The Spark

“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx

Waste and fraud:
Arms merchants know their business

Jul 19, 2004

Congressional hearings beginning July 22 will take testimony from six former employees of Halliburton. Halliburton is accused of "fraud" in its contracts connected to the Iraq war. Halliburton has contracts of over a billion dollars for supplying troops in Iraq, not to mention the multi-billion dollars contract for rebuilding the Iraqi oil industry and other billion-dollar contracts for military support in the Balkans and Afghanistan.

Halliburton, of course, is not the only company profiting from this war. The "Big Three" of military contracts – Lockheed Martin, Northrup Grumman and Boeing – get even bigger contracts than does Halliburton. In 2002, Lockheed Martin had 17 billion dollars in Pentagon contracts, Boeing had 16.6 billion and Northrup Grumman got 8.7 billion.

The official military budget – the majority of which goes to such contracts – stands at 400 billion dollars today. And this figure doesn't include contracts from other government agencies, like the Energy Department's two-billion-dollar-a-year contract to Lockheed Martin to run the Sandia National Laboratories for research on nuclear weapons and the Nevada Test Site for underground testing. Lockheed Martin gets billions each year as part of the administration's so-called war on terror.

In fact, Lockheed Martin alone gets more money each year than is spent on the entire federal welfare program, TANF, Temporary Assistance for Needy Families.

These big contracts don't neglect to reward those at the top: Vice President Dick Cheney, as chief executive of Halliburton, got 26 million dollars in 1999. This amount, and others like it, was paid during the Clinton administration's years of overseeing military contracts. The CEO of Lockheed Martin pushed up his salary from some 6 million during the Clinton years to 25 million in 2002.

Fraud? You bet. The whole thing is a fraud. And not just because the Coalition Provision Authority in Iraq has, as its inspector general, a man who worked eight years directly on Bush's staff. Nor because a former vice president of Chevron-Texaco, Norm Szydolowski, heads the CPA Review Board to oversee contracts concerning Iraqi oil.

The major reason for military spending is to create a force to impose U.S. corporations on countries around the world. But a secondary reason is to pump super profits into some of the biggest corporations in the country through contracts for goods and services.

Since World War II, under five Democratic presidents and six Republican presidents, the merchants of death have flourished. Congress has been equally determined to help their pals, whether it was during the 20 terms led by Democrat majorities or the seven terms led by Republican majorities. In the words of economist Paul Krugman, these elected representatives insist they will "leave no defense contractor behind."