DC Small Businesses Oppose US$25 Million Plan to Lure Northrop Grumman

Monday, Mar 08, 2010

While the District of Columbia is facing a budget shortfall of hundreds of millions of dollars and cutting essential services, the DC Council is offering $25 million in tax abatements and grants to lure defense contractor Northrop Grumman to the District. This is part of a bidding war between DC, Virginia and Maryland, a bidding war that Washington Post business writer Steven Pearlstein called "loony."

Small business owners are incensed that scarce tax dollars are being offered to a Fortune 100 company with $34 billion in revenue. "Small businesses, the engine of our city's economy, are struggling to pay their taxes and secure loans -- and many are going out of business," says Busboys and Poets owner Andy Shallal, who employs 250 people -- most of whom are district residents. "The city should be giving priority to small businesses, not to huge corporations that don't need the help."

The corporate giveaway -- championed by Councilmember Jack Evans and Mayor Adrian Fenty -- does not come with any analysis of the benefits for the city, nor any comparison of what the funds invested elsewhere could generate. "With unemployment at crisis levels of over 12 percent citywide, the city needs jobs," says Trisha Clauson, director of Think Local First DC, which represents 160 DC small and local businesses. "It is small businesses that can generate more jobs and support a locally-driven economy where money stays in the community."

Opposition to the project is also coming from the city's peace community, who see Northrop Grumman as a major war profiteer. "Northrop Grumman wants to be closer to the nation's lawmakers so it can lobby for more war funds," said Medea Benjamin with CODEPINK: Women for Peace. "The district, whose residents are overwhelmingly pro-peace, should not be subsidizing a huge defense contractor that profits from war. That's why we're building a broad-based coalition to oppose this plan."

Charlie Cray of the Center for Corporate Policy adds that Northrop Grumman has not been a good steward of public funds. "It has had to pay hundreds of millions in fines for overbilling the government and knowingly using defective parts," said Cray. "It would be scandalous to give DC tax dollars to a company with such a long record of waste, fraud and abuse."

Source: PR Newswire