Last updated March 17, 2008 8:51 p.m. PT
Jury selection set to begin in trial over Boeing leaks
By ANDREA JAMES
P-I REPORTER

Jury selection for the trial of Gerald Eastman, a former Boeing employee charged with stealing documents and leaking them to a Seattle newspaper, is expected to begin this week.

- This is a copy of the prosecution's trial memo in its case against Gerald Eastman. (PDF)
A King County Superior Court judge on Monday denied Eastman's request to delay the trial a week. His public defender asked for more time to gather documents from Chicago-based Boeing Co.
"We haven't had any time to prepare for my defense," Eastman said outside the Seattle courtroom.
Senior deputy prosecutor Scott Peterson argued against delaying the trial, saying that the state would begin to lose witnesses March 28. Numerous Boeing executives, including former vice president and general manager of the 787 program, Mike Bair, have delayed travel plans and vacations so that they could testify, Peterson said.
Eastman, 46, worked as a precision assembly inspector in Boeing's propulsion division in Tukwila from 1987 to 2006. He is accused of taking confidential Boeing documents, and pleaded not guilty in July to 16 counts of computer trespass. He faces up to four years and nine months in prison if convicted on all charges.
The trial is expected to last at least two weeks, Peterson said. The state has identified five Boeing witnesses, including Bair and Boeing investigator Anthony Maus, and four Seattle Police Department witnesses.
A series of articles revealing sensitive information about Boeing aircraft design appeared in The Seattle Times, starting in 2003, prosecutors allege. On April 12, 2006, Boeing investigators say they received an anonymous e-mail tip that pinpointed Eastman as the source of the leaked information, according to charging papers.
Eastman's attorney was still deciding Monday whether she would seek to have the reporter who wrote those articles, Dominic Gates, testify. Seattle P-I reporter James Wallace is also identified as a "contact" in Eastman's address book. The state said it would not subpoena either reporter.
Eastman says that he is a whistle-blower who was retaliated against for raising safety concerns. He says that he copied the files to document allegations to the Federal Aviation Administration that Boeing engaged in fraud. He has since found employment in Bothell.
"It kind of looks like payback," he said of the charges. "I'll leave that to whoever's out there to make their own decision."
Defense attorney Ramona Brandes said, "Boeing is a very big presence here in this part of the country. I think that the prosecutor is under a lot of pressure from Boeing."
Boeing officials have refused to comment on the ongoing case. A spokesman for the prosecutor said there is no pressure from Boeing, and that it would be inappropriate to comment before jury selection.
The case has been assigned to King County Superior Court Judge Monica Benton.
P-I reporter Andrea James can be reached at 206-448-8124 or andreajames@seattlepi.com.

Boeing Railroads Boeing Whistleblower: Company refuses to release information needed for defense.

Another case of injustice against a Boeing Whistleblower appears to be poised and launching.

I heard from Gerald Eastman today. The King County Courts do not appear to be very friendly to a Boeing Whistleblower. Mr. Eastman’s attorney’s motion to continue, in order to allow sufficient time for preparation for the trial was denied by the King County Judge. A part of the problem (and why more time is needed) is that Boeing has been refusing to release needed documentation and necessary materials for Mr. Eastman’s defense attorney to prepare his defense, and with the lightening speed with which things are moving, it appears the trial will be over before he can get that information that he has a right to, which wouldl significantly help him prove his side of the case. And we call this justice.

The trial began promptly at 1:30 p.m. Monday, 3-17-08.
A full day of jury selection is scheduled for Tuesday, 3-18-08, and it appears the King County Prosecutor’s office is hot to trot to service the intent of Boeing to make a serious example of one Boeing whistleblower.

Considering the normal pace of the “justice” system, this is remarkably rapid. This observer wonders if all those campaign contributions to certain King County Officials are finally being called in for repayment/quid pro quo. Someone ought to investigate this.

Mr. Eastman will be in court this week. If you have any helpful information regarding his case, please contact him via his website: www.thelastinspector.com

GFS

http://pogoblog.typepad.com/pogo/2008/03/whistleblowing.html

Whistleblowing Is Not Industrial Espionage: The Unjust Ironies of the Gerald Eastman Case

Behind the liberal latte-sipping, post-industrial idea of Seattle that rests in the national consciousness, the reality is quite different. The town and its environs is an industrial powerhouse and long ago was a major center of the labor movement. For instance, it was the site of America's first city-wide "general strike" in 1919. Despite decline, unions there are still strong, largely because it is proudly ground zero for the nation's number one export industry: aerospace. And that means, to a large extent, Boeing.


Seattle residents still consider it a slap in the face when Boeing's corporate headquarters moved to Chicago in 2001, but the core of the commercial aviation part of the company remains. That is considered the heart of the company, with the workers, technicians and engineers the lifeblood of it. But there is a startling disconnect between the man on the ground at Boeing and the vast apparatus of corporate control that seeks to stifle dissent. The case of a longtime Boeing quality assurance technician, Gerald Eastman, highlights this. Moreover, Boeing often hypocritically engages in the same kind of activity for which Eastman was busted and is now facing a jury trial over. However, Eastman sought to expose issues of the public interest and safety, whereas has Boeing repeatedly simply sought unfair and illegal advantages over its corporate rivals, which ultimately costs the taxpayer and the consumer.

Eastman, after trying to raise concerns about the integrity of Boeing quality assurance system, first through his Boeing quality assurance managers, then through internal chains of command in the company, next through the Federal Aviation Administration (FAA), finally decided he had no other choice. He decided to bring his concerns to the press. After a series of articles that did raise questions about Boeing's activities, including the possibility that Boeing had improperly used classified taxpayer-funded R&D in its commercial aircraft, Eastman was identified by Boeing's relentless and powerful security team after they received an anonymous tip about Eastman.
Eastman was caught with thousands of Boeing documents with proprietary markings on them. Perhaps some of these were truly sensitive documents, however at many major companies, almost every document is marked proprietary whether it contains a trade secret (still a very poorly defined term) or not. How can a corporate whistleblower provide evidence for his allegations and not use proprietary information (or marked as proprietary)? The answer: it's impossible.

While we cannot speak to the guilt or innocence of Eastman, I have talked to him several times since he was arrested. He and his website will tell you that he sought simply to improve quality control at Boeing out of concern for the public, and to show that classified military information was improperly ending up in commercial aircraft. A recent Department of Transportation IG report shows that his concerns about Boeing's quality assurance system had at least some merit, and furthermore, shows that the FAA--one of the places he went to with his allegations--does not always do a good job of identifying systematic safety issues.


Other Boeing employees who found serious problems at Ducommun, a major supplier of parts for Boeing, were retaliated against for trying to raise concerns about Ducommun at Boeing. As their unsealed complaint states (pdf), when they "brought this information to the attention of Boeing management, the initial reaction within the Boeing procurement community was that a serious problem had been uncovered. However, as the ramifications of Boeing's own quality control deficiencies became understood to Boeing management, a radical change occurred. [The Boeing employees] became the subject of harassment, threats and intimidation. Rather than make disclosure to the United States Federal Aviation Administration ('FAA'), Boeing chose to cover up and conceal the information from the government."
According to prosecutors (pdf), some of the documents on Eastman's computer corresponded with a "March 5, 2006, article revealing engineering concerns that lightning could cause fuel tanks on the 787 to explode." Seems Eastman was concerned about aviation safety. And he wasn't the only one, at least on this specific issue: Vince Weldon, now a retired Boeing engineer, had a similar concern about the 787 and lightning (pdf) and some believe was arguably forced out of Boeing because he had raised concerns.

The Seattle Times article supposedly based in part on documents found on Eastman's computer seems to bear out much of Eastman's belief that Boeing has indeed improperly migrated classified information into its commercial aircraft which are sold abroad. It reported in 2006 that:
The engineers, veterans of Boeing's work on the B-2 stealth bomber two decades ago, told [Boeing] investigator Rick Barreiro that technology and know-how developed for that secretive military program would be used in manufacturing the company's newest commercial jet.
Again, Eastman has written that this technology was stolen from Northrop, the B-2 bomber's prime contractor:

This information—the technical data and engineering procedures defining how to design composite structures of aircraft not detectable by radar—stealth aircraft—was developed by prime contractor Northrop during B-2 Bomber production for the Air Force, and required both Northrop and federal government approval before Boeing could use this data on anything other than the B-2 Bomber subcontracting work they were doing for Northrop.
Indeed, Boeing has been busted numerous other times for exporting sensitive information overseas and for having the proprietary information of its rivals. Boeing was order to pay $10 million after it "was alleged that Boeing violated the Arms Export Control Act, and the International Traffic in Arms Regulations by exporting technical data and defense services to Russia, the Ukraine, Norway and Germany 'without the required approvals from the Department [of State] and, in other circumstances, violated the terms and conditions of approvals that were provided by the Department.'"


In another case, "The Boeing Company was alleged to have violated the Arms Export Control Act, and the International Traffic in Arms Regulations in connection with its involvement in the Wedgetail project… by violating the express terms and conditions of Department of State munitions license and other authorizations, by exporting defense articles and defense services without a munitions license or other authorization, and by omitting material facts from its applications for munitions licenses or other authorizations." Boeing was ordered to pay $4.2 million in this case.

While Boeing was the lead system integrator for the National Missile Defense Program, they were found to be illegally in possession of Raytheon's proprietary documents (pdf) and had used them to win a major contract for the Exoatmospheric Kill Vehicle part of the program.

In another case, Boeing was found with some 25,000 Lockheed Martin proprietary documents while the two companies competed for the Evolved Expendable Launch Vehicle contract (see this affidavit; pdf). This was part of $615 million settlement Boeing made with the government.

With the Future Combat System Lead System Integrator contract, Army officials and others expressed reservations several years ago, worrying that "Boeing could get an unfair advantage on the work it bids for" since Boeing executives James Albaugh and Roger Krone obtained access to competitor's secret information, thus weakening company firewalls, according to the Wall Street Journal (cited in testimony before Congress; pdf).

Recently, Alabama Aviation has claimed, in a bid protest filing with the GAO, that Boeing had improperly used Alabama Aviation's proprietary information to help it defeat Alabama Aviation.
Then there was the massive and now largely-forgotten Justice Department investigation from the 1980s called Operation Uncover, where Boeing and several other defense contractors were engaged in a massive and illegal classified document-swapping black market. At Boeing, investigators even learned about a library filled with classified Pentagon budget documents they were not supposed to have.
Perhaps if Boeing security were focused less on Big Brother-like attempts to stamp out disclosures to the press on issues of public importance from the rank and file, and more on controlling truly sensitive information, the company and the country would be in better shape. Ironically, Boeing has tried to wrongly cast the Eastman case as one of industrial espionage, when Boeing repeatedly has been among the worst, if not the worst offender of it itself.
According to the Seattle Post-Intelligencer:

A King County Superior Court judge on Monday denied Eastman's request to delay the trial a week. His public defender asked for more time to gather documents from Chicago-based Boeing Co.
"We haven't had any time to prepare for my defense," Eastman said outside the Seattle courtroom.

Senior deputy prosecutor Scott Peterson argued against delaying the trial, saying that the state would begin to lose witnesses March 28. Numerous Boeing executives, including former vice president and general manager of the 787 program, Mike Bair, have delayed travel plans and vacations so that they could testify, Peterson said.
Eastman told me last night:

My trial started today, much to my chagrin. A judge in the morning denied our request for continuance because the prosecution hadn't given us access to requested files from my computer yet, among other issues. The case was assigned to a judge this afternoon at 1:30 PM PST. Tomorrow jury selection begins. Talk about being railroaded. I guess my right to a fair trial is trumped by the prosecutor's wish to have a trial on his schedule. It was a bad day, indeed, and I had just begun to get full time representation from my attorney as of last week, and only started substantive work on preparing our defense three days ago.

Again, I nor POGO cannot speak to Eastman's guilt or innocence. I find the judge's refusal to give Eastman more time to prepare a defense troubling, especially considering the uphill battle he faces. He certainly deserves the time and access to information necessary for a fair defense. Someone's vacation plans don't trump the demands of a working and fair justice system.
-- Nick Schwellenbach

--
Nick Schwellenbach
cell # (202) 302 3258
email: schwellenbach@gmail.com

Keep Washington sane! If you are a member of CREDO Mobile, show your support for sound, accountable government by voting for POGO on the Working Assets 2008 Donations Ballot! Go to http://www.workingassets.com/vote and POGO will receive a share of the over $50 million dollars available to several worthy causes. The more votes POGO gets, the more money we will receive. Thank you!

From Third World Traveler
Military Waste & Fraud: $172 billion/year
excerpted from the book
Take the Rich Off Welfare
by Mark Zepezauer and Arthur Naiman
Odonian Press, 1996


Military Waste and Fraud - $172 billion a year
When it comes to wasting money, the Pentagon has no peer. For one thing, there's the single question of scale. For fiscal year 1996, the Pentagon budget was $265 billion ($7 billion more than it requested). That's 5% of our gross national product, a larger percentage than in virtually any other industrialized nation.
In absolute dollars (not as a percentage of GNP), the Pentagon shells out 3 1/2 times more than the next largest military spender (Russia), 6 1/2 times more than Britain, 7 1/2 times more than France, 7 1/4 times more than Japan, 8 1/2 times more than Germany. Our military budget is bigger than the next nine largest military budgets combined, and sixteen times larger than the combined military budgets of all of our "regional adversaries"- Cuba, Syria, Iran, Iraq, North Korea and Libya. It accounts for 37% of all military spending on the planet (in comparison, our economy is only 22% of the world total).
As enormous as the Pentagon's budget is, there's more military spending buried elsewhere-in the Department of Energy's production of fuel for nuclear weapons, in the military portion of the NASA budget, in the VA, etc. By adding in these hidden military expenses, the Center for Defense Information (CDI), a Washington think tank run by retired generals and admirals, concluded that we spend a total of $327 billion a year on the military. (When it did similar computations independently, the War Resisters League came up with $329 billion.)
But that doesn't include what we have to pay for past Pentagon budgets. The CDI went back to 1941 and multiplied the military's percentage of each year's budget by the deficit for that year. Using that method, they figured that interest on past military spending cost us $167 billion in fiscal 1996. (The War Resisters League went all the way back to 1789 and came up with $291 billion.)
Since the CDI's estimates are lower, let's be conservative and use them. Adding them together gives us a figure for total military spending-past and present-of $494 billion a year ($9 1/2 billion a week, $1 1/3 billion a day.

Waste beyond your wildest dreams
But just the scale of the Pentagon's budget alone can't explain its prodigious ability to waste money. Another quality is required- world-class incompetence. There are so many examples of this that they tend to blur together, numbing the mind. Here are just a few:
According to a US Senate hearing, $13 billion the Pentagon handed out to weapons contractors between 1985 and 1995 was simply "lost." Another $15 billion remains unaccounted for because of "financial management troubles." That's $2B billion-right off the top-that has simply disappeared...

Career criminals
... According to the Bulletin of the Atomic Scientists, every single one of the top ten weapons contractors was convicted of or admitted to defrauding the government between 1980 and 1992. For example:
* Grumman paid the government $20 million to escape criminal liability for coercing subcontractors into making political contributions.
* Lockheed was convicted of paying millions in bribes to obtain classified planning documents.
* Northrop was fined $17 million for falsifying test data on its cruise missiles and fighter jets.
* Rockwell was fined $5.5 million for committing criminal fraud against the Air Force.
In another study, the Project on Government Oversight (PGO) searched public records from October 1989 to February 1994 and found-in just that 4~/~-year period-85 instances of fraud, waste and abuse in weapons contracting. For example:
Boeing, Grumman, Hughes, Raytheon and RCA pleaded guilty to illegal trafficking in classified documents and paid a total of almost $15 million in restitution, reimbursements, fines, etc.
* Hughes pleaded guilty to procurement fraud in one case, was convicted of it in a second case and, along with McDonnell Douglas and General Motors, settled out-of-court for a total of more than $1 million dollars in a third case.
* Teledyne paid $5 million in a civil settlement for false testing, plus $5 million for repairs.
* McDonnell Douglas settled for a total of more than $22 million in four "defective pricing" cases.
But General Electric was the champ. PGO lists fourteen cases, including a conviction for mail and procurement fraud that resulted in a criminal fine of $10 million and restitution of $2.2 million. In our own research, we found several other examples of GE crimes and civil violations:
* In 1961, GE pleaded guilty to price-fixing and paid a $372,500 fine.
* In 1977, it was convicted of price-fixing again.
* In 1979, it settled out-of-court when the State of Alabama sued it for dumping PCBs in a river.
* In 1981, it was convicted of setting up a $1.25 million slush fund to bribe Puerto Rican officials.
* In 1985, GE pleaded guilty to 108 counts of fraud on a Minuteman missile contract. In addition, the chief engineer of GE's space systems division was convicted of perjury, and GE paid a fine of a million dollars.
* In 1985, it pleaded guilty to falsifying time cards.
* In 1989, it paid the government $3.5 million to settle five civil lawsuits alleging contractor fraud at a jet-engine plant (which involved the alteration of 9,000 daily labor vouchers to inflate its Pentagon billings).
In 1990, GE was convicted of criminal fraud for cheating the Army on a contract for battlefield computers; it declined to appeal and paid $16 million in criminal and civil fines. ($11.7 million of this amount was to settle government complaints that it had padded its bids on 200 other military and space contracts-which comes to just $58,000 or so per contract.)
In 1993, GE sold its weapons division to Martin Marietta for $3 billion (retaining 23.5% of the stock and two seats on the board of directors).
The largest investigation of Pentagon fraud took place between 1986 and 1990. Called Operation Ill Wind, it began when Pentagon official John Marlowe was caught molesting little girls. He cut a deal to stay out of jail and, for the next few years, secretly recorded hundreds of conversations with weapons contractors.
There's no way of knowing how much the crimes Ill Wind looked into cost the taxpayers, but the investigation, which cost $20 million, brought in ten times that much in fines. According to Wall Street Journal reporter Andy Pasztor, "more than 90 companies and individuals were convicted of felonies... including eight of the military's fifteen largest suppliers....Boeing, GE and United Technologies pleaded guilty...Hughes, Unisys, Raytheon, Loral, Litton, Teledyne, Cubic, Hazeltine, Whittaker and LTV...admitted they violated the law."
Unisys signed the largest Pentagon fraud settlement in history: $190 million in fines, penalties and forgone profits (which means they weren't allowed to charge for cost overruns the way military contractors usually do).
Assistant Navy Secretary Melvyn Paisley was the central figure in the Ill Wind scandal and the highest-ranking person convicted (he was sentenced to four years in prison). He ran his office like a supermarket for weapons manufacturers, soaking up bribes, divvying up multibillion-dollar contracts and diverting work to a firm he secretly controlled with a partner.
Paisley may have been a bit more...flamboyant than most, but there was nothing terribly unusual about his approach. As of 1994, nearly 70 of the Pentagon's 100 largest suppliers were under investigation. Fines for that year totaled a record $1.2 billion.
That may sound like a lot, but it's less than 2% of the weapons industry's net income (which averaged $64 billion a year in 1994 and 1995). A billion or two in fines is hardly an incentive to end the corruption and waste in Pentagon contracting.

The black budget
Not all Pentagon waste is visible. Hidden within the military budget is a secret "black budget" that's not subject to any congressional oversight (toothless as that usually is). It includes money for the CIA (tucked away in the Air Force budget, it gets about 10% of the total) and for less well-known but better-funded "intelligence" organizations like the National Security Agency (NSA) and the National Reconnaissance Office (NRO).
In 1995, several members of Congress tried to argue that, with the Cold War over, there was no harm in publishing the total amount of the intelligence black budget, without details on how it was spent. Even this modest proposal went down to defeat but, in the process, led to the absurd spectacle of legislators mentioning the figure-$28 billion for fiscal 1996-while arguing that it shouldn't be publicly disclosed.
John Pike of the Federation of American Scientists estimates that the 1996 black budget included an additional $3 billion or so in military "stealth" projects, for a total of about $31 billion-down from about $36 billion a year during the Reagan years. Pike attributes the decrease to a couple of projects that grew too huge to be hidden in the black budget.
One of the projects that "surfaced" into the public budget is the B-2 bomber. Originally projected to cost $550 million each, B-2's ended up costing $2.2 billion each-literally more than their weight in gold.
Another is MILSTAR, which is designed to ''fight and win a six-month nuclear war...long after the White House and the Pentagon are reduced to rubble." The Air Force has tried to kill this idiotic program four times since it emerged from the black budget, but Congress won't listen. MILSTAR has cost us between $8 and $12 billion so far, and could cost another $4.5 billion between 1996 and 2000.
Since the black budget is completely off the books, it encourages waste on a titanic scale. As one Pentagon employee put it: "In a black project, people don't worry about money. If you need money, you got it. If you screw up and need more, you got it. You're just pouring money into the thing until you get it right. The incentive isn't there to do it right the first time. Who's going to question it?" ...
Don't call it bribery
Why do our legislators put up with military waste and fraud? For the same reason they do anything. Defense PACs gave members of Congress $7.5 million in 1993 and 1994. And PAC money is just part of the story.
Of the $4.5 billion in unrequested weapons funding added to the Pentagon budget for fiscal 1996, 74% was spent in or near the home districts of representatives who sit on the House National Security Committee. Another $290 million was spent in or around Newt Gingrich's home district, Cobb County, Georgia. (Cobb gets more federal pork than any county except Arlington in Virginia, which is right next to Washington, and Brevard in Florida, where Cape Canaveral is located.)
Although the Pentagon insists that it doesn't need any more B-2 bombers, Norman Dicks (D-Washington) and Ted Stevens (R-Alaska) don't care. Dicks-who's one of the largest recipients of military PAC money in the House-received over $10,000 from nine major B-2 contractors in the four months just before the battle to resurrect B-2 funding. Stevens got $37,000 between 1989 and 1994, making him one of the top ten recipients of PAC contributions from B-2 contractors. (Isn't it amazing how little politicians cost?)
If PAC money isn't enough, military lobbyists can always argue jobs. It didn't hurt funding for the B-2 that spending for it was spread across 88% of all congressional districts and all but two states.
Liberal California Representative Maxine Waters defended her vote to continue B-2 funding by candidly admitting that it was one of the few ways she knew to bring federal jobs to her district. (Since her district is South-Central Los Angeles, you can understand her desperation.)
There's no conceivable need for Seawolf submarines (which cost $2.4 billion apiece)- except for the votes in Connecticut, where it's built, and in surrounding states. That's why liberal New England senators like Ted Kennedy, John Kerry and George Mitchell supported it, as did Bill Clinton-who needed votes from those states-in his 1992 campaign.
Neither the Air Force nor the Navy wants any part of the V-22 Osprey assault plane, which the Bush administration tried in vain to kill. But it's supported by legislators in Texas and Pennsylvania-the two states that do the most contracting for it-and by Clinton, who...oh, you get the idea.
What about the jobs we'd lose? -- If new weapons systems are nothing more than make-work programs, they're really inefficient ones. A 1992 Congressional study estimated that shifting money from the Pentagon to state and local governments would create two jobs for every one it eliminates. Building weapons we don't need is so wasteful that the economy would probably be better off if we just paid people the same money to stay at home.
The Congressional Budget Office concluded that a billion dollars spent on successfully promoting arms exports creates 25,000 jobs, but if that same billion is spent on mass transit, it creates 30,000 jobs; on housing, 36,000 jobs; on education, 41,000 jobs; or on health care, 47,000 jobs.
Aside from the cost, using federal money to prop up military contractors creates a disincentive for them to convert to civilian products. Shifting Pentagon funds to urgently needed domestic uses would be good for both the US and the rest of the world. As President Eisenhower put it, "Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and not clothed."
Pentagon boosters argue that military spending has already been slashed too far, since more than 800,000 military-related jobs have disappeared since 1990. But many of these layoffs were in nonmilitary divisions of the companies, and more than half of them were caused by the economy contracting in a recession, not by smaller Pentagon budgets-especially since they've dropped off only slightly from their all-time high of $304 billion (adjusted for inflation) in 1989.
Just eight companies-McDonnell Douglas, Lockheed, Martin Marietta, Boeing, General Dynamics, Northrop Grumman, Raytheon and Hughes-were responsible for half of all military contractors' layoffs in 1993. Only 15% of Boeing's layoffs and a third of McDonnell Douglas' were related to military production. After the firings, the stocks of these eight companies rose by 20% to 140%, and the salaries of their CEOs soared.

The revolving door
Another reason for Pentagon waste and fraud is the revolving door between military contractors and government personnel. Before he was Secretary of Defense, Caspar Weinberger was a top executive at Bechtel, which does massive engineering projects for the Pentagon and foreign clients like Saudi Arabia. Before he was Secretary of State, George Shultz was president of Bechtel.
Before his days as a Navy felon, Melvyn Paisley worked for Boeing-as did his boss at the Pentagon, Navy Secretary John Lehman. Secretary of Defense William Perry and CIA Director John Deutch both did consulting work for Martin Marietta before they joined the Clinton administration. The list goes on and on.
Generals have an interest in keeping weapons contractors happy-at least if they want to sit on the boards of corporations after they retire. Contractors can use their connections at the Pentagon to find work there and, like Paisley, feed lucrative contracts to their friends in the private sector.
On both sides of the revolving door, militarists live in the lap of luxury. Nobody batted an eyelash when Paisley entertained contractors in staterooms on the Queen Elizabeth, nor is there ever much dismay when military aircraft are used, at a cost of tens of thousands of dollars an hour, to fly politicians, lobbyists and weapons contractors on pleasure trips.

Direct handouts
Still, personal perks don't cost us much compared to corporate perks. For example, when Lockheed and Martin Marietta merged to become Lockheed Martin, $92 million in bonuses-or "triggered compensation," as they prefer to call it-was handed out to top executives and members of the board. They expect the government to pick up $31 million of that.
John Deutch quietly reversed a 40-year ban on such compensation when he was at the Pentagon. The biggest bonus, $8.2 million, went to the new company's president, Norman Augustine, who Deutch and William Perry had done work for at Martin Marietta.
Both Deutch and Perry obtained waivers from an ethics regulation that prohibits Pentagon officials from dealing with people they formerly did business with untl a year has passed. (Up to 30,000 employees will lose their jobs as a result of this merger.)
Military contractors milk the government in other ways as well. It's common for the State Department to give foreign aid to brutal dictatorships like Indonesia and Guatemala, with the requirement that the money be used to buy US weapons. Each year this program results in the transfer of $5-7 billion from US taxpayers to US arms merchants (not to mention the murder of lots of innocent people in the countries involved).
The Pentagon has similar programs that not only provide subsidies to foreign countries to buy from US weapons suppliers but also help them negotiate the sale. In 1994, General Dynamics and Lockheed received a total of $1.9 billion in foreign military sales awards- 126,567% more than the $1.5 million they gave to candidates for federal offices in the
1994 elections. (As we've already remarked, politicians sure are a bargain.)
Thanks in large part to these Pentagon programs-on which we spend $5.4 billion a year, almost half our total foreign aid expenditure-the US is the largest arms supplier on earth, with 43% of the world trade. What's more, many of these loans are ultimately defaulted on or forgiven. Egypt, for example, was let off the hook for $7 billion in loans, as a reward for participating in the Gulf War...

How much military spending is waste?
Even if you accept the absurd two-war plan, lots of savings are still possible:
* We have more Trident missiles than we could ever use, and nobody to aim them at. But the Navy isn't happy with their old Tridents (currently funded at $787 million a year). They want to replace them with a newer version, even though both kinds of Tridents are likely to be eliminated under the next arms-control agreement, START lll.
* Although our 121 C-5 and 265 C-144 transport planes are perfectly adequate, the Pentagon wants to replace a bunch of them with 120 new C-17s, at a total cost of $45 billion.
The rationale for the F-22 fighter is especially weak. It was designed to achieve air superiority in the 1990s over the now-defunct Soviet Union. We already have 900 F-15s (which the GAO calls the best tactical aircraft in the world), and none of our real or potential enemies have more than a handful of planes that come anywhere close to matching its capabilities. That hasn't stopped the Pentagon from asking for 442 F-22s, at a total cost of $72 billion.
* Even a hawk like Barry Goldwater points out the waste involved in the Army, Navy, Air Force and Marines each having its own air force. Both the Marines and the Army have light infantry divisions, and the Navy and the Air Force aren't satisfied with the same kind of satellites and cruise missiles-each has to have its own kind.
* The Pentagon keeps 100,000 troops in Europe and 70,000 in Korea and Japan. We spend $80 billion a year on NATO, $59 billion a year in South Korea and $48 billion a year in the Persian Gulf. In all of these cases, the countries we're supposedly defending have militaries that are better-equipped and much better-funded than their enemies'.
* As we've mentioned above, even the Pentagon doesn't want any more B-2 bombers, V-22 Osprey assault planes or additional Star Wars funds. The Navy doesn't want the Seawolf submarine and admits it doesn't need another $3.5-billion nuclear-powered aircraft carrier. But try telling that to the companies that make those weapons, or to the politicians whose campaigns they fund.
By now it should be obvious that the "defense" budget isn't based on any rational calculation of what the defense of this country actually requires-it's based on what US arms manufacturers can get away with (almost anything, it turns out).
Attaching the word "defense" to this spending isn't just misleading-it's the complete opposite of the truth, since military waste and fraud make our country weaker, not stronger. The preposterously obese Pentagon budget is the single greatest threat there is to our national security.
It's not just wild-eyed radicals who feel this way:
* Lawrence Korb, a military planner under Reagan who's now with the Brookings Institution, says we could have the most overwhelmingly powerful military in the world for around $150 billion a year.
* In a report called Ending Overkill, the Bulletin of the Atomic Scientists laid out a detailed military budget that includes funding for a lot of programs we think are unnecessary (Star Wars, for example). Even so, its report calls for scaling down the military budget to $115 billion by the year 2000, and states that this would still give us a force "adequate to undertake six or eight Somalia-like operations at the same time, or to mount a force somewhat larger than the American part of Desert Storm."
* The Center for Defense Information (founded by retired generals and admirals) thinks we could get by quite nicely with about a million soldiers, instead of the 1.6 million we now have, and with a Pentagon budget of about $200 billion.
The average of those three estimates is $155 billion a year-quite a bit less than the $327 billion a year we actually spend. (And remember: that $327 billion doesn't include the $167 billion or more we lay out each year to service debt that's the result of past military programs. Unfortunately, there isn't much we can do about that past debt-except to cut down on present military budgets, so the problem doesn't keep getting worse.)
Subtracting $155 billion from $327 billion gives us a figure for current military waste and fraud of $172 billion a year-almost $500 million a day-virtually all of which goes to large corporations and super-rich individuals. (Sure, some of it pays for ordinary people's salaries, but they'd also be earning money if they were doing something useful.) Half a billion dollars a day could buy a lot of medical care, or fill a lot of potholes, or...you name it. After all, it's your money.

Take the Rich Off Welfare

I had quite a bit of information sent to me regarding the Boeing/Northrop Grumman Tanker Deal II. I thank my sources and pass along these things to all of you to think about:

1. What is the real reason The Boeing Company lost Tanker Deal II? What Lou Dobbs ad a lot of others do not seem to know is important to consider.

It would be nice if there were an American company that really made things totally in America. Alas, that does not seem to be the case in this arena. Boeing also outsources many of its parts and functions with increasing frequency. A few years ago, quite a few machinists were downsized here, (U.S. jobs lost), and parts began to be made by non-US workers in China (Chinese jobs gained). I hear from someone inside of Boeing that the parts imported in from China were so bad, the few U.S. machinists they had left were having to remachine the parts to even remotely make them usable.

Once Boeing hastily moved making of composite materials to China, I think we can pretty well expect the technology is no longer proprietary to the U.S. And now that the Chinese have it, they will be using it themselves. Unfortunately, a lot of the edge on technology we used to have is now lost due to shortsighted decisions made according to greed, rather than the long-term well being of the company and our country.

2. What Lou Dobbs and a lot of other people don’t seem to realize is that there is a lot more to the selection of a contract awardee, in this case the Air Force Tanker Contract, than is immediately visible to the public. First, Northrop Grumman, the successful awardee, is a U.S. defense contractor. This is no different than Boeing. Yes, Northrop Grumman teamed with EADS. But how much of the Boeing 767 plane is derived from materials procured or manufactured overseas?

Given Boeing’s long track record of honesty and integrity issues surrounding government procurements, it is not surprising that the contracting scales were tipped in Northrop Grumman’s favor on this contract. Mr. Dobbs and others are not aware of all the FBI and DOD IG investigations currently open. Open investigations issues are factored into these contract awards.


-GFS