Show Notes
On today’s episode of The Drill Down, co-hosts Peter Schweizer and Eric Eggers discuss two unpleasant outcomes from the 20-year anniversary of the September 11 attacks – the growth of the military-industrial complex and the rise of the surveillance state.
Even though they are tightly related, let’s take them one at a time, starting with what Peter calls “the dirty bowels of the national security decision-making process.”
There’s a saying that when you have a hammer, a lot of things look like a nail. Peter asks, “When you’re selling hammers, does that make even more things look like nails?”
Talking about the recent chaotic withdrawal from the war in Afghanistan, Eric adds: “it’s tough to look at these companies and the profound profits they’ve made… and compare it to the stark reality of what happened on the ground there.”
The stocks for defense industry companies have vastly outperformed the broader stock market in the last 20 years because of the wars in Afghanistan and Iraq, not to mention the uses of military force in Syria and against Iran. It’s been boom times for companies that develop, manufacture, and sell new technologies and weapons to the U.S. government as well as to governments around the world.
At the same time, the “wash-back” cycle of senior people working for the U.S. military then jumping to private-sector defense industry jobs, and back again is often called a “revolving door” but works blurs into having the people who make the weapons set the policies for using them.
In 2018, the Project on Government Oversight found that the top 20 Pentagon contractors had hired at least 645 individuals formerly on the federal payroll; of that, nearly 90% of them were hired as lobbyists. Five top defense firms – Boeing, General Dynamics, United Technologies, Lockheed Martin, and Northrop Grumman – alone employ nearly a quarter of all former DoD officials monitored through the project.
Our current Secretary of Defense, Lloyd Austin left the Army in 2016. He joined United Technologies, which then became part of Raytheon Corp., receiving about $1.4 million as a board member. Raytheon received $27,405,894,269 from the Department of Defense in Fiscal Year 2020. The company has hired 22 former senior military officials from the Department of Defense.
Trump’s last Secretary of Defense, Mark Esper, had worked on the staff of then-Senator Chuck Hagel. When Hagel became President Obama’s third Secretary of Defense, Esper had become vice president of Government Relations at Raytheon. By 2015, The Capitol Hill newspaper The Hill had named him a top corporate lobbyist in DC. Esper left that job to become Trump’s Secretary of the Army in 2017, and his departure from Raytheon included a deferred compensation package set to go into effect after 2022, based partly on Raytheon’s stock prices.
Peter: “Raytheon is active in all areas [of defense technology]” “They develop precision guided munitions. They have strong ties with foreign govts including Qatar, which is not always best allies with the US. Peter asks, “What effect does this have on the decision-making process?”
Trump’s first Defense Secretary was the retired four-star General James Mattis, who had joined the board of directors of a small startup company called Theranos. When he was in charge of CENTCOM, Mattis pushed for the Army to acquire a blood-testing system created by Theranos, despite the company at the time being “non-FDA compliant,” according to one FDA official. The test’s technology was later revealed to be completely fake. Mattis remained on Theranos’s board until he left in anticipation of his nomination to be Secretary of Defense by Trump.
Also, after his retirement from the military, Mattis joined the board of General Dynamics, which received over $21.8 billion from the Department of Defense in FY2020. In this position, Mattis was paid $594,369 in salary and amassed more than $900,000 worth of company stock. The year after Mattis took over as defense secretary, General Dynamics’ federal revenue grew nearly from $19 billion to $23.6 billion in 2018, the largest annual increase in nearly 10 years since 2008-2009.
None of this accuses any of these men of neglecting their public duty on behalf of their former employers. And these three examples are just the tip of the iceberg, the senior people who have to disclose their sources of income when they join government. The revolving-door pattern occurs with lesser military members even more frequently – they just don’t show up in the news.
But president Eisenhower knew what he was talking about in 1960 when he warned about “the Military-Industrial Complex” – the nearly seamless connection between the people who make the weapons and the people who decide the strategy that will require those weapons. To this day we must always ask: Which comes first, the strategy or the weaponry?
