Lisa Rein writes: The world’s largest defense contractor has agreed to pay $4.7 million to settle charges that it illegally used government money to lobby top federal officials to extend its contract to run one of the country’s premier nuclear weapons labs.

Over five years starting in 2009, top executives for Lockheed Martin — who were being paid by the federal government to run Sandia National Laboratories — ran a fierce campaign to lobby members of Congress and senior Obama administration officials for a seven-year extension of their contract, according to the settlement the Justice Department announced Friday.

Lockheed executives, who hired a former New Mexico congresswoman to help them, didn’t just press people with influence to re-hire them for a deal worth $2.4 billion a year. 

Mizer said the lab, a subsidiary of Lockheed, allegedly used federal money to lobby Congress and other federal officials from 2008 and 2012, “to receive a non-competitive extension” of its contract in violation of federal law.

The case opened a window on the inner workings of power and influence in Washington. It’s not surprising that a big, politically connected defense contractor would lobby hard to keep a lucrative slice of federal business. But this case went further. It was taxpayers, not Lockheed’s corporate lobbying arm in Bethesda, Md., who paid for the influence peddling.

Excerpt from guidance that former New Mexico Republican Rep. Heather Wilson gave Lockheed Martin officials to ensure that the company’s contract to run a premier nuclear lab would be renewed. (Source: Energy Dept. Inspector General)

To clinch the contract extension, Sandia labs officials hired high-priced consultants — including a former congresswoman who was paid $226,000 — to write up a “contract extension strategy.” Among the tactics suggested by Heather A. Wilson (R-N.M.) were “working key influencers” by targeting then-Energy Secretary Steven Chu’s staff, and even his family, friends and former colleagues at another federal lab, all with the goal of keeping Lockheed Martin in charge of Sandia in Albuquerque.

Wilson was not just on Lockheed’s payroll. From 2009 through 2011, she had consulting jobs for Lockheed and three other contractors managing the Energy Department’s national lab, charging taxpayers a total of $450,000.

Wilson, who left Congress in 2009 after an unsuccessful run for the Senate, has publicly denied that she took part in any lobbing involving the Sandia contract. But Friedman at the time that she was “deeply, deeply involved” in Lockheed’s effort to renew its contract.

he world’s largest defense contractor has agreed to pay $4.7 million to settle charges that it illegally used government money to lobby top federal officials to extend its contract to run one of the country’s premier nuclear weapons labs.

Over five years starting in 2009, top executives for Lockheed Martin — who were being paid by the federal government to run Sandia National Laboratories — ran a fierce campaign to lobby members of Congress and senior Obama administration officials for a seven-year extension of their contract, according to the settlement the Justice Department announced Friday.

Congresswoman who was paid $226,000 — to write up a “contract extension strategy.” Among the tactics suggested by Heather A. Wilson (R-N.M.) were “working key influencers” by targeting then-Energy Secretary Steven Chu’s staff, and even his family, friends and former colleagues at another federal lab, all with the goal of keeping Lockheed Martin in charge of Sandia in Albuquerque.

The Rocky Road to Globalization

European and most Asian financial markets rebounded strongly as China’s stocks continued to slide. The Shanghai Composite index dropped 7.6 percent, just a day after its biggest loss in eight years triggered worldwide market turmoil. Beijing’s central bank followed by cutting interest rates and banks’ reserve requirements in hopes of ending the mayhem that erased a combined $5 trillion from global equity markets on Monday.

Dow futures indicated a sharply higher open on Wall Street, with premarket trading showing an initial gain of around 600 points, one day after a roller-coaster session that included a 1000-point drop. Inside China, government censors appeared to crack down on editors at the state-run People’s Daily: A day after it referred to the rout as “China’s Black Monday,” the newspaper had no mention of the financial upheaval.

David M. Smick writes:  Today the big thinkers are debating whether a growth strategy for Greece (if not the entire eurozone periphery) should entail further debt relief, this time from public creditors.  But here’s the thing: Are the smartest guys missing an even more important picture? The entire world’s public and private debt, depending on the means of measurement, now exceeds a whopping $180 trillion. What’s the significance of this massive debt? Is it sustainable? Is it one reason for the world’s subpar growth? Nobody knows. If a global deflation scenario unfolds, the level of the world’s real debt will grow to the point where massive rolling defaults could become a terrifying fact of life. In an aggressive inflation scenario, on the other hand, the debt’s value in real terms will shrink, but at a brutal cost to the livelihoods of working families if not to capitalism itself. The obvious solution is to control the growth of future debt while encouraging a global explosion in innovation and productivity growth. This is what the British did in dealing with their horrendous debt after the Napoleonic Wars.

In an environment of record-low global interest rates, in which a lot of economic activity has been moved forward, an explosion in innovation and higher productivity growth may be the only safe way eventually out of today’s low interest rate trap. But an explosion in innovation that leads to higher global growth entails the issue of human motivation. People have to believe the future will be better than the past. That’s not the case today. Yet in the period since the 2008 crisis, the smartest guys have consistently argued that money is the driver of human behavior.

In response to the crisis, for example, the world’s governments and central banks bet the farm on a giant money-driven rescue operation the size of which the world had never before seen. More than $17 trillion, or 25 percent of global GDP, went for stimulus, bailouts, and guarantees. The result: After an initial sugar rush of economic activity, global growth, trade, and cross-border financing since 2010 have all plummeted. Today’s slow-growth environment is helping spawn a geopolitical nightmare. It turns out the massive flood of money failed to drive human behavior, at least to a level expected by historic standards. The lesson here is that money is just a measuring tool. As Adam Davidson wrote in the New York Times, “What actually matters is what we make and do and feel and want.”

Stated in short: In achieving higher levels of economic growth, attitude matters. Record low interest rates and generous fiscal stimulus are meaningless if people have no confidence in the future. So where does this all end? The world faces a troubling nexus of unprecedented debt, record low interest rates, exploding central bank balance sheets, declining growth, worldwide asset prices that may or may not reflect true value because the policymakers have their thumbs pressing down on the scale, a global currency war against the dollar as dollar-denominated debt is approaching $15 trillion, all at a time when polls consistently show people believe their children’s future is in jeopardy. Does anybody know the end game to this bewildering scenario? Or should we get the smart guys on the line?   Confidence about the Future

Yichio Wang writes: The People’s Bank of China (PBOC) has set its official guidance rate down by almost 3%, from 6.21 to 6.39 yuan per dollar, the lowest point in almost three years. Much of this was accomplished in one day with a decline of 1.9% (see chart below). It also changed the way it calculates the reference rate around which the yuan is allowed to trade in a two percentage point band. Last week, China’s currency dropped by a cumulative 4.4% against the U.S. dollar before recovering to trade very near the target.

This move has been explained by PBOC as a key reform that allows the currency’s value to be more responsive to market forces. China has been urging the IMF to include the yuan in the basket of the Special Drawing Rights (SDR), in order to boost international use of the yuan. As China is being accused of controlling its currency, this free-market reform can help China to have the yuan join the IMF reserve currency group.

The devaluation also suggests a growing worry about the growth after China’sexports tumbled 8.3 percent in July. A weaker currency can make Chinese exports cheaper and more competitive, while many other efforts to boost the economy seem useless.

Moreover, in order to keep the exchange rate stable, PBOC has to sell its dollar holdings to bolster the yuan’s value, which in turn offsets the effect of easing policies. As a result, China’s currency reserves have decreased $315 billion in the year to $3.65 trillion in July. Therefore, the currency devaluation could lower the cost of stabilizing the exchange rate and enhance the effect of monetary policies. One off for China?

The daily life of the modern office worker is an ordeal with ever-changing trends. Sometimes workers are overstimulated to the point of burnout. At others they are understimulated to the point of boredom. Bookshelves are crowded with literature on employee psychopathology. But one phenomenon is often overlooked when people research the daily office life that takes place between the meetings and the water cooler: toxic workers who contaminate the workplace and make things a nightmare.

German psychologist Heidrun Schüler-Lubienetzki has now come up with a name for these types of people: “toxifiers.” For several years now, Schüler-Lubienetzki and her husband have been coaching office workers in a number of companies — employees ranging from average income workers right up to powerful executives. Soon the couple began noticing similar problems among their clients. Increasingly, similar types of people were being portrayed in their client’s stories; a type of person who utilizes all means in order to advance his or her career.

Schüler-Lubienetzki and her husband noticed a vast spread of this phenomenon, prompting them to publish a German-language book this year titled, “Difficult People in the Workplace.”

Based on her research, the psychologist assumes that five to 10 percent of all employees have a toxic nature. Women and men can be affected to the same degree. And anyone can turn into a victim — the colleague walking past in the hallway, the person in the meeting, even the boss.

The trouble with toxifiers is that they are difficult to detect. Often, toxifiers are even popular amongst colleagues, perceived as friendly and amiable. It’s only after a while that co-workers begin to notice that the toxifier is responsible for bullying an entire workplace. But it is possible to see signs.

“If a person starts to polarize — either by being extremely despised or being very loved by others — you could be dealing with a toxifier,” the authors say. Likewise, toxifiers can also often be unpredictable. One moment they can be charming and courteous, and the next they can swiftly switch into a mode of ruthless and inconsiderate behavior.

Often, they are sensitive people who are masters at the art of sniffing out the atmosphere around a team of co-workers and exploiting it. Every action — whether a performance review with a supervisor or a heart-to-heart talk with a co-worker — serves only one purpose: to execute both control and power. Toxifiers gather information in very calculating ways only to later ruthlessly exploit those insights. They deliberately bully and psychologically torture their colleagues. Indeed, the act of consciously harming others is part of the standard repertoire of the toxifier.

Surprisingly, the scheming colleague often remains undetected. Lubienetzki explains that toxifiers act in extremely skillful ways, often even establishing friendships with their victims. If they regard their supervisor as weakened, they often seek to gain control in the office through a kind of hostile takeover.

So what character traits can be found in a toxifier? He or she is not your occasional perpetrator who takes advantage of a situation only when opportunity knocks. Toxifiers act in premeditated, categorical ways with the sole goal of obtaining personal power and reaping its rewards: status, recognition, money and sometimes even sexual relations.

“Toxifiers are drawn to power like a moth to a flame,” Schüler-Lubienetzki says. This is what makes this type of person so successful and dangerous. Whenever arguments occur, the toxifier thrives. The subject matter of the dispute is unimportant because it is only the means to an end. Toxifiers enjoy it when conflicts escalate and they do not shy away from publicly humiliating their critics. Schüler-Lubienetzki describes a case in which a top manager threw his colleague’s mobile phone into the trash can because he got annoyed by the ringing. In truth, though, the episode had to do with power and submission.

Poor leadership provides the ideal breeding ground for toxifiers. If a supervisor shies away from conflict, it creates an open field in which the perpetrator can operate in scrupulous ways.

Schüler-Lubienetzki says that some fields are literally suffering from epidemics of toxifiers in the workplace. They include the political sector, the art market, financial markets and the media. In all of these areas, the authors conclude, “toxic skills are nearly essential for survival.

As France faces a financial hit for suspending its much-maligned sale of a Mistral warship to Russia, some observers have a suggestion to mitigate the pain: Let the European Union buy it.

“I would have liked to see the EU buy that warship instead of it going in some freezer compartment,” says Amanda Paul, an analyst at the European Policy Center in Brussels, even as she acknowledged it would be an unlikely move. “It would have been nicer to see the EU take that step, when they are supposed to be strengthening their foreign and defense policy.”

Such a move, she says, would have ensured the deal remains a done one. Otherwise, she says, “I’m sure at some point the Russians will get their hands on it.” !

The transaction, she notes, could have accomplished two goals with one move – at least for those who want to see the EU bolster its defense capabilities. That issue is front and center at the NATO summit in Wales, where both the amount and nature of NATO member spending are under intense debate.

French officials announced Wednesday that France would not deliver the Mistral-class ship, part of a $1.7 billion weapons deal, saying that the conditions “aren’t right,” despite a possible cease-fire in Ukraine. The statement left ambiguous whether the deal could move forward in the future and under what circumstances.

France was under intense pressure to scrap the deal, even though at home, many decried the loss of jobs and the hit the economy would take.

“It was simply extremely difficult to defend morally the contract,” says Paul Ivan, an expert on European sanctions also at the European Policy Center. And France had been facing the glare of other countries who have taken a bigger hit from EU sanctions imposed on Russia, and Russia’s subsequent retaliation.

In other words, this evens the score, as much as one can when it comes to comparing bilateral trade relationships.

France’s decision also sends an important message before the EU is expected to make a new announcement about toughening sanctions on Russia tomorrow.

There are still deep divides across Europe about how to punish Russia, and who stands to lose what. But with the Mistral deal out of the way – for now – it takes one more blemish off the record.

“No other country had such a big defense contract,” says Vivien Pertusot, head of the Brussels office of the French Institute of International Relations.  ”It was not small stuff. It was very, very visible, and very big.”