Military-industrial complex

A U.S. AH-64A Apache helicopter

The term military-industrial complex (MIC), or "Iron Triangle," usually refers to the combination of the U.S. armed forces, its arms industry, and the associated political and commercial interests that grew rapidly in scale and influence in the wake of World War II and throughout the Cold War to the present.

The term, often used pejoratively, refers to the institutionalized collusion among private defense industry, the military services, and the United States government (especially the Department of Defense). Such collusion includes the awarding of no-bid contracts to campaign supporters and the earmarking of disproportionate spending to the military. Many observers worry this alliance is driven by a quest for profits rather than a pursuit of the public good.

In recent decades, the collusion within the "Iron Triangle" has become even more prevalent, putting the United States' economy, some argue, permanently on a "war" footing; instead of defense spending in response to armed aggression, current government policy guarantees "readiness" by maintaining worldwide bases and spending large sums of money on the latest military technology. Furthering the problem is increased regional dependence on the defense industry for jobs and tax revenues. If the U.S. government were to drastically reduce its military spending, many Americans working in defense manufacturing plants around the country would lose their jobs; this reality makes it politically difficult for U.S. congressmen to vote against unnecessary defense spending.

The increasingly global nature of the U.S. military-industrial complex has led some to charge that the United States is intent on establishing a new, worldwide empire based on military power. Nonetheless, the term MIC can also be applied to similar arrangements elsewhere in the world, both past and present.

Origin of the Term

The term was first used publicly by President of the United States (and former General of the Army) Dwight D. Eisenhower in his farewell address to the nation on January 17, 1961. Written by speechwriter Malcolm Moos, the speech addressed the growing influence of the defense industry:

"[The] conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence—economic, political, even spiritual—is felt in every city, every statehouse, every office of the federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society.

"In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.

"We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals so that security and liberty may prosper together."

In the penultimate draft of the address, Eisenhower initially used the term military-industrial-congressional complex, indicating the essential role that the U.S. Congress plays in supporting the defense industry. But the president was said to have chosen to strike the word congressional in order to avoid offending members of the legislative branch of the federal government.

Although the term was originally coined to describe U.S. circumstances, it has been applied to corresponding situations in other countries. It was not unusual to see it used to describe the arms production industries and political structures of the Soviet Union, and it has also been used for other countries with an arms-producing economy, such as Wilhelminian Germany, Britain, France, and post-Soviet Russia. The expression is also sometimes applied to the European Union.

Background of the Military-Industrial Complex in the United States

Legal Framework

At its creation, the American Constitution was unique for its inherent separation of powers and system of checks and balances among those powers. The founders feared that one branch or one office would gain a disproportionate amount of power, so systems were put into place to prevent it. Changing times, however, have limited the effectiveness of these systems. For one, when the Constitution was written, the few corporations that existed had little power in American affairs, but today, corporate money has more and more influence in Washington, D.C. For another, when the founders prepared the document, the United States was an isolated state protected by two vast oceans with little need to involve itself in world affairs. In light of the relative simplicity of American foreign policy at the time, the Constitution granted the executive branch almost absolute power in that area. In today's globalized world, however, the fact that the executive branch wields enormous power and military might can lead to excessive militarization.

These issues have contributed to the formation of the American military-industrial complex.

World War II

The pre-December 1941 Lend-Lease deal, which provided aid and equipment to the United Kingdom, preceding the entry of the United States into World War II, led to an unprecedented conversion of civilian industrial power to military production. American factories went into high gear, producing tanks, guns, ammunition, and the other instruments of war at an astonishing rate. Increased industrial production, however, was not the only change in American life brought on by the war. The military participation ratio—the proportion of people serving in the armed forces—was 12.2 percent, which was the highest that the U.S. had seen since the American Civil War.

World War II did not, however, cause the shift to a permanent military-industrial complex. For all practical purposes, the military demobilized after the war, and the American economy shifted back to peacetime production. After World War II, political scientist Chalmers Johnson writes, "…the great military production machine briefly came to a halt, people were laid off, and factories were mothballed. Some aircraft manufacturers tried their hands at making aluminum canoes and mobile homes; others simply went out of business."

Cold War/Korean War

The U.S. military-industrial complex as it is known today really began with the onset of the Cold War between the United States and the Soviet Union. When North Korea invaded South Korea in 1950, the previously "cold" war turned hot, and the Truman administration decided to back its previously announced policy of containment with military action. That conflict provided the impetus for massive increases in the U.S. defense budget, though little was earmarked to fund the actual fighting. Rather, "most of the money went into nuclear weapons development and the stocking of the massive Cold War garrisons then being built in Britain, [West] Germany, Italy, Japan, and South Korea." In simple numbers (2002 purchasing power), "defense spending rose from about $150 billion in 1950…to just under $500 billion in 1953," a staggering increase of over 200 percent.

The public's intense fear of the Soviet Union, and a now unleashed armaments industry, inflicted intense pressure on politicians to "do something" to protect Americans from the Soviets. In the 1960 presidential race, for example, Democratic candidate John F. Kennedy claimed that the U.S. had fallen behind the Soviets in terms of military readiness, an issue that he had previously raised in a 1958 speech to the Senate:

…the opportunity to take political advantage of what seemed like a major failing on the part of the Eisenhower administration was irresistible [for Kennedy]. In August 1958, Jack spoke in the Senate about a fast-approaching “dangerous period” when we would suffer a “gap” or a “missile-lag period”—a time “in which our own offensive and defensive missile capabilities will lag so far behind those of the Soviets as to place us in a position of grave peril.” The gap was the result of a “complacency” that put “fiscal security ahead of national security.”

The charge was mainly for political opportunism; officials in the Eisenhower administration had images taken by U-2 spy-planes that confirmed American superiority in both missile numbers and technology, but the president worried that publicizing the data would lead to the Soviets ramping up their own weapons programs.

During the Cold War and immediately after, defense spending sharply peaked upwards four times: first, during the Korean War; second, during the Vietnam War; third, during Ronald Reagan's presidency; and fourth, in response to the September 11 attacks in 2001. During those periods, defense spending per year often exceeded $400 billion. The perceived need for military readiness during the Cold War created a new, permanent and powerful defense industry. That industry quickly became so entrenched in the American consciousness that it became normal for the government to spend large sums of money on defense during peacetime.

Vietnam War

The long duration of the Vietnam War required that the United States establish bases and semi-permanent infrastructure in Vietnam for the support of its troops. To do this, the U.S. government largely turned to private contractors such as Brown and Root, a company that maintained extensive ties to U.S. politicians.

File:Vietnamchopper.jpg

U.S. helicopters in Vietnam during the war

The war in Vietnam provided ample government work for Brown and Root. The company became part of a consortium of four companies that built about 85 percent of the infrastructure needed by the army during the Vietnam War; one contract with the U.S. Navy was worth $380 million. Domestically, during the war, the company also benefited greatly from its connections with President Johnson, obtaining contracts for huge government construction projects. Republicans in Congress claimed that these contracts were a reward for large contributions to Johnson's 1964 presidential campaign.

At the height of the war resistance movement of the 1960s, Brown and Root was derided as "Burn & Loot" by protesters and soldiers; such critics charged that Brown and Root had become an example of the developing U.S. military-industrial complex.

Often, during the Vietnam-era, American citizens supported the military-industrial complex because it was required for the struggle against communism. Also, the increased military spending brought economic prosperity to regions of the United States that supported it. California, for example, led the nation in military contracts and also featured the military bases to match.

Current Issues

Technological advances in weaponry and the required rebuilding of Iraqi infrastructure after the 2003 American invasion have further entrenched the U.S. military-industrial complex. One corporation in particular, Halliburton Energy Services, has become instrumental in the Iraqi war effort.

Halliburton

Halliburton Energy Services (NYSE: HAL) is a multinational corporation with operations in over 120 countries, and is based in Houston, Texas. It operates two major business segments: The Energy Services Group, which provides technical products and services for oil and gas exploration and production, and Kellogg, Brown and Root (KBR), which is a major construction company that now specializes in the building of refineries, oil fields, pipelines, and chemical plants. 2005 revenues were $20.99 billion, and the company employs over 106,000 people worldwide.

Activities in Afghanistan

KBR was awarded a $100 million contract in 2002 to build a new U.S. embassy in Kabul, Afghanistan, from the State Department.

KBR has also been awarded 15 Logistics Civil Augmentation Program (LOGCAP) task orders worth more than $216 million for work under Operation Enduring Freedom, the military name for operations in Afghanistan. These include establishing base camps at Kandahar and Bagram Air Base and training foreign troops from the Republic of Georgia.

The Iraq War (2003)

Today, KBR employs over 30,000 men and women in Iraq. Halliburton's work in Iraq is diverse and complicated. In addition to troop support, it also provides air traffic control support, produces 74 million gallons of water a month for consumption, hygiene, and laundry, deploys as many as 700 trucks a day to deliver essentials to American forces, and provides firefighter and crash-rescue services, as well as working to restore Iraqi oil infrastructure.

The Defense Contract Auditing Agency {DCAA} estimates that KBR has received 52 percent of the approximately $25 billion paid out by the Pentagon to private contractors in Iraq.

Controversy

The United States Army hired Kellogg, Brown and Root to provide housing for approximately 100,000 soldiers in Iraq in a contract worth $200 million, based on a long-term contract signed in December 2001 under the LOGCAP. Other LOGCAP orders have included a pre-invasion order to repair oil facilities in Iraq; $28.2 million to build prisoner-of-war camps; and $40.8 million to accommodate the Iraqi Survey Group, which was deployed after the war to find hidden weapons of mass destruction.

In the competition for the current LOGCAP contract, the Army Corps of Engineers asked competitors to develop a contingency plan for extinguishing oil well fires in Iraq. The Army chose KBR's plan in November 2001, though it remains classified. On March 24, 2003, the Army announced publicly that KBR had been awarded five task orders in Iraq potentially worth $7 billion to implement the plan. One of the task orders, obtained by the Center for Public Integrity, required KBR to "procure, import and deliver" fuels to Iraq. In fact, the contract was awarded more than two weeks earlier, without submission for public bids or congressional notification. In their response to congressional inquiries, Army officials said they determined that extinguishing oil fires fell under the range of services provided under LOGCAP, meaning that KBR could deploy quickly and without additional security clearances. They also said that the contract's classified status prevented open bidding.

The Army's actions came under fire from Congressman Henry Waxman, who, along with Rep. John Dingell, asked the U.S. Government Accountability Office (GAO)—the auditing arm of Congress—to investigate whether the U.S. Agency for International Development (U.S. AID)and the Pentagon were circumventing government contracting procedures and favoring companies with ties to the Bush administration. They also accused KBR of inflating prices for importing gasoline into Iraq. In June 2003, the Army announced that it would replace KBR's oil-infrastructure contract with two public-bid contracts worth a maximum total of $1 billion to be awarded in October. However, the Army announced in October it would expand the contract ceiling to $2 billion and the solicitation period to December. As of October 16 2003, KBR had performed nearly $1.6 billion worth of work.

Ties to Vice President Cheney

File:Cheneyportrait.jpg

Former chairman and CEO of Halliburton and current Vice President Dick Cheney

In recent years Halliburton has become the center of several controversies involving the 2003 Iraq War and the company's ties to U.S. Vice President Dick Cheney. Cheney retired from the company during the 2000 U.S. presidential election campaign with a severance package worth $20 million. As of 2004, he had received $398,548 in deferred compensation from Halliburton while Vice President.

Concerns have been raised regarding the possible conflict of interest resulting from Cheney's deferred compensation and stock options from Halliburton. However, before entering office in 2001, Cheney bought an insurance policy that guaranteed a fixed amount of deferred payments from Halliburton each year for five years so that the payments would not depend on the company's fortunes. He is legally bound by an agreement he signed that turns over power of attorney to a trust administrator to sell the options at some future time and to give the after-tax profits to three charities.

Political opponents accuse Cheney of supporting the 2003 invasion of Iraq to provide work to KBR under contingency contracts that would enrich his business associates. The contract that KBR won from the U.S. Army in a competitive bid process is referred to as LOGCAP (Logistical Civilian Augmentation Program) and is managed by the Army. (KBR won the first LOGCAP contract, Dyncorp the second, and KBR the current one, dubbed "LOGCAP III.") It is a contingency-based contract that is invoked at the convenience of the U.S. Army; the orders under the contract are not competitively bid (as the overall contract was) and thus the reason for the confusion. When the contract was invoked during the Balkans crisis there was no controversy and very little scrutiny of the contract. KBR performed under this agreement in the Balkans for over 10 years and still maintains a LOGCAP presence there to this day.

Allegations of Fraud

Allegations of fraud by Halliburton, specifically with regard to its operations in Iraq, have persisted since before the 2003 Iraq War. The associations between Cheney and Halliburton had led many to speculate with regard to improprieties and billing discrepancies.

Congressional Corruption

The vast sums of money spent throughout the military-industrial complex have led to increased competition among representatives to shift defense projects to their home districts. Sometimes, this competition turns to outright corruption and bribery.

Randy "Duke" Cunningham

File:Duke.jpg

Former Congressman Randy "Duke" Cunningham in January 2005

Randall "Duke" Cunningham, a Republican member of the House of Representatives from California's 50th Congressional, was found guilty of accepting at least $2.4 million in bribes from defense contractors in exchange for supporting their projects on the important House Committee on Appropriations. Cunningham resigned his seat on in November 2005 after pleading guilty to the various charges against him, but the case goes further than that. Related to their dealings with the same contractors, the high school friend of one of the guilty defense contractors, former number 3 at the CIA Kyle Foggo, and the head of the House Committee on Appropriations, Jerry Lewis, are under investigation as well.

Preventing Conflicts of Interest, Corruption, and Collusion

In an era of increasing militarization and congressional corruption, serious reform is necessary. After the WorldCom and Enron scandals of the early 2000s, Congress passed the Sarbanes-Oxley legislation to better regulate business and accounting practices. That act, however, does not address the military-industrial complex specifically and how it can adversely affect American society. Reform will have to come in the form of legislation specifically designed to define the legal relationship between private defense contractors and the government and also the role that American foreign policy plays in the world.

Legislation could specifically address:

• Conflict of interests in campaign financing and awarding of contracts.
• The award of contracts through votes where individual representatives and senators are identified (not committees).
• Disclosure and transparency at a level which the IRS requires of non-profits.
• Competitive bidding of contracts, to include bids from corporations from other countries when on foreign soil.
• Disentangle foreign aid from conditions that dictate suppliers and products for which aid is given.
• Principles of foreign policy consistent with domestic policy.
• Limitation of executive power in management of foreign policy.

Further Reading

• Dallek, Robert. An Unfinished Life : John F. Kennedy, 1917 – 1963. New York: Brown, Little, 2003. ISBN 0316172383
• Eisenhower, Dwight D. Public Papers of the Presidents, 1035–40. 1960.
• "Dwight D. Eisenhower's Farewell Address to the Nation." In The Annals of America, vol. 18. 1961–1968: The Burdens of World Power, 1–5. Chicago: Encyclopedia Britannica, 1968.
• Gottlieb, Sanford. Defense Addition: Can America Kick the Habit? Boulder, CO: Westview Press, 1997.
• Hartung, William D. "Eisenhower's Warning: The Military-Industrial Complex Forty Years Later." World Policy Journal 18, no. 1 (Spring 2001).
• Johnson, Chalmers. The Sorrows of Empire: Militarism, Secrecy, and the End of the Republic. New York: Metropolitan Books, 2004. ISBN 0805070044
• Kurth, James. "Military-Industrial Complex." In The Oxford Companion to American Military History, ed. John Whiteclay Chambers II, 440–42. Oxford & New York: Oxford University Press, 1999.
• Nelson, Lars-Erik. "Military-Industrial Man." In New York Review of Books 47, no. 20 (Dec. 21, 2000): 6.
• Nieburg, H. L. In the Name of Science. Quadrangle Books, 1970.
• Singer, P. W. Corporate Warriors: The Rise of the Privatized Military Industry. Ithaca, NY: Cornell University Press, 2003.

External links

General

• Schema-root.org: military industry 38 military industry topics, each with a current newsfeed
• Open Secrets: Top Defense Contributors to Federal Candidates and Parties database
• War Resisters: Pie chart and information on defense spending
• National priorities project chart showing how your federal income tax is spent
• Quotes on Money and Banking and Militarism
• Flows of Money and Patronage from Washington Truth in Recruiting
• Why We Fight: A film by Eugene Jarecki exploring the effects of the Military-Industrial Complex

Halliburton

• Halliburton official corporate site
• World Internet News: "Big Oil Looking for a Government Handout," April 2006.
• HAL: Summary for HALLIBURTON HLDG CO – Yahoo! Finance
• The World According to Halliburton
• Halliburton Watch
• Halliburton at SourceWatch
• Independent Media TV – Dick Cheney and Halliburton media watch
• “Halliburton Company” from The Handbook of Texas
• “Halliburton Is a Handy Target for Democrats” from the Washington Post, September 18, 2004.
• “The Halliburton Agenda: The Politics of Oil and Money” from Democracy Now, May 17, 2004.
• “A Halliburton Primer” from the Washington Post, July 11, 2002.
• A Bill to Disclose Halliburton's Business with Iran
• “Halliburton worker [Glenn Allen Powell admits bribes [with KBR],” BBC News.]
• What's Up With Cheney And Halliburton? from About.com Conservative Politics.
• Frontline: Private Warriors PBS special on Halliburton, KBR, and other contractors in Iraq and Afghanistan.

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