refuse_resist
7th July 2004, 01:23
Here are some of the corporations that benefit from wars and conflicts:
Lockheed Martin
The world's #1 military contractor, responsible for the U-2 and SR-71 spy planes, F-16, F/A-22 fighter jet, and Javelin missiles. They've also made millions through insider trading, falsifying accounts, and bribing officials.
CEO: Vance D. Coffman
Military contracts 2003: $21.9 billion
Campaign contributions: $9.7 million in 2002
This Bethesda, Maryland-based company is the world's #1 military contractor as well as the world’s largest arms exporter. Lockheed Martin built the U-2 and the SR-71 Blackbird spy planes. Today they make F-16, F/A-22 jet fighter, Hellfire and Javelin missiles, as well as designing nuclear weapons. Its F-117 stealth attack fighters were used to “shock and awe” the population of Iraq at the start of the US invasion, while since the start of that war the Air Force has increased production of Lockheed’s PAC-3 Patriot missile – which cost $91 million per copy.
According to the Arms Trade Resource Center, Lockheed Martin gets $105 from each U.S. taxpayer and $228 from each U.S. household. In 2002 the company was effectively taxed at 7.7% compared to an average tax rate for individuals of 21-33%.
In late 2001 the company was awarded the world's largest weapons contract ever, a $200 billion deal to build the Joint Strike Fighter, a "next-generation" combat jet that eventually will replace aircraft used by the Navy, Air Force and Marine Corps. In the last few years the SEC has investigated Lockheed for insider trading and falsifying their accounts.
Lockheed Martin did not win the contract on force of personality alone, or fighter plane design. During the calendar year 2000, Lockheed Martin spent more than $9.8 million lobbying members of Congress and the Clinton administration, more than double the $4.2 million the company spent during 1999. Among the company's newest lobbyists: Haley Barbour, the former chairman of the Republican National Committee. During the 1999-2000 election cycle, Lockheed Martin contributed just over $2.7 million in soft money, PAC and individual contributions to federal candidates and parties. More than two-thirds of that money went to Republicans. Lockheed Martin spends more on lobbying Congress than any of its competitors, spending a whopping $9.7 million in 2002. Only General Electric and Philip Morris reported more lobbying expenses. And in the 2004 election cycle, Lockheed has already given more than $400,000.
Lockheed has also been able to exercise its influence in a larger way – in support of the invasion of Iraq. The company’s former vice-president Bruce Jackson chaired the Coalition for the Liberation of Iraq, a bipartisan group formed to promote Bush’s plan for war in Iraq. Bruce Jackson was also involved in corralling the support for the war from Eastern European countries, going so far as helping to write their letter of endorsement for military intervention. Not surprisingly, Lockheed also has business relations with these countries. In 2003 Poland shelled out $3.5 billion for 48 F-16 fighter planes, which it was able to buy with a $3.8 billion loan from the US.
In 1976 Lockheed paid millions of dollars to Japanese government officials to smooth the way for the sale of Lockheed's airplanes to a Japanese airline corporation, All Nippon Airways. They paid Japanese gangster and yakuza chief Kodama Yoshio $2.1 million in payoffs to help them sell their new wide-bodied passenger airplane, the TriStar L1011, against stiff competition from Boeing and McDonnell-Douglas. Kodama relied on familiar yakuza techniques to force the resignation of Tetsuo Oba, president of All Nippon Airways. At a stockholders' meeting, Kodama packed the room with "sokaiya" -- financial specialists -- who leaked information about an illegal $1 million loan which had been paid to Oba. In disgrace, ANA's president stepped down to be replaced by a candidate favorable to Kodama's interests.
The former prime minister, the former minister of transportation, and the former parliamentary vice-minister of transportation were arrested and prosecuted. The former prime minister was sentenced to four years imprisonment with forced labor but he died while the case was in the Supreme Court.
Boeing
Aside from 747s, Boeing makes "smart" bombs, F-15 fighters, and Apache helicopters. Boeing has paid tens of millions in fines for selling flawed parts that led to thousands of unnecessary landings and at least one fatal crash and has been plagued by scandals connected to the company’s influence-peddling.
CEO: Harry C. Stonecipher
Military contracts 2003: $17.3 billion
Major campaign contributions: $1.6 million in 2002
America’s largest exporter, Boeing is also the Pentagon’s second largest contractor, eclipsed only by Lockheed Martin. In 2003 Boeing landed over $27 billion in contracts from the Department of Defense. While revenues from commercial planes have been suffering in the wake of September 11th – leading to the lay off of tens of thousands of workers – demand for its military production is booming. Revenue from military goods now outstrips Boeing’s earnings from commercial sales by $5 billion a year.
The world's largest aerospace company has a role in all three of the Pentagon’s advanced fighter plane programs: the F-22 Raptor, the Joint Strike Fighter/F-35, and the F-18 and it makes both F-15 fighter and Apache helicopters. Caught knowingly selling flawed parts for the Apache that led to thousands of unnecessary landings and at least one fatal crash, Boeing has paid tens of millions of dollars in fines. Boeing also oversees many of the Pentagon’s missile defense programs, operates the Space Shuttle, makes the guidance systems for the Minuteman and Peacekeeper missiles and builds precision munitions such as the Standoff Land Attack Missile-Expanded Response (SLAM-ER), Conventional Air-Launched Cruise Missile (CALCM), Brimstone and Harpoon missiles, and JDAM "smart" bombs. Boeing’s JDAM (joint direct attack munitions) kit fits over a "dumb" missile and coverts it into a satellite-guided weapon using movable fins and a satellite positioning system to make a “smart” bomb. But there’s a downside: the precision JDAMs have repeatedly missed their targets in Iraq and Afghanistan, hitting both civilians and US soldiers.
The lobbying efforts of Boeing, and the revolving door between the US government and the Chicago-based giant, are legendary. But Boeing’s influence-peddling finally turned sour last December when Boeing CEO Philip M. Condit was forced to resign in the wake of revelations of that the company negotiated the hiring of top Air Force procurement official Darlene Druyun while Druyun was setting up a lucrative $27.6 billion leasing deal of Boeing’s 767 air-refueling aircrafts over a period of ten years. The deal, which went through despite controversy, will cost taxpayers up to $10 billion dollars more than if the Air Force has purchased the aircrafts outright.
But Boeing still has a lot of well-connected people looking out for its interests. John Shalikashvili, retired Chairman of the Joint Chiefs of Staff is on the Boeing board. Former Deputy Secretary of Defense, Rudy de Leon heads up Boeing's Washington office. After September 11th Boeing beefed up its political connections by hiring former Senator Bennett Johnson (D-LA) and former Rep. Bill Paxon (R-NY). Former Ambassador Thomas Pickering, Boeing's senior vice president for international relations, uses his forty years of experience to generate business for Boeing with foreign governments and corporations. Richard Perle, former Chairman and current member of the Pentagon’s Defense Policy Board, is another important Boeing ally within the corridors of power. So it should come as no surprise that Boeing has provided Perle’s venture capital firm, Trireme Partners, with $20 million. Two other Defense Policy Board members also work as consultants for Boeing: the Air Force’s General Ronald Fogelman and former Navy Admiral David Jeremiah.
Boeing ranks number sixty six in the Center for Responsive Politics’ list of the 100 biggest political donors since 1989. Over the nineties, Boeing handed out $7.6 million in Political Action Committee (PAC) and soft money contributions. During the 2002 election year, Boeing gave $909,134 in PAC contributions and $700,482 in soft money donations and its contributions added up to more than $1.5 million during the 2000 elections.
Raytheon
Raytheon means "light from the gods." Makers of "Bunker Buster" bombs, Tomahawk and Patriot missiles, this company loves big noises and large civilian casualty counts. When a missile killed 62 civilians in a Baghdad market, that was Light from the Gods.
CEO: William H. Swanson
Military contracts 2003: $7.9 billion
Campaign contributions: $1.08 million in 2002
This company loves to make things that go boom and kill lots of people such as Patriot & Tomahawk missiles including a missile that struck Baghdad market Shu'ale, killing at least 62 civilians, during the second Gulf War. About 100 Raytheon million dollar land-attack cruise missiles were lobbed at Afghanistan from U.S. Navy ships since October 7th, fifty in the opening salvo alone.
Raytheon also makes the "bunker buster" GBU- 28, a 5,000-pound bomb and missiles like the TOW, Maverick and Javelin, all being used in Operation Enduring Freedom. In addition to missiles, Raytheon also builds sensors and radars used on unmanned and manned reconnaissance airplanes used extensively in Afghanistan.
The company has paid millions of dollars in fines for illegal activities. In October 1994, Raytheon paid $4 million to settle government charges that it had inflated the cost of a $71.5 million radar contract. In October 1993, Raytheon paid out $3.7 million to settle U.S. government charges that it had inflated the cost of Patriot missiles. The year before the company paid out $2.75 million for overpricing missile test equipment. In March 1990, Raytheon pleaded guilty in federal court to Judge Albert Bryan, Jr. in Virginia for illegally obtaining secret Air Force budget and planning documents. The company paid a million dollars in fines. In October 1987, the Justice Department signed on to a $36 million lawsuit originally filed by a former Raytheon employee, which alleged that Raytheon submitted false claims for work done on missiles.
One of Raytheon's more secretive subsidiaries is E-Systems, whose major clients have historically been the CIA and other spy agencies like the National Security Agency and the National Reconnaissance Office. An unnamed Congressional aide told the Washington Post once that the company was ''virtually indistinguishable'' from the agencies it serves. ''Congress will ask for a briefing from E- Systems and the (CIA) program manager shows up,'' the aide is quoted as saying. ''Sometimes he gives the briefing. They're interchangeable.''
Aircraft support for drug-enforcement activities become a part of E-Systems' work after it bought up Air Asia, the CIA's aircraft repair and maintenance facility in Taiwan in 1975. Until E-Systems took it over, Air Asia provided support for Air America, the CIA's covert airline that ferried arms, heroin and opium in Indo-China during the Vietnam War, according to the British reporter Christopher Robbins, who wrote the authoritative account of the airline's history in 1979.
Immediately after acquiring Air Asia, E-Systems won a contract to maintain planes for the U.S.-funded Operation Condor in Mexico. Condor monitored drug trafficking in the state of Sinaloa in the mid-1970s. A 1985 U.S. congressional study found that the contract was ''a shambles ... There are no adequate records to indicate how the funds have been and are being spent.'' The study also cited incidents of planes being used for joy rides. Peter Dale Scott and Jonathon Marshall, authors of ''Cocaine Politics,'' say that the Condor operation ''succeeded in filling the jails with hapless peasants ... but failed to arrest a single drug trafficker.''
E-Systems paid $4.2 million in 1994 to settle a lawsuit brought by Carlos Uribe, a man in El Paso, Texas, on the Mexican border. Uribe charged that an E-Systems employee, Truett Burney, accidentally murdered Uribe's wife in a hotel room when his gun went off in an adjoining room in September, 1991. Burney's lawyers said he was helping install ''top secret listening devices'' on suspected drug traffickers at the time.
E-Systems has a murky history as a military contractor also. The first time the company appeared in the news was when it was sued by the widow of an employee who was killed in a 1971 crash of an Air Force plane sent to spy on a French nuclear test.
In the early 1970s, E-Systems won the contract to install communication gear on Air Force One, the U.S. president's plane. This led to similar contracts for the heads of state of Iran, Israel, Nigeria, Malaysia, Romania and Saudi Arabia. E-Systems has since built the ''Doomsday Plane,'' an airborne command post for the Pentagon and the White House in the event of a nuclear attack.
In 1977, during the height of the ''dirty war'' in Argentina, E-Systems won a contract to supply ''Wheelbarrow'' systems -- a radio transmitter that detonates explosives by remote control -- to the Argentine police. In August 1990, E-Systems pleaded guilty to criminal charges of falsifying results on tactical field radios manufactured at its Florida factories. The company paid out almost $3 million in fines to settle the charges.
Halliburton
This company truly has a guardian angel: former Halliburton CEO and now Vice President Dick Cheney who looks out for its interests from the White House. The result? $2 billion in contracts “rebuilding” Iraq in 2003.
CEO: David J. Lesar
Military contracts 2003: $3.9 billion
The biggest windfall in the invasion of Iraq has most certainly gone to the oil services and logistics company Halliburton. The company, which was formerly run by Vice President Dick Cheney, has won over $8 billion in contracts in Iraq in 2003 alone. And while Halliburton’s dealings in Iraq have been dogged everywhere by scandal – including now a criminal investigation into overcharging by Halliburton subsidiary Kellogg Brown and Root for gas shipped into Iraq – Vice President Cheney manages to be doing quite well from the deal. He owns $433,000 unexercised Halliburton stock options worth more than $10 million dollars.
But Halliburton’s history of benefiting from government largesse goes back a ways. From 1962 to 1972 the Pentagon paid the company tens of millions of dollars to work in South Vietnam, where they built roads, landing strips, harbors, and military bases from the demilitarized zone to the Mekong Delta. The company was one of the main contractors hired to construct the Diego Garcia air base in the Indian Ocean, according to Pentagon military histories.
In the early 1990s the company was awarded the job to study and then implement the privatization of routine army functions under then-secretary of defense Dick Cheney. When Cheney quit his Pentagon job, he landed the job of Halliburton's CEO, bringing with him his trusted deputy David Gribbin. The two substantially increased Halliburton's government business until they quit in 2000, once Cheney was elected vice president. This included a $2.2 billion bill for a Brown and Root contract to support US soldiers in Operation Just Endeavor in the Balkans.
After Cheney and Gribbin departed, another confidante of Cheney, Admiral Joe Lopez, former commander in chief for U.S. forces in southern Europe, took over Gribbin's old job of go-between for the government and the company, according to Brown and Root's own press releases.
In 2001 the company took in $13 billion in revenues, according to its latest annual report. Currently, Brown and Root estimates it has $740 million in existing U.S. government contracts (approximately 37 percent of its global business).
For example, in mid November 2001, Brown and Root was paid $2 million to reinforce the U.S. embassy in Tashkent, Uzbekistan, under contract with the State Department, according to the New York Times. More recently Brown and Root was paid $16 million by the federal government to go to Guantnamo Bay, Cuba, to build a 408-person prison for captured Taliban fighters, according to Pentagon press releases.
That's by no means all: Brown and Root employees can be found back home running support operations from Fort Knox, Kentucky, to a naval base in El Centro, California, according to company press releases. In December 2001, Brown and Root secured a 10-year deal named the Logistics Civil Augmentation Program (LOGCAP), from the Pentagon, which has already been estimated at $830 million.
Meanwhile independent agencies are still skeptical about claimed financial savings from contracting out military support operations. According to the Government Accounting Office (GAO), a February 1997 study showed that a Brown and Root operation in Bosnia estimated at $191.6 million when presented to Congress in 1996 had ballooned to $461.5 million a year later.
All told this former Yugoslavia contract has now cost the taxpayer $2.2 billion over the last several years. Examples of overspending by contractors include flying plywood from the United States to the Balkans at $85.98 a sheet and billing the army to pay its employees' income taxes in Hungary.
A subsequent GAO report, issued September 2000, showed that Brown and Root was still taking advantage of the contract in the Balkans. Army commanders were unable to keep track of the contract because they were typically rotated out of camps after a six-month duration, erasing institutional memory, according to the report. The GAO painted a picture of Brown and Root contract employees sitting idly most of the time. The report also noted that a lot of staff time was spent doing unnecessary tasks, such as cleaning offices four times a day. Pentagon officials were able to identify $72 million in cost savings on the Brown and Root contract simply by eliminating excess power generation equipment that the company had purchased for the operation.
Brown and Root has been also been investigated for over billing the government in its domestic operations. In February 2002, Brown and Root paid out $2 million to settle a suit with the Justice Department that alleged the company defrauded the government during the mid-1990s closure of Fort Ord in Monterey, California.
The allegations in the case surfaced several years ago when Dammen Gant Campbell, a former contracts manager for Brown and Root turned whistle-blower, charged that between 1994 and 1998 the company fraudulently inflated project costs by misrepresenting the quantities, quality, and types of materials required for 224 projects. Campbell said the company submitted a detailed "contractors pricing proposal" from an army manual containing fixed prices for some 30,000 line items.
Once the proposal was approved, the company submitted a more general "statement of work," which did not contain a breakdown of items to be purchased. Campbell maintained the company intentionally did not deliver many items listed in the original proposal. The company defended this practice by claiming the statement of work was the legally binding document, not the original contractors pricing proposal.
"Whether you characterize it as fraud or sharp business practices, the bottom line is the same: the government was not getting what it paid for," says Michael Hirst, of the United States Attorney's Office in Sacramento, who litigated the suit on behalf of the government. "We alleged that they exploited the contracting process and increased their profits at the governments expense."
Northrop Grumman
Makers of the B-2 stealth bomber, you'd think this company could stay under the radar. But they're dogged by scandals-from bribing Saudi princes to botching the training of the Iraqi National Army to the tune of $48 million. Above board, their job is simply selling death.
CEO: Ronald Sugar
Military contracts 2003: $11.1 billion
Campaign contributions: $2.01 million in 2002
Northrop Grumman makes B-2 stealth bomber, which costs $2 billion per plane, the F-14 fighter, the unmanned Global Hawk and amphibious assault ships. Its Newport News division is the only designer, builder and refueler of nuclear-powered aircraft carriers in the US. Northrop Grumman is also responsible for ALQ-15 jamming device, used to protect jets from enemy radar-guided missiles. As David Steigman, senior defense analyst for the Teal Group, boasts, "Northrop Grumman's role is supplying the command control communications and the intelligence surveillance systems to find the bad guys and bop them in the head."
And the company is politically savvy as well, having given $8.5 million in federal campaign contributions from 1990-2002, which has paid off over the years in spades. In December 2003, Northrop Grumman and partner Raytheon won a contract potentially worth more than $10 billion with the Pentagon for a missile defense system. It’s now the third largest “defense” company in the US, after Lockheed Martin and Boeing.
In June of 2003, Northrop Grumman paid $111.2 million to settle a suit alleging their subsidiary, TRW, overcharged the US government space projects in the 1990s. But paying out money is not hard for the company. Northrop Grumman’s subsidiary Logicon, along with Oracle, was suspected of solidifying a purchasing deal with then Governor Gray Davis in exchange for a sizable campaign donation; an executive at Logicon was also investigated by the SEC for aiding and abetting securities fraud in a separate case. And in 1972 Northrop was caught bribing the head of the Saudi air force and a Saudi prince to buy F-5 military aircraft.
Former Northrop Grumman Electronics Systems chief James Roche served as George Bush's Secretary of the Air Force for two years. Since September 11th, Roche has emphasized the need for more spending on intelligence systems, specifically mentioning Northrop Grumman's Airborne Warning and Control Systems (AWACS), a control center and a huge radar disc mounted atop a Boeing 707, which serves "as the airborne nerve center for a military air campaign." At least seven former officials, consultants, or shareholders of Northrop Grumman now hold posts in the Bush administration, ensuring that the company’s interests are not overlooked for lucrative contracts in the “war on terrorism”, including Deputy Secretary of Defense Paul Wolfowitz, Vice-Presidential Chief of Staff I. Lewis Libby, Pentagon Comptroller Dov Zakheim, and Sean O’Keefe, director of NASA.
Northrop Grumman’s subsidiary, Vinnell Corporation, has been catching a lot of flack lately. They landed a $48 million contract with the US occupational authority to train the Iraqi National Army, but have botched the job so badly that the Jordanian Army has recently been brought in to take over the job.
Vinnell Corporation, founded by the late A. S. Vinnell in 1931 to pave roads in Los Angeles, handles a number of large domestic as well as government projects. After working with Chinese Nationalist Chiang Kai-shek to back US anti-communist efforts against Mao Zedong, the company became the major contractor for US military operations in Okinawa, overhauled Air Force planes in Guam in the early 1950s, and sent men and equipment onto the battlefields of the Korean War.
Now based in Fairfax, Virginia, the company has been controlled in the past through a web of interlocking ownership by a partnership that included James A. Baker III and Frank Carlucci, former U.S. secretaries of state and defense under Presidents George Bush senior and Ronald Reagan respectively.
Perhaps the most important military contract Vinnell landed was in 1975 when the Pentagon helped the company win a bid to train the 75,000 strong Saudi Arabian National Guard, a military unit descended from the Bedouin warriors who helped the Saud clan impose control on the peninsula early in last century. This aspect of Vinnell’s activities was highlighted last spring when Saudi insurgents attacked a compound housing Vinnell workers. Currently, Vinnell has a five-year contract with the House of Saud worth $831 million, which is bankrolled by the Saudis but run by the US Army Materiel Command.
General Dynamics
General Dynamics makes traditional F-16 jets, Abrams tanks, and Trident subs. With contracts in the billions, and new markets (read: wars) opening every day, they're not as washed up as some may think.
CEO: Nicholas D. Chabraja
Military contracts 2003: $8.2 billion
Campaign contributions: $ 1.64 million in 2002
The Falls Church, Virginia-based company is second only to Northrop Grumman as the US Navy’s largest shipbuilder and is the United States’ leading producer of combat vessels, including nuclear submarines, surface combatants, and auxiliary ships. General Dynamics also makes land and amphibious combat systems and information technology systems for military use. Subsidiaries of General Dynamic produce some of its best-known military products: the innocuously-named Bath Iron Works builds the DDG 52 destroyer; Land Systems makes GD’s famous M1 tank; and Electric Boat makes the Trident and Seawolf attack submarine.
In the past several years, “defense” companies have been swallowing up small technology firms in order to upgrade to the type of high-tech warfare that the Defense Secretary Donald Rumsfeld is pushing in the Pentagon. General Dynamics got on the ball early, setting up an Information Technology sector in the late 1990s, which has now become one of GD’s fastest growing divisions with revenues of $4 billion. Last year, General Dynamics acquired Creative Technology Inc, which makes computer systems for the transmission of classified information in order to do a technical makeover on the company’s tanks and submarines, outfitting them with digital capabilities.
General Dynamics was accused of having paid former South Korean president Roh Tae Woo $100 million in a bid to get the country to purchase 120 F-16 fighter jets in 1991. South Korea ultimately bought 120 fighters for $6 billion, after reversing the government’s earlier decision to buy McDonnell Douglas’ F-18 despite the preference for the latter of many in the South Korean Air Force. The division of General Dynamics that produces F-16 was eventually bought by Lockheed Martin, in one of its many consolidations and both companies were investigated by the US government for foreign bribery.
More recently, General Dynamics received a subpoena in early 2004 on charges of having falsely stated that submarine parts sold to the US Navy were tested properly. The company has also been subpoenaed in an investigation by the Department of Defense’s inspector general over whether it had produced shoddy parts for military use.
The company’s record for labor rights isn’t much better. Workers took General Dynamics to court,
arguing that the company was violating the federal Age Discrimination in Employment Act of 1969 for not guaranteeing retirement health benefits to workers under fifty. The case is still pending.
The Secretary of the Navy, Gordon England, is a former General Dynamics executive. The Boston Globe noted at the time of his nomination that "Gordon England had no military experience, but he had just the right qualification to become President Bush’s pick for secretary of the Navy: Two decades in the corporate world." Former Pentagon and military officials populate General Dynamic’s Board of Directors, including Jay L. Johnson, Chief of Naval Operations in the U.S. Navy, Paul G. Kaminski, Under Secretary of U.S. Department of Defense for Acquisition and Technology, and George A. Joulwan, former U.S. Army Supreme Allied Commander, Europe.
Current Secretary of State Colin Powell has an interest in the company as well. He received $1 million of stock in General Dynamics, as well as more than $20 million in other corporate investments, when he joined the board of America Online.
In 2002, General Dynamics gave $1.64 million in campaign contributions, with 60% going to Republicans. So far in the 2004 election cycle, the company has given $731,725, 62% of it to Republican candidates.
General Electric
Run until 2001 by “Neutron” Jack Welch, who made it a matter of principle to lay off 10% of his workers per year, the world’s biggest company churns out plastics, aircraft engines and nuclear reactors and media spin through NBC, CNBC, Telemundo, and msnbc.com.
CEO: Jeffrey R. Immelt
Military contracts 2003: $2.8 billion
Campaign contributions: $221,350 in 2002
The world’s largest company by market share, General Electric’s revenues in 2003 totaled $134.2 billion. GE was run until 2001 by “Neutron” Jack Welch, who made it a matter of principle to lay off 10% of his workers per year.
General Electric makes household appliances, plastics, water treatment systems, lighting, medical equipment, and commercial financial services. It also makes aircraft engines and nuclear reactors, and keeps criticism at bay with its ownership of media giants NBC, CNBC, Telemundo, Bravo, and, in partnership with Microsoft, msnbc.com. GE’s recent partnership with Vivendi added Universal Studios, USA, Trio and Sci-fi cable channels to its $43 billion media empire.
General Electric is one of the world’s top three producers of jet engines, supplying Boeing, Lockheed Martin and other military aircraft makers for the powering of airplanes and helicopters.
The “war on terrorism” has seen GE’s military contracts rise substantially. But the company’s “defense” side has been doing well for a while. GE and other military contractors got a big boost under the Clinton administration from Presidential Directive 41 which stated that it was the job of US diplomats to promote arms sales abroad in order to safeguard American jobs; this directive tied the promotions of diplomats to how effectively they hocked US armaments.
GE has designed 91 nuclear power plants in 11 countries, yet its nuclear reactors around the world have a fatal flaw. In the event of a nuclear meltdown, there is a 90 percent chance that radiation from GE-designed reactors would be discharged directly into the atmosphere. While the US Nuclear Regulatory Commission is aware of the problem, it continues to license GE nuclear reactors.
GE’s history with nuclear power is an ugly one. In the 1940s-1960s the company ran experiments on humans with radiation, including irradiating the reproductive organs of prison inmates in Walla Walla, Washington, without warning them of the risk of cancer. Other tests were run on the elderly and hospital patients. General Electric intentionally released large amounts of radiation into the air from the Hanford Nuclear Reservation in Richland, in order to see the distance it would travel. These atrocities were revealed in hearings in 1986 held by Representative Edward Markey of Massachusetts. The company has also been accused of knowingly poisoning its workers at the Knolls Atomic Power Laboratory in Schenectady, New York with radiation and asbestos.
General Electric is currently attempting to overturn the US Superfund Law of 1980, which allows the government to hold polluters responsible for cleaning up their toxic chemicals. GE argues that it is “unconstitutional” for the Environmental Protection Agency to force the company to pay $500 million for the cleanup of the Hudson River, where GE dumped carcinogenic PCBs, or polychlorinated biphenyls, over three decades. In March 2004, a federal appeals court has revived GE’s lawsuit. It shouldn’t come as a surprise that GE is trying to change the Superfund Law: the company is responsible for 78 Superfund sites around the US.
It’s clearly not safe to be a worker for GE either. The US government’s Occupational Safety and Health Administration, or OSHA, has cited the company for 858 workplace safety violations from 1990-2001.
General Electric has been involved in so many cases of fraud that in the 1990s the Pentagon's Defense Contract Management Agency created a special investigations office specifically for the company, which indicted GE on 22 criminal counts and recovered $221.7 million. In one case, in 1992, GE entered a guilty plea to criminal and civil charges for defrauding the Pentagon in a case where money was funneled to the Israeli military. GE was fined $69 million for violation of the Foreign Corrupt Practices Act.
GE’s financial division has been another area ripe for fraud. GE was fined $100 million for trying to get bankrupt creditors to pay without informing the bankruptcy courts, in effect paying debts that they no longer legally owed. Not surprisingly, General Electric is the financial backer of WorldCom, the telecom company whose massive fraud and creative accounting led to the largest bankruptcy in US history.
The company has been involved in countless scandals, but strangely enough, they don’t seem to affect General Electric’s ability to win government contracts – but then, this is typical of all military contractors. According to a survey by the Center for Public Integrity, from 1990-2002, 30 of the US government’s top contractors were found guilty of fraud in 400 cases, leading to settlements and fines amounting to at least $3.4 billion. General Electric paid $982.9 million for 63 cases in this period.
Such repeated behavior and continued contracts wouldn’t be possible without friends in high places, of which General Electric. GE spent more than $31 million in 2001 and 2002 lobbying lawmakers; in 2000 it spent $16 million. Reigning CEO Jack Welch had enormous influence and was consistently ranked CEO of the Year by the slavish business press; he was major Republican donor as well. GE director Sam Nunn was senator for Georgia for 27 years, and also sits on the boards of ChevronTexaco. GE’s Senior Vice President and General Counsel and Secretary, Benjamin W. Heineman, used to work for the US government’s Department of Health, Education and Welfare. General Electric gave $221,350 to political campaigns in the 2002 election cycle, with 40 percent going to Democrats and 60 percent to Republicans.
CSC/ DynCorp
The world's premier rent-a-cop business runs the security show in Afghanistan, Iraq, and the US-Mexico border. They also run the coca crop-dusting business in Colombia, and occasional sex trafficking sorties in Bosnia. But what can you expect from a bunch of mercenaries?
CEO: Paul V. Lombardi
Military contracts 2003: $2.5 billion
The U.S. State Department awarded DynCorp a multimillion-dollar contract to advise the Iraqi government on setting up effective law enforcement, judicial and correctional agencies. DynCorp will arrange for up to 1,000 U.S. civilian law enforcement experts to travel to Iraq to help locals "assess threats to public order" and mentor personnel at the municipal, provincial and national levels. The company will also provide any logistical or technical support necessary for this peacekeeping project. DynCorp estimates it could recoup up to $50 million for the first year of the contract.
Already armed DynCorp employees make up the core of the police force in Bosnia. DynCorp troops protect Afghan president Hamid Karzai, while DynCorp planes and pilots fly the defoliation missions over the coca crops in Colombia. Back home in the United States Dyncorp is in charge of the border posts between the US and Mexico, many of the Pentagon's weapons-testing ranges and the entire Air Force One fleet of presidential planes and helicopters. The company also reviews security clearance applications of military and civilian personnel for the Navy.
DynCorp began in 1946 as a project of a small group of returning World War II pilots seeking to use their military contacts to make a living in the air cargo business. Named California Eastern Airways the original company was soon airlifting supplies to Asia used in the Korean War. By 2002 Dyncorp, headquartered in Reston, Virginia, was the nation's 13th largest military contractor with $2.3 billion in revenue until it merged with Computer Sciences Corporation, an El Segundo, California-based technology services company, in an acquisition worth nearly $1 billion.
The company is not short on controversy. Under the Plan Colombia contract, the company has 88 aircraft and 307 employees - 139 of them American - flying missions to eradicate coca fields in Colombia. Soldier of Fortune magazine once ran a cover story on DynCorp, proclaiming it "Colombia's Coke-Bustin' Broncos."
US Rep. Janice Schakowsky, an Illinois Democrat, told Wired magazine that hiring a private company to fly what amounts to combat missions is asking for trouble. DynCorp's employees have a history of behaving like cowboys," Schakowsky noted. "Is the US military privatizing its missions to avoid public controversy or to avoid embarrassment - to hide body bags from the media and shield the military from public opinion?" she asked.
Indeed a group of Ecuadoran peasants filed a class action against the company in September 2001. The suit alleges that herbicides spread by DynCorp in Colombia were drifting across the border, withering legitimate crops, causing human and livestock illness, and, in several cases, killing children. Assistant Secretary of State Rand Beers intervened in the case right away telling the judge the lawsuit posed "a grave risk to US national security and foreign policy objectives."
What's more, Kathryn Bolkovac, a U.N. International Police Force monitor filed a lawsuit in Britain in 2001 against DynCorp for firing her after she reported that Dyncorp police trainers in Bosnia were paying for prostitutes and participating in sex trafficking. Many of the Dyncorp employees were forced to resign under suspicion of illegal activity. But none were prosecuted, since they enjoy immunity from prosecution in Bosnia.
Earlier that year Ben Johnston, a DynCorp aircraft mechanic for Apache and Blackhawk helicopters in Kosovo, filed a lawsuit against his employer. The suit alleged that that in the latter part of 1999 Johnson "learned that employees and supervisors from DynCorp were engaging in perverse, illegal and inhumane behavior [and] were purchasing illegal weapons, women, forged passports and [participating in] other immoral acts."
The suit charges that "Johnston witnessed coworkers and supervisors literally buying and selling women for their own personal enjoyment, and employees would brag about the various ages and talents of the individual slaves they had purchased." "DynCorp is just as immoral and elite as possible, and any rule they can break they do," Johnston told Insight magazine. He charged that the company also billed the Army for unnecessary repairs and padded the payroll. "What they say in Bosnia is that DynCorp just needs a warm body -- that's the DynCorp slogan. Even if you don't do an eight-hour day, they'll sign you in for it because that's how they bill the government. It's a total fraud."
Science Applications International Corporation
SAIC, awarded control of the Iraqi Media Network, was not able to spin US propaganda in Iraq and ended up being forced to withdraw. But their financial prospects remain solid as supplier of surveillance technology to US spy agencies.
CEO: K.C. Dahlberg
Military contracts 2003: $2.6 billion
Campaign contributions: $704,048 in 2002
In the fiscal year that ended Jan. 31, 2002, San Diego-based Science Applications International Corporation generated $6.1 billion in revenue and ranked number 294 on the Fortune 500 list of the largest U.S. companies. Founded in 1969 by physicist J. Robert Beyster, formerly a nuclear scientist with the Los Alamos National Laboratory, it is an employee-owned, decentralized company.
The company made a fortune during the dot com boom by buying Network Solutions, the Web domain name keeper, for $4.5 million in 1996 and selling it for $3.1 billion before the bubble popped.
SAIC was given the contract to run the Occupational Authority’s Iraqi Media Network, including television stations, radio stations and newspapers. But even as propaganda goes, the network was such a flop – no Iraqis would watch it – that SAIC lost the contract this January.
But SAIC's biggest source of income is surveillance especially for the United States spy agencies: it is reportedly the largest recipient of contracts from the National Security Agency (NSA) and one of the top five contractors to the Central Intelligence Agency (CIA). Some 5,000 employees (or one in eight employees) have security clearances. Beyster himself has one of the highest top-secret clearances of any civilian in the country. "We are a stealth company," Keith Nightingale, a former Army special ops officer, told a magazine named Business 2.0. "We're everywhere, but almost never seen."
Today two of SAIC's most valuable products are: TeraText and Latent Semantic Indexing (LSI) data-mining programs that are used by intelligence agencies to sift the immense volumes of data they now collect by monitoring phone calls, faxes, e-mails, and other types of electronic communications.
SAIC became home to former United Nations weapons inspector David Kay who went to SAIC as a vice president from 1993 to 2002. Last year he was hired by the CIA to return to Iraq and head the search for weapons of mass destruction.
Critics note that the company has a revolving door with the spy agencies: NSA veteran William B. Black Jr. retired from the intelligence agency in 1997, went to SAIC for three years and returned to the NSA as deputy director in 2000. Two years later, SAIC won the $282 million job of overseeing the latest phase of Trailblazer, the most thorough revamping in the agency's history of its eavesdropping systems.
SAIC has dozens of other government contracts: it trains air marshals for the Federal Aviation Administration, works with Bechtel to run the proposed Yucca Mountain nuclear waste dump in Nevada on Western Shoshone traditional lands (despite major protests from the Native Americans), The Army hired the company to destroy old chemical weapons at Aberdeen Proving Ground, the National Cancer Institute uses SAIC to help run its research facility in Frederick, the Transportation Security Administration asked it to dispose of scissors and pocket knives confiscated from air travelers and SAIC's unmanned Vigilante helicopters, equipped with Raytheon's low-cost, precision-kill rockets, are to undergo testing by the Army.
Not all of its surveillance work is for the United States military The company has installed a location-based Global Positioning System tracking service for BellSouth's 14,000 installation and maintenance vehicles and today its latest contract is to run security for the upcoming Athens Olympics from a zeppelin that will hover over the city.
Corpwatch (http://www.corpwatch.org)
Lockheed Martin
The world's #1 military contractor, responsible for the U-2 and SR-71 spy planes, F-16, F/A-22 fighter jet, and Javelin missiles. They've also made millions through insider trading, falsifying accounts, and bribing officials.
CEO: Vance D. Coffman
Military contracts 2003: $21.9 billion
Campaign contributions: $9.7 million in 2002
This Bethesda, Maryland-based company is the world's #1 military contractor as well as the world’s largest arms exporter. Lockheed Martin built the U-2 and the SR-71 Blackbird spy planes. Today they make F-16, F/A-22 jet fighter, Hellfire and Javelin missiles, as well as designing nuclear weapons. Its F-117 stealth attack fighters were used to “shock and awe” the population of Iraq at the start of the US invasion, while since the start of that war the Air Force has increased production of Lockheed’s PAC-3 Patriot missile – which cost $91 million per copy.
According to the Arms Trade Resource Center, Lockheed Martin gets $105 from each U.S. taxpayer and $228 from each U.S. household. In 2002 the company was effectively taxed at 7.7% compared to an average tax rate for individuals of 21-33%.
In late 2001 the company was awarded the world's largest weapons contract ever, a $200 billion deal to build the Joint Strike Fighter, a "next-generation" combat jet that eventually will replace aircraft used by the Navy, Air Force and Marine Corps. In the last few years the SEC has investigated Lockheed for insider trading and falsifying their accounts.
Lockheed Martin did not win the contract on force of personality alone, or fighter plane design. During the calendar year 2000, Lockheed Martin spent more than $9.8 million lobbying members of Congress and the Clinton administration, more than double the $4.2 million the company spent during 1999. Among the company's newest lobbyists: Haley Barbour, the former chairman of the Republican National Committee. During the 1999-2000 election cycle, Lockheed Martin contributed just over $2.7 million in soft money, PAC and individual contributions to federal candidates and parties. More than two-thirds of that money went to Republicans. Lockheed Martin spends more on lobbying Congress than any of its competitors, spending a whopping $9.7 million in 2002. Only General Electric and Philip Morris reported more lobbying expenses. And in the 2004 election cycle, Lockheed has already given more than $400,000.
Lockheed has also been able to exercise its influence in a larger way – in support of the invasion of Iraq. The company’s former vice-president Bruce Jackson chaired the Coalition for the Liberation of Iraq, a bipartisan group formed to promote Bush’s plan for war in Iraq. Bruce Jackson was also involved in corralling the support for the war from Eastern European countries, going so far as helping to write their letter of endorsement for military intervention. Not surprisingly, Lockheed also has business relations with these countries. In 2003 Poland shelled out $3.5 billion for 48 F-16 fighter planes, which it was able to buy with a $3.8 billion loan from the US.
In 1976 Lockheed paid millions of dollars to Japanese government officials to smooth the way for the sale of Lockheed's airplanes to a Japanese airline corporation, All Nippon Airways. They paid Japanese gangster and yakuza chief Kodama Yoshio $2.1 million in payoffs to help them sell their new wide-bodied passenger airplane, the TriStar L1011, against stiff competition from Boeing and McDonnell-Douglas. Kodama relied on familiar yakuza techniques to force the resignation of Tetsuo Oba, president of All Nippon Airways. At a stockholders' meeting, Kodama packed the room with "sokaiya" -- financial specialists -- who leaked information about an illegal $1 million loan which had been paid to Oba. In disgrace, ANA's president stepped down to be replaced by a candidate favorable to Kodama's interests.
The former prime minister, the former minister of transportation, and the former parliamentary vice-minister of transportation were arrested and prosecuted. The former prime minister was sentenced to four years imprisonment with forced labor but he died while the case was in the Supreme Court.
Boeing
Aside from 747s, Boeing makes "smart" bombs, F-15 fighters, and Apache helicopters. Boeing has paid tens of millions in fines for selling flawed parts that led to thousands of unnecessary landings and at least one fatal crash and has been plagued by scandals connected to the company’s influence-peddling.
CEO: Harry C. Stonecipher
Military contracts 2003: $17.3 billion
Major campaign contributions: $1.6 million in 2002
America’s largest exporter, Boeing is also the Pentagon’s second largest contractor, eclipsed only by Lockheed Martin. In 2003 Boeing landed over $27 billion in contracts from the Department of Defense. While revenues from commercial planes have been suffering in the wake of September 11th – leading to the lay off of tens of thousands of workers – demand for its military production is booming. Revenue from military goods now outstrips Boeing’s earnings from commercial sales by $5 billion a year.
The world's largest aerospace company has a role in all three of the Pentagon’s advanced fighter plane programs: the F-22 Raptor, the Joint Strike Fighter/F-35, and the F-18 and it makes both F-15 fighter and Apache helicopters. Caught knowingly selling flawed parts for the Apache that led to thousands of unnecessary landings and at least one fatal crash, Boeing has paid tens of millions of dollars in fines. Boeing also oversees many of the Pentagon’s missile defense programs, operates the Space Shuttle, makes the guidance systems for the Minuteman and Peacekeeper missiles and builds precision munitions such as the Standoff Land Attack Missile-Expanded Response (SLAM-ER), Conventional Air-Launched Cruise Missile (CALCM), Brimstone and Harpoon missiles, and JDAM "smart" bombs. Boeing’s JDAM (joint direct attack munitions) kit fits over a "dumb" missile and coverts it into a satellite-guided weapon using movable fins and a satellite positioning system to make a “smart” bomb. But there’s a downside: the precision JDAMs have repeatedly missed their targets in Iraq and Afghanistan, hitting both civilians and US soldiers.
The lobbying efforts of Boeing, and the revolving door between the US government and the Chicago-based giant, are legendary. But Boeing’s influence-peddling finally turned sour last December when Boeing CEO Philip M. Condit was forced to resign in the wake of revelations of that the company negotiated the hiring of top Air Force procurement official Darlene Druyun while Druyun was setting up a lucrative $27.6 billion leasing deal of Boeing’s 767 air-refueling aircrafts over a period of ten years. The deal, which went through despite controversy, will cost taxpayers up to $10 billion dollars more than if the Air Force has purchased the aircrafts outright.
But Boeing still has a lot of well-connected people looking out for its interests. John Shalikashvili, retired Chairman of the Joint Chiefs of Staff is on the Boeing board. Former Deputy Secretary of Defense, Rudy de Leon heads up Boeing's Washington office. After September 11th Boeing beefed up its political connections by hiring former Senator Bennett Johnson (D-LA) and former Rep. Bill Paxon (R-NY). Former Ambassador Thomas Pickering, Boeing's senior vice president for international relations, uses his forty years of experience to generate business for Boeing with foreign governments and corporations. Richard Perle, former Chairman and current member of the Pentagon’s Defense Policy Board, is another important Boeing ally within the corridors of power. So it should come as no surprise that Boeing has provided Perle’s venture capital firm, Trireme Partners, with $20 million. Two other Defense Policy Board members also work as consultants for Boeing: the Air Force’s General Ronald Fogelman and former Navy Admiral David Jeremiah.
Boeing ranks number sixty six in the Center for Responsive Politics’ list of the 100 biggest political donors since 1989. Over the nineties, Boeing handed out $7.6 million in Political Action Committee (PAC) and soft money contributions. During the 2002 election year, Boeing gave $909,134 in PAC contributions and $700,482 in soft money donations and its contributions added up to more than $1.5 million during the 2000 elections.
Raytheon
Raytheon means "light from the gods." Makers of "Bunker Buster" bombs, Tomahawk and Patriot missiles, this company loves big noises and large civilian casualty counts. When a missile killed 62 civilians in a Baghdad market, that was Light from the Gods.
CEO: William H. Swanson
Military contracts 2003: $7.9 billion
Campaign contributions: $1.08 million in 2002
This company loves to make things that go boom and kill lots of people such as Patriot & Tomahawk missiles including a missile that struck Baghdad market Shu'ale, killing at least 62 civilians, during the second Gulf War. About 100 Raytheon million dollar land-attack cruise missiles were lobbed at Afghanistan from U.S. Navy ships since October 7th, fifty in the opening salvo alone.
Raytheon also makes the "bunker buster" GBU- 28, a 5,000-pound bomb and missiles like the TOW, Maverick and Javelin, all being used in Operation Enduring Freedom. In addition to missiles, Raytheon also builds sensors and radars used on unmanned and manned reconnaissance airplanes used extensively in Afghanistan.
The company has paid millions of dollars in fines for illegal activities. In October 1994, Raytheon paid $4 million to settle government charges that it had inflated the cost of a $71.5 million radar contract. In October 1993, Raytheon paid out $3.7 million to settle U.S. government charges that it had inflated the cost of Patriot missiles. The year before the company paid out $2.75 million for overpricing missile test equipment. In March 1990, Raytheon pleaded guilty in federal court to Judge Albert Bryan, Jr. in Virginia for illegally obtaining secret Air Force budget and planning documents. The company paid a million dollars in fines. In October 1987, the Justice Department signed on to a $36 million lawsuit originally filed by a former Raytheon employee, which alleged that Raytheon submitted false claims for work done on missiles.
One of Raytheon's more secretive subsidiaries is E-Systems, whose major clients have historically been the CIA and other spy agencies like the National Security Agency and the National Reconnaissance Office. An unnamed Congressional aide told the Washington Post once that the company was ''virtually indistinguishable'' from the agencies it serves. ''Congress will ask for a briefing from E- Systems and the (CIA) program manager shows up,'' the aide is quoted as saying. ''Sometimes he gives the briefing. They're interchangeable.''
Aircraft support for drug-enforcement activities become a part of E-Systems' work after it bought up Air Asia, the CIA's aircraft repair and maintenance facility in Taiwan in 1975. Until E-Systems took it over, Air Asia provided support for Air America, the CIA's covert airline that ferried arms, heroin and opium in Indo-China during the Vietnam War, according to the British reporter Christopher Robbins, who wrote the authoritative account of the airline's history in 1979.
Immediately after acquiring Air Asia, E-Systems won a contract to maintain planes for the U.S.-funded Operation Condor in Mexico. Condor monitored drug trafficking in the state of Sinaloa in the mid-1970s. A 1985 U.S. congressional study found that the contract was ''a shambles ... There are no adequate records to indicate how the funds have been and are being spent.'' The study also cited incidents of planes being used for joy rides. Peter Dale Scott and Jonathon Marshall, authors of ''Cocaine Politics,'' say that the Condor operation ''succeeded in filling the jails with hapless peasants ... but failed to arrest a single drug trafficker.''
E-Systems paid $4.2 million in 1994 to settle a lawsuit brought by Carlos Uribe, a man in El Paso, Texas, on the Mexican border. Uribe charged that an E-Systems employee, Truett Burney, accidentally murdered Uribe's wife in a hotel room when his gun went off in an adjoining room in September, 1991. Burney's lawyers said he was helping install ''top secret listening devices'' on suspected drug traffickers at the time.
E-Systems has a murky history as a military contractor also. The first time the company appeared in the news was when it was sued by the widow of an employee who was killed in a 1971 crash of an Air Force plane sent to spy on a French nuclear test.
In the early 1970s, E-Systems won the contract to install communication gear on Air Force One, the U.S. president's plane. This led to similar contracts for the heads of state of Iran, Israel, Nigeria, Malaysia, Romania and Saudi Arabia. E-Systems has since built the ''Doomsday Plane,'' an airborne command post for the Pentagon and the White House in the event of a nuclear attack.
In 1977, during the height of the ''dirty war'' in Argentina, E-Systems won a contract to supply ''Wheelbarrow'' systems -- a radio transmitter that detonates explosives by remote control -- to the Argentine police. In August 1990, E-Systems pleaded guilty to criminal charges of falsifying results on tactical field radios manufactured at its Florida factories. The company paid out almost $3 million in fines to settle the charges.
Halliburton
This company truly has a guardian angel: former Halliburton CEO and now Vice President Dick Cheney who looks out for its interests from the White House. The result? $2 billion in contracts “rebuilding” Iraq in 2003.
CEO: David J. Lesar
Military contracts 2003: $3.9 billion
The biggest windfall in the invasion of Iraq has most certainly gone to the oil services and logistics company Halliburton. The company, which was formerly run by Vice President Dick Cheney, has won over $8 billion in contracts in Iraq in 2003 alone. And while Halliburton’s dealings in Iraq have been dogged everywhere by scandal – including now a criminal investigation into overcharging by Halliburton subsidiary Kellogg Brown and Root for gas shipped into Iraq – Vice President Cheney manages to be doing quite well from the deal. He owns $433,000 unexercised Halliburton stock options worth more than $10 million dollars.
But Halliburton’s history of benefiting from government largesse goes back a ways. From 1962 to 1972 the Pentagon paid the company tens of millions of dollars to work in South Vietnam, where they built roads, landing strips, harbors, and military bases from the demilitarized zone to the Mekong Delta. The company was one of the main contractors hired to construct the Diego Garcia air base in the Indian Ocean, according to Pentagon military histories.
In the early 1990s the company was awarded the job to study and then implement the privatization of routine army functions under then-secretary of defense Dick Cheney. When Cheney quit his Pentagon job, he landed the job of Halliburton's CEO, bringing with him his trusted deputy David Gribbin. The two substantially increased Halliburton's government business until they quit in 2000, once Cheney was elected vice president. This included a $2.2 billion bill for a Brown and Root contract to support US soldiers in Operation Just Endeavor in the Balkans.
After Cheney and Gribbin departed, another confidante of Cheney, Admiral Joe Lopez, former commander in chief for U.S. forces in southern Europe, took over Gribbin's old job of go-between for the government and the company, according to Brown and Root's own press releases.
In 2001 the company took in $13 billion in revenues, according to its latest annual report. Currently, Brown and Root estimates it has $740 million in existing U.S. government contracts (approximately 37 percent of its global business).
For example, in mid November 2001, Brown and Root was paid $2 million to reinforce the U.S. embassy in Tashkent, Uzbekistan, under contract with the State Department, according to the New York Times. More recently Brown and Root was paid $16 million by the federal government to go to Guantnamo Bay, Cuba, to build a 408-person prison for captured Taliban fighters, according to Pentagon press releases.
That's by no means all: Brown and Root employees can be found back home running support operations from Fort Knox, Kentucky, to a naval base in El Centro, California, according to company press releases. In December 2001, Brown and Root secured a 10-year deal named the Logistics Civil Augmentation Program (LOGCAP), from the Pentagon, which has already been estimated at $830 million.
Meanwhile independent agencies are still skeptical about claimed financial savings from contracting out military support operations. According to the Government Accounting Office (GAO), a February 1997 study showed that a Brown and Root operation in Bosnia estimated at $191.6 million when presented to Congress in 1996 had ballooned to $461.5 million a year later.
All told this former Yugoslavia contract has now cost the taxpayer $2.2 billion over the last several years. Examples of overspending by contractors include flying plywood from the United States to the Balkans at $85.98 a sheet and billing the army to pay its employees' income taxes in Hungary.
A subsequent GAO report, issued September 2000, showed that Brown and Root was still taking advantage of the contract in the Balkans. Army commanders were unable to keep track of the contract because they were typically rotated out of camps after a six-month duration, erasing institutional memory, according to the report. The GAO painted a picture of Brown and Root contract employees sitting idly most of the time. The report also noted that a lot of staff time was spent doing unnecessary tasks, such as cleaning offices four times a day. Pentagon officials were able to identify $72 million in cost savings on the Brown and Root contract simply by eliminating excess power generation equipment that the company had purchased for the operation.
Brown and Root has been also been investigated for over billing the government in its domestic operations. In February 2002, Brown and Root paid out $2 million to settle a suit with the Justice Department that alleged the company defrauded the government during the mid-1990s closure of Fort Ord in Monterey, California.
The allegations in the case surfaced several years ago when Dammen Gant Campbell, a former contracts manager for Brown and Root turned whistle-blower, charged that between 1994 and 1998 the company fraudulently inflated project costs by misrepresenting the quantities, quality, and types of materials required for 224 projects. Campbell said the company submitted a detailed "contractors pricing proposal" from an army manual containing fixed prices for some 30,000 line items.
Once the proposal was approved, the company submitted a more general "statement of work," which did not contain a breakdown of items to be purchased. Campbell maintained the company intentionally did not deliver many items listed in the original proposal. The company defended this practice by claiming the statement of work was the legally binding document, not the original contractors pricing proposal.
"Whether you characterize it as fraud or sharp business practices, the bottom line is the same: the government was not getting what it paid for," says Michael Hirst, of the United States Attorney's Office in Sacramento, who litigated the suit on behalf of the government. "We alleged that they exploited the contracting process and increased their profits at the governments expense."
Northrop Grumman
Makers of the B-2 stealth bomber, you'd think this company could stay under the radar. But they're dogged by scandals-from bribing Saudi princes to botching the training of the Iraqi National Army to the tune of $48 million. Above board, their job is simply selling death.
CEO: Ronald Sugar
Military contracts 2003: $11.1 billion
Campaign contributions: $2.01 million in 2002
Northrop Grumman makes B-2 stealth bomber, which costs $2 billion per plane, the F-14 fighter, the unmanned Global Hawk and amphibious assault ships. Its Newport News division is the only designer, builder and refueler of nuclear-powered aircraft carriers in the US. Northrop Grumman is also responsible for ALQ-15 jamming device, used to protect jets from enemy radar-guided missiles. As David Steigman, senior defense analyst for the Teal Group, boasts, "Northrop Grumman's role is supplying the command control communications and the intelligence surveillance systems to find the bad guys and bop them in the head."
And the company is politically savvy as well, having given $8.5 million in federal campaign contributions from 1990-2002, which has paid off over the years in spades. In December 2003, Northrop Grumman and partner Raytheon won a contract potentially worth more than $10 billion with the Pentagon for a missile defense system. It’s now the third largest “defense” company in the US, after Lockheed Martin and Boeing.
In June of 2003, Northrop Grumman paid $111.2 million to settle a suit alleging their subsidiary, TRW, overcharged the US government space projects in the 1990s. But paying out money is not hard for the company. Northrop Grumman’s subsidiary Logicon, along with Oracle, was suspected of solidifying a purchasing deal with then Governor Gray Davis in exchange for a sizable campaign donation; an executive at Logicon was also investigated by the SEC for aiding and abetting securities fraud in a separate case. And in 1972 Northrop was caught bribing the head of the Saudi air force and a Saudi prince to buy F-5 military aircraft.
Former Northrop Grumman Electronics Systems chief James Roche served as George Bush's Secretary of the Air Force for two years. Since September 11th, Roche has emphasized the need for more spending on intelligence systems, specifically mentioning Northrop Grumman's Airborne Warning and Control Systems (AWACS), a control center and a huge radar disc mounted atop a Boeing 707, which serves "as the airborne nerve center for a military air campaign." At least seven former officials, consultants, or shareholders of Northrop Grumman now hold posts in the Bush administration, ensuring that the company’s interests are not overlooked for lucrative contracts in the “war on terrorism”, including Deputy Secretary of Defense Paul Wolfowitz, Vice-Presidential Chief of Staff I. Lewis Libby, Pentagon Comptroller Dov Zakheim, and Sean O’Keefe, director of NASA.
Northrop Grumman’s subsidiary, Vinnell Corporation, has been catching a lot of flack lately. They landed a $48 million contract with the US occupational authority to train the Iraqi National Army, but have botched the job so badly that the Jordanian Army has recently been brought in to take over the job.
Vinnell Corporation, founded by the late A. S. Vinnell in 1931 to pave roads in Los Angeles, handles a number of large domestic as well as government projects. After working with Chinese Nationalist Chiang Kai-shek to back US anti-communist efforts against Mao Zedong, the company became the major contractor for US military operations in Okinawa, overhauled Air Force planes in Guam in the early 1950s, and sent men and equipment onto the battlefields of the Korean War.
Now based in Fairfax, Virginia, the company has been controlled in the past through a web of interlocking ownership by a partnership that included James A. Baker III and Frank Carlucci, former U.S. secretaries of state and defense under Presidents George Bush senior and Ronald Reagan respectively.
Perhaps the most important military contract Vinnell landed was in 1975 when the Pentagon helped the company win a bid to train the 75,000 strong Saudi Arabian National Guard, a military unit descended from the Bedouin warriors who helped the Saud clan impose control on the peninsula early in last century. This aspect of Vinnell’s activities was highlighted last spring when Saudi insurgents attacked a compound housing Vinnell workers. Currently, Vinnell has a five-year contract with the House of Saud worth $831 million, which is bankrolled by the Saudis but run by the US Army Materiel Command.
General Dynamics
General Dynamics makes traditional F-16 jets, Abrams tanks, and Trident subs. With contracts in the billions, and new markets (read: wars) opening every day, they're not as washed up as some may think.
CEO: Nicholas D. Chabraja
Military contracts 2003: $8.2 billion
Campaign contributions: $ 1.64 million in 2002
The Falls Church, Virginia-based company is second only to Northrop Grumman as the US Navy’s largest shipbuilder and is the United States’ leading producer of combat vessels, including nuclear submarines, surface combatants, and auxiliary ships. General Dynamics also makes land and amphibious combat systems and information technology systems for military use. Subsidiaries of General Dynamic produce some of its best-known military products: the innocuously-named Bath Iron Works builds the DDG 52 destroyer; Land Systems makes GD’s famous M1 tank; and Electric Boat makes the Trident and Seawolf attack submarine.
In the past several years, “defense” companies have been swallowing up small technology firms in order to upgrade to the type of high-tech warfare that the Defense Secretary Donald Rumsfeld is pushing in the Pentagon. General Dynamics got on the ball early, setting up an Information Technology sector in the late 1990s, which has now become one of GD’s fastest growing divisions with revenues of $4 billion. Last year, General Dynamics acquired Creative Technology Inc, which makes computer systems for the transmission of classified information in order to do a technical makeover on the company’s tanks and submarines, outfitting them with digital capabilities.
General Dynamics was accused of having paid former South Korean president Roh Tae Woo $100 million in a bid to get the country to purchase 120 F-16 fighter jets in 1991. South Korea ultimately bought 120 fighters for $6 billion, after reversing the government’s earlier decision to buy McDonnell Douglas’ F-18 despite the preference for the latter of many in the South Korean Air Force. The division of General Dynamics that produces F-16 was eventually bought by Lockheed Martin, in one of its many consolidations and both companies were investigated by the US government for foreign bribery.
More recently, General Dynamics received a subpoena in early 2004 on charges of having falsely stated that submarine parts sold to the US Navy were tested properly. The company has also been subpoenaed in an investigation by the Department of Defense’s inspector general over whether it had produced shoddy parts for military use.
The company’s record for labor rights isn’t much better. Workers took General Dynamics to court,
arguing that the company was violating the federal Age Discrimination in Employment Act of 1969 for not guaranteeing retirement health benefits to workers under fifty. The case is still pending.
The Secretary of the Navy, Gordon England, is a former General Dynamics executive. The Boston Globe noted at the time of his nomination that "Gordon England had no military experience, but he had just the right qualification to become President Bush’s pick for secretary of the Navy: Two decades in the corporate world." Former Pentagon and military officials populate General Dynamic’s Board of Directors, including Jay L. Johnson, Chief of Naval Operations in the U.S. Navy, Paul G. Kaminski, Under Secretary of U.S. Department of Defense for Acquisition and Technology, and George A. Joulwan, former U.S. Army Supreme Allied Commander, Europe.
Current Secretary of State Colin Powell has an interest in the company as well. He received $1 million of stock in General Dynamics, as well as more than $20 million in other corporate investments, when he joined the board of America Online.
In 2002, General Dynamics gave $1.64 million in campaign contributions, with 60% going to Republicans. So far in the 2004 election cycle, the company has given $731,725, 62% of it to Republican candidates.
General Electric
Run until 2001 by “Neutron” Jack Welch, who made it a matter of principle to lay off 10% of his workers per year, the world’s biggest company churns out plastics, aircraft engines and nuclear reactors and media spin through NBC, CNBC, Telemundo, and msnbc.com.
CEO: Jeffrey R. Immelt
Military contracts 2003: $2.8 billion
Campaign contributions: $221,350 in 2002
The world’s largest company by market share, General Electric’s revenues in 2003 totaled $134.2 billion. GE was run until 2001 by “Neutron” Jack Welch, who made it a matter of principle to lay off 10% of his workers per year.
General Electric makes household appliances, plastics, water treatment systems, lighting, medical equipment, and commercial financial services. It also makes aircraft engines and nuclear reactors, and keeps criticism at bay with its ownership of media giants NBC, CNBC, Telemundo, Bravo, and, in partnership with Microsoft, msnbc.com. GE’s recent partnership with Vivendi added Universal Studios, USA, Trio and Sci-fi cable channels to its $43 billion media empire.
General Electric is one of the world’s top three producers of jet engines, supplying Boeing, Lockheed Martin and other military aircraft makers for the powering of airplanes and helicopters.
The “war on terrorism” has seen GE’s military contracts rise substantially. But the company’s “defense” side has been doing well for a while. GE and other military contractors got a big boost under the Clinton administration from Presidential Directive 41 which stated that it was the job of US diplomats to promote arms sales abroad in order to safeguard American jobs; this directive tied the promotions of diplomats to how effectively they hocked US armaments.
GE has designed 91 nuclear power plants in 11 countries, yet its nuclear reactors around the world have a fatal flaw. In the event of a nuclear meltdown, there is a 90 percent chance that radiation from GE-designed reactors would be discharged directly into the atmosphere. While the US Nuclear Regulatory Commission is aware of the problem, it continues to license GE nuclear reactors.
GE’s history with nuclear power is an ugly one. In the 1940s-1960s the company ran experiments on humans with radiation, including irradiating the reproductive organs of prison inmates in Walla Walla, Washington, without warning them of the risk of cancer. Other tests were run on the elderly and hospital patients. General Electric intentionally released large amounts of radiation into the air from the Hanford Nuclear Reservation in Richland, in order to see the distance it would travel. These atrocities were revealed in hearings in 1986 held by Representative Edward Markey of Massachusetts. The company has also been accused of knowingly poisoning its workers at the Knolls Atomic Power Laboratory in Schenectady, New York with radiation and asbestos.
General Electric is currently attempting to overturn the US Superfund Law of 1980, which allows the government to hold polluters responsible for cleaning up their toxic chemicals. GE argues that it is “unconstitutional” for the Environmental Protection Agency to force the company to pay $500 million for the cleanup of the Hudson River, where GE dumped carcinogenic PCBs, or polychlorinated biphenyls, over three decades. In March 2004, a federal appeals court has revived GE’s lawsuit. It shouldn’t come as a surprise that GE is trying to change the Superfund Law: the company is responsible for 78 Superfund sites around the US.
It’s clearly not safe to be a worker for GE either. The US government’s Occupational Safety and Health Administration, or OSHA, has cited the company for 858 workplace safety violations from 1990-2001.
General Electric has been involved in so many cases of fraud that in the 1990s the Pentagon's Defense Contract Management Agency created a special investigations office specifically for the company, which indicted GE on 22 criminal counts and recovered $221.7 million. In one case, in 1992, GE entered a guilty plea to criminal and civil charges for defrauding the Pentagon in a case where money was funneled to the Israeli military. GE was fined $69 million for violation of the Foreign Corrupt Practices Act.
GE’s financial division has been another area ripe for fraud. GE was fined $100 million for trying to get bankrupt creditors to pay without informing the bankruptcy courts, in effect paying debts that they no longer legally owed. Not surprisingly, General Electric is the financial backer of WorldCom, the telecom company whose massive fraud and creative accounting led to the largest bankruptcy in US history.
The company has been involved in countless scandals, but strangely enough, they don’t seem to affect General Electric’s ability to win government contracts – but then, this is typical of all military contractors. According to a survey by the Center for Public Integrity, from 1990-2002, 30 of the US government’s top contractors were found guilty of fraud in 400 cases, leading to settlements and fines amounting to at least $3.4 billion. General Electric paid $982.9 million for 63 cases in this period.
Such repeated behavior and continued contracts wouldn’t be possible without friends in high places, of which General Electric. GE spent more than $31 million in 2001 and 2002 lobbying lawmakers; in 2000 it spent $16 million. Reigning CEO Jack Welch had enormous influence and was consistently ranked CEO of the Year by the slavish business press; he was major Republican donor as well. GE director Sam Nunn was senator for Georgia for 27 years, and also sits on the boards of ChevronTexaco. GE’s Senior Vice President and General Counsel and Secretary, Benjamin W. Heineman, used to work for the US government’s Department of Health, Education and Welfare. General Electric gave $221,350 to political campaigns in the 2002 election cycle, with 40 percent going to Democrats and 60 percent to Republicans.
CSC/ DynCorp
The world's premier rent-a-cop business runs the security show in Afghanistan, Iraq, and the US-Mexico border. They also run the coca crop-dusting business in Colombia, and occasional sex trafficking sorties in Bosnia. But what can you expect from a bunch of mercenaries?
CEO: Paul V. Lombardi
Military contracts 2003: $2.5 billion
The U.S. State Department awarded DynCorp a multimillion-dollar contract to advise the Iraqi government on setting up effective law enforcement, judicial and correctional agencies. DynCorp will arrange for up to 1,000 U.S. civilian law enforcement experts to travel to Iraq to help locals "assess threats to public order" and mentor personnel at the municipal, provincial and national levels. The company will also provide any logistical or technical support necessary for this peacekeeping project. DynCorp estimates it could recoup up to $50 million for the first year of the contract.
Already armed DynCorp employees make up the core of the police force in Bosnia. DynCorp troops protect Afghan president Hamid Karzai, while DynCorp planes and pilots fly the defoliation missions over the coca crops in Colombia. Back home in the United States Dyncorp is in charge of the border posts between the US and Mexico, many of the Pentagon's weapons-testing ranges and the entire Air Force One fleet of presidential planes and helicopters. The company also reviews security clearance applications of military and civilian personnel for the Navy.
DynCorp began in 1946 as a project of a small group of returning World War II pilots seeking to use their military contacts to make a living in the air cargo business. Named California Eastern Airways the original company was soon airlifting supplies to Asia used in the Korean War. By 2002 Dyncorp, headquartered in Reston, Virginia, was the nation's 13th largest military contractor with $2.3 billion in revenue until it merged with Computer Sciences Corporation, an El Segundo, California-based technology services company, in an acquisition worth nearly $1 billion.
The company is not short on controversy. Under the Plan Colombia contract, the company has 88 aircraft and 307 employees - 139 of them American - flying missions to eradicate coca fields in Colombia. Soldier of Fortune magazine once ran a cover story on DynCorp, proclaiming it "Colombia's Coke-Bustin' Broncos."
US Rep. Janice Schakowsky, an Illinois Democrat, told Wired magazine that hiring a private company to fly what amounts to combat missions is asking for trouble. DynCorp's employees have a history of behaving like cowboys," Schakowsky noted. "Is the US military privatizing its missions to avoid public controversy or to avoid embarrassment - to hide body bags from the media and shield the military from public opinion?" she asked.
Indeed a group of Ecuadoran peasants filed a class action against the company in September 2001. The suit alleges that herbicides spread by DynCorp in Colombia were drifting across the border, withering legitimate crops, causing human and livestock illness, and, in several cases, killing children. Assistant Secretary of State Rand Beers intervened in the case right away telling the judge the lawsuit posed "a grave risk to US national security and foreign policy objectives."
What's more, Kathryn Bolkovac, a U.N. International Police Force monitor filed a lawsuit in Britain in 2001 against DynCorp for firing her after she reported that Dyncorp police trainers in Bosnia were paying for prostitutes and participating in sex trafficking. Many of the Dyncorp employees were forced to resign under suspicion of illegal activity. But none were prosecuted, since they enjoy immunity from prosecution in Bosnia.
Earlier that year Ben Johnston, a DynCorp aircraft mechanic for Apache and Blackhawk helicopters in Kosovo, filed a lawsuit against his employer. The suit alleged that that in the latter part of 1999 Johnson "learned that employees and supervisors from DynCorp were engaging in perverse, illegal and inhumane behavior [and] were purchasing illegal weapons, women, forged passports and [participating in] other immoral acts."
The suit charges that "Johnston witnessed coworkers and supervisors literally buying and selling women for their own personal enjoyment, and employees would brag about the various ages and talents of the individual slaves they had purchased." "DynCorp is just as immoral and elite as possible, and any rule they can break they do," Johnston told Insight magazine. He charged that the company also billed the Army for unnecessary repairs and padded the payroll. "What they say in Bosnia is that DynCorp just needs a warm body -- that's the DynCorp slogan. Even if you don't do an eight-hour day, they'll sign you in for it because that's how they bill the government. It's a total fraud."
Science Applications International Corporation
SAIC, awarded control of the Iraqi Media Network, was not able to spin US propaganda in Iraq and ended up being forced to withdraw. But their financial prospects remain solid as supplier of surveillance technology to US spy agencies.
CEO: K.C. Dahlberg
Military contracts 2003: $2.6 billion
Campaign contributions: $704,048 in 2002
In the fiscal year that ended Jan. 31, 2002, San Diego-based Science Applications International Corporation generated $6.1 billion in revenue and ranked number 294 on the Fortune 500 list of the largest U.S. companies. Founded in 1969 by physicist J. Robert Beyster, formerly a nuclear scientist with the Los Alamos National Laboratory, it is an employee-owned, decentralized company.
The company made a fortune during the dot com boom by buying Network Solutions, the Web domain name keeper, for $4.5 million in 1996 and selling it for $3.1 billion before the bubble popped.
SAIC was given the contract to run the Occupational Authority’s Iraqi Media Network, including television stations, radio stations and newspapers. But even as propaganda goes, the network was such a flop – no Iraqis would watch it – that SAIC lost the contract this January.
But SAIC's biggest source of income is surveillance especially for the United States spy agencies: it is reportedly the largest recipient of contracts from the National Security Agency (NSA) and one of the top five contractors to the Central Intelligence Agency (CIA). Some 5,000 employees (or one in eight employees) have security clearances. Beyster himself has one of the highest top-secret clearances of any civilian in the country. "We are a stealth company," Keith Nightingale, a former Army special ops officer, told a magazine named Business 2.0. "We're everywhere, but almost never seen."
Today two of SAIC's most valuable products are: TeraText and Latent Semantic Indexing (LSI) data-mining programs that are used by intelligence agencies to sift the immense volumes of data they now collect by monitoring phone calls, faxes, e-mails, and other types of electronic communications.
SAIC became home to former United Nations weapons inspector David Kay who went to SAIC as a vice president from 1993 to 2002. Last year he was hired by the CIA to return to Iraq and head the search for weapons of mass destruction.
Critics note that the company has a revolving door with the spy agencies: NSA veteran William B. Black Jr. retired from the intelligence agency in 1997, went to SAIC for three years and returned to the NSA as deputy director in 2000. Two years later, SAIC won the $282 million job of overseeing the latest phase of Trailblazer, the most thorough revamping in the agency's history of its eavesdropping systems.
SAIC has dozens of other government contracts: it trains air marshals for the Federal Aviation Administration, works with Bechtel to run the proposed Yucca Mountain nuclear waste dump in Nevada on Western Shoshone traditional lands (despite major protests from the Native Americans), The Army hired the company to destroy old chemical weapons at Aberdeen Proving Ground, the National Cancer Institute uses SAIC to help run its research facility in Frederick, the Transportation Security Administration asked it to dispose of scissors and pocket knives confiscated from air travelers and SAIC's unmanned Vigilante helicopters, equipped with Raytheon's low-cost, precision-kill rockets, are to undergo testing by the Army.
Not all of its surveillance work is for the United States military The company has installed a location-based Global Positioning System tracking service for BellSouth's 14,000 installation and maintenance vehicles and today its latest contract is to run security for the upcoming Athens Olympics from a zeppelin that will hover over the city.
Corpwatch (http://www.corpwatch.org)