The United States of Boeing

The U.S. has, slowly, since the beginning of the twentieth century, become a giant weapons factory. A partnership between massive private firms and government exists, all funded by the U.S. taxpayer.

One of the largest such firms is Boeing. Boeing’s history mirrors that of the U.S. at large. Begun as a manufacturer of civilian aircraft, Boeing has, through mergers and takeovers, metamorphosed into a contractor of what it terms “Integrated Defense Systems.” The U.S., begun as a rejection of coercive domination by a foreign nation, is now the world’s lone “superpower,” a position attained and maintained by coercive domination of foreign nations.

How big is Boeing? According to this article, Boeing is the biggest aerospace company in the world, employing 200,000 people in 27 states and several foreign countries. This year, for the first time, Boeing is expected to earn more revenue from its “defense” business than from civilian aircraft. Some well-known projects Boeing has been involved in are the disastrous V-22 Osprey helicopter, and the over-budget, overdue F/A-22 Raptor “stealth” fighter.

Boeing has been involved in several high-profile scandals in recent years. The most recent began when Alaska Sen. Ted Stevens (R) inserted an item in an appropriations bill in September 2001, following the 9/11 attacks. The item called for the Air Force to lease one hundred 767 tankers from Boeing. Immediately criticized by Sen. John McCain (R-Ariz.), it ballooned into a scandal which cost Boeing’s chief executive, Phil Condit, his job. It also cost Air Force Secretary James Roche a possible promotion. What was the scandal? As Joseph L. Galloway reported in the Detroit Free Press:

“The Air Force gave the Boeing Co. five months to rewrite the official specifications for 100 aerial refueling tankers so that the company’s 767 aircraft would win a $23.5-billion deal, according to e-mail and documents.

“In the process, Boeing eliminated 19 of the 26 requirements the Air Force originally specified, and the Air Force acquiesced in order to keep the price down.

“The Air Force then gave Boeing’s competitor, Airbus, 12 days to bid on the project and awarded the contract to Boeing even though Airbus met more than 20 of the original 26 specifications and offered a price that was $10 billion less than Boeing’s.”

Rick Anderson has done a series of articles for the Seattle Weekly exposing Boeing’s “ethical failures.” Anderson reported in December 2003 that “in the past five years under Condit, Boeing racked up more than $100 million in fines and settlements for federal violations.”

No problem, since Boeing’s revenues run into the tens of billions every year. Most of these ethical violations involve documents stolen from both governments and Boeing’s competitors, and bribes to government officials. What’s the difference between a bribe and a campaign contribution? According to,

“In the 1999-2000 election cycle, Boeing gave $1.9 million to federal parties and candidates. The money was divided almost equally between Democrats and Republicans. Through June 2001, Boeing contributed $468,000 to federal parties and candidates; 58 percent of the money has gone to Republicans and 42 percent to Democrats.

“Sen. Ted Stevens (R-AK), a major proponent of the 767 lease deal, has received $3,000 from Boeing this year. In the 2000 election cycle, Boeing contributed $10,000 to Stevens’ candidate committee and $1,000 to Stevens’ Northern Lights PAC.

“Boeing’s federal lobbying expenditures hit $7.8 million in 2000. (Boeing spent $7.4 million on lobbying in 1999.) In the first half of 2001, Boeing spent $3,783,310 lobbying Congress and federal agencies and employed 39 lobbyists. Nine lobbying firms – plus company lobbyists – are representing the company in 2001. Lobbyists include former Sen. Bennett Johnston (D-LA).”

Airbus never stood a friggin’ chance! This is a full-throttle application of the military-industrial complex, which President Eisenhower identified in his farewell address on Jan. 17, 1961:

“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.”

Ike hadn’t seen anything. Here’s how the complex works: Defense contractors “lobby” (bribe) Washington politicians – since war is politics continued through violent means, politicians start wars which require increased “defense” (attack) spending on the “defense” contractors (merchants of death), and the circle is completed. This has been very profitable for Boeing, particularly since the beginning of the 1990s, when Boeing decided to diversify their business, first acquiring defense contractor Rockwell International and then merging with McDonnell Douglas. Boeing is always very high on the Fortune 500 list, but Boeing isn’t the world’s largest defense contractor.

And Then There Was Lockheed Martin

The biggest merchant of death in the world is Lockheed Martin. The firm became famous in the 1950s for building two great spy planes, the U-2 and the SR-71. By 1970 however, the firm was nearing collapse. In rolled Uncle Sam with a $250 million “bailout.” BusinessWeek Online reported:

“Beset by cost overruns, inflation, and lack of demand for a new jetliner, the L-1011, Lockheed Corp. asked Congress for support. The aerospace giant argued that should it fail, its demise would not only imperil the nation’s defense and leave 60,000 workers unemployed, it would also ground commercial airlines that had paid Lockheed for future aircraft. After a contentious debate, lawmakers approved $250 million in loan guarantees. The turnaround was anything but smooth: Revelations that Lockheed had paid foreign bribes compelled the feds to oust two top execs and closely scrutinize Lockheed’s activities.”

According to G. Edward Griffin’s The Creature from Jekyll Island, the U.S. government essentially purchased a controlling interest in Lockheed. Is it any surprise then, that Lockheed is now the biggest defense contractor in the U.S.? At the time of the bailout, Lockheed, which has since merged with Martin Marietta, employed 60,000 people. Today, it employs 130,000 in several countries. It has “939 facilities in 457 cities and 45 states throughout the U.S.; internationally, business locations in 56 nations and territories.” Is that all? In better shape than the ethically challenged Boeing, Lockheed hasn’t been without an ethics scandal itself.

Back to those mergers. In 1993, the Pentagon decided to grant money to defense contractors who wished to merge. Predictably, countless mergers have since occurred, with the taxpayers picking up the tab in each case. In a 1997 study for the Cato Institute, Dean Stansel chronicled the breathless spate of mergers which occurred in just a few years following the policy change:

“Numerous mergers and acquisitions have subsequently taken place. The newly formed Lockheed Martin acquired Loral. Boeing acquired Rockwell International and soon thereafter merged with McDonnell Douglas. Northrop Grumman acquired Vought, and Raytheon has recently merged with Hughes.”

Stansel knocked down the contractors’ arguments in favour of the “corporate welfare”:

“The claim that defense-merger subsidies will save millions of taxpayer dollars ignores a key factor: the role of competition in keeping down costs and encouraging innovation. … Does anyone believe that the Pentagon will be able to get better value for the taxpayers’ dollars if there is only one company, rather than four, from which to purchase missiles?

“[M]ilitary contractors should not be exempt from marketplace pressures to keep overhead costs low. If market conditions require defense contractors to merge in order to survive, then they should do so. It is nonsense to argue that because those mergers may save taxpayers money, taxpayers should subsidize them.

“If two defense contractors decide that merging makes sense economically and is in their shareholders’ interest, then they should do so. However, if those two firms conclude that merging would be unwise, then they certainly should not do so. Instead, the Pentagon’s policy says to those two companies, go ahead and merge, we’ll make the taxpayers pick up the tab. …

“[W]e hear the constant refrain that we ‘cannot afford’ tax cuts. If we cannot allow taxpayers to keep more of their own earnings, how can we possibly afford to give away hundreds of millions of their tax dollars to huge corporations that decide to merge?”

Making taxpayers pick up the tab is one area where the merchants of death have become ever more efficient. Paying off politicians, stealing documents, building dangerously sub-standard equipment and over-charging for it – hey, it’s all in a day’s work. There are many more defense contractors, such as Northrop Grumman, on the Fortune 500 list. All are ethically questionable to say the least, but they are just going where the money is; they manipulate and are manipulated by a political system that’s up for sale.