Below the Radar

Inside Lockheed's $250 Billion Pentagon Connection

 George Bush has said if he is fortunate enough to be elected president, he is going to look at our whole military situation, including the tactical air account. He's noted that the 3000 number [of planes] seems a bit much.
—Bush campaign adviser Richard Armitage, September 2000

After one month of military strikes against Afghanistan, terrorism alerts, anthrax scares, and record-breaking flag sales, the Pentagon has recently announced the largest defense contract in U.S. military history, a potential $250 billion deal that calls for the construction of approximately 6000 stealthy, supersonic Joint Strike Fighter combat planes to protect the nation's shores and sell to foreign governments.

On October 26, Air Force Secretary James G. Roche awarded the contract to Lockheed-Martin and Northrop Grumman, the dynamic defense duo who edged off the only other competitor, Boeing. The order, expected to provide over 40 years' worth of work and revenue, calls for the development and manufacturing of 3000 fighters to be used by the Air Force, Navy and Marines. It also entails an a similar number of planes to be sold abroad to countries like Turkey, Israel, and Canada.

The Department of Defense won't comment on Roche's specific reasons for choosing the Lockheed-Northrop team. Some experts say America's largest defense contractor produced a slicker-looking model. Others thought the debt-plagued company needed the economic boost. But arms-policy experts and watchdog groups are examining the move, questioning the timing of the deal, the need for such an extensive air fleet, and the connections between the Pentagon officials who made the decision and the corporations who will benefit from the contract.

Before his nomination this summer, Air Force Secretary Roche worked as a top executive for Northrop Grumman for 17 years. Deciding who should get the fighter contract was finally Roche's decision, according to his spokesperson. He looked at benchmarks in performance, test and cost runs, radars and electronic mission systems—complicated gizmos whose development Roche oversaw in his role at Northrop Grumman, the Voice has learned.

By the end of his tenure, Roche had been promoted to president of the Electronic Sensors and Systems Sector, a division that, according to the company, will now be a "key" subcontractor for the fighter deal, responsible for the production of an advanced fire-control radar system and primary elements of the aircraft's integrated mission systems. What's more, on the day before Roche's nomination hearing before the Senate's Armed Services Committee, Northrop Grumman made two unusually large donations to sectors within the Republican Party: $100,000 to the president's 2001 Dinner Committee (a joint trust split between House and Senate Republicans) and an additional $15,000 to the Republican National State Elections Committee.

"It's a conflict of interest," says William Hartung, a research fellow who follows the arms trade at the New School's World Policy Institute. "The guy's only been out of the company a few months." Defense officials "don't seem to be particularly sensitive that someone might consider that they're lining the pockets of former colleagues and business partners."

A spokesperson for the secretary said neither he nor his wife have any remaining financial interest in Northrop. "He has complied completely with all ethical and legal guidelines," said Major Chet Curtis.

Roche might face more public scrutiny in the near future. Two weeks ago, the federal government accused Northrop of fraud in the fulfillment of multimillion-dollar defense contracts, including parts for the B-2 stealth bomber—a fighter now in action over Afghanistan, with radar and avionics components manufactured by the company's Electronic Systems and Services. During his Senate confirmation hearings, Roche pushed the Northrop product, saying the company had made some "exquisite" new developments. Through Major Curtis, Roche declined comment on the government's accusation against Northrop. In a written statement, Northrop said the case had already been investigated by the U.S. attorney's office from 1989 to 1992, resulting in a decision not to prosecute. The compay said that the accusations stemmed from "disgruntled former employees" and that it's confident "it will prevail at trial."

Lockheed made its own headlines in the mid 1980's when the Defense Department found the company was producing $640 toilet seats. For Hartung, the matter just seems too far removed from public oversight. "The Constitution says that civilians should be in charge of the militia, but the Bush administration has put a lot of corporate and military people in charge of the Pentagon," Hartung said. "Where's the watchdog? Who's going to hold these people accountable?"

Navy secretary Gordon England served as president of Lockheed's Fort Worth division, which will build the fighter planes. Bush's secretary of transportation, Norman Mineta, ditched his term as a Congressional representative to join the Lockheed team back in 1995. The undersecretary for the air force, Albert E. Smith, was a Lockheed vice president who oversaw the company's space program. And Vice President Dick Cheney's wife, Lynne, served on the Lockheed board of directors from 1994 to 2001—a $120,000-a-year post she gave up shortly before her husband's inauguration.

Bruce Jackson, a current Lockheed vice president, served as financial chair and fundraiser for Bush's presidential campaign. At a 1999 conference, Jackson bragged that he would personally "write the Republican platform" on defense if the Texas governor made it to the Oval Office.

For over five years, Lockheed and Boeing battled for the contract. They spent millions building prototypes and millions wooing politicians. Since the 1999-2000 election cycle, Lockheed has spent $12,725,000 on lobbying and campaign contributions, with nearly $2 million going to the Republican Party, according to the Center for Responsive Politics. Boeing, in contrast, spent $9.8 million on lobbying and campaign contributions, with some $1.9 million split almost evenly between the two parties.

"The defense industry is one of the major industries that enjoys close ties with the U.S. government," says Pete Eisner, managing director at the Center for Public Integrity. "It's a long-standing practice of revolving door, and it's not the first time the door's spun more than once. With Americans preoccupied with the war on terrorism, there should be heightened scrutiny on these contracts. They might be coming around the back door when we may not be giving it our full attention."

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