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Introducing K Street Confidential

For decades, K Street has been the hub to the world’s most connected individuals in Washington – lobbyists.

These lobbyists have one role: to use their connections to further their clients’ agendas.

So, if politicians are puppets, then lobbyists are the masters pulling their strings.

Following this manipulation can lead to serious profits. That’s why we’ve created K Street Confidential – a regular column that gives you a glimpse into the world of the real power players in Washington.

The Century-Old Titan on K Street

Now, if I walked up to you offering a briefcase full of money, and asked you to get all of your friends to follow Capitol Hill Daily, would you take it?

Whether you’d take the money or not, you’re probably going to feel creeped out by the exchange… and slightly dirty, too.

Now imagine if a close friend swung by your place and told you, “There’s no better place in the world for political information than Capitol Hill Daily.”

First, I’d say that you have some pretty smart friends. And second, with that seal of approval, you wouldn’t think twice about signing up and getting your friends to do the same.

That, in essence, is the secret to D.C. lobbying. It’s not just about bribing for influence… It’s bribing for influence through established relationships. It’s friends persuading friends over lunch, drinks, casual conversation and laughter.

The Game

In the world of lobbying, there are few players larger than General Electric (GE).

GE is a titan in the lobbying arena, with just about $300 million spent over the last decade. That’s an average of $30 million per year strictly dedicated to lobbying efforts. The only team that has them beat is the U.S. Chamber of Commerce, which is a lobbying group.

That makes GE the second-largest lobbying effort out there, but the largest of any company or non-lobbying entity.

Now, the word on K Street is that GE is beefing up its lobbying efforts even more by signing another firm to its arsenal.

As of last Friday, GE hired The Ringo Group to lobby for its aviation division. It’s no coincidence that GE has recently put a tremendous amount of energy and money into that same subdivision.

GE Aviation handles a wide spectrum of aviation business, but its bread and butter is engine production and distribution. It’s one of the world’s leading providers of jet engines.

It supplies turboprop and turbo shaft engines for commercial and military use – everything from drones to Boeing 737s to private jets.

And business is booming. Projections indicate that active GE engines in aircrafts will grow from 25,000 to 40,000 over the next five years.

That would represent half of all airplanes in use today…They say that a plane takes off with a GE engine every two seconds.

These prospects make GE’s future look tremendously bright. But keep in mind, GE doesn’t have it made in the shade.

There are always a number of factors that could negatively affect its business, especially when it comes to government legislation.

That’s why GE is stockpiling lobbyists. And with a slew of lobbyists already on retainer, GE is covered in all aspects of legislation… except one.

And that’s where The Ringo Group comes into play.

Soliciting Legislation

When developing new technology, there’s one key issue that GE needs assistance with…

“Air worthy certificates” – FAA-required approvals that permit the equipment to be used in flight.

You see, by changing the characteristics of engines, some of GE’s new technologies and qualities may fall outside of the FAA’s realm of airworthiness.

That’s precisely where Durwood W. “Skip” Ringo can help GE. He’s a man with 25 years’ worth of established relationships within the U.S. Senate.

Not only is he well connected in the Senate, but he’s tied to the Aviation Committee and the DOD. And he can lobby for GE’s ability to change the rules, so to speak… To rewrite the framework for what’s considered “air worthy.”

A Worthy Investment

Tracking the moves on K Street can often lead us to extraordinary opportunities to profit. And GE’s moves are no exception.

Of course, with any stock, you need a catalyst to justify a “Buy.” And GE’s efforts to expand its aviation division certainly qualify as such a catalyst.

In fact, GE acquired Italy based Avio S.p.A for a whopping $4.3 billion in December, 2012 in an effort to expand its civil and military aircraft market potential.

And with a solid 3.4% dividend, which indicates future earnings confidence, now’s the time to get on board, while there’s still time.

Especially while GE is taking the appropriate measures to keep government legislation from standing in the way of profit potential.

In Pursuit of the Truth,

MartyB

Martin Biancuzzo

Marty Biancuzzo

, Technology Analyst

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