A Spin On The Revolving Door: Pentagon Officials Turned Venture Capitalists

 

"NEW YORK TIMES" By Eric Lipton

"Retiring generals and departing top Pentagon officials once migrated regularly to the big established weapons makers. Now they are increasingly flocking to venture capital firms that have collectively pumped billions of dollars into Silicon Valley-style startups"

___________________________________________________________________________________

"When Defense Secretary Lloyd J. Austin III and other top officials assembled for an event at the Ronald Reagan Presidential Library, they walked into a lesson in how the high-stakes world of Pentagon lobbying is being altered by the rise of defense technology startups.

Inside, at this elite gathering near Los Angeles of senior leaders from government and the arms industry, was a rapidly growing group of participants: former Pentagon officials and military officers who have joined venture capital firms and are trying to use their connections in Washington to cash in on the potential to sell a new generation of weapons.

They represented a new path through the revolving door that has always connected the Defense Department and the military contracting business.

Retiring generals and departing top Pentagon officials once migrated regularly to the big established weapons makers like Lockheed Martin and Boeing.

Now they are increasingly flocking to venture capital firms that have collectively pumped billions of dollars into Silicon Valley-style startups offering the Pentagon new war-fighting tools like autonomous killer drones, hypersonic jets and space surveillance equipment.

This new route to the private sector is one indicator of the ways in which the United States is trying to become more agile in harnessing technological advances to maintain military superiority over China and other rivals.

But the close ties between venture capital firms and Defense Department decision makers have also put a new twist on long-running questions about industry access and influence at a time when the Pentagon is under pressure to rethink how it allocates its huge procurement budget.

During Mr. Austin’s visit to the Reagan Library, Mark T. Esper, who served as defense secretary under President Donald J. Trump, was on hand with business cards from Red Cell, a venture capital firm. Red Cell has invested in new military startups like Epirus, whose anti-drone technology Mr. Esper said in an interview he had helped pitch to top Pentagon officials.

Also on the guest list for the event were Ryan McCarthy, the former Army secretary, and Raj Shah, the former head of the Pentagon’s Defense Innovation Unit. Both now work for venture capital firms.

The New York Times has identified at least 50 former Pentagon and national security officials, most of whom left the federal government in the last five years, who are now working in defense-related venture capital or private equity as executives or advisers. In many cases, The Times confirmed that they continued to interact regularly with Pentagon officials or members of Congress to push for policy changes or increases in military spending that could benefit firms they have invested in.

“There’s panache now with the ties between the defense community and private equity,” said Ellen M. Lord, a former under secretary of defense for acquisitions, who said she had been solicited by a number of venture capital firms but had decided to focus on advising individual military contractors. “But they are also hoping they can cash in big-time and make a ton of money, too.”

This new generation of venture capitalists has big incentives to tap into its network of government and military contacts, many of whom it previously helped move ahead in their careers.

Unlike former officials who have joined the big military contractors, they are not salaried executives inside public companies.

Instead, as venture capitalists who profit in part when the startups they are backing make it big, they are wagering that at least a few of the companies they have invested in will hit the jackpot in the form of major military contracts — enough, perhaps, to generate a lucrative buyout offer or even to drive one of the startups to sell shares and go public, potentially generating an even bigger windfall for the early investors.

“A few years back you would have gone to be executive vice presidents at Lockheed Martin — totally not sexy,” said Chris O’Donnell, a former Navy SEAL and now a director at Franklin Venture Partners, whose investments include Air Space Intelligence, an air traffic control company, and CesiumAstro, a space communications company.

“Now, a venture capital guy comes up and says, ‘I will pay you twice as much. I will give you a cut in the form of carried interest in the deal and you will hobnob with the C.E.O.s of the companies we invest in,’” Mr. O’Donnell said during an interview, as he prepared to host a dinner for top Pentagon officials, members of Congress and other industry executives. “It’s much more attractive.”

The new venture capitalists say they typically use their access to press the Pentagon to provide more funding for emerging technologies in general, rather than to push for contracts for a particular startup they are backing.

“I can really leverage my experience, my positions, my voice to help accelerate innovation adoption,” Mr. Esper, a former defense industry lobbyist, said in an interview.

Pushing for a bigger share of the pie

One recent focus for the venture capitalists has been urging Congress to set aside at least $1 billion in the coming year for the kinds of cutting-edge technologies their startups are pursuing. Ensuring that innovative new firms get a bigger slice of Pentagon spending after decades in which the business has been dominated by a handful of giant prime contractors, they say, is vital to national security.

“The military-industrial-congressional complex is pretty comfortable with market share as it is,” said Sally Donnelly, a former Defense Department official who is now a founding partner at Pallas Ventures, which invests in startups while also helping them interact with Pentagon officials. “It’s a precooked system that needs to be shaken up a little bit.”

Pentagon procurement officials confirmed that they had repeatedly met with former Defense Department officials who are now venture capitalists. They said recommendations pushed by the venture capitalists had played a role in changes they are making in the way they acquire technology, helping accelerate purchases from some of the startups, like Saildrone, which makes marine surveillance equipment.

“We definitely hear from them,” said Schuyler Moore, the chief technology officer at Central Command.

In the last four years, at least $125 billion of venture capital has flooded into startups that build defense technology, according to data assembled for The Times by PitchBook, which tracks these investments, compared with $43 billion in the prior four years.

But at least so far, the defense-tech sector has had only a few breakthrough success stories. They include Palantir, which makes artificial intelligence software and went public in 2020, and Elon Musk’s SpaceX, which has a market valuation of more than $175 billion, larger than the market capitalization of Lockheed Martin, the world’s largest military contractor.

Much more frequently, it has been a continuing struggle for venture-backed defense technology companies to secure large-scale contracts.

That is where the new generation of well-connected venture capitalists comes in.

More than a dozen of them, assisted by think tanks and other nonprofits that get funding from venture capital groups, have been pushing Congress and the Defense Department to accelerate spending with defense-tech companies, or to make policy changes that make it easier for them to get Pentagon money.

Lawmakers and Pentagon officials said they welcomed the input.

“They want to do things,” said Representative Ken Calvert, Republican of California and chairman of the House Appropriations subcommittee that oversees the Pentagon budget. “Let’s face it, their budgets for research and development of new technologies are much better than ours. So they’re developing technologies that we can’t.”

But not everyone on Capitol Hill is pleased with the new revolving door, including Senator Elizabeth Warren, Democrat of Massachusetts, who raised concerns about it with the Pentagon this past summer.

The growing role of venture capital and private equity firms “makes President Eisenhower’s warning about the military-industrial complex seem quaint,” Ms. Warren said in a statement, after reviewing the list prepared by The Times of former Pentagon officials who have moved into the venture capital world. “War profiteering is not new, but the significant expansion risks advancing private financial interests at the expense of national security.”

‘Let’s go faster’

The annual Reagan National Defense Forum, the event attended by Mr. Austin this month, drew a substantial contingent of venture capitalists eager to mingle with government decision makers at cocktail parties and over meals, some held in the main atrium of the Reagan Library, where the plane used by President Ronald Reagan as Air Force One hangs suspended over visitors.

Doug Philippone, a former Army Ranger who is now the co-founder of Snowpoint Ventures, a defense-sector venture capital firm, was busy during the event chatting with various members of Congress and Pentagon officials. They included Heidi Shyu, the under secretary of defense for research and engineering, and Representative Pat Ryan, Democrat of New York, a West Point graduate who serves on the Armed Services Committee.

Mr. Philippone, whose firm has invested $172 million over the last two years mostly in defense-tech companies, said he had repeatedly urged government officials to pick winners to get money flowing to them.

“Let’s go faster,” Mr. Philippone said, recalling his message. “Why does it take so long?”

Certain startups like Shield AI are initially building their business almost entirely around revenue from Pentagon contracts and research awards, a risky bet given how slowly the Defense Department moves.

The result is a lot of pressure on the companies, resulting in an almost frantic push for support from Washington.

“A venture capitalist that is going to put tens of millions or even hundreds of millions of dollars into your startup, they are expecting to see revenue of $50 and $100 million a year,” said A.J. Piplica, the founder and chief executive of Hermeus, a venture-capital-funded startup that is working to build a new type of hypersonic jet. “And building a book of revenue of that scale, when you are working with the Defense Department primarily, is very, very difficult.”

Mr. Philippone, who is widely known in the industry for his role in helping build Palantir’s Pentagon sales before he set up his venture capital firm, is not shy about his advocacy. He said he works with every company he invests in to push the Pentagon or other agencies to move more quickly.

“I’m meeting with members of Congress,” he said. “I’m talking to members of the military. I’m introducing them to different people.”

But he said he was not a lobbyist because he is not paid for the advocacy work and it does not make up at least 20 percent of his time, the threshold for disclosure in federal law. Almost none of the venture capitalists promoting defense technology are registered as lobbyists.

Mr. Esper would not disclose the names of the government officials he spoke with on behalf of his firm’s investments, other than to say they included Pentagon officials. At times, he said, he urged them to consider specific technologies, like those from Epirus, which uses an electromagnetic pulse to disrupt or disable enemy drones. Mr. Esper said his effort in this field is based on a belief that he can help the Pentagon confront change.

“Part of this is just kind of being able to reach out to leaders within the building and say, hey, there’s a neat tech. You should check it out,” Mr. Esper said. “Because it’s being worked through echelons down. So if you know there’s a need and you can put a technology in front of them and say, just check it out, see how it works.”

Nick Sinai, an Obama-era White House official who is now a venture capitalist with Insight Partners, traveled to the Middle East last spring to meet with Gen. Michael E. Kurilla, who oversees the Pentagon’s Central Command operations in the region, to suggest ways to enhance military equipment now in use.

He suggested that the Pentagon acquire more data from commercial satellite companies that can help it improve awareness of what is happening on ocean waters. Among his firm’s investments is HawkEye 360, a startup that sells satellite data that can allow the military to track enemy movements.

Several months after the visit, the Navy doubled the size of a contract with HawkEye 360 to provide a more extensive array of satellite data. Mr. Sinai said the larger contract, worth $12.3 million, was unrelated to his intervention.

Many of the venture capitalists keep ties to Washington. Mr. Shah, the former head of the Defense Innovation Unit, serves on a congressionally appointed commission looking at ways to revamp the Pentagon’s budgeting process.

“D.C.-wise, we are very plugged in,” Mr. Shah said of his firm, which includes Michael Brown, who also served as head of the Defense Innovation Unit until he left last year.

Mr. Esper is co-chairman of a commission set up by the Atlantic Council that is studying ways to accelerate the Pentagon’s embrace of new technology. The Atlantic Council staff set up a series of 70 briefings for Pentagon and congressional officials to promote their ideas.

The lead author of the report, Stephen Rodriguez, is an executive at a defense venture capital firm. He also serves as an adviser to Applied Intuition, a software startup and military contractor that helped fund and promote the report. Funding for the Atlantic Council report also came from several other venture-backed defense startups and Mr. Philippone’s Snowpoint Ventures.

Mr. Rodriguez and his team keep a chart of all the recommendations that have resulted in policy changes, including expanding the power of the Defense Innovation Unit by making the new leader of the office a direct report to the defense secretary, and eliminating the prohibition on firms with more than 50 percent financing from venture capitalists from getting Pentagon small-business grants.

“We were not in the business of pitching or lobbying,” Mr. Rodriguez said. “We were just briefing our recommendations, and had detailed discussions about what the implementation of them would look like.”

Mr. O’Donnell, of Franklin Venture Partners, helped start what he calls the Silicon Valley Defense Group, which has sponsored a dozen “salon” dinners over the last year offering off-the-record opportunities for venture capital executives to meet with Pentagon officials and members of Congress.

The group has sent letters to members of Congress to push them to invest $1 billion next year in the Defense Innovation Unit, which is distributing a large share of its money to tech startups.

“The goal is to get a lot of conversations with the right people,” said Sam Gray, a former Pentagon acquisitions executive who is now the Washington-based director of the Silicon Valley Defense Group, as well as a partner at Franklin Venture Partners.

While many of the startups have yet to win substantial government funding, some are beginning to hit pay dirt.

Anduril secured a contract worth up to $1 billion with the U.S. Special Operations Command to identify, track and intercept enemy drones. Hermeus, the hypersonic jet startup whose investors include Ms. Donnelly’s firm, as well as funds set up by the investor Peter Thiel and Sam Altman, the chief executive of Open AI, recently secured a major Defense Innovation Unit contract.

Doug Beck, a former Apple executive who now leads the Defense Innovation Unit, said in an interview that the venture capitalists were not getting any special favors, nor did they ask for them.

“They are leaning in on policies that help break down systemic barriers, because that rising tide of defense innovation lifts all their boats,” he said, “and because they believe in the impact for the nation.”

A Spin On The Revolving Door: Pentagon Officials Turned Venture Capitalists

ABOUT THE AUTHOR

Eric Lipton is investigative reporter for The New York Times, who digs into a broad range of topics from Pentagon spending to toxic chemicals. https://www.nytimes.com/by/eric-lipton

 

The US Military Has Became A Wal-Mart

Click Image To Enlarge

“FOREIGN POLICY”  By Rosa Brooks

“Asking warriors to do everything poses great dangers for our country — and the military.

Our armed services have become the one-stop shop for America’s policymakers.

Here’s the vicious circle in which we’ve trapped ourselves: As we face novel security threats from novel quarters — emanating from nonstate terrorist networks, from cyberspace, and from the impact of poverty, genocide, or political repression, for instance — we’ve gotten into the habit of viewing every new threat through the lens of “war,” thus asking our military to take on an ever-expanding range of nontraditional tasks. But viewing more and more threats as “war” brings more and more spheres of human activity into the ambit of the law of war, with its greater tolerance of secrecy, violence, and coercion — and its reduced protections for basic rights.

Meanwhile, asking the military to take on more and more new tasks requires higher military budgets, forcing us to look for savings elsewhere, so we freeze or cut spending on civilian diplomacy and development programs. As budget cuts cripple civilian agencies, their capabilities dwindle, and we look to the military to pick up the slack, further expanding its role.

“If your only tool is a hammer, everything looks like a nail.” The old adage applies here as well. If your only functioning government institution is the military, everything looks like a war, and “war rules” appear to apply everywhere, displacing peacetime laws and norms. When everything looks like war, everything looks like a military mission, displacing civilian institutions and undermining their credibility while overloading the military.

More is at stake than most of us realize. Recall Shakespeare’s Henry V:

In peace there’s nothing so becomes a man

As modest stillness and humility:

But when the blast of war blows in our ears,

Then imitate the action of the tiger;

Stiffen the sinews, summon up the blood,

Disguise fair nature with hard-favour’d rage… 

In war, we expect warriors to act in ways that would be immoral and illegal in peacetime. But when the boundaries around war and the military expand and blur, we lose our ability to determine which actions should be praised and which should be condemned.

For precisely this reason, humans have sought throughout history to draw sharp lines between war and peace — and between the role of the warrior and the role of the civilian. Until less than a century ago, for instance, most Western societies maintained that wars should be formally declared, take place upon clearly delineated battlefields, and be fought by uniformed soldiers operating within specialized, hierarchical military organizations. In different societies and earlier times, humans developed other rituals to delineate war’s boundaries, from war drums and war sorcery to war paint and complex initiation rites for warriors.

Like a thousand other human tribes before us, we modern Americans also engage in elaborate rituals to distinguish between warriors and civilians: Our soldiers shear off their hair, display special symbols on their chests, engage in carefully choreographed drill ceremonies, and name their weapons for fearsome spirits and totem animals (the Hornet, the Black Hawk, the Reaper). And despite the changes ushered in by the 9/11 attacks, most of us view war as a distinct and separate sphere, one that shouldn’t intrude into our everyday world of offices, shopping malls, schools, and soccer games. Likewise, we relegate war to the military, a distinct social institution that we simultaneously lionize and ignore. War, we like to think, is an easily recognizable exception to the normal state of affairs and the military an institution that can be easily, if tautologically, defined by its specialized, war-related functions.

But in a world rife with transnational terrorist networks, cyberwarriors, and disruptive nonstate actors, this is no longer true. Our traditional categories — war and peace, military and civilian — are becoming almost useless.

In a cyberwar or a war on terrorism, there can be no boundaries in time or space: We can’t point to the battlefield on a map or articulate circumstances in which such a war might end. We’re no longer sure what counts as a weapon, either: A hijacked passenger plane? A line of computer code? We can’t even define the enemy: Though the United States has been dropping bombs in Syria for almost two years, for instance, no one seems sure if our enemy is a terrorist organization, an insurgent group, a loose-knit collection of individuals, a Russian or Iranian proxy army, or perhaps just chaos itself.

We’ve also lost any coherent basis for distinguishing between combatants and civilians: Is a Chinese hacker a combatant? What about a financier for Somalia’s al-Shabab, or a Pakistani teen who shares extremist propaganda on Facebook, or a Russian engineer paid by the Islamic State to maintain captured Syrian oil fields?

When there’s a war, the law of war applies, and states and their agents have great latitude in using lethal force and other forms of coercion. Peacetime law is the opposite, emphasizing individual rights, due process, and accountability.

When we lose the ability to draw clear, consistent distinctions between war and not-war, we lose any principled basis for making the most vital decisions a democracy can make: Which matters, if any, should be beyond the scope of judicial review? When can a government have “secret laws”? When can the state monitor its citizens’ phone calls and email? Who can be imprisoned and with what degree, if any, of due process? Where, when, and against whom can lethal force be used? Should we consider U.S. drone strikes in Yemen or Libya the lawful wartime targeting of enemy combatants or nothing more than simple murder?

When we heedlessly expand what we label “war,” we also lose our ability to make sound decisions about which tasks we should assign to the military and which should be left to civilians.

Today, American military personnel operate in nearly every country on Earth — and do nearly every job on the planet. They launch raids and agricultural reform projects, plan airstrikes and small-business development initiatives, train parliamentarians and produce TV soap operas. They patrol for pirates, vaccinate cows, monitor global email communications, and design programs to prevent human trafficking.

Many years ago, when I was in law school, I applied for a management consulting job at McKinsey & Co. During one of the interviews, I was given a hypothetical business scenario: “Imagine you run a small family-owned general store. Business is good, but one day you learn that Walmart is about to open a store a block away. What do you do?”

“Roll over and die,” I said immediately.

The interviewer’s pursed lips suggested that this was the wrong answer, and no doubt a plucky mom-and-pop operation wouldn’t go down without a fight: They’d look for a niche, appeal to neighborhood sentiment, or maybe get artisanal and start serving hand-roasted chicory soy lattes. But we all know the odds would be against them: When Walmart shows up, the writing is on the wall.

Like Walmart, today’s military can marshal vast resources and exploit economies of scale in ways impossible for small mom-and-pop operations. And like Walmart, the tempting one-stop-shopping convenience it offers has a devastating effect on smaller, more traditional enterprises — in this case, the State Department and other U.S. civilian foreign-policy agencies, which are steadily shrinking into irrelevance in our ever-more militarized world. The Pentagon isn’t as good at promoting agricultural or economic reform as the State Department or the U.S. Agency for International Development — but unlike our civilian government agencies, the Pentagon has millions of employees willing to work insane hours in terrible conditions, and it’s open 24/7.

It’s fashionable to despise Walmart — for its cheap, tawdry goods, for its sheer vastness and mindless ubiquity, and for the human pain we suspect lies at the heart of the enterprise. Most of the time, we prefer not to see it and use zoning laws to exile its big-box stores to the commercial hinterlands away from the center of town. But as much as we resent Walmart, most of us would be hard-pressed to live without it.

As the U.S. military struggles to define its role and mission, it evokes similarly contradictory emotions in the civilian population. Civilian government officials want a military that costs less but provides more, a military that stays deferentially out of strategy discussions but remains eternally available to ride to the rescue. We want a military that will prosecute our ever-expanding wars but never ask us to face the difficult moral and legal questions created by the eroding boundaries between war and peace.

We want a military that can solve every global problem but is content to remain safely quarantined on isolated bases, separated from the rest of us by barbed wire fences, anachronistic rituals, and acres of cultural misunderstanding. Indeed, even as the boundaries around war have blurred and the military’s activities have expanded, the U.S. military itself — as a human institution — has grown more and more sharply delineated from the broader society it is charged with protecting, leaving fewer and fewer civilians with the knowledge or confidence to raise questions about how we define war or how the military operates.

It’s not too late to change all this.

No divine power proclaimed that calling something “war” should free us from the constraints of morality or common sense or that only certain tasks should be the proper province of those wearing uniforms. We came up with the concepts, definitions, laws, and institutions that now trap and confound us — and they’re no more eternal than the rituals and categories used by any of the human tribes that have gone before us.

We don’t have to accept a world full of boundary-less wars that can never end, in which the military has lost any coherent sense of purpose or limits. If the moral and legal ambiguity of U.S.-targeted killings bothers us, or we worry about government secrecy or indefinite detention, we can mandate new checks and balances that transcend the traditional distinctions between war and peace. If we don’t like the simultaneous isolation and Walmartization of our military, we can change the way we recruit, train, deploy, and treat those who serve, change the way we define the military’s role, and reinvigorate our civilian foreign-policy institutions.

After all, few generals actually want to preside over the military’s remorseless Walmartization: They too fear that, in the end, the nation’s over-reliance on an expanding military risks destroying not only the civilian competition but the military itself. They worry that the armed services, under constant pressure to be all things to all people, could eventually find themselves able to offer little of enduring value to anyone.

Ultimately, they fear that the U.S. military could come to resemble a Walmart on the day after a Black Friday sale: stripped almost bare by a society both greedy for what it can provide and resentful of its dominance, with nothing left behind but demoralized employees and some shoddy mass-produced items strewn haphazardly around the aisles.”

How the Pentagon Became Walmart

Time To Retire The Phrase ‘Military Industrial Complex’

 

“RESPONSIBLE STATECRAFT” By Dan Grazier

“President Dwight Eisenhower coined this immortal phrase during his January 17, 1961 farewell address to warn Americans. “Sorry Ike: it’s a bit too dated and no longer the right moniker to describe what we’re up against.

The Pentagon, Congress, the defense industry, think tanks, lobbyists, and industry-sponsored media outlets are all very real.  When combined, they make up what is better termed the “National Security Establishment,” which Americans see in action all the time.”

____________________________________________________________________________________

“It is time to retire the phrase “military-industrial complex.”

President Dwight Eisenhower coined this immortal phrase during his January 17, 1961 farewell address to warn Americans against the “acquisition of unwarranted influence” by the conjunction of “an immense military establishment and a large arms industry.”

As a five-star general, Ike knew, perhaps better than anyone, the self-serving and mutually beneficial relationship between the defense industry and the military. But he neglected to mention Congress’s role in the arrangement, nor could he necessarily have foreseen the ways in which corporate interests would intertwine themselves with the various bureaucracies that keep the Pentagon’s coffers flowing.

While the phrase “military-industrial-congressional-information complex” would be more accurate, it doesn’t exactly roll off the tongue. And like Eisenhower’s snappier appellation, it still suggests an element of conspiracy. But, of course, none of this is theoretical.

The Pentagon, Congress, the defense industry, think tanks, lobbyists, and industry-sponsored media outlets are all very real. When combined, they make up what is better termed the “National Security Establishment,” which Americans see in action all the time.

We see it when a retired general goes on television to explain exactly how the Ukrainian army can defeat the Russians — but only if Congress passes the latest billion-dollar aid package. No mention is made of the rather relevant fact that the general’s think tank is funded by defense contractors who stand to benefit from the aid package he is calling for.

We see it when another general retires from his post as the head of his service branch and turns up six months later on the board of a major defense contractor. Coincidentally, it’s the same defense contractor that celebrated a year earlier when that general announced the company had won the $21.4 billion contract to build a fleet of bombers.

We see it when a senior member of the Senate Armed Services Committee proposes the U.S. spend 5% of the gross domestic product every year on the military — a $55 billion increase to the current Pentagon budget. Predictably, he fails to mention that the majority of this money would go to defense contracts awarded to the same organizations that have given him more than $530,000 in campaign money since 2019. He fails to acknowledge how flush Pentagon budgets over the past 25 years created the sorry state of the military today.

We even see it when we least expect to, as when the country’s largest defense contractor runs advertisements during the Oscars and posts an interactive map on the company’s website touting the economic benefits of a weapon program. The company wants everyone to know how many jobs could be lost if Congress votes to disrupt the program in any way.

The American people also see the impact of these actions by the National Security Establishment.

We see tens of billions spent on a fighter jet that can only be reliably ready for combat a third of the time. We also see more than $60 billion spent designing and building warships that were so flawed Navy officials apparently can’t get rid of them fast enough. The Navy decommissioned one of these ships less than 5 years after its commissioning ceremony, roughly two decades ahead of the ship’s planned lifespan.

Starting in 2003, the Army spent at least $8 billion, and some sources say the better part of $20 billion, developing the Future Combat System, a family of armored vehicles to replace Cold War-era tanks, personnel carriers, and artillery vehicles. The Pentagon then canceled the program in 2009 with little to show for the effort and expense.

There are plenty of other examples of failed acquisition efforts from the past 25 years which partially explain why annual defense spending is now a whopping 48% higher than it was in 2000. Compounding these efforts is the Pentagon’s reliance on contractors to perform many roles once performed by uniformed service members at a much lower financial rate. The Department of Defense itself analyzed one case where hiring a group of contractors cost 316% more than the government employees tasked with similar work.

In a city where partisanship and political rancor impacts nearly every debate, wasteful and ineffective defense policies are a conspicuous exception. That is because the National Security Establishment is party-agnostic. Military contractors donate money to candidates and lobbyists on both sides of the aisle, those candidates vote for Pentagon budget increases and fund weapons programs long after their failures are widely known, and lobbyists and corporate-sponsored media groups generate public support for those programs.

Without massive structural changes, this pattern is all but certain to continue into future generations. Today’s National Security Establishment has launched several major weapons programs in recent years that, if allowed to continue on their current trajectories, will drive the annual Pentagon budget to truly unprecedented levels.

As programs like the B-21, Constellation-class frigate, Next Generation Air Dominance fighter jet, Columbia-class ballistic missile submarine, several ground vehicle programs, the Sentinel nuclear missile, and myriad space and cyber systems mature and enter full-rate production in the coming decades, the Pentagon budget will expand to cover the costs.

But this doesn’t have to be the case, if Congress actually does its oversight job. Several of these programs are already behind schedule and over budget. Costs for the Sentinel missile program have increased 81% to $140.9 billion from the original $77.7 billion estimate and it will still be several years before the first missile is installed in its silo. Yet, given the massive financial influence, even these egregious failures are all but glossed over, a simple footnote for most, and then prepared for a rubber stamp.

The services and their bureaucracies, the defense industry, members of Congress, and the paid mouthpieces promoting their interests in the media and during lobbying visits all comprise the all-too-real National Security Establishment. Identifying this network is the first step to avoid saddling future generations with the crushing debt associated with unsustainable U.S. military policies today.

While it is long-past time to update the name, Eisenhower’s warning is still more real than ever. Americans must remain vigilant and guard against the self-serving nature of this apparatus that is more intent on lining its own pockets than it is actually keeping Americans and our allies safe.”

Time To Retire The Phrase ‘Military Industrial Complex’

ABOUT THE AUTHOR:

Dan Grazier is a senior fellow and program director at the Stimson Center. He is a former Marine Corps captain who served tours of duty in Iraq and Afghanistan. His assignments in uniform included tours with 2nd Tank Battalion in Camp Lejeune, North Carolina, and 1st Tank Battalion in Twentynine Palms, California.

What Has Happened To Great Leaders And What The Next Ones Are Facing

Left to right and top to bottom above: Colin Powell , Dwight Eisenhower, Harry Truman, Jimmy Carter and General Norman Schwarzkopf

The next great world leaders will be faced with the following:

• Facing geopolitical and economic realities, stopping war interventions and investing in relationships within and without our country by offering mutual collaboration.

• Ceasing dwelling on threat and build long term infrastructure, education and international development.  The threats will melt away. 

• Investing for the long term based on a strategy dealing with challenges in education, communication and society value transitions.

• Developing government working modes that know how to strike a balance between long and short term actions. We must let them know what we think regularly by communicating with them. 

• Knowing that most cultures and societies in upheaval today are watching our national models and choosing whether or not to support them, ignore them or attack them. 

Let us hope they are up to the challenge

The world is crying for great leaders. They are out there, but I believe they are hesitant to step forward. It is worth examining why and what has happened to some recent United States great leaders.

This author watched for over 35 years in aerospace as the massive machine of government ground up men of integrity who had a true sense of leadership, purpose and service.

Unknown to the average American is the swinging door of military personnel who enter the defense industrial complex and then move on into government civil positions, lobbying activities or enterprises tapping their former service background for gain and greed.  Statesmanship and integrity have a difficult time surviving in that environment. The potential for waste, fraud and abuse is tremendous:

Star Creep and the Revolving Door

Oversight organizations such as POGO have highlighted many cases of abuse where former military personnel have been involved. The POGO data base at the link below has public record details regarding these type of occurrences:

Contractor Misconduct Data Base

Colin Powell had difficulties in a government role because real integrity fares poorly in the big machine and he made the mistake of trusting the NSA and the CIA, as well as Lockheed Martin, SAIC and CSC on Iraq war policy.

Dwight David Eisenhower was one of the last, great, ex-military presidents who led well in government. He warned us at the ink below about the big machine gathering power as he left office:

Eisenhower Farewell Address

Harry Truman could not have made the type of hard decisions and "Buck Stops Here" operations in this day in age. The machine would have crippled him.

Jimmy Carter had integrity but did not fare well because the huge gears of government were grinding away by then.

General Schwarzkopf demonstrated true leadership potential in the first Gulf War but very prudently moved away from the government he served as a military officer when he retired. He was a Vietnam vet who knew the machine too well..

I worked in Aerospace through 7 Administrations and all I saw was the machine getting bigger, grinding up leadership principles, young soldiers, creating new enemies and spewing foreign interventions and profits for large corporations.

Our hope for the future is that the massive machine of government will be re-sized small enough so a true leader with statesman qualities will be inclined to take the helm and steer it in a direction away from political stagnation while fostering a resumption of the premiere place the US has had in history. 

We found the STRATFOR Article by George Friedman exceptional in its analysis of the limited power of the President and the absolute necessity of anyone holding office to be capable of evolving coalitions effectively in governing domestically and on the world stage: 

U.S. Presidency Designed to Disappoint

Here are some select extracts: 
*** "The American presidency is designed to disappoint. Each candidate must promise things that are beyond his power to deliver. No candidate could expect to be elected by emphasizing how little power the office actually has and how voters should therefore expect little from him. So candidates promise great, transformative programs. What the winner actually can deliver depends upon what other institutions, nations and reality will allow him." 

*** " The power often ascribed to the U.S. presidency is overblown. But even so, people -- including leaders -- all over the world still take that power very seriously. They want to believe that someone is in control of what is happening. The thought that no one can control something as vast and complex as a country or the world is a frightening thought. Conspiracy theories offer this comfort, too, since they assume that while evil may govern the world, at least the world is governed."

A Veteran Connects the Dots In the Military and Veterans Health Care Systems Maze

PLEASE CLICK ON IMAGE TO ENLAGE

The Massive backlog recently highlighted in the press and in Congress  reveals a dire necessity for simplification, communication and  efficiency in processes, systems and government service contracting in DOD and the Veterans Administration as well as better management of federal government contractors. 

The news media, the auditors and the average American are pointing the finger at the President and the Head of the VA.  One cannot ignore the accountability aspects of these individuals.  

However, the real root causes lie in the massive volume of war veterans returning from our pointless incursions in the Middle East over the last decade, coupled with the historically poor process and systems work conducted between the Department of Defense and the VA and poorly managed contractors taking home millions on systems specifications that change like the wind blows.  

It is not unlike the Obama Care fiasco.

After returning from two combat tours in Vietnam, I worked in the government contracting environment for 36 years then went through the VA system as a Veteran getting treatment at retirement in 2006

In 2006 I found the VA had a magnificent system capable of handling medical records and treatment anywhere in the world once a veteran was in the system; a key point.  Please contrast the below Time Magazine Story with current events and ask yourself : Why have we had such deterioration?  

http://content.time.com/time/magazine/article/0,9171,1376238,00.html

ANSWER:   We have not experienced deterioration - within the VA itself, except  from pressures due to millions returning from war and from human beings who look for excuses when systems fail.

We have had over 17 years of Middle East incursions, a sudden discharge of veterans and poor management from the DOD to the VA, from the systems contractors to the state veterans homes.  

Veterans fall through the cracks as a result.

 This is an F-35 aircraft, cost plus scenario, revisited in the form of veterans care systems mismanagement and it will cost billions to fix.  THAT IS THE COST OF WAR.

Unlike the F-35 we must have veterans health care or our volunteer army will disappear.

THE TOTAL SPECTRUM MUST BE VIEWED TO MANAGE THE ISSUES. 


BACKGROUND

A recent 3 part special in Time Magazine addresses the serious gaps between treatment,  benefits and services processes and systems between the military  services and the Veterans Administration:

http://nation.time.com/2013/04/22/what-the-hell-is-going-on-with-va/#ixzz2RnspoSM4

"While awaiting  processing, "the veteran’s claim sits stagnant for up to 175 days as VA  awaits transfer of complete (service treatment records) from DoD,":

After years of work to move toward integrated electronic records that would eliminate this sort of delay, Defense Secretary Chuck Hagel recently  conceded that the Defense Department is not holding up its end of the bargain to improve the disability process.

"I didn’t think, we knew what the hell we were doing.":
 
http://www.federalnewsradio.com/394/3288748/Hagel-orders-DoD-to-restructure-path-toward-integrated-health-record 
 

HISTORICAL SIMILARITIES

The above scenario is not unlike the Walter Reed Army Hospital care  fiasco a few years ago, before the facility was shut down and consolidated with the Bethesda Naval facility.

OTHER SYMPTOMS

The VA decided to have those who would  actually use the system (claims processors) work with software  developers. This process took longer but will create a system more  likely to meet the needs of those who actually use it. VA also worked  closely with major Congressional-chartered veterans’ service  organizations.

2013 was the year in which regional offices were to be being transitioned to the new electronic system.  It obviously has not occurred as planned.

ROOT CAUSE

Both DOD and the Veterans  Administration use service contractors to perform this type of systems development.  Government Computer News (GCN)  carried a story on the  difficulties experienced with, "Performance-Based Contracting", which  has been made part of the Federal Acquisition Regulation (FAR) in an  attempt to pre-establish at contract award those discrete outcomes that determine if and when a contractor will be paid.

http://gcn.com/articles/2006/12/01/performancebased-contracting-still-baffles-agencies.aspx 

Interestingly enough, the article splits the blame for the difficulties  right down the middle, stating the government typically has problems  defining what it wants as an end product or outcome and looks to  contractors to define it for them. More than willing to do so, the contractors detail specific end products or outcomes, set schedule  milestones and submit competitive proposals.

The winner is selected based on what the government thinks it needs at  the time to fulfill its requirement and a contract is negotiated. Once underway, the government decides it wants something else (usually a  management-by-government committee phenomena with a contractor growing  his product or service by offering lots of options). The resulting  change of contract scope invalidates the original price and schedule, so  a whole new round of proposals and negotiations must occur with the  winner while the losers watch something totally different evolve than  that for which they competed. The clock keeps ticking and the winner  keeps getting his monthly bill paid based on incurred cost or progress  payments.

CONCLUSION

The present state of the economy and the needs of our servicemen will not allow the aforementioned to  continue. Government agencies are now hard pressed to insure the most  "Bang for the Buck". It is in the long term interests of the politician, the DOD, the VA and astute contractors to assist in that endeavor. 

(1)The only way to achieve such an objective is through sound technical, cost and schedule contract definition via an iterative process of baseline management and control.

http://www.smalltofeds.com/2009/08/contract-baseline-management-in-small.html

(2)  Government civil servants must be trained to report systemic poor service up the line in lieu of hiding bad news from superiors or developing workarounds.  This must be an expectation built into their job description and they must be rewarded and promoted for meeting that requirement just as they are for the other requirements of their jobs. 

The first whistle to be blown must be to the boss when the service issue occurs, not to the press a year from the occurrence. 

Our returning soldiers and those who have served before deserve better"