Who Profits from Nuclear Weapons? The Corporate Battle to Control the Profits of Doomsday
August 9, 2015
Arnie Alpert / American Friends Service Committee & Patrick Malone and R. Jeffrey Smith / Center for Public Integrity & TIME Magazine
With the Obama administration planning to spend upwards of a trillion dollars on new nuclear weapons (some of which are designed for first-strike attacks), big corporations stand to make billions of dollars from a new generation of nuclear weapons and the missiles, bombers, and submarines that would deliver them to their targets. Now, an investigation into the Sandia corporation's plot to seize nuclear war contracts peels back part of the veil surrounding a defense contractor's "capture strategy."
Who Profits from Nuclear Weapons?
Arnie Alpert @ Governing Under the Influence / American Friends Service Committee
(August 5, 2015) -- With the dropping of atomic bombs on Hiroshima and Nagasaki in 1945, the world learned that humans now had the ability to extinguish life on the planet. Seven decades later, the nuclear threat continues to loom over humanity. And instead of making comprehensive efforts to rid the world of nuclear weapons, the United States and other nuclear power are building up their arsenals.
In fact, the Obama administration is backing a plan to spend upwards of a trillion dollars on new nuclear weapons, some of which are designed for first-strike attacks. But while the use of nuclear weapons would be a disaster for the planet, their production means big bucks for the military-industrial-complex.
Most of trillion dollars would go to the corporations that would produce a new generation of missiles, bombers, and submarines designed to carry nuclear weapons. The "modernization" plan also calls for a new generation of nuclear warheads, to be designed and built in a complex of federal labs whose management has been outsourced by the Department of Energy to the private sector.
Those corporations are using their resources -- much of which comes from the taxpayers -- to support candidates favorable to their business plans and to lobby for policies that will produce more contracts.
The specific components of the nuclear upgrade include
* New land and sea-launched ballistic missiles (SLBMs and ICBMs); new bombers; new submarines; and new air-launched cruise missiles
* Re-designed warheads to be mounted on cruise and ballistic missiles and to be launched from aircraft
* New facilities at the DOE-owned by privately-run weapons labs; and
* New command, control, and communications systems.
The list of firms likely to get contracts for nuclear weapons production includes familiar players from the military industrial complex.
The biggest player is probably Lockheed Martin, the nation's number one Pentagon contractor and operator of the Sandia Lab. Lockheed employs 82 lobbyists, including at least one former US Senator and two former US Representatives, according to the Center for Responsive Politics.
Of the other Lockheed lobbyists, 70% are former federal employees, what the Center calls "revolvers" in reference to the "revolving door" between Capitol Hill and the lobbying industry. Sometimes the lobbyists cross the line into activities prohibited by federal law.
According to a report by the Department of Energy's Inspector General obtained by the Center for Public Integrity, Lockheed hired a lobbying firm headed by Heather Wilson, a former Congresswoman from New Mexico, where Sandia is located.
To secure Sandia's contracts, Wilson's firm advised, "Lockheed Martin should aggressively lobby Congress, but keep a low profile." Implementation of the "low profile" plan involved Sandia employees, whose positions were funded by the corporation's existing federal contracts.
"We recognize that LMC [Lockheed Martin Corporation], as a for-profit entity, has a corporate interest in the future of the Sandia Corporation contract," the DOE Inspector General stated. "However, the use of Federal funds to advance that interest through actions designed to result in a noncompetitive contract extension was, in our view, prohibited by Sandia Corporation's contract and Federal law and regulations."
It's a classic case of GUI, Governing under the Influence, except in this case it was illegal. In most cases, GUI is fully protected by the law and the US Supreme Court. The ten corporations we see as key players in the nuclear weapons industry reported spending nearly $71 million on lobbying in 2014, and another $24 million on Congressional candidates in the last election cycle, according to the Center for Responsive Politics.
And that's not the whole list of nuclear weapons producers; Don't Bank on the Bomb identifies 20 more.
As we remember the hundreds of thousands of people -- mostly civilians -- who perished in the atomic bombs 70 years ago, and consider what steps we need to take to make sure nuclear weapons are never again used by anyone, let's also set aside time to discuss the need for nuclear weapons abolition with the candidates for president.
Ask them about plans to spend a trillion dollars on nuclear weapons and find out what steps they will take to make sure the military industrial complex is not leading the way to another nuclear holocaust.
Arnie Alpert is co-director of the American Friends Service Committee's New Hampshire Program, which he has led since 1981.
Nuclear Weapons Lab Lobbied with Federal Funds
To Block Competition for Lucrative Contract
Patrick Malone and R. Jeffrey Smith / Center for Public Integrity & TIME Magazine
(July 8, 2015) -- Top officials at one of the US nuclear weapons laboratories secretly drew up a careful list of targets in 2009. But these were not Russian missile silos or Chinese leadership targets. The officials' aim was instead to hit a small group of policymakers in Washington with enough political pressure to ensure that the laboratory's managers could get a lucrative new, 7-year federal contract.
To ensure victory -- which to the corporation controlling the lab meant avoiding a messy competition with any other corporations -- those at the helm of Sandia National Laboratories devised what they called a "capture strategy" for senior Obama administration officials, according to a laboratory internal document. In part, it entailed hiring three high-priced consultants, at a total expense to taxpayers of up to half a million dollars, who helped craft the target list.
Those on the list were in many cases the usual suspects -- members of Congress who served on key committees, their staffs, top Department of Energy officials, a governor of New Mexico and a retired senator. Meetings were held, emails were sent, letters were written, and Washington-based corporate staff was enlisted, all with the aim of keeping the Lockheed Martin Corporation in control at Sandia.
This was, Sandia said in one of its position papers, not merely in the corporation's best interest, but in the country's. "We believe," one of the lab officials said at one point, "it is best for LM [Lockheed Martin], Sandia, and the nation to work together towards influencing DOE to retain this team." Another message was blunt: "It is in the taxpayer's best interest to not compete for competition's sake, but to use the regulatory processes already available" to keep the existing contractor.
While this might seem predictable -- after all, what federal contractor would not be eager to keep the federal monies coming in? -- it is nonetheless noteworthy for one reason in particular: The analyzing, the strategizing, and the lobbying to get a new contract were all funded by the existing federal contract, according to the Energy Department's Inspector General, who said this was a violation of federal law, not to mention Sandia's contract language.
"We recognize that LMC [Lockheed Martin Corporation], as a for-profit entity, has a corporate interest in the future of the Sandia Corporation contract," said Inspector General Gregory H. Friedman in his Nov. 7, 2014 "Official Use Only" report, which was released to the Center for Public Integrity under a Freedom of Information Act request. "However, the use of Federal funds to advance that interest through actions designed to result in a noncompetitive contract extension was, in our view, prohibited by Sandia Corporation's contract and Federal law and regulations."
"Given the specific prohibitions against such activity, we could not comprehend the logic of using Federal funds for the development of a plan to influence members of Congress and federal officials to, in essence, prevent competition," Friedman said in the report.
Sandia did not see it that way. Its officials told Friedman's investigators they were merely trying to inform officials in Washington about the work they were doing, an explanation Friedman said was contradicted by the lab's internal documents.
At stake in the three-year effort was the Lockheed Martin Corporation's proposal for a 7-year contract extension, with the option for a 5-year renewal after that. While the company's prospective revenues were not stated in the report, the existing contract called for spending, on average, about $2.4 billion a year. So the total revenues might have exceeded $16 billion.
"Sandia National Laboratories has cooperated fully with the government's review of this matter," Heather Clark, a spokeswoman for Sandia National Laboratory, said in language that resembled a statement she issued when a truncated summary of Friedman's report was first released by the Energy Department last November. "We will continue to work closely with the Inspector General's office, the Department of Energy and the National Nuclear Security Administration to address all the IG's recommendations. We are hopeful this matter will soon be resolved."
In 2009, the report explains, Sandia Corp. hired a consulting firm headed by former US Rep. Heather Wilson, R-New Mexico, and two unnamed former employees of the Energy Department's National Nuclear Security Administration, at least one of whom previously had oversight authority at the lab.
Wilson's company, Heather Wilson, LLC, provided explicit directions about how to influence the most crucial decision-makers in the contract-award process, according to the IG report.
"Lockheed Martin should aggressively lobby Congress, but keep a low profile," Wilson's firm advised, according to notes from a meeting obtained during the investigation.
The notes showed that Wilson's firm instructed Lockheed Martin to "work key influencers" by targeting then Energy Secretary Steven Chu's staff -- as well as his family, friends, and even his former colleagues at another Energy Department laboratory -- and by enlisting former members of Congress to endorse extending Lockheed Martin's contract without competition.
Wilson has publicly denied that she personally took part in the interactions between her firm and Lockheed Martin involving the Sandia contract. Reached by phone, she declined to answer questions, but later sent a written statement saying that she never contacted federal officials about the Sandia contract extension. Sandia Corp. has said it already repaid the Energy Department $226,378 for the federal money that it spent with Wilson's firm.
But Friedman went further: He urged the department to determine whether it should recover the money spent by Sandia on the other two consultants, and on the salaries of Sandia officials and employees who worked on the new contract "capture strategy."
Asked if anyone at the department had pursued this effort, Michelle Laver, a spokeswoman for the National Nuclear Security Administration -- which oversees Sandia's work -- said the NNSA has not yet determined if it will seek to recoup more money.
A Justice Department spokesman, asked if a federal investigation was under way into what Friedman depicted as a violation of federal laws, declined comment.
The copy of Friedman's report that was released to the Center for Public Integrity was heavily redacted to withhold names. But it made clear that Sandia's push for a long-range, no-bid contract extension under the present administration was not the first attempt to lobby public officials at taxpayers' expense.
"Perhaps [Sandia National Laboratories] felt empowered because it had improperly directed Federal funds to similar activities in the past," the Inspector General's report said, in a phrase that did not appear in the November public summary.
A Department of Energy official in 2009 warned lab leaders that their actions "crossed the line" when reports to Congress recommended funding levels for particular programs and policy positions, actions the officials compared to illegal lobbying, according to the report. But in a 2010 email, one of Sandia's officials -- whose name was redacted -- said that using federally funded laboratory staff for purposes of pursuing contract extensions was not a big deal, because it had been done before.
"We used operating costs in the same way in securing the extensions in  and 2003," the lab official wrote.
Lockheed Martin has received a series of one-year contract extensions since 2012, but its push to lock in a longer-term contract failed. Currently, the management and operation contract for Sandia National Laboratory is up for competitive bid -- the precise result that Sandia and Lockheed worked to block. The corporation's existing contract expires April 30, 2017.
This story was co-published with TIME.
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