How the
Military-Industrial Complex Preys on the Troops
The Scandal of Pentagon Spending
By William Hartung
October 11,
2017 "Information
Clearing House"
- Here’s a question for you: How do you spell
boondoggle?
The answer
(in case you didn’t already know): P-e-n-t-a-g-o-n.
Hawks
on Capitol Hill and in the U.S. military routinely
justify increases in the Defense Department's
already munificent budget by arguing that yet more
money is needed to “support
the troops.” If
you’re already nodding in agreement, let me explain
just where a huge chunk of the Pentagon budget --
hundreds of billions of dollars -- really goes.
Keep in mind that it’s your money we’re talking
about.
The answer
couldn’t be more straightforward: it goes directly
to private corporations and much of it is then
wasted on useless overhead, fat executive salaries,
and startling (yet commonplace) cost overruns on
weapons systems and other military hardware that, in
the end, won’t even perform as promised. Too often
the result isweapons that aren’t needed at prices we
can’t afford. If anyone truly wanted to help the
troops, loosening the corporate grip on the Pentagon
budget would be an excellent place to start.
The
numbers are staggering. In fiscal year 2016, the
Pentagon issued $304
billionin contract
awards to corporations -- nearly half of the
department’s $600
billion-plus budget
for that year. And keep in mind that not all
contractors are created equal. According to the
Federal Procurement Data System’s top 100
contractors report for 2016, the biggest
beneficiaries by a
country mile were Lockheed Martin ($36.2 billion),
Boeing ($24.3 billion), Raytheon ($12.8 billion),
General Dynamics ($12.7 billion), and Northrop
Grumman ($10.7 billion). Together, these five firms
gobbled up nearly $100 billion of your tax dollars,
about one-third of all the Pentagon's contract
awards in 2016.
And
remember: the Pentagon buys more than just weapons.
Health care companies like Humana ($3.6 billion),
United Health Group ($2.9 billion), and Health Net
($2.6 billion) cash in as well, and they’re joined
by, among others, pharmaceutical companies like
McKesson ($2.7 billion) and universities deeply
involved in military-industrial complex research
like MIT ($1 billion) and Johns Hopkins ($902
million).
The real
question is: How much of this money actually
promotes the defense of the country and how much is
essentially a subsidy to weapons makers and other
corporations more focused on their bottom lines than
giving the taxpayers value for their money?
“Modernizing” the Military-Industrial Complex
Let’s
start with the obvious (but seldom said). Some arms
company expenditures clearly have no more of a
national security rationale than Tom Price’s
air travel did for
the promotion of American health. Take the
compensation that defense company CEOs get, for
example. The heads of the top five Pentagon
contractors -- Lockheed Martin, Boeing, Raytheon,
General Dynamics, and Northrop Grumman --
made a cumulative
$96 million last year. These are companies that are
significantly or, in the cases of Lockheed Martin
and Northrop Grumman, almost entirely dependent on
government dollars. That means one thing: your tax
dollars are basically paying their exorbitant
salaries. And that $96 million figure doesn’t even
count the scores of other highly paid executives and
board members at major weapons contractors like
these. Don’t you feel safer already?
Donald Trump initially spent a fair amount of
tweeting energy
bragging about how he was going to bring such
contractors to heel on their pricing practices for
weapons systems. In fact, he’s already turned out
to be good news indeed for major contractors, most
of whom have seen
sharp upturns in
revenues and profits in the first two quarters of
this year (compared to the same period in what was
still the Obama era). Among other things, Trump has
proven eager to
lift restrictions
on U.S. weapons sales abroad (and enlist State
Department and Pentagon officials to spend more of
their time shilling such weaponry). As a result,
future American arms deals are already on a
precipitous upward trajectory and, as one defense
industry analyst has
noted, “both
commercial aerospace and the defense sectors expect
improvement for the remainder of 2017 with the
potential for new records in both revenue and
operating profit.”
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Whether such increases in the funds flowing to major
weapons contractors will accelerate yet more
depends, in part, on the outcome of this year’s
budget debate in which Trump and Congress are
competing to see who can sponsor the biggest
increase in Pentagon spending. Trump has backed a
$54 billion
budgetary rise, while the Senate, in the recently
passed National Defense Authorization Act, backed a
$90 billion
increase. The only thing standing between the
contractors and another huge payday is the question
of whether Congress can, in fact, pass a budget this
year or if its representatives will have to fall
back on a continuing resolution that would keep
spending at last year’s levels.
Needless to say, Lockheed Martin and its cohorts are
doing everything in their power to break the budget
deadlock and open the spigot to release the huge
funding increases they feel entitled to. In the
process, they are spending impressive sums
(undoubtedly, in part, also your tax dollars) to
promote their interests in Washington. The defense
industry has, for instance, anted up
$65 million on
Political Action Committee contributions since 2009.
You
probably won’t be surprised to learn that the bulk
of that sum has been lavished on the congressional
representatives who are in the best position to help
the industry -- particularly members of the armed
services and defense appropriations committees of
the House and Senate. In recent years, these
contributions have tilted Republican, with nearly
two-thirds of the contributions going to GOP
candidates. But this ratio will shift back toward
the Democrats, should they retake control of
Congress at any point. For weapons contractors,
it’s ultimately not about party or ideology but
about buying access and influence with whoever has
the power to appropriate money for them.
The
arms industry’s investment in lobbying is even more
impressive. The defense sector has spent a total of
more than
$1 billion on that
productive activity since 2009, employing anywhere
from
700 to 1,000 lobbyists
in any given year. To put that in perspective,
you’re talking about significantly more than one
lobbyist per member of Congress, the
majority of whom
zipped through Washington’s famed “revolving door”;
they moved, that is, from positions in Congress or
the Pentagon to posts at weapons companies from
which they could proselytize their former
colleagues.
This
process, of course, allows newly minted lobbyists to
use their privileged contacts with former government
colleagues to promote the special interests of their
corporate clients. It also ensures that
congressional staffers, military officers, and
Pentagon bureaucrats nearing the end of their
careers and looking toward a lucrative future will
be inclined to cut major contractors some slack.
Why not, when they are looking forward to a big
payday with that same cast of characters after they
leave government?
An
egregious example --
the case of Darleen Druyun
-- offers an inside look at how a Pentagon official
curries favor with future corporate employers.
Druyun was a high-ranking Pentagon procurement
officer who rigged contracts for Boeing while
negotiating for a job with that company (which was
already employing her daughter and son-in-law). The
Druyun case was the exception that proves the rule.
She actually did nine months in prison for her
actions, thanks in large part to Senator John
McCain’s dogged pursuit of the case. Lesser cases
of influence peddling, however, occur all the time
and no one faces jail time for them. As long as the
lure of big corporate payoffs remains so central to
the lives of government employees, the game will
regularly be tilted toward their potential future
employers.
In
other words, what we’re getting in return for the
hundreds of billions of dollars we shower on those
weapons firms is a raw deal and that revolving door
is but one example of it. Don’t forget the endemic
waste, fraud, and abuse that is part and parcel of
the Pentagon budget -- of that is, an outfit that
has proven incapable of even
auditing itself.
As with influence peddling, when it comes to that
trio there’s a scale that ranges from the criminal
to the merely outrageous. In the first category,
you might start with the
“Fat Leonard” scandal,
named for a corporate executive who bribed dozens of
Navy officials with money, vacations, and
prostitutes to get the inside track on contracts to
help maintain U.S. ships based in ports in the
Pacific. So far, 29 criminal indictments have been
handed down in the case.
That
one got the headlines, but the biggest sources of
corporate waste when it comes to Pentagon dollars
are such a part of everyday life in Washington that
they go largely unnoticed. The Pentagon, for
example, employs
more than 600,000
private contractors. There are so many of them and
they are so poorly monitored that the Pentagon (as
it has reluctantly
acknowledged)
doesn’t even have an accurate count of how many of
them it has hired. What we do know is that many are
carrying out redundant tasks that could be done more
cheaply by government employees. Cutting the
contractor work force by 15% -- theoretically an
easy task but light years beyond anything presently
imaginable -- would save a quick
$20 billion a year.
Then
there are the big weapons programs. As the Project
on Government Oversight has shown, the Lockheed
Martin F-35 combat aircraft -- supposedly a
state-of-the-art plane for the twenty-first century
-- has had so many cost and performance issues that
it may
never be fully ready
for combat. That, however, hasn’t stopped the
Pentagon from planning to spend
$1.4 trillion to
build and maintain more than 2,400 of these
defective planes during the lifetime of the program.
Last
but hardly least, don’t forget the Pentagon’s
misguided plan to spend
more than $1 trillion
in the next three decades on a whole new generation
of nuclear-armed bombers, submarines, and land- and
air-based missiles. The United States nuclear
arsenal already has
more than 4,000 nuclear warheads in its active
stockpile, with 1,700 deployed and ready to be
launched on a moment’s notice.
Even
if one accepts the idea that there is a need for
nuclear weapons to deter other countries (like, say,
North Korea), this could be accomplished with an
arsenal a fraction of the size of the current one.
Two analysts from U.S. war colleges have estimated
that
about 300
deliverable nuclear warheads would be enough to
dissuade any nation from attacking the United States
with a nuclear weapon. Anything else represents
sheer excess, not to mention a huge source of
unjustified revenue and profits for weapons
contractors. (And note that the current
trillion-dollar “modernization” program for the
nuclear arsenal was initiated under President Barack
Obama, a man who won the Nobel Prize for his urge to
abolish all such weaponry. Take that as a measure
of the power of America's corporate nuclear lobby.)
Military Spending Generates Jobs (for Lobbyists and
Overpaid CEOs)
In addition
to “supporting the troops,” the other common
argument in Washington for runaway Pentagon spending
is: jobs, jobs, jobs. And there can be no question
that if you plow hundreds of billions of dollars
into new weapons systems, you will create some new
employment opportunities. What’s surprising is how
relatively few jobs actually flow these days from
such Pentagon expenditures.
In
2011, a
study by economists
from the University of Massachusetts made this
blindingly clear. What they showed was that
military spending is the worst way to create jobs.
Putting the same money into any other area -- from
infrastructure to transportation to alternative
energy to health care or education -- creates up to
twice as many jobs as military spending does. If
it’s about jobs, there are plenty of alternatives to
throwing vast piles of tax dollars at a wasteful
Pentagon.
The
challenge here is political, not economic. The
question at hand is how to get a president and a
Congress who are willing to buck the arms lobby and
invest in what would quite literally be more
constructive activities.
Contractors aid and abet the process of investing in
the Pentagon by routinely exaggerating the number of
jobs their programs create. The F-35 is a classic
example. Lockheed Martin has a handy interactive
map on its website
that claims the program supports 125,000 jobs in 46
states. When I took a closer look at the company’s
analysis and compared it with standard economic
estimating procedures, however, I found that the
true number is
less than half that
many jobs generated.
In
fact, according to Lockheed’s own figures, more than
half of the jobs generated by the program are in
just two states,
Texas and California. In short, the F-35 creates
nothing like the number of jobs the company claims
and those jobs aren’t spread as widely or evenly
across the country as their propaganda suggests. In
truth, the best jobs generated by Pentagon spending
are the ones for well-heeled lobbyists and overpaid
corporate executives.
So
the next time someone suggests that the Pentagon
needs yet more money for the troops, just remember
that what they’re actually talking about are troops
of overpaid defense contractors, not members of the
armed forces. If you want to “defend” this country,
maybe it’s time to protect it from the predators
that President Dwight D. Eisenhower once memorably
called “the
military-industrial complex.”
William
D. Hartung, a
TomDispatch regular,
is the director of the Arms and Security Project at
the Center for International Policy and the author
of
Prophets of War: Lockheed Martin and the Making of
the Military-Industrial Complex.
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Copyright
2017 William D. Hartung
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