Sometime in the late 1990’s during those blue skies of economic growth and Clintonian soothsaying the American people and Press forgot about that internal threat to democracy and peace: the military-industrial complex.

Forgotten was the power and influence wielded in the halls of government by those wealthy weapons makers. The corrupting influence of corporate wealth went unrecognized as the wasteful spending and lost opportunities made through sweetheart deals and revolving door relationships between the military industrial machine and its patron in the Department of Defense supposedly became things of the cold war past.

But it was an illusion. Just as recession and unemployment have made a comeback in 2003, so too has the ugly cerebrum of the military establishment, replete with all its vices and viciousness.

The Boeing Corporation is the posterchild of this arms buildup for America’s newest necessary concoction of a permanent war, the “War on Terror.” Just as the war against communism during the latter half of the 20th Century led to a political mentality and economic atmosphere in favor of feeding the black hole of the military industrial complex, the war on terror has brought back all the trappings of that system on a new, indeed larger scale.

Take the militarization of the American economy as an example. As society is told to mobilize for another permanent war, more and more institutions and entities become increasingly dependent upon that war for their own well being. Education becomes a lamb of sacrafice to pay for war; military service is pushed on the lives of more men and women; universities are told to take up research and recruitment for the purposes of “defense”; communities are told to bend over backward for the military machine; the environment is subjected to toxins and treatment of the warfare economy; and of course, corporations assume increasing activities in support of war. Boeing, for instance, prior to September 11 was primarily a manufacturer of commercial jet aircraft. Since that time Boeing has become more dependent on military contracts to support its operations. Military contracts now account for the majority of Boeing’s income. Boeing is an example of the dependence on a kind of weapons welfare that many businesses succumb to in the militarized economy.

The pork barrel politics and pet projects of a congress addicted to military-industrial money applies just as easily to our Boeing example, and the new war on terror. The weapons economy of the cold war had a distinct geographical dispersion in the US that related to the lobbying and influence of military-industrial corporations and their worker’s unions in the Congress. US Representatives have often gone to bat for those weapons makers whose operations were to be cited in their district, favoring them with tax breaks, handouts, and favors throughout the legislative process. Boeing is currently wielding its economic power to run a virtual bidding war of tax breaks in each respective state where it is considering production of its next generation 7E7 civilian jetliner. In this instance, a military-industrial corporation is using its time tested weapons economy tactics to win $3.2 billion in aerospace industry tax breaks from Washington State to build its only remaining significant civilian product.

When it comes to the cost over-runs and wasteful spending that have always been characteristic of the military-industrial complex, the new weapons economy is performing well above par. Boeing Corporation’s ill-fated tanker deal with the US Air Force is a prime example. The company’s $26 billion contract to supply 100 modified 767 aerial refueling craft was nearly a done deal before it was blown out of the skies by the revelations that Boeing might have succeeded in winning the contract through corrupt dealings and access to proprietary competitor information. But had the deal proceeded without such over the top scandalous behavior on the part of Boeing’s executives, the contract would have gone through with little scrutiny and fanfare. Awarding contracts for billions more than their actual worth is common with the Department of Defense. The practice of cost maximization and over-runs is distinctive of a warfare driven economy. During the cold war an infamous example of wasting US taxpayer dollars to help keep weapons manufacturers afloat was General Dynamics’ F-111 Airplane. The F-111 began as a $3.9 million per plane contract. By the end of the program each jet costs the Air Force $12.7 million, $8.2 million in over-runs. The jet was eventually scrapped before being fielded, but General Dynamics accomplished its financial goals and the DoD successfully supported one of its dependent corporations all in the name of “national defense”.

Boeing’s tanker contract is similar, but surely the Air Force did expect a product in addition to its goal of lending corporate welfare to Boeing from this vexed wasteful spending spree. The key is that most military industrial corporations, and those that become increasingly dependent on the militarized economy act as parasites on the market economy of civilian goods.

Perhaps more akin to Boeing’s most recent attempt to bilk the taxpayers for billions of dollars is the emerging news that Halliburton, the largest contractor in Iraq has been overcharging the US military for gasoline and fuels in the war torn nation. Halliburton which has the exclusive contract to import fuel into Iraq has been selling the fuel at $2.64 a gallon, a markup of $1.40 which according to the New York Times has cost American taxpayers an additional $61 million. Price gouging in Iraq is only the most recent of Halliburton’s cost maximizing practices. The Associated Press reports that; “Last year, the firm paid $2 million in fines to settle charges it inflated prices for repairs and maintenance at Fort Ord, Calif.” And that, “Congress' General Accounting Office found in 1997 and 2000 that KBR had billed the Army for questionable expenses on its support contracts for operations in the Balkans. Those reviews cited instances such as charging $85.98 per sheet of plywood which cost $14.06 and billing the Army for cleaning some offices up to four times per day.” (3). Unlike Boeing which is now facing the whip of government regulation and public scrutiny, it is unclear that the more politically connected Halliburton will receive a similar treatment. In this instance the status quo is likely to roll on.

Boeing’s position as the poster child of the new militarized economy shows for us the most characteristic practice within the military-industrial complex; the corruption of government, and the revolving doors of “public service” and “corporate greed”. Boeing’s tanker deal with the Air Force has become a major political scandal primarily because of the behavior of former Air Force contract negotiator Darleen Druyun and Boeing CFO Mike Sears. Druyun, who negotiated the deal on the behalf of the Air Force apparently did so with the intentions of getting Boeing the best deal possible, while raking the taxpayer’s for billions in inflated costs. Druyun supplied Boeing with information of rival bids form European Aeronautic Defense and Space, and used her power to win the inflated deal for Boeing. In return Boeing hired Druyun on as an executive shortly after the deal. Druyun had talked about the job at Boeing with Mike Sears during her time negotiating contracts for the DoD.

Speaking about the corrupt tanker deal and the conduct of Druyun, Sears, and Boeing, Lawrence Korb of the Center for American Progress (also a former DoD official) commented that; “This confirms the worst stereotypes of the military-industrial complex… The military and industry get together to generate requirements that may or may not be valid, and they award contracts in the best interest of the company as opposed to the country.” (1.) Unfortunately Korb’s description of Boeing’s conspiratorial dealings with the military miss the relevance entirely by saying the episode confirms a “stereotype”. The episode confirms a rarely revealed reality within the military-industrial complex, one that has spread to the upper echelons of the mainstream economy in recent years in the form of financial scandals and corruption in every sector from energy to communications, the stock exchange to mutual funds.

The foreign press has been much more truthful in its admission that the United States indeed continues to foster a military-industrial economy, wasting trillions in the process and eroding its own democratic institutions and ideals. The Straits Times of Singapore describes the situation with more honesty saying that, “the latest Boeing scandal has thrown light on the tight relations, lobbying and conflicts of interest between US arms builders and their top client, the Pentagon. Shady hiring of government officials, political and financial ties, fat contracts – the Boeing affair has only begun to reveal this sector’s ethical practices.” (2).

The ties between industry and the military are by far too vast and complex to explain here, but certainly with a swelling military budget, and an arms buildup surpassing even the Reagan administration, the American people are going to become familiar once again with the social and economic ills associated with the military-industrial complex. Boeing is the poster child and the prelude.

1. Chandler, Susan. “Email: Air Force Buyer in Tanker Deal Favored Boeing.” Seattle Times. December 11, 2003.
2. The Straits Times. “Boeing Scandal Exposes Cosy Ties Between Pentagon and Suppliers.” The Straits Times. December 10, 2003.
3. AP. “Pentagon Finds Halliburton Overcharged.” Associated Press. Washington D.C. December 11, 2003.