"For the period 1970-89 as a whole, by every measure, the top defense firms outperformed the market by a huge margin." (Higgs 2006: 192).

BAE Systems: In 2000 BAe spent some $13 billion to acquire Marconi Electric Systems, the military portion of Britain’s General Electric Co., thereby propelling itself to the top ranks of the world’s aerospace/military companies. In the wake of that move, the company changed its name to BAE Systems. The next year it merged its missile operations with those of EADS and Finmeccanica to form the joint venture MBDA. In 2000 BAE purchased the Sanders military electronics unit of Lockheed Martin. In 2005 BAE sold its UK-based avionics unit to Finmeccanica. That same year it completed the largest foreign acquisition of a U.S. defense company when it paid $4 billion to purchase U.S. armored-vehicle producer United Defense Industries, maker of the Bradley Fighting Vehicle (BAE had acquired a similar UK company called Alvis in 2004). The following year, BAE sold its interest in Airbus to EADS. In 2007 BAE increased its U.S. presence by agreeing to acquire Armor Holdings Inc. for about $4 billion.

General Electric: On July 23, 1992, GE pled guilty in federal court to civil and criminal charges of defrauding the Pentagon and agreed to pay $69 million to the U.S. government in fines — one of the largest defense contracting fines ever. The company said in a statement that it took responsibility for the actions of a former marketing employee who, along with an Israeli Air Force General, diverted Pentagon funds to their own bank accounts and to fund Israeli military programs not authorized by the United States. Under the settlement with the Justice Department over violations of the Foreign Corrupt Practices Act, GE paid $59.5 million in civil fraud claims and $9.5 million in criminal fines... When the Project on Government Oversight surveyed defense contractors, it found that General Electric was responsible for 15 instances of fraudulent activity in just a four year period (1990-1994) — more than any other defense contractor... On January 10, 1997, the U.S. Department of Justice announced (# 97-012) that GE would pay $950,000 to settle allegations that it fraudulently misrepresented that it had conducted certain test procedures on circuit boards for hundreds of aircraft engine controls when in fact the tests were not conducted... GE paid fines between 1990 and 1994 ranging from a $20,000 criminal fine to a $24.6 million civil fine for a variety of defense contracting frauds, including: misrepresentation, money laundering, defective pricing (2 incidents), cost mischarging (3 incidents), false claims, product substitution, conspiracy/conversion of classified documents, procurement fraud and mail fraud... On July 22, 1992, GE "... [pled] guilty to diverting some $26.5 million from the U.S. foreign military aid program used to finance General Electric's sale of F-16 jet engines and support equipment to Israel ." (United States v General Electric, Docket #90-CV-792, US DC SD OH, Cincinnati) (See: Defense Contracting: Contractor Claims for Legal Costs Associated with Stockholder Lawsuits, GAO/NSIAD-95-66 (July 1995) GE was convicted on February 3, 1990 in U.S. District Court in Philadelphia of defrauding the government out of $10 million for a battlefield computer system. GE pled guilty on May 19, 1985 to charges of fraud and falsifying 108 claims on a missile contract. GE was convicted of defrauding the Air Force out of $800,000 on the Minuteman Missile Project... Before long GE was dominating virtually all aspects of electrification in the United States--from generating and transmitting power to making the trolleys, motors (including large ones for industry), elevators, fans, and bulbs that used it... While GE's appliance business was blossoming, government concern about the company's market dominance was growing. In 1924 GE and Westinghouse were forced out of the power generating business, and a later antitrust action forced GE to make its light bulb patent available to competitors. Meanwhile, GE was boldly entering new lines of business, most notably the young field of broadcasting... RCA, essentially a subsidiary of GE with a large minority interest owned by AT&T, was the vehicle by which a small group of companies attempted to dominate the new industry through the pooling of patents--so much so that soon after Westinghouse Electric entered the arena, it was invited to join the combine, as was United Fruit, which made use of radio to communicate with its banana boats going to and from Central America... In 1926 AT&T decided to quit broadcasting in exchange for a monopoly on wire connections between stations. That same year a new entity called National Broadcasting Company (NBC) was formed to operate AT&T's former stations and RCA's outlets. It was agreed that NBC--50 percent owned by RCA, 30 percent by GE and 20 percent by Westinghouse--would pay AT&T generous rates for guaranteed access to land-line connections... In 1930 the Justice Department brought antitrust charges against RCA, GE and Westinghouse. The industry was stunned but worked out a consent decree they could live with... with the onset of the Second World War, the company shifted its focus to military needs. GE produced radar systems and power plants for ships while also building some of the first jet engines for airplanes... GE produced the first nuclear reactors for submarines and, after the federal government opened up atomic energy to civilian purposes, nuclear reactors for power plants... GE's promoted the slogan "Progress is Our Most Important Product" and sent Ronald Reagan around the country as a good-will ambassador. Yet the old bugaboo of the company--antitrust--returned to torment it. In 1961 the Justice Department indicted several dozen companies, GE among them, for criminal price fixing in the electrical equipment business.

Lockheed Martin: ..the company receives some 84 percent of its revenue from the U.S. government, mostly the Pentagon. It is the largest federal contractor and the largest weapons producer in the world. It trails Boeing, United Technologies and EADS in total revenues, but those companies, unlike Lockheed Martin, have substantial revenue from civilian products. Most of the 16 percent of Lockheed’s revenues that doesn’t come from Uncle Sam comes from foreign governments. Formed by the 1995 “merger of equals” of two long-time military contractors—Lockheed Corp. and Martin Marietta Corp.—Lockheed Martin produces a wide range of combat aircraft (F-16, F-22, F-35 fighters, C-130 transports, etc.), combat ships, missiles (Hellfire, Javelin, Patriot, etc.), space systems (Hubble Space Telescope, Mars Reconaissance Orbiter, etc.), military electronics and even the new Presidential helicopter. Lockheed has been involved in numerous controversies involving questionable foreign payments, overbilling of the federal government, race and age discrimination, and environmental racism. Yet it continues to receive a steady stream of new contracts and has made itself indispensable to the U.S. military establishment. The Project On Government Oversight’s Federal Contractor Misconduct Database lists more instances (42) of misconduct for Lockheed Martin than for any of the other 50 largest federal contractors. Here are some examples from POGO’s list: * In June 2000 the State Department fined Lockheed Martin $13 million ($5 million of which was to pay for remedial measures) for violations of the Arms Control Export Act in connection with the transfer of information about space launches to China. * In August 2002 Lockheed Martin’s Tactical Systems Division agreed to pay the federal government $2.1 million to settle charges that it submitted fraudulent bills to the Navy for work on Trident Missiles. * In January 2003 Lockheed Martin agreed to pay $1.4 million to settle allegations that Loral Corp., which it acquired in 1996, had overbilled the Air Force on the F-15E Weapon System Trainer. * In June 2003 Lockheed Martin paid $7.1 million to settle charges that one of its units submitted fraudulent lease cost claims to NASA, for which it was doing work on the space shuttle program. * In January 2005 Lockheed Martin Missiles and Fire Control agreed to pay $1.4 million to resolve allegations of mischarging the U.S. Army in connection with its production and support contracts for the Multiple Launch Rocket System. * In 2007 Lockheed agreed to repay the federal government $265 million plus interest in connection with overbilling for work on the F-35 Joint Strike Fighter. The company called the overbilling “inadvertent.” In June 2008 the Project On Government Oversight made public a 2007 report by the Defense Contract Management Agency that found Lockheed failed to follow 19 of 32 Pentagon guidelines on tracking and managing costs on major weapons programs. In August 2008 Lockheed agreed to pay $4 million to settle charges that it failed to get permission to sell missiles to the United Arab Emirates and that the company revealed classified information during negotiations with the Persian Gulf nation... Lockheed, which produced the first U.S. jet fighter (the P-80 used in the Korean War) and later the U-2 spy plane, made a new foray into commercial jets in the 1960s with the introduction of its L-1011 TriStar? , a rival to Douglas’s DC-10. Problems with that project and the C-5A transport it was building for the U.S. Air Force nearly put the company under in the early 1970s. Lockheed had to be rescued by a $250 million federal government loan guarantee, which passed the Senate by only a one-vote margin. Despite the rescue, Lockheed’s commercial aircraft operation continued to struggle, so management put an end to it in 1981. The company later averted a takeover by corporate raider Harold Simmons by forming an employee stock ownership plan... Lockheed’s F-117 Stealth fighters played a major role during the 1991 Persian Gulf War (and later during the initial invasion of Iraq), and the company’s role as a producer of military aircraft was enhanced when it agreed in 1992 to purchased the fighter plane unit of General Dynamics... During this period Lockheed Martin supplemented its military work with another form of government contracting: it got into the business of doing outsourced administrative work for state social-service agencies. One of its major customers was Florida, which aggressively privatized its public-assistance programs. In 1997 Lockheed Martin announced its intention to acquire Northrop Grumman, but after federal regulators balked the plan was dropped. Lockheed did acquire the satellite company Comsat Corp. in 1998 but sold it in 2004. In 2000 Lockheed sold its Sanders military electronics business to BAE Systems. Amid the U.S. military buildup of the past decade, Lockheed has fared well. In October 2001 it was awarded the Pentagon’s largest contract ever—a deal worth at least $200 billion over several decades to produce the Joint Strike Fighter for the Air Force. Shortly after that, Lockheed and TRW were given a $2.6 billion contract to create the next generation of military satellites, also for the Air Force. In 2007 the U.S. Navy cancelled Lockheed Martin’s contract to build the second of two coastal combat vessels because of large cost overruns. The company has also been facing criticism over rising costs on the new Marine One Presidential helicopter it is building using a design from Italy’s Finmeccanica. A March 2008 Government Accountability Office estimated that the cost of the Joint Strike Fighter program led by Lockheed Martin was expected to rise to $337 billion, a 45 percent jump from what was estimated in 2001. Problems such as these did not stop the company from getting more contracts, such as a May 2008 award worth $1.5 billion to building the next generation of navigation satellites.

DynCorp: DynCorp? then largely disappeared from the public eye until the early 2000s, when it began to be receive attention for its expanded role in providing security services for the U.S. government in places such as Colombia, Afghanistan and Iraq. That attention was often negative, as in the scandal over allegations that DynCorp? workers in Bosnia had purchased young women from brothels and kept them as sex slaves. A DynCorp? employee who revealed the practice and was terminated from her job later won a $173,000 judgment from an employment tribunal in Britain... Despite its controversial role of providing services in war zones, the company tried to avoid scrutiny. An in-depth look at DynCorp? by the Dallas Morning News in December 2006 stated that “there’s little public accounting of what DynCorp? does or whether tax dollars are being well spent.”... Robberson also examined the role of prominent retired military officers on DynCorp? ’s board of directors. These included Gen. Richard E. Hawley (former head of the U.S. Air Combat Command), Gen. Barry McCaffrey? (former head of the U.S. Southern Command), Gen. Anthony Zinni (former head of the U.S. Central Command) and Adm. Joseph W. Prueher (former head of the U.S. Pacific Command). Also covered by Robberson were criticisms that DynCorp? paid little attention to employee safety considerations in its war-zone operations as well as charges by a former company accountant that she was terminated for raising question about what she said were billing practices that cheated the federal government of millions of dollars. A false claims lawsuit initiated by the former employee is pending in federal court. In October 2007 DynCorp? was at the center of controversy when the Special Inspector General for Iraq Reconstruction, Stuart W. Bowen Jr., issued a report charging that the State Department was unable to specify what had been accomplished under a $1.2 billion contract awarded to the company for Iraqi police training. The Washington Post subsequently reported that the company had refunded $14 million to the State Department in the course of cleaning up its records... In the summer of 2006, the Islamic Courts Union (ICU) controlled most of Somalia, taking power from the warlords who had controlled Somali's capital for the past 15 years. While International news outlets reported that the ICU's rise to popular power promoted peace within Somalia that could be a turning point for lasting peace in the region, the U.S. was training Ethiopian troops. In late December of the same year, Ethiopian troops invaded Somalia, followed by air raids by the U.S. (ostensibly to fight Al Queda suspects of a 1998 bombing) and put the U.S.-backed interim government back in power. The following March (2007), Dyncorp was awarded a $10 million contract for logistics support for "peace-keeping", "giving the United States a significant role in the critical mission without assigning combat forces," according to Forbes... The new DynCorp? , which receives almost 100 percent of its revenue from the federal government, wasted no time getting new contracts. It was hired by the State Department to train a new army for Liberia and got another contract for additional work on narcotics eradication and interdiction. In December 2006 the company won a huge prize when its joint venture with McNeil? Technology was awarded a five-year Army contract worth up to $4.6 billion to provide linguists in Iraq. Six months later, DynCorp? was chosen along with KBR and Fluor for a 10-year contract worth up to $150 billion to provide an array of support services for the Army

KBR: KBR is the largest US private employer in Iraq with roughly 20,000 employees and 40,000 subcontractors... Although KBR/Halliburton probably have the longest rap sheet of any government contractor, leading members of Congress to call for the companies' suspension and/or debarment from taxpayer-funded federal contracts, the military has refused to suspend or debar the recidivist companies from federal contracts... KBR/Halliburton remains under investigation in numerous countries for a massive (est'd $180 million) bribery scheme related to the Bonny Island, Nigeria natural gas consortium that the company coordinated. For a chronology of the bribery scandal see Halliburton Watch's detailed timeline. The Army's top civilian contracting official, Bunnatine Greenhouse, blew the whistle on the preferential treatment received by KBR/Halliburton in Iraq in late 2004. Greenhouse was demoted in August, 2005 after testifying before the Senate Democratic Policy Committee about what she called a "clubby" relationship between Halliburton's KBR subsidiary and the Army Corps of Engineers. "I can unequivocally state that the abuse related to contracts awarded to KBR represents the most blatant and improper contract abuse I have witnessed during the course of my professional career," Greenhouse told Congress. Although a criminal probe of Greenhouse's allegations was referred to the Department of Justice in November 2005, nearly three years later, no action has been taken.

ManTech International: ManTech? , which had a contract backlog of $3.2 billion at the end of 2007, has cemented its ties to the Washington establishment by naming to its board of directors the likes of retired admiral David E. Jeremiah, former vice chairman of the joint chiefs of staff, and former Deputy Secretary of State Richard Armitage. One of the company’s top officers has been Eugene Renzi, a retired Army general and father of Rep. Rick Renzi of Arizona.