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The Buying and Selling of the Pentagon (Part I)

(Image: Jared Rodriguez / Truthout)

Part of the Series

For the last seven weeks, we have been running Solutions columns on how to fix the Pentagon. With the DoD budget ballooning again and again over the past 40 years and the news yesterday that we have already spent $600 million in the first week in defending Libya from the air, there appears to finally be some movement to look into what is wrong with our defense spending. We have fired 191 cruise missiles at a cost of $288 million alone ($1.5 million per missile) – just one illustration on how we have spent too much for our weapons, and the Pentagon has admitted that it is unauditable and cannot successfully track most of its procurement money.

There was story yesterday by Tony Capaccio of Bloomberg Government that, according to the Government Accountability Office (GAO):

About one in three major US Defense Department weapons programs since 1997 have had cost overruns of as much as 50 percent over their original projections …

The overruns, found in 47 of 134 programs included in a study by the US Government Accountability Office, were enough to trigger a law that requires congressional notifications and potential termination. Only a single program has been terminated during that review process – the Bell Helicopter Textron $6.78 billion Army Armed Reconnaissance Helicopter, the GAO said.

What the GAO is not saying is that these are the overruns that the government knows about because there are many contractor and DoD program manager accounting tricks that hide overruns, including putting the extra expense in other programs that are not so closely monitored. Defense contractors and their buddies in the Pentagon are as good at hiding or deflecting overruns and manufacturing problems as General Electric is at dodging taxes.

I could go on for many more paragraphs about the problem and cite years and years of reports of fraudulent, wasteful and ineffective contracting, but most informed readers (especially Truthout readers) have heard of these horror stories for decades.

So, I wanted to concentrate and pull back the layers of problems and try to get down to basic incentives that would allow this to go on for generations of military and DoD civilian personnel. Each round of exposés triggered legislative reforms that were just reforms on paper, which were ignored by the bureaucracy, or real reforms that were deformed by a bureaucracy skilled in loopholes and slow rolls with few in the Congress or various administrations unwilling to commit to true oversight.

I don't believe that the US can make real changes to DoD procurement until we change the financial incentives of the individuals who work in this corrupt system. All other reforms can be deformed, and anyone who does not go along with this system, i.e. the Boy Scout types, are pushed out and most often have their careers destroyed if they don't go along with it. In this column, I will define the problem with the incentives for the people who work in this DoD/contractor system, and in next week's column, I will suggest tough solutions to change the very base of incentives for DoD personnel and the defense contractors.

For those who are interested in digging deeper on how this system got its start since World War II, I would suggest reading journalist Andrew Cockburn's excellent essay in the “Pentagon Labyrinth” called “Follow the Money.”

Since I started working on reforming the Pentagon in 1979, I have found one of the most corrupting problems has been the revolving door, the insidious practice where DoD and Congressional personnel go to work for defense contractors or start work at defense contractors and move in and out of the government positions using their influence and inside knowledge to maximize the profits of the defense industry. There have been many attempts to curb this process such as making DoD officials register where they working after leaving the DoD and putting in one- or two-year cooling off periods where they cannot attempt to influence the government in programs that they worked in, but most of these reforms have been ignored or deformed. When Congress passed a law requiring that DoD keep a list of who went through the revolving door, the DoD decided that the list was not to be made public.

There have been decades of reports by the GAO on the problems of the revolving door, hearings by Congress and reports in the media with very little effect. As I wrote about in a Solutions column a few weeks ago, the revolving door with our officer corps is the worst because when senior officers retire with their military pensions and sell their souls to a defense contractor for money, it is devastating to the morale of the junior officer corps. The younger officers who don't believe in this corrupting practice get out of the service, and those who stay have to accept the undue influence of former officers to the detriment of national defense.

Thomas Amlie, while working within the Air Force, wrote the best explanation I have seen on the corrupting pressures with our officers, in a 1983 memorandum to his superiors. Dr. Amlie was the inventor of the Sparrow missile and had been the director of Naval Weapons Laboratory at China Lake. I included part of his memorandum in my 1985 book, “The Pentagon Underground”:

The major problem with having a military officer in charge of procurement is his vulnerability. It turns out that not everyone can make general or admiral and our “up or out” policy forces people to retire. The average age of an officer at retirement is 43 years. Counting allowances, a colonel has more take home pay than a US Senator. At the age of 43, he probably has kids in or ready for college and a big mortgage and can't afford a large cut in his income. Besides, he is at the peak of his intellectual powers, is emotionally involved and doesn't want to quit. We throw him out anyway, no matter how good a job he is doing. Many of these officers, particularly the good ones who have spent most of their careers flying aircraft, operating ships or leading troops, do not have the skills which are readily marketable in the civilian sector. This nice man then comes around and offers him a job at 50k-75K [1983 dollars] per year. If he stands up and makes a fuss about high cost and poor quality, no nice man will come to see him when he retires. Even if he has no interest in a post-retirement job in the defense industry, he is taking a chance by making a fuss. The “system” will, likely as not, discover a newly open job in Tule, Greenland; Adak Alaska; or some other garden spot for which he and only he, is uniquely qualified. Thus, his family, as well as his career, suffers. To their everlasting credit, many fine officers have made a fuss anyway and suffered the consequences.

This is not the precarious situation that we should be putting our officers in and this practice is worse when our generals and admirals also go through the revolving door. I have spent many years trying to get the public, the media and members of Congress who want to curtail this damaging practice to understand that the defense contractors are not necessarily hiring and paying these officers and civilian personnel for influence peddling that they will do in the future, but instead, are hiring and rewarding them for what they did while they were in government service for the contractors. The rewards of the job are for “services rendered” to the contractors, such as helping to hide overruns and handing out waivers and change orders to help out malfunctioning contractors so they don't have to pay the costs to fix their own mistakes. The problem is that the high-level officers begin to see themselves as on the same team as the contractor and their success relies on the contractors' power and influence in the system.

This was revealed to me in a very startling way in the early 1980s when I was the director of the Project on Military Procurement (now Project on Government Oversight, POGO, where I still serve as treasurer and a member of the board of directors.) I received a call from one of my sources that he had some important documents for me. He was a source that was helping me with investigating the push to buy another run of the notorious C-5 cargo plane.

The first production run of the C-5A cargo plane was one of the worst overrun and technical failures that the Air Force had ever produced, but now Lockheed, the contractor for the C-5A, is pushing for another generation of this plane disaster, the C-5B. The Air Force had picked another plane for the replacement of the C-5A in 1981 to be built by McDonnell Douglas, but by 1982, Lockheed had pushed hard enough to change that decision and the DoD and Air Force fell behind the idea of making the C-5B and reversed their decision. It was widely suspected that Lockheed was able to turn the DoD and the Air Force around from their original decision because Lockheed needed a bailout because of their past failures. There were other potential planes for the job, such as the 747 cargo plane (hated by the Air Force brass because it was a commercial plane, but Boeing gave the Air Force an unsolicited proposal to use 747s for military cargo) and KC-10. We were examining the technical data and the costs of these other options to the C-5, especially given the history of the program under Lockheed.

Once the Air Force fell behind the new C-5B, they became one with Lockheed in pushing it in the media and the Congress. Usually this is done under the radar where the government helps the contractor lobby the Congress, but keeps their fingerprints off the dirty work. However, my source nervously handed me a thick document through the window of my car when I pulled up to see him on a Washington corner. He, uncharacteristically, said little and furtively walked away. Once I opened the document, I could see why. It was a lobby plan for the C-5B that coordinated the lobbying efforts of the DoD, Air Force and Lockheed, giving each group assignments and commingling their efforts so that they were virtually one. We knew that this had happened before, but I never thought anyone was dumb or arrogant enough to write it all down. Besides showing Lockheed's hold and power over the DoD and the Air Force, it was and is illegal for the executive branch to use appropriated funds to actually lobby the Congress. In the past, the executive branch and the DoD would have legislative liaisons, which were a fig leaf cover for lobbying because they claimed that they were just supplying needed information to the Congress. However, this time the government was caught as close in bed to the contractor as you can get.

The document was a 96-page computerized printout that gave various tasks to the DoD, Air Force and Lockheed. It was a coordinated effort that planned to use such “heavy hitters” as four-star generals, Senate Majority Leader Howard Baker, the mayor of Atlanta, the secretary of the Air Force, the deputy secretary of the DoD and even President Reagan. There was very little emphasis on the substantive issues of which cargo plane would work best for delivering supplies to the troops, but rather, schemes on how to use pork barrel and horse trading to influence the Congress for the benefit of Lockheed's program.

One task had Lockheed writing up a draft for the secretary of defense to present to justify spending money to buy Lockheed's C-5Bs and the secretary of defense signed it and sent it to the top Armed Services committees. Another task was to have the Air Force and the DoD to get outside military organizations such as the American Legion and National Defense Council to lobby for the C-5B. Government agencies are not supposed to seek lobby support from outside groups.

Another task had Lockheed putting together strange political bedfellows to make sure that Lockheed got the C-5B, which was to be built in their plant in Marietta Georgia, an Atlanta suburb. They got Andrew Young, mayor of Atlanta and former civil rights champion, to work the Congressional Black Caucus to vote for the C-5B because he was told that the plane would bring 8,500 jobs to the area. It worked because major members of the Congressional Black Caucus voted for the plane. In the same task, Lockheed also had other members of Congress, including conservatives like Newt Gingrich, whose district was near the plant, lobby for the plane because of the jobs. The Air Force was tasked with taking pictures of the C-5 holding several helicopters and giving the photos to Lockheed so they could use them in full-page ads in major newspapers such as The Washington Post.

Probably the most grievous task that was in the lobby plan was for the Air Force and Lockheed to put the squeeze on the general who was in charge of the Military Airlift Command (MAC). The lobby plan said that the head of MAC, Gen. Jim Allen, prepared testimony to Congress for a hearing on airlift, but it was not strong enough for the C-5. It was well known that MAC was reluctant to have more C-5s, so his testimony was tempered to look at all the potential candidates for the new cargo plane. The Congress wanted to hear from this general because he was from the command that would be using this plane, yet when he arrived in town, his statement had to be “purified” – even being a four-star general did not allow him to speak freely to the Congress. A few years later, after a speech I gave on the C-5B lobby plan, an Air Force major told me that he had been an aide to General Allen during the controversy and that the general was very bitter about the interference with his testimony. This is exactly the problem I am concerned about: the forced corruption of a general, who did not have the integrity to testify truthfully, and the impression of this corrupt system on his junior officers. This type of corruption of the system went on for 96 pages in this document.

After we leaked this lobby plan to the press, the DoD was unapologetic and claimed it was the normal order of business. One of the excerpts from The Washington Post:

Air Force Lt. General Kelly H. Burke, who is responsible for the proposed C5 program, said yesterday: “You're just wrong if you think this is a highly unusual happening. Anytime you get competing views, it's customary for the government to work with those contractors whose views are congruent with the president's … I do not want to sound platitudinous, but all you're seeing is democracy in action. This is the way the system is supposed to work.

In the uproar over this leaked lobby plan, Congress asked the GAO to investigate the government using its funding to lobby the Congress in lock step with a contractor. The GAO did a very thorough job and found that laws were broken. They sent evidence to the Reagan Justice Department for possible criminal and civil cases against various DoD and Air Force employees, but nothing was ever pursued.

So, you may be wondering why I dredged up all this information from the 1980s. One reason is that the C-5 lobby plan was a unique look into the system that has not been replicated (after this plan leaked, I am sure no contractor was dumb enough to ever write down their lobby efforts with the DoD again). Another is that I have spent several weeks exploring these same problems of revolving doors and the power of the defense contractors' money and influence on the DoD civilian personnel and officer corps, and have found that, in the past 25 years, there has been little change and fewer remedies that have curbed this system. In fact, as the DoD budget has risen to unprecedented heights since World War II and defense companies have merged to become very large entities, the corruption and undue influence on individuals who work for the DoD has gotten worse. I believe that until you change the daily incentives for the people who are responsible for the day-to-day workings in the DoD, nothing will change.

So, next week, in part two of this column, I will lay out what I believe are strong changes that need to happen. Many may believe that we can't get such tough measures enacted, but we must get control of a system that gives us missiles that are $1.5 million a pop and generations of other overpriced weapons that produce money and jobs for defense contractors and their DoD minions, but do not protect our troops or our country.

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