Simmons-controlled company fights for protectionist measuresBy Nancy Watzman Mar 13 2012 11:17 a.m.
When Titanium Metals Corp., a defense contractor that's part of Harold Simmons's business empire, lobbied for protectionist policies designed to shield it from foreign competition, the fight allied the Texas billionaire and Republican mega-donor with some unlikely political bedfellows, including Sen. Sherrod Brown, a liberal Democrat from Ohio, and a union that overwhelmingly gives to Democrats.
Of the more than $34 million that Harold Simmons, his wife and daughters have contributed to politicians, parties and political organizations, just $520,000 has benefited Democrats.
TIMET, as the Simmons company is known, relies heavily on defense contracts; the company's website says it makes products for military jets, helicopters, ground transport, ships and submarines, and boasts that it supplies 80 percent of the world's titanium armor needs. In its business with the federal government, Timet benefits from an obscure legal provision, which Congress updated in 2006, that requires the Pentagon to limit its purchase of weapons containing titanium only to those firms that use titanium melted or produced in the United States.
“This law is intended to help preserve critical sectors of the United States defense industrial base, including the United States titanium industry, and to prevent the United States military from becoming dependent for strategic materials on foreign suppliers that may be politically unreliable,” wrote the company’s lobbyist, J. Kevin Horgan, in a 2008 comment letter to the Defense Department.
However, in 2009, the Department of Defense (DoD), issued a rule to implement the law that TIMET believed “may reduce its effectiveness.” The company wrote in its 2010 annual report that it would “continue to resist attempts to undermine this specialty metals law. A weakening in the enforcement of this specialty metals law could increase foreign competition for sales of titanium for defense products, adversely affecting our business, results of operations, financial position or liquidity.”
At issue were a pair of interpretations, one that would allow "off the shelf" consumer products to be modified to meet Defense Department requirements and a second that would consider metal components "produced in the United States" even if the bulk of the work was done abroad, and only the final processing performed domestically. The rules changes would also have affected the steel industry, which mounted an intensive lobbying campaign on Capitol Hill. In response, Politico reported, a bipartisan group of lawmakers wrote letters to the Defense Department demanding that the definition be clarified.
Among the signers was Sen. Dan Coats, R-Ind., who has gotten more than $15,748 from Simmons' holding company, Contran Corp., its company PACs and employees over the years, and his family members, including a $2,500 PAC contribution in his successful 2010 bid to make a comeback to the Senate. Other signers who have gotten support include Sen. Richard Burr, R-N.C., Rep. Joe Wilson R-S.C., and Rep. Steve Stivers, R-Ohio. Some of the Democratic signers have gotten support from Simmons' daughter, Serena, who gives to liberal candidates, such as Sen. Kay Hagan, D-N.C. and Sen. Al Franken, D-Minn. (Simmons himself contributed to the Republican incumbent whom Franken defeated, Norm Coleman.)
That same month, as the Senate was debating the defense reauthorization bill, Sen. Sherrod Brown, D-Ohio, offered two amendments related to specialty metals, one to strike a provision in the bill to provide exemptions to the "Made in America" rules and another to clarify that to be defined as "produced" in this country that it must be "melted" here.
While it does not appear that Simmons, Contran or TIMET have directed campaign contributions to the liberal senator, half of its U.S. workers based in Ohio are represented by the United Steelworkers of America, which is a strong advocate for "Buy American" programs. The steelworkers have contributed generously to Brown, who has been a longtime advocate for such provisions.
Senate Armed Forces Committee Chairman Carl Levin, D-Mich., who told Brown in an exchange on the Senate floor that he was also concerned about the issue, was lobbied by a trade group that includes one of TIMET's U.S. competitors, Allegheny Technologies, which also has a stake in the protective policies.The domestic titanium advocates scored a victory when the exemption from the "Buy American" rules was later dropped in conference.
Titanium Metals Corp. also strongly supports retention of titanium tariffs that have been targeted for elimination in the World Trade Organization's (WTO) Doha round.
"We have urged that no change be made to these tariffs, either on wrought or unwrought products....We will continue to resist efforts to eliminate duties on titanium products, although we may not be successful in these activities. Further reductions in, or the complete elimination of, any or all of these tariffs could lead to increased imports of foreign sponge, ingot, slab and mill products into the U.S. and an increase in the amount of such products on the market generally, which could adversely affect pricing for titanium sponge, ingot, slab and mill products and thus our business, results of operations, financial position or liquidity," reads the company's annual report."
The company has reported spending $1.4 million on federal lobbying since 2006, when Congress reaffirmed the "buy American" provisions affecting titanium as part of 2007 defense authorization legislation.
Simmons, who famously supported the Swift Boat ads in the 2004 presidential campaign against the Democratic nominee, Sen.John Kerry, D-Mass., has poured $7 million through personal and corporate donations into the coffers of the super PAC American Crossroads this election season. He was an early supporter of the Rick Perry campaign, made a $500,000 contribution to the super PAC supporting Newt Gingrich in late 2012, and last month gave $100,000 to Restore Our Future, the super PAC backing Mitt Romney.
TIMET did not return a call for comment.
Joshua Hatch contributed to this post
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