Friday, November 09, 2007

Merchant of Death of the Month

Raytheon Company

Raytheon is the fifth-largest defense contractor in the United States. By its own accounting, the company is involved in more than 4,000 weapons programs and received more than $8.5 billion in Pentagon contracts in FY2004.

After Congress released the first full “war on terrorism” military budget in 2002, Raytheon Vice President Tom Culligan declared, “You see Raytheon’s brand name everywhere, from tanks and rifles to ships, aircraft and UAVs [unmanned aerial vehicles],” all of which received increased funding in the fiscal year 2002 Pentagon budget. Since then, billion-dollar contracts have continued to flow, and by the end of March 2005, Raytheon announced net sales of $4.9 billion, an increase of $200 million over the same period last year.

Raytheon is best known for the Patriot air-defense missile, which received massive publicity during the 1991 Gulf conflict when it was used to defend against Iraqi Scud missiles. After the conflict, MIT’s Dr. Theodore Postol found that the Patriot was far less accurate than U.S. officials originally claimed, missing its target more often than not. Since then, the Pentagon has spent $3 billion improving the missile system, and foreign sales of the improved system account for a significant portion of Raytheon’s overseas sales.

Another high-visibility Raytheon product is the Tomahawk land-attack missile, described in promotional literature as the “Navy’s weapon of choice.” The company is proud of the Tomahawk’s combat record, noting on its website that Tomahawks have been used in “Operation Desert Storm, Bosnia, Iraq and Kosovo.” It adds, “Over 300 Tomahawks were used in Operation Desert Storm alone. Since Desert Storm in 1991, more than 1,000 Tomahawks have been fired.”

More than 50 of the missiles—which cost between $600,000 and $1 million each—were fired in Afghanistan in the opening salvo of the war against terrorism. The United States used even more—as many as 800—in the first hours of the attack against Iraq. The company’s “bunker-buster” weapons, like their GBU-28, a 5,000-pound bomb, and missiles like the TOW, Maverick and Javelin were used in both “Operation Enduring Freedom” in Afghanistan and “Operation Liberate Iraq.” The sensors and radar Raytheon built for unmanned and manned reconnaissance airplanes were also used extensively in both wars. The company calls its latest line of radar, surveillance and targeting systems “the Terminator family.”

Fueling Conflict
Raytheon is a major arms exporter, with billions in overseas arms sales in the past decade to a client list that includes Israel, Egypt, Saudi Arabia, Turkey, Indonesia, Malaysia, Oman, Singapore, Greece, Taiwan and South Korea.

Jim Maslowski, vice president of Raytheon’s international business, says weapons sales to foreign countries constitute “one of the key elements in our growth strategy.” In 2004, foreign military sales at Raytheon Missile Systems rose about 3 percent to $1.2 billion. Raytheon has gone to great lengths to get international business, to the point of defying federal regulations. In March 2003, Raytheon agreed to pay $25 million in fines to settle charges that it unlawfully tried to sell long-range microwave transmitters to Pakistan from 1990 through 1997 when the U.S. government prohibited such sales.

Raytheon denied it intentionally violated U.S. export laws, but a spokesperson admitted that the company failed to wait for the State Department to determine whether the system was commercial or military. This year, Pakistan announced its intention to buy $46 million in Raytheon-manufactured Sidewinder missiles.

Big Guns, Big Money
Raytheon CEO William H. Swanson’s salary increased almost 20 percent this year to $1.2 million, plus another $2.94 million in stock awards. Meanwhile, 350 workers at Raytheon’s wire harness plant in Wichita, KS, were laid off in April when the company subsidiarized the operation to Chihuahua, Mexico. Workers at the plant were making $15-20 an hour.

Like other major weapons makers, Raytheon makes a significant investment in political influence and access in Washington. Since 2000, the firm has doled out more than $3.14 million in soft money and Political Action Committee donations, ranking fifth in donations among major military contractors in the 2004 election cycle.

Raytheon makes its political connections work in other ways as well. In the past seven years, the company has hired 23 former senior government officials, according to the independent watchdog agency, the Project on Government Oversight. It’s a common theme in Merchants-of-Death watching; overall, more than 200 former members of Congress and senior government officials have gone through the “revolving door” to work for military contractors since 1997, the Project on Government Oversight said in a 2004 report.

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Frida Berrigan is a Senior Research Associate at the Arms Trade Resource Center of the World Policy Institute at the New School University in New York City.

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