Layoffs and donations to charities with political ties

The Daily Record's business blog

Mar 3, 2011

Layoffs and donations to charities with political ties

By: Ben Mook

A U.S. Air Force Northrop Grumman B-2 Spirit bomber.

Defense contractor Northrop Grumman found itself in the news Thursday over two issues no company likes to see associated with its name – big layoffs and money mixed with politicians.

Northrop, maker of the B-2 bomber and nuclear submarines, among many, many other products, said that it was cutting about 500 jobs from its Electronic Systems division, based in Linthicum. A slowdown in defense spending was cited. The company is hoping to meet the reduction through buyouts, but is not ruling out layoffs.

Also Thursday, Northrop found itself tangentially related to a juicy story in the New York Times about Louisiana Gov. Bobby Jindal and his wife’s charity, the Supriya Jindal Foundation for Louisiana’s Children.

Here’s the story’s lead paragraph:

“Louisiana’s biggest corporate players, many with long agendas before the state government, are restricted in making campaign contributions to Gov. Bobby Jindal. But they can give whatever they like to the foundation set up by his wife months after he took office.”

Hmmm.

Anyway, according to the Times piece, major corporations like WalMart, Dow Chemical and Marathon Oil have ponied up about $250,000 a piece to sponsor the charity, which says its goal is to “provide Louisiana’s school with essential support programs and services.”

The article goes on to point out that many of the charity’s sponsors have had significant business interactions with the Jindal administration, including Northrop.

“… the military contractor Northrop Grumman, which got state officials to help set up an airplane maintenance facility at a former Air Force base, promised $10,000 to the charity.”

According to the charity’s website, sponsorships range from “charter” to “bronze.” Charter members, of which there are four listed, pay $250,000, while bronze sponsors, like Northrop Grumman, pay $10,000. Adding up all of the sponsors cited on the charity’s website shows it has close to $1.3 million in pledges so far.

That’s better than 2009, when, according to the foundation’s IRS Form 990, it raised $278,310.

Hopefully, the charity became a little more active too. Looking at the same form, the organization said it had only $66,697 in expenses, none of it going toward grants.