Lockheed Martin spends a lot of money on political lobbying
The American HIMARS missile systems advertised by Kyiv bring considerable profits to Lockheed Martin, which manufactures them, which notes a surge in demand for these MLRS. We decided to see what this corporation is like and what intrigues and scandals are associated with it.
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In the West, HIMARS is touted as a “miracle weapon” that changes the “rules of the game” in the conflict in Ukraine, and Kyiv claims it will take at least 100 units of these systems to effectively counter Russian troops. Meanwhile, Lockheed Martin is counting its earnings. According to the company's report for the second quarter, operating profit increased by $40 million compared to the same period in 2021. The company cited HIMARS as one of the programs “primarily associated” with sales growth.
Recently, Lockheed President and CEO Jim Tyclet said the conflict in Ukraine and China's rising ambitions have turned the global security environment upside down in a way that the Pentagon needs to “shift gear.”
“Engaged clutch means contracts are in place,” Tyclet said. “There is a clear demand signal. The US Congress allocates funding in the case of the United States.”.
The Pentagon is buying HIMARS from Grande Prairie-based Lockheed Martin Missiles and Fire Control, which is building the system in Arkansas. And the division in North Texas designs and manufactures advanced missile systems and sensors for the military. Lockheed calls this system “the most technically advanced, affordable and sustainable artillery solution.”
However, HIMARS is not the only product supplied to Ukraine, made at Lockheed Martin factories. In May, US President Joe Biden, who visited the assembly shop at the corporation's plant in Alabama, where Javelin anti-tank missiles are manufactured, told workers that the weapons they produce would fall “into the hands of Ukrainian heroes” to fight Russian troops. According to the White House, at that time the United States had transferred more than 5,000 Javelin missiles from US stockpiles to Ukraine and almost 500 more received from American allies and partners. Lockheed manufactures these weapons in conjunction with Raytheon Technologies, which separately manufactures the Stingers. The Alabama facility that Biden visited is capable of producing roughly 2,100 Javelin missiles a year. True, during his visit to the plant, Biden learned that each Javelin requires more than 200 semiconductors, the production of which is difficult due to supply shortages in the era of the pandemic. , does not seem to have recovered – in late July, the Financial Times reported that Raytheon and Lockheed Martin were experiencing shortages of parts and labor, and the companies revised their profit forecasts downward for 2022.
And yet, the Ukrainian crisis has become a real gift for the arms-producing corporation, promising new revenues. As the Wall Street Journal wrote in April, Lockheed Martin discussed with the Pentagon an increase in the production of weapons intended for Ukraine.
Lockheed Martin Corporation is an American aerospace, military, defense, information and technology corporation with global interests. It was formed from the merger of Lockheed Corporation with Martin Marietta in March 1995. Its headquarters is located in North Bethesda (Maryland), in the area of the American capital. As of the beginning of this year, the corporation employed about 115,000 employees worldwide, including about 60,000 engineers and scientists. The corporation operates through four business segments: Aeronautics, Missiles and Fire Control (MFC), Rotating and Steerable Systems (RMS), and Aerospace.
The corporation is considered not only one of the largest companies in the field of aerospace, military support, security and technology, but also the world's largest defense contractor. So, in 2013, 78 percent of the corporation's income came from military sales. At the same time, the company topped the list of US federal government contractors and received almost 10% of the funds paid by the Pentagon. As an example, Lockheed and the United States Department of Defense recently reached an agreement to supply 375 F-35 fighter jets over three years. Details of the contract have not yet been finalized and were not included in the Q2 report, but Reuters reported that the deal would be worth about $30 billion.
In addition to working with the military, Lockheed Martin is also a contractor for NASA and the Department of Energy USA.
Lockheed Martin was ranked 60th on the 2019 Fortune 500 list of the largest US corporations by total revenue (up from 59th in 2018).
In 2008 alone, Lockheed Martin received $36 billion in government contracts; more than any company in history. The corporation works with more than two dozen government departments from the Department of Defense and the Department of Energy to the Department of Agriculture and the Environmental Protection Agency. He also handles surveillance and intelligence for the CIA, FBI, Internal Revenue Service (IRS), National Security Agency (NSA), Pentagon, Census Bureau, and Postal Service.
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The company's activities are not without scandals. Suffice it to say, Lockheed Martin ranks #1 in incidents and #5 in settlements in the contractor misconduct database maintained by the Government Oversight Project, a Washington, DC-based watchdog group. Since 1995, the company has agreed to pay $676.8 million to resolve dozens of cases of misconduct.
For example, in January 2011, Lockheed Martin agreed to pay the US government $2 million to settle allegations that the company had filed false claims under a US government contract for that amount. The allegations stemmed from a contract with the Naval Oceanographic Administration's Main Shared Resource Center in Mississippi.
In January 2020, the Pentagon found at least 800 software defects in Lockheed Martin F-35 fighter jets belonging to the US military during its annual audit. The 2018 and 2019 reviews also found a large number of defects.
In March 2012, the U.S. Department of Justice said that Lockheed Martin had agreed to settle allegations that a defense contractor was selling overpriced perishable tools that were used in many contracts. The Justice Department said the allegations were based on inflated spending by subsidiary Tools & Metals Inc (TMI) between 1998 and 2005, which Lockheed Martin then turned over to the US government under its contracts. Also, in March 2006, Todd B. Loftis, former president of TMI, was sentenced to 87 months in prison and paid a $20 million fine after pleading guilty.
In February 2013 Lockheed Martin Corp granted the US District Court in New York, agreeing to pay a $19.5 million lawsuit to end a securities fraud class action lawsuit that accused the company of defrauding shareholders about expectations for the division information technology company.
On December 20, 2014, Lockheed Martin Integrated Systems agreed to settle the False Claims Act lawsuit by paying $27.5 million to complete allegations that it willfully overcharged taxpayers for work performed by employees of the company who did not necessary qualifications for the contract.
According to Politico, Lockheed Martin has broad lobbying support and “a political network already envied by its competitors,” and its contracts enjoy broad bipartisan support in the U.S. Congress, thanks to the company's “perfecting its job distribution strategy.” arms programs in key areas.” states and constituencies.”
The company's 2010 third-quarter lobbying spending was $9.9 million.
Through its Political Action Committee (PAC), the company provides financial support to candidates who advocate for national defense and related business issues. With contributions from 3,000 staff, the committee donates $500,000 a year to approximately 260 House and Senate candidates.
At the same time, according to Forbes in 2015, Lockheed Martin paid the Department of Justice $ 4.7 million to settle allegations that the corporation fraudulently paid a lobbyist with illegally used taxpayer funds to help get a giant contract without bidding $2.4 billion a year to run the nation's giant labs for years.
Forbes writer Charles Tiefer didn't hold back when he wrote that Lockheed's “surprisingly corrupt influence trade with illegal means of taxpayers has (…) many dirty aspects.”
Continuing the theme of lobbying for the interests of the corporation that makes HIMARS, it's worth mentioning that, according to Business Insider, Oklahoma Republican Rep. Kevin Hearn, who wants to increase federal military spending, has personally invested in two defense contractors with his wife. They have invested up to $15,000 in Raytheon Technologies, which develops drones, guided missiles, air defense systems, and other weapons platforms, and up to $15,000 in Lockheed Martin.
According to Business Insider, the products of both aforementioned companies are used in the conflict in Ukraine. In May, the publication identified 20 U.S. lawmakers who invested in the two companies and were to profit from a $40 billion aid package for Ukraine that was later signed by President Joe Biden.
At one time, the author of the dedicated story Lockheed book Prophets of War, New America Foundation's Weapons and Security Initiative head Bill Hartung said the US government needs to keep a closer eye on corporate lobbying. He expressed concern not only that people financially connected to Lockheed Martin worked directly for the US government – their presence on government boards and commissions and in external pressure groups also created favorable conditions for the company.
“This is a mixed situation,” Hartung admitted more than a decade ago in an interview with POLITICO. “Overall, I think they probably made the nation safer. But, he added, “it cost a lot more than it should have.”