Send Lawyers, Guns and Money:
Lobbying and the Merchants of Death

from the book Washington on $10 million a Day

by Ken Silverstein

Common Courage Press, 1998


... The vast sums allocated each year to the Pentagon-$260 billion in 1997- constitutes the largest gravy train for private interests in the history of mankind.

The scale of the plunder is not the only reason that military lobbyists deserve special scrutiny. When the weapons industry convinces Congress to dole out money for more tanks and planes, a de facto outcome is that less money is left for social programs. The choice truly is between guns and butter.

Yet eight years after the Berlin Wall came down, the defense budget sits at the same level, in real dollars, as it did during the 1950s, the coldest days of the Cold War. It has declined only 23 percent from its all time peak under Ronald Reagan. As of 1997, the U.S. was spending almost as much on defense as the rest of the world combined-and internal Defense Department studies show a doubling of the Pentagon's budget over the next twenty years.

The money now being spent on "defense" is completely out of proportion to any credible threat to national security. The United States accounts for about half of all military spending on the planet and with the Soviet Union gone, the gravest "threat" to national security is posed by "rogue" nations such as North Korea, Libya, Iran and Iraq.

The absurdity of this situation is matched only by the absurdity of the military industry's post-Cold War lobbying efforts, which have been greatly increased in order to fend off any threat to its money pipeline. Here's an example of just how ridiculous things have become: A few years ago, it appeared that Congress might kill off a relic of the Cold War, the V-22 Osprey, a vertical lift-off plane whose prime contractors are Boeing and Bell Helicopter. From the perspective of Pentagon porkers and arms makers, the V-22 has special appeal: since it is incapable of carrying any of the military's current inventory of fighting vehicles, it has opened the door to a subsidiary boondoggle, the armored dune buggy. Said buggy, which is capable of attaining speeds of 80 miles per hour, is being designed especially to fit on the V-22.

To help save the plane, lobbyists for the V-22 dreamed up Alyssa, Albert B the Magic Plane, a cartoon book that was distributed to members of Congress. The comic book opens with little Alyssa playing in her backyard with Albert, a stuffed animal who springs to life. The pair dream of attending the 1996 Olympics in Atlanta but grow despondent upon concluding that they won't be able to get to the games by bicycle (too far), truck (no drivers license), boat (no water near Atlanta), the Space Shuttle (not practical), or a variety of other means.

Just as the cuddly duo have reached the point of despair a V22-the "Magic Plane"-lands in the backyard to fly them to Atlanta. After "meeting people from all over the world and learning new games," Alyssa and Albert remember that "daddy would be done fixing the kitchen sink very soon and that they needed to get back home. Alyssa wished again for the Magic Plane to come take them home. And it did!"

The dramatic tale of Alyssa and other lobbying, combined with hefty campaign donations from Boeing and Bell, led Congress to save the V-22. Coming next: The arms makers sign up Barney the Dinosaur to lobby for Star Wars.

The Pentagon's Nightmare Scenario: Budget Cuts

Though the military budget remains in the stratosphere, life has become far more complicated for the arms lobby during the past decade. During the Cold War, the military-industrial complex needed only to point to the Soviet Union, and lawmakers would immediately sign over a check to cover yet another of the Pentagon's gold-plated boondoggles. With the Soviet Bear extinct and China and other future "threats" not yet on line, the public has grown somewhat more reluctant to tolerate Cold War levels of defense spending.

Hence, soon after the fall of the Berlin Wall the arms industry and the Pentagon began invoking the grave threat to national security posed by the "rogue" nations. But this strategy never galvanized the public. As Michael Klare has written in The Nation, "None of the prominent rogues have made any move in recent years to threaten U.S. interests seriously, and periodic claims of major breakthroughs by these states in acquiring nuclear or chemical weapons have rarely amounted to much....Only Iran now appears as a credible enemy...[but it] spends only about 1 percent of what the United States spends on defense [and its] poorly equipped military is a mere shadow of the force assembled by Saddam Hussein in 1990."

By 1997, the Pentagon had grown desperate to find a stand-in for the Red Army, as seen in a secret document prepared by the Air Force University that year and uncovered by journalist Andrew Cockburn. Peering into the second decade of the coming millennium, Air Force soothsayers were pointing to the emergence of a terrifying specter they called The Khan (as in Genghis). By this the "futurists" mean an aggressive China, enlarged by domination of the entire Korean Peninsula, not to mention Japan and possibly Vietnam. The Khan will be an economic superpower and thus able to develop and produce the most advanced forms of weaponry. It therefore follows that U.S. defense spending will have to rise commensurably to defend the West against this ominous Asian monster.

Elsewhere in the Pentagon officials are invoking the menace of "peer competitors," by which they mean China (though not yet grown to Khan dimensions) and, bizarrely, Russia. Yet others talk of GET, which stands for Generic Emerging Threat-a menace as yet undefined but against which the U.S. had better arm itself.

The Pet Rock Lobby

In addition to its failure to drum up a new "threat" to national security, the arms industry lobby is burdened by the shoddy nature of some of its wares. The primary cause here is that the chief mission of the U.S. defense industry is not to protect national security, but to inflate contractor profits.

This is seen in the case of McDonnell Douglas's hopeless C17 cargo plane. Like many current Pentagon projects, the C-17 gained momentum following the 1979 Soviet invasion of Afghanistan, when the Carter administration pushed for a wave of new defense spending to counter the Red Menace. The Pentagon initially planned to buy 210 C-17s for $32 billion-$152 million apiece-but in 1990 cut the order to 120 planes for $36 billion-$333 million apiece. In 1993, the program was further reduced to 40 planes, with the per copy cost soaring to $700 million.

Since the original justification for the aircraft has vanished, the Pentagon and McDonnell Douglas now insist that the cargo plane is essential to national security because of its alleged ability to move personnel and tons of equipment to distant combat zones. Just as important is the C-17's much hyped capacity to land on short, dirt airstrips, and thus handle the dangerous task of re-supplying advance troops.

In reality, the C-17 is a threat to national security, and to anyone who is forced to ride it. A 1992 Congressional Research Service report detailed a few of the problems experienced by this monstrous boondoggle, including multiple problems with the software for the C-17's nineteen on-board computers. The C-17 also has a mysterious center-of-gravity problem, which makes take-off extremely dangerous unless the plane is fully loaded. When the aircraft is empty, sources say, Air Force crews keep two 7,950 pound cement blocs-known as the "pet rocks"-in the craft's forward area to ensure safe take-off This means that the C-17 will either fly into action pre-loaded with nearly eight tons of cement or advance troops will be forced to tote along two "pet rocks" to load onto the plane after removing its cargo.

Even worse, the C-17 is incapable of carrying out its assigned task of forward re-supply. The enormous aircraft needs at least 4,000 feet of runway to land, 1,000 more than the Air Force claims. A former Pentagon official tells me that the C-17 cannot come down on a dirt airstrip because its jet engines will "ingest" earth. "You could land it on a concrete strip but if you try to put it down on dirt you'll end up with some very expensive repair hills," says this person, who points out that advance combat troops are not normally anywhere near a concrete landing strip.

This same person says that a used Boeing 747, which can be bought and modified for less than $100 million, can carry three times as much cargo as the C- 17 and twice as far. In fact, the Pentagon's old twin engine C-123, which was used in Vietnam, could perform the C-17's job perfectly well Unfortunately, the Pentagon hated that plane because it was inexpensive and lacked the glamour of a jet-engine aircraft. As the source points out, "this golden turkey represents a sizable chunk of the GNP and can be blown to smithereens by a $22 mortar shell."

In the Belly of the Beast

If the post-Cold War environment has left arms makers exposed, the industry still has plenty of assets when it comes to getting its way in Washington. Chief among them is that weapons makers, to an even greater extent than other industries, have especially tight links to the government bureaucracy. When the Pentagon in 1997 needed a team to prepare a report on "reshaping the U.S. military for the 21st century," it picked for the job a task force headed by Philip Odeen, president of BDM, one of the country's big defense companies. Odeen was ably assisted by other hacks for the weapons lobby including Robert Riscassi, a former Army general who now serves as a vice president at Lockheed. The task force, known as the Quadrennial Defense Review, predictably concluded that force levels should be cut further, but the Pentagon's procurement budget should be increased, thereby ensuring future profits for the arms industry.

The Pentagon's Defense Policy Advisory Committee on Trade provides confidential recommendations to the Secretary of Defense on the sale of weapons abroad. Members have included CEOs from Lockheed, Boeing, Northrop Grumman and McDonnell, as well as a number of former Pentagon officials who now serve as consultants to the arms industry.

Needless to say, the Advisory Committee invariably favors elimination of any barrier to foreign sales and the introduction of a host of new public subsidies to arms companies. Then there's the Pentagon's Defense Science Board, where Defense Department officials and industry executives join hands to lard out vast sums of money to fund research on future boondoggles. Past members at the science board have included former Defense Secretary William Perry; former CIA chief John Deutsch, and Paul Kaminski, the assistant secretary for defense.

Worthy of more detail is the Defense Trade Advisory Group (DTAG), the panel set up by the State Department to offer counsel in regard to the Direct Commercial Sales (DCS) program, by which defense contractors make private sales to foreign military and police forces. Details about the DCS program are hard to come by, since only deals worth more than $14 million must be reported to Congress. In theory, State allows the sale of weapons destined for a "defensive" role. It will not vend arms to an "aggressor" nation.

In practice, State authorizes sales to virtually any nation capable of paying for its purchases. Of some 20,000 requests for licenses made by vendors in 1994, State rejected just 209. During the Clinton years, State has sanctioned the sale of tank engines to Israel, trainer aircraft to Taiwan, and Black Hawk helicopters to Mexico. Also approved were deals with Guatemala, El Salvador, Colombia and Saudi Arabia.

None of this is surprising after examining the roster of DTAG, State's advisor on these deals. In 1995, 57 of the 60 panel members came from the arms industry. The group was headed at the time by William Schneider, a veteran of the military-industrial complex who served as undersecretary of state for security assistance during the Reagan/Bush years.

One especially enthusiastic DTAG member is Joel Johnson of the Aerospace Industries Association. Reflecting the judicious approach he brings to the committee, Johnson once told the Los Angeles Times that he "would feel more guilty selling sugar-coated breakfast cereal to kids" than he does about selling weapons abroad. After the Chinese government carried out its bloody crackdown at Tienanmen Square, Johnson fretted that the U.S. government might prevent arms companies from cutting new deals with Beijing. "If we get out of the Chinese market now, we could lose out on sales well into the next century," he told William Hartung, an analyst at the World Policy Institute. In any case, he added, Tiananmen was no big deal. "For the Chinese, whether it was 200 or 2,000 deaths, it's just a blip on the radar screen. It's like their version of Kent State."

The three non-industry members of DTAG are two lawyers and Janne Nolan, a polite centrist from the Brookings Institution. When former Arkansas Senator David Pryor questioned State Department officials about the objectivity of the group, they pointed to Nolan as providing balance.

DTAG is not a policy-making body, but it has lobbied the Clinton administration on proposals it reviews, such as revisions in export regulations and conventional arms transfer policy. "DTAG has frequent, high-level access to the people who are making policy," says Lora Lumpe of the Federation of American Scientists. "People from the arms control community are completely shut out of that loop."

Opening a New Front in the Lobbying Wars

The end of communism convinced the arms lobby that Congress could no longer be counted on to rubber stamp every new weapons program put in front of it by the military-industrial complex. Hence, many big defense firms greatly stepped up their beltway lobbying efforts following the fall of the Berlin

A first step taken by many companies was to move corporate offices to Washington, or to beef up existing D.C. operations. The rush to the beltway began in earnest in 1991, when Grumman (later bought by Northrop, which in 1997 was purchased by Lockheed) moved from St. Louis to Falls Church in northern Virginia. As then-CEO William Anders told the New York Times, the move was made so as to bring the company's "leadership closer to our principal customers and policy makers." Other companies followed suit, including the nation's biggest defense contractor, Lockheed, which moved from Calbasas, California, to Bethesda, Maryland, after its merger with Martin Marietta in 1995. "There are no longer plenty of programs to go around," John Harbison, a vice president at Booz-Allen & Hamilton, told Defense News in 1996 in explaining the eastward march.

The arms makers dramatically increased their spending on lobbying programs as well. In 1987, GE was considered to be the defense industry's lobbying powerhouse, with 19 lobbyists working in Washington. Raytheon, Hughes and United Technology didn't have a single influence peddler registered with Congress. Lobbying expenditures by the big defense firms averaged about $40,000 per year. As late as 1991, the ten biggest defense companies had a total of 108 lobbyists registered in Washington.

As of mid-1997, Lockheed Martin alone has 87 lobbyists registered with Congress, 26 working out of the company's own offices and 61 at outside firms that the company had on retainer. Lockheed's total lobbying expenditures for 1996 totaled $3.8 million, 10 times more than the combined lobbying expenditures for the ten biggest defense contractors in 1985.

While Boeing has fewer lobbyists on its payroll-70-it spent more than Lockheed, shelling out $5.2 million for lobbying in 1996. Other arms makers have similarly huge efforts, with Northrop employing 58 lobbyists and McDonnell Douglas 53.

The merchants of death have also stepped up their pace of campaign contributions. In 1987, political contributions by weapons companies averaged a few hundred thousand dollars a year. In 1996, Lockheed Martin ponied up $2.3 million in PAC and soft money contributions to the big parties. All told, defense makers delivered more than $11 million to friends in high places during the 1996 presidential and congressional campaigns.

To build further political support on Capitol Hill, arms makers have begun promoting weapons systems as being not only vital to national security but jobs programs to boot. To make the jobs pitch work, defense makers spread out contracts and subcontracts across the nation, thereby giving every state- and more importantly, most members of Congress-a stake in a given arms program.

Rockwell made especially smart use of this tactic in lobbying for its B-1 bomber, the hideously expensive plane deemed so unreliable that the Air Force didn't dare send it into combat during the Gulf War (and now put out to pasture with the National Guard, which will presumably use the craft to conduct urgent national security tasks such as bombing marijuana plantations). Some 5,000 companies in all 48 contiguous states worked on the B-1. The wings were made in Nashville, the tail assembly in Baltimore, engines near Cincinnati, wheels in Akron and electronic units in Nashua, New Hampshire. "From the standpoint of efficiency, to try to make a [weapons system] in as many congressional districts as possible is nuts," former Rep. Patricia Schroeder told the New York Times a few years back. "But from a lobbying standpoint it's incredibly sophisticated."

An Army of Lobbyists:

The Pentagon's Job Placement Program

The arms lobby's firepower is further augmented by the nonstop revolving door between the Pentagon and the defense industry. Common Cause published a study some years ago which showed that between 1983 and 1985, 3,745 officers with the rank of major or above, along with top level civilian employees at the Pentagon, had gone to work for arms contractors. The revolving door is spinning just as fast today, with thousands of Cold War veterans-both bureaucrats and soldiers-now serving as consultants and lobbyists to the arms industry, as well as on the boards of directors of the big weapons makers.

Until 1997, Lockheed was headed by Norman Augustine, a former secretary of the army. The company's board includes retired Gen. Riscassi, mentioned above as a member of the Pentagon panel that issued a report on future defense priorities. Among the top lobbyists at the company's corporate offices in Bethesda, Maryland, are Alan Ptak, a former Navy deputy secretary of defense, and Jack Overstreet, ex-chief of weapons systems at the Air Force.

Then there's SAIC, a huge high-tech firm, which receives more contracts from the government than any other company. It translates and decodes intercepts for the NSA, provides the CIA with computer software to analyze intelligence data, and has a variety of contracts working on the Star Wars missile defense program. SAIC's board members have included two former defense secretaries-William Perry and Melvin Laird- and three former heads of the CIA-John Deutsch, Bobby Ray Inman, and Robert Gates. Most top positions at the firm are filled by retired military officials, spooks, former Congressional staffers and employees of federal agencies

In the years immediately following World War 11, military officers did not commonly go to work for defense companies upon retiring from active duty (with the exception of the Air Force, which has always been the most corrupt service branch). There was a social stigma about using influence and knowledge attained while serving one's country as tools of profiteering. Today, such inhibitions have all but disappeared.

Ernie Fitzgerald is the Air Force official who was fired by President Nixon because he blew the whistle on cost overruns on Lockheed's G130. Fitzgerald sued to get his job back and was reinstated four years later following a long court battle. Fitzgerald is still at the Pentagon and is as crotchety as ever about the corruption there. Here's how he explains the inner workings of the revolving door

Military officers for the most part are forced to retire when their family expenses are at a peak-they've got a couple of kids in college and they're still paying a mortgage. They won't starve on their retired pay. But at the same time they can't keep up their lifestyle. What happens in our system is that the services see one of their management duties as placing their retired officers, just like a good university will place its graduates. And the place the services have the most influence at is with the contractors.

If you're a good clean-living officer and you don't get drunk at lunch or get caught messing around with the opposite sex in the office, and you don't raise too much of a fuss about horror stories you come across-when you retire, a nice man will come calling. Typically he'll be another retired officer. And he'll be driving a fancy car, a Mercedes or equivalent, and wearing a $2,000 suit and Gucci shoes and Rolex watch. He will offer to make a comfortable life for you by getting you a comfortable job at one of the contractors.

Now, if you go around kicking people in the shins, raising hell about the outrages committed by the big contractors, no nice man comes calling. It's that simple.

Sell, Sell, Sell: Lobbyists and Foreign Arms Sales

A particularly illuminating case of the revolving door in action is that of retired Lt. Gen. Howard Fish. A former Pentagon staffer I interviewed says Fish worked in the Pentagon for decades but always as a staff officer. "He never commanded anything in his life," this person says. "He was one of the all-time champions of service in the Pentagon, always holding ass-kissing positions."

During the Nixon and Ford administrations, Fish headed the Defense Security Assistance Agency (DSAA), the Pentagon bureau that handles foreign military sales and one of the more corrupt components of the military establishment. The DSAA has a field staff of about 1,000 people who work out of the U.S. embassy in some 15 countries. They offer everything from briefings on weapons systems to demonstrations of major aircraft, in addition to arranging the financing needed to close a deal.

The DSAA receives a 3 percent commission per sale- which provides about 80 percent of its operating budget-and agency personnel are promoted on the basis of the* ability to move weaponry. Due to this dynamic, says a 1991 report from Congress's now defunct Office of Technology Assessment, "there is powerful incentive for DSAA personnel to make as many sales as possible."

As head of the DSAA, Fish was an exuberant promoter of selling weapons to any and all buyers. According to William Hartung of the World Policy Institute, Fish played a key role in watering down the Arms Export Control Act of 1976, which would have placed a ceiling on total foreign arms sales and given Congress the right to veto sales on human rights grounds.

During the early 1970s, Fish was among several officials who were found to have passed sensitive information about contractual matters to several big arms makers, including Lockheed and LTV Aerospace & Defense. The information was of great use to the arms makers, as it involved plans for overseas sales and information about what weapons systems might be targeted for cuts. The affair caused a huge scandal inside the Pentagon, but Fish escaped censure.

At roughly the same time Fish became heavily involved in sales to Iran, then headed by the Shah. Iran was seen as an enormous cash cow for the Pentagon and the arms makers. The environment surrounding the arms trade was so corrupt that even the Shah became incensed, especially about American "brokers" for U.S. companies who were running around Iran and receiving huge commissions on deals they arranged. When the Shah sought to eliminate bribes and fees paid to these brokers, Fish fought him every inch of the way, claiming that this would impinge on the flexibility contractors needed to close deals.

Later in the decade Fish began to take a keen interest in Egypt, as that nation was coming on-line as a major buyer of U.S. weaponry. As a result of the 1978 Camp David accords, Egypt was to receive $1 billion per year in military aid. To ship weapons to the Egyptians, the Pentagon signed an exclusive contract with a company called Eatsco, which was formed by an Egyptian government official named Hussein K. Salem and a retired CIA official named Thomas Clines, who later played a prominent role in the Iran-Contra scandal. A third principal, though a silent one, was Edwin Wilson, the retired CIA agent who at the time was living in Libya and providing military equipment and training to the government of Muammar Quaddafi. Wilson is currently serving a 52-year prison term for arranging shipments of explosives to Quaddafi, and for subsequent attempts to kill witnesses against him.

It later turned out that Eatsco had overbilled the Pentagon by $8 million on shipments to the Egyptians. In one case, Eatsco billed the government $1.3 million for a shipment that cost about half that much. The mark-up increased further on a $46,409 shipment for which Eatsco billed the government $210,904.

It also turned out that Eatsco had two additional principals, both silent partners who worked inside the government. The two were Fish's closest cronies at the Pentagon, Richard Secord, later another big player in the Iran-Contra affair, and Erich von Marbod, who served as Fish's second in command at the DSAA. Secord and von Marbod were forced to retire from the Pentagon as a result of the Eatsco affair, though the cause was hushed up.

Fish's work at the Pentagon provided him with the perfect resume when he decided to retire from government in the late 1970s. He quickly found work with LTV-one of the two firms he had provided classified information to a few years earlier. Within months of his resignation he turned up in Malaysia, where he was hawking A-7 fighters. Fish also hired von Marbod to work at LTV's Paris offices.

Fish later worked as the head of international marketing for Loral, another big weapons maker, and then took charge of the American League for Exports and Security Assistance (ALESA) in the late 1980s. The latter outfit is one of the many powerful trade groups formed by arms makers-others include the Aerospace Industries Association and the American Defense Preparedness Association-to lobby for higher military outlays at home and greater U.S. military involvement abroad.

One of Fish's chief missions has been promoting the sale of weapons to the Middle East, especially to Saudi Arabia where Fish has intimate connections (he kept a picture of Saudi King Fahd on a bookcase at his office). Back in 1989, Fish met with chief of staff John Sununu and National Security Advisor Brent Scowcroft in a successful effort to convince the Bush administration to sell frontline tanks and supersonic fighters to Arab countries.

An impressive display of the ALESA's efforts came in the early 1990s, when at the behest of weapons makers it helped form the Middle East Action Group to press for deals then in the pipeline with the Saudis. Other members of the coalition included GE, Ford, Bechtel, Boeing, and the U.S.-Arab Chamber of Commerce

In addition to Fish, the Action Group also retained the services of a number of high-powered consultants with links to the Saudis. These include:

Dov Zakheim, a former deputy defense undersecretary for Reagan, chief defense adviser to Bob Dole during the 1996 presidential campaign and head of a consulting firm called SPC International. Zakheim is an ordained rabbi with close ties to the American Jewish community. His great credibility with the pro-Israel lobby makes Zakheim especially useful to arms makers lobbying for sales to Arab countries.

Sandra Charles served on the National Security Council as director for Middle East Affairs during the Bush years. After retiring, she formed a consulting firm, C&O Resources, which handles foreign policy analysis, business development, and arms sales to the Middle East, including Saudi Arabia.

Robert Lilac, head of Lilac Associates, which represents both arms contractors and foreign governments who buy weapons from U.S. companies. Lilac is a former Air Force officer who also served on the National Security Council during the Reagan years, where he was an intimate companion with several key figures in the Iran-Contra scandal, especially Richard Secord. Lilac commands a premium among the weapons makers due to his close relationship with Prince Bandar, the long-time Saudi ambassador to the U.S., who Lilac worked for immediately after he left government service. As Joel Johnson of Aerospace Industries Association once explained, "Bob knows the Saudi system, he knows the industry, and he knows the Pentagon."

The Middle East Working Group's lobbying campaign was laid out in a 300-page strategy book. It shows that the coalition assigned individuals to work with the White House, the State Department, the National Security Council, the Pentagon, key committees of Congress, the media, think tanks, veterans groups and patriotic organizations. The strategy book also called for member companies to mobilize their workers, middle managers and executives to flood Washington with telegrams and phone calls supporting arms sales.

Another group focused on putting the best possible spin on arms sales. Among the themes developed for public consumption were that "the sooner we bolster the Saudi military, the sooner...[U.S. military personnel in Saudi Arabia] will be able to return to the United States" and that "blocking arms a sure way to cripple our economy and cause unnecessary layoffs of thousands of professionals." The coalition didn't get everything it asked for, but its member companies succeeded in ramming billions of dollars of dollars worth of deals through Congress during the past few years.

Fish recently left the league to become a consultant to Lockheed Martin. He also wears a second hat as a member of the export policy subcommittee of the DPACT, where he advises the Pentagon on the international arms trade.

The Invisible Man

It's not only Pentagon retirees who moving through the revolving door to work for the defense industry. Countless former denizens of Capitol Hill also make the move, lured by the big bucks offered up by weapons makers. Paul Magliocchetti left a job at the House Appropriations Committee in 1988 and now heads a powerful lobby shop that caters to defense firms. In a 1996 report, Legal Times called Magliocchetti "The Invisible Man," and detailed how an "obscure Hill aide...became a million dollar lobbyist."

Magliocchetti's specialty when he worked on the Hill was defense appropriations. Before that he worked at the General Accounting Office, where he conducted audits and investigations of the Pentagon. All this helped Magliocchetti learn the nuts and bolts of the defense industry and the budget process, two skills that proved vital when he decided to strike out on his own as a lobbyist. Legal Times quoted former Rep. Charles Wilson as saying, "The thing about Paul is [he and his lobbying aides] just always had such a wealth of knowledge, and they could really make their case...They just knew [in] what line of the bill" they should place a special favor to their clients.

Magliocchetti incorporated his lobbying firm in October of 1988. He was still drawing a salary at the House until at least two months later. Within months of retiring he had signed up his first client, the Sikorsky Aircraft Division of United Technologies.

Many of Magliocchetti's current aides previously worked at the Pentagon, including Thomas Veltri, who had served as the Air Force's liaison with Appropriations Committees in Congress. Magliocchetti's firm also runs a generous political action committee- it gave more than $75,000 during the 1996 election cycle-and throws an annual Christmas party for members of Congress and their staffers at the Alpine restaurant in Arlington, just across the Potomac from Washington.

All of this has paid off nicely. Magliocchetti, who was forced to eke out a modest living on his $65,200-a-year salary at House Appropriations, now rakes in big fees from dozens of firms. Legal Times says his company's revenues topped $1 million during the first half of 1996, ranking it 42nd on the newspaper's ranking of top lobby shop money earners.

Government Issue Golden Parachutes

Stepped up lobbying efforts by the arms industry have paid big dividends these past few years. Even as Congress hacks away at social programs, it has granted virtually every budgetary wish of the defense lords.

One especially egregious assault on the federal treasury involves a Pentagon decision to reimburse defense contractors for expenses related to mergers and acquisitions. This taxpayer rip-off dates to June 3, 1993. On that day, the CEOs of Martin Marietta, GM Hughes Electronics, Lockheed and Loral Corporation wrote a letter to then Under Secretary of Defense John Deutsch saying that the Pentagon's policy at that time of refusing to help pay for merger costs would "discourage needed restructuring...[and] undermine the defense industrial base."

Deutsch responded swiftly. Just a month later, he unilateralIy overruled the Pentagon's own internal auditors and decreed that henceforth contractors could submit merger-related bills to the Defense Department for review.

That the top Pentagon brass was so sensitive to the CEOs, who were led by Norman Augustine of Martin Marietta, was understandable. Before moving to the Pentagon, Deutsch had served as a consultant to Augustine's firm for nine years, earning $425,000. Then Defense Secretary William Perry was part owner of a firm, Technology Strategies & Alliances, which had a contract with Martin Marietta until 1992.

Recognizing that the public might not look kindly upon the new policy, Deutsch and the Pentagon prudently failed to notify Congress of the payoff plan. The program only came to light in early 1994, when former Senator Sam Nunn, who then headed the Senate Armed Services Committee, received a memo showing that Martin Marietta was seeking $60 million from the Pentagon to help pay for its $208 million acquisition of General Dynamic's space division. The Pentagon didn't even publish the decision in the Federal Register until months after it was made.

That $60 million request from Martin Marietta foreshadowed a stampede by big defense contractors heading for the public trough. Lockheed and Martin Marietta merged in March 1995, a move that will eliminate 30,000 jobs. The new company, Lockheed Martin, later submitted bills to the federal government for more than $1 billion in restructuring costs. The bills included a plea for taxpayer help in paying for $31 million out of $92 million in bonuses that the companies paid to their top executives in the merger's aftermath. Augustine, who became CEO of the new company, was showered with a cash payment of $10.6 million, as well as stock options worth $9.5 million. Daniel Tellep, who had been president of Lockheed, pocketed the same amount in stock options as well as $4.3 million in cash. (The Pentagon gave preliminary approval for $16 million of the bonus money requested and is reviewing the rest.)

Ten months after Lockheed Martin was formed, the new company swallowed up the Loral Corporation. After agreeing to sell his firm, Loral's CEO Bemard Schwartz-who was one of the letter writers to Deutsch-received a $35 million bonus, part of which taxpayers were also asked to cover.

Other defense contractors have moved to cash in on the Pentagon's largesse. By 1997, the government was reviewing 30 applications for merger subsidies totaling $2 billion.

The weapons makers and the Pentagon insist that post-Cold War cuts in military spending have made industry consolidation necessary. Further, they claim, mergers will lead to greater efficiency and therefore reduce the prices defense companies charge the government. "I'm puzzled at how a policy that saves the government billions of dollars can be termed a subsidy," Chip Manor, a Lockheed spokesman, told me when I asked about the Pentagon policy.

Yet it is far from clear that the savings promised by the arms industry will ever materialize. A 1996 report from the Government Accounting Office examined eight defense mergers that had been approved by the Pentagon and found that actual savings realized are less than half of what defense companies had estimated when applying for subsidies.

We Arm the World

To ensure that they remain profitable in the event, however unlikely, that Congress should decide to cut the domestic defense budget, arms makers have aggressively lobbied for greater foreign sales. Between 1993 and 1996, the government approved about $75 billion worth of arms exports, to 160 of the world's 180 nations (about half of all sales went to non-democratic countries). The U.S. controls more than half of the international arms market, and foreign purchases now account for about 25 percent of all defense orders, up from 15 percent in the 1980s.

It's hard to see how exporting weapons can possibly enhance U.S. or international security. A large share of American exports go to countries at war and soon end up on the battlefield. U.S. troops based abroad are also endangered by American exports. As a CIA report from 1995 noted, "the acquisition of advanced conventional weapons and technologies by hostile countries could result in significant casualties being inflicted on U.S. forced or regional allies." In fact, U.S. troops deployed to Bosnia, Haiti, Somalia, Kuwait and Panama have confronted foreign forces armed with weapons that were made in America.

None of this has stopped the government from increasing federal subsidies for arms exports-which total more than $7.5 billion annually at the behest of the weapons lobby. In September of 1996, President Clinton agreed to eliminate "recoupment fees," this being a special tax on foreign military sales that allowed the federal treasury to recover a portion of taxpayer-funded R&D costs. Two months later, the Pentagon inaugurated its new "Defense Export Loan Guarantee" program by which the government will underwrite the sale of U.S. weapons to a selected list of 38 foreign countries. If purchasers default, taxpayers will pick up the bill.

In early 1997, the administration again caved to the weapons makers. This time it lifted a ban on the sale of advanced weaponry-for example, fighter jets and missiles-to South America, which had been imposed during the Carter years when the continent was largely ruled by military regimes.

The last thing Latin America needs is an arms race to acquire a new generation of high-priced weaponry. Most Latin American nations have only recently emerged from long periods of military rule and the armed forces remain politically powerful. Furthermore, Latin governments are smothering in debt and have little money available to pay for social programs, let alone F-16s.

Needless to say, the arms industry is not terribly interested in such issues. Since sales of fighter planes are the companies' biggest money maker, they rallied as one in seeking to overturn the 25-year old ban. The effort was particularly intense because traditional big volume buyers in the Middle East are uniformly cash-strapped, leaving the arms makers desperate to crack new markets.

Until 1994, the Clinton administration indicated it favored maintenance of the Latin arms embargo. That year it prevented Lockheed from attending an international air show in Chile. The arms lobby was outraged, particularly as Britain, France, Israel, Russia and vendors from at least two dozen other companies used the show to hawk their wares.

The Clinton administration was not the only obstacle in the arms makers' path. For if the supply was willing, the demand was not. Latin nations had not expressed any real interest in buying advanced weaponry, least of all the fighter planes the arms makers were so keen to off-load. In 1982, Venezuela had received a waiver from the Reagan administration that allowed it to buy 26 F-16s, but the country did not have the money to fly or maintain the planes. Most simply sat parked in Air Force hangars.

To start the ball rolling on the supply side, DPACT issued a study in 1995 calling for a "balanced policy" that would allow South American nations to meet "the demands...for needed equipment modernization." Joel Johnson, who chaired the panel, later said that the U.S. was "treat[ing] the Latins like children when we say they can't have new planes."

During the 1996 campaign, the arms lobby got the GOP to include a plank in its platform promising that the Clinton administration's "policy of denying most Latin American countries the opportunity to replace their obsolescent military equipment...will be reversed by a Republican administration." That same year, more than 100 members of Congress signed two separate letters to the Clinton administration-drafted by the merchants of death themselves-claiming that the Latin ban had cost U.S. companies $4 billion in exports and 40,000 jobs.

The arms lobby also moved to sweep away demand side barriers. As lime magazine reported, the Pentagon in March of 1996 sent advanced fighters to Chile for an air show. The Defense Department also arranged for Puerto Rican National Guard pilots to fly Brazilian generals in F-16s. Within months, Brazil and Chile-whose military is less pressed for cash than most of its neighbors as it receives 10 percent of national copper exports-had taken the bait, with both nations contacting the Pentagon to inquire about possible sales.

The rest was simple. When William Perry resigned as Secretary of Defense in 1997 he wrote a letter to Clinton urging him to reconsider the ban. Perry's successor, William Cohen, also began lobbying for the change shortly after he joined the administration. The spring of 1997 saw Clinton's inevitable capitulation, with the president unveiling a draft policy on arms sales to South America that was virtually identical to the one proposed by DPACT in its original 1995 report.

Pork Central: The Appropriations Trough

Some of the fiercest military lobbying battles have involved fights to obtain (or maintain) appropriations for new weapons programs. This is where the real pork lies, as any first generation system costs billions and billions of dollars. A really good contract will allow a contractor to plunder the federal treasury for decades, from R&D through final sales and then post-production business, such as maintenance and repairs, and modifications.

One costly taxpayer swindle involves Lockheed's F-22 fighter, a plane originally conceived as a counter to a new generation of Soviet fighters and planned to be based at European air bases in order to deter a Warsaw Pact assault on NATO forces. Since this function no longer serves as an alibi, Lockheed's promo material for the F-22 now argues that the plane is needed because of the threat posed by "regional aggressors," pointing here to the formidable aircraft possessed by potential U.S. adversaries. Yet according to Harper's, if a single nation somehow gained control of every Soviet MIG-29 and Su-27 on the planet, the U.S. Air Force already has a tactical fleet that would outnumber this ominous threat by seven to one. A Congressional Budget Office report in 1995 said that "the F-22 may provide more capability to attack enemy fighters than the United States needs." A GAO report the following year concluded that "the aircraft and air defense forces of potential adversaries have not been substantially improved and do not pose a serious threat."

Like all big-money weapons projects, the F-22 has suffered outrageous cost overruns. The Pentagon initially estimated that the plane would cost $60 million each, a price that has now risen to $148 million each. Lockheed succeeded in driving up the cost by covering the plane with as much high-tech gold-plating as it could dream up-"every extra except fuzzy dice," Harper's said. All the additional hardware added 12,000 pounds to the plane's weight, making it impossible for the fighter to carry out one of its supposed strong suits-flying at supersonic speeds-other than for brief bursts.

Despite all of its drawbacks, Lockheed has succeeded in maintaining hefty funding for the plane (though the initial order of 438 has been reduced to 339). In a bid to ensure Congressional support, the company lavished out portions of the F-22 pie to 676 companies in 44 states. In 1990, Lockheed had the foresight to move the main F-22 production plant to Georgia, home of then Senate Armed Services chairman Sam Nunn, widely known during his years of public service as the "Senator from Lockheed." After Nunn retired, another Georgian, House Speaker Newt Gingrich, stepped in to lead Congressional forces battling for the F-22.

The boldest move by Lockheed lobbyists came in the early l990s, when even a few defense hawks were getting squeamish about the F-22's soaring costs and dwindling promise. The company then began circulating promo literature that laid out the top threats to American air supremacy, a list that includes everything from Russian MIG-29s owned by nations such as Iraq and North Korea to Lockheed's own F-16s, which the company has sold to "hostile" nations like Israel, South Korea and Canada. Lockheed goes so far as to boast that the F-22 can stymie the air defense radar systems which it has installed on the planes it has previously exported abroad. "We can't predict the future 30 years from now," Jeff Rhodes, a Lockheed spokesman, said in an interview. "A military dictator could take power in a country [that owns Lockheed aircraft] which is currently an ally."

With amazing audacity, Lockheed and the Pentagon are already stating that the F-22 might be made available to foreign countries as a means of reducing per unit costs. Possible buyers are Japan, Israel and Saudi Arabia. Already, one can hear Lockheed's next battle cry: Give us money to develop a new plane that can counter the dread threat posed by foreign nations which own the F-22!

The Mother of All Boondoggles

A full listing of Pentagon boondoggles would require a multi-volume collection. However, there is one project that stands out as perhaps the most egregious taxpayer rip-off of the post World War II period: The B-2 bomber, whose stealth technology is supposed to make it invisible to enemy radar.

The B-2 is the single most expensive piece of military equipment ever designed, costing three times its weight in gold and carrying a per unit price of about $2 billion. Congress has already allocated $44 billion for the project, a figure that exceeds the annual defense budget for all but a few nations in the world.

When Northrop Grumman, the plane's prime contractor, was awarded the B-2 contract by the Reagan administration in 1981, the company and the Pentagon sold it as a remarkable new weapon which could penetrate deep into Soviet air space, inflict heavy damage and then safely fly home. Northrop executives were alarmed after Mikhail Gorbachev took power and began dismantling the communist system. An internal company memo from the period suggested that Northrop should begin selling the B-2 as "a prudent hedge against the uncertainty that [Gorbachev] may fail (or change his mind)."

Northrop was forced to come up with a new PR spin when Gorbachev was evicted from power and Boris Yeltsin decreed the end of the Soviet Union. The company has since claimed (among other things) that as the number of forward-deployed aircraft carriers declines and the U.S. gradually withdraws from its overseas bases, the B-2 will become more vital than ever because of its ability to carry out long-range missions from bases in the U.S.

Whatever the spin, Northrop's fundamental problem is that its plane is a dog. The B-2 employs a technology-stealth- that has never been shown to work. A Pentagon source who has reviewed classified data calls stealth "the biggest fraud ever perpetrated on the American public." He says that during the Gulf War, British destroyers picked up stealth crafts from 40 miles away. U.S. radar identified them at up to five times that distance. In regard to the B-2 specifically, this source points out that the bomber weighs a staggering 360,000 pounds. "There's no way to hide something like that," he states, adding that the B-2's gigantic size makes it "stick out like a dog turd in a fish bowl."

The conventional wisdom is that stealth craft, especially the F-117, played a central role in the Gulf War. In fact, stealth was completely irrelevant. The key to the Allied victory was that the Iraqi army suffered the largest mass desertions in history; up to 175,000 soldiers fled the front before the ground combat began. The desertions resulted from Saddam Hussein's having stuffed the front with segregated units of Shiite and Kurd troops. Realizing that they were merely cannon fodder, huge numbers returned to their villages. That left some 25,000 troops to confront 400,000 U.S.-led soldiers. The latter could have walked in with swords.

Even if stealth technology worked, the B-2 wouldn't. The plane's stealth coating is extremely frail and suffers serious damage if exposed to rain or sun. The plane needs to be recoated frequently and B-2 pilots are only allowed to fly the bomber for a few hours per week. A 1997 General Accounting Office report said that "it is unlikely that the aircraft's sensitivity to moisture and climates or the need for controlled environments to fix low-observability problems will ever be fully resolved, even with improved materials and repair processes."

Stealth technology is just the start of the B-2's problems. Another GAO report, this one from 1995, found that the bomber's radar system malfunctions, leaving the plane unable to distinguish between a mountain and a rain cloud. The same GAO report concluded, "After 14 years of development... including six years of flight testing, the Air Force has yet to demonstrate that the B-2 design will meet some of its most important mission requirements."

A sign of the B-2's troubles came in the spring of 1997. Though the bomber had already performed substantial test flights, it was only on April 1 of that year that it was certified as combat ready and put on active duty. Northrop immediately announced in a series of newspaper ads that with the bomber finally fit for action, America's enemies had better watch their step. Within days, a shaft assembly in one of the engines of one of the planes cracked and the B-2 was withdrawn from the active roster.

Dracula's Revenge

There is a general recognition that the B-2 is a grotesque boondoggle. Already back in 1989, the Washington Post was reporting that consensus on the need for the B-2 had "crumbled," and was predicting its imminent demise. The original order for the plane shrank from 132 to 75 and then, in 1992, Congress and President Bush agreed to a compromise that terminated the program with an order of 20 planes. Several Pentagon reports have concluded that there is no need to build any more of the bombers and the Air Force itself has said it can't afford the plane, preferring to spend its money instead on short-range tactical jets it can base overseas.

Despite all of this, Northrop and its allies have scored a series of major victories these past few years. In 1995, Northrop got Congress to approve $493 million in new money for the bomber. During the presidential campaign the following year, Clinton, playing to voters in Califomia-where Northrop and the B-2 production lines are located-added one more bomber to the package. In 1997, hawks in Congress led by Rep. Norm Dicks of Washington state, home to Boeing, a key subcontractor on the B-2, began pressing to raise the order back up to 30.

Why does the B-2 live on? The answer can be found in the expensive and multi-pronged lobbying campaign Northrop has conducted over most of the past decade. That campaign well illustrates why Congress continues to approve Cold War-era military budgets despite there being no plausible threat to the nation's security.

Northrop's lobbying for the B-2 has covered all of the bases, from hiring up former Pentagon officials to press Congress, to orchestrating fake "grassroots" uprisings. The company's top in-house lobbyist on the B-2 is Robert Helm, a former Pentagon Comptroller. He joined the company in 1994, replacing Togo West, who had been named secretary of the army. Offering outside counsel is Michael Balzano, a Nixon administration veteran who moved to the American Enterprise Institute and later worked on the Reagan/Bush campaign of 1980. Balzano now heads his own lobbying firm and represents almost all major defense contractors.

To provide further firepower on Capitol Hill, Northrop wheeled out Chuck Horner, the Air Force official who designed the Gulf War air campaign and who is revered by members of Congress. Homer, who is on Northrop's payroll, has testified several times before Congress about the B-2's awesome capabilities. The B-2 campaign has been further assisted by a number of other retired Pentagon officials. In 1995, former Air Force Secretary Don Rice was brought in to brief wavering members on the day of the vote.

Northrop has greatly assisted the B-2's cause by doling out billions of dollars' worth of work to subcontractors across the country. As a result, the plane has been built, at various times, in 46 states and 383 congressional districts. Fourteen suppliers build the airframe and 25 firms make the electronic systems. Boeing received a subcontract for landing gear assemblies and then further subcontracted with at least ten more firms, ranging from giants such as Allied Signal and Goodyear to small companies such as Crissair of California and Cleveland Pneumatic. In short, there's a bit of pork for everybody, whether it's the $791 million in contracts spread across Texas or the $100,000 for West Virginia, where IMO Industries in Huntington makes clamps for the bomber.

Northrop relies on its vast network of subcontractors when it comes time to lobby for the plane's survival. During a crucial vote in 1995, Northrop brought together hundreds of subcontractor CEOs, who fanned out across the Capitol to press home state lawmakers.

Nor has Northrop skimped when it came to larding out campaign contributions to members of Congress. During the 1996 election cycle, the company poured more than $700,000 into political campaigns. About $80,000 of that was dispensed in June, the month that the House voted-by a margin of 213 to 210-to provide additional money for the B-2. Northrop's 213 allies received an average of $2,073 in PAC money from the company in 1996, while B-2 opponents received an average of a mere $113.

No member of Congress has shilled for the B-2 with greater fervor than Rep. Norm Dicks of Washington, who took in $10,000 from Northrop, the maximum allowed, during the 1995-1996 election cycle. Dicks even took advantage of the 1996 incident, in which Scott O'Grady was shot down during a reconnaissance flight in Bosnia, to seek support for his pet bomber. In several public statements, Dicks claimed that if the B-2 had been in America's arsenal at the time, this tragic event might not have taken place as if the Air Force would ever dispatch and risk losing a $2 billion plane to conduct a simple reconnaissance mission. (When he was in the Senate in 1989, Defense Secretary William Cohen remarked that using the B-2 in any conventional war would be like sending "a Rolls-Royce down into a combat zone to pick up groceries.")

Northrop has arranged to fly lawmakers less enthusiastic than Dicks to visit its production lines in Pico Rivera and Palmdale, California. "I have visited the B-2 factory in Califomia, seen the B-2, climbed on its extraordinary wing, and in the cockpit, and met with representatives of the literally hundreds of firms that designed and built it," Rep. Sam Brownback marveled during House debate after returning from his tour. For black lawmakers, Northrop provides a list of minority-owned firms that have received work on the bomber, while women lawmakers get a list detailing all the female-owned firms taking part.

Similar efforts have been made to woo the public. To fine tune the PR spin for the B-2, Northrop once hired Democratic pollster Peter Hart, whose focus groups responded best to the theme that the bomber exposes fewer pilots to danger. The company has unleashed numerous advertising blitzes to take that message to the masses.

Northrop has twice retained that king of the "grassroots," Jack Bonner, to build public momentum for the B-2. In the early 1990s, when it appeared that the Cold War's end would lead to a collapse of congressional support for the B-2, Bonner's phoners helped turn the tide by prodding hundreds of organizations- representing seniors, minorities, religious groups, police chiefs, farmers and Rotary Club presidents-to send postcards to congress that called for continued production of the bomber.

In 1996, Northrop again hired Bonner after President Clinton decided to include no new money for the B-2 in the 1997 budget. Bonner & Associates sent a letter to Northrop employees and suppliers saying it was "absolutely vital" to inform President Clinton that his action would have a devastating impact "on you, on Califomia, and on the country." The letter provided a toll-free number to call, with operators standing by to take orders for telegrams to the White House. Though Northrop and Bonner did not succeed in freeing up more cash for the B-2, Clinton and Congress maintained funding for the bombers that had been previously ordered.

Public opinion has also been targeted by a number of prominent defense intellectuals. The foremost public proponent of the B-2 is Loren Thompson of the Alexis de Tocqueville Institution in Arlington, an outfit that receives funding from Northrop. Thompson produces a steady stream of pro-B-2 op-ed articles and is regularly quoted in the press. He also is a regular witness before Congressional panels, telling one committee in 1997 that the B-2 is a miracle plane that can "fly anywhere in the world within a few hours, safely penetrate modern air defenses and precisely destroy up to 16 separate targets with minimum collateral damage." Such assurances were given despite the fact that at the time the B-2 had never even been certified as combat ready and had yet to fly a single mission.

Thompson also put together a letter from seven former secretaries of defense-Melvin Laird, James Schlesinger, Donald Rumsfield, Harold Brown, Caspar Weinberger, Frank Carlucci and Dick Cheney-in support of the B-2, which was used to great effect on Capitol Hill. "It is essential that steps be taken now to preserve an adequate long-range bomber force," the seven said judiciously. "The B-2 remains...the most cost-effective means of rapidly projecting force over great distances."

On numerous occasions during the past decade, Congress seemed all but sure to kill off the B-2. Each time, though, Northrop has managed to fend off the final stake to the heart with a lobbying blitzkrieg, prompting Rep. John Kasich of Ohio to dub the B-2 the "Dracula" bomber. This, then, is how military policy is formulated in the late-20th century: Because a company can mobilize enough lobbying firepower, the American people end up paying for a bomber that doesn't work, to meet a threat that doesn't exist.

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