PROPOSAL TO PROVIDE STRATEGIC SUPPORT FOR PERCEPTICS •••• November 9, 2012 1 Privileged and Confidential INTRODUCTION The Podesta Group has been honored to once again be part of the Perceptics’ Washington, DC, team over the past several months, and we look forward to continuing our partnership. In the past, our work together has focused on legislative outreach to Capitol Hill to both personal and committee offices to motivate policymakers to turn up the heat on the State Department to rectify the anomalies of the contract bid approval process of AXIOMPASS by Sarakki Associates, Inc. (SAI). We welcome the opportunity to not only continue this work but also expand our role to take on a more proactive congressional campaign and outreach strategy. Based on our conversations with you, we believe that the Podesta Group can work with Perceptics to effectually:  Educate law and policy makers about the integrated solutions and Perceptics’ well-documented successes, and  Proactively seek out opportunities to help establish Perceptics as the industry and thought leader in security imaging and vehicle intelligence products — as well as to become the authoritative voice in Washington when it comes to related topics. The Podesta Group is well suited to construct and implement a successful Washington strategy for Perceptics. We are highly effective, experienced and successful in the transportation, defense, international and appropriations arenas in Washington, DC, because we bring talent and devote resources that other firms cannot match. The Podesta Group is an ideal partner for Perceptics due to our long history and expertise working in these industries, as well as the depth of our bipartisan bench for dealing with the unforeseeable in the current challenging political and budgetary climate. We believe Perceptics has an important success story to tell during an era of budget cuts. We look forward to helping you send your message to key players on Capitol Hill and in the administration and achieve success in Washington. STRATEGIC RECOMMENDATIONS Educate law and policy makers about Perceptics Historically, our work with Perceptics has focused on narrowly tailored, specific objectives that kept our outreach strategy limited in scope to only those lawmakers who had the most sway or who were most likely to be supportive of our objectives at the State Department. We now propose an outreach campaign that will give Perceptics the opportunity to introduce itself as an integrated solutions provider with a 30-year, proven track record to a much larger audience of interested law and policy makers. Gaining congressional champions is vital not only to Perceptics’ short-term objectives at the State Department, but also to develop a long-term strategy of branding Perceptics as an innovative thought leader on border, transportation and vehicle security issues. It will be important to develop relationships with influential members of Congress who will support our issues and also be able to champion our cause with their colleagues. The ultimate goal of this outreach is to 1) educate policy leaders about the integrated solutions Perceptics can offer in terms of vehicle imaging and security, 2) promote Perceptics’ 30-year track record of success, and 3) effectively brand Perceptics as the industry leader of imaging security in the Washington community. We believe a broad range of members is available to go to for support. These include members of the 2 Privileged and Confidential local delegation, cosponsors of relevant legislation and members of various committees of jurisdiction who are already involved in this debate. Through this targeted outreach, we will be able to work with members’ offices to gain their public support, encourage them to weigh in with the administration, and recruit them to support targeted legislation or other initiatives. The Podesta Group will help create opportunities to generate positive support from key members of Congress:  Tennessee delegation. The Podesta Group and STR have both made inroads into many offices of the Tennessee delegation including: Sens. Lamar Alexander and Bob Corker, Perceptics’ home congressman Rep. John Duncan, as well as Rep. Diane Black and Rep. Fincher. We will broaden our outreach to the larger Tennessee delegation, which has several members on influential committees. We will focus the state outreach on those members who sit on the House Transportation and Infrastructure and Armed Services committees to have maximum impact. Several members of our firm enjoy strong working relationships with the Tennessee delegation, including David Morgenstern, who served as Sen. Alexander’s legislative director and chief of staff from 2005 to 2011 and Josh Holly, a Tennessee native who worked on Sen. Alexander’s first Senate campaign.  Cosponsors of pending legislation. In September, the Podesta Group alerted Perceptics of a House-passed piece of legislation that requires the Justice and Homeland Security departments to update Congress regarding their capacity to monitor growing violence along the Mexican border. The bill was sponsored by Rep. Quico Canseco (R-TX), co-chair of the Congressional Border Caucus, who has already been helpful to Perceptics. The Podesta Group will do a thorough analysis of similar bills introduced in the 112th Congress to discern which members have demonstrated their interest in vehicle security issues writ large; border violence and security, specifically; and transportation monitoring, generally. We will compile a list of target members from these pieces of legislation to engage with during the lame-duck session ahead and into the new 113th Congress going forward.  Committees of Jurisdiction. We will look to reach out to several committees of jurisdiction and initiate general conversations with their members regarding the potential role Perceptics can play in the policy issues of the company’s general concern. Many of these committees will have new leadership in the 113th Congress and we should look to engage these members now before they take on new responsibilities in January. For example, the House Transportation and Infrastructure Committee will get a new chairman and the Senate Commerce, Science and Transportation Committee will have a new ranking member. Senate Committees: - Appropriations: including Defense, Homeland Security and Transportation subcommittees - Armed Services: Readiness and Management Support Subcommittee - Commerce, Science and Transportation: Surface Transportation Subcommittee - Environment and Public Works: Transportation and Infrastructure Subcommittee - Finance: Energy, Natural Resources and Infrastructure Subcommittee - Homeland Security and Governmental Affairs - Judiciary: Immigration, Refugees and Border Security Subcommittee 3 Privileged and Confidential House - Committees: Appropriations Committee: Defense, Homeland Security, Transportation subcommittees Armed Services: Readiness Subcommittee Homeland Security Committee: Border and Maritime, Transportation subcommittees Judiciary Committee: Crime, Terrorism and Homeland Security, Immigration Policy and Enforcement subcommittees - Transportation and Infrastructure Committee Promote Perceptics as an industry and thought leader Considering Perceptics’ well-proven, 30-year track record, the company’s integrated solutions should be at the forefront of the border, transportation and vehicle security debate as not only an industry leader with exceptional marks for speed, accuracy and reliability, but also as a thought leader on how to address constantly emerging new security threats. In order to accomplish this goal, we suggest positioning Perceptics in a much more public role in the policy debate. For example, over the last several years, Rep. Henry Cuellar (D-TX), the ranking member of the Homeland Security Committee’s Border and Maritime Security Subcommittee, hosted several field hearings in his district in the border town of Laredo concerning border security. We recommend that Perceptics seek opportunities to testify at these kinds of hearings in the next congressional session. In the alternative, or perhaps in addition, Perceptics should also use similar opportunities to submit formal comments for the congressional record. The Podesta Group would assist in drafting the comments to ensure their relevance and that Perceptics is making the strongest arguments possible. Additionally, we will take the opportunity to disseminate Perceptics’ comments widely to other interested parties so that we begin to see an echo chamber effect within the Beltway. This will ensure key players are constantly met with the continued drumbeat that Perceptics has the best thinking, strategy and products when it comes to border, transportation and vehicle security. Similarly, the Podesta Group will also seek opportunities to highlight Perceptics at relevant events off Capitol Hill. Several think tanks in the Washington area, such as the Brookings Institution, the Center of Strategic and International Studies (CSIS), and RAND host conferences on domestic and international security threats and the potential solutions that should be considered when targeting them. Perceptics testimony, either live or a written submission, will go far in furthering the echo chamber effect and will give Perceptics exposure to an even larger group of interested parties, and possibly, potential purchasers. Perceptics should also look to capitalize on new legislative opportunities that will likely present themselves in the new Congress. For example, Sen. Barbara Boxer (D-CA), chairwoman of the Environment and Public Works Committee, has already stated that she wants to begin work as soon as possible on a more substantive Transportation Reauthorization bill. Similarly, the White House has expressed interest in working on infrastructure investment in the new year. Perceptics has an opportunity to capitalize on this renewed focus on infrastructure spending in Washington to ensure that security issues remain at the forefront of the conversation and targeted with investment dollars. 4 Privileged and Confidential ABOUT THE PODESTA GROUP The Podesta Group is a bipartisan, full-service government affairs and public relations firm based in Washington, DC. Since 1987, the Podesta Group has provided organizations with superior strategic counsel, combined with ingenuity that is unique in Washington. The Podesta Group has a rich history of delivering winning results for our global clients. We specialize in issue and reputation management, using our policy knowledge and public relations expertise to craft strategies to reach success across the policy spectrum. Our senior strategists understand the politics and publicity that determine our clients’ fates. We work with Capitol Hill policymakers, recruit third-party allies, connect with the media and build coalitions to champion our clients’ agendas. Few firms enjoy a winning record of consistently employing the right strategies, combined with superb execution, to deliver results. As you know, our success on behalf of our clients speaks for itself. THE PODESTA GROUP TEAM We will ensure that our partnership is both effective and efficient and that Perceptics receives the consistent, high-level, hands-on expertise and attention it deserves. You understand how our company structure is different than most Washington public affairs firms; our unique “teaming” approach to addressing client needs ensures that we are providing services that none of our competitors can. The majority of our team members are principals, assuring our clients receive top representation and advisers and that the firm’s leadership is engaged on their issues. That’s how we have successfully supported clients ranging from small startups to Fortune 100 companies, trade associations to nonprofits, and local municipalities to foreign governments realize their legislative and public relations goals. We take pride our client service, ensuring regular client communications and mutually developed plans and availability whenever you need us. As under our current partnership, the senior principals you meet are the same people who do the work. For this project, you will have a primary team, and other members of the firm may be brought on for a specific aspect of the project as needed. At critical junctures throughout the fight, we can deploy our entire team on behalf of Perceptics. Following are highlights of members of our team who would provide strategic counsel and work product for your project. Full bios can be found on our website at www.podestagroup.com. 5  Cristina Antelo, a native Texan, provides expertise in transportation, tax, intellectual property and trade. Prior to joining the Podesta Group, she worked with the government affairs practice of a Washington, DC, law firm, at Goldman Sachs Group as a financial analyst and later joined the trading floor in Los Angeles. Cristina was a legal fellow on the Senate Democratic Steering Committee chaired by former Sens. Hillary Clinton (D-NY) and Tom Daschle (D-SD), where she focused her work on Latino outreach and constituent issues.  Jim Dyer is a preeminent Republican strategist with a wealth of experience in the White House and on Capitol Hill. Working with Presidents Ronald Reagan and George H. W. Bush, Jim served as the deputy assistant to the president for legislative affairs. Under President Reagan, Jim was responsible for the overall management of the legislative affairs office, overseeing the defense, foreign policy and appropriations portfolios. With President Bush, Jim served as the principal contact with the US Senate. A veteran of Capitol Hill, Jim served as staff director and clerk of the House Committee on Appropriations for more than a decade, producing 13 annual appropriations bills and supervising a 125-person professional staff. As principal committee liaison to the Republican leadership, he was responsible for planning the House legislative agenda. Privileged and Confidential 6  Jaime R. Harrison draws on his mastery of the legislative process to help clients maneuver complex congressional alignments related to transportation and infrastructure issues, among others. A rising star of the Democratic Party, Jaime is the former director of floor operations and counsel for former Majority Whip James Clyburn (D-SC). He is the first African-American to serve as floor director for a leader of the House of Representatives. Prior to his tenure in the Majority Whip’s office, Jaime was the executive director of the House Democratic Caucus. Accumulating a wealth of experience and a deep bench of relationships, Jaime worked closely with the House and Senate leadership.  Josh Holly provides Podesta Group clients with high-level contacts in the Republican leadership on the Hill as well as national media contacts and innovative advocacy strategies. Prior to joining the firm, Josh served as a senior professional staff member at the House Armed Services Committee for more than six years. In that role, he had a seat at the table for some of the nation’s most important national security decisions and debates. As chief spokesman for the committee, Josh developed and managed a comprehensive strategic communications plan. From his experience with the Iraq surge to making the case against deep cuts to defense spending, Josh understands how a successful public affairs strategy can drive public policy results for clients.  David Morgenstern provides expert advice for Podesta Group clients, drawing on a decade of experience as a leading staffer for Republicans in the US Senate. Before joining the Podesta Group early in 2011, David served as chief of staff and legislative director to former Secretary of Education Sen. Lamar Alexander (R-TN). David oversaw Sen. Alexander’s legislative efforts on a number of Senate committees including the Budget and Appropriations committees, and issues including education, clean air, highways, science, and the Tennessee Valley Authority. Earlier in his career on Capitol Hill, David served as legislative assistant and counsel for then-Sen. Lincoln Chafee (R-RI).  Sean McLaughlin offers clients both substantive and political heft and is a tested authority on technology, intellectual property and competition issues with close ties to Republican leadership. He has been at the helm of some of the most contentious political battles in recent history, serving five years as the leading Republican staffer for the House Judiciary Committee in the role of staff director and most recently, chief of staff. Previously, Sean was a deputy assistant attorney general with the US Department of Justice under President George W. Bush and crafted the department’s legislative strategy and served as the Office of Legislative Affairs’ primary liaison with Congress. Privileged and Confidential