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Chapter 14

General Dynamics hires Cassidy & Associates for a huge project, to try to save the Seawolf submarine. The firm has never had a higher-visibility client, and the lobbying campaign goes well. Did Cassidy save the Seawolf? Or was this a campaign that was destined to succeed?

By Robert G. Kaiser

In February 1992, Cassidy & Associates landed the biggest corporate client in its nearly two decades in the lobbying business. General Dynamics, the big defense contractor, faced an unexpected crisis, and on the recommendation of Sen. Daniel Inouye, had turned to Gerald Cassidy for help.

The Cold War rationale that had driven Pentagon procurement for nearly five decades had suddenly collapsed along with the Soviet Union. General Dynamics built one of the weapons systems explicitly designed to counter a Soviet threat that no longer existed -- the Seawolf attack submarine, whose primary mission was to kill Soviet missile-carrying subs. This high-tech behemoth cost nearly $2 billion per boat; as 1992 began, the first Seawolf was being assembled in Groton, Conn.

The Seawolf was expendable, decided Dick Cheney, then secretary of defense. In his State of the Union address in January 1992, President George H. W. Bush announced that his new budget would include a "rescission" to take back $2.8 billion already appropriated to build the second and third Seawolfs.

A Seawolf submarine
A Seawolf submarine (U.S. Navy Photo)

For General Dynamics's Electric Boat division, killing the Seawolf would have been fatal. The Seawolf was the only new submarine being built and the only meal ticket for Electric Boat's Connecticut shipyard.

General Dynamics was controlled by the Crown family of Chicago, the heirs of Henry Crown, an 8th-grade dropout who became a financial wizard. He built a $2 billion fortune before he died in 1990. In 1992 his oldest son, Lester, was the patriarch. Lester Crown was active in Jewish and pro-Israeli organizations and had befriended Inouye, one of Israel's staunchest supporters in Congress. In 1992 Inouye was chairman of the Senate defense appropriations subcommittee, a key position to influence the fate of the Seawolf and Electric Boat.

In October 1991, three months before the announcement of the decision to kill the Seawolf, Lester Crown had written a check for $1,000 to Inouye's reelection campaign -- a small fraction of the tens of thousands the Crown family has contributed to Inouye over the years, often in batches of checks from various Crowns all written on the same day.

After Bush's speech Crown sought Inouye's advice: How could the Seawolf be saved? In an interview, speaking in the deliberate, orotund phrases familiar to anyone who has seen him perform in public, Inouye recalled his response:

"I said you're a big executive, you can't do everything by yourself, you should get some sort of assistance. There are many who can provide that. But you should be very careful about who you select, because there are some who just open doors, and there are some who make it a point to study your case. I suggested a few names, and he apparently picked Gerry [Cassidy]."

Crown, who declined to be interviewed about these events, had to know that one of Cassidy's proudest recent additions to his firm was Henry Giugni, Inouye's closest friend and associate. Giugni, a native Hawaiian, went to work for Inouye in 1957 and was his chief aide from 1963 to 1986. In 1987, with Inouye's support, Giugni became the Senate's first non-white sergeant-at-arms, its chief operating officer. He left that job at the end of 1990 to become the Cassidy firm's vice president for business development.

General Dynamics retained Cassidy for one of the biggest retainers the firm ever received, $60,000 a month. Jim Turner, then president of Electric Boat, recalled an early meeting with Bill Anders, the former astronaut who was then General Dynamics's CEO, Cassidy, Inouye and others. "There was a feeling we could go through the legislative process and save the program, but help would be needed to orchestrate it," Turner remembered. "That's where Cassidy & Associates came into it."

Cassidy was thrilled to have this opportunity. He recalled that he and his colleagues found experts in the Navy, among retired Navy officers, and "in the think tanks" who gave them a sense of the arguments for and against the Seawolf. And he recalled the message they settled on to try to sell the idea that the Seawolf program should survive:

It was much too uncertain a time to decide what submarines might be needed in the future, either to counter "an emerging China" with ambitions to dominate the Pacific or "a stronger, nationalistic Russia" that might emerge. Moreover, killing the Seawolf could amount to giving up the capacity to build advanced, nuclear-powered subs, because the "industrial base" for building such ships, once dissolved, could not be easily reconstituted.

"The basic strategy was, you had to change the administration's position," Cassidy said. "You had to really demonstrate that the policy had major flaws." The lobbyists also set out to find the members whose districts would be most affected by canceling the submarine. Electric Boat had followed the standard procedure of putting subcontracts for the Seawolf in many different congressional districts, in more than 30 states. Some votes, Cassidy reckoned, could be won with the policy arguments, some on the basis of the local economic impact.

The Seawolf campaign was Cassidy's first opportunity to exploit the new capabilities he had recently added to the firm. Powell Tate, his then-new public relations arm, would work on building public and media support for the Seawolf in ways that members of Congress would notice. Beckel-Cowan, the newly-acquired "grass-roots" lobbying firm, would stir up pro-Seawolf pressure on members from their home districts.

Glenn Cowan recalled visiting the home towns of Seawolf subcontractors. "We'd try to explain to local car dealers how much money the Seawolf, in effect, had put into their community." Then they'd solicit letters from the car dealers to the local members of Congress, put them in a binder and present the book of letters to the town's members of the House and Senate -- that was grass-roots lobbying.

Powell Tate worked with Electric Boat to create the Submarine Industrial Base Council, which has survived to the present day. It consists of companies that make parts or provide services for the construction of subs. "A lot of these smaller companies, this was about all they did, because nobody else needs the things they make," Jody Powell said years later. "So it was life or death for them too." They helped generate pro-Seawolf publicity in unlikely places.

Powell and his colleagues created teams of local subcontractors, think-tank analysts and retired admirals who could lobby local media outlets. Powell Tate had a studio in its 13th Street offices where it trained these spokesmen in how best to make their case to local television anchors and editorial boards. "We got . . . very good coverage in local markets," Powell said. They also visited editorial boards in small-town papers to promote pro-Seawolf editorials. "Most members of Congress . . . damn well read their local papers every day," he said.

The subcontractors were also effective in Washington, Cassidy said. "We were able to bring well over a hundred subcontractors to town for a number of visits on the Hill. They went from office to office."

It was a presidential election year, which gave Cassidy another target: "The Clinton campaign needed a position to be stronger than the administration in the defense area. So they started criticizing the president's decision and citing the support of admirals and so forth on this, and made it an issue."

***

The Seawolf was saved. The key votes came in early May 1992: On the 5th, the Senate rejected Bush's proposed rescission by a vote of 52-46. On the 7th, the House followed suit, 266-150. Cassidy and his colleagues were jubilant; so were the executives of General Dynamics. If we ended the story right here, it would describe a successful, creative lobbying campaign.

But that is too simple. It leaves out the actors who actually made the decision to keep the program alive: members of the House and Senate. The Seawolf campaign illustrates the difficulty of allocating credit or blame for a particular outcome in Washington. Lobbyists don't vote in the House or the Senate; they try to influence the votes of members. But so do congressmen and senators, who have many advantages over lobbyists when they play the same game.

Cassidy and General Dynamics celebrated those votes for the Seawolf, but not as euphorically as did the two Democratic senators from Connecticut, Chris Dodd and Joseph I. Lieberman, and Rep. Sam Gejdenson, also a Democrat, who represented the district where the Seawolf was built. For Cassidy's lobbyists, rescuing the Seawolf was a job; for Dodd and Gejdenson, both candidates for reelection in 1992, it was potentially a matter of survival.

Sen. Chris Dodd of Connecticut
Sen. Chris Dodd helped lead the charge to save funding for the Seawolf submarine, built at a shipyard in his home state. (Associated Press Photo)

Electric Boat was in Dodd's blood. At the age of 10, his father, Thomas Dodd, then the congressman from eastern Connecticut and later a senator himself, took him to the launching of the USS Nautilus, America's first nuclear submarine. Twenty-six years later, in 1980, when he was the congressman, Chris Dodd helped settle a seven-month strike by Electric Boat's draftsmen.

When he learned on Jan. 29, 1992, that President Bush planned to use his State of the Union speech that very night to propose eliminating the Seawolf program, it was "a real shock," Dodd said in an interview. "Reversing a presidential decision is pretty difficult on these things." Dodd and his staff, led by Robert Gillcash, who had just joined the senator after a stint as a professor of national security at the Air Force Academy, quickly organized a campaign in the Senate at least as elaborate as Cassidy & Associates's effort on the outside.

Dodd knew he had a vital ally in Inouye, who had been one of his father's best senatorial friends, and whose subcommittee chairmanship gave him perhaps the loudest voice in the Senate on this issue. "Danny was critical," Dodd remembered. But he knew he would have to go "door to door" in the Senate in search of votes.

He framed the issue as protecting America's capacity to build nuclear submarines. He said he told his colleagues, one by one, not to worry about the political impact of killing the Seawolf on him personally -- a classic pose on Capitol Hill, rarely taken entirely seriously -- but to focus on the national security issue, which was maintaining the "industrial base" needed to produce subs in the future.

Yes, the Seawolf's original mission had been overtaken by the collapse of Soviet power, but Dodd argued that subs would remain the key to U.S. naval superiority. If Electric Boat died and its talented workforce melted away, reconstituting the ability to manufacture nuclear-powered subs would be difficult and extremely expensive. Just build two more Seawolfs, he argued, to keep the company and its workforce intact, then move on to a new, cheaper model suitable to the new strategic environment.

Dodd, popular among his colleagues, visited scores of senators to try to persuade them that it would cost more to cancel the Seawolf than to build two more ships, partly because of penalty clauses in existing contracts for the sub. Retaining Electric Boat's unique capabilities was worth a few billion more, he argued. "It took ten years to train a welder" at Electric Boat, Dodd said, and if the yard closed, those welders would "disappear into the civilian economy."

Sen. Sam Nunn of Georgia
Sen. Sam Nunn of Georgia was chairman of the powerful Armed Services Committee during the Seawolf fight. (Getty Images)

Probably the most important single ingredient in the successful campaign to save the Seawolf involved neither Cassidy or Dodd. This was the startling testimony at a Senate Armed Services Committee Hearing on April 1, 1992, of Adm. Bruce DeMars, the Navy's director of nuclear propulsion, the influential billet long held by Adm. Hyman Rickover, "father" of the nuclear Navy. After Cheney and Bush had proposed eliminating the Seawolf, Sen. Sam Nunn (D-Ga.), chairman of the Armed Services committee, asked DeMars at a public hearing if he would support that decision if he were a senator. DeMars replied -- as a "personal opinion" -- that he would vote against killing the Seawolf.

"The bottom line is, you have to continue to build," DeMars testified. "A hiatus in submarine construction would surely put the final nail in the coffin of the U.S. submarine-construction capability after 90 years of being the preeminent builder in the world." It was crucial, he said, to preserve "the industrial base" -- Dodd's and Cassidy's favored argument. Now a senior admiral was defying his bosses to support it.

So how important was the lobbying campaign to the final outcome? The question is unanswerable: the lobbying happened, it contributed to a political environment favorable to the Seawolf, and there's no way to know what might have happened without it.

Dodd said: "I don't recall the Cassidy involvement. That doesn't mean they weren't involved," he added. Not surprisingly, Dodd and his aide Gillcash thought their efforts were the most significant.

Inouye offered this explanation for why the Seawolf survived: "We're always trying to help each other shore up our constituencies' economies," he said. Dodd was a special friend whom he wanted to help, and supporting the Seawolf was easy once he concluded it was "in the national interest." He did not mention the lobbying campaign.

Whatever the firm's actual impact on the vote, for Cassidy & Associates the Seawolf victory was huge. "You can market yourself on that for years to come," said Victoria Lion Monroe, a former lobbyist for the Cassidy firm. "It gave you street cred for other big corporations." Indeed it did. A 1993 story in The Post's business section began with this free advertisement: "The Washington lobbying firm of Cassidy and Associates Inc. is a comer as far as Getting the Job Done in the defense business." In the story, Seawolf was cited as the main evidence.

Washington Post research editor Alice Crites contributed to this report.

Tomorrow: Dabbling in foreign policy.

About This Series | Chapters:

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An overview of Gerald Cassidy's life and career.

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A "cast of characters" in the life and career of Gerald Cassidy.

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This part of the Cassidy story touches upon the life of a truly fine gentleman and public servant, Henry Giugni. Like many other former Senate staffers and colleagues, I was pleased to call Henry my friend and mentor. He was a person of wise counsel and loyalty and was well-respected by Members of Congress and their staffs on both sides of the aisle. The work of Congressional staffers is generally unrecognized and under-appreciated. Henry was recognized by those that know as one of the best examples of Congressional staffers who serve their sponsors loyally and faithfully and find ways to advance the interests of their home states. Steve Seale.

Posted by: css | March 22, 2007 12:56 AM

And as everyone knows, General Dynamics, a large corporation needs to have total governmental access to shape policy and law because they manufacture one product in many guises - machines that kill people. Can't sell the machines if you don't have a war, can you? Can't have a war unless you can manipulate policy and law. But the defenders say "Cassidy works for schools and hospitals!" Sure he does. As soon as their check clears. What was that about the right to petition again? How is this not the corporatism aspect of fascism? How is this fair and equitable access to the system? How is lobbying as practiced good for America? It isn't - plain and simple. Lobby needs severe reform and the current lot of lobbyist must go. ALL OF THEM. Leaving any of them in place has all the sense of putting a junkie in charge of the pharmacy.

Posted by: toddradian | March 22, 2007 07:19 AM

Interesting about Chris Dodd. I'm kinda into him as president, seems smart. But I'm curious what John Edwards will announce today. Any guesses?

Posted by: John2.Bravo | March 22, 2007 09:10 AM

I second Steve Seale's comments about Henry Giugni. He was instrumental in getting me to Washington in 2001 and was a great mentor, friend and American. He was not a "typical lobbyist" and above all was an honest gentleman. I count myself as fortunate for the lessons learned from Henry.

Posted by: rmodlin | March 22, 2007 10:02 AM

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