Billion-Dollar Babies

Five Stealth Pentagon Contractors Reaping Billions of Tax Dollars

by Nick Turse
The top Pentagon contractors, like death and taxes, almost never change. In 2002, the massive arms dealers Lockheed Martin, Boeing, and Northrop Grumman ranked one, two, and three among Department of Defense contractors, taking in $17 billion, $16.6 billion, and $8.7 billion. Lockheed, Boeing, and Northrop Grumman did it again in 2003 ($21.9, $17.3, and $11.1 billion); 2004 ($20.7, $17.1, and $11.9 billion); 2005 ($19.4, $18.3, and $13.5 billion); 2006 ($26.6, $20.3, and $16.6 billion); and, not surprisingly, 2007 as well ($27.8, $22.5, and $14.6 billion). Other regulars receiving mega-tax-funded payouts in a similarly clockwork-like manner include defense giants General Dynamics, Raytheon, the British weapons maker BAE Systems, and former Halliburton subsidiary KBR, as well as BP, Shell, and other power players from the military-petroleum complex.

With the basic Pentagon budget now clocking in at roughly $541 billion per year — before “supplemental” war funding for Iraq, Afghanistan, and the President’s Global War on Terror, as well as national security spending by other agencies, are factored in — even Lockheed’s hefty $28 billion take is a small percentage of the massive total. Obviously, significant sums of money are headed to other companies. However, most of them, including some of the largest, are all but unknown even to Pentagon-watchers and antiwar critics with a good grasp of the military industrial complex.

Last year, in a piece headlined “Washington’s $8 Billion Shadow,” Vanity Fair published an exposé of one of the better known large stealth contractors, SAIC (Science Applications International Corporation). SAIC, however, is just one of tens of thousands of Pentagon contractors. Many of these firms receive only tens or hundreds of thousands of dollars from the Pentagon every year. Some take home millions, tens of millions, or even hundreds of millions of dollars.

Then there’s a select group that are masters of the universe in the ever-expanding military-corporate complex, regularly scoring more than a billion tax dollars a year from the Department of Defense. Unlike Lockheed, Boeing, and Northrop Grumman, however, most of these billion-dollar babies manage to fly beneath the radar of media (not to mention public) attention. If appearing at all, they generally do so innocuously in the business pages of newspapers. When it comes to their support for the Pentagon’s wars and occupations in Afghanistan and Iraq, they are, in media terms, missing in action.

So, who are some of these mystery defense contractors you’ve probably never heard of? Here are snapshot portraits, culled largely from their own corporate documents, of five of the Pentagon’s secret billion-dollar babies:

1. MacAndrews & Forbes Holdings Inc.

Total DoD dollars in 2007: $3,360,739,032

This is billionaire investor Ronald Perelman’s massive holding company. It has “interests in a diversified portfolio of public and private companies” that includes the cosmetics maker Revlon and Panavision (the folks who make the cameras that bring you TV shows like 24 and CSI). MacAndrews & Forbes might, at first blush, seem an unlikely defense contractor, but one of those privately owned companies it holds is AM General — the folks who make the military Humvee. Today, says the company, nearly 200,000 Humvees have been “built and delivered to the U.S. Armed Forces and more than 50 friendly overseas nations.” Humvees, however, are only part of the story.

AM General has also assisted Carnegie Mellon University researchers in developing robots for the Pentagon blue-skies outfit, the Defense Advanced Research Projects Agency’s “Grand Challenge,” an autonomous robot-vehicle competition. Last year, AM General and General Dynamics Land Systems, a subsidiary of mega-weapons maker General Dynamics, formed a joint venture “to compete for the U.S. Army and Marine Corps Joint Light Tactical Vehicle (JLTV) program.” AM General has even gone to war — dispatching its “field service representatives” and “maintenance technical representatives” to Iraq where they were embedded with U.S. troops.

As such, it’s hardly surprising that, earlier this year, the company received one of the Defense Logistics Agency’s Outstanding Readiness Support Awards. Nor should anyone be surprised to discover that a top MacAndrews & Forbes corporate honcho,Executive Vice Chairman and Chief Administrative Officer Barry F. Schwartz, contributed a total of at least $10,000 to Straight Talk America, the political action committee of presidential candidate John McCain, who famously said it would be “fine” with him if U.S. troops occupied Iraq for “maybe a hundred years” (if not “a thousand” or “a million”).

Perhaps hedging their bets just a bit, MacAndrews & Forbes is diversifying into an emerging complex-within-the-Complex: homeland security. Recently, AM General sold the Department of Homeland Security’s Border Patrol “more than 100 HUMMER K-series trucks for use in border security operations.”

2. DRS Technologies, Inc.

Total DoD dollars in 2007: $1,791,321,140

http://www.commondreams.org/archive/2008/06/25/9870/

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