Profits of War: Beneficiaries of Post-9/11 Pentagon Spending Surge

Profits of War: Beneficiaries of Post-9/11 Pentagon Spending Surge

Since the start of the Afghan war, Pentagon’s military spending was over 14 trillion dollars with one-third to one-half of the money going to defence contractors, especially five big contractors, according to a Brown University study.

The authors referred to some of these corporations earning profits that are widely considered legitimate and other profits as consequence of questionable or corrupt business practices that amount to waste, fraud, abuse, price gouging or profiteering.

BUDGET INCREASE

The Study was critical on Pentagon’s increasing reliance on private contractors in the post-9/11 period. The study noted that it raised several questions of accountability, transparency and effectiveness. It also mentioned that privatising key functions could reduce the US military’s control of activities that occur in war zones while increasing risks of waste, fraud and abuse.

The US budget increased by over ten percent in the first year after the 9/11 attacks and the commencement of the war in Afghanistan, the study noted. The budget increased year after year for ten years running. The spending peaked in 2010 at the highest level since World War II—over 800 billion dollars in 2021. This figure was substantially more than the US spent on its military at the height of the Korean or Vietnam Wars or the Reagan build up of the 1980s.

TOTAL EXPENDITURE

The total expenditures for all purposes since Fiscal Year 2001 topped 14.1 trillion. Of this, 4.4 trillion dollars went for weapons procurement and research and development (R&D), categories that primarily benefit corporate contractors, the study said. The remaining funds went to pay and benefits for military and civilian personnel and supporting expenditures needed to operate and maintain the military. The 4.4 trillion dollar is a conservative estimate of the pool of funding Military contractors drew in the two decades since 9/11, the report added.

The report clearly mentions that one-quarter to one-third of all Pentagon contracts in recent years went to five major weapons contractors: Lockheed Martin, Boeing, General Dynamics, Raytheon, and Northrop Grumman. These companies received over 286 billion dollars in contracts in Fiscal Year 2019 and Fiscal Year 2020. From FY 2001 to FY 2020 they alone split over 2.1 trillion dollars among themselves.

Numerous companies took advantage of wartime conditions, which require speed of delivery and often involve less rigorous oversight to overcharge the government or engage in outright fraud. In 2011, the Commission on Wartime Contracting in Iraq and Afghanistan estimated that waste, fraud and abuse had totalled between 31 billion dollars and 60 billion dollars.

MILITARY CONTRACTS TO STAY

Even though the US has reduced the size of its military footprint in Afghanistan and Iraq, the report said that the military contractors would still play the field with the US continuing with its overseas military engagements in counter terrorism operations in over 85 nations. They would maintain hundreds of overseas military bases and are engaged in new base construction in a number of areas including Guam and the Marianas. However, claims about China’s rise and the need for a robust military response are now dominating the budget debate in Washington.

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