The Shadow World

It was President Roosevelt, in the early years of the Second World War, who recast America as ‘the great arsenal of democracy’. Before the attack on Pearl Harbor the US had been supplying its allies with arms and matériel behind the scenes. Between 1939 and 1945 America became an arsenal of unprecedented scale, first supplying others and then, in the wake of the Japanese attack, using force herself.1 Not only were America’s population, resources and industrial capacities marshalled to this end, but the war effort became the driving force in a far-reaching transformation of American society.2

The historian D. W. Brogan suggested in 1944 that ‘war is a business, not an art … and the US is a great, very great, corporation.’3 The Second World War witnessed an industrial explosion in the US, with manufacturing output doubling between 1940 and 1943. Arms production increased eightfold between 1941 and 1943, to a level nearly that of Britain, the Soviet Union and Germany combined. As the film-maker Eugene Jarecki observed, the conflict wove the idea of war inextricably into the American way of life. It saw an ever-increasing proportion of national resources diverted into the military and engendered unprecedented closeness between the federal government and corporate America. This gave the defence apparatus a life of its own in influencing public policy and exerted damaging influence on the separation of powers. It produced a symbiosis between the executive branch and corporate America in which each simultaneously shelters and empowers the other, producing a climate of decreased transparency and accountability and, ultimately, of unchecked executive power. During his years in the White House FDR transformed the executive branch into an office of far greater power, secrecy and autonomy than had ever been contemplated before.4

The bombings of Hiroshima and Nagasaki ordered by President Harry Truman, strategic efficacy aside, were an extreme case of a kind of self-perpetuating militarism. The US-driven victory in the war unleashed the forces of executive overreach and militaristic aggression that would shape American policy and society for decades to come.5 Since this time defence industry executives have played powerful roles in influencing both domestic and foreign policy in directions that suit the needs of their companies.

After the boom years of the war, defence spending plunged from $908bn in 1945 to $141bn in 1947.6 Yet the growing Soviet threat would soon compel a renewed military build-up. The US replaced the UK as the pre-eminent Western global power. And the domino theory set the Truman Doctrine in motion, the most significant expansion of American foreign policy since the Monroe Doctrine of 1823. Truman argued that in the shadow of communism, a threat to free people anywhere was a threat to the United States and that the US should protect these free people anywhere at any time. In so doing he blurred the lines between peacetime and war, calling for permanent military preparedness. And through the National Security Act of 1947 increased war-making power was concentrated in the executive branch.7

The creation after 1947 of a national security state, which shifted power from the State Department to the Department of Defense, was a godsend to the arms industry. Since 1947, the Department of Defense has become the gravitational centre of a vast system of recruitment centres, military bases, laboratories, testing grounds, command centres, defence-related corporations and academic institutions. And the Cold War brought the military and industry into an unprecedented level of cooperation with one another, compounding their cumulative level of influence over policy: the military-industrial complex (MIC) as described by Eisenhower.8

Speaking to the American Society of Newspaper Editors on 16 April 1953, less than three months into office and as the US started again to spend more on defence than on human needs, President Eisenhower delivered his ‘Chance for Peace’ speech: ‘Every gun that is made, every warship launched, every rocket fired, signifies a theft from those who hunger and are not fed, those who are cold and are not clothed.’9

Despite these sentiments, Eisenhower’s administration conducted several covert operations in foreign countries, most notoriously Guatemala and Iran. While the intention was to gain geo-strategic ground in the struggle against communism, with increasing frequency the economic interests of corporations were also involved. Major General Smedley Butler, two-time Medal of Honour recipient and the most decorated marine in US history, said of his own participation in profit-driven US military action around the world: ‘I spent 33 years and four months in active military service and during that period I spent most of my time as a high class muscle man for Big Business. In short, I was a racketeer, a gangster for capitalism.’10

What was new in the covert operations initiated under Eisenhower was the use of the CIA to invisibly implement the plans hatched in private consultations between the executive, select advocates in Congress and their cronies in industry, especially the weapons business. The establishment of the CIA in 1947 helped to create a new layer of secrecy and reduce accountability, blurring the line between America’s national interest and the private interests of corporations friendly to the US government.11

This same nexus of interests accused Eisenhower, despite his remarkable military career, of being soft on the Soviets and falling behind the USSR in the arms race. This criticism took the form of two lines of negative propaganda, known as the ‘bomber gap’ and the ‘missile gap’, both of which showed the insidious intertwining of the interests of the military, Congress and the defence-industrial sector.

The bomber gap was a political canard promoted by an alliance of Air Force brass and defence contractors seeking money to build more bombers. They claimed that the USSR was surpassing the US in its production of jet-powered strategic bombers, and that these bombers were capable of delivering a nuclear attack on the US. Despite evidence refuting the claim, it was popularized by members of Congress, especially Missouri’s Democratic Senator, Stuart Symington, who had served as the first Secretary of the Air Force. He is the prototype of the role played by many members of Congress today in lobbying and fear-mongering for the desires of the military-industrial complex, leading Eisenhower to suggest that ‘each community in which a manufacturing plant or a military installation is located profits from the money spent and jobs created in the area. This constantly presses on the community’s political representatives to maintain the facility at maximum strength.’12 Despite being shown to be false, the bomber gap achieved its desired effect, with a massive expansion of the Air Force’s air power.

The notion of a missile gap emerged after the launch of Russia’s first spacecraft, Sputnik 1. Again it began with Senator Symington and a defence contractor executive – who had been his PA when Symington was Secretary to the Air Force – whose company wanted to produce missiles at $1.5m a piece to overcome the gap. As the defence contractor Boeing and Douglass (as it then was) fanned the missile gap flames, Eisenhower was moved to remark that he was ‘getting awfully sick of the lobbies by the munitions … You begin to see this thing isn’t wholly the defence of the country, but only more money for some who are already fat cats.’13 Kennedy used the missile gap claim to embarrass Eisenhower and then Nixon. Later, as President, Kennedy would have to admit it was a myth. Having run on a platform of Eisenhower being soft on the Soviets, Kennedy adopted a more hawkish global posture and oversaw ‘the most far-reaching defence improvements in the peacetime history of this country’.14 This resulted in an increase in spending from $371bn to $388bn between 1961 and 1962 – the largest single peacetime increase in US history up to that point.15 And he committed the US to Vietnam.

It was Eisenhower, the former military man, who best understood the US arms business as systemic collusion between not only the munitions manufacturers and the military, but also Congress. His granddaughter, Susan, a prominent Cold War scholar, argues that her grandfather felt that ‘clearly Congress is part of a triangle here’.16 This symbiotic relationship prompted some critics to use the term military-industrial-congressional complex (MICC), or the iron triangle.17 A senior Capitol Hill aide described this connivance to me as legal bribery.

The controversial and sometimes intersecting careers of two men in their mid-seventies who died within two days of each other in early February 2010 reflected much of what is wrong with the formal arms trade in the USA. One was a Congressman serving his nineteenth term, the other a former twelve-term Representative. Their careers thrived in the system built on a circle of patronage between defence companies, lobbyists, lawmakers, the White House and the Pentagon: a scheme of mutual back- scratching that is not necessarily illegal under US law, but in some parts of the world would constitute illegal bribery.

John Murtha, who died on 8 February 2010 at the age of seventy-seven, was the first Vietnam combat veteran to serve in Congress after winning a special election to the House in 1974.18 His victory as a Democrat in a district with a strong conservative tradition was taken in part as a rejection of President Richard Nixon. Murtha’s campaign slogan, ‘One honest man can make a difference’, played to the grave doubts voters held about Nixon’s ethics.

Ironically, by the time of his death John Murtha had become the pre-eminent symbol of the congressional practice of earmarking, the process by which lawmakers add federal money to the budget of often unrelated pieces of legislation to give no-bid contracts (contracts that are awarded to a company without any competition) to pet projects and companies of their choosing. He faced a drumbeat of questions about possible ethical conflicts, as executives and lobbyists for the firms receiving the contracts were among his most generous campaign contributors.

Murtha, who in 1989 had become Chairman of the powerful House Appropriations Subcommittee on Defense that controls Pentagon spending, was dubbed the ‘King of Pork’ for the volume of taxpayer money he directed to the area around his home town of Johnstown: $192m in the 2008 budget alone.19 Most of this largesse came in defence and military research contracts he steered to companies based in his district or with small offices there.20 Murtha was regularly ranked by watchdog bodies as among the most corrupt Representatives in the House.21

The PMA Group, a powerhouse lobbying firm, whose founder, Paul Magliocchetti, was a close friend of Murtha’s and his former subcommittee staffer, achieved unique success in winning earmarks from Murtha for its clients. In return, these companies and PMA staffers made generous campaign contributions to the Congressman.22

In October 2008, the FBI raided PMA’s Arlington offices as part of an investigation into improper campaign donations to lawmakers. Magliocchetti was charged with eleven counts of corruption and conspiracy, including making illegal payments; in essence, funnelling illegal donations to friendly lawmakers. A year later, the Office of Congressional Ethics decided to discontinue its investigation of Murtha’s actions on behalf of PMA Group and recommended that the House ethics committee take no action against him. In September 2010, Magliocchetti pleaded guilty to federal campaign finance violations.23

Murtha’s power also reaped benefits for his family. His brother, Robert C. ‘Kit’ Murtha, built a successful lobbying practice around clients seeking defence funds through the Appropriations Committee and became a senior player at KSA, a lobbying firm whose contractor clients often received multimillion-dollar earmarks directed through the committee Chairman.24 The Congressman’s nephew – Kit’s son, Robert C. Murtha Jr – for years made an excellent living working with companies that relied on Pentagon contracts over which his uncle held considerable sway. His company, Murtech, received millions in no-bid Pentagon contracts.25

Documents obtained by the Washington Post show Robert Murtha using his influential family connection as leverage in his business dealings and holding unusual power with the military. For instance, in 2001, Murtha Jr told a business partner that there were conditions for ‘keeping funds flowing’. Part of the federal work, he said, must be channelled to Johnstown. ‘This has been a requirement for what I do to get dollars through.’26 A former employee at Murtech claims that the company did virtually no work on some of the contracts it won with larger contractors.27

In July 2010, a former executive of a Pennsylvania defence firm with close ties to John Murtha pleaded guilty to taking bribes from a partner defence company. Richard Ianieri, the former president of Coherent Systems International, admitted that he took $200,000 in bribes from officials at a firm the company hired as a subcontractor. The firm to which bribes were paid was Kuchera Defense Systems in Murtha’s congressional district. Ianieri and other Coherent officials donated a total of $92,000 to members of Congress from 2003, with $34,700 of that going to Murtha’s re-election campaigns or political action committee.28 Kuchera, a company that Murtha had helped grow with more than $100m in military contracts and earmarks, was suspended from receiving further Navy contracts pending an investigation into allegations that it had defrauded the government in its billing.29 Company officers contributed $60,000 to Murtha’s campaigns. The company was not a client of PMA, but it relied for several years on lobbying work by the Congressman’s brother, Kit.30

A year before his death, Murtha had told the Pittsburgh Post-Gazette that every lawmaker looks out for his own: ‘If I’m corrupt, it’s because I take care of my district.… Every president would like to have all the power and not have Congress change anything. But we’re closest to the people.’31

The John Murtha Johnstown–Cambria County Airport sits on a windy mountain two hours east of Pittsburgh, a 650-acre expanse of smooth tarmac, spacious buildings, a helicopter hangar and a National Guard training centre. It is a fitting monument to its benefactor’s career. The airport only exists because of the $200m in federal funds that Murtha steered towards its construction and development over a decade. When the economic stimulus package was agreed in 2009, Murtha’s airport was the first to win funding from it: $800,000 to repave a backup runway. On an average weekday about four passengers board each of its three commercial flights to Dulles International, often outnumbered by the seven security staff members and supervisors. When Johnstown native Bill Previte arrived one morning, he lamented that his plane was half empty and that the terminal was deserted. ‘Doesn’t it seem kind of ridiculous to have a motorized carousel for the baggage claim when 15 people get off the airplane?’ he said. ‘It’s obvious: There’s not enough population to justify this place.’ The little-used commuter airport doubles as a wartime preparedness facility for the Pentagon, after $30m was invested in improvements and expansion.32

Murtha’s earmarks, while undoubtedly saving his economically depressed home town, have not delivered the number of jobs promised. A Washington Post analysis showed that of sixteen local companies the Congressman had helped win federal earmarks, ten have generated far fewer jobs than forecast, and half of those have closed operations in his former district.33

But there was another side to the ultimate crony insider: John Murtha, the tough former combat veteran who would not back down in a fight against powerful adversaries if he believed passionately in something. So, despite having been a crucial informal adviser to Dick Cheney when he was first made Secretary of Defense in 1989 and didn’t by his own admission ‘know a blankety-blank thing about defense’, in 2005, when Murtha reached the conclusion that the Iraq occupation had turned into a quagmire where Americans should not be serving, let alone dying, he vociferously called for the troops to be brought home. Cheney accused him of losing his backbone, to which Murtha responded: ‘I like guys who got five deferments [from serving in the military] and (have) never been there and send people to war, and then don’t like to hear suggestions about what needs to be done’, referencing the Vice President’s history of draft avoidance in the 1960s. Murtha’s call to bring the troops home, and the ensuing tussle with Cheney, was a critical turning point in the debate about the war. Even more so, it was crucial in exposing George W. Bush and Dick Cheney for what they were: crude and frequently ignorant ideologues who cared more about pursuing their own agendas than about doing right by America or its soldiers.34

On his death, Lockheed Martin took out a full-page ad memorializing John Murtha. On the bottom, under the Lockheed Martin logo, was the company’s tagline: ‘We never forget who we’re working for’.35

When in the autumn of 1980 an FBI sting operation to trap corrupt public officials started to move against John Murtha, his friend and powerful Democratic Speaker of the House, Thomas ‘Tip’ O’Neill, asked the flamboyant Congressman Charlie Wilson to take up a position on the House Ethics Committee to help shut down any inquiry into Murtha. While Murtha hadn’t been prosecuted for his role in the Abscam bribery scandal, in which an FBI agent disguised as an Arab sheikh lured six Congressmen and a Senator into performing political favours in return for money, the internal watchdog committee was looking into whether he broke House rules by not reporting the bribery attempt.36

Given his reputation as a philandering hedonist, Wilson was hardly an obvious choice. When a puzzled reporter asked the Congressman why he, of all people, had been selected for this sober assignment to the committee that acts as the conscience of the House, he replied roguishly: ‘because I’m the only one of the committee who likes women and whiskey, and we need to be represented’.37 In addition to being persuaded onto the committee with a lifetime box at the prestigious Kennedy Center, Wilson also admired Murtha, whom he worked with on Defense Appropriations and saw as a fellow anti-communist and a decorated war veteran.38

Wilson went to work as the wrecker-in-chief on the normally staid committee, forcing the Murtha investigation to be closed down and the special prosecutor to resign.39 Murtha would never forget Charlie Wilson’s rescue operation on his behalf and when he became chair of the Appropriations Subcommittee on Defense always deferred to Wilson on his driving political passion, Afghanistan.

Charlie Wilson was a 6 foot 4 inch Texan, square-jawed, with an all-year tan and a deep, booming Texas baritone. He was a dashing dresser – loud striped shirts set off with equally bold braces – who staffed his Congressional office almost exclusively with tall, beautiful women, known to everyone as ‘Charlie’s Angels’. Whenever asked about his staffing practices, Wilson would respond: ‘You can teach them how to type, but you can’t teach them to grow tits.’40 The ultimate political hedonist, his indulgent apogee came in 1980 at Las Vegas’s Caesar’s Palace, when he was photographed in a jacuzzi snorting cocaine with two naked strippers.41

In the early summer of the same year Wilson walked off the floor of the House of Representatives into the Speaker’s Lobby, where he read a story off the teletype datelined Kabul. The article described hundreds of thousands of refugees fleeing Afghanistan as Soviet helicopter gunships levelled villages, slaughtered livestock and killed anyone suspected of harbouring guerrillas resisting the occupation. Wilson, a fervent anti-communist, was taken with the report’s description of how the Afghani resistance was murdering Russians in the dead of night with knives and pistols, or hitting them over the head with shovels and stones. Wilson immediately called the Appropriations Committee staffer who dealt with ‘black appropriations’, i.e. CIA funds for covert operations. He asked the staffer how much was being given to the Afghans. ‘Five million,’ came the reply. ‘Double it,’ said the Texan.42 ‘The mysterious force in the US government that was destined to hound the Red Army with a seemingly limitless flood of ever more lethal and sophisticated weapons was about to be activated,’ according to Wilson’s biographer, George Crile.43

No Congressman prior to Charlie Wilson had ever moved unsolicited to increase a CIA budget. From the beginning of the Cold War, Congress had granted that exclusive right to the President. But as dramatic as the doubling might sound, it had no visible impact on the war.

Two years later, on a trip to Peshawar instigated by his wealthy, right-wing mistress, Joanne Herring, Wilson ‘lost his heart to the Afghans’ at a Red Cross hospital overflowing with guerrillas wounded by the Soviets. They all asked for weapons so they could bring down the Soviet Mi-24 Hind helicopters tormenting them from the skies.44 And they got them, in huge quantities, as Wilson increased their funding from the initial $5m to $750m a year. In addition to persuading his colleagues on Appropriations to stump up, Wilson also persuaded the Saudis – in the form of the Al Yamamah-linked Defence Minister, Prince Sultan, and his son, Prince Bandar – to match the American funds dollar for dollar.45 Prince Bandar, a most willing accomplice in the funding of the secret war, often entertained Wilson and Herring in the desert kingdom.46

To keep American prints off the operation, Wilson ordered anti-aircraft guns from Israel, bullets from Egypt and cut-price AK-47s from China. When faced with resistance to providing the Afghans with lethal Stinger missiles, Wilson pushed on every possible door until the weapons that changed the course of the war were sent. When the ‘muj’, as he referred to them, ran into transport problems, Wilson shipped out mules from Tennessee. When the CIA would not get them field radios, he spent $12,000 buying them from Radio Shack. He travelled to the region thirty-two times, astonishing Afghan warlords and General Zia of Pakistan by showing up with attractive women called ‘Snowflake’ or ‘Firecracker’, clad in tight pink jumpsuits.47

In the course of a decade, billions of rounds of ammunition and hundreds of thousands of weapons were smuggled across the border on the backs of camels, mules and donkeys. At one point over 300,000 Afghan warriors carried weapons provided by the CIA, and thousands were trained in the art of urban terror. By the time they left in early 1989, 28,000 Soviet soldiers had been killed.

Throughout the 1980s, the Afghan mujahideen were America’s surrogate soldiers in the brutal guerrilla war that became the Soviet Union’s Vietnam, a defeat that played some role in the subsequent collapse of the Soviet empire. It was the biggest secret war in history, fought without debates in Congress or protests in the streets.48

When the Soviets were forced out of Afghanistan there were many who echoed the words of Pakistan’s military leader, General Zia ul-Haq: ‘Charlie did it.’ Not least of these was the CIA itself, which awarded Wilson the seldom-bestowed title ‘Honoured Colleague’.49 When Wilson travelled to Saudi Arabia he was treated as an esteemed guest, being told on one trip as he was shown his lavish suite: ‘We want you to know, Mr. Congressman, that these are larger quarters than we provided for George Bush [snr]. Mr. Bush is only the vice president. You won the Afghan war.’50

George Crile’s account of Wilson’s devotion to the Afghans inadvertently confirms the view of the Pulitzer Prize-winning writer Steve Coll that Wilson ‘saw the mujahideen through the prism of his own whiskey-soaked romanticism, as noble savages fighting for freedom, as almost biblical figures’.51 But Wilson’s activities in Afghanistan were not simply a romantic fight against evil, but also ‘led directly to a chain of blowback that culminated in the attacks of September 11, 2001, and to the United States’ [then] status as the most widely hated nation on earth’.52

The warning signs were there, but Wilson’s less than informed romanticism continued to drive his actions. With the departure of the Soviets, Afghan guerrillas quickly returned to the centuries-old feuding of warlordism, but now armed with hundreds of millions of dollars’ worth of weapons and explosives of every conceivable type. The Russians continued to pump an estimated $3bn a year into the mountainous country to prop up the puppet government they’d left behind, while the CIA, with Saudi support, maintained the enormous flow of weapons to the feuding warlords. The Russians suggested that the brand of militant Islam emerging in the region was just as dangerous to America as it was to the Soviet Union, a point Wilson had heard frequently from his own side, but chose to ignore.53

Over the next two years thanks to the money Wilson continued to deliver and the matching Saudi funds, the mujahideen received almost half a billion dollars a year to wage war. In addition, they were gifted a cornucopia of new weaponry after the United States decided to send them the Iraqi weapons captured during the Gulf War. The Afghans responded with increased internal conflict and, in some cases, public support for Saddam Hussein when he invaded Kuwait in 1990. Wilson’s response was to drink more and more: he would not acknowledge what was becoming of his pet ‘freedom fighters’.54

Under the umbrella of the CIA’s programme, Afghanistan had become a gathering place for militant Muslims from around the world. As early as the First Gulf War, a mujahideen leader who had greatly impressed the Americans, Gulbuddin Hekmatyar, articulated the belief that the United States was seeking world domination and control of Muslim oil. Jalaluddin Haqani, a man Wilson had described as ‘goodness personified’, had long been a magnet for extremist Saudi volunteers. Osama bin Laden was one of the volunteers who could frequently be found in the same area where Wilson had been Haqani’s honoured guest. As the CIA’s favourite commander, Haqani had received bags of money each month from the station in Islamabad.55

The ten-year commitment of the CIA had turned a primitive army of tribesmen into highly armed warriors, imbued with the spirit of jihad and the belief that, having brought down one superpower, they could just as easily take on another.56 It was some of these people or their successors who in 1996 killed nineteen American airmen at Dhahran, Saudi Arabia; bombed the US embassies in Kenya and Tanzania in 1998; blew a hole in the side of the USS Cole in Aden Harbour in 2000; and on 11 September 2001 flew hijacked planes into the World Trade Center and the Pentagon. The Afghan freedom fighters of the 1980s were the forebears of the militants of Al Qaeda and the Taliban of the 1990s and 2000s.57

Immediately after 9/11 Wilson took comfort in pointing out that the perpetrators ‘were all Arabs, not Afghans. It didn’t register with me for a week or two that this thing was all based in my mountains.’58 For most other Americans, the events of 9/11 were immediately tied to Afghanistan when it was learned that the hijackers had all spent time there. Much was made of this by the Bush administration, which assailed the Taliban for harbouring Osama bin Laden and for allowing Afghanistan to become a breeding ground for international terrorists. The American public rallied behind the President when he launched his War on Terror. Barely a word was spoken of America’s role in arming their attackers, even when the CIA attempted unsuccessfully to assassinate not only Osama bin Laden, but also Hekmatyar and Haqani.59

When it was suggested to him that he was an early facilitator of bin Laden’s Al Qaeda movement, Wilson continued to claim that the defeat of the Soviet Union in Afghanistan was ‘glorious and changed the world.… And then we fucked up the endgame.’60 But the reality is that 9/11 was the ultimate example of blowback in the arms trade: the unintended consequences of supplying arms, especially through covert means.

For the cavalier manner in which he continued to supply his ‘noble savages’ with sophisticated weaponry even after he was warned of their anti-American militancy, Charlie Wilson was undoubtedly ‘the King of Blowback’.

As a respected academic, Chalmers Johnson, suggested, the real victor in Afghanistan was the military-industrial complex, for ‘the billion dollars worth of weapons Wilson secretly supplied to the guerrillas ended up being turned on ourselves’,61 requiring more and more weapons and services to be sourced from the very same suppliers in order to protect America.

Charlie Wilson died just two days after his close colleague, John Murtha. He was seventy-six. ‘He was a rascal but he was our rascal,’ the mayor of his home town of Lufkin said after Wilson’s death.62

A month before he died, John Murtha had chuckled when asked about President Obama’s assertion that he was going to freeze all discretionary spending, all earmarks, and bring about greater transparency in defence spending. ‘Well, he can call for it, but we’re the guys who make the decision. I always remind them of that.’63

President Obama inherited the most powerful fighting force in the world. It is also the most expensive and arguably the most systemically corrupt.

The US is by far the world’s largest manufacturer, seller and buyer of arms and weapons. It sells about 40 per cent of the world’s armaments with a high of 61 per cent in 2008.64 Military spending has increased by 81 per cent since 2001, and now accounts for 43 per cent of the global total, six times that of its nearest rival, China. At 4.8 per cent of GDP, US military spending in 2010 represents the largest economic burden outside the Middle East.65 Thus, unlike in Europe, US domestic defence spending is more important to arms companies than foreign deals. While corruption in export deals has declined since the toughening of legislation and enforcement, the importance of the domestic market, combined with elected representatives’ dual need to deliver jobs to their constituents and to raise money for biennial elections, has led to systemic legal bribery:

Our corruption is legal. It’s legal bribery. Whatever the Pentagon wants it gets. And we’re happy to sell to pretty much anyone and we’re not that interested in what happens post-sale. Pakistan, Colombia, Taiwan, the Middle East, the Saudis. Often we don’t even sell them, we give them weapons. We are buying political influence and American jobs. It’s the most powerful lobby there is. I don’t think Obama will be able to withstand it.66

US militarism – which a retired army colonel, Andrew Bacevich, describes as the thrall in which Americans hold military power and its perpetuation – has become the largely unchallenged underpinning of the country’s national identity.67 It is a complex network of economic and political interests tied in a multitude of different ways to American corporations, universities and communities, the so-called MICC which, true to Eisenhower’s prescient words, has come to ‘exercise misplaced power [which] endangers our liberties and democratic processes’.68

Until the late 1970s the major US arms companies could, with the assistance of their government, bribe and strong-arm their way to pre-eminence around the world.69 The favoured Lockheed Corporation was extremely close to the CIA, selling to its client states and actively involving itself in some of the less reputable actions of the Agency in Latin America – described as a free-for-all for arms salesmen – and the Far East.70

The company, the world’s largest defence contractor, dominates the weapons business along with fellow American giants Boeing and Northrop Grumman and Britain’s BAE. After a volatile early history that saw the company teeter in and out of financial crisis, it was bought by Robert Gross in 1932.71 Under his leadership the company became influential in the corridors of power. It built the Electra transport plane which featured as the getaway plane in the iconic Humphrey Bogart film Casablanca. But the Electra was insufficient to make the company profitable, so Gross turned to ‘government contracts for war machines’ despite preferring ‘not to have to depend on the light and shadow of politics’.72 His concerns about military business were not grounded in morality, as evidenced by his sale of Electras to the Japanese army which strengthened the fascist regime in the run-up to war. From 1934 to 1938 US aircraft sales to Europe amounted to over $42m, with the UK, Nazi Germany and the fascist regime in Italy each receiving over $2m of these sales. Japan received $15.5m. In 1938, the UK’s Royal Air Force ordered 200 Hudson bombers from Lockheed. With the passing of legislation in September 1939 preventing any US citizen from delivering military goods to countries engaged in war, Lockheed bought an airfield that straddled the US border with Canada. The Hudsons were flown to the American side, and pulled into Canada before being flown to Britain. The deal transformed Lockheed into a major power in the weapons industry.

The end of hostilities posed a threat to the company’s well-being. So Gross set about insinuating himself into the political process to engender permanent high spending on military aircraft. Before a Senate committee investigating national defence he argued: ‘I find it very difficult to talk about the airplane as a weapon of war. It is a cause I would not be selfish enough to plead as a businessman, but it is my duty as a citizen to plead for it.’73

As Bill Hartung, author of a book on the company and its role in the making of the MIC suggests, this conflating of the company’s and industry’s interests with the national interest was to serve Lockheed and its rivals well in the decades to come. But ultimately it was not the words and arguments that opened the military spigot, but war – the Korean War. Lockheed not only supplied the US military with goods and equipment, at a substantial profit, but also with the means to transport it.

The Cold War also served the company well. Lockheed produced missiles, space vehicles and sophisticated spy planes to enable the CIA to keep track of the military capabilities of the Soviet Union. Despite this windfall, by 1960 the company was once again in financial difficulty, relying on the Kennedy administration’s military build-up to return to health.

But even with this build-up, Lockheed, mirroring the history of many weapons manufacturers, was soon in trouble once more. At the centre of its difficulties lay the largest military aircraft ever built, the C-5A Galaxy. The Air Force decided it needed a colossal plane to move large numbers of troops and equipment anywhere in the world within days: hence the Galaxy, over 260 feet long, with a 223-foot wing span and a tail wing that is six storeys high. Despite its size it needed to be able to land on a dirt runway of just 4,000 feet.74

This gargantuan plane, which would enable the US to have an instant military base wherever in the world it needed to, was criticized early in its conception. William Fulbright, the Senate Foreign Relations Committee Chairman, argued in 1969 that such capacity would tempt the US to intervene in every conflict that broke out anywhere.

The Galaxy would never have been built if Air Force procurement officers had their way. A Boeing design was deemed superior to Lockheed’s, but had an additional $400m price tag. But Lockheed held the lobbying upper hand, to the extent that when its original design exhibited faults, it was allowed to fix them. Senator Richard Russell, from Georgia, where the plane would partly be built, chaired the Senate Armed Services Committee and the Appropriations Committee’s defence subcommittee. He was also a close friend of President Lyndon B. Johnson. Lockheed also placed a sub-assembly plant for the plane in the district of the House Armed Services Committee chairman, L. Mendel Rivers, an unapologetic practitioner of pork barrel politics in the Murtha mould. Legend in South Carolina held that if Rivers got one more military base for his Charleston area, it would sink into the Atlantic ocean.

When it became clear that the C-5A had enormous cost and performance problems, Rivers ensured that the House Armed Services Committee never made serious inquiries into them.

But the most important factor in Lockheed winning the contract was the Pentagon’s desire to keep the company’s Georgia operation in business as part of the defence industrial base. As Hartung notes:

The practice of doling out contracts according to the financial needs of the arms makers rather than the merits of a particular weapons design is a long standing practice in the MIC, where the investments needed to keep factories at the ready to build modern armaments can run into the billions of dollars. As a result, a symbiotic relationship has developed between the Pentagon and its top contractors in which each needs the other to survive and prosper.75

The Air Force overruled its own selection board and opted to buy the C-5A rather than the Boeing design. The Pentagon went so far as to draw up a new form of contract for the project, requiring the company to estimate R&D and production costs up front, and commit to explicit timing and performance yardsticks. Slipping up on the schedule would bring fines up to a maximum of $11m, a minuscule amount in relation to the size of the project budget, reflecting the loopholes that riddled the contract. The government was on the hook for the vast majority of any overspending. Crucially, there was a repricing formula that would allow the overruns on the first batch of C-5As to be folded into the costs of the second batch. So the rewards for ramping up costs actually far outweighed the penalties.

Ernie Fitzgerald, a courageous cost estimator in the Air Force, repeatedly blew the whistle on the problems with the programme, until he could no longer be ignored. After his initial misgivings were concealed within the Pentagon, Fitzgerald finally discovered that the projected costs for the programme had increased by almost $2bn, since the initial estimates. It was the most expensive aircraft project ever undertaken by the US, and set records for excess costs as well. The Air Force continued to tell Congress that all was well and few on Capitol Hill were interested in asking tough questions of a scheme that was delivering billions in pork barrel projects for their constituents.

Senator William Proxmire of Wisconsin, a fitness fanatic and former journalist with a legendary reputation as an opponent of government waste, was an exception. He refused to accept campaign contributions and turned down several large projects for his own state on the grounds that he viewed them as a waste of money. His Joint Economic Committee’s subcommittee on Economy in Government called Fitzgerald to give evidence, during which the whistle-blower acknowledged the possibility of the multibillion-dollar overrun.

Fitzgerald was immediately excluded by his superiors from any serious work on cost assessment or acquisitions. Investigations were launched into all aspects of Fitzgerald’s personal and professional life and eventually he was fired, a year after his original testimony. He was told that his unit was being eliminated as a cost-cutting measure. The irony of removing the organization’s premier cost-cutter to make savings was lost on the Air Force bureaucrats whose primary concern was to be rid of Fitzgerald so they could continue to offer sweetheart deals to Lockheed and other defence contractors.76 Four years later, after an extensive lawsuit, Fitzgerald was allowed to return to the Pentagon in a circumscribed role. The most frightening revelation in his lawsuit was that the decision to fire him went all the way to the Oval Office, where Nixon admitted he had issued an instruction ‘to get rid of that bastard’.77

Fitzgerald nevertheless managed to access key documents to fight the Air Force’s propaganda machine. He revealed not only the extent of the overruns, but also that top officials in the Air Force had known about them for years and had misled Congress. The cover-up was eventually acknowledged under pressure from a handful of Congressmen, leading to an SEC investigation, which discovered that senior executives in Lockheed had also sold off shares at about the time misgivings were being expressed about the C-5A, without informing other shareholders. Remarkably, the SEC decided that no law had been broken and no insider trading had occurred.

An internal Pentagon study in 1969 suggested that buying the second batch of C-5As – which would help Lockheed recoup the money it had lost to cost overruns on the first batch – was unnecessary. In 1971, the General Accounting Office (GAO) revealed that the Air Force was accepting the planes with major deficiencies to the landing gear, wings and avionics. It also noted that the plane was unable to land on unpaved runways as required. Twenty-five defects were identified, including that it could only carry half of the projected capacity.

Since 1966, when the problems had been known about, the fixes proposed sometimes caused more harm than the original problem. Henry Durham, a production supervisor on the C-5A, blew the whistle from inside the Lockheed plant. He described ‘mismanagement and waste’ in all parts of the factory and saw ‘what appears to be collusion with the Air Force to receive credit and payment for work on aircraft which had not been accomplished’.78 Durham’s job and life were threatened, requiring federal marshal protection for him and his family. Threats notwithstanding, Durham testified before Senator Proxmire’s committee in 1971 and set out Lockheed’s pricing policies, including charging $65 for a simple bolt along with dozens of other examples which cost the taxpayer millions of dollars. He suggested that this practice characterized Lockheed’s production processes and contributed to the massive cost overruns. Describing planes being rushed through the production line with crucial parts missing so that the company could receive progress payments from the Air Force, Durham raised a host of safety issues with the aircraft.

As the C-5A scandal was unfolding, Lockheed’s finances continued to crumble. The Air Force attempted to bail the company out by buying additional C-5As on even more relaxed terms. In terms of the absurd contract formula, because the first fifty-three planes cost 100 per cent more than estimated, so the second run of planes would cost 240 per cent of the original projected cost. Lockheed was, in effect, being rewarded for its own enormous cost overruns. The Air Force rammed through the order for the second batch of planes in January 1969 without notifying Congress or the incoming Nixon administration, just hours before Senator Proxmire was to hold hearings on the deal. At this point, only four of the original run of planes had been delivered and seventeen others were in bits and pieces.

When Congress attempted to stop the programme at eighty-one planes, rather than the planned 120, Senator John Stennis argued against the cut, claiming it was part of an effort to ‘cut the bone and muscle out of our military capability’ rendering America ‘a second rate nation’ that would be ‘second best to the Russians’.79 During the debate, Mendel Rivers, the arch-supporter of the C-5A, limited some critics of the plane to as little as forty-five seconds’ speaking time.

Even after Ernie Fitzgerald revealed that the overruns on the C-5A were being used to finance Lockheed’s troubled commercial airliner business, Congress continued to support payments to the company. As Fitzgerald remarked: ‘advocates of infinite contributions to Lockheed reacted as if [a] pallid little amendment [to hold back some payments] would have wrecked the national economy and ensconced Bolsheviks in the Pentagon in one fell swoop.’80

But the Pentagon’s profligacy was insufficient to restore Lockheed’s financial health, so the company was dependent on a $250m loan guarantee from the federal government. This came after the company was reimbursed $757m in cost overruns on the C-5A and several other projects. Ernie Fitzgerald described it as ‘the great plane robbery’.81

In the midst of the C-5A foul-up, Lockheed had another disaster on its hands, the Cheyenne helicopter. Described as an aircraft that could take off and land like a helicopter, the Cheyenne experienced a tripling of costs and constant technical problems, resulting in the crash of a prototype in March 1969, killing the pilot. Lockheed was unable to fix the problems and the contract was cancelled, with nearly half a billion dollars in public money washed down the Lockheed drain. This debacle was made worse by the revelation that Lockheed’s selection was the result of a significant conflict of interest. Willis Hawkins, the army official whose office awarded the contract, had only left the company’s executive suite two years previously. Hawkins had sold his stock in the company when he joined government but continued to receive deferred compensation. This conflict appears even more damaging when considering that Lockheed had never built a helicopter before. As the Cheyenne programme was imploding, Hawkins returned to Lockheed along with his assistant, General W. Dick Jr. Mendel Rivers defended Hawkins, arguing that Congress should not find ‘guilty every businessman who comes down here’.82

This instance of the revolving door between government and defence contractors was just the tip of the iceberg: a 1969 report released by Senator Proxmire’s office found that over 2,000 military officers had gone to work for major defence contractors as of that year. Lockheed led the way with 210 former military officers on its payroll. Proxmire described this practice as ‘a real threat to the public interest because it increases the chances of abuse.… How hard a bargain will officers drive when they are one or two years away from retirement and have the example to look at over 2,000 fellow officers doing well on the outside after retirement.’83

Lockheed’s CEO, Dan Haughton, in arguing for the federal bailout of the company, described the C-5A programme as an unqualified success that resulted in ‘the greatest airplane that had ever been built, without question’.84 The successful lobbying for the loan guarantee, in which the Nixon administration played a crucial role, was driven as much by pork barrel politics as ideology or the merits of the case. An otherwise liberal Democrat, Alan Cranston of California, the centre of Lockheed production of its commercial airliner, sang the company’s praises. He extolled the virtues of the relationship between the Pentagon and defence contractors, whom he described as ‘quasi-governmental companies dependent largely on defence contracts … [just as] our country is dependent on them in this world of deadly, sophisticated weapons, for national defense and security’.85

And herein lies a key ambiguity about large defence contractors: they are pillars of the free market economy whose shareholders are supposed to provide oversight, while receiving extensive state support which insulates them from market vagaries and meaningful oversight. One thing, however, is constant: this either-or status has resulted in companies that are often badly managed and regularly find themselves in financial difficulties, despite their government’s efforts, sometimes illegal, to find them business.

Human nature being what it is, the MICC comprises avaricious individuals who seek to gain private benefit at public cost. But the idea that all the players knowingly conspire to mastermind so intricate a system is difficult to prove, and unnecessary. Instead corruption among defence contractors, Representatives in Congress and the military brass is standard operating procedure camouflaged by an incestuous labyrinthine system and the primacy of ‘national security’. Not only do the corrupt actors need to be held to account but, as importantly, the system needs to be untangled.86

To further understand this entanglement, I met Chuck Spinney, a life-long Pentagon insider who experienced this labyrinth on a daily basis for over two decades. He produced a vast body of work explaining how the Pentagon really operates. His efforts culminated in the wrath of all participants in the MICC but saw him featured on the cover of Time magazine. In retirement, he now travels the world on a yacht. I managed to see him on a couple of his brief stopovers in the US. We met first at the tidy apartment he and his wife keep in Alexandria outside Washington DC.87 A shortish, pugnacious man with light-brown hair, Spinney has a face that exudes determination: a tough jaw, Roman nose and searching eyes. He describes himself as an outsider, prone to be critical and unorthodox, driven by his belief in the Socratic method. To describe him as feisty would be an understatement, while the term maverick underplays his contempt for overbearing authority, sense of conviction, steely determination and personal courage.

Franklin ‘Chuck’ Spinney was born into the military, quite literally. He took his first breaths at the Wright-Patterson Air Force Base in Ohio, the son of an Air Force Colonel. A mechanical engineer by training, he worked in the flight dynamics lab at the base before leaving military life for two years. In 1977, he joined the Pentagon as a civilian analyst in the Office for Systems Analysis working under his mentor, a famous fighter pilot and iconoclastic military reformer, John R. Boyd. Boyd was not only the best fighter pilot the Air Force had, but also developed a theory on air tactics which is still used today and a hugely influential thesis of aeroplane design. He was known variously as ‘the Mad Major’ for his intense intellectual passion, ‘Genghis John’ for his abrasive and confrontational interpersonal communication, and ‘the Ghetto Colonel’ for his extreme, spartan lifestyle. Boyd once said to Spinney: ‘the most important thing in the world is to be free. There are two ways to be free, you can be rich or you can crank down your needs to nothing. I am never going to be rich so I am going the other way.’

Boyd had a massive influence on the young Spinney, who was a fast learner. In 1975, the Pentagon was trying to figure out what to do with the B1 bomber, the costs for which had already gone through $100m. Spinney realized they were going to have to pretty much give up everything, destroy the Air Force, to keep ‘this high-cost turkey’. When he presented his report to General Chapman, who led the team undertaking the review, the General went through the roof, exclaiming: ‘You can’t show this.’ Spinney responded: ‘Well that’s what the numbers show.’ The senior officer put his foot down: ‘You’re not going to show this because I have better information than you and we are going to get more money than you say we are going to get. You just understand, Captain! I am giving you a direct order, you are doing it my way not your way.’ In the presentation to the senior decision-makers, Spinney laid out every possible option, including the forbidden doomsday figures he had calculated. When asked which option he would go for, the 24-year-old chose his own scenario. Chapman went berserk. Chuck immediately called Boyd to tell him he was in trouble with the General. ‘There is silence on the end of the line, and all of a sudden Boyd starts roaring with laughter. He pulls the phone away and I hear him shouting: “My captain just fucked Chapman.”’88

Eventually, because of the budget implications he had raised, the Pentagon wanted to find a way to get rid of a plane they had been saying was essential to the survival of the Western world. When he became President, Jimmy Carter saved them, by killing off the B1. Up to that point its manufacturers had been working with the Governor of California, Ronald Reagan, and their Congressional allies, to keep it alive using money intended for the space shuttle. When Reagan was elected President they reinvented the B1 as a sub-sonic plane.

John Boyd was the intellectual ring-leader of what became known as the Military Reform Movement (MRM). The MRM were the only insiders who believed that the Pentagon, not the politicians, had lost Vietnam. Their intention was to move beyond the primitive perspective of war held by the military. They wanted to develop weapons that worked from a tactics and strategy perspective, but also provided a defence capability that was affordable.

To do this they had to reveal the inner workings of the Pentagon and the influence of the MICC as a force that corrodes US policy making, leading not just to misbegotten expenditures but ultimately to war:

The MICC is incredibly complex with each component textured by competing interests: interservice, corporate and congressional rivalries respectively. They then interact in more complex ways than a simple co-conspiracy. At times they collaborate, at others compete. It is a system in which the components of the Complex evolve through their competition toward a state of heightened voracity whose cumulative effect accrues to the benefit of the system as a whole.

The sponsors of any specific weapons programme are a diffuse alliance of people in Congress, the Pentagon and the defense industry. Each has his own agenda. The defense contractor wants the programme to sell for obvious reasons. The program manager at the Pentagon wants it to happen for career reasons. And the Congressman wants it because it will increase his political clout or bring him some other kind of benefit.

The contractor and service arm talk about what is needed and develop products to match. But then the contractors add all sorts of bells and whistles, with which the Pentagon is seduced. The collaboration in getting to this point unfortunately increases the risk that the public interest represented by the service arm becomes blurred by the private interest of the contractor.89

For instance, a commander at the Pentagon described his relationship with Lockheed Martin in matrimonial terms: ‘Whenever we find a new way to improve the processes, Lockheed is involved. We are wedded to the factory and the company. They are our prime source of parts and expertise. And they are a part of all we do. It is a wonderful marriage of industry with military.’90

Working in matrimony, the service arms and the company develop a proposal for a weapons system and then work together to win the support of those in the Pentagon and Congress who control the purse strings. The Pentagon has developed two basic power games. Spinney calls them front loading and political engineering.

In front loading they over-promise what the system is going to do and underestimate the kind of economic and other burdens it’s going to impose. When the benefits don’t materialize and the burdens are higher than predicted a safety net is created that makes it impossible to shut off the money flow. This is political engineering, in which the defence contractor intentionally spreads contracts and subcontracts for a particular system to a wide range of Congressional districts in order to build a constituency in Congress that provides long and lasting support for that system, with the elected officials effectively becoming representatives of the producer to his colleagues on Capitol Hill and to the executive. It actually benefits a very small percentage of the American people, but they are strategically placed to ensure enough members of Congress have to commit to the system.

Most of the people who are making the decisions are benefiting from them. That’s why I call it ‘Versailles on the Potomac.’ It’s very similar to Versailles: You’ve got people who are parasitic, they feed off the masses while of course keeping the masses in ignorance. I think one of the things you have to realize is that the majority of people that are doing this are not evil-intentioned people, they are not ripping the system off consciously. In the government, like in the Pentagon, it’s not to say there are not rotten apples, there are a lot of them. But you are also dealing with a lot of dedicated, hardworking people. In fact, one of the central questions to me has always been: how can so many well-intentioned people create such a mess?

In 1977, I was trying to kill this program, which I actually did. It wasn’t a big programme, about 6 or 800 million dollars. The guy I was working with was a good engineer and obsessed with bringing this thing in. He got diagnosed with terminal brain cancer and took early retirement. He heard that I was being successful at canceling the program. He came in to put a stop to it. He got off of his early retirement, came back on active duty for the last days of his life to take me out. This guy had nothing to gain, absolutely nothing!

The mentality they have is: ‘we got to do this to save the country.’ They sit around saying this to each other and they really believe it.

The defense contractors are a little different because, first of all, their survival is much more directly related to it. The higher ups in the defence contractors are uniformly more venal. And over in congress you have got a system that is so overwhelmed by information. The staffers are flooding the information in. A lot of these staffers wanna go work for a K street lobbyist or become an Assistant Secretary over at the Pentagon or wherever.

Let me give you a concrete example. I have a friend who is a congressional staffer for a guy who represented a district in Florida. My friend was a really moral guy. The Senate had decided to terminate the production of the F-16. The House then decides they are going to fund this fully. The whole idea is you are gonna negotiate a compromise in the middle and keep the line open. So as soon as the Senate zeroes it, the lobbyists let loose and they start spreading letters around the Hill. They’ve got a letter from General Dynamics saying ‘The F-16 is absolutely essential for national security and accounts for so many jobs.’ My friend was incensed. He called me up and says, ‘this is nothing but extortion.’ The benefits were supposedly going to about 44 states, one in every congressional district. I remember this one district in Alabama, it had something like 132 dollars going to it. And by the way, these jobs, if you wanna make jobs, defence spending is about the worst way to do it.

What you have is huge economic distortion taking place because when these guys go and work for defense contractors, the engineers learn cost plus economics – where basically your profits are a function of your costs. The higher your costs, the more you make. These companies are insecure, they are basically welfare queens. They have to live on the government dole. That’s another reason why we can’t turn this off, because you’ve got a disproportionate size of the shrinking manufacturing sector tied up in defense. So we’ve got this real monster on the loose, it’s Eisenhower’s nightmare writ large. You have a lot of people scratching each other’s back and they are making out like bandits.91

Crucially, this dependence manifests itself in a greater belligerence in foreign policy too. To keep defence spending high and thus the defence contractors growing, it is essential that the US continue to fulfil the role of the world’s policeman, the defender of freedom wherever it may be threatened, at home and abroad. So every President enters the Oval Office with enormous pressure, from the industry and its lobbyists, from both sides of Congress and from the military, to keep this ‘virtuous circle’ spinning through continual increases in defence spending and constant expansion of the imperial role of the US military around the world while always ensuring homeland security.