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Arms Trade Resource Center ISSUE BRIEF THE SECURE BORDER INITIATIVE: Border Control or Corporate Boondoggle? Are Contacts or Competence Deciding Who Gets Security Contracts? by William D. Hartung and Frida Berrigan , World Policy Institute, May 18, 2006 For More Information: William D. Hartung, 212-229-5808 ext. 4257, Hartung@newschool.edu Frida Berrigan, 212-229-5808 ext. 4254, BerrigaF@newschool.edu www.worldpolicy.org/projects/arms In his recent immigration reform speech, President George W. Bush described securing U.S. borders as an "urgent requirement of our national security." He also tried to reassure Americans and Mexicans that despite proposals to beef up border security patrols by adding 6,000 National Guardsmen, "The United States is not going to militarize the southern border." But it is tough to not militarize the border when the technologies being proposed as solutions are likely to come from the largest military corporations in this country. As highlighted by the New York Times on May 18th, the systems that private companies like Lockheed Martin, Raytheon and Northrop Grumman can bring to the border could cost taxpayers more than $2 billion over the next three to six years. Department of Homeland Security Michael Chertoff, in a press conference following President Bush’s speech, was quick to assert the Secure Border Initiative’s judicious use of resources: "We're not just going to say, ‘Oh, this looks like some neat stuff, let's buy it and then put it on the border.’" However, a look at some of the systems military contractors are proposing demonstrates that "buying neat stuff" is exactly what may happen. Some of the systems described include: Lockheed Martin’s Tethered Aerostat Radar, a helium-filled airship. Twice the size of the Goodyear Blimp, the airship is attached to the ground by a cable and can hover overhead, automatically monitoring any movement on the ground. These systems, which are being used to broadcast TV Marti to Cuba and to detect insurgents in Iraq, will have one significant weakness in the vast windswept desert areas along the border -- they cannot operate in high winds. This could be yet another government windfall for Lockheed Martin, which received $19.4 billion in Department of Defense contracts last year alone. Northrop Grumman plans to offer its Global Hawk, an unmanned aerial vehicle with a wingspan nearly as wide as a Boeing 737, which can snoop on movement along the border from heights of up to 65,000 feet. The system is the most expensive unmanned-air-vehicle currently available. According to Global Security, the estimated unit costs had tripled over the original estimate of $15 million apiece by 2002. Fully equipped, the aircraft costs about $48 million (or about $70 million each if development costs are factored in). Northrop Grumman is also no newcomer to government largesse, receiving $13.5 billion in military contracts in 2005. Raytheon will offer a variation on the "Terminator family" of sensors and video equipment it provides U.S. troops in Iraq. The system monitors an area and uses software to identify suspicious objects, analyzing and highlighting them even before anyone is sent to respond. The company raked in $9.1 billion in Pentagon contracts last year. GOOD MONEY AFTER BAD? The 2006 budget for the Department of Homeland Security is $34.2 billion, an almost 7% increase over 2005. And with President Bush’s late term focus on border security and immigration reform, it is likely that more money will be spent in a hurry. In border security, a new focus on high-tech solutions follows on a wave of failure and money wasted. A $425 million system of cameras and sensors was installed improperly and never worked effectively, and a $6.8 million unmanned aerial vehicle patrolling the border crashed and was destroyed. A FEW NOTES ON THE COMPANIES Lockheed Martin The Bethesda, Maryland based company is present in most major lines of Pentagon business, from the Paveway GBU-12 and 16 laser-guided bomb kits used in Iraq and Afghanistan; to the F-22 and F-35 fighter planes; to multiple aspects of the administration’s missile defense program, which is pegged at $10.4 billion in the FY 2007 budget. Lockheed Martin also benefits from increased spending on homeland security. Already, the company has won billions in homeland security-related contracts, including a $591 million contract to provide classified and unclassified information technology services to Defense Department users. The company tops the Department’s list of contractors–pulling in $118 million in contracts in 2005, almost 10% more than the second largest contract recipient.
Is the company being considered for new contracts due to competence or contacts? This may be a classic case of "it’s not what you know, it’s who you know." Deputy Secretary of Homeland Security Michael Jackson, who is heavily involved in the effort to contract out border security, is a former vice-president at Lockheed Martin. In addition, President Bush recently appointed Philip J. Perry as General Counsel for the Department of Homeland Security. The former Lockheed Martin lobbyist helped the company secure liability insurance after September 11, 2001 to protect itself from lawsuits stemming from the attacks. Only eight companies got such insurance. Perry was also a partner at Latham and Watkins, a law firm which represented Lockheed Martin in dealings with the Department. And, to top it off, Perry is married to Elizabeth Cheney, the vice president’s daughter. The Pittsburgh Post Gazette called the appointment "a pure form of nepotism not usually seen in American government." Northrop Grumman After almost being swallowed up by Lockheed Martin in the late 1990s, Northrop Grumman is the "new kid on the block" among the defense-industrial conglomerates. It bounced back with its own buying binge of major military shipyards like Newport News and space/missile defense specialist TRW. Northrop Grumman may have the widest area of military products in the industry. From aircraft carriers and attack subs built at its Newport News, Virginia shipyards; to its major subcontracting role on the F/A-18E/F; to a major missile defense role via its acquisition of TRW; to its ownership of Vinnell, a private military firm that trains the Saudi National Guard and has a role in training the new Iraqi armed forces; to its role as prime contractor for the B-2 "stealth" bomber and the Global Hawk Unmanned Aerial Vehicle (UAV); to a wide array of defense electronic systems and electronic warfare contacts. In the area of homeland security, Northrop Grumman has developed an "Urban Combat Communications" system for the Army’s Stryker Brigade Combat Team using secure wireless technology. It is also promoting the use of armed unmanned aerial vehicles like the Prowler. Boeing Despite being investigated for war profiteering in a scandal involving the leasing of Boeing 767s by the Air Force — a scandal in which two company executives went to jail — Boeing plans to compete for the role of "systems integrator" for the Secure Border Initiative along with rivals Lockheed Martin, Raytheon, Northrop Grumman and Ericsson. Boeing clocked in at $ 18.3 billion in Pentagon prime contracts in FY 2005, a $1.2 billion increase over 2004. Outside of the areas where it has engaged in specific, questionable practices, like the tanker deal and satellite launches, the company seems to be moving full speed ahead. Big programs like the Army’s Future Combat System (FCS, funded at $3.2 billion in the FY 2005 budget), an information-based "battlefield of the future" in which Boeing is serving as the systems integrator, are being amply funded, as is the company’s F/A-18E/F combat aircraft ($3.1 billion in the FY 2005 budget). Boeing is also a big player administration’s multi-tiered missile defense program, which is being funded at $10.2 billion in the FY 2005 budget. Raytheon The fifth largest defense contractor in the United States, Raytheon is involved in over 4,000 weapons programs and the Massachusetts-based conglomerate received more than $ 9.1 billion in Pentagon contracts in FY 2005. After Congress released the first full "war on terrorism" military budget in 2002, Tom Culligan, one of Raytheon’s Vice Presidents, rejoiced, saying, "we are pleased… you see Raytheon’s brand name everywhere — from tanks and rifles to ships, aircraft and UAVs" As the new Department of Homeland Security was being established in 2001, Secretary Tom Ridge visited his friend and former Bush-Cheney fundraiser David Girard-diCarlo in Arizona. The high profile lobbyist was under contract with Raytheon at the time, and hired two former Ridge employees to lobby at the Department of Homeland Security. In June 2004, a team of companies that includes Raytheon won a border protection contract from DHS worth up to $10 billion. Pentagon’s Top Five Contractors, FY 2005
Source: U.S. Department of Defense, Washington Headquarters Services, "100 Companies Receiving the Largest Dollar Volume of Prime Contract Awards, Fiscal Year 2005." **Note: Figures rounded to the nearest 100 Million. Reports | Recent News Coverage | Updates | Links | Search | Contact Us
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