New Balance's Cronyism Invades Defense Bill

New Balance's Cronyism Invades Defense Bill
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Who should decide what running shoes should be worn by new military recruits? Currently, new Army and Air Force recruits can use a one-time stipend to choose from about a dozen different shoes from multiple manufacturers. Anyone familiar with running -- especially long distance running -- knows that shoe choice is exceedingly important for not only comfort, but also to prevent injury. Despite the differences that exist among the military’s roughly 250,000 new recruits every year, there is an effort afoot to force those recruits to wear shoes made by just one company.

During last month’s mark up of the National Defense Authorization Act (NDAA), Massachusetts Democrat Niki Tsongas added language that would effectively force the Department of Defense (DoD) to provide only New Balance athletic shoes for new military recruits.

Maine Republican Bruce Poliquin praised the effort, saying that New Balance “manufacture[s] the highest-quality shoes in the world.” Having pride in domestic manufacturers – especially those located in one’s sprawling congressional district – is understandable, but if those shoes are truly the highest-quality in the world there should be absolutely no need to eliminate shoe choices for young military recruits.

Thankfully, South Carolina Republican Mark Sanford is stepping up.

This week, the House will likely vote on his amendment to strip the Tsongas-New Balance language from the NDAA. Every lawmaker -- Republican and Democrat alike -- should join Sanford in standing up for the men and women of our military. Their comfort and health should come before the parochial politics of corporate welfare. Sadly, many will not as they happily embrace Washington’s corrupt nexus of big business and big government.

To fully understand how a shoe mandate and corporate welfare became a flashpoint in the annual debate over our nation’s military posture requires a mini history lesson.

In 1941 -- as America was watching wars escalate in the Pacific and Europe -- Congress adopted the Berry Amendment as a rider to promote the purchase of American-made goods by the military. It was made permanent in 1994 and subsequently codified in 2002, with various tweaks along the way. (Of course, it is not 1941 anymore and the practical impact of this restriction makes it harder for the military to quickly and affordably obtain necessary equipment.) While the Berry Amendment requires the military to buy uniforms from American manufactures, the DoD has not considered athletic shoes part of the uniform. In addition to increasing shoe choice, there has not been a wholly American-made athletic shoe that complied with the Amendment’s requirements.

Two years ago, the DoD announced it would begin the process of searching for a Berry Amendment compliant athletic shoe for new recruits as long as those shoes met the department’s guidelines. Enter New Balance.

That August, the company unveiled a new prototype that it believed could meet the Berry Amendment requirements and become “standard-issue in boot camp.” The Army Times noted at the time that “details about the shoemaker’s 950v2 sneaker emerged after a visit from lawmakers” to a factory in Massachusetts. After touring New Balance’s “biomechanical research lab, prototype lab and manufacturing floor,” Reps. Niki Tsongas (D-MA) and Mike Turner (R-OH) “[sat] down with executives to discuss the potential of a Pentagon policy change.” Turner, it should be noted, is chairman of a House Armed Services subcommittee that oversees Army and Air Force acquisition programs.

It was no accident that Tsongas and Turner were at the New Balance facility that summer because New Balance had been laying the groundwork for a major lobbying push for years.

In 2007, the company began a low-level lobbying effort in the House, Senate and at the Department of Defense on defense-related issues under the generic description of “Providing company business overview to members and staff.” New Balance continued that approach until 2010, when the company’s lobbying firm McDermott Will & Emery LLP began “Address[ing] legal and policy issues regarding the procurement of athletic footwear for U.S. military personnel that is compliant with the Berry amendment.” Starting in 2013, the company’s new lobbying firm, Strategic Marketing Innovations (SMI), simply noted the company was lobbying the DoD on “Defense acquisition.” A 2015 report for the fourth quarter notes both “Defense acquisition” and the aforementioned “Berry amendment.” Since 2013, New Balance has spent $230,000 in lobbying expenses, nearly all of which went to SMI lobbying the Department of Defense on the amorphous “Defense acquisition” issue. It should also come as no surprise to anyone that the two lobbyists working on behalf of New Balance have intimate congressional ties to both Massachusetts and Maine. Bill McCann was a longtime chief of staff to former Massachusetts Democrat Congressman Martin Meehan, and Samuel Horton was a former legislative assistant to former Maine Republican Senator Olympia Snowe.

This alone reeks of the revolving door politics the political left is usually swift to condemn, but it gets even worse.

Last month, New Balance revealed the company disengaged from the fight over the Trans-Pacific Partnership last year because it had cut a secret deal with the Obama administration. New Balance vice president Matt LeBretton told National Public Radio the “trade ambassador came to us and said, ‘look, I know you have this other initiative - you want to sell shoes to the military?’”

The “big, sweet military contract,” as NPR described it, came at a price though.

LeBretton told the Boston Globe that the company “swallowed the poison pill that is TPP so we could have a chance to bid on these [military] contracts” -- presumably the contracts it had been lobbying the DoD for over the past several years. During his NPR interview LeBretton added “we were told that we weren't to speak about this publicly in any way, shape or form. And we weren't to criticize the TPP or the administration in any way, shape or form. We took the deal.”

The reason New Balance broke its silence was because the DoD determined the shoes provided for consideration did not meet “cost standards, and one of the models did not meet durability standards.”

We now know that it was right at this time that Tsongas and Poliquin sprung into action to include the New Balance amendment into the annual NDAA. If the provision ultimately becomes law, it would effectively force the DoD to buy New Balance athletic shoes for new military recruits. By virtue of successful lobbying, New Balance would become the sole provider of athletic shoes for newly enlisted military members.

As The Heritage Foundation’s Bryan Riley explains, the new “mandate would give New Balance a substantial financial windfall, since new recruits could no longer use their allowances to buy” from Brooks or Asics, which are currently available to Army and Air Force recruits along with New Balance. According to the Congressional Budget Office (CBO) the requirement would cost taxpayers an additional $50 million over the next five years. Riley also notes that “Of the different types of shoes New Balance offers, only three would be available to new recruits.”

The DoD has expressed serious concerns over the Tsongas amendment, including safety concerns. A study conducted by the Army found a strong correlation between reduced injury rate and variety of running shoes available. Because New Balance is the only shoe manufacturer to make a Berry Amendment compliant shoe, recruits would have their choice drastically reduced, potentially raising the injury rate during basic training.

Some will point to Michigan-based Saucony as another potential provider of Berry Amendment compliant athletic shoes, and argue more choice is on the way. There is absolutely no indication those shoes will pass the DoD’s quality tests -- the same tests that stymied New Balance for years -- in the immediate future, leaving recruits with just one shoe choice: New Balance. Of course, Wolverine World Wide, which owns Saucony, is actively working to ensure their shoes make the cut. The company has been lobbying on “Issues related to warfighter equipage, footwear contracting, Berry-Amendment compliant athletic footwear.” The company’s lobbying on “Berry compliance for athletic footwear” dates back to 2013 as well. Since then, Wolverine has spent nearly half a million dollars lobbying (though not all of that was geared toward this specific issue).

In typical fashion, the tentacles of the manufacturing supply chain are now woven well beyond Michigan, Massachusetts and Maine. The Charleston-based Post and Courier noted over the week that Spartanburg, South Carolina “is home to two textile manufacturers that provide materials to New Balance and Saucony.” It makes Mark Sanford’s stand all the more impressive.

Using the legislative process to limit choice and competition is par for the course in our corrupt political system, but doing so at the expense of America’s brave sons and daughters outrageous. So the question for House lawmakers is simple: do you want new military recruits to have a choice in athletic shoes or do you want them forced into a single brand?

The answer should be easy.

Michael A. Needham is chief executive officer of Heritage Action for America.

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