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Behind the Revolving Door

The Arms Pushers

by Ken Silverstein

Last November, Secretary of State Madeline Albright denounced the “unregulatedand illegitimate” sale of small arms at a gathering of the InternationalRescue Committee. “It is a trade carried out by profiteers, abettedby corruption, creating a bottomless armory for rogue militias, criminalempires, and bands of thugs,” the secretary thundered righteously.

Albright’s speech was part of a campaign by the Clinton administrationto crack down on the illegal trade in firearms. But the administration isfar less interested in cracking down on the legal trade in weaponry, andit’s easy to see why. With exports valued at $26 billion in 1997, the USis the world’s No. 1 weapons dealer, thus accounting for a 43 percent marketshare.

The heart of the government’s sales program is the Defense Security AssistanceAgency, the Pentagon bureau that handles the government’s Foreign MilitarySales program. The DSAA has a staff of about 5,000 people working out ofU.S. embassies and field offices in more than 100 countries. The DSAA receivesa 3 percent commission per sale, which provides about 80 percent of itsbudget. DSAA racked up so much money from the 3 percent kickback that in1992 Congress placed a $300 million cap on the funds the agency could accumulatein its account.

The US military establishment is now trying to boost overseas sales evenmore. As part of that effort, deputy defense secretary John Hamre last yearordered a review of the Pentagon’s foreign military sales program with aneye towards cutting red tape that slows shipments abroad. The “studygroup” heading up the review is composed of military officials, industryleaders and even representatives of foreign governments who purchase Americanweaponry.

The study group has fallen to its task with vigor. A January 18 DefenseNews story about its progress said that the Pentagon is seeking to “breakdown bureaucratic barriers that have prompted many U.S. friends and alliesto shop elsewhere for military goods and services…Officials at the Pentagonhave engaged in massive introspection with an eye toward reinventing itscostly, cumbersome and often condescending arms export system”.

A chief problem for the Pentagon, the story added, is that a buyer’smarket has developed in the post-Cold War period and “increasinglysavvy and demanding international customers can often dictate the termsof a deal”. Hence, an “attitudinal sea change” is neededso that weapons customers are “treated as partners rather than aidrecipients”.

When it comes to peddling arms, the Pentagon gets plenty of help fromprivate industry. And there are no better salesmen than the officials whopreviously worked at the DSAA. Of the agency’s last ten directors goingback to 1971, nine went on to work for the arms industry, and seven of thosewere employed by firms that sell weapons or military services abroad.

To see how the revolving door in arms sales works, we offer here a post-governmentservice career summary of former heads of the DSAA.

1/ Lieut. Gen. Thomas Rhame, September 1993 to August 1997: During histenure, Rhame opened the spigot for funding to subsidize deals to formercommunist regimes in Eastern Europe. Rhame tried retirement directly afterdischarge, but says “you can only golf so many days a week”. Hesoon took a vice president position at the Association of the United StatesArmy, a private organization that lobbies the government to maintain “astrong national defense”.

2/ Lieut. Gen. Teddy Allen, August 1990 to August 1993: The day afterhe retired from DSAA Allen took a job as a consultant to Hughes, offeringthem advice on sales to Egypt. Allen now consults for the ACI Group International,a firm that helps companies penetrate foreign markets by using its “accessto government and…contacts to government and industry both here and abroad.”

3/ Lieut. Gen. Charles Brown, October of 1987 to August of 1990: Soonafter retiring, Brown took a post with Military Professional Resources Inc.,a firm that trains foreign armies and instructs them in the fine art ofbuying US military equipment. Brown says the company hired him because itassumed he had strong international contacts from his days at DSAA. In 1995,Brown headed a Pentagon panel that looked to private industry to see whatthe Pentagon could learn about “streamlining and reorganization”.Though Brown has now retired from Military Professional Resources Inc. andlives on his family cattle ranch in Rushville, Nebraska, he comes back toWashington three or four times a year to do consulting work for privatefirms.

4/ Lieut. Gen. Philip Gast, August 1982 to August 1990: Before headingto DSAA Gast served as the head of the U.S. Military Advisory group to Iran,where he helped funnel weaponry to the Shah’s regime. He’s now a vice presidentfor international operations at Burdeshaw Associates, whose self-describedmission is to help clients “compete and win in global defense and governmentmarkets”.

5/ Lieut. Gen. James Ahmann, March 1982 to May 1982: Upon retirement,he became a vice president at BDM, a company headed by former Secertaryof Defense Frank Carlucci. BDM’s subsidiary Vinell trains the Saudi ArabianNational Guard, a Praetorian Guard for the royal family. From BDM, Ahmannwent on to work for Northrop and General Dynamics.

6/ Erich von Marbod, July 1981 to January 1982: Before taking his short-livedpost at DSAA, von Marbod ran all US military assistance to Vietnam and nextbecame the senior US defense representative to Iran, where he helped pushthe Shah into buying huge amounts of American weaponry. While at the DSAA,Marbod-along with Iran/contra figures Thomas Clines and Richard Secord-quietlybecame a partner in a shipping company called Eatsco. In 1980, that firmwas found to have overbilled the Pentagon $8 million on arms shipments toEgypt. After retiring from government, Howard Fish, a predecessor at DSAA(see No. 8) hired von Marbod to work at the Paris offices of armsmaker LTV.

7/ Lieut. Gen. Ernest Graves, March 1978 to July 1981: The only headof the DSAA who didn’t go on to work for the defense industry (other thana few freelance consulting jobs). Graves, who since retiring has workedas a military analyst at Georgetown’s Center for Strategic and InternationalStudies, says two weapons makers offered him jobs promoting overseas sales,but that he turned them down. “I just wasn’t comfortable with the notionof trading commercially on relationships I had formed when I was workingfor the government,” he says.

8/ Lieut. Gen. Howard Fish, August 1974 to August 1978: The classic revolvingdoor story. Fish was a big backer of foreign sales while at DSAA, especiallyto the Middle East. After resigning he went to work for LTV and soon turnedup in Malaysia where he was hawking the company’s A-7 fighters. He nextturned up as head of international marketing for Loral, and then took chargeof the American League for Exports and Security Assistance, a trade groupthat lobbies for foreign sales. Fish left ALESA in 1997 and now serves asa consultant to Lockheed Martin.

9/ Vice Admiral Ray Peet, June 1972 to July 1974: After stepping downfrom the DSAA he worked for two defense contractors, Cubic Corporation andTeledyne Ryan, where now serves as vice president.

10/ Lieut. Gen. George Seignious, August 1971 to June 1972: In his post-DSAAcareer, Seignious became chairman of GRC International Inc., a defense andnational security consulting firm.

This revolving door from DSAA is typical of the unceasing migrationsfrom the military and the private sector. Between 1992 and 1995, number3,288 Pentagon employees – of whom 2,482 were officers with the rank ofcolonel or above made – the jump to industry. It’s impossible to determinehow fast the revolving door is now spinning because at the request of thePentagon, Congress in February of 1996 repealed the law that mandated suchreporting, a move that apparently was never noticed by the mainstream press.CP