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.
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.