Monday, August 15, 2016

Unicorns: How Palantir Invaded Washington And Played The Lobbying/Influence Procurement Game Better Than The Incumbants

From Politico:

How Silicon Valley's Palantir wired Washington
Armed with effective narrative and backed by aggressive lawmakers, the upstart has steadily landed more federal business and is now shouldering its way into the Army acquisition system
When a little-known Silicon Valley software startup began vying for national security contracts, it went up against an entrenched bureaucracy and opposition from major contractors skilled in the Washington game.

But quickly, Palantir began pulling pages from the defense industry's own playbook — bulking up on lobbyists, challenging the Pentagon’s contracting rules and getting members of Congress to sprinkle favorable language into defense legislation. Seven years later, the secretive firm has landed $1.2 billion worth of federal business, and critics say the legislative favors it has secured will give it a leg up on billions more.

Representatives of the firm — founded by venture capitalist and prominent Donald Trump supporter Peter Thiel — insist it remains an outsider in a Washington culture deeply wedded to the status quo.
But a review of public documents and interviews with key players shows the company is no stranger to Beltway politics and influence. Its lobbying expenditures more than tripled to more than $1 million in a few short years as it enlisted lawmakers such as Republican Sens. John McCain of Arizona and Tom Cotton of Arkansas to help it compete against established players like Raytheon and Northrop Grumman. Now, about 40 percent of Palantir’s business comes from government clients, and it appears to be winning a fight with the Army over a $3 billion program to build a new battlefield intelligence network.

“The other companies were asleep at the switch,” said an industry consultant who works for one of Palantir's competitors, speaking on condition he not be identified.

“It’s a company that couldn’t win a contract and now doesn’t want another company to win,” added a congressional aide who has seen the operation up close but is not permitted to speak publicly. “It happens all the time. They’re just being more aggressive about it than normal.”

Palantir, which has repeatedly declined to speak publicly, got an inside track soon after its inception in 2004. (Its name comes from the magical crystal balls in the “Lord of the Rings” trilogy.) Thiel, the co-founder of PayPal, got the Central Intelligence Agency to invest $2 million through In-Q-Tel, the agency’s venture capital arm. That granted Palantir access to the inner workings of government contracting — and it quickly learned how the game is played.

Palantir hired a series of power players in 2010: At lobbying firm Patton-Boggs, they included former Sens. John Breaux (D-La.) and Trent Lott (R-Miss.) and a group of their former congressional aides who lobbied on “funding for intelligence analysis tools” and defense appropriations bills and advocated before a variety of agencies.

Also hired to influence the defense appropriations process was Alexander Silbey of ATS Communications, who spent several years on Capitol Hill, including as a senior policy adviser to Rep. James Clyburn (D-S.C.), a member of the House Democratic leadership. At Kadesh and Associates LLC, it was Mark Kadesh, former chief of staff to Sen. Dianne Feinstein (D-Calif.), and Christian Kierig, who was a legislative assistant for Feinstein.

While still a fraction of what the Pentagon’s biggest contractors spend, Palantir’s lobbying expenditures grew from $300,000 in 2010 to over $1 million by 2015.

The company’s federal business also steadily grew. Since 2009, the company has landed contracts worth at least $1.2 billion from the Marine Corps, Defense Intelligence Agency, Department of Justice, FBI, State Department, CIA, Internal Revenue Service, Immigration and Customs Enforcement, Department of Homeland Security and the National Center for Missing and Exploited Children, according to a former lobbyist for the firm....MORE
HT: naked capitalism