Peter Schweizer, a William Casey Fellow at Stanford University, was the first to document the stimulus windfalls for companies in his 2011 book, "Throw Them All Out: How Politicians And Their Friends Get Rich Off Insider Stock Tips, Land Deals And Cronyism That Would Send The Rest Of Us To Prison." He said the financial crisis created a perfect storm for rewarding supporters of the administration.
"My view is that Barack Obama simply has engaged in cronyism on a massive scale," said Schweizer. "With the stimulus you really had, for the first time in American history, an American president and his administration that had the opportunity to literally hand out hundreds of billions of dollars to companies whether it was related to infrastructure, whether it was related to high-speed Internet in rural areas or whether it was related to clean energy. So this was an unprecedented level of cronyism." One executive for a top federal integrator, who has 30 years of experience working on government IT projects, said ARRA was inevitably going to flow to politically connected companies with strong lobbying efforts. "It was totally out of control," said the executive, who did not want to be identified. "It was like a river of money and everyone had their hand out. And with a river you can divert the flow to wherever you want it to go without anyone being the wiser. I guess they can say they saved some jobs, but a lot of it went to program expenses for bureaucrats. A lot of it was money not well spent."
Insiders from some of the companies that were awarded ARRA funds said claims of cronyism with regard to the ARRA funding are unfounded. Those insiders, who refuse to go on the record, claim the ARRA funds saved the country from an economic collapse and that the cronyism charges are a vicious partisan attack by Republicans determined to see President Obama thrown out of office. They say that in many cases the applications for government funding that kicked in with ARRA were in the works under the Bush administration and were filed by states, cities, universities and third parties. What's more, they maintain, a large part of the funds that made their way to companies were the result of a rigorous government vetting process that had nothing to do with lobbying expenditures, White House visits, fundraising or support of President Obama and the administration.
Several attempts by CRN to get someone in the administration for comment were unsuccessful.
"The Republican National Committee has ignored factual information as it relates to the Recovery Act, insinuating payback for support of the president," said one source close to one of the companies that benefited from ARRA funding."Nobody in the private sector wants to go up against the RNC, which has a much bigger budget. When we have spoken up, we have gotten shouted down in public and bashed over the head. We don't think it's a good time to pick that fight so close to the election. We'd rather keep our head down and let the facts speak for themselves. With seven weeks before the election we'd rather stay out of it and let the two candidates' ideas and records speak for themselves."
Taking into account funding and jobs data from the Recovery.gov database, lobbying expenditures and campaign contribution data from the Center for Responsive Politics, entries from the White House visitor’s log, and interviews with economists and government watchdogs, CRN ranked the top five companies benefiting from ARRA.
Following is the first installment of CRN's three-part series on the impact of the $840 billion ARRA.