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Mattis: One More General for the ‘Self Licking Ice Cream Cone’

Before he became lionized as the “only adult in the room” capable of standing up to President Trump, General James Mattis was quite like any other brass scoping out a lucrative second career in the defense industry. And as with other military giants parlaying their four stars into a cushy boardroom chair or executive suite, he pushed and defended a sub-par product while on both sides of the revolving door. Unfortunately for everyone involved, that contract turned out to be an expensive fraud and a potential health hazard to the troops.

According to a recent report [1] by the Project on Government Oversight, 25 generals, nine admirals, 43 lieutenant generals, and 23 vice admirals retired to become lobbyists, board members, executives, or consultants for the defense industry between 2008 and 2018. They are part of a much larger group of 380 high-ranking government officials and congressional staff who shifted into the industry in that time.

To get a sense of the demand, according to POGO, which had to compile all of this information through Freedom of Information requests, there were 625 instances in 2018 alone in which the top 20 defense contractors (think Boeing, General Dynamics, Lockheed Martin) hired senior DoD officials for high-paying jobs—90 percent of which could be described as “influence peddling.”

Back to Mattis. In 2012, while he was head of Central Command, the Marine General pressed the Army [2] to procure and deploy blood testing equipment from a Silicon Valley company called Theranos. He communicated that he was having success with this effort directly to Theranos’s chief executive officer. Even though an Army health unit tried to terminate the contract due to its not meeting requirements, according to POGO, Mattis kept the pressure up. Luckily, it was never used on the battlefield. [3] 

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Maybe it shouldn’t be a surprise but upon retirement in 2013, Mattis asked a DoD counsel about the ethics guiding future employment with Theranos. They advised against it. So Mattis went to serve on its board instead for a $100,000 salary. Two years after Mattis quit to serve as Trump’s Pentagon chief in 2016, the two Theranos executives he worked with were indicted for “massive” fraud [4], perpetuating a “multi-million dollar scheme to defraud investors, doctors and patients,” and misrepresenting their product entirely. It was a fake.

But assuming this was Mattis’s only foray into the private sector would be naive. When he was tapped for defense secretary—just three years after he left the military—he was worth upwards of $10 million [5]. In addition to his retirement pay, which was close to $15,000 a month [6] at the time, he received $242,000 as a board member, plus as much as $1.2 million in stock options in General Dynamics, the Pentagon’s fourth largest contractor. He also disclosed payments from other corporate boards, speech honorariums—including $20,000 from defense heavyweight Northrop Grumman—and a whopping $410,000 from Stanford University’s public policy think tank the Hoover Institution for serving as a “distinguished visiting fellow.”

Never for a moment think that Mattis won’t land softly after he leaves Washington—if he leaves at all. Given his past record, he will likely follow a very long line, as illustrated by POGO’s explosive report, of DoD officials who have used their positions while inside the government to represent the biggest recipients of federal funding on the outside. They then join ex-congressional staffers and lawmakers on powerful committees who grease the skids on Capitol Hill. And then they go to work for the very companies they’ve helped, fleshing out a small army of executives, lobbyists, and board members with direct access to the power brokers with the purse strings back on the inside. 

Welcome to the Swamp.

change_me

“[Mattis’s’ career course] is emblematic of how systemic the problem is,” said Mandy Smithberger, POGO’s lead on the report and the director of its Center for Defense Information. “Private companies know how to protect their interests. We just wish there were more protections for taxpayers.” When everything is engineered to get more business for the same select few, “when you have a Department of Defense who sees it as their job to promote arms sales…does this really serve the interest of national security?”

That is something to chew on. If a system is so motivated by personal gain (civil servants always mindful of campaign contributions and private sector job prospects) on one hand, and big business profits on the other, is there room for merit or innovation? One need only look at Lockheed’s F-35 joint strike fighter, the most expensive weapon system in history, [7] which was relentlessly promoted over other programs by members of Congress and within the Pentagon despite years of test failures and cost overruns, to see what this gets you: planes that don’t fly, weapons that don’t work, and shortfalls in other parts of the budget that don’t matter to contractors like pilot training and maintenance of existing systems.

“It comes down to two questions,” Smithberger noted in an interview with TAC. “Are we approving weapons systems that are safe or not? And are we putting [servicemembers’] lives on the line” to benefit the interests of industry?

All of this is legal, she points out. Sure, there are rules—”cooling off” periods before government officials and members of Congress can lobby, consult, or work on contracts after they leave their federal positions, or when industry people come in through the other side to take positions in government. But Smithberger said they are “riddled with loopholes” and lack of enforcement. 

Case in point: current acting DoD Secretary Patrick Shanahan spent 31 years working for Boeing [8], which gets about $24 billion a year as the Pentagon’s second largest contractor. He was Boeing’s senior vice president in 2016 just before he was confirmed as Trump’s deputy secretary of defense in 2017. Last week he recused himself from all matters Boeing, but he wasn’t always so hands off. [9] At one point, he “prodded” for the purchase of 12 $1.2 billion Boeing F-15X fighter planes, according to Bloomberg. [10]

But the revolving door is so much more pervasive and insidious than POGO could possibly catalogue. So says Franklin “Chuck” Spinney [11], who worked as a civilian and military officer in the Pentagon for 31 years, beginning in 1968. He calls the military industrial complex a “quasi-isolated political economy” that is in many ways independent from the larger domestic economy. It has its own rules, norms, and culture, and unlike the real world, it is self-sustaining—not by healthy competition and efficiency, but by keeping the system on a permanent war footing, with money always pumping from Capitol Hill to the Pentagon to the private sector and then back again. Left out are basic laws of supply and demand, geopolitical realities, and the greater interest of society.

“That’s why we call it a self-licking ice cream cone,” Spinney explained to TAC. “[This report] is just the tip of the iceberg. There’s a lot more subtle stuff going on. When you are in weapons development like I was at the beginning of my career, you learn about this on day one, that having cozy relationships with contractors is openly encouraged. And then you get desensitized. I was fortunate because I worked for people who did not like it and I caught on quickly.”

While the culture has evolved, basic realities have persisted since the massive build-up of the military and weapons systems [12] during the Cold War. The odds of young officers in the Pentagon making colonel or higher are slim. They typically retire out in their 40s. They know implicitly that their best chance for having a well-paid second career is in the only industry they know—defense. Most take this calculation seriously, moderating their decisions on program work and procurement and communicating with members of Congress as a matter of course. 

“Let’s just say there’s a problem [with a program]. Are you going to come down hard on a contractor and try to hold his feet to the fire? Are you going to risk getting blackballed when you are out there looking for a job? Sometimes there is no word communicated, you just don’t want to be unacceptable to anyone,” said Spinney. It’s ingrained, from the rank of lieutenant colonel all the way up to general.

So the top five [13] and their subsidiaries continue to get the vast majority of work, usually in no-bid contracts ($100 billion worth in 2016 alone) [14], and with cost-plus structures that critics say [15] encourage waste and never-ending timetables, like the $1.5 trillion F-35. “The whole system is wired to get money out the door,” said Spinney. “That is where the revolving door is most pernicious. It’s everywhere.”

The real danger is that under this pressure, parties work to keep bad contracts alive even if they have to cook the books. “Essentially from the standpoint of Pentagon contracting you are not going to have people writing reports saying this product is a piece of shit,” said Spinney. Worse, evaluations are designed to deflect criticism if not oversell success in order to keep the spigot open. The most infamous example of this was the rigged tests [16] that kept the ill-fated “Star Wars” missile defense program going in the 1980s.

♦♦♦

Everyone talks about generals like Mattis as though they’re warrior-gods. But for decades, many of them have turned out to be different creatures altogether—creatures of a semi-independent ecosystem that operates outside of the normal rules and benefits only a powerful minority subset: the military elite, defense contractors, and Congress. More recently, the defense-funded think tank world has become part of this ecology, providing the ideological grist for more spending and serving as a way-station for operators moving in and out of government and industry.

Call it the Swamp, the Borg, or even the Blob, but attempting to measure or quantify the revolving door in the military-industrial complex can feel like a fool’s errand. Groups like POGO have attempted to shine light on this dark planet for years. Unfortunately, there is little incentive in Capitol Hill or at the Pentagon to do the very least: pull the purse strings, close loopholes, encourage real competition, and end cost-plus practices.

“We generally need to see more (political) championing on this issue,” Smithberger said. Until then, all outside efforts “can’t result in any meaningful change.”

Kelley Beaucar Vlahos is executive editor at TAC. Follow her on Twitter @Vlahos_at_TAC [17].

17 Comments (Open | Close)

17 Comments To "Mattis: One More General for the ‘Self Licking Ice Cream Cone’"

#1 Comment By Cali On January 7, 2019 @ 11:34 pm

Fantastic article…just jaw dropping…you wonder why our country is in the shape it’s in and this is why. Mattis should be occupying a prison cell right next to the other Theranos employees. What a scumbag

#2 Comment By Whine Merchant On January 7, 2019 @ 11:43 pm

I note that the loudest cries against the [mythical] Deep State often come from the loudest supporters of the sacred military and its shiny toys for boys.

It’s easy to complain and criticise when not in power, but once in office, things seem to look a bit different…

#3 Comment By www.telldunkin.com On January 8, 2019 @ 2:17 am

useful post!!!

#4 Comment By b. On January 8, 2019 @ 5:45 am

May we call this one profiteer a “self-licking lapdog of war” yet?

The meaning of “adult” in reference to the dysfunctions of governance has acquired an outright pornographic meaning since 2016…

#5 Comment By EliteCommInc. On January 8, 2019 @ 9:30 am

Stop bursting my bubbles about our military leadership’s integrity.

Grrrrrrrrrrrr . . .

appreciated this article.

Again: there ought to be a five year cooling off period before personnel in such positions are permitted to have any relations to the private industry.

#6 Comment By Stephen J. On January 8, 2019 @ 10:18 am

This interesting article states: “If a system is so motivated by personal gain (civil servants always mindful of campaign contributions and private sector job prospects) on one hand, and big business profits on the other, is there room for merit or innovation? One need only look at Lockheed’s F-35 joint strike fighter, the most expensive weapon system in history, which was relentlessly promoted over other programs by members of Congress and within the Pentagon despite years of test failures and cost overruns, to see what this gets you: planes that don’t fly, weapons that don’t work, and shortfalls in other parts of the budget that don’t matter to contractors like pilot training and maintenance of existing systems.”
————————

One wonders if this “business” of war could be called:
“The War Racketeers and Taxpayers Money”

“War is a Racket” Smedley Butler
[18]

The war racketeers in our midst have, I believe, perpetrated the biggest and most evil scam ever on taxpayers. They plot and plan wars on various countries.
[19]

Millions are dead, millions are refugees, millions are homeless and their homes and countries are destroyed. Soldiers are killed or maimed after obeying orders to go to war by the war racketeers. Some soldiers have difficulty getting their benefits after serving in these planned wars.

“…a CBS News investigation has found widespread mismanagement of claims, resulting in veterans being denied the benefits they earned, and many even dying before they get an answer from the VA, reports CBS News correspondent Wyatt Andrews.”
CBS News February 25, 2015
[20]

The powerful are not being held to account for the massive destruction, killings, bombings’ and invasions they perpetrated. The homeless and stateless are now wandering the earth as a result of devious conspiracies by those in power. These dishonourable “leaders” bask in the limelight of the world stage. Real life abominable actors in this real production of evil personified. Some of them even offer to “help” in this hellish tragedy of refugees that they diabolically created. Hypocrites, dressed in expensive suits, with fancy titles to their names, pretending to be “humanitarians.”
[21]

“We are the death merchant of the world” Laurence Wilkerson
[22]

“We have met the enemy and he is us.” – Pogo

I believe the world is in the grip of the maniacs of militarism. Wars are plotted and planned, all paid for by the peoples’ taxes. The people send their sons and daughters to die or get maimed. The corporate cannibals in the war industry make massive bloodstained profits. Millions of refugees wander the earth or are in camps. (If they are “lucky”) The taxpayer funded, United Nations U.N. is helping the refugees, and some of the countries that bombed these unfortunate war torn countries are sending taxpayer “aid.” And all this carnage is paid for by taxpayers’ dollars. Was there ever a more evil scam in history? First we plan to destroy countries then we “help” them! This surely can be described as: “The Rule and Roles of Dangerous Hypocrites”…

[much more info at link below]

[23]

#7 Comment By SteveM On January 8, 2019 @ 10:20 am

Re: EliteCommInc. “Again: there ought to be a five year cooling off period before personnel in such positions are permitted to have any relations to the private industry.”

The Merchants of Death, DoD support contractors and Beltway Think Pimp Tanks are anything but “private industry”.

#8 Comment By E.J. Smith On January 8, 2019 @ 10:29 am

Outstanding comments, as usual. I found this observation in the article to be particularly compelling:

“It has its own rules, norms, and culture, and unlike the real world, it is self-sustaining—not by healthy competition and efficiency, but by keeping the system on a permanent war footing, with money always pumping from Capitol Hill to the Pentagon to the private sector and then back again. Left out are basic laws of supply and demand, geopolitical realities, and the greater interest of society.”

It explains much when you look at American foreign (and domestic) policy though this prism.

#9 Comment By SteveM On January 8, 2019 @ 10:50 am

I worked for a defense contractor for 8 years. 90% of the “competitive” contracts we won were wired to us.

Standard M.O., Uniformed Officer (O-5, O-6) riding a desk as a Program Manager (PM) to retirement in a year or two wants to segue into a DoD contractor job when he separates. A contractor wanting work as a support contractor for the Program Office gets in bed with the PM. The PM has to write a Statement of Work (SOW) to hire a support contractor. So he has the preferred contractor write the SOW for him instead as part of the soft corruption Kabuki dance.

The contractor obviously games the SOW so only his company can win. The SOW is included in an RFP released by a clueless contracting officer in some remote location. Other contractors see the RFP but know that the work is wired so don’t even bid. The company wins the contract and schmoozes with the PM for a year delivering mindless PowerPoint presentations as deliverables. (E.g. spending 2 months on a study creating visual spaghetti graphics and making “happy” to “glad” edits.)

The PM eventually retires on a Friday and starts work the next week with his contractor pals. His first assignment? Go schmooze with his replacement at his old program office to spin the revolving door one more time.

I have to admit that I myself helped flush millions of taxpayer dollars down the toilet doing near worthless modeling for studies and analyses that were gamed out of the box. I.e., we knew what conclusions the client wanted and back rationalized the analysis to get there.

As Kelly notes, the soft corruption is a way of life inside that business. It is NEVER challenged because it is normative. If Libertarians want to bang a waste, fraud and abuse drum, DoD contracting is a perfect instrument. Unfortunately it is politically and socially impossible inside of the MSM eco-system which has sanctified the military. So this is something else you’ll never see reported because of the Supremacy of the Pentagon cultural mindset.

The taxpayers are totally clueless about getting totally hosed…

#10 Comment By SteveM On January 8, 2019 @ 1:17 pm

BTW, this article is a fantastic synopsis of everything that is wrong with the Pentagon culture and the Cult of Military Exceptionalism that allows it.

Kelly Vlahos is a contrarian treasure…

#11 Comment By AlecC On January 8, 2019 @ 4:28 pm

Excellent analysis here. Now we know why Russia and South Africa (Denel Arms) can more quickly produce superior weapon systems than can the US. And these nations do this at much less cost. The only other writer I know who tells of this is the South African George M James in over 50 books on political and military analysis, georgemjames.com

#12 Comment By Fred On January 8, 2019 @ 6:02 pm

Don’t waste time trying to figure it all out. Just cut “defense” spending 15% per year for the next 15 years, repeat as necessary.

#13 Comment By jay kalend On January 8, 2019 @ 7:27 pm

Coincidentally, I thought that John Kyl was some reluctant eminence grise who was tapped for as short a time as possible to fill the late John McCain’s senate set.

Think again. He has been a lobbyist all along. These fading old war horses like Bob Dole, and probably soon, Mitch McConnell, never lose their taste for power and money.

That’s why I’m such a fan of the government shutdown. By stitching together budget after budget with lies and unmet public promises, no honest accountability to goals,and backslaps and handshakes, it should be no surprise that the civil service, even the ones in uniform, have more to gain by feigning respect of our elected plutocrats, than enduring a firing or two, all the more to boost the esteem of their ranks. They merely want a part of the action.

And little wonder until now that Trump was unwilling to use the shutdown. After trusting McConnell (less so Ryan) and such sterling elected representatives as Zinke, Pruitt, and Price, government has gotten worse and less able to acheive the basic objectives Trump was elected on.

Now we can expose the farce of the continuing resolutions, “GOPAY”, and the floating debt ceilings that pass for wise folkways, but have no basis in our Constituion. Trump would be well within his rights to impound funds, shuffle money wherever it is wisely spent, create item vetoes, hold all appropriations to legal authorizations (alas, 2/3 of the authorizations actually have expired) and declare emergencies, until the lies and deceptions of Congress, particularly as regards immigration and border security, are exposed and fixed.

That is a start to creating an honest and independent civil service, that can actually stand up to fools who ruin democracy.

#14 Comment By Whine Merchant On January 8, 2019 @ 10:38 pm

Here is another one for you: Have a very senior political role, say Sec of Defence, retire to be be Chair of a big contractor, say Halliburton, then retire with a swag of stock and huge options for more stock. Then get a new government role and create a situation of such mass destruction that people are shocked and awed. This calls for urgent rebuilding that spends billions of tax dollars on a multinational company, like Halliburton, via no-bid contracts. Those stocks and options skyrocket in value and you retire again, to be defended by your daughter as you try to buy her a seat in Congress.

Nice work if you can get it –

#15 Comment By EliteCommInc. On January 11, 2019 @ 7:42 am

“The Merchants of Death, DoD support contractors and Beltway Think Pimp Tanks are anything but “private industry”.”

As much as it pains me to say it. I agree. And I will remain where I came in, government contractor expenditures should not be treated as part of the private economy. Unless public sector spending can be linked to private economic growth, it resides in a place outside the actual economy model of capitalism. The size of government spending to the economy should be measured as a debit.

No objections outright to contractors, but how that money is calculated into the economy is a tad askew, in my view.

#16 Comment By stablesort On January 13, 2019 @ 2:20 pm

“…the most expensive weapon system in history…”

A very disingenuous statement. First, never before has any weapon system had its entire anticipated cost over 50 year life rolled into a single number. That number includes clothing, feeding, housing and training F-35 pilots and F-35 Maintenance personnel.

Also included are the costs of jet fuel, parts, repairs. missiles, bombs and bullets expended over the lifetime of the entire program.

One final comment, rest assured that the total cost of fighter jet to replace the F-35 will become “the most expensive weapon system in history”.

#17 Comment By Nichevo On February 21, 2019 @ 2:35 pm

The most infamous example of this was the rigged tests that kept the ill-fated “Star Wars” missile defense program going in the 1980s.

Your link reads:

[16]

Note the FOOLED THE KREMLIN part.

Do I have to draw you a diagram?