Picking on Halliburton

Halliburton's move from Houston to Dubai has aroused predictable concerns about security. Halliburton is known to be a major defense contractor, and the rulers of Dubai are undeniably Arabs, albeit Arabs who are demonstrably among America's closest allies. On one level, the announcement appears to have unleashed emotional Arab-bashing based on the same reservoir of bigotry and fear that scuppered the Dubai Ports World deal in February 2006.

On yet another level, however, the concerns appear to be misguided regarding which Halliburton businesses will actually move to the Middle East. Halliburton subsidiary Kellogg Brown and Root, or KBR, is the part of the company that deals with military contracting, and it is Halliburton's stated intention to spin KBR off from the parent company. If that actually occurs, it would mean that the Halliburton operating in Dubai would be primarily in the business of oil industry support, not Defense Department contracting. That Halliburton might be moving to escape taxes, regulation, or potential liability issues is a more relevant criticism, but the company does not differ substantially from other corporate bad citizens in that regard, seeking the cheapest and most trouble-free environment in which to conduct its business.

Halliburton has emerged as the poster child for much of what is wrong with the Bush administration because of its links to former CEO and current vice president of the United States Dick Cheney and because of KBR's incompetence and overbilling on defense-related projects in Iraq and elsewhere. KBR obtained a sweetheart $10 billion non-compete Pentagon contract for Iraq, and reports suggest that it assiduously overbilled and underperformed on the work it did, though it was far from unique in either regard. It has already paid the government some compensation for overbilling, and it reportedly continues to be the target of numerous government auditors who wonder where all the billions of dollars went.

But Halliburton and KBR are only symptoms of a much broader and deeper corruption that threatens more than the Pentagon's overgrown budget. In 1961, President Dwight D. Eisenhower, himself a former general, warned about the threat to the American Republic from what he described as the growing "military industrial complex." He deserves to be quoted at length:

"This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence – economic, political, even spiritual – is felt in every city, every state house, every office of the federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources, and livelihood are all involved; so is the very structure of our society.

"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."

Eisenhower saw the development of a symbiotic relationship between the Department of Defense and the defense contractors and politicians that would substantially alter the very nature of the United States, turning it from a country that went to war only reluctantly, where ploughshares could be beaten into swords and then back into ploughshares, to a country in which the political and social system would be in permanent thrall to a war economy and mentality. Eisenhower clearly understood that at a certain point, the defense contracting and the distinct economy that it fosters would gain control of the political process and would be able to dictate how the American people work and live. This process has come to fruition, and it has positively bloomed under the Bush administration, which now is speaking confidently of a "long war" that will last for generations.

But not even Eisenhower could have predicted how that military industrial complex would eventually form strategic alliances with foreign countries, support advocacy groups promoting perpetual war, and eventually bring about the downfall of the foreign policy consensus that has guided the United States since 1945. Nor would he have predicted just how the new order led by the so-called neoconservatives, largely funded by the defense industries, would be able to gain control of the federal government's decision-making process and lead the United States into a series of catastrophic wars, seemingly without end.

There is nothing benign about the arms industry. Companies that make armaments need war to be profitable. Constant war is even better, producing an unending flow of money. President George W. Bush's 2002 National Security Strategy [.pdf] is best of all – with its embrace of a vaguely defined preemptive war doctrine and the promise of a series of unilateral wars. To that end, the industry lobbies politicians to increase defense spending and supports ideologues with bellicose worldviews. Thus, the contractors who place full-page ads in leading newspapers featuring warriors using their weapons profit from the injury and death of American soldiers. If the national interest actually lies in peace, harmony, and international amity, as was envisioned by America's Founding Fathers, then the arms merchants are the enemy, however much they wrap themselves in the flag and proclaim themselves the arsenal of freedom.

The intentions of the defense contractors are clearly demonstrated by how they spend U.S. taxpayers' money. Few can doubt that think tanks and advocacy groups such as the American Enterprise Institute, the Project for a New American Century, the Hudson Institute, the Center for Security Policy, the Jewish Institute for National Security Affairs, and the National Institute for Public Policy led the rush to war against Iraq and are eager to do the same to Iran. Many of these think tanks receive funds from the five leading defense contractors – Boeing, Lockheed Martin, Northrop Grumman, Raytheon, and General Dynamics. On an individual level, many well-known neoconservatives have moved seamlessly between the contractors and the think tanks, filling their bank accounts along the way. They include all-too-familiar names such as William Kristol, Stephen Bryen, Richard Perle, Dov Zakheim, Robert Joseph, Douglas Feith, Paul Wolfowitz, and Frederick Kagan. Vice President (and former Secretary of Defense) Dick Cheney and former Secretary of Defense Donald Rumsfeld have done the revolving door one better, moving from senior government posts to senior executive positions with the defense contractors, where they made millions of dollars before moving back into government at the highest levels. All told, at least 43 former employees, board members, or advisers for defense contractors are currently serving or have recently served in policy-making positions in the Bush administration.

And there are also the international interests of the defense contractors, concentrated primarily in Israel. Former Undersecretary of Defense for Policy Douglas Feith's law firm, Feith & Zell, represented Lockheed Martin and Northrop Grumman, while Richard Perle's connection with Trireme Partners provided business connections for U.S. and Israeli defense contractors, enriching Feith and Perle in the process. Both Feith and Perle have worked as lobbyists for Turkey, a major recipient of U.S.-made weapons. The multilateral relationship involving U.S. contractors, Israel's defense industry, and former U.S. and Israeli government officials is both incestuous and apparently frequently beyond the rules that govern international arms sales. FBI whistleblower Sibel Edmonds has recently said that unsealing the Bureau's investigative reports on Perle, Feith, and former State Department number three Marc Grossman would reveal that they all engaged in what she describes as treasonous activity reportedly linked to illegal weapons sales.

The military industrial complex also sustains and feeds off the Bush administration's so-called "global war on terror," or GWOT. Most experts on terrorism would agree that the GWOT is largely a fiction created to simplify a multifaceted problem and heighten fear so that the flow of taxpayer money will continue unabated. Fighting terrorism worldwide, even where it does not exist, isn't cheap, particularly as the increasing reliance on contractors is much more expensive per man-hour than using full-time government employees. The $160 billion increase in the Pentagon budget since 2001 is dedicated to counter-terrorism (this number does not include Iraq and Afghanistan, which have been funded by separate appropriations). Add to that at least half of the intelligence budget ($20 billion) and at least half of the Department of Homeland Security budget ($20 billion). This means the astonishing sum of $200 billion, which does not include Iraq and Afghanistan, is being spent by the United States annually to deal with terrorism. No other country attacks terrorism in such a disproportionate fashion, and many of America's allies have successfully combated it using police and intelligence resources. If there are 5,000 active terrorists worldwide, and there are probably less than that, it would mean that the GWOT is costing the U.S. taxpayer $40 million per terrorist per year, with no end in sight. That's using an elephant to squash a fly. Considering that the fly can move a lot faster than the elephant, no victory is likely to happen soon, apart from the odd "Mission Accomplished" banner here and there.

The problem is bigger than you think