Entry
Reader's guide
Entries A-Z
Subject index
Military-Industrial Complex
FIRST COINED by outgoing President Dwight D. Eisenhower in his farewell address to the nation, the military-industrial complex is a tight-knit group of interchangeable parts and people, for example, retired military officers moving into defense companies, defense company leaders moving into government. Eisenhower warned the country to be wary of the military-industrial complex. Indeed, the opportunity for fraud and white-collar crime, may not be matched by another segment of society. The collusion between the military and industry has grown significantly since Eisenhower's 1950s.
Before World War II, between 1922 and 1939, annual military budgets averaged 1 percent of the Gross National Product, only $744 million. Purchasing was by public advertisement for fixed quantities. Bids were sealed, and awards went to low bidders. Government business was not lucrative, and companies solicited it reluctantly.
World War II changed that. Between 1940 and late 1941, the War Department spent $36 billion, more than the army and navy combined in World War I. And the contracts were cost-plus (allowing for profit), granted to large firms. The top 10 contractors got 30 percent, with General Motors alone getting 8 percent. The top 10 research and development (R&D) contractors received almost 40 percent of the funds. Government invested $17 billion in industrial plants after the war. Government largesse and protection proved irresistible, and the military-industrial complex was born. Over the next half century, the military-industrial complex cost over $10 trillion in 2002 dollars.
Collusion
The relationship was intimate as industry leaders moved back and forth between government and corporations. They met young military officers who, on retiring, used their connections to move by the thousands into the industries they had worked with at the Pentagon.
Government valued the contractors, bailing out Lockheed, Litton, General Dynamics, Chrysler, Grumman, and others instead of holding them to their contractual obligations. Department of Defense (DOD) money subsidized loans, facilities, and R&D. Congress recognized the value of military spending in the home district.
The proposed $21-billion Boeing tanker lease deal of 2003 was typical. The air force initially did not want the planes. Boeing used insiders in the air force to develop specifications that excluded Boeing's rivals. Perhaps an insider provided proprietary information; possibly the air force used Boeing's documents and arguments to lobby for the tankers once it accepted their value.
The working together of Boeing and air force insiders typified the method by which the militaryindustrial complex bought planes and ships and most other DOD needs. The military-industrial complex also buys electronic voting devices. In this case, a maker of electronic voting machines reputedly containing defects, that make vote fraud easy and undetectable, has a management team replete with retired military and intelligence personnel. On the VoteHere board is ex-CIA director Robert Gates, for example. VoteHere also interlocks with the Carlyle Group and Halliburton. Conspiracists see the connection as rife with potential for fraud and stolen elections.
The aftermath of the Iraq War in 2003 epitomized the military-industrial complex at its worst. The Center for Public Integrity documented that 30 members of the Defense Policy Board (non-elected formulators of defense policy in the Pentagon) had ties to companies that received over $76 billion in defense contracts in 2001 and 2002 alone. Bechtel made hundreds of millions dealing with the Iraqi regime then got hundreds of millions in non-competitive and open-ended rebuilding contracts. Halliburton, another top contractor reaping millions from the Iraq War, once employed Vice-President Dick Cheney. The spoils of war could top $100 billion.
...
- Business Fraud & Crimes
- Advertising Fraud
- Antitrust
- Arbitrage
- Bank Fraud
- Bankruptcy Fraud
- Bid Rigging
- Boycott
- Campaign Finance
- Canadian Mining Scandals
- Charity Fraud
- Cigarette Advertising
- Computer Hacking
- Copyright Infringement
- Corporate Criminal Liability
- Corporate Dumping
- Corporate Raiding
- Direct-Mail Fraud
- Economic Espionage
- Free Enterprise System
- Greenmail
- Hoarding
- Illegal Competition
- Industrial Espionage
- Insurance Fraud
- Interlocking Directorates
- Internet Fraud
- Kickbacks
- Labor Crimes
- Mail Fraud
- Market Manipulation
- Marketing Fraud
- Outside Directors
- Patent Infringement
- Predatory Practices
- Price Discrimination
- Price Fixing
- Puffery
- Redlining
- Revolving Door
- Small-Business Fraud
- Tariff Crimes
- Tax Evasion
- Trademark Infringement
- Tying Arrangements
- Unfair Trade Practices
- Unions
- Wire Fraud
- Companies
- A. H. Robins
- AAMCO
- Adelphia Communications
- Allied Chemical
- Allied Irish Banks
- American Cyanamid
- American Hospital Supply
- American Motors
- Anheuser-Busch
- Archer Daniels Midland
- Arthur Andersen
- AT&T
- B. F. Goodrich
- Banco Ambrosiano
- Bank of Credit and Commerce International
- Banker's Trust
- Barings Bank
- BASF
- Beech Aircraft
- Beech-Nut Nutrition
- Board of Directors
- Bre-X
- Canadian Mining Scandals
- Carl Karcher Enterprises
- Cendant
- Centennial Savings and Loan
- Chem-Bio
- Chevron
- Conoco
- Crédit Lyonnais
- Daiwa Bank
- Dow Chemical
- Drexel Burnham Lambert
- E. F. Hutton
- Eli Lilly
- Enron Corporation
- Film Recovery Systems
- Firestone Tires
- Fisher-Price
- G. D. Searle
- General Dynamics
- General Electric
- General Motors
- Georgia Pacific
- Global Crossing
- Great Electrical Equipment Conspiracy
- Gulf Oil Corporation
- IBM
- Imperial Food Products
- Investors Overseas Services
- ITT
- Johns-Manville
- Kerr-McGee
- Kidder, Peabody
- Lloyds of London
- Lockheed
- Madison Guaranty
- Merrill Lynch
- Metallgesellschaft
- Microsoft
- Morgan Grenfell
- Morton-Thiocol
- National Medical Enterprises
- NatWest Markets
- Northrop Grumman
- Owens Corning
- Pharmaceutical Industry
- Procter and Gamble, Inc.
- Revco
- Rite Aid
- Rockwell International
- Salomon Smith Barney
- Standard Oil
- Sumitomo
- Teledyne Industries
- Tyco International
- Unisys
- United American Bank
- United Fruit
- United States Steel
- Waste Management, Inc.
- WorldCom
- Consumers
- Advance Fee Scam
- Age Discrimination
- Automobile
- Bait and Switch
- Bank Fraud
- Beech-Nut Nutrition
- Bendectin
- Better Business Bureaus
- Breast Implants
- Caveat Emptor
- Charity Fraud
- Cigarette Advertising
- Consumer Deaths
- Contractor Fraud
- Credit Card Fraud
- Cyberstalking
- Dalkon Shield
- Direct-Mail Fraud
- Fertility Fraud
- Fisher-Price
- Gambling and Lotteries
- Identity Theft
- Impersonation
- Infant Formula
- Public Citizen Health Research Group
- Tampons and Toxic Shock
- Telemarketing Fraud
- Tobacco Industry
- Countries & Regions
- Africa
- Arab Nations
- Argentina
- Asia
- Australia
- Brazil
- Canada
- Canadian Mining Scandals
- Caribbean Islands
- Central America
- China
- Cuba
- Eastern Europe
- France
- Germany
- Greece
- Hong Kong
- Indonesia
- Ireland
- Israel
- Italy
- Japan
- Luxembourg
- Mexico
- Middle East
- Poland
- Russia
- Saudi Arabia
- Scandinavia
- Singapore
- South America
- South America
- Spain
- Switzerland
- Thailand
- United Kingdom
- United States
- Criminology & Justice
- Age Discrimination
- Ancient Mercantile Crime
- Art Fraud
- Board of Directors
- Bribery
- Capitalism
- Caveat Emptor
- Civil Forfeiture
- Class-Action Lawsuits
- Conflict Theory
- Consequences of White-Collar Crime
- Conspiracy
- Corporate Criminal Liability
- Corruption
- Crime Seriousness
- Critical Theory
- Differential Association
- Drug Trafficking
- Elite Crime
- Ethics
- Fear of Crime
- Felony
- Forensic Auditing
- Forgery
- Gender Discrimination
- Global Warming
- Globalization
- Hartung-Burgess Debate
- Human Trafficking
- Investigation Techniques
- Juries and Awards
- Justice, Department of
- Knapp Commission
- Legal Malpractice
- Military-Industrial Complex
- Misappropriation Theory
- Mollen Commission
- Money Laundering
- Multinational Corporations
- National White-Collar Crime Center
- Negligence
- Oligopoly
- Organized Crime
- Perjury
- Police Brutality
- Police Corruption
- Political Assassinations
- Pornography
- Prosecution
- Prostitution
- Public Corruption
- Racial Discrimination
- Racketeering
- Religious Fraud
- Respondeat Superior
- Risk Analysis
- Self-Control Theory
- Sutherland-Tappan Debate
- Techniques of Neutralization
- Financial & Securities Fraud
- Accounting Fraud
- Arbitrage
- Bad Checks
- Banco Ambrosiano
- Bank Fraud
- Bank of Credit and Commerce International
- Banker's Trust
- Bankruptcy Fraud
- Barings Bank
- Bendix Corporation
- Boesky, Ivan
- Bond Fraud
- Centennial Savings and Loan
- Check Kiting
- Commodity Fraud
- Counterfeiting
- Credit Card Fraud
- Currency Fraud
- Debt Restructuring Fraud
- Drexel Burnham Lambert
- Embezzlement
- Equity Funding Scandal
- Extortion
- Fiduciary Fraud
- Flaming Ferraris
- Insider Trading
- Investment Trust Fraud
- Nonprofit Organization Fraud
- Offshore Bank Accounts
- Offshore Entities
- Savings & Loan Fraud
- Securities Fraud
- Stock Fraud
- Teamsters Pension Fund
- Vatican Bank
- Government
- Bid Rigging
- Bribery
- Commodities Futures Trading Commission
- Corruption
- Defense Industry Fraud
- Environmental Protection Agency
- Federal Deposit Insurance Corporation
- Federal Trade Commission
- Food and Drug Administration
- Government Contract Fraud
- Government Procurement Fraud
- Graft
- HUD Scandals
- Iran-Contra
- Prisoners
- Securities and Exchange Commission
- Sentencing Guidelines.
- Tailhook Scandal
- Teapot Dome Scandal
- Laws
- Antitrust
- Bank Secrecy Act
- Boland Amendments
- Campaign Finance
- Celler-Kefauver Act
- Clayton Antitrust Act
- Clean Air Act
- Clean Water Act
- Comprehensive Thrift Act
- Computer Fraud and Abuse Act
- Consumer Product Safety Act
- Ethics Reform Act
- Fair Housing Act
- False Claims Act
- Federal Trade Commission Act
- Financial Crime Kingpin Statute
- Foreign Corrupt Practices Act
- Hart-Scott-Rodino Act
- Hobbs Act
- Insider Trading Sanctions Act
- Interstate Commerce Act
- Major Fraud Act
- Meat Inspection Act
- Occupational Carcinogens
- Occupational Safety and Health Act
- Pure Food, Drug and Cosmetics Act
- Racketeer Influenced Corrupt Organizations (RICO)
- Robinson-Patman Act
- Sherman Antitrust Act
- Toxic Substances Control Act
- Truth in Labeling
- Truth in Lending Act
- Witness and Victim Protection Act
- Medical & Healthcare Fraud
- People
- Agnew, Spiro
- Anderson, Jack
- Bakker, Jim and Tammy
- Benson, Michael L.
- Boesky, Ivan
- Braithwaite, John
- Bush, George H. W.
- Bush, George W.
- Butcher Brothers
- Capone, Alphonse
- Carnegie, Andrew
- Carson, Rachel
- Carter, Jimmy
- Clinard, Marshall
- Clinton, William J.
- Coffee, John C., Jr.
- Cohen, Albert K.
- Coleman, James W.
- Coolidge, Calvin
- Cressey, Donald
- Cullen, Francis T.
- Domhoff, G. William
- Edelhertz, Herbert
- Eisenhower, Dwight D.
- Fisse, Brent
- Ford, Gerald R.
- Frankel, Martin
- Geis, Gilbert
- Giuliani, Rudy
- Grant, Ulysses S.
- Green, Mark J.
- Holley, Louis Malcolm
- Hoover, Herbert
- Irving, Clifford
- Jesilow, Paul
- Jett, Joseph
- Johnson, Lyndon B.
- Keating Five
- Keating, Charles
- Kennedy, Robert F.
- Leeson, Nick
- Levi, Michael
- Levine, Dennis
- Madison, James
- Maxwell, Robert
- Milken, Michael
- Morgan, J. P.
- Nader, Ralph
- Nixon, Richard M.
- North, Oliver
- Pontell, Henry
- Reagan, Ronald
- Rich, Marc
- Roberts, Oral
- Rockefeller, John D.
- Roosevelt, Franklin D.
- Roosevelt, Theodore
- Ross, Edward
- Rusnak, John
- Short, James F. Jr.
- Shover, Neal
- Silkwood, Karen
- Simpson, Sally
- Sinclair, Upton
- Spitzer, Elliot
- Stanford, Leland, Sr.
- Stavisky, Serge
- Steffens, Lincoln
- Stewart, Martha
- Sutherland, Edwin H.
- Truman, Harry S.
- Vaughan, Diane
- Weisburd, David
- Wheeler, Stanton
- Whistleblowers
- Political Scandals
- Pollution
- Products
- Regulation
- Scams & Swindles
- Advance Fee Scam
- Art Fraud
- Bad Checks
- Bait and Switch
- Better Business Bureaus
- Bid Rigging
- Bond Fraud
- Charity Fraud
- Computer Hacking
- Consumer Product Safety Commission Act
- Contractor Fraud
- Counterfeiting
- Currency Fraud
- Daisy Chains
- Direct-Mail Fraud
- Grifters
- Home-Stake Swindle
- Nigerian 419
- Ponzi Schemes
- Real Estate Investments
- Scams
- Securities Fraud
- Stock Churning
- Sweepstakes Fraud
- War-Profiteering
- Work-Related Crimes
- Loading...
Get a 30 day FREE TRIAL
-
Watch videos from a variety of sources bringing classroom topics to life
-
Read modern, diverse business cases
-
Explore hundreds of books and reference titles
Sage Recommends
We found other relevant content for you on other Sage platforms.
Have you created a personal profile? Login or create a profile so that you can save clips, playlists and searches