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Featured, Foreign Policy, International, Politics

Defense Contractors Discuss ‘Benefits’ of Middle Eastern Conflicts

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Major defense contractors Lockheed Martin, Oshkosh and Raytheon appeared pleased this week as escalating conflicts in the Middle East were touted as a reason for investor optimism at a Credit Suisse conference in West Palm Beach.

While defense spending has been a target of budget cuts for the past few years dating back to the budget sequester, this trend was recently reversed with an October budget deal which included $607 billion in additional defense spending.

“Our programs are well supported [in the budget],” said Lockheed’s Executive Vice President Bruce Tanner at the conference. “We think we did fare very well.”

Wilson Jones, president of Oshkosh, noted that countries have shown interest in buying M-ATV armored vehicles made by the company due to “the ISIS threat growing.”

The situation on the ground in Syria and recent downing of a Russian aircraft by the Turkish military has brought defense spending to the forefront of presidential rhetoric. Meanwhile, defense contractors viewed the aircraft downing through a positive lens for their bottom line.

Presidential candidate and United States Senator Rand Paul (R-Ky.), an outspoken critic of defense spending, asked “how is it conservative to pass a trillion dollars in military expenditures?” during an exchange at the November 12th presidential debate. Paul’s criticism directly targeted a proposal by fellow 2016 candidate United States Senator Marco Rubio (R-Fla.), calling for a $1 trillion dollar increase over the next 10 years. Rubio is one of several candidates calling for large scale increases in defense spending.

The perceived need for the U.S. military to operate stealth aircraft like the Lockheed Martin-made F-22, combined with increases in spending by other regional powers like Saudi Arabia and the United Arab Emirates on munitions and other systems for use in operations in Yemen, give defense manufacturers even more reason for a positive outlook.

Given this volatility in the region, the environment also promises to provide a boost for candidates in both parties who can leverage hawkish rhetoric and calls for increased U.S. involvement in the Middle East.

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International, Politics, US

John Kerry’s War: Syrian Strike Means Big Money for Lawmakers

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The Department of Defense’s missile and munitions budget is $9.2 billion so a missile strike on Syria means a big payout for defense companies like Raytheon and Boeing.

According to DefenseNews.com, the planned Syria strike wouldn’t be cheap. “A cruise missile strike against Syria could cost the Pentagon hundreds of millions of dollars in weapons,” according to experts and government documents.
A report by the Department of Defense states that the unit cost of a Tomahawk tactical missile costs $1.5 million.

Barack Obama, the Nobel Peace prize winning president just added the Syrian people to his kill list this summer and it is a defense contractor’s dream come true. Wall Street has rewarded their lobbying efforts with a positive uptick.

Raytheon Stock

For example, according to Reuters, Raytheon generates more of its revenues overseas than any other large U.S. weapons maker. It has forecast a 20-percent increase in foreign bookings in 2013.

Congress loves the defense industry too because of their lobbying efforts and campaign contributions.

The defense sector’s biggest companies include Center for Responsive Politics “Heavy Hitters” Lockheed Martin, Boeing and General Dynamics, as well as Northrop Grumman and Raytheon.

One of the major recipients of the defense sector campaign contributions went to Sen. John Kerry (D) who was confirmed Secretary of State on Jan 29, 2013.

Recently, Kerry went to the Middle East and praised a $2.1 billion Raytheon deal in Oman.

Kerry thanked them for their decision to buy the ground-based air defense system from the Massachusetts company. “We’re very excited about that and very grateful for your confidence in Raytheon,” Kerry said.

According to Reuters, “an official, who spoke on condition of anonymity, said the $2.1 billion deal included these elements – which are being funded with the help of U.S. government financing – as well as other items that Oman is buying directly from the arms maker.”

On January 8, 2013, Kerry pledged to sell stocks that would be considered a conflict of interest. This included his Raytheon stock. See document

However, according to Legistorm.com, Kerry’s most recent statement does not list Raytheon shares as being sold according to the February 8, 2013 financial disclosure. See document here.

The U.S. Office of Government Ethics (OGE) certifies that government officials comply with these pledges, however, no report on Kerry has been published on their website. No one from the OGE has responded to our request as of this publication to show proof that he sold those particular stocks.

The Middle East crisis means lucrative business opportunities for defense contractors, and the demand never seems to end.

The U.S. taxpayer gives $50 billion dollars to foreign aid a year and most of this goes into the pockets of defense contractors who in return fund both political Parties in America through aggressive lobbying efforts.

For the rest of world, the real “shock and awe” is observing the indifference of Americans who lack the courage and political will to end this vicious cycle.