How Business America Cashed in on the Post-9/ 11 Pentagon Investing Rise
By William HARTUNG
The expenses and effects of America’s twenty-first-century wars have actually by now been well-documented– an incredible $8 trillion in expenses and more than 380,000 civilian deaths, as computedby Brown University’s Expenses of War task. The question of who has benefited most from such an orgy of military costs has, unfortunately, received far less attention.
Corporations big and small have actually left the financial feast of that post-9/ 11 surge in military spending with really incredible sums in hand. After all, Pentagon costs has amounted to an almost unimaginable $14 trillion-plusconsidering that the start of the Afghan War in 2001, up to halfof which (catch a breath here) went directly to defense professionals.
“The Bag is Now Open”: The Post-9/ 11 Flood of Armed Force Contracts
The political environment developed by the Global War on Terror, or GWOT, as Bush administration officials rapidly calledit, set the phase for humongous boosts in the Pentagon budget. In the very first year after the 9/11 attacks and the invasion of Afghanistan, defense costs increasedby more than 10% and that was simply the beginning. It would, in reality, increase every year for the next decade, which was extraordinary in American history. The Pentagon budget plan peakedin 2010 at the greatest level given that World War II– over $800 billion, significantly morethan the country invested in its forces at the height of the Korean or Vietnam Wars or throughout President Ronald Reagan’s vaunted military accumulation of the 1980s.
And in the new political climate stimulated by the reaction to the 9/11 attacks, those increases reached well beyond expenditures specifically connected to eliminating the wars in Iraq and Afghanistan. As Harry Stonecipher, then vice president of Boeing, informedthe Wall Street Journal in an October 2001 interview, “The purse is now open … [A] ny member of Congress who doesn’t vote for the funds we require to safeguard this country will be trying to find a brand-new job after next November.”
Stonecipher’s prophesy of quickly increasing Pentagon spending plans proved correct. And it’s never ended. The Biden administration is anything however an exception. Its most current proposition for spending on the Pentagon and related defense work like nuclear warhead development at the Department of Energy topped $753 billionfor FY2022. And not to be outdone, the House and Senate Armed Solutions Committees have already voted to include approximately $24 billionto that staggering sum.
Who Benefitted?
The benefits of the post-9/ 11 surge in Pentagon spending have been distributed in a highly concentrated style. More than one-thirdof all contracts now go to just 5 significant weapons business– Lockheed Martin, Boeing, General Dynamics, Raytheon, and Northrop Grumman. Those 5 got more than $166 billionin such agreements in 2020 alone. To put such a figure in point of view, the $75 billion in Pentagon contracts granted to Lockheed Martin that year was substantially more than one and one-half times the whole 2020 spending plan for the State Department and the Agency for International Advancement, which together amounted to $44 billion.
While it’s true that the most significant financial beneficiaries of the post-9/ 11 military spending rise were those 5 weapons professionals, they were anything however the only ones to money in. Business taking advantage of the accumulation of the previous twenty years likewise consisted of logistics and building firms like Kellogg, Brown & Root (KBR) and Bechtel, along with armed personal security professionals like Blackwater and Dyncorp. The Congressional Research Service estimates that in FY2020 the costs for contractors of all kinds had grown to $420 billion, or well over half of the overall Pentagon budget plan. Companies in all three classifications kept in mind above made the most of “wartime” conditions– in which both speed of shipment and less rigorous oversight happened thought about the norms– to overcharge the federal government and even participate in straight-out fraud.
The best-known reconstruction and logistics professional in Iraq and Afghanistan was Halliburton, through its KBR subsidiary. At the start of both the wars in Afghanistan and Iraq, Halliburton was the recipientof the Pentagon’s Logistics Civil Augmentation Program contracts. Those open-ended plans included collaborating support functions for soldiers in the field, including setting up military bases, maintaining equipment, and providing food and laundry services. By 2008, the business had actually received more than $30 billionfor such work.
Halliburton’s function would prove controversial undoubtedly, reeking as it did of self-dealing and outright corruption. The concept of privatizingmilitary-support services was very first started in the early 1990s by Penis Cheney when he was secretary of defense in the George H.W. Bush administration and Halliburton got the contractto figure out how to do it. I think you will not be surprised to learn that Cheney then went on to serveas the CEO of Halliburton until he ended up being vice president under George W. Bush in 2001. His journey was a (if not the) classic case of that revolving door in between the Pentagon and the defense industry, now utilizedby numerous government authorities and generals or admirals, with all the apparent conflicts-of-interest it involves.
Once it secured its billions for work in Iraq, Halliburton proceeded to vastly overcharge the Pentagon for standard services, even while doing substandard workthat put U.S. troops at danger– and it would show to be anything however alone in such activities.
Beginning in 2004, a year into the Iraq War, the Unique Inspector General for Iraq Reconstruction, a congressionally mandated body developed to root out waste, scams, and abuse, along with Congressional watchdogslike Agent Henry Waxman (D-CA), exposed scores of examples of overcharging, malfunctioning building and construction, and outright theft by specialists engaged in the “rebuilding” of that nation. Once again, you unquestionably will not be surprised to discover that reasonably couple of companies suffered substantial monetary or criminal repercussions for what can just be referred to as striking war profiteering. The congressional Commission on Wartime Contracting in Iraq and Afghanistan approximated that, since 2011, waste, scams, and abuse in the 2 battle zone had currently totaled$31 billion to $60 billion.
A case in point was the International Oil Trading Company, which gotcontracts worth $2.7 billion from the Pentagon’s Defense Logistics Agency to supply fuel for U.S. operations in Iraq. An examinationby Congressman Waxman, chair of the House Federal Government Oversight and Reform Committee, discovered that the company had actually consistently overcharged the Pentagon for the fuel it delivered into Iraq, making more than $200 million in profits on oil sales of $1.4 billion during the duration from 2004 to 2008. More than a third of those funds went to its owner, Harry Sargeant III, who likewise worked as the finance chairman of the Florida Republican Politician Party. Waxman summed upthe scenario by doing this: “The files reveal that Mr. Sargeant’s company took advantage of U.S. taxpayers. His company had the only license to transport fuel through Jordan, so he might get away with charging inflated rates. I have actually never ever seen another scenario like this.”
A particularly egregious case of substandard deal with terrible human repercussions included the electrocution of at least 18 military personnel at several bases in Iraq from 2004 on. This took place thanks to defective electrical installations, some done by KBR and its subcontractors. An examination by the Pentagon’s Inspector General foundthat leaders in the field had “stopped working to ensure that renovations … had been appropriately done, the Army did not set standards for tasks or specialists, and KBR did not ground electrical devices it installed at the facility.”
The Afghan “reconstruction” process was likewise replete with examples of scams, waste, and abuse. These consisted of a U.S.-appointed economic job force that invested $43 millionconstructing a gasoline station basically in the middle of no place that would never be used, another $150 millionon luxurious living quarters for U.S. economic advisors, and $3 millionfor Afghan authorities patrol boats that would show similarly ineffective.
Perhaps most disturbingly, a congressional examination discoveredthat a substantial part of $2 billion worth of transportation contracts provided to U.S. and Afghan companies ended up as kickbacks to warlords and authorities officials or as payments to the Taliban to permit large convoys of trucks to travel through areas they controlled, sometimes as much as $1,500 per truck, or as much as half a million dollars for each 300-truck convoy. In 2009, Secretary of State Hillary Clinton mentionedthat “one of the significant sources of financing for the Taliban is the protection cash” paid from simply such transport contracts.
A Two-Decade Explosion of Corporate Profits
A second stream of revenue for corporations connected to those wars went to private security specialists, some of which guarded U.S. facilities or vital infrastructure like Iraqi oil pipelines.
The most well-known of them was, of course, Blackwater, a variety of whose employees were associated with a 2007 massacreof 17 Iraqis in Baghdad’s Nisour Square. They opened fire on civilians at a crowded crossway while safeguarding a U.S. Embassy convoy. The attack triggered ongoing legal and civil cases that continued into the Trump period, when a number of perpetrators of the massacre were pardonedby the president.
In the wake of those killings, Blackwater was rebrandedseveral times, initially as XE Solutions and then as Academii, prior to eventually mergingwith Triple Canopy, another personal contracting firm. Blackwater creator Erik Prince then separated from the company, but he has considering that recruitedpersonal mercenaries on behalf of the United Arab Emirates for release to the civil war in Libya in violation of a United Nations arms embargo. Prince likewise unsuccessfully proposedto the Trump administration that he hire a force of private contractors meant to be the backbone of the U.S. war effort in Afghanistan.
Another job taken up by personal companies Titan and CACI International was the interrogationof Iraqi prisoners. Both businesshad interrogators and translators on the ground at Abu Ghraib jail in Iraq, a site where such prisoners were completely tortured.
The variety of workers deployed and the incomes received by security and restoration professionals grew considerably as the wars in Iraq and Afghanistan endured. The Congressional Research Study Service estimatedthat by March 2011 there were more professional staff members in Iraq and Afghanistan (155,000) than American uniformed military workers (145,000). In its August 2011 last report, the Commission on Wartime Contracting in Iraq and Afghanistan put the figure even greater, mentioningthat “specialists represent more than half of the U.S. presence in the contingency operations in Iraq and Afghanistan, at times using more than a quarter-million people.”
While an armed specialist who had served in the Marines could make as much as $200,000annually in Iraq, about three-quarters of the contractor work force there was made up of individuals from nations like Nepal or the Philippines, or Iraqi residents. Poorly paid, at times they received as little as $3,000 per year. A 2017 analysis by the Expenses of War project recorded”abysmal labor conditions”and major human rights abuses caused on foreign nationals working on U.S.-funded jobs in Afghanistan, including false imprisonment, theft of salaries, and deaths and injuries in locations of dispute. With the U.S. armed force in Iraq lowered to a fairly modest number of armed” advisors”and no American forces left in Afghanistan
, such contractors are now looking for foreign clients. For instance, a U.S. company– Tier 1 Group, which was established by a previous worker of Blackwater– skilled four of the Saudi operatives involved in the murder of Saudi journalist and U.S. resident Jamal Khashoggi, an effort moneyed by the Saudi government. As the New York Times noted when it broke that story,”Such issues are likely to continue as American personal military specialists significantly aim to foreign clients to shore up their company as the United States scales back overseas releases after twenty years of war.” Add in another element to the two-decade” war on terror “surge of corporate revenues. Abroadarms sales likewise rose dramatically in this age. The most significant and most controversial market for U.S. weapons over the last few years has actually been the Middle East, especially sales to countries like Saudi Arabia and the United Arab Emirates, which have been involved in a disastrous war in Yemen, as well as fueling conflicts somewhere else in the region. Donald Trump made one of the most noise about Middle East arms sales and their advantages to the U.S. economy
. However, the giant weapons-producing corporations in fact offered more weaponry to Saudi Arabia, on average, during the Obama administration, consisting of three major deals in 2010 that amounted to more than$60 billion for battle airplane, attack helicopters, armored lorries, bombs, missiles, and guns– practically a whole toolbox. A number of those systems were utilized by the Saudis in their intervention in Yemen, which has actually included the killing of thousands of civilians in indiscriminate air strikes and the imposition of a blockade that has contributed considerably to the
deaths of almost a quarter of a million individuals to date. Forever War Profiteering? Reining in the excess earnings of weapons specialists and preventing waste, fraud, and abuse by personal companies associated with supporting U.S. military operations will ultimately need lower costs on war and on preparations for war. So far, sadly, Pentagon budget plans only continue to increase and yet more cash flows to the huge 5 weapons firms. To change this extremely plain pattern, a new method is needed, one that increases the role of American diplomacy, while concentrating on emerging and persistent non-military security obstacles.”National security”needs to be redefined not in regards to a new “cold war”with China, however to forefront vital concerns like pandemics and environment change. It’stime to put a stop to the direct and indirect foreign military interventions the United States has carried out in Afghanistan, Iraq, Syria, Somalia, Yemen, and so many other locations in this century. Otherwise, we remain in for decades of more war profiteering by weapons professionals reaping massive revenues with impunity. tomdispatch.com