Ike's worst fears realized - SAIC and the MIC takeover of government

[JohnyCanuck]

Washington's $8 Billion Shadow
Mega-contractors such as Halliburton and Bechtel supply the government with brawn. But the biggest, most powerful of the "body shops"—SAIC, which employs 44,000 people and took in $8 billion last year—sells brainpower, including a lot of the "expertise" behind the Iraq war.

by Donald L. Barlett and James B. Steele (Vanity Fair)

SNIP

To be sure, there isn't really such a corporation: the Omnivore Group, as it might be called. But if there were such a company—and, mind you, there isn't—it might look a lot like the largest government contractor you've never heard of: a company known simply by the nondescript initials SAIC (for Science Applications International Corporation), initials that are always spoken letter by letter rather than formed into a pronounceable acronym. SAIC maintains its headquarters in San Diego, but its center of gravity is in Washington, D.C. With a workforce of 44,000, it is the size of a full-fledged government agency—in fact, it is larger than the departments of Labor, Energy, and Housing and Urban Development combined. Its anonymous glass-and-steel Washington office—a gleaming corporate box like any other—lies in northern Virginia, not far from the headquarters of the C.I.A., whose byways it knows quite well. (More than half of SAIC's employees have security clearances.) SAIC has been awarded more individual government contracts than any other private company in America. The contracts number not in the dozens or scores or hundreds but in the thousands: SAIC currently holds some 9,000 active federal contracts in all. More than a hundred of them are worth upwards of $10 million apiece. Two of them are worth more than $1 billion. The company's annual revenues, almost all of which come from the federal government, approached $8 billion in the 2006 fiscal year, and they are continuing to climb. SAIC's goal is to reach as much as $12 billion in revenues by 2008. As for the financial yardstick that really gets Wall Street's attention—profitability—SAIC beats the S&P 500 average. Last year ExxonMobil, the world's largest oil company, posted a return on revenue of 11 percent. For SAIC the figure was 11.9 percent. If "contract backlog" is any measure—that is, contracts negotiated and pending—the future seems assured. The backlog stands at $13.6 billion. That's one and a half times more than the backlog at KBR Inc., a subsidiary of the far better known government contractor once run by Vice President Dick Cheney, the Halliburton Company.

It is a simple fact of life these days that, owing to a deliberate decision to downsize government, Washington can operate only by paying private companies to perform a wide range of functions. To get some idea of the scale: contractors absorb the taxes paid by everyone in America with incomes under $100,000. In other words, more than 90 percent of all taxpayers might as well remit everything they owe directly to SAIC or some other contractor rather than to the IRS. In Washington these companies go by the generic name "body shops"—they supply flesh-and-blood human beings to do the specialized work that government agencies no longer can. Often they do this work outside the public eye, and with little official oversight—even if it involves the most sensitive matters of national security. The Founding Fathers may have argued eloquently for a government of laws, not of men, but what we've got instead is a government of body shops.

The unhappy business practices of the past few years in Iraq—cost overruns, incompetence, and corruption on a pharaonic scale—have made the American public keenly aware of the activities of mega-contractors such as Halliburton and Bechtel. Although SAIC takes on government projects such as those pursued by contractors like these, it does not belong in exactly the same category. Halliburton and Bechtel supply the government's brawn. They pour concrete, roll out concertina wire, build infrastructure. They call on bullnecked men to provide protection.

In contrast, SAIC is a body shop in the brain business. It sells human beings who have a particular expertise—expertise about weapons, about homeland security, about surveillance, about computer systems, about "information dominance" and "information warfare." If the C.I.A. needs an outside expert to quietly check whether its employees are using their computers for personal business, it calls on SAIC. If the Immigration and Naturalization Service needs new record-keeping software, it calls on SAIC. Indeed, SAIC is willing to provide expertise about almost anything at all, if there happens to be a government contract out there to pay for it—as there almost always is. Whether SAIC actually possesses all the expertise that it sells is another story.

http://www.vanityfair.com/politics/features/2007/03/spyagency200703

Found this link at http://rosecoveredglasses.blogspot.com/

From their web site: "Rose Covered Glasses" is a serious essay, satire and photo-poetry commentary from a group of US Military Veterans in Minnesota

[Joanne98]

1. Very important! K&R!

[thunder rising]

2. SAIC is welfare for the cronys. There contracts are not very involved but they pay a lot of money.

GPS mapping (walking or driving with a GPS sensor). Uses of well-known technology in well known ways that would not normally require a clearance, but that's the welfare system of the 101-keyboardists. So, favored ex-military are granted clearances where "left wingers" are denied.

Fuck SAIC. They WILL be out of business when the oversight comes.

[kstewart33]

3. I own stock in SAIC, and I'm not a crony.

My mother worked there for 20 years or so, rising from an everyday secretary to full Vice President. Her colleagues were military types and Ph.D's. I came to know the company very well. Sure, there's some bad apples in the basket, but geez, is that story overblown.

Every company that does defense work is not corrupt. Stereotypes are for idiots.

[JohnyCanuck]

4. As I see it

The whole fricking system is corrupt and rotten and it's getting worse. You have more and more contractors having an easier and easier job of ripping of the US taxpayers and making it easier and easier for politicians to start unnecessary and illegal (but very profitable for the "defense" contractors) wars.

"To amass military power without regard to our economic capacity would be to defend ourselves against one kind of disaster by inviting another." -- President Dwight D. EisenhowerÕs first State of the Union address, 1953.

MILITARY-INDUSTRIAL COMPLEX STILL CENTRAL TO REPUBLICAN WAR MACHINE
By Bill Gallagher

SNIP

Bush's proposed 2009 budget, a record $3.1 trillion, would raise military spending to inflation-adjusted levels not seen since World War II. The plan is to spend three-quarters of a trillion dollars, more than the combined military spending of every other nation on earth. Yet again, Bush's budget does not include the $140 billion needed to fund the wars in Iraq and Afghanistan for another year.

While troops fighting in those wars have had to cope with lack of armor and equipment shortages, and medical care for a disabled soldier is often inadequate, no money is ever spared for fat-cat military contractors.

I refuse to call them "defense contractors," because the term supports the myth that pouring billions of taxpayer dollars into their corporate coffers necessarily adds to our national defense and security. It doesn't.

Last Thursday, National Public Radio's Guy Roz did an excellent report slugged "What Drives Record Spending on Defense?" With the kind of in-depth reporting you'll rarely find in mainstream media broadcasting, Roz examined the reality of the Pentagon budget and the political forces behind it. He used the F-22 fighter jet as an example of the kind of boondoggle that seems to live on forever. The plane costs $300 million a pop, and Lockheed-Martin, the nation's biggest military contractor, is still churning them out.

Over the last 25 years, Lockheed has raked in $60 billion producing the F-22. Many members of Congress argue we need this weapon to keep us safe from Muslim jihadists. In fact, the F-22 has not been involved in one sortie in either Afghanistan or Iraq.

Miriam Pemberton, a research fellow at the Institute for Policy Studies, told NPR that many weapons systems "have no real value for any counter-terrorism operations. You know, al-Qaeda and the Taliban have no fighter jets and they're never going to get any. So these big-ticket items drive the budget and become, de facto, our security priorities when they don't, in fact, enhance our security."

Lockheed-Martin's political action committee has pumped millions of dollars into Republican campaigns, along with quite a few Democratic campaigns. The return on the investment is enormous.

SNIP

Dwight Eisenhower was the only general to serve as president in the 20th century, and no one knew better how wasteful military spending could be. When he took over as president, Ike had the guts to slash Pentagon spending and famously warned in his farewell address of the dangers of "the military-industrial complex." Eisenhower worried that reckless military spending would harm the economy and curse the nation with debt.

"What Eisenhower said was true then. It's just that now, it's ten times more true," Winslow Wheeler, the director of the Straus Military Reform Project, told NPR.

Bush wants to cut spending for Medicare and other domestic programs. That's as he prepares to throw even more money to the military contractors to build and sell unneeded weapons to the government and make unconscionable profits in the process.

Bush plans to do this with more debt, burdening wage-earning, working-class Americans.

http://www.niagarafallsreporter.com/gallagher352.html

Here is how one US veteran and defense industry insider sees it:

Ken Larson:

I am a 2 tour Vietnam Veteran who recently retired after 36 years of working in the Defense Industrial Complex on many of the weapons systems being used by our forces as we speak.

Politicians make no difference.

We have bought into the Military Industrial Complex (MIC). If you would like to read how this happens please see:

http://www.vanityfair.com/politics/features/2007/03/spyagency200703

http://www.vanityfair.com/politics/features/2007/11/halliburton200711

Through a combination of public apathy and threats by the MIC we have let the SYSTEM get too large. It is now a SYSTEMIC problem and the SYSTEM is out of control. Government and industry are merging and that is very dangerous. (my emphasis added here /JC)

There is no conspiracy. The SYSTEM has gotten so big that those who make it up and run it day to day in industry and government simply are perpetuating their existance.

http://barbadosfreepress.wordpress.com/2008/02/12/dwight-eisenhower-barbados-diapers-and-communist-chinas-military-industrial-complex/#comments
(page down to comment #6 by Ken Larson)

[kstewart33]

5. For many, many years SAIC has been totally employee owned.

No stock traded on the market, compensation tied to performance for everyone.
Everyone in the company owns stock. This is exceptionally rare for a defense-oriented company.

Two years ago, SAIC went public on a limited basis because they needed $$$ for expansion and R&D development.

Today, you can buy SAIC stock, but relatively few shares are available.

SAIC is a great company, ranking near the top of their industry every year in Fortune's best run companies list.

Let's stop the stereotyping and replace it with knowledge.

[leveymg]

6. "SAIC is a great company" - maybe if you work for them

Here's some data from SourceWatch on SAIC. Looks like the company is very active in the opinion spinning business. Can you hack that fact? http://www.sourcewatch.org/index.php?title=Science_Applications_International_Corporation

Lost contract
In July 2006 the U.S. military "removed two firms from a psychological operations contract aimed at influencing international public opinion," reports the Washington Post. "The firms, plus a third company (SYColeman) that will retain the contract, spent the past year developing prototypes for radio and television spots intended for use in Iraq and in other nations... The TV and radio contract, originally worth up to $300 million over five years, had been held by three firms since last year: the Lincoln Group; San Diego-based Science Applications International Corp.; and Arlington-based SYColeman, a subsidiary of New York-based L-3 Communications Corp. ... 'We learned that working with three companies increases expenditures in both time and money and does not provide best value to the government," said Lt. Col. David Farlow, spokesman for the military's psychological operations unit. Lincoln Group spokesman Bill Dixon said in a statement yesterday that the firm 'continues to win contracts' for Pentagon propaganda, but 'because confidentiality is vital to this work, the firm will not comment on the details of any contracts.' " <5>

Iraq work
"SAIC executives have been involved at every stage ... of the war in Iraq," from pushing WMD claims to helping "investigate how American intelligence could have been so disastrously wrong," described Vanity Fair in its March 2007 issue. <6> The Center for Public Integrity summarized SAIC's Iraq work as "to provide experts and advisers on development of representative government in Iraq; restore and upgrade the country's broadcast media; and provide a group of Iraqi expatriates to assist coalition officials working in the country." <7>

Under "yet another no-bid contract," SAIC created the Iraqi Media Network, supposedly a "free and independent indigenous media network" that quickly became "a mouthpiece for the Pentagon." Eventually, "the network was turned over to Iraqi control. Today it is a tool of Iraq's Shiite majority and spews out virulently anti-American messages." Moreover, SAIC's work on the Iraqi Media Network was criticized by the Pentagon's Inspector General as having "widespread violations of normal contracting procedures." <8> <9>

Spinning Wikipedia
According to the WikiScanner program, which maps anonymous edits made on the online encyclopedia Wikipedia, people on SAIC computers have made hundreds of anonymous Wikipedia edits. They include, on the w:American Civil Liberties Union Wikipedia article:

Adding: "he ACLU's real mission is to create a Eugenicist Communist society based on principles of Anarchy against the will of the American people"; <10>
Adding: "The ACLU is trying to destroy America," and listing five examples, including representing members of the "North American Man/Boy Love Association." <11>
And on the "w:Skynet (fictional)" Wikipedia article, removing several paragraphs under the "Trivia" section having to do with actual British military satellites named "Skynet," along with other examples of real Skynets (mostly computer-related). <12>

Personnel
According to an August 16, 2003 report by Katrin Dauenhauer and Jim Lobe, SAIC's personnel include:

Christopher Ryan Henry, SAIC's corporate vice president for strategic assessment and development, who previously worked at the the Pentagon as deputy undersecretary of defense for policy, serving with Under Secretary of Defense for Policy Douglas Feith.
Retired Admiral William A. Owens, a former vice chairman of the U.S. Joint Chiefs of Staff "who also served as SAIC's president and CEO and is currently its vice chairman."
David Kay, the former UN weapons inspector who was hired by the Central Intelligence Agency in June 2003 to head the effort to track down Iraqi weapons of mass destruction. <13>
Former employee Ali Dabiri.

[JohnyCanuck]

7. Thanks for posting that information on SAIC.

This is a youtube video snipped from the documentary "Why We Fight":

http://www.youtube.com/watch?v=pAKRCZE1Rug

It explains how Dick Cheney as Secretary of Defense helped the MIC grab and even bigger hold on government. When Dick Cheney was Secretary of Defense the Defense Department arranged for a contract to Kellogg Brown and Root for KBR (a Halliburton subsidiary) to perform a study to see if the Pentagon should contract out even more of its services to contractors. Knock me down with a feather if the answer didn't come back from KBR, "Yes, by all means. This is a terrific idea." The suggestions and proposals in the KBR report were immediately put into effect. Knock me down with a feather for the second time when Cheney, after leaving government service, goes to work (at a substantial salary/benefit increase) for the same company he, as Secretary of Defense, ensured got many lucrative government contracts. However, the Dick's behavior in jumping from government service to very well recompensed work for the same corporation he helped gain government contracts is nothing unusual, as it is apparently standard operating procedure within the MIC today. A spokesman from the Center for Public Integrity calls it a "system of legalized corruption."

As Lt. Col Karen Kwiatowski USAF (Ret) points out in the video, this merging of interests between the Pentagon and corporations makes it much easier to go to war. The goal of all corporations is to make as much money for their shareholders as possible and war is an extremely profitable business for the war contractors as we have seen over the last few years.

As the MIC becomes a bigger and bigger part of the economy, more and more Americans depend on MIC profits for salaries, pensions, investment income etc.. When the MIC is criticized they perceive it as a threat to their own economic interest and will be happy to close their eyes to the excess and corruption and the dealing in death in order to keep living off the war machine gravy train. For God's sake, the US already spends more than the rest of the world combined on "defense" spending and no politician in the US can get elected by promising to cut defense spending. However,much of the money for these missiles, bombs, tanks, F 22s, and cost plus contracts to the likes of SAIC, Halliburton, Blackwater, KBR is being borrowed from overseas (especially from China) by the US going into ever more debt. As the saying goes, the borrower is servant to the lender. It is ironic that those who strenuously defend and support these rapacious, war profiteering corporations because they are "strong on defense" are in the long run harming their own county's interest by helping to send the US economy into the toilet and laying an enormous burden of debt on their children and grandchildren that it is doubtful they even will be able to repay.

The entire documentary "Why We Fight" is avaiable for viewing on line here: http://www.freedocumentaries.org/index.php?ct=21

[bobthedrummer]

8. Well, there is a "corporate culture" in every organization-and some of them are criminal. n/t

[JohnyCanuck]

9. "...the dirty secrets of Iraq war profiteering keep pouring out."

Inside the world of war profiteers
From prostitutes to Super bowl tickets, a federal probe reveals how contractors in Iraq cheated the U.S.

By David Jackson and Jason Grotto | Tribune reporters
February 21, 2008

ROCK ISLAND, Ill.—Inside the stout federal courthouse of this Mississippi River town, the dirty secrets of Iraq war profiteering keep pouring out.

Hundreds of pages of recently unsealed court records detail how kickbacks shaped the war's largest troop support contract months before the first wave of U.S. soldiers plunged their boots into Iraqi sand.

The graft continued well beyond the 2004 congressional hearings that first called attention to it. And the massive fraud endangered the health of American soldiers even as it lined contractors' pockets, records show.

Federal prosecutors in Rock Island have indicted four former supervisors from KBR, the giant defense firm that holds the contract, along with a decorated Army officer and five executives from KBR subcontractors based in the U.S. or the Middle East. Those defendants, along with two other KBR employees who have pleaded guilty in Virginia, account for a third of the 36 people indicted to date on Iraq war-contract crimes, Justice Department records show.

SNIP

In one case, a freight-shipping subcontractor confessed to giving $25,000 in illegal gratuities to five unnamed KBR employees "to build relationships to get additional business," according to the man's December 2007 statement to a federal judge in the Rock Island court. Separately, Peleti named five military colleagues who allegedly accepted bribes. Prosecutors also have identified three senior KBR executives who allegedly approved inflated bids. None of those 13 people has been charged.

http://www.chicagotribune.com/news/nationworld/chi-kbr-war-profiteers-feb21,1,5231766.story?page=1