General Dynamics participates in the U.S. political process when it is in the best interests of its shareholders, businesses and employees to do so. Participation in this process ensures that the company's interests as a leading member of the defense and aerospace industries, as well as a large employer, are well represented.
Process and Oversight
The company has a comprehensive oversight process to ensure that political contributions are made in a legal, ethical and transparent manner that best represents the interests of our shareholders.
Corporate political contributions are made pursuant to the company's Delegation of Authority, as established by the Board of Directors, which requires that all corporate political contributions be approved by the Senior Vice President, Planning and Development who oversees the company's government relations. The company's Board of Directors receives annual briefings on prior-year corporate-wide political spending.
As part of an effort to ensure compliance with all applicable laws relating to political activities and effective corporate governance, we have a written policy governing lobbying practices. This policy covers compliance with laws and regulations regarding the lobbying of government officials, the duty to track and report lobbying costs and expenses as nondeductible for tax purposes and unallowable for purposes of U.S. Government contracts. It requires that all lobbying contacts with covered government officials be coordinated with and approved by the Senior Vice President, Planning and Development.
Political Contributions Summary
Lobbying Contributions. Each quarter we file a publicly available federal Lobbying Disclosure Act report that provides specific information on all General Dynamics lobbying activities. This report captures all of the company's lobbying expenditures, including all federal and state direct, indirect and grassroots lobbying.
Our quarterly lobbying report, which can be found at the U.S. House of Representatives Office of the Clerk website, describes the specific pieces of legislation that were the subject of our lobbying efforts and identifies the individuals who lobbied on behalf of our company. Outside consultants who lobby on our behalf also file reports detailing their efforts on the company's behalf, and any sums we expend on those consultants are included in our own report.
In 2015, our total lobbying expenditures were $10.3 million; in 2014, $10.7 million; and in 2013, $11.1 million. State lobbying expenditures and grassroots lobbying represent a very small portion of our annual spend.
State & Local Contributions. The company makes contributions to state and local candidates, where permissible and in accordance with all laws and regulations. In 2015, our total State & Local contributions were $311,727.
In April 2014, the company instituted a policy to no longer make contributions to 501(c)(4) and Section 527 organizations.
Tax-exempt organizations that Write and Endorse Model Legislation. General Dynamics has not been a member of or made payments to any organization that writes and endorses model legislation, such as the American Legislative Exchange Council. If this policy changes, we will disclose this development.
Employee Political Contributions Summary
General Dynamics offers certain eligible employees (as determined by federal election laws) an opportunity to make political contributions through a company-sponsored Political Action Committee (PAC), called the General Dynamics Corporation Political Action Committee (GDC PAC). The General Dynamics employee PAC is organized and operated on a strictly voluntary, nonpartisan basis and is registered with the Federal Election Commission.
The PAC's political contributions are reported monthly to the Federal Election Commission. Detailed information about the PAC's donations can be accessed on the U.S. Federal Election Commission website.
PAC Process and Oversight
A committee of senior management employees administers the company's employee PAC. In conjunction with this committee's oversight, the PAC contributions are subject to a robust internal review process. PAC expenditures are reviewed to ensure they represent the best interests of the company, its employees and its shareholders. Additionally, internal financial controls exist to ensure company compliance with federally mandated contribution limits.