Sunday 18th of November 2018

supporting the local battling industry of cronyism...


The Pentagon’s crony capitalism, aka military procurement, never sleeps.

According to reports, Amazon Web Services (AWS) is the clear frontrunner to win a sole source, 10-year, $10 billion contract from the Department of Defense (DoD) to handle all of its cloud computing. 

The case for a sole provider, however, is underwhelming, with critics saying the idea of putting all of the DoD’s computing on “one cloud” is unheard of. Congress should direct the Pentagon to do the right thing, not collude with a new member of the multi-trillion-dollar military-industrial-counterterrorism complex.

Amazon’s current market capitalization exceeds $750 billion, making it the second most valuable publicly listed company in the world after Apple. Post-retirement employment or consulting opportunities for DoD personnel involved in procurement concentrate the mind wonderfully. 

The lamp of experience teaches that military procurement is to procurement as military music is to music. The Pentagon would be bankrupt if it held no government monopoly on the armed forces. The day before 9/11, Secretary of Defense Donald Rumsfeld reported that $2.3 trillion in spending by the DoD could not be documented. Although required by law, the DoD has never been audited (though it’s supposedly in the midst of its first one now). In the meantime, a recent internal audit of the Defense Logistics Agency found that the agency could not provide proper documentation for more than $800 million worth of construction projects, among other abnormalities. No private investor would invest a penny in such a financially feckless enterprise. Even Saudi Arabia’s fabulously wealthy ARAMCO underwent an outside audit in contemplation of stock sales.

The DoD’s byzantine but also lackadaisical procurement standards give birth to chronic financial disasters. These include Lockheed Martin’s huge Air Force C5-A transport plane’s cost overruns and performance deficiencies; General Dynamics’ Electric Boat Division’s production of the Navy’s SSN-68 Attack Submarine at a hugely inflated sum despite major construction flaws, and, more recently, Lockheed’s F-35 Joint Strike Fighter, the most expensive weapon system in the nation’s history (and still in testing stages after nearly 20 years).

Lax procurement safeguards also invite corruption. Thus, Darleen Druyun,principal deputy assistant secretary of the Air Force, was convicted of bribery in 2004 for awarding a $23 billion sole source leasing arrangement with Boeing for 100 KC-767 mid-air refueling tankers in exchange for a lucrative post-retirement position with the mainstay of the military-industrial complex.

More recently, two U.S. Navy captains and a commander faced court martial in the so-called “Fat Leonard” scandal in which a charismatic Malaysian businessman was able to bilk the Navy for $35 billion in fuel charges, mostly by bribing officers with lavish gifts and prostitutes. Some 200 people have been connected to the scandal with at least 18 Navy personnel pleading guilty to federal crimes or charges under the Uniformed Code of Military Justice. Leonard Glenn Francis, also known as “Fat Leonard,” continued to get lucrative DoD contracts for years despite repeated calls for investigation.

The DoD’s contemplated 10-year exclusive cloud computing contract with AWS predictably carries earmarks of procurement amateurism, bias, and even influence peddling. Other suppliers are no slouches, including Microsoft, IBM Corp., and industry groups representing rivals such as Oracle Corp. They know that, according to this Bloomberg report, that Amazon has increased its lobbying presence in Washington by 400 percent over five years and has lobbied Congress on no fewer than 24 issues (each would include dozens of laws and regulations, including relaxing rules for flying commercial drones, for their deliveries, specifically). 

According to recent reporting from the Project on Government Oversight (POGO), Amazon spent $37 million on lobbying last year and gave $1 million to candidates of both parties.

Those efforts appear to have paid off last year with the passage of the so-called “Amazon amendment,” a provision tucked into the defense authorization bill that will establish a program facilitating government purchasing through e-commerce portals like

A full-court press on specific agencies is no different. According to Bloomberg, Amazon’s lobbying netted the cloud contract for the CIA, and an earlier contract with Pentagon for $950 million.  In 2016, Bezos was appointed to the Defense Innovation Advisory Board, to ostensibly help the Pentagon with new technologies. He also hosted Defense Secretary James Mattis at Amazon’s Seattle headquarters in August 2017.

It doesn’t hurt that the revolving door of top Pentagon officials who retire and then work for industry players, or serve on their boards, only to push and lobby for contracts and weapon systems the military doesn’t even necessarily want, is notorious. In 2010, then-Boston Globe correspondent Bryan Bender analyzed the career paths of 750 “of the highest ranking generals and admirals who retired during the last two decades.” He found that, “for most, moving into what many in Washington call the ‘rent-a-general’’ business is all but irresistible.”

From 2004 through 2008, 80 percent of retiring three- and four-star officers went to work as consultants or defense executives, according to the Globe analysis. That compares with less than 50 percent who followed that path a decade earlier, from 1994 to 1998.

According to POGO, citing statistics from the watchdog group Center for Responsive Politics, 59 of Amazon’s 90 lobbyists are “revolvers” who had previously worked somewhere in the federal government.

But why can’t the Pentagon see its way clear past all of the heavy sell for these sole-source contracts? Diversity of risk is business gospel, i.e., don’t put all your eggs in one basket, and the DoD’s nuclear triad is anchored in that truth. Multiple suppliers diminish the risk of non-performance. They also diminish the risk of technological obsolescence, which is exceptionally high in our digital age of warp-speed advances. They lessen the risk of hacking from Russia, China, Iran, North Korea, and other enemies of the United States. Indeed, AWS has sold computing equipment used in its cloud services in China to its local partner there, Sinnet Technology Co. That collaboration heightens the risk of China hacking into AWS’s cloud services to DoD. 

Multiple suppliers lessen the risk of procurement corruption like the Darleen Druyun-Boeing scandal by making concealment problematic. Druyun’s email correspondence revealed a consistent pattern of favoring Boeing in price negotiations; she had previously tilted two other contracts towards Boeing worth $500 million while arranging Boeing jobs for her daughter and her daughter’s fiancé. The more players involved in a procurement award, the less likely it is that corruption will escape detection and exposure by a whistleblower or otherwise.


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the most profligate public agency...

Everyone hates government waste. President Trump believes it is “our moral duty to the taxpayer” to “make our government leaner and more accountable,” and his political opponents seem to agree.

And yet, when called to vote on an extra $80 billion a year for the most profligate public agency in the country, the overwhelming majority of U.S. senators asked no questions. The Pentagon not only escaped serious budget cuts while everything from national parks to Meals on Wheels has been squeezed, but it actually almost got more than it asked for in the spending bill the Senate approved on September 18.

The Pentagon’s latest increase alone — never mind its base budget, which runs hundreds of billions higher — is a sum large enough to make public colleges free across the country, and by itself is worth well over 80 percent of Russia’s entire military budget.

It’s worth asking: Where does the money go?

“We’re the largest bureaucracy in the world”

Consider the reaction if the Environmental Protection Agency buried evidence of $125 billion in bureaucratic waste. At the very least, we would see congressional inquiries with Republicans foaming at the mouth and Democrats solemnly stating their commitment to safeguarding your tax dollars. At most, we would hear calls for some kind of criminal investigation.

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the fear budget...

Last week, the House Appropriations Committee advanced a lavish $674.6 billion Pentagon spending bill for fiscal year 2019. That means Congress is preparing to spend even more on defense, which isn’t at all shocking. To even marginally decrease defense spending, according to its champions, would be disastrous. After Senator Rand Paul proposed a “penny plan” to balance the budget with minor cuts, Senator Lindsey Graham warned his peers that the initiative “creates the one thing we can’t afford, which is unpredictability.” This attitude shapes Congress’s treatment of the defense budget, even though “unpredictability” is intrinsically inescapable and feverishly spending in an effort to evade it costs us the very liberty that our military ostensibly protects.

Over two millennia ago, the Greek philosopher Heraclitus said, “Everything changes and nothing stands still.” He was right, and not only in the cosmic sense, but regarding the tumult of modern geopolitics. Unexpected alliances, the development of new weaponry, and erratic fluctuations in financial markets can all alter a military’s defensive capabilities in an instant. So, like most prudent nations, we invest heavily in an array of measures that allow our military to be effective in inauspicious circumstances—except, unlike all other nations, that amounts to an inexplicably colossal sum.

America’s military has over 800 bases worldwide, more than any other nation or empire in history. In order to staff, equip, and maintain this body, the U.S. spends more on defense than China, Saudi Arabia, Russia, the United Kingdom, India, and France combined—to great effect. According to the Credit Suisse Research Institute, the strength of the American military exceeds that of all other countries, based on factors that include its quantities of soldiers, tanks, and aircraft. If any nation is prepared to brave the whirlwind of geopolitics, it is the United States. Yet legislators still claim that the military is experiencing a “readiness crisis,” which necessitates further fattening of the defense budget.

This “crisis” is often exaggerated or confused by its proponents because “readiness” is an ambiguous term that hints at urgency without ever specifying a threat. In that vein, arguments often focus on the health of particular programs while failing to contextualize them within clearly defined geopolitical aims. Whether a certain squadron of pilots is getting enough flight hours is a very different question than whether the U.S. is ready to maintain its current commitments abroad or hold its ground in a world war. Emotion, not genuine geopolitical insight, drives popular support for inflated defense spending, and, in the words of horror writer H. P. Lovecraft, “the oldest and strongest emotion of mankind is fear.”

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reinventing the square wheel...

If you are a regular reader of this show, er I mean this site, you would remember that every so often we invent the square wheel again as a philosophical means to transcend the useless impractical pragmatic hypocrisy of politics. We also investigate what the next invention of Darpa, the creative department of the US defence painful systems, is going to be — like the old gun that shoots around curves, using the soccer ball technology of "curveball". But what we should worry about in this fair dinkum country is that the southern skies are going to fill up with big drones: 


The Turnbull government will spend nearly $7 billion on massive, long-range surveillance drones that will dramatically expand Australia’s ability to spot military ships on the seas of Asia and tighten joint operations with the United States in the region.

Prime Minister Malcolm Turnbull will on Tuesday announce the purchase of the country's first Triton drone, which has the wingspan of a Boeing 737 and will easily be able to complete a lap of the South China Sea after taking off from the Northern Territory.


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Imagine. You are flying your little Cessna with confidence over Lake Amadeus, listening to some Mozart in the earphones, when you meet with one of these giant grey birds. You'd be shitting yourself, would you not?


Ah, and for the square wheel see:


The US Defense Advanced Research Projects Agency (DARPA) has created a new transforming wheel it says is suitable for rough terrain as part of its Ground X-Vehicle Technologies program. However, sharp-eyed and skeptical social media users said that the project looks like an incredible waste of taxpayer money.

DARPA showed off its Reconfigurable Wheel-Track (RWT) in a video, with the custom wheels shown to be able to transition from a standard round wheel into a triangular track, depending on terrain. DARPA boasts that the wheel will improve the "mobility, survivability, safety and effectiveness of future combat vehicles without piling on armor."

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We now have to work harder to find "a new philosophical image to transcend the useless impractical pragmatic hypocrisy of politics"... The bastards are catching up with us.

buying things for cash or on credit?

Since 20 January 2017, the arrival at the White House of a believer in productive capitalism has shuffled the international order to the detriment of financial capitalism. Imperialism, which until now had always been blindly defended by US Presidents to the point where we identified it with US foreign policy, is now based on bureaucracies, and in the front line are the administrations of NATO and the EU.

Donald Trump, acting as he said he would during his electoral campaign, is very predictable. However, his capacity to change the system is absolutely unpredictable. So far, he has not been assassinated like John Kennedy, nor forced to resign like Richard Nixon [1], and continues on his path, one step forward, one step back.

The Western powers have forgotten this, but in a Republic, the unique role of elected representatives is to control the administrations of the states they govern. However, progressively, a form of « pensée unique » has taken hold of them all, transforming the elected members into senior civil servants and the states into administrative dictatorships. The conflict between President Trump and his predecessors’ senior civil servants is simply a tentative to return to normality. It is also a titanic battle comparable to that which opposed the two French governments during the Second World War [2].

Scalded by the NATO summit of 25 May 2017, during which Donald Trump imposed the addition of the war against terrorism to the objectives of the Alliance, and by the G7 summit of 8 and 9 June 2018, where Donald Trump refused to sign the final Declaration, the NATO administration attempted to preserve the objectives of imperialism. 
- First of all, it signed a joint Declaration with its counterparts from the European Union on the evening before the summit, [3]. By doing so, it guaranteed the link subordinating the EU to NATO, instituted by Article 42 of the Treaty of Maastricht. This Declaration was signed by the President of the European Council, Donald Tusk, and by the President of the European Commission, Jean-Claude Juncker. Tusk is of Polish origin, born of a family which worked in secret for NATO during the Cold War, while Luxembourg citizen Juncker is the ex-representative responsible for the secret services of the Alliance in his country (Gladio) [4]. The European senior civil servants know that they are in danger since ex-special adviser to Donald Trump, Steve Bannon, came to Italy to support the creation of an anti-system government with the clearly-announced intention of dynamiting the European Union. 
- Secondly, the NATO administration imposed the signature of the first draft of the Joint Declaration at the start of the summit and not at its end [5]. There was therefore no discussion of the Alliance’s anti-Russian doctrine.

Aware of the trap that had been set for him, President Trump decided to surprise his civil servants. So while all the participants expected a speech about the minimal financial contribution by the Allies to the common war effort, Donald Trump questioned the very foundation of the Alliance - protection against Russia.

Convening the Secretary General, Jens Stoltenberg, at the residence of the US ambassador in the presence of the Press, he observed that Germany nourished its economy with gas from its Russian « friend » while at the same time asking for protection against its Russian « enemy ». By pointing out this contradiction, he relegated the question of finance to second place, which, nonetheless, he did not abandon. Above all, a week before his meeting with President Vladimir Putin, he rendered null and void the long indictment against Russia contained in the Declaration at the beginning of the summit.

Contrary to the comments in the Press, this remark by President Trump was aimed less at Germany than at Stoltenberg himself. It underlines the negligence of the senior civil servants who administrate NATO without ever questioning NATO’s raison d’etre.

The confrontation between the White House and Brussels continues [6].

On one hand, NATO has just endorsed the creation of two joint command centres (at Ulm in Germany and Norfolk in the USA)… and the increase of its personnel by 10%. Meanwhile, the European Union has just created the « Permanent Structured Cooperation » (a capabilities programme which enjoys a budget of 6,5 billion Euros) and France has added the « European Intervention Initiative » (an operational programme). Contrary to the speeches about European independence, these two structures are submitted to the Treaty of Maastricht, and are therefore at the service of NATO. They add to the complexity of European bureaucracy, to the great satisfaction of its senior civil servants.

On the other hand, President Trump has discreetly opened discussions with his Russian counterpart with a view to withdrawing both Russian and NATO troops from their front-line positions.

Thierry Meyssan

Pete Kimberley


see also:

why trump is facing resistance: skull and bones, the elite of the empire...

business not as usual...

hiding the black hole in their breeches...

The Pentagon is often described as a black hole of government spending. Just how bad is it these days? The Defense Department spent $21 billion in taxpayer money over two years without telling anyone what services were rendered or which companies benefitted. 

Normally, watchdog groups can at least identify the agency’s frivolous spending and tease out who the major beneficiaries are. But under something called Other Transaction Authority (OTA), the Pentagon can award money without the usual disclosures or due diligence normally required of federal contracts. Voila! A black hole.

Officials claim that OTA helps the the Department of Defense (DoD) court smaller, non-traditional contractors in places like Silicon Valley by avoiding some of the burdens of a more restrictive competitive bidding process. But loosely written rules and a lack of required congressional communication make OTAs Trojan horses for unaccountable spending that benefits some of the DoD’s most entrenched contractors.

According to a recent report from Federal News Radio, the Pentagon spent $21 billion on 148 OTAs between 2015 and 2017. This number, obtained via the Pentagon’s public affairs office, is at odds with the $4.2 billion logged by the Federal Procurement Data System. So why does the DoD give two different numbers on OTA spending? Because OTAs are not subject to the regulatory and disclosure guidelines required for most contracts, the Pentagon can get away with not reporting them as procurements—in other words, as part of the grand total.

The growth of spending across the federal government has led to the creation of a litany of laws designed to curb procurement waste and abuse. The Competition in Contracting Act (CICA) of 1984, for instance, requires federal agencies to give companies at least 30 days to respond to an agency solicitation (posting) for a task that needs completing. According to the statute, “The contracting officer must promote competition to the maximum extent practicable.” And any deviation must be documented in writing and reviewed. But laws are only as strong as loopholes allow them to be. And even the OTAs that do show up in public records demonstrate a confusing, unruly process where large players dominate. 

In February, the Pentagon announced a $950 million no-bid contract to REAN Cloud, LLC for the migration of legacy systems to the cloud. As an Amazon Web Services consulting partner and reseller, REAN Cloud was likely favored due to Amazon’s recent $600 million cloud project for the Central Intelligence Agency. Creating an unusually large contract with little oversight or competition led to ample criticism of the Pentagon, as lawmakers demanded an explanation from DoD. In response to the brouhaha, the Pentagon announced in early March that the maximum value of the contract would be reduced from $950 million to $65 million. 

As it turned out, though, even the Pentagon wasn’t exactly sure how to apply the murky requirements of OTA. The Government Accountability Office (GAO) ruled in May that the REAN contract did not accord with federal law, in that REAN was granted an award without even really considering going through a competitive bidding process. “Vague and attenuated” statements from the Pentagon to potential bidders in the beginning of the process ensured that the process would not be an open one. After the cancellation of the REAN deal, the Pentagon finally seems open to competitive bidding for cloud migration. 

Unfortunately, OTA is still alive and well across the DoD procurement process. In June, the Defense Information Systems Agency joined the growing list of agencies dabbling in OTA, noting that “many of the companies we’re dealing with are small start-ups.” But as the REAN Cloud case shows, many companies appear “small” but have far larger partners. According to statistics in the Federal News Radio report, “Only $7.4 billion of the nearly $21 billion went to…nontraditional companies.” The problem is created in part by the use of consortiums, which are comprised of multiple companies, which vary in size. The consortium can decide how money is allocated for an award, allowing larger businesses to benefit disproportionately out of sight of the DoD and taxpayers.


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Red from top.

the american pie: subsidies on top of tariffs...

Congress created the usual special interest frenzy with its latest iteration of the farm bill. Agricultural subsidies are one of the most important examples of corporate welfare—money handed out to businesses based on political connections. The legislation suffered a surprise defeat in the House, being viewed as too stingy. But it is certain to return.

Fiscal responsibility is out of fashion. The latest federal budget, drafted by a Republican president and Republican-controlled Congress, blew through the loose limits established under Democratic President Barack Obama. The result is trillion-dollar deficits as far as the eye can see.

Spending matters. So does the kind of spending. Any amount of corporate welfare is too much.

Business plays a vital role in a free market. People should be able to invest and innovate, taking risks while accepting losses. In real capitalism there are no guaranteed profits. But corporate welfare gives the well-connected protection from many of the normal risks of business. 

Business subsidies undermine both capitalism and democracy. Allowing politicians to channel economic resources toward their preferred ends distorts investment and trade. Moreover, turning government into an engine of illicit profit encourages what economists call rent-seeking. Well-organized special interests usually triumph over the broader public and national interest.

Explained Mercatus scholar Tad DeHaven, then a budget analyst at the Cato Institute: “Corporate welfare often subsidizes failing and mismanaged businesses and induces firms to spend more time on lobbying rather than on making better products. Instead of correcting market failures, federal subsidies misallocate resources and introduce government failures into the marketplace.”

While corporate welfare suggests money for big business, firm size is irrelevant. There is no substantive difference between, say, the Small Business Administration and the Export-Import Bank. Both turn capitalism into a rigged game of Monopoly.


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