Saturday, December 17, 2016

Trump pick for Secretary of Defense is a general who is on the board of defense contractor General Dynamics

Donald Trump's pick for Secretary of Defense, retired Marine General James Mattis, has plenty of experience in the armed forces but also serves on the board of General Dynamics, a prime U.S. defense contractor.

Dwight Eisenhower in a farewell address in January of 1961 warned that for security and liberty to prosper together that Americans must guard against the growth of unwarranted influence by what he called the "military industrial complex". Yet that is what has been happening for some time in the U.S. A study by the Government Accountability Office (GAO) in 2008 found:
In 2006, 52 contractors employed 2,435 former DOD senior and acquisition officials who had previously served as generals, admirals, senior executives, program managers, contracting officers, or in other acquisition positions which made them subject to restrictions on their post-DOD employment.The GAO found that more than 400 of those former military personnel took private sector jobs where they competed for specific Pentagon contracts that they previously oversaw.
Mattis would be moving directly to his job from his position as one of 13 independent directors of General Dynamics, a company that relies heavily on Pentagon contracts that are overseen by the Defense Secretary. Financial filings show that Mattis has been paid $594,369 by General Dynamics. He also owns stock worth about $900,000. While on the General Dynamics board Mattis testified against caps on defense spending, calling sequestration a national security threat. He said in 2015: “No foe in the field can wreak such havoc on our security that mindless sequestration is achieving.” The Defense Department directs more than $250 billion worth of contracts to private companies each year. Richard Painter, former chief ethics counsel to President George W. Bush said: “General Dynamics could try to use this relationships to get access into the Pentagon.I am very worried about this.”
General Dynamics routinely ranks among the top five Pentagon contractors receiving over $10 billion in contracts each year. The company offers a wide range of services and products from information technology to armored combat vehicles. It is a main exporter of tanks to such US allies as Saudi Arabia and Egypt. The company has won a number of contracts to build a replacement fleet for present nuclear submarines costing up to $100 billion. The Center for Responsive Politics claims that General Dynamics has spent more than $100 million in lobbying over the last decade. Mattis will need to recuse himself from any decision involving General Dynamics for a period of year. But those below him would have no such prohibition. The law does not prevent Mattis from having close contact with General Dynamics.
In 2008, concern about the revolving door between the military and the corporate world resulted in the Pentagon being tasked with keeping a database to keep track of such connections. Six years later, an Inspector General's report found that the Pentagon simply failed to update its database. Mandy Smithberger, of the Project on Government Oversight said: “We really think it’s become corrosive how many senior military officers go to work for defense contractors."
While still part of the military in 2012, Mattis intervened to help the controversial blood-testing company Theranos to gain approval for military tests. On leaving the Marines he joined the Theranos board. Trump in his campaign pledged to tighten federal ethics rules and to slow down the revolving door between government and lobbying firms. However, the appointment of Mattis appears to signal that defense contractors can expect favorable relations with the government. Perhaps the Mattis appointment, plus Trumps' appointment of officials connected to Wall Street firms help explain the recent so-called Trump rally on stock markets.


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