Privatizing the Apocalypse: How Nuclear Weapons Companies Commandeer Your Tax Dollars
Imagine for a moment a genuine absurdity: somewhere in the United States, the highly profitable operations of a set of corporations were based on the possibility that sooner or later your neighborhood would be destroyed and you and all your neighbors annihilated. And not just you and your neighbors, but others and their neighbors across the planet. What would we think of such companies, of such a project, of the mega-profits made off it?
In fact, such companies do exist. They service the American nuclear weapons industry and the Pentagon's vast arsenal of potentially world-destroying weaponry. They make massive profits doing so, live comfortable lives in our neighborhoods, and play an active role in Washington politics. Most Americans know little or nothing about their activities and the media seldom bother to report on them or their profits, even though the work they do is in the service of an apocalyptic future almost beyond imagining.
Add to the strangeness of all that another improbability. Nuclear weapons have been in the headlines for years now and yet all attention in this period has been focused like a spotlight on a country that does not possess a single nuclear weapon and, as far as the American intelligence community can tell, has shown no signs of actually trying to build one. We're speaking, of course, of Iran. Almost never in the news, on the other hand, are the perfectly real arsenals that could actually wreak havoc on the planet, especially our own vast arsenal and that of our former superpower enemy, Russia.
In the recent debate over whether President Obama's nuclear deal with Iran will prevent that country from ever developing such weaponry, you could search high and low for any real discussion of the U.S. nuclear arsenal, even though the Bulletin of the Atomic Scientists estimates that it contains about 4,700 active warheads. That includes a range of bombs and land-based and submarine-based missiles. If, for instance, a single Ohio Class nuclear submarine - and the Navy has 14 of them equipped with nuclear missiles - were to launch its 24 Trident missiles, each with 12 independently targetable megaton warheads, the major cities of any targeted country in the world could be obliterated and millions of people would die.
Indeed, the detonations and ensuing fires would send up so much smoke and particulates into the atmosphere that the result would be a nuclear winter, leading to worldwide famine and the possible deaths of hundreds of millions, including Americans (no matter where the missiles went off). Yet, as if in a classic Dr. Seuss book, one would have to add: that is not all, oh, no, that is not all. At the moment, the Obama administration is planning for the spending of up to a trillion dollars over the next 30 years to modernize and upgrade America's nuclear forces.
Given that the current U.S. arsenal represents extraordinary overkill capacity - it could destroy many Earth-sized planets - none of those extra taxpayer dollars will gain Americans the slightest additional "deterrence" or safety. For the nation's security, it hardly matters whether, in the decades to come, the targeting accuracy of missiles whose warheads would completely destroy every living creature within a multi-mile radius was reduced from 500 meters to 300 meters. If such "modernization" has no obvious military significance, why the push for further spending on nuclear weapons?
One significant factor in the American nuclear sweepstakes goes regularly unmentioned in this country: the corporations that make up the nuclear weapons industry. Yet the pressures they are capable of exerting in favor of ever more nuclear spending are radically underestimated in what passes for "debate" on the subject.
Privatizing Nuclear Weapons Development
Start with this simple fact: the production, maintenance, and modernization of nuclear weapons are sources of super profits for what is, in essence, a cartel. They, of course, encounter no competition for contracts from offshore competitors, given that it's the U.S. nuclear arsenal we're talking about, and the government contracts offered are screened from critical auditing under the guise of national security. Furthermore, the business model employed is "cost-plus," which means that no matter how high cost overruns may be compared to original bids, contractors receive a guaranteed profit percentage above their costs. High profits are effectively guaranteed, no matter how inefficient or over-budget the project may become. In other words, there is no possibility of contractors losing money on their work, no matter how inefficient they may be (a far cry from a corporate free-market model of production).
Those well-protected profits and the firms raking them in have become a major factor in the promotion of nuclear weapons development, undermining any efforts at nuclear disarmament of almost any sort. Part of this process should be familiar indeed, since it's an extension of a classic Pentagon formula that Columbia University industrial economist Seymour Melman once described so strikingly in his books and articles, a formula that infamously produced $436 hammers and $6,322 coffee makers.
Given the process and the profits, the weapons contractors have a vested interest in ensuring that the American public has a heightened sense of danger and insecurity (even as they themselves have become a leading source of such danger and insecurity). Recently, the International Campaign to Abolish Nuclear Weapons (ICAN) produced a striking report, "Don't Bank on the Bomb," documenting the major corporate contractors and their investors who will reap those mega-profits from the coming nuclear weapons upgrades.
Given the penumbra of national security that envelops the country's nuclear weapons programs, authentic audits of the contracts of these companies are not available to the public. However, at least the major corporations profiting from nuclear weapons contracts can now be identified. In the area of nuclear delivery systems - bombers, missiles, and submarines - these include a series of familiar corporate names: Boeing, Northrop Grumman, General Dynamics, GenCorp Aerojet, Huntington Ingalls, and Lockheed Martin. In other areas like nuclear design and production, the names at the top of the list will be less well known: Babcock & Wilcox, Bechtel, Honeywell International, and URS Corporation. When it comes to nuclear weapons testing and maintenance, contractors include Aecom, Flour, Jacobs Engineering, and SAIC; missile targeting and guidance firms include Alliant Techsystems and Rockwell Collins.
To give a small sampling of the contracts: In 2014, Babcock & Wilcox was awarded $76.8 million for work on upgrading the Ohio class submarines. In January 2013, General Dynamics Electric Boat Division was awarded a $4.6 billion contract to design and develop a next-generation strategic deterrent submarine. More of what is known of such corporate weapons contracts can be found in the ICAN Report, which also identified banks and other financial institutions investing in the nuclear weapons corporations.
Many Americans are unaware that much of the responsibility for nuclear weapons development, production, and maintenance lies not with the Pentagon but the Department of Energy (DOE), which spends more on nuclear weapons than it does on developing sustainable energy sources. Key to the DOE's nuclear project are the federal laboratories where nuclear weapons are designed, built, and tested. They include Sandia National Laboratory in Albuquerque, New Mexico, Los Alamos National Laboratory (LANL) in Los Alamos, New Mexico, and Lawrence Livermore National Laboratories in Livermore, California. These, in turn, reflect a continuing trend in national security affairs, so-called GOCO sites ("government owned, contractor operated"). At the labs, this system represents a corporatization of the policies of nuclear deterrence and other nuclear weapons strategies. Through contracts with URS, Babcock & Wilcox, the University of California, and Bechtel, the nuclear weapons labs are to a significant extent privatized. The LANL contract alone is on the order of $14 billion. Similarly, the Savannah River Nuclear Facility, in Aiken, South Carolina, where nuclear warheads are manufactured, is jointly run by Flour, Honeywell International, and Huntington Ingalls Industries. Their DOE contract for operating it through 2016 totals about $8 billion. In other words, in these years that have seen the rise of the warrior corporation and a significant privatization of the U.S. military and the intelligence community, a similar process has been underway in the world of nuclear weaponry.
In addition to the prime nuclear weapons contractors, there are hundreds of subcontractors, some of which depend upon those subcontracts for the bulk of their business. Any one of them may have from 100 to several hundred employees working on its particular component or system and, with clout in local communities, they help push the nuclear modernization program via their congressional representatives.
One of the reasons nuclear weapons profitability is extremely high is that the National Nuclear Security Administration (NNSA) of the Department of Energy, responsible for the development and operations of the DOE's nuclear weapons facilities, does not monitor subcontractors, which makes it difficult to monitor prime contractors as well. For example, when the Project on Government Oversight filed a Freedom of Information Act request for information on Babock & Wilcox, the subcontractor for security at the Y-12 nuclear complex at Oak Ridge, Tennessee, the NNSA responded that it had no information on the subcontractor. Babcock & Wilcox was then in charge of building a uranium processing facility at Y-12. It, in turn, subcontracted design work to four other companies and then failed to consolidate or supervise them. This led to an unusable design, which was only scrapped after the subcontractors had received $600 million for work that was useless. This Oak Ridge case, in turn, triggered a Government Accountability Office report to Congress last May indicating that such problems were endemic to the DOE's nuclear weapons facilities.
The Nuclear Lobbyists
Federal tax dollars expended on nuclear weapons maintenance and development are a significant component of the federal budget. Although difficult to pin down precisely, the sums run into the hundreds of billions of dollars. In 2005, the Government Accountability Office reported that even the Pentagon had no firm numbers when it came to how much the nuclear mission costs, nor is there a standalone nuclear weapons budget of any sort, so overall costs must be estimated. Analyzing the budgets of the Pentagon and the Department of Energy's National Nuclear Security Administration, as well as information gleaned from Congressional testimony, the Center for Nonproliferation Studies suggests that, from 2010-2018, the United States will spend at least $179 billion to maintain the current nuclear triad of missiles, bombers, and submarines, with their associated nuclear weaponry, while beginning the process of developing their next-generation replacements. The Congressional Budget Office projects the cost of nuclear forces for 2015-2024 at $348 billion, or $35 billion annually, of which the Pentagon will spend $227 billion and the Department of Energy $121 billion.
In fact, the price for maintaining and developing the nuclear arsenal is actually far greater than either of those estimates. While those numbers include most of the direct costs of nuclear weapons and strategic launching systems like missiles and submarines, as well as the majority of the costs for the military personnel responsible for maintaining, operating, and executing the missions, they don't include many other expenses, including the decommissioning process and nuclear-waste disposal issues involved in "retiring" weapons. Nor do they include the pensions and health-care costs that will go with retiring their human operators.
In 2012, a report from a high-level committee chaired by former Vice Chairman of the Joint Chiefs of Staff General James Cartwright concluded that "no sensible argument has been put forward for using nuclear weapons to solve any of the major 21st century problems we face [including] threats posed by rogue states, failed states, proliferation, regional conflicts, terrorism, cyber warfare, organized crime, drug trafficking, conflict-driven mass migration of refugees, epidemics, or climate change. In fact, nuclear weapons have on balance arguably become more a part of the problem than any solution."
Not surprisingly, for the roster of corporations involved in the U.S. nuclear programs, this matters little. They, in fact, maintain elaborate lobbying operations in support of their continuing nuclear weapons contracts. In a 2012 study for the Center for International Policy, "Bombs vs. Budgets: Inside the Nuclear Weapons Lobby," William Hartung and Christine Anderson reported that, for the elections of that year, the top 14 contractors gave nearly $3 million directly to Congressional legislators. Not surprisingly, half that sum went to members of the four key committees or subcommittees that oversee spending for nuclear arms.
In 2015, the defense industry mobilized a small army of at least 718 lobbyists and doled out more than $67 million pressuring Congress for increased weapons spending generally. Among the largest contributors were corporations with significant nuclear weapons contracts, including Lockheed Martin, Boeing, and General Dynamics. Such pro-nuclear lobbying is augmented by contributions and pressure from missile and aircraft companies that are primarily non-nuclear. Some of the systems they produce, however, are potentially dual-use (conventional and nuclear), which means that a robust nuclear weapons program increases their potential market.
The continuing pressure of Congressional Republicans for cuts in domestic social programs are a crucial mechanism that ensures federal tax dollars will be available for lucrative military contracts. In terms of quality of life (and death), this means that underestimating the influence of the nuclear weapons industry is singularly dangerous. For the $35 billion or more the U.S. taxpayer will put into such weaponry annually to support the narrow interests of a modest number of companies, the payback is fear of an apocalyptic future. After all, unlike almost all other corporate lobbies, the nuclear weapons lobby (and so your tax dollars) put life on Earth at risk of rapid extinction, either following the direct destruction of a nuclear holocaust or a radical reduction in sunlight reaching the Earth's surface that would come from the sort of nuclear winter that would follow almost any nuclear exchange. At the moment, the corporate-nuclear complex is hidden in our midst, its budgets and funds shielded from public scrutiny, its project hardly noticed. It's a formula for disaster.
Richard Krushnic is a former real estate loan asset manager and housing and business contract analyst at Boston's Department of Neighborhood Development. He is currently involved in community development in Latin America and can be reached at email@example.com.