The arms trade

Payne, Douglas W.

THE YEAR 2000 was the worst for the U.S. stock market in nearly two decades— but not for weapons makers. The share prices of the two biggest military contractors, Lockheed Martin and Boeing, hit...

...arms manufacturers...
...It was chaired by Donald Rumsfeld, former and future secretary of defense and an adviser and donor to the center, and included mostly Star Wars champions...
...Then they didn't have to go running to Congress for money...
...With Bush's son now in the White House, paying to get into the Oval Office shouldn't be necessary...
...companies at an arms exposition in Rio de Janeiro in 1999 suggested to Ken Silverstein that a little less democracy in Latin America might even be okay, saying, "Things were different when the military ran things down here...
...Christopher, who had been on the board of Lockheed following a stint at the State Department under Jimmy Carter, joined Perry in recommending to Clinton that the ban be rescinded, which it was in August 1997...
...corporations to push for the aid package, but not Philip Morris—although he did say that he had spoken with the company regarding cigarette smuggling and the lawsuit...
...multinationals with interests in Colombia, including Colgate-Palmolive, BP Amoco, Pfizer, and construction giant Bechtel—pressed Washington on narco-trafficking's threat to business...
...In spring 1997, Oscar Arias, the former Costa Rican president who won the Nobel Peace prize a decade earlier, was in New York as part of an effort to get the United Nations to adopt an international code of conduct governing conventional arms sales...
...The two national missile defense tests conducted in 2000 were failures...
...arms companies in making export sales, with public praise for those making substantial contributions...
...The Bottom Line It was the late Ron Brown, Clinton's first secretary of commerce, who made clear the Clinton administration's bottom-line approach to weapons exports...
...The share prices of the two biggest military contractors, Lockheed Martin and Boeing, hit new highs, while the Standard & Poor's Aerospace/Defense Index was up nearly 35 percent, outperforming most other sectors...
...As Rumsfeld's appointment sailed through Congress, a number of Republican heavyweights stepped forward to support his nomination...
...Another Colombia aid booster was tobacco giant Philip Morris, whose lobbyists quietly pressed the issue on Capitol Hill, as reported by Legal Times correspondent Sam Loewenberg...
...With Clinton's election, some believed a substantial peace dividend was in the offing...
...A few months after the aid package was passed, it was announced that Pickering was resigning to join Boeing as a senior vice president...
...However, while Arias and other Nobel laureates struggled without much success at the United Nations, the arms industry's muscular lobbying, fueled by hefty campaign contributions on both sides of the aisle, was about to pay off in Washington...
...The defense industry, despite $130 billion spent on Stars Wars research since Ronald Reagan, still couldn't get a "kill vehicle"—the critical component of the system—to hit a moving target...
...Arms industry trade publications fretted that the U.S...
...He also has advocated forging ahead with the Air Force's new F-22 fighter jet, which is produced by Lockheed...
...But for more than a decade, Carlucci has been the chair of Carlyle, a multibillion-dollar private investment and buyout firm whose various acquisitions have made it one of the top dozen defense contractors in the United States, ahead of such companies as General Electric and Rockwell International...
...Perry would eventually go on to join the boards of Boeing and United Technologies (UT), another U.S...
...A senior equity analyst at Prudential Securities in New York said, "Lockheed has been relying on international business...
...It touted the company's prospects for weapons sales in Latin America, particularly its F-16 fighter, and projected that the region would provide a market of up to $15 billion over the next decade...
...By the end of Clinton's first term, according to the Bulletin of the Atomic Scientists, around 6,400 Commerce, State, and Defense Department employees were working full time to help weapons makers increase foreign sales, and the U.S...
...Robert Zoellick, a top foreign policy adviser and now U.S...
...a Beltway lobbyist who was working in support of the aid, said that gaining the backing of liberals such as Dodd and Gejdenson by appealing to homestate interests was "absolutely crucial...
...What was the company's interest...
...Mellman told the White House that illegal drugs was one issue where the Republicans held a clear edge in the 2000 election...
...Development Program, investing that amount over the course of ten years would be enough to provide basic education to the entire population of the developing world...
...When the Clinton presidency drew to a close, the U.S...
...In fact, in a written statement, the White House asserted that selling weapons to Latin America would help stabilize the region and strengthen the transition to democracy...
...At one point the Bush camp seemed to endorse an even tougher line...
...His Gulf War cohort, former British prime minister John Major, is on the firm's European board, and both are paid to facilitate access to government officials in countries such as Saudi Arabia, where a Carlyle subsidiary won the contract to train the Saudi defense force...
...As noted by Hartung and Michelle Ciarrocca, Bush has been close to Lockheed for years, and when governor of Texas even tried to give the company a contract to operate the state's welfare system, before backing down in the face of public protests...
...Meanwhile, the U.S.-Colombia Business Partnership—a consortium of U.S...
...Gaffney's main achievement on behalf of NMD was spearheading the effort that convinced Congress to create a commission to assess ballistic missile threats against the U.S...
...Clinton signed legislation that mandated deployment of an anti-missile system "as soon as technologically possible," with analysts saying it would take $60 billion to get it done...
...Critics of the sale predicted that it would set off a regional arms race, a pleasing prospect for Lockheed and other weapons makers who fare best when international tensions and conflict are on the rise...
...Rumsfeld has advocated a more extensive missile defense system than the model proposed by Clinton, one that includes an array of space-based weapons and is expected to cost $120 billion...
...According to the Center for Responsive Politics, between 1997 and early 2000, Dodd received $33,200 from UT and Gejdenson, $19,000...
...When it comes to the war racket, the transition from Clinton to Bush should be smooth...
...Lockheed was lobbying against the effort and distributing brochures, including one slipped under the door of Arias's hotel room...
...In the 1996 campaign cycle, the arms industry had contributed a total of nearly $12 million to both parties...
...corporations doing business abroad...
...Free market" really means systematic U.S...
...But contractors, particularly Lockheed, had reason to believe they would be treated more favorably under Bush than they were during the Clinton years...
...officials told Newsweek that a major factor in turning the tide was a survey by Democratic pollster Mark Mellman that showed the public to be increasingly worried about drug use and inclined to blame Democrats...
...Oscar Arias noted that, according to the U.N...
...Gore declined to meet with U'wa representatives who came to Washington and did not respond to calls by the Legal Times seeking comment...
...McCaffrey's spokesperson later said the general was kidding...
...An analyst for the Teal Group, a Virginia-based aerospace research firm, said, "Rumsfeld's appointment is the single most important indicator that the Bush administration is serious about national missile defense...
...arms manufacturers...
...Bush criticized the Democrats for being weak on defense and promised to increase military spending by $45 billion over ten years...
...He campaigned as an arms-control advocate and promised to press for strong international limits "on the dangerous and wasteful flow of weapons to troubled regions," as stated in the Democratic platform...
...Anti-smoking groups charged that the company was angling for the Colombian federal government to intervene with state authorities to drop the suit...
...The arms industry wanted more...
...government intervention on behalf of U.S...
...This is definitely a good thing...
...DOUGLAS W PAYNE is a New York-based writer...
...Then, in the 2000 presidential campaign, Democratic nominee Al Gore promised to hike military spending by more than double what George W. Bush proposed...
...In 1999, the pliable Colombian government gave Occidental permission to expand its 40 n DISSENT / Spring 2001 PLAN B drilling onto the ancestral lands of the U'wa Indians...
...Newspaper coverage of the arms industry is generally found in the business pages, where the concerns are corporate earnings and stock prices, not whether U.S.-made attack 38 n DISSENT / Spring 2001 PLAN B helicopters are being used against civilian populations in, say, Turkey or Colombia...
...president since the Vietnam War, including Ronald Reagan...
...Under White House pressure, however, Congress made the conditions optional, and in August 2000, with no evidence of Colombian compliance, President Clinton quietly waived them—to the satisfaction of the makers of Black Hawks and Hueys and to the pleasure of General Dynamics, the manufacturer of Gau-19 Gatling guns with which the Black Hawks were to be outfitted...
...But the White House, along with many skeptical Democrats on Capitol Hill, was eventually brought around through the efforts of U.S...
...Following the inclusion of the Black Hawks, Connecticut's two U.S...
...Then, with questions about cost overruns and mismanagement among NMD contractors reappearing in the media, Clinton deferred a decision on deployment to the next administration...
...Secretary of State Warren Christopher in 1993 instructed U.S...
...The two companies gave more than a million dollars to both parties between 1997 and 1999, with UT adroitly shifting a majority of its soft money to the Democrats as the Colombia aid issue emerged...
...As Hartung wrote in the Progressive, "It looks like the Pentagon and the weapons makers can break out the champagne regardless of who wins in November...
...He said, "It's all part of the game...
...official who was promoting U.S...
...Contributions are tax deductible, another government subsidy to the industry...
...aerospace and defense contractors, "We will work with you to help you find buyers for your products in the world marketplace, and then we will work to help you close the deal...
...The Times did not relate that one of every two dollars in U.S...
...Ralph Nader questioned Pentagon spending, but was excluded from the debates...
...NMD proponents were more than pleased when Bush named Rumsfeld secretary of defense...
...The Clinton administration seemed not to share such concerns...
...The catch was that President Jimmy Carter had instituted a ban on sales of high-tech weapons to Latin America that had been maintained through two successive Republican administrations...
...With Brazil reportedly next up for a fighter-jet acquisition from Lockheed, the company's shares finished the year with a 52 percent gain...
...A number of transactions with Latin countries had been put on hold when the region was buffeted by the global currency crisis in 1998...
...embassies would be graded for promotion based in part on how well they assisted U.S...
...corporations, led by weapons makers and oil companies, as detailed by the Legal Times and Newsweek...
...Its managing directors include James A. Baker III, who was secretary of state in the first Bush administration and George W.'s consigliere during the Florida recounts, as well as Richard Darman, former President Bush's budget director...
...As the Clinton years were ending, military analyst and former soldier Ralph Peters observed, "Increasingly, our national defense is a business and its business is not defense...
...The Pentagon was already on board for lifting the ban, as then secretary of defense William Perry was hoping to fatten his accounts by selling older model U.S...
...It became State Department policy that personnel stationed at U.S...
...David B. Hermelin, a former U.S...
...companies doing business abroad, and the Export-Import Bank, which provides below-market-rate loans to countries buying U.S...
...helicopter suppliers: Connecticut-based UT, whose Sikorsky aircraft division manufactures the Black Hawk, a lethal machine well known to the Kurds in southeastern Turkey and the residents of Chiapas, Mexico, and Texas-based Textron, maker of the Bell Huey...
...DISSENT / Spring 2001 n 43...
...In the last days of 2000, however, the first major deal came through with the announcement that Chile would purchase ten to twelve F-16s from Lockheed for around $600 million...
...In response to the concerns of Amnesty International and other rights groups—and to increase support among undecided Democrats— certain conditions were inserted into the aid legislation...
...access to a large untapped pool of petroleum was in jeopardy...
...I would say it's been a dramatic turn...
...What he didn't advertise was that his poll was commissioned by Lockheed, which, as the manufacturer of P-3 radar planes used to track drug smugglers, has consistently pushed for greater drug-war funding...
...Carlos M. Salinas of Amnesty International noted that Gejdenson and Dodd had consistently opposed U.S...
...Lynne Cheney, wife of Vice President Dick Cheney, has been on the board of Lockheed, as well as a number of other corporations that do business with the U.S...
...AmoNG THE most aggressive advocates were two U.S...
...Boeing CEO Phil Condit said Pickering, who had held diplomatic posts on five continents, would "form a State Department for Boeing" to assess the company's interests in every foreign country...
...Carlucci was identified by most media simply as a former defense secretary...
...Because both parties supported the military approach in Colombia, it was not an issue in the 2000 campaign...
...Lots of money is going to be poured into it...
...Gore responded that he was not weak and vowed to increase spending by $100 billion over the same period...
...They are more dynamic than any administration we've seen...
...At first, the Clinton administration was wary of such involvement in what a number of observers believe will be the next quagmire...
...Its ominous and, critics say, exaggerated portrayal of a potential threat from a North Korean, Iranian, or Iraqi missile attack caused enough stir that the Clinton administration reversed itself again...
...With regard to national missile defense (NMD), there were few differences between Bush and Gore...
...John Mikels, vice president of the Hughes missile division, said, "We've all been pretty pleasantly surprised by Clinton...
...defense budget could end up being cut by more than half to $150 billion...
...THE CANDIDATES didn't spend much time on broader military issues, either...
...Sam Gejdenson...
...There were concerns within the industry because both aircraft continued to be criticized for cost overruns...
...By Clinton's last year, international arms DISSENT / Spring 2001 n 39 PLAN B sales had surged, and the United States had solidified its position as the world's biggest dealer...
...Senators, Christopher Dodd and Joseph Lieberman, became proponents of the aid package, as did Connecticut Rep...
...But as the Center for • Public Integrity in Washington reminded us, Gore's father, the late Senator Albert Gore, was on the board of Occidental, and since the 1960s, the company has paid the vice president's family $20,000 a year for unused mineral rights on its land...
...environmental and indigenous rights groups appealed on behalf of the U'was to Vice President Gore...
...Much of it has been documented by Hartung and such groups as the Center for Defense Information, the Council for a Livable World, the Center for International Policy, and the Federation of American Scientists, as well as by investigators at Mother Jones magazine, including Ken Silverstein, author of Private Warriors, a close look at how old cold warriors have profited by scheming to keep the United States on a permanent war footing...
...The former president himself holds the title of senior adviser and is a member of Carlyle's Asian board...
...The second signaled that President Bush might be even more weaponsfriendly than his predecessor, particularly when it comes to the militarization of space...
...sales going to developing nations, according to a Congressional Research Service report cited by the New York Times...
...Human rights groups warned that an arms race would enhance the influence of Latin militaries at the expense of still shaky civilian governments and take funds away from social programs in a region still plagued by poverty and inequality...
...Congressional aides said Philip Morris was lobbying at the request of Colombia...
...government...
...But business has been good and, under George W. Bush, is likely to remain so...
...Occidental also has contributed hundreds of thousands of dollars to Gore and to the Democratic National Committee, whose treasurer in the 1996 election, Scott Pastrick, was hired by Occidental to lobby on Colombia...
...Gaffney heads the Center for Security Policy in Washington, a think tank and advocacy shop whose board includes cold war icons such as Jeane Kirkpatrick, no less than four Lockheed executives, and two from Boeing...
...Air Force jets south of the border...
...government was spending up to $7.5 billion a year supporting the arms industry through a combination of tax breaks, subsidized loans, promotional programs, and outright grants...
...One was that the Colombian army move to break its ties with right-wing death squads responsible for 35,000 civilian DISSENT / Spring 2001 n 41 PLAN B slayings during the 1990s...
...defense budget was nearly $310 billion, and, as noted by William D. Hartung, director of the Arms Trade Resource Center at the World Policy Institute in New York, Clinton had utilized military force more often than any U.S...
...But that commitment didn't last, thanks in large part to the efforts of a group of former national security insiders led by Frank Gaffney, a Reagan-era Pentagon official and one of the "private warriors" profiled by Silverstein...
...The Gau-19 fires .50-caliber ammunition at thirty-three-rounds-per-second at a cost of $4 a round...
...The Colombian Quagmire The nearly $1 billion military-aid package for Colombia as it descended into drug-fueled civil war was also a moneymaker for U.S...
...While testifying before Congress, McCaffrey extolled the virtues of the Black Hawk, saying, "These are the best helicopters in the world...
...Rumsfeld is an ardent backer of air power, too, and in recent years has called for building more B-2 bombers, which are manufactured by Northrup Grumman and, at $2.2 billion per copy, are the most expensive planes ever made...
...It was not surprising that when the White House came out with its Colombia proposal, it earmarked hundreds of millions of dollars to purchase dozens of helicopters from both companies...
...The Colombian ambassador in Washington told Loewenberg he had asked numerous U.S...
...weapons giant discussed below in relation to Colombia...
...For those enamored of bipartisanship, it's hard to top the mutual servicing of the war industry by the Democrats and the Republicans...
...The State Department followed Commerce's lead, as it would throughout much of the Clinton administration...
...Headed by Michael Skol, Clinton's deputy assistant secretary of state for Latin America until 1997, the group weighed in with generous political contributions across the board...
...Initially, the Clinton administration opposed the project, with Clinton vowing in 1993 to bring most Star Wars-type research to a halt...
...In 2000, it was sued in New York federal court by state governments in Colombia for allegedly working with Colombian drug traffickers to combine cigarette smuggling with the laundering of drug proceeds...
...They needn't have worried...
...military aid in Central America and said he had hoped they "would have been more helpful on this issue...
...Yet little of the work of these arms trade monitors gets into the mainstream media...
...The center opposes virtually any form of arms control and has relied on defense contractors for up to a quarter of its budget, with Boeing, the primary contractor on NMD projects, and Lockheed, Raytheon, and other subcontractors among the most generous donors...
...taxpayers, an enormous subsidy that undermines the claims of the arms industry and government officials that profits from weapons exports save American jobs...
...goods...
...By the end of Clinton's first year, the primacy of commercialism in his foreign policy was well established, with particular emphasis on government support for U.S...
...arms makers looking to expand their markets abroad, especially in the developing world...
...Gore supported Clinton in this, but aides reiterated that the vice president still backed NMD and, with the election looming, his campaign came out 42 n DISSENT / Spring 2001 PLAN B with a television ad highlighting Gore's support for the MX missile under Reagan and the Gulf War under Bush's father...
...One U.S...
...The Center for Security Policy awarded Rumsfeld its Keeper of the Flame award, previously given to Newt Gingrich and Malcolm Forbes, Jr., among others...
...That cheered Occidental because the insurgents are expert at blowing up the company's pipelines...
...But former representative Gerald Solomon (R-N.Y...
...Clinton's final year also saw the initial dividends from the reopened Latin American market...
...ambassador to Norway, was even hailed in his obituary in the New York Times by a State Department official for having helped close a deal for Lockheed to provide the missile systems for Norwegian warships...
...embassies "to support overseas marketing efforts of American companies bidding on defense contracts...
...In 1992, candidate Clinton pledged that with the end of the cold war the Democrats would adopt a less militaristic approach...
...Founded in Washington, D.C., less than a decade and a half ago, Carlyle is now the thirteenth largest investment group in the world...
...The next time you see me, I'll probably be peddling them, I hope...
...The appearance of one of them, Frank Carlucci, indicates that with George W. in the White House a closer look at the Carlyle Group is warranted...
...trade representative in the Bush cabinet, told the Council on Foreign Relations that it would probably be necessary to use greater force and to apply it directly against the guerrillas...
...Meanwhile, thirty-eight senators and seventy-eight representatives who had received more than a million dollars from political action committees controlled by Lockheed and other manufacturers signed a letter to Secretary of State Christopher urging that the ban be lifted...
...According to Joel Johnson, a spokesperson for the Aerospace Industries Association, "The Clinton people are very supportive of specific sales...
...All denied they were influenced by the selection of a Connecticut company...
...Starting with the Gulf War, network television—particularly CNN—has often seemed more like an infomercial for high-tech weaponry...
...arms export revenues came from U.S...
...The first, coupled with a big military aid package to Colombia, indicated how far the Clinton White House went to enhance the welfare of U.S...
...One of the prime movers was Occidental Petroleum, which said that its installation in Colombia— now the number-seven supplier of oil to the U.S.—was losing millions because of attacks by left-wing guerrillas flush with drug money, and that U.S...
...Arms makers were pleased by the prospects of greater military assistance to Colombia—not to mention the likelihood of the conflict spilling over into neighboring countries—and their lobbyists were soon documenting battlefield gains by the guerrillas to buttress the argument for greater spending...
...companies controlled better than a third of the global market, more than all European companies combined, with more than three-quarters of U.S...
...And although the past, as they say, is no guarantee of future returns, two developments at the end of December seemed to augur greater profits yet for those in on the war trade the proposed sale of Lockheed advanced fighter planes to Chile and the appointment of inveterate Star Warrior Donald Rumsfeld as defense secretary in the Bush administration...
...The assistance would include support from federal agencies such as the Overseas Private Investment Corporation (OPIC), which insures the operations of U.S...
...The White House point men on Colombia were drug czar Barry McCaffrey and Thomas Pickering, undersecretary of state for political affairs...
...The flourishing of the war industry during a time of relative peace is a tale of big-dollar lobbying, revolving-door careers, influence peddling, and political expediency...
...Speaking for the president at the 1993 Paris Air Show, he told U.S...

Vol. 48 • April 2001 • No. 2


 
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