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In the first 100 hours of the House’s legislative calendar, homeland security was a big-ticket item. Not only did the lower chamber up the ante for airports, forcing them to screen all air cargo, but it also targeted ports, calling for complete inspection of all shipments. The move betrayed a calculation by Democrats that being tough on defense and homeland security issues is necessary in the current political environment and to prevail in the 2008 elections. It also sent a clear-cut message to lobbyists for the homeland-security industry that Democrats are aggressively looking for new technologies to meet their goals. “[The DHS] is fully prepared to put their money where their mouth is,” says Gary Krump, a former administrative judge who is vice president and director of federal marketing at the Rhoads Group. “Today’s requirement is to have a better sniffer to stop the bomb; the next generation lets us identify those who may have a predisposition to have the bomb.” Rapiscan Systems, an OSI Systems Inc. subsidiary, has already taken note. The Hawthorne, Calif.-based company puts around 15 percent of its revenues back into the company to develop new technology. But Rapiscan knows it needs to play ball in Washington to increase its profits. Like all companies that deal in homeland security, Rapiscan faces myriad legislative issues involving privacy, liability, customs, and the implementation of the 9/11 Commission recommendations. To compete with Boeing, Northrop Grumman, and L-3 Communications Corp., among other companies, two years ago Rapiscan opened a Washington office and hired more outside lobbyists and agency-specific federal marketing and sales staff. The results have been apparent. Last year the company did $17 million to $20 million in contracts. Over the past six months, the company has had $40 million in sales to the U.S. government, compared with $8 million in 2004. “We plan to dramatically expand in the next few years well above the multimillion-dollar [mark],” says Peter Kant, vice president of government affairs for Rapiscan. KANT TO THE RESCUE In early 2001, Rapiscan was one of many in the nascent homeland-security industry trying to get noticed on Capitol Hill. At the time, the company had Jefferson Consulting Group as its outside lobbying presence, with Kant as a consultant. Kant’s mission was to elevate lawmakers’ interest in security technology, but he wasn’t getting much traction. That all changed after Sept. 11, 2001. The company’s portfolio of scanning equipment and cargo screening was in high demand with the newly formed Transportation Security Administration. After the terrorist attacks, Rapiscan initially focused on port security and law enforcement on the Hill with the help of Kant, Adam Emanuel of Adam Emanuel and Associates, and Steven Palmer of Van Scoyoc Associates. “We had a very, very limited presence in Washington,” says Peter Williamson, vice president of OSI Systems. “As we would go out and talk to agencies, we found that Rapiscan was far too much of a well-kept secret, if you will.” The company decided in 2005 to revamp its strategy of using only outside lobbyists. “Actually, it was one of the things we were recommending at Jefferson — they needed a Rapiscan presence in Washington,” says Kant. OSI Systems decided to bring Kant over to open the D.C. Office. Kant decided to run the office with two separate divisions — one focused on legislative affairs and the other on selling technology to the government. Within six months, Rapiscan had seven people in Washington. While working to make Rapiscan a known entity, Kant faced some political hurdles. The 35-year-old Democrat, who served under President Bill Clinton in the Agriculture Department, became Rapiscan’s face in Washington at just the wrong time, when partisan bickering in Congress was at its worst in years — and Republicans ruled both chambers with impunity. “I had to learn how to work on the other side,” he says. But he adds, “I didn’t come with a lot of political baggage.” One way the company has been successful is by finding bipartisan congressional advocates in locations where its plants are based, including Missouri, Michigan, California, and New Jersey. Rapiscan also found political allies in Mississippi in Republican Sens. Trent Lott and Thad Cochran as well as Rep. Gene Taylor, a Mississippi Democrat, after Hurricane Katrina. Rapiscan has a plant in Ocean Springs, Miss., which reopened five days after the hurricane and was the first business to hire additional help in that congressional district. Since Katrina, Rapiscan has gotten valuable assistance from the Mississippi delegation and other lawmakers. “We went pre-Katrina with almost zero machines in Iraq to over 200 machines there,” says Kant. The company’s Mississippi plant builds machines that detect suicide bombers. The machines were in high demand after a suicide bombing in northern Iraq killed more than 20 people in a U.S. military tent. “[Lawmakers' help] wasn’t appropriations or an earmark, but on policy issues,” Kant says. “[The Defense Department] was able to work with the Hill and accelerate the process. Within 60 days, we were having multiple shipments to Iraq to prevent suicide attacks.” (Rapiscan does not have any no-bid contracts and actually advocates for competitive contract awards, says Kant.) Having an X-ray machine in at least 400 U.S. airports has also helped the company make contacts within multiple congressional districts. GROWTH AND MORE GROWTH Liability and privacy issues abound for homeland-security companies, and Rapiscan is no different. The company has steered clear of training or providing operators for its machines, which have been Safety Act certified, a process that includes liability protections for companies. Today Rapiscan has 10 staff members in Washington. And although the company just upped its outside lobbying budget from $16,000 to $20,000 a month, using firms such as Adam Emanuel and Associates, DiNovo Strategies Inc., and Innovative Federal Strategies, its spending is still much lower than that of its competitors. In 2005, Boeing’s in-house operation alone reported spending more than $9 million lobbying, according to Senate records. And even though Kant represents Rapiscan on Capitol Hill, he only recently registered as a lobbyist after it became apparent that more than 20 percent of his job was spent directly lobbying Congress. Rapiscan also decided last year to join the political money game in a more coordinated effort, by creating a political action committee. Kant says he expects the PAC to raise $50,000 to $75,000 a year and donate equally to both parties. Previously, about 60 percent of the political donations from the firm’s executives went to Republicans. And two weeks ago, the company opened an office in Brussels to be closer to the European Union. Rapiscan does about 60 percent of its business overseas. How Rapiscan and other homeland-security companies will fare in the new political climate is still unclear. Lawmakers are expected to increase oversight and investigation of homeland-security issues such as government contracts. “Peter King was hardly a shrinking violet when it came to oversight,” says John Clerici of McKenna Long & Aldridge, who now represents Smiths Detections, a competitor of Rapiscan, of the former chairman of the House Homeland Security Committee. Yet lobbyists say they are more concerned about what Rep. Henry Waxman (D-Calif.), chairman of the House Committee on Government Reform, will do with lobbying reform and whether it will create an environment in which members of Congress won’t go to bat for companies to help them secure contracts. “The ethics and lobbying reform will, if it hasn’t already, impact the willingness of members to intercede on behalf of a constituent. They will want to make sure they are clearly on the right side of whatever lines are out there,” says Robert Efrus, vice president of the Implementation Group, a consulting firm that focuses on federal marketing.
Anna Palmer can be contacted at [email protected].

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