Up to Half of the $14 Trillion Spent by Pentagon Since 9/11 Has Gone to War Profiteers

By Jake Johnson, staff writer at Common Dreams. Originally published at Common Dreams

Up to half of the estimated $14 trillion that the Pentagon has spent in the two decades since the U.S. invasion of Afghanistan has gone to private military contractors, with corporate behemoths such as Lockheed Martin, Raytheon, Boeing, and General Dynamics hoovering up much of the money.

That’s according to a new paper (pdf) authored by William Hartung—director of the Arms and Security Program at the Center for International Policy—and released Monday by Brown University’s Costs of War Project.

Published just days after the 20th anniversary of the September 11 attacks and two weeks after the last U.S. military plane departed Afghanistan, the paper documents the extent to which the massive post-9/11 surge in Pentagon spending benefited weapon makers, logistics firms, private security contractors, and other corporate interests.

“The magnitude of Pentagon spending in the wake of the 9/11 attacks was remarkable,” Hartung observes. “The increase in U.S. military spending between Fiscal Year 2002 and Fiscal Year 2003 was more than the entire military budget of any other country, including major powers like China, Russia, the United Kingdom, Germany, and France.”

According to Hartung’s analysis, from “one-third to one-half” of the Pentagon’s $14 trillion in spending since the U.S. invasion of Afghanistan on October 2001 went to defense contractors, which spend heavily on government lobbying.

“A large portion of these contracts—one-quarter to one-third of all Pentagon contracts in recent years—have gone to just five major corporations: Lockheed Martin, Boeing, General Dynamics, Raytheon, and Northrop Grumman,” Hartung writes. “The $75 billion in Pentagon contracts received by Lockheed Martin in fiscal year 2020 is well over one and one-half times the entire budget for the State Department and Agency for International Development for that year, which totaled $44 billion.”

But those five corporate giants are far from the only companies that profited from the increase in U.S. Defense Department outlays following the Afghanistan invasion, which ultimately killed more than 46,000 Afghan civilians. Hartung notes that numerous other firms—including Erik Prince’s since-rebranded Blackwater, the Dick Cheney-tied company Halliburton, and DynCorp—benefited handsomely from the Pentagon spending boom.

“Halliburton’s Pentagon contracts grew more than tenfold from FY2002 to FY2006 on the strength of its contracts to rebuild Iraq’s oil infrastructure and provide logistical support for U.S. troops in Iraq and Afghanistan,” the new paper reads. “By 2009, over half of DynCorp’s revenues were coming from the Iraq and Afghan wars.”

Hartung argues that the Pentagon’s growing reliance on private contractors to carry out U.S. foreign policy in the aftermath of the 9/11 attacks “raises multiple questions of accountability, transparency, and effectiveness.”

“This is problematic because privatizing key functions can reduce the U.S. military’s control of activities that occur in war zones while increasing risks of waste, fraud, and abuse,” he writes. “Additionally, that the waging of war is a source of profits can contradict the goal of having the U.S. lead with diplomacy in seeking to resolve conflicts.”

In order to rein in war profiteering and increase government “accountability over private firms involved in conducting or preparing for war,” Hartung recommends several broad policy changes, including:

  • Slashing overall spending on war and military operations overseas;
  • Increasing “the role of diplomacy” in U.S. foreign policy;
  • Implementing more strict regulations and “strengthening the role of inspectors general, auditors, and contracting officers in rooting out corruption”; and
  • Enacting “revolving door reforms” such as “longer cooling off periods between government service and employment in the arms industry, closing loopholes in current laws, and increasing detailed reporting on revolving door employment.”

“Reducing the profits of war ultimately depends on reducing the resort to war in the first place,” Hartung writes. “Likewise, making war less profitable decreases the incentive to go to war. Given the immense financial and human costs of America’s post-9/11 wars—and the negative security consequences generated by many of these conflicts—adopting a new, less militarized foreign policy should be a central goal of the public and policymakers alike.”

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  1. PlutoniumKun

    It would be interesting to see what proporation of contracts go to what are now essentially monopolist suppliers. Sometimes supposedly competitive tenders are nothing of the sort because they are constructed in such a way that exclude all but a handful of companies, or sometimes just once company. It seems crazy that a company like Halliburton could have such a hold on contracts for such mundane services like providing food or translation.

    Sometimes of course they aren’t even bothering with pretending – it used to be that every major combat aircraft project involved competing prototypes and a fly-off. They don’t even pretend to do that anymore, they just call Lockeed Martin (or Northrop, if its a bomber).

    Governments of course have always used private contractors but from my understanding of WWII history nearly all the major combatants – including Germany and the Soviet Union – were always keen on maintaining a high level of genuine competition between suppliers at all levels. Even the later Cold War Soviet Union saw a value in this in maintaining competing ‘design bureaus’.

    I wonder if the politically feasible solution to this lies less in trying to reform the miasma of the defence world, and more in taking an old fashioned anti-monopolist approach and break up the big contractors.

  2. duffolonious

    Essentially no-bid, cost plus contracts have ruined America’s govt contractors. It’ll take something catastrophic to change that course (Iran dropping a carrier or some more falling bridges at home).

    While the US has made such things God awful in terms of contractor competition, Russia appears to have given Sukhoi it’s major contracts for the last decade for fighter-bombers.

    Mig contracts are just updates and Yak just does trainers.

  3. Tom Stone

    The US Military has been steadily politicized and corrupted since the Vietnam years, I’m surprised that it’s only 50%.
    Take a look at the logistic tail of our weapons systems and remember that spare parts and trained people to service these systems are always in short supply.
    At Major and above you have to submit a “Readiness Report” on a regular basis, if it doesn’t show at least 100% of your vehicles etc ready to go you will get dinged when on your next “Fitness report” and your career is over.

  4. David

    Yes, well, let’s see. Military forces consist of more than people in uniform; they also have to be equipped, housed and fed, and the equipment has to be kept up to date, serviced and supported. In a modern industrial society, anything between 40-60% of the defence budget goes on R and D, production, upgrades and support in the widest sense. So the figures for the US are pretty much what you’d expect. However, the US is lucky to have multiple sources of supply for some of its weapons platforms: the British and French, for example, effectively only have one.

    As often, the article can’t make up its mind what it’s trying to say. You can argue that the US defence budget is too high. You can argue that more should be spent on diplomacy. You can argue that the role of private military companies should be reduced. But none of these arguments have much to do with the logic of the article, or indeed with each other. It’s hard to avoid the conclusion that the author started with the recommendations and then worked backwards, looking for words to fill up the empty space.

  5. Mike

    I seem to remember the day before 9-11, when Rumsfeld announced that a huge amount ($2 trillion?) of defense department money was “unaccounted”, both expense and allocation budgets. It should not surprise any of us that that number has increased manifold over the years since then. Now we have this number… can we be sure that defense allocations are not a sinkhole for all kinds of “payments”, as I’m sure the CIA “budget” is also swamped with under-the-table expenses we never learn of. Graft, payoffs, and general grease to satisfy the distemper amongst our competing capitalist firms are the usual, not the exception. We are not privy to the whole because of the unrest it would cause, just like the harm to soldiers and citzens is not discussed.

    What strikes me is the number of people who fall for these budget-tracking figures as if they were the real cost and not projections of propaganda to mollify the citizenry into accepting corruption as “that’s the way it is”. How much money would the government have to dispense to pay us back for all the waste of the years since the NDA was passed?

    1. drsteve0

      Well, give credit where credit is due. At least in the case of the CIA it partially self funds via its wide ranging illicit drug operations.

  6. Questa Nota

    “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world’s greatest civilizations has been 200 years. These nations have progressed through this sequence: From bondage to spiritual faith; From spiritual faith to great courage; From courage to liberty; From liberty to abundance; From abundance to selfishness; From selfishness to apathy; From apathy to dependence; From dependence back into bondage.”

    From Alexander Fraser Tytler

    Some more about him: Alexander Fraser Tytler, Lord Woodhouselee, was a Scottish lawyer, writer, and professor. Tytler was also a historian, and for some years was Professor of Universal History, and Greek and Roman Antiquities, in the University of Edinburgh.

    Similar quote sentiments available from Alexis de Tocqueville below, and others.

    “The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.”

    Those observations appear almost quaint in the modern era. Politics and technology advance to create that largesse in new ways to serve new ends by any means and to disburse and disperse to more targets.

  7. Robin Kash

    To the extent that militarization of foreign policy is in the service of assuring the continuation of the dollar as the world reserve currency, demilitarization is unlikely. Militarization along with the financial pressures applied via the World Bank and the IMF.
    BRICS countries sought to dethrone the dollar. The US has apparently succeeded in removing or dramatically reducing initiatives by Brazil, India, and South Africa from that mission. China and Russia keep pressing ahead; Iran has become an ally in that effort. Venezuela is a minor participant in their effort to reduce the importance of the dollar. Thus the US’s interest in defanging the four.
    Perhaps the US’s military will salve its wounds by taking on Venezuela and amp up bullying Nicaragua and Bolivia.

  8. Wukchumni

    We all heard about $400 gallons of gas dlvd to the ‘stanbox, and anybody in the USA could’ve bought as many gallons as their little hearts desired @ $5 or less.

    So, who made $395 per gallon?

  9. shinola

    This article may as well be titled “Did you know that the sun sets in the west?!!!..”

    IIRC, a certain fellow who had a bit of experience in both war and politics warned us about this sort of thing. What did he call it? Oh yeah – the Military Industrial Complex. What’s the point of war these days unless it can provide “shareholder value?” I imagine that Milton Friedman would approve wholeheartedly.

  10. Sound of the Suburbs

    No one has ever successfully defeated Afghanistan in a war in its home territory.
    The country is so spread out, it’s impossible to control.
    They can just fade into the background, regroup and then start fighting again at any time.

    As soon as he Americans had gone, they came out of hiding.
    If you’ve got a couple of trillion to burn, that’s the way to do it.

    If you have another few trillion to burn you could stay longer.
    They will still come out of hiding when you’ve gone.

    Former US ambassador, Chas Freeman, gets to the nub of the problem.
    “The US preference for governance by elected and appointed officials, uncontaminated by experience in statecraft and diplomacy, or knowledge of geography, history and foreign affairs”

    That explains it, Chas.
    Well done mate.

  11. Sound of the Suburbs

    Western democracy doesn’t seem to work as well as it used to.
    Where did it all go wrong?
    James Buchanan came up with Public Choice Theory.

    James Buchanan life’s work was dedicated to putting democracy in chains and this is covered in Nancy MacLean’s book of that name.
    He wanted to take power away from the people and he came up with “Public Choice Theory”.
    As soon as you know what it is, you’ll see what’s wrong with it.
    Who better to explain it than the man himself?
    James Buchanan explains “public choice theory” in a BBC Documentary called “The Trap”.
    At 48.00 min.

    When you know the theory, you can see the problem.
    Politicians are supposed to be for sale; that is the idea.
    Lobbyists would now guide Western politicians rather than the electorate.
    It wasn’t actually democracy anymore.

    Defence industry lobbyists are directing US foreign policy.
    What was supposed to happen?

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