Capitalizing on conflict: How defense contractors and foreign nations lobby for arms sales

- OPENSECRETS.ORG - Feb 25, 2021 -

Dan Auble -

Defense companies spend millions every year lobbying politicians and donating to their campaigns. In the past two decades, their extensive network of lobbyists and donors have directed $285 million in campaign contributions and $2.5 billion in lobbying spending to influence defense policy. To further these goals they hired more than 200 lobbyists who have worked in the same government that regulates and decides funding for the industry.

Defense companies sell a variety of products and services around the world from missiles, rifles and personnel equipment to tanks, aircraft and complex electrical and computer systems. The industry's political activity is dominated by the well known behemoths. Just 200 defense companies reported lobbying the federal government in 2020. The top five account for more than 50 percent of the industry's lobbying and the top 15 spend 75 percent of the lobbying money. The five biggest spenders in 2020 — Lockheed Martin, Boeing, Northrop Grumman, Raytheon Technologies and General Dynamics — spent $60 million altogether.

The defense industry's business prospects are tightly controlled and in many ways entirely decided by official decisions made in Congress and the Pentagon in a way that other industries don't have to contend with. Despite those restrictions, business is undeniably good both at home and abroad. Foreign sales delivered an average of $12 billion worth of arms per year between 2016 and 2018, according to Security Assistance Monitor data analyzed by the Center for Responsive Politics.

That's on top of a sizable portion of the $740 billion Pentagon budget spent on weapons for use by the U.S. military. When it comes time for Congress to decide funding levels for a Pentagon that spends nearly three times as much as any other military in the world, arms manufacturers and military support sellers have an extensive network of lobbyists and former government employees pushing their business interests to members of Congress who have taken contributions from them and also often have constituents employed by them.

While it is well known that the U.S. spends enormous sums to keep the most powerful military in history humming, many may be unaware that a major part of the industry's business model is selling arms to other countries with the blessing of the U.S. Congress and State Department. Often those arms are developed using taxpayer money. Over the last year, American defense firms struck deals to sell $175 billion worth of weapons, including $23 billion worth of F35 fighters and drones to the United Arab Emirates, and multi-billion dollar sales to Taiwan and Saudi Arabia.

These deals are sometimes controversial. The Senate tried — and failed — to block the Trump administration backed sales to the UAE and Saudi Arabia amid concerns about their use in Yemen as well as worries about human rights abuses such as the killing of Jamal Khashoggi, a Washington Post journalist and U.S. green card holder critical of the Saudi government. The presidential election did what the Senate could not, and within weeks of taking office, President Joe Biden paused those sales for review. With Democrats in charge of the Senate, Robert Menendez (D-N.J.) and Jack Reed (D-R.I.), both instrumental in the effort to block the deals, now chair the Foreign Relations and Armed Services committees respectively.

Despite the suspensions, new sales agreements continue. Since Biden's inauguration, the State Department approved an $85 million sale of Raytheon manufactured missiles to Chile and $60 million worth of Lockheed Martin's F-16 aircraft and services to Jordan.

While Biden has touted strict ethics rules that attempt to thwart the influence of lobbyists on the administration, several of his earliest appointees, including Secretary of Defense Lloyd Austin and Secretary of State Antony Blinken consulted for a private equity firm that emphasized its "access, network and expertise" in the defense industry. Austin also had a seat on the United Technologies and Raytheon board, earning more than $250,000 from the now merged companies. Raytheon CEO Greg Hayes seems optimistic about the company's prospects under the new administration, telling investors in January that "peace is not going to break out in the Middle East anytime soon" and that the region "remains an area where we'll continue to see solid growth."

Playing both sides

Both customers and suppliers are putting the squeeze on the U.S. government to continue the flow of arms. Some of the biggest foreign consumers of U.S. arms are also spending considerable sums to exert their influence in the U.S., though some of the biggest spenders, including South Korea and Japan, are focused on trade and commercial issues rather than military matters, according to disclosures.


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