Arms Around the World

MoJo Wire / Mother Jones, August 1999


It was the early 1990s and then-presidential candidate Bill Clinton was on the campaign trail making promises: "I expect to review our arms sales policy and to take it up with the other major arms sellers of the world as a part of a long-term effort to reduce the proliferation of weapons."

Ah, campaign promises. But the economy was in the doldrums, and the prospect of cutting arms sales -- sugar daddy to one of the nation's largest industries -- didn't thrill either labor or corporate America. What's more, the Gulf War had just ended the previous year, and it was the best extended commercial an arms salesman could ask for. (Indeed, some arms manufacturers incorporated bombing videos into their promotional materials.) Countries were clamoring for the high-tech weapons that made for such good TV.

So, once elected, Bill Clinton did what he does best: He took advantage of the opportunity. Rather than insert human-rights concerns into the arms-sales equation, as did his Democratic predecessor President Carter, Clinton decided to aggressively continue the sales policies of President Bush, himself no slouch when it came to selling U.S. arms.

Early on, Clinton required our diplomats to shill for arms merchants to their host countries. The results were immediate: During Clinton's first year in office, U.S. arms sales more than doubled. From 1993 to 1997, the U.S. government sold, approved, or gave away $190 billion in weapons to virtually every nation on earth.

The arms industry, meanwhile, has greased the wheels. It filled the Democratic Party coffers to the tune of nearly $2 million in the 1998 election cycle.

... while the U.S. obviously sells weapons to NATO countries and relatively democratic allies like Japan and South Korea, it also has a nasty habit of arming both sides in a conflict, as well as countries with blighted democracy or human-rights records, like Indonesia, Colombia, and Saudi Arabia.

All of this might be justified as a way to maintain a strong manufacturing job-base in the U.S., but some of these sales actually result in jobs being shipped abroad -- while arms manufacturers get tax breaks for merging, resulting in further layoffs here at home.


Shipping Jobs Overseas

According to the Pentagon, the defense industry laid off 795,000 American workers between 1992 and 1997. At the same time, many of these corporations were sweetening their arms deals to other countries by offering "offsets" -- incentives provided to foreign countries in exchange for the purchase of military goods and services. The programs often include agreements to manufacture some or all of the products in the purchasing country.

Turkey, for example, agreed to buy 160 F-16s from General Dynamics in 1987 (for delivery through 1994) for an estimated $4 billion -- on the condition that most of the planes be built in Turkey. The offset resulted in 1,500 jobs going to Turkey. In 1992, General Dynamics entered into a similar F-16 offset deal with South Korea and brought 400 Koreans to its Fort Worth, Texas, plant for training, after having laid off 10,000 workers in the previous two years.

Lockheed Martin has continued the trend since it bought General Dynamics' F-16 program in 1993: In vying for a contract to supply fighters to Poland, it is offering to build an assembly plant there for all future F-16 sales to Central Europe -- so the planes won't be made in the U.S. at all. Makes you feel patriotic, doesn't it?


Corporate Pork

Under a Defense Department policy initiated in 1993, U.S. taxpayers wind up covering a big chunk of the cost of defense-corporation mergers. The tally so far has reached $856.2 million in perfectly legal write-offs, including $405 million for the Lockheed/Martin Marietta merger, to name one example. Because of the policy, Lockheed was able to bill the Pentagon up front for $2.4 million of CEO Norman Augustine's salary.

In 1996, Congress created the Defense Export Loan Guarantee program to finance U.S. weapons sales to foreign countries. Its first beneficiary? A United Industrial sale of pilotless aircraft and training systems to cash-strapped Romania. If Romania defaults on its payments (not a bad bet for a country in economic turmoil), U.S. taxpayers will be left holding the bag: $16.7 million. But United Industrial gets paid either way.


Arming Both Sides

The Clinton administration has not been shy about arming potential foes in regional conflicts. For example, two of America's biggest arms customers are Greece and Turkey, which have been threatening to go to war with each other for decades over the tiny Mediterranean island of Cyprus.

Both countries stake a claim to the island, more than a third of which has been occupied by Turkish forces since 1974, and the two have clashed hundreds of times in the 25 years since.

Though barred by Congress from selling offensive weapons to Cyprus itself, in 1997 the U.S. sold (or allowed American corporations to sell) more than $270 million worth of weapons to Greece and nearly $750 million worth to Turkey. Now if there's a war, the two NATO allies can blast away at one another with far greater efficiency, thanks to the U.S. defense industry and its cheerleader, Bill Clinton.

Pentagon watch