New World Disorder: Arms Dealers Profit from War on Terror

New World Disorder: How U.S. Arms Dealers and Their Cabinet-Level Cronies Profit from the War on Terror
By Brian Awehali
Lip Magazine
November 11, 2002

What's wrong with this picture?
The world's lone superpower, fearful of being attacked by one of many real or perceived enemies, sets out to solve the problem by increasing weapon sales and military aid to the world. But the sales and aid aren't just made available to existing allies; indeed in the wake of Sept. 11th, the race is on to arm governments formerly considered unstable or otherwise "off-limits" due to gross human rights violations, on grounds that these nations are assisting in the sweeping "war against terrorism."

If that sounds illogical, then perhaps you're beginning to understand the perverse logic that pervades the U.S. arms industry. After Sept 11th, the industry has - with the support of the Bush Administration - stepped up its efforts to further reduce oversight and regulation of arms sales and military aid. This, despite a clear track record of providing weapons to the very forces now portrayed to a frightened public as threats.

In the process, the administration is apparently jettisoning efforts to use military aid as a carrot to encourage the advancement of human rights. In the past year, restrictions on military aid and arms sales to formerly off-limits regimes have largely been eliminated. Of the 67 countries which have received or are set to receive U.S. military aid, 32 have been identified by the State Department as having "poor" or worse human rights records.

"Two key [FY2002] Defense Department funding allocations - $390 million to reimburse nations providing support to U.S. operations in the war on terror and $120 million 'for certain classified activities,'" according to a report in the Arms Sales Monitor (Aug. 2002), can now be delivered "notwithstanding any other provision of the law."

In other words, Congress has approved a staggeringly large sum of military aid for regimes fighting an ill-defined "war on terror," and is working to ensure that there will be little or no public scrutiny of how such aid is spent.

The central question is: does this make the world a safer place for anyone but arms manufacturers and the politicians who love them?

Conflicts of Interest

From 1991 to 2000, the U.S. delivered $74 billion worth of military equipment, services and training to countries in the Middle East, according to a Sept. 2002 General Accounting Office (GAO) report. You might expect that a majority of that military aid went to our staunch ally in the region, Israel, which has been cited repeatedly by the U.N. and Amnesty International for human rights abuses. However, military aid to Saudi Arabia - where a majority of the terrorists reported to be involved in the Sept 11 attacks were from - topped $33 billion for the period, outpacing aid to Israel by a more than 5-to-1 margin.

What's more, there is ample evidence that arms sales to the Middle East are, in fact, destabilizing and dangerous.

"Foreign [military] assistance to the Middle East," noted West Virginia Democratic Senator Robert Byrd in 2001, "virtually ignores the spiraling violence in the region."

In a November 9, 2001 interview with Pakistan's Ausaf newspaper, none other than Osama bin Laden justified the Sept. 11 attacks by noting that the U.S. sells advanced weaponry to Israel, which is in turn used in the military occupation of Palestinian territories. Bin Laden was specifically discussing the sale of Lockheed Martin's F-16 fighter planes. It's worth noting that Lynne Cheney, the wife of Vice-President Dick Cheney, was on the board of Lockheed Martin from 1994 until 2001, and would have been involved in overseeing this sale.

On July 13, 2002, the New York Times also reported that Vice President Dick Cheney's former employer, the Halliburton Company, is "benefiting very directly from the United States' effort to combat terrorism." From building cells for detainees at Guantanamo Bay ($300 million) to feeding American troops in Uzbekistan, the Times reported, "the Pentagon is increasingly relying on a unit of Halliburton called KBR, sometimes referred to as Kellogg Brown & Root." KBR is the "exclusive logistics supplier for both the Navy and the Army, providing services like cooking, construction, power generation and fuel transportation."

And then there's the Carlyle Group, described by the The Industry Standard as "the world's largest private equity firm," with more than $12 billion in assets. A Washington merchant bank specializing in buyouts of defense and aerospace companies, the Carlyle Group stands to make a substantial sum of money from a global "war on terror." Former U.S. President George Bush, Sr. - whom current President Bush is known to consult about policy matters almost daily - works for the firm. According to the Baltimore Sun, so do former Secretary of State James Baker III and former Bush Sr. campaign manager Fred Malek. Former Republican Defense Secretary Frank Carlucci (a college roommate of Defense Secretary Donald Rumsfeld), is the Carlyle Group's chairman and managing director.

The bin Laden family, hailing from Saudi Arabia, is also heavily invested in the Carlyle Group. On Sept. 27, 2001, the Wall Sreet Journal published an article entitled "Bin Laden Family Could Profit From Jump in Defense Spending Due to Ties to U.S. Bank." The "bank" in question? You guessed it: the Carlyle Group.

Cold War Communism vs. New World Terrorism

One of the more disturbing aspects of post-9/11 arms sales is the wanton redefinition of various dissident groups around the world as "terrorists." Even longstanding conflicts such as the 38-year-old civil war in Colombia have been re-cast as a war between our Colombian allies and "terrorists." In the Phillipines, "counter-terrorism aid" has been released to fight a band of Islamic militants, the Abu Sayyaf Group (ASG), despite the fact that even government analysts admit the ASG poses no credible threat to the U.S. In Nepal, counter-terrorism aid has been allocated to help the Nepalese military quell Maoist dissent, despite State Department testimony that there's no evidence that these dissidents are connected to al-Qaeda.

Military aid flowing to Central Asia under the auspices of fighting terrorism seems equally ill-justified, with virtually every country in the region receiving increases in U.S. military aid despite connections to the war on terrorism that are, at best, tenuous.

What seems clear from a close look at military aid policy over the past year is that the U.S. military is using the threat of terrorism to garner support for its ambitious goals for extending its reach around the world, and that it doesn't mind arming unstable or anti-democratic regimes in the process.

The "weapons against terror" rationale is strained even further by a 2001 report released by the Centre for Defense Information, an independent non-profit research group. The report, entitled "US Arms Exports to Countries Where Terror Thrives," found the following:

"There are 28 terrorist groups currently operating in 18 countries, according to the State Department's bi-annual list of active foreign terrorist organizations....In the period of 1990-1999, the United States supplied 16 of the 18 countries on the State Department list with arms.....In addition, the U.S. military (and CIA) has trained the forces of many of these 18 countries in U.S. war fighting tactics, in some cases including individuals now involved in terrorism."

In sum, the U.S. has sold weapons or training to almost 90% of the countries it has identified as harboring terrorists. A severe restructuring of U.S. arms export policy is in order, but little or nothing is being done to ensure a safer future.

Guns and History in the Middle East: Why Insecurity Sells

Perhaps nowhere is the correlation between arms sales and violence more apparent than in the Middle East, where the U.S. sells an enormous amount of weapons.

According to an August 6, 2002 congressional report on arms sales to developing countries, "The Persian Gulf War....played a major role in further stimulating already high levels of arms transfer agreements with nations in the Near East region. The war created new demands by key purchasers such as Saudi Arabia, Kuwait, the United Arab Emirates, and other members of the Gulf Cooperation Council (GCC) for a variety of advanced weapons systems."

"The Gulf states' arms purchase demands," the report continued, "were not only a response to Iraq's aggression against Kuwait, but a reflection of concerns regarding perceived threats from a potentially hostile Iran."

The U.S. dominated the arms market in the region from 1994-2001, selling more than $13 billion worth of weapons to Bahrain, Egypt, Israel, Jordan, Kuwait, Lebanon, Saudi Arabia and the United Arab Emirates. Russia and China also sold $8 billion worth of weapons to Iran, Algeria, Syria, Yemen, and Libya. Judging by numbers alone, it's hard to miss the parallels to Cold War-era geopolitical strategy.

Also hard to miss is the profit motive. 2001 marked a slump for arms dealers, as sales to developing nations dropped 43%, according to a Congressional Research Service (CRS) report. Peace, obviously, is not good business for the "defense" industry.

Why would countries siphon money from all manner of social programs in order to purchase expensive weapons systems if they didn't feel threatened? The reason has more to do with insecurity than fiscal logic, as evidenced by the fact that Israel, despite a declining economy, was the number one U.S. arms importer in 2001, purchasing, among other weapons, 52 F-16 fighter jets and six Apache helicopters.

Given that Israel has repeatedly violated international humanitarian law with its advanced U.S. weapons systems, it's clear that profits - and geopolitical advantage - trump human rights when it comes to selling weapons.

Focusing on the War, Not the Battle

"Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed," proclaimed former U.S. President Dwight Eisenhower. "The world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children... This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron."

Fifty years later, the figures seem to back Eisenhower up. The 2002 Federal Military Budget stands at a mind-boggling $343 billion. Consider that the same budget allocates a comparatively paltry $39 billion to children's health, $6 billion to the Headstart program, and $1 billion to combat world hunger. It's estimated that it would cost just $6 billion a year - or approximately 1/57th of the military budget - to provide healthcare for all uninsured children in the United States.

Given the broad bipartisan support for a war with Iraq, and considering the largely-abysmal quality of most mainstream coverage of the subject, even the encouragingly large number of spirited anti-war protests around the world may not be enough to prevent an attack. However, there are battles and there are wars: the battle to prevent an attack on Iraq might fail, but the war to end a global arms race and U.S. militarism can still be won.

The U.S. military-industrial complex is a giant enterprise, employing hundreds of thousands of people, raking in billions of dollars in profits every year, and utilizing a veritable army of lobbyists and Washington insiders to maintain its dominant position in the U.S. economy. As such, the struggle to wean the country from its dependence on the defense industry has been - and will continue to be - a difficult one.

The good news is that the defense industry is not a monolith, and that opposition to U.S. arms sales is actually a popular, majoritarian stance. The problem is not so much one of educating the public on why arming the world to the teeth is a bad idea, but what can be done about it.

We can start by supporting efforts to end export subsidies on U.S. arms sales. Ever year, defense contractors receive billions of dollars in subsidies: that's taxpayer money poured right into the pockets of arms dealers, and it needs to stop. Defense industry types claim they need these subsidies in order to remain competitive around the globe, but at a time when U.S. military spending dwarfs our nearest competitor - Russia - by a margin of more than 9-to-1, this argument simply demonstrates the greed and lack of restraint that defines the defense industry.

The Bush Administration has been working, with relative success, to end all export controls on weapons in the name of fighting terrorism. Rebuffed in their efforts to completely do away with weapons controls, they have turned to a strategy of incrementalism, successfully weakening or circumventing a host of weapons export controls, including the Export Administration Act. All efforts to weaken the control, oversight, and regulation of arms exports should be challenged vigorously.

Most importantly, the defense industry must not be allowed the secrecy it seeks. Public servants of both major parties must be scrutinized for conflicts of interest, and barred from public office if such conflicts come to light. This should include virtually everyone in the Bush Administration.

The agency once called the Bureau of Export Administration, which controls weapons exports, recently changed its name to the Bureau of Industry and Security (BIS). The BIS is part of the Commerce Department, and although lip service is paid to the office's responsibility for controlling arms exports, the BIS is also charged with promoting arms exports.

Politicians cannot simultaneously serve the interests of peace and war, nor can an office like the BIS serve two masters well. This office must be restructured or split in two if the concept of arms "control" is to be taken seriously. Instead of crowing on its website about its Defense Trade Advocacy Program generating "high-level, government-to-government advocacy on behalf of U.S. firms," helping them "succeed in today's highly competitive global defense market," and supporting "$22 billion in U.S. [weapons] exports since 1994," the BIS might instead make it its business to actually help stem the flow of arms to the rest of the world.

In 1925, President Calvin Coolidge uttered the famous line, "The business of America is business." However repugnant a truth that may be, fighting over the long haul against U.S. arms exports to the world - and diminishing the political influence of the defense industry - is important if we, as a nation wish to avoid the continuation of an even uglier truth: that the business of America is the business of war.