that Kiss has alienated the progressive left wing and scandals like Burlington Telecom have soiled the administration’s image. Even if Kiss opts not to run again, or is rejected at the Progressive caucus, his party will need to heal its divisions and agree on a candidate capable of beating ambitious Democrats and Republicans, who smell victory for the first time in years. 

The best hope for Burlington Progressives at the moment is a Democrat sympathetic to their basic ideas. If they don’t strike a bargain with one, the coalition movement that launched Bernie Sanders, but has been losing momentum for several years, may be entering its final days.

The Burlington City Council; Progressive Emma Mulvaney-Stanak at far right.
In July Leopold explained under oath the city’s rationale for not revealing to the state the improper use of $17 million in general city funds to keep Burlington Telecom afloat in 2008 and 2009. The plan was to get new commercial financing for BT — which would allow repayment of the city money — and then announce the violation of the municipally owned utility’s state license to the Department of Public Service. “We would address the issue of non-compliance,” Leopold said, “when we felt we had a cure.” But the plan failed in late 2009 when the City Council, newly alerted to BT’s financial troubles, refused to authorize new debt.


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