USA: Inside Lockheed's $250 Billion Pentagon Connection
George Bush has said if he is fortunate enough to be elected president,
he is going to look at our whole military situation, including the
tactical air account. He's noted that the 3000 number [of planes] seems
a bit much.
--Bush campaign adviser Richard Armitage, September 2000
After one month of military strikes against Afghanistan, terrorism
alerts, anthrax scares, and record-breaking flag sales, the Pentagon
has recently announced the largest defense contract in U.S. military
history, a potential $250 billion deal that calls for the construction
of approximately 6000 stealthy, supersonic Joint Strike Fighter combat
planes to protect the nation's shores and sell to foreign governments.
On October 26, Air Force Secretary James G. Roche awarded the contract
to Lockheed-Martin and Northrop Grumman, the dynamic defense duo who
edged off the only other competitor, Boeing. The order, expected to
provide over 40 years' worth of work and revenue, calls for the
development and manufacturing of 3000 fighters to be used by the Air
Force, Navy and Marines. It also entails an a similar number of planes
to be sold abroad to countries like Turkey, Israel, and Canada.
The Department of Defense won't comment on Roche's specific reasons for
choosing the Lockheed-Northrop team. Some experts say America's largest
defense contractor produced a slicker-looking model. Others thought the
debt-plagued company needed the economic boost. But arms-policy experts
and watchdog groups are examining the move, questioning the timing of
the deal, the need for such an extensive air fleet, and the connections
between the Pentagon officials who made the decision and the
corporations who will benefit from the contract.
Before his nomination this summer, Air Force Secretary Roche worked as
a top executive for Northrop Grumman for 17 years. Deciding who should
get the fighter contract was finally Roche's decision, according to his
spokesperson. He looked at benchmarks in performance, test and cost
runs, radars and electronic mission systems ?omplicated gizmos whose
development Roche oversaw in his role at Northrop Grumman, the Voice
By the end of his tenure, Roche had been promoted to president of the
Electronic Sensors and Systems Sector, a division that, according to
the company, will now be a "key" subcontractor for the fighter deal,
responsible for the production of an advanced fire-control radar system
and primary elements of the aircraft's integrated mission systems.
What's more, on the day before Roche's nomination hearing before the
Senate's Armed Services Committee, Northrop Grumman made two unusually
large donations to sectors within the Republican Party: $100,000 to the
president's 2001 Dinner Committee (a joint trust split between House
and Senate Republicans) and an additional $15,000 to the Republican
National State Elections Committee.
"It's a conflict of interest," says William Hartung, a research fellow
who follows the arms trade at the New School's World Policy Institute.
"The guy's only been out of the company a few months." Defense
officials "don't seem to be particularly sensitive that someone might
consider that they're lining the pockets of former colleagues and
A spokesperson for the secretary said neither he nor his wife have any
remaining financial interest in Northrop. "He has complied completely
with all ethical and legal guidelines," said Major Chet Curtis.
Roche might face more public scrutiny in the near future. Two weeks
ago, the federal government accused Northrop of fraud in the
fulfillment of multimillion-dollar defense contracts, including parts
for the B-2 stealth bomber? fighter now in action over Afghanistan,
with radar and avionics components manufactured by the company's
Electronic Systems and Services. During his Senate confirmation
hearings, Roche pushed the Northrop product, saying the company had
made some "exquisite" new developments. Through Major Curtis, Roche
declined comment on the government's accusation against Northrop. In a
written statement, Northrop said the case had already been investigated
by the U.S. attorney's office from 1989 to 1992, resulting in a
decision not to prosecute. The compay said that the accusations stemmed
from "disgruntled former employees" and that it's confident "it will
prevail at trial."
Lockheed made its own headlines in the mid 1980's when the Defense
Department found the company was producing $640 toilet seats. For
Hartung, the matter just seems too far removed from public oversight.
"The Constitution says that civilians should be in charge of the
militia, but the Bush administration has put a lot of corporate and
military people in charge of the Pentagon," Hartung said. "Where's the
watchdog? Who's going to hold these people accountable?"
Navy secretary Gordon England served as president of Lockheed's Fort
Worth division, which will build the fighter planes. Bush's secretary
of transportation, Norman Mineta, ditched his term as a Congressional
representative to join the Lockheed team back in 1995. The
undersecretary for the air force, Albert E. Smith, was a Lockheed vice
president who oversaw the company's space program. And Vice President
Dick Cheney's wife, Lynne, served on the Lockheed board of directors
from 1994 to 2001? $120,000-a-year post she gave up shortly before her
Bruce Jackson, a current Lockheed vice president, served as financial
chair and fundraiser for Bush's presidential campaign. At a 1999
conference, Jackson bragged that he would personally "write the
Republican platform" on defense if the Texas governor made it to the
For over five years, Lockheed and Boeing battled for the contract. They
spent millions building prototypes and millions wooing politicians.
Since the 1999-2000 election cycle, Lockheed has spent $12,725,000 on
lobbying and campaign contributions, with nearly $2 million going to
the Republican Party, according to the Center for Responsive Politics.
Boeing, in contrast, spent $9.8 million on lobbying and campaign
contributions, with some $1.9 million split almost evenly between the
"The defense industry is one of the major industries that enjoys close
ties with the U.S. government," says Pete Eisner, managing director at
the Center for Public Integrity. "It's a long-standing practice of
revolving door, and it's not the first time the door's spun more than
once. With Americans preoccupied with the war on terrorism, there
should be heightened scrutiny on these contracts. They might be coming
around the back door when we may not be giving it our full attention."
This story is part of the Voice's ongoing coverage of the war on
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