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Congratulations to us! Speak concerning the artwork of the deal! Whether we all know it or not, in the wake of those presidential Fourth of July festivities on the Washington Mall (“the biggest ever fireworks”), we’re all Saudis now. And here’s the excellent news: it only value the Pentagon $1.2 million additional — which, within the twenty-first century, is army chump change — for those spectacular fly-overs, the uniformed personnel gathered within the rain, and the otherwise largely ineffective tanks hovering right here and there in Washington. It did, in fact, value the National Park Service another almost $2.5 million, however who cares? And then there was that $1.7 million the town of Washington needed to spend to entertain the president in the type to which he’s grown accustomed, drastically draining its Emergency Planning and Safety Fund. But, hey, a small matter certainly beneath the circumstances. In any case, what a spectacular celebration it proved to be, although less of U.S. army may than of Pentagon value overruns.
I mean, overhead that day was the costliest weapons system in history, the F-35, that reportedly might never really be ready for fight. Then there have been these Blue Angel jets that, in accordance with the Washington Submit, value $10,000 an hour to operate, and F-22 Raptors for which the American taxpayer forked over considerably greater than $100 million apiece, and that’s just to start out down the listing. No marvel that presidential spectacular on the Mall overran us all.
And hey, for his favs, the Saudis and their charming crown prince, President Trump solely lately swept aside congressional objections, declared a “national emergency,” and slammed by way of $8 billion in arms and military-equipment gross sales in order that they’ll never come up brief of their brutal conflict in Yemen. And that was earlier than, on the Fourth, he bought the rest of us on each wildly out-of-whack weapons procurement program we American taxpayers had ponied up for in these years (whether or not we knew it or not).
So, as honorary Saudis, we should always now feel splendid certainly. And as TomDispatch regular and Pentagon skilled William Hartung stories at present, it’s only going to get higher within the Trump years in relation to the merger of big weapons makers, cost-overruns, and the military-industrial corruption of Congress. Simply wait until July 4, 2020, in the midst of an election campaign season, when, as already promised, Donald J. Trump will return to the Washington Mall to provide us a flyover so spectacular we really gained’t know what hit us. Tom
The Army-Industrial Complicated on Steroids
By William D. Hartung
When, in his farewell handle in 1961, President Dwight D. Eisenhower warned of the risks of the “unwarranted influence” wielded by the “military-industrial complex,” he might never have dreamed of an arms-making company of the dimensions and political clout of Lockheed Martin. In a great yr, it now receives as much as $50 billion in authorities contracts, a sum larger than the operating finances of the State Department. And now it’s about to have firm.
Raytheon, already one of the prime 5 U.S. defense contractors, is planning to merge with United Applied sciences. That firm is a serious contractor in its personal right, producing, among different issues, the engine for the F-35 combat aircraft, the costliest Pentagon weapons program ever. The brand new agency shall be second only to Lockheed Martin in terms of consuming your tax dollars — and it might end up much more powerful politically, because of President Trump’s fondness for hiring arms business executives to run the national security state.
Simply as Boeing benefited from its former Senior Vice President Patrick Shanahan’s stint as appearing secretary of defense, so Raytheon is more likely to cash in on the nomination of its former prime lobbyist, Mike Esper, as his successor. Esper’s elevation comes shortly after another former Raytheon lobbyist, Charles Faulkner, left the State Department amid fees that he had improperly influenced selections to sell Raytheon-produced guided bombs to Saudi Arabia for its brutal air conflict in Yemen. John Rood, third-in-charge on the Pentagon, has worked for both Lockheed Martin and Raytheon, while Ryan McCarthy, Mike Esper’s alternative as secretary of the Military, labored for Lockheed on the F-35, which the Undertaking on Authorities Oversight (POGO) has decided might never be ready for combat.
And so it goes. There was a time when Donald Trump was enamored of “his” generals — Secretary of Protection James Mattis (a former board member of the weapons-maker Basic Dynamics), Nationwide Safety Advisor H.R. McMaster, and White Home Chief of Employees John Kelly. Now, he appears to have a crush on personnel from the economic aspect of the military-industrial complicated.
As POGO’s research has demonstrated, the infamous “revolving door” that deposits protection executives like Esper in prime national safety posts swings both methods. The group estimates that, in 2018 alone, 645 senior authorities officers — principally from the Pentagon, the uniformed army, and Capitol Hill — went to work as executives, consultants, or board members of one of the prime 20 protection contractors.
Fifty years ago, Wisconsin Senator William Proxmire identified the problem when he noted that:
“the movement of high ranking military officers into jobs with defense contractors and the reverse movement of top executives in major defense contractors into high Pentagon jobs is solid evidence of the military-industrial complex in operation. It is a real threat to the public interest because it increases the chances of abuse… How hard a bargain will officers involved in procurement planning or specifications drive when they are one or two years away from retirement and have the example to look at of over 2,000 fellow officers doing well on the outside after retirement?”
In other phrases, that revolving door and the issues that go together with it are anything however new. Proper now, nevertheless, it seems to be spinning quicker than ever — and mergers like the Raytheon-United Technologies one are only more likely to feed the phenomenon.
The Final Supper
The merger of Raytheon and United Technologies should convey again reminiscences of the merger growth of the 1990s, when Lockheed mixed with Martin Marietta to type Lockheed Martin, Northrop and Grumman shaped Northrop Grumman, and Boeing absorbed rival army aircraft producer McDonnell Douglas. And it wasn’t just a matter of massive companies pairing up either. Lockheed Martin itself was the product of mergers and acquisitions involving almost two dozen corporations — distinctly a story of massive fish chowing down on little fish. The consolidation of the arms business in these years was strongly inspired by Clinton administration Secretary of Defense William Perry, who held a dinner with protection executives that was later dubbed “the last supper.” There, he reportedly advised the assembled corporate officers that a third of them can be out of enterprise in 5 years if they didn’t merge with one among their cohorts.
The Clinton administration’s encouragement of defense business mergers would show something however rhetorical. It will, as an example, provide tens of hundreds of thousands of dollars in merger subsidies to pay for the closing of crops, the shifting of kit, and other necessities. It even picked up a part of the tab for the golden parachutes given defense executives and corporate board members ousted in those offers.
Probably the most egregious case was certainly that of Norman Augustine. The CEO of Martin Marietta, he would truly take over on the helm of the much more highly effective newly created Lockheed Martin. Within the process, he acquired $eight.2 million in funds, technically for leaving his publish as head of Martin Marietta. U.S. taxpayers would cover greater than a 3rd of his windfall. Then, a congressman who has solely gained stature in recent times, Consultant Bernie Sanders (I-VT), began to struggle again towards these merger subsidies. He dubbed them “payoffs for layoffs” as a result of executives acquired government-funded bailouts, while an estimated 19,000 staff have been laid off in the Lockheed Martin merger alone with no specific taxpayer help. Sanders was truly capable of shepherd by means of legislation that clawed again some, but not all, of those merger subsidies.
In accordance with one argument in favor of the merger binge then, by closing half-empty factories, the new companies might cost much less overhead and taxpayers would profit. Nicely, dream on. This never got here near occurring, as a result of the newly merged industrial behemoths turned out to have even higher bargaining power over the Pentagon and Congress than the unmerged corporations that preceded them.
Draw your personal conclusions about what’s more likely to occur on this next spherical of mergers, since value overruns and profitable contracts continue apace. Despite this dismal document, Raytheon CEO Thomas Kennedy claims that the new company pairing will — you guessed it! — save the taxpayers money. Don’t maintain your breath.
Influence on Steroids
While Donald Trump briefly expressed reservations concerning the Raytheon-United Applied sciences merger and a few members of Congress struck notes of caution, it has been welcomed eagerly on Wall Road. Among the many reasons given: the truth that the two corporations usually make totally different merchandise, so their union shouldn’t scale back competition in any particular sector of protection manufacturing. It has also been claimed that the brand new combo, to be generally known as Raytheon Technologies, may have extra funds obtainable for research and improvement on the weapons of the longer term.
But focusing on such considerations misses the large image. Raytheon Technologies may have extra money to make marketing campaign contributions, extra money to hire lobbyists, and more production sites that can be used as leverage over members of Congress detest to oppose spending on weapons produced in their states or districts. The basic example of this phenomenon: the F-35 program, which Lockheed Martin claims produces 125,000 jobs spread over 46 states.
Once I took a cautious take a look at the corporate’s estimates, I found that they have been claiming roughly twice as many jobs as that weapons system was truly creating. In truth, more than half of F-35-related employment was in simply two states, California and Texas (though many different states did have modest numbers of F-35 jobs). Even when Lockheed Martin’s figures are exaggerated, nevertheless, there’s no query that spreading protection jobs across the country provides weapons manufacturers unparalleled influence over key members of Congress, a lot to their profit when Pentagon finances time rolls round. In truth, it’s a commonplace for Congress to fund extra F-35s, F-18s, and comparable weapons techniques than the Pentagon even asks for. A lot for Congressional oversight.
Theoretically, incoming defense secretary Mike Esper should recuse himself from major selections involving his former firm. Among them, whether or not to proceed selling Raytheon-produced precision-guided bombs to Saudi Arabia and the United Arab Emirates (UAE) for his or her devastating air struggle in Yemen that has killed exceptional numbers of civilians.
No worries. President Trump himself is the most important booster in dwelling reminiscence of company arms sales and Saudi Arabia is way and away his favourite buyer. The Senate lately voted down a package deal of “emergency” arms gross sales to the Saudis and the UAE that included hundreds of Raytheon Paveway munitions, the weapon of selection in that Yemeni air marketing campaign. A comparable vote should now happen within the Home, but even when it, too, passes, Congress might want to override a nearly guaranteed Trump veto of the invoice.
The Raytheon-United Technologies merger will additional implicate the brand new firm in Yemeni developments because the Pratt and Whitney division of United Applied sciences makes the engine for Saudi Arabia’s key F-15S fight plane, a mainstay of the air struggle there. Not solely will Raytheon Technologies revenue from such engine gross sales, but that company’s technicians are doubtless to assist keep the Saudi air pressure, thereby enabling it to fly yet extra bombing missions extra typically.
When pressed, Raytheon officials argue that, in enabling mass slaughter, they are merely following U.S. authorities coverage. This ignores the truth that Raytheon and different weapons contractors spend tens of hundreds of thousands of dollars a yr on lobbyists, political contributions, and different forms of influence peddling making an attempt to form U.S. insurance policies on arms exports and weapons procurement. They’re, in different phrases, anything however passive recipients of edicts handed down from Washington.
As Raytheon chief monetary officer Toby O’Brien put it in a call to buyers that came after the murder of Washington Publish columnist Jamal Khashoggi, “We continue to be aligned with the administration’s policies, and we intend to honor our commitments.” Lockheed Martin CEO Marillyn Hewson made an identical point, asserting that “most of these agreements that we have are government-to-government purchases, so anything that we do has to follow strictly the regulations of the U.S. government… Beyond that, we’ll just work with the U.S. government as they are continuing their relationship with [the Saudis].”
How Powerful Are the Army-Industrial Combines?
On the subject of lobbying the Pentagon and Congress, measurement issues. Main companies like Lockheed Martin, Boeing, and Raytheon can point to the roles they and their subcontractors present in dozens of states and scores of Congressional districts to maintain members of Congress in line who may in any other case question and even oppose the tens of billions of dollars in authorities funding the businesses receive yearly.
Raytheon — its motto: “Customer Success Is Our Mission” — has main operations in 16 states: Alabama, Arkansas, Arizona, California, Colorado, Florida, Indiana, Kentucky, Massachusetts, Michigan, Minnesota, New Mexico, Pennsylvania, Rhode Island, Texas, Utah, and Virginia. That translates into loads of leverage over key members of Congress and it doesn’t even rely states where the corporate has major subcontractors. The addition of United Technologies will reinforce the brand new company’s presence in various these states, while adding Connecticut, Iowa, New York, and North Carolina (in different phrases, no less than 20 states in all).
In the meantime, if the merger is accredited, the longer term Raytheon Technologies can be greasing the wheels of its subsequent arms contracts by relying on almost 4 dozen former government officers the two separate corporations hired as lobbyists, executives, and board members in 2018 alone. Add to that the $6.four million in campaign contributions and $20 million in lobbying bills Raytheon clocked over the past two election cycles and the outlines of its growing influence begin to turn into clearer. Then, add as properly the $2.9 million in campaign contributions and $40 million in lobbying bills racked up by its merger companion United Applied sciences and you’ve got a lobbying powerhouse rivaled only by Lockheed Martin, the world’s largest protection conglomerate.
President Eisenhower’s proposed counterweight to the facility of the military-industrial complicated was to be “an alert and knowledgeable citizenry.” And there are indicators that vital numbers of individuals and organizations are starting to pay more attention to the machinations of the arms lobby. My very own outfit, the Middle for International Policy, has launched a Sustainable Defense Activity Drive composed of former army officers and Pentagon officials, White House and Congressional price range specialists, and analysis staffers from progressive and good-government teams. It has already crafted a plan that might reduce $1.2 trillion from the Pentagon price range over the subsequent decade, whereas enhancing U.S. safety by avoiding unnecessary wars, eliminating waste, and scaling back a Pentagon nuclear-weapons buildup slated to value $1.5 trillion or extra over the subsequent three many years.
The Poor Individuals’s Marketing campaign, backed by analysis carried out by the National Priorities Challenge of the Institute for Policy Studies, is looking for a one-year $350 billion reduce in Pentagon expenditures. And a brand new community referred to as “Put People Over the Pentagon” has brought together more than 20 progressive organizations to press presidential candidates to cut $200 billion annually from the Division of Defense’s bloated finances. Members within the network embrace Public Citizen, Moveon.org, Indivisible, Win With out War, 350.org, Associates of the Earth, and United We Dream, lots of them organizations that had not, in previous years, made decreasing the Pentagon price range a precedence.
Raytheon and its arms business allies gained’t sit still within the face of such proposals, but at the least the times of unquestioned and unchallenged corporate greed in the ever-merging (but in addition ever-expanding) arms business could also be coming to an end. The USA has paid an exorbitantly excessive worth in blood and treasure (as have nations like Afghanistan and Iraq) for letting the military-industrial complicated steer the American ship of state by way of this century up to now. It’s gone time for a reckoning.
William D. Hartung, a TomDispatch regular, is the director of the Arms and Safety Venture at the Middle for International Coverage and the writer of Prophets of War: Lockheed Martin and the Making of the Army-Industrial Complicated.
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Copyright 2019 William D. Hartung