Growth of Corporate Power
and Profiteering

Large defense contractors have played a central role in fighting the post-9/11 wars, as well as in arming and supplying coalition forces and the new Iraqi and Afghan governments. 

Their involvement raises major economic and security concerns among critics.

The wars in Iraq and Afghanistan, along with an increase in the Pentagon’s budget, have led to an increase in total military contracts to nearly $400 billion, their highest levels since World War II.

Private contracting has grown to such a level that, by 2011, there were more private contract employees involved in the wars in Iraq and Afghanistan than uniformed military personnel.

Pentagon contracts awarded in the 2000s have been concentrated in the hands of just five contractors: Lockheed Martin, Boeing, Northrop Grumman, Raytheon and General Dynamics. 

These five companies account for over one-third of all Pentagon contracts.

Halliburton’s contract to put out oil fires in Iraq and rebuild the country’s oil infrastructure generated controversy on several fronts.

One of the major ones concerns the question of why Halliburton was awarded a no-bid, open-ended 7-year contract for their work in Iraq even before the war began.

Critics have contested the Pentagon’s reasoning that the need was too urgent and Halliburton was the only company capable of doing this work.

Another issue is the “revolving door” between Halliburton and Bush administration Vice President, Dick Cheney.

Halliburton served as an all-purpose logistics support service under the Army’s Logistics Civil Augmentation Program (LOGCAP). 

This program was developed at the behest of Dick Cheney in the early 1990s and Halliburton was awarded the first contract in 1995, by which time Cheney had become Halliburton’s CEO.

Further, Halliburton made huge profits through this program, much of them generated through gross overcharging and inflating invoices to cover “fraudulent war risk surcharges.”

Halliburton has also been accused of breaching its government contract and KBR has been said to have been systematically “veiling its business practices in Iraq,” thereby restricting the government’s oversight ability.

The Coast Guard employed Lockheed Martin and Northrop Grumman in 2002 to plan, supervise, and deliver several hundred new boats and aircraft in connection with the Guard’s expanded post-9/11 role.

For a number of years, the two companies used their procurement charge as an opportunity to steer work to their subsidiaries, and failed to get the best price or the best work. 

The Coast Guard ignored frequent warnings from their own engineers about the new ships’ poor design and potentially unsafe condition. 

Four years later, the shipbuilding was halted when the design was finally found to be flawed.