The Pentagonists: An Insider's View of Waste, Mismanagement

"Science," the Greek word for knowledge, when appended to the word "political," creates what seems like an oxymoron. For who could claim to know politics? More complicated than any game, most people who play it become addicts and die without understanding what they were addicted to. The rest of us suffer under their malpractice as our "leaders." A truer case of the blind leading the blind could not be found. Plumb the depths of confusion here.

Re: The Pentagonists: An Insider's View of Waste, Mismanagem

Postby admin » Sat Nov 02, 2013 2:52 am

17. Our Corporate State

A LONG AND CURIOUS article titled "The Morning After" appeared in the October 1987 issue of the Atlantic Monthly. Its author, Peter G. Peterson, was an investment banker, former government official, and chairman of the Council on Foreign Relations. It was curious in that much of its analysis was so accurate and its conclusions so wrong. Those conclusions represent, in some interesting ways, a lot of the confused thinking of the 1980s.

Peterson wrote, "We now find that the budget deficits and an evaporation of the public's pro-defense consensus are drawing an ever-tightening circle around all our strategic options." That, of course, is only half the story. What is needed to complete the thought is a better understanding of the Reagan-era fiscal disasters that helped to evaporate the consensus.

Among other symptoms of fiscal illness, Peterson noted the collapse of our trade balance in manufactured goods "from a $17 billion surplus in 1980 to a $139 billion deficit in 1986." His solution? "First, we must tame the federal budget deficit." Obviously, but where do we start cutting? At the Pentagon? That's not impossible, according to Peterson, if fate would give us a lucky break: "Real defense spending has been effectively frozen for the last couple of years, and we may be at a crossroads in foreign policy which will allow us to make substantial future savings in security expenditure."

In looking forward to, presumably, a new era of detente with the Soviets, Peterson overlooked the fact that the greatest pacific development in American foreign policy over the past forty-two years -- the withdrawal from Southeast Asia -- was followed by an enormous increase in military spending. Peterson used the standard Establishment evasion: We can't control the huge expenditures at the Pentagon, but with a more benign foreign policy, expenditures may recede in some natural ebb of the tide. The reader will note that this argument rests on a supposed cause and effect that have no necessary connection.

Meanwhile, what to do? "We must," Peterson said, "increase federal revenue" by adding a huge sales tax on gasoline and a "five-percent value-added (sales) tax on all products." Presumably working people, who are hit hardest by such regressive taxes, would then be too broke to buy Japanese cars and televisions, and thereby the trade deficit would be reduced.

While in our nightly prayers we were supposed to wish for a change in foreign policy that might miraculously slow the Pentagon's upsurge in spending, where could we actually economize? The answer: in "non-means-tested entitlements," of which Social Security, a favorite Peterson target in the past, was the largest.

But wait. Social Security was not adding to the budget deficit; the Social Security trust fund was running a huge and growing surplus. According to the February 18, 1988, Washington Post, the Congressional Budget Office estimated that the surplus in the trust funds (Social Security was the largest of these) was likely to be $97 billion in fiscal 1988, as opposed to a deficit of $245 billion in the nontrust-fund part of the federal budget, or the Federal Funds Schedule. Chart 17-1 shows the role of the Social Security surplus in masking the size of the overall federal deficit and making the black hole look less deep than it is.

As of this writing, government actuaries estimate that Social Security surpluses will, unless there is an economic collapse, rise to the trillions before the inevitable downward trend when the Baby Boom generation begins to retire in the 2010s. The constant danger, of course, is that an administration faced with the hungry demands of the Pentagon will begin reneging on the deal with the old folks.

In his Atlantic Monthly article, Peterson pointed out that at the end of 1981 we were the world's largest net creditor nation, with foreigners collectively owing us $141 billion more than we owed them. By the end of 1987, Peterson forecast, we would be closing in on a negative $400 billion, with our net foreign debt projected to reach $1 trillion by the early 1990s. As Chart 17-2 shows, by 1988 the federal government's bonded debt was growing exponentially. It was becoming interest-driven; that is, we were borrowing money to pay accrued interest, which, as Senator Grassley has often pointed out, is a classic economic definition of bankruptcy.

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Chart 17-1. How the Social Security surplus masks the size of the federal deficit. Source: Congressional Budget Office.
Budget deficit (in billions of dollars), 1988-1993


So Congress had to take some action. It did that with the budget summit of 1987, making a modest start on the Peterson prescription. But in doing so it actually added more than $10 billion to the military budget set by the House Budget Committee and almost $5 billion to that approved by the Senate!

Since the two houses usually reconcile their budget figures by splitting the difference, the Senate Budget Committee staff focused on the midpoint of the difference between the two bodies, as shown in the summit outcome. This produced an increase for the military of $6.676 billion and a cut of $1.587 billion for everybody else, which meant a net increase of $5.089 billion in overall obligational authority. When this was translated into projected spending, the Pentagon outlays budget went up $5 billion from fiscal 1987 to 1988 and a whopping $8.5 billion for FY 1989. Most of that new $13.5 billion was for acquisitions.

In the end the Merlins of the budget announced a projected reduction in the deficit. But how? First they used the trust fund surpluses as camouflage. Next they whistled up some hoped-for increases in revenues from 1987 to 1989 -- $119 billion, partly from higher Social Security taxes and partly from projected increased revenues from general taxation.

The summit's action seemed insane: the only scare loose in the world was a peace scare. Congress had decided that we were not going to initiate a war in Central America. Mikhail Gorbachev was behaving less like an Evil Emperor and more like a politician eager to make arms reduction deals with Ronald Reagan. There was no known increase in The Threat. It had been demonstrated to all Pentagon insiders that we could drastically reduce unit costs for weapons while improving their quality. So why the big increases in the military budget?

The secret was that the planners in the DoD had continued to stick to their ascending plan even during the slowdown called the Freeze. Over the previous twelve years Congress had appropriated so much more than the Pentagon was able to unload that there was a huge backlog of unspent money. Spending did rise, just more slowly. Meanwhile, back at their computers, the planners and programmers looked into their crystal screens and saw visions of new billions after the Freeze nonsense was forgotten.

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Chart 17-2. U.S. public debt, 1930-1988. Source: Office of the Secretary of the Treasury, May 3, 1986.

Their guiding horoscope was a kind of five-year plan. Back in 1961 the Robert McNamara Whiz Kids created something called the Program Planning and Budgeting System, or PPBS. Managers used it to make their future cost projections, which were combined into the Five Year Defense Program, or FYDP. This latter, with its year-by-year estimates for each element, was intended as fiscal guidance for the president.

Needless to say, the negotiations that produced the FYDP were horrendous, with great politicking, re-estimating, trimming the losing programs and expanding the winners, adjusting and reallocating the adjustments. My friends in the office of the secretary of defense estimated that all this consumed at least a million manhours per year in the Pentagon. And though it was far from perfect, PPBS did bring some order to Fort Fumble's feeding frenzy.

Then in 1986 an odd thing happened. The price tag on the future plans vastly exceeded even Ronald Reagan's permissive guidelines, the sum of the parts being much greater than the acceptable total. Weinberger and his baffled aides finally gave up trying to reconcile the figures, and thus there was no balanced FYDP in 1987.

Under strictest secrecy, they were able to get away with the concealment, sharing the facts only with Pentagon insiders, big contractors, and tame members of Congress. This was management breakdown on a huge scale, involving hundreds of billions of dollars in mismatched projections. But it passed unnoticed in 1987, and in 1988, under the Poindexter-Packard plan, no reconciled FYDP was required.

It was a hefty time bomb that Cap Weinberger had wrapped up to present to the new administration when it took office in January 1989. A new management team would "discover" that the Pentagon "needed" as much as $400 billion more than previously planned for the ensuing five years in order to avoid immediate mass layoffs, contract terminations, and base closures -- all nightmare prospects for even the most fiscally responsible president.

The obvious course of that point would be for the president to announce to the country that in this crisis the nation's security and economic health were at stake. He would call upon everybody to make sacrifices until he could bring order out of chaos. In the meantime Pentagon spending would have to remain at the current level, or even higher.

The only thing that prevented Weinberger's ruse from succeeding was the vigilance of one senator, Lowell Weicker, and his staff assistant, Charlie Murphy. Informed members of the Pentagon underground passed the news to Murphy in early 1987. I learned of it at about the same time, but I was crippled by the straitjacket of Poindexter-Packard and the new secrecy gag rules, which threatened me even though I had not signed the SF 189. More important, almost everybody else had gagged themselves, which greatly reduced the flow of information.

My arithmetic showed that the Air Force alone had a five-year price tag that exceeded the Reagan guidance by $24.5 billion and exceeded our expectations of what Congress might appropriate by $72.8 billion. I tried repeatedly to get my new military bosses to discuss the issue, arguing that the sooner we squeezed some appreciable amount of fat from our programs, the better off we would be when we faced the budget discrepancy.

They had a sudden and interesting deafness. It took me a little while to realize that what the top Pentagonists were aiming for was fiscal chaos. They actually believed that chaos would benefit them and their contractor allies by forestalling any new spending discipline. It would be a license to steal.

I had some clues about this that would have been amusing under any other circumstances. In one staff meeting when I was trying to get some useful discussion of our overriding problem, I was silenced so that the meeting could devote itself to the price of haircuts in Air Force barbershops. In another meeting I was cut off in favor of a discussion dear to the heart of the chief of staff of the Air Force: leather flying jackets for pilots. In the year 1987 pilots no longer actually wore leather jackets (our open-cockpit biplanes had all been retired), but in their off-duty hours, such jackets would give them a kind of heroes-of-the-Dawn-Patrol look greatly admired by the chief of staff.

Specifications had been drawn up for the purchase of North African goatskins, which were supple and soft and supposedly had more sex appeal than other goatskins. But the North American goat breeders were horrified. What about the Buy American act? What about the fact that American goatskins were almost half again larger than the foreign kind? Shut up, Fitzgerald, this is a lot more important than any $73 million budget shortfall.

I then appealed to General Claudius Watts to declassify information about the serious budget mismatch, but while the bureaucrats stalled, Senator Weicker brought the news. In the meantime a secret deal -- a kind of defense summit -- had been in the works. Apparently, part of that deal was to replace Weinberger with Frank Carlucci. Carlucci, the rumor went, looked more "reasonable" to the public and Congress and would probably be a more plausible front for increased Pentagon spending.

On January 10, 1988, the Washington Post published a chart that gave a graphic view of the budget mismatch before the summit deal (see Chart 17-3). The exact details of the deal have not been made public at this writing, but the essentials were these: the Reagan administration had projected spending at the 1987 level plus 3 percent annual growth plus inflation; the deal changed that to 2 percent plus inflation, compounded annually. The trade-off was an accelerated increase in the congressional funding line. Instead of rising to $300 billion by 1997, congressional funding would get to that figure by 1990, seven years sooner. All this, of course, would be the problem of the new president. It was a true banana-republic solution: postpone it to manana. Peter Peterson was only one of many economists and critics who commented on the defense spending crisis. Seymour Melman wrote a monumental book on the subject, titled Profits without Production (1983). A key passage noted that "the Pentagon has effectively displaced cost-minimizing with a system of cost- and subsidy-maximizing," a demonstrably correct proposition that David Packard and Ronald Reagan have hailed as a virtue.

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Chart 17-3. Defense Department budget projections. Source: System Planning Corp., prepared for the Commission on Long Term Strategy but not included in the commission's report to the Pentagon and the president.

Gordon Adams and David Gold, in a July 1987 study financed by the Rockefeller Brothers Fund and the Circle Fund, tried to counter Melman's view with a kind of apologia. Defense contractors' prices were comparatively reasonable, they said: "Cost-maximizing practices within defense industries appear to have contributed to significant growth in weapons systems costs. However, defense sector price indexes compiled by the Department of Commerce indicate that inflation within defense industries is only slightly higher than inflation in civilian sectors with similar products" (emphasis added).

The point is that the comparison is tainted. The industries with "similar products" were already infected with cost-maximizing by the defense giants in their midst. Thus it was only natural that the infected sectors should be only slightly behind the disease carriers. Adams and Gold did not even begin to address the problem of a manufacturer whose cost for making one toilet pan was $600. He could not sell his product in any truly competitive market, domestic or foreign; his only conceivable buyer was the Pentagon.

Melman and his colleagues had noted the important "lost opportunity" factor, which is one way that military spending drains the general economy. Engineers who devote many hours to designing a plain three-inch piece of wire are not using their time to design products that might compete with Toyota or Sony. Worse, engineers long employed in such boondoggles rust and lose their skills. Adams and Gold missed those points entirely. They also failed to understand the additional drain caused by the lax and slovenly work habits so endemic to defense industries -- and so easily spread to "civilian sectors with similar products."

Another attempt to answer the great "why-can't-America-compete-any-longer?" question arrived in a 1988 treatise titled "The Case for Manufacturing in America's Future," prepared under the general supervision of Colby H. Chandler. Mr. Chandler was chairman and CEO of Eastman Kodak, a sizable military contractor. The paper began with the sensible but obvious thesis that American manufacturing now compares badly with that of the rest of the world and that we thus have reason to worry about our competitiveness. Chart 17-4 (constructed from data compiled by the CIA) illustrates the situation.

After that beginning, Chandler and company headed for the deep end. They decided that "our competitiveness plummeted due in large measure to an overvalued dollar." As patient readers of this book know by now, our "competitiveness" began to decline in 1965, and whatever the state of the dollar -- high in 1985 or low in 1988 -- the overall trend in our balance of trade has been down. Obviously we can improve the balance of trade if we take less for our goods and pay more for imports, thereby reducing the American standard of living. But this is a self-flagellating solution to the major problem of competitiveness.

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Chart I7-4. Changes in components of the U.S. trade deficit. Source: Central Intelligence Agency.

Chandler's article, in fact, gave evidence that our competitiveness did not plummet solely as a result of an overvalued dollar. He included a chart of values ("U.S. Real Exchange Rate") based on an index for the years 1970-1988 and compiled by Morgan Guaranty Trust. It compared the prices, in dollars, of nonfood manufactures in the United States, to prices for the same goods in other countries, in their currencies. In 1970 (the year before our first modern-day trade deficit), the index stood at 112. By 1987 it had dropped by 17 percent to 93. In other words, the dollar had lost only 17 percent in relative value while our balance-of-trade figures were in a free fall. The correlation Chandler's authors sought just wasn't there.

Chandler had a Petersonian remedy, though: boost consumer taxes, especially the value-added kind. That would raise the price of American manufactures at home and "all imported goods would be taxed, so that consumers would not detect any differential between the retail prices of domestic and imported goods." It was a marvelous soak-the-poor-to-support-the-rich program -- the rich being anybody who profited from military contracting and the poor being all ordinary taxpayers.

Chandler went on to give apparently impressive figures on increases in defense manufacturing jobs: over a million new ones in 1977, 1980, and 1985. As manufacturing employment in general decreased by 1.29 million from 1980 to 1986, defense employment went up by 740,000. Without defense industries to bolster the job market, he stressed, employment would be at its lowest since 1965.

So a lot more people were working in defense, but what were they producing? Chandler said nothing about output of useful products, nor even whether all that employment culminated in the noneconomic objective of outgunning the Evil Empire.

The ergo at the end of all this was that military acquisitions were wonderful medicine for our economic health: "Just as the manufacturing sector benefits the most when defense spending increases, it will be the largest loser as spending declines." And, making the prognosis of many a quack doctor before him, he uttered the words most likely to make Congress turn faint and helpless: "Defense cutbacks will ... lead to rather concentrated employment reductions."

Like Adams and Gold, Chandler was not quite in the real world. As many of our giant corporations became less and less able to compete in foreign -- or domestic -- markets, Congress gave them massive intravenous injections of military money. Unfortunately, as Chart 17-5 demonstrates, that was no cure. If anything, Congress anticipated the steep drop in our competitive ability. The upward-zooming line of "total obligation authority for DoD acquisition" actually preceded the downward slide of the trade figures because the former is done by fiscal year and the latter by calendar year. Prior to 1977, then, the obligation figures appeared on July 30 and the trade figures at year's end. Furthermore, the obligation authority is simply a permission to spend. The actual spending usually comes a year or so later.

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Chart 17-5. Defense acquisition costs versus U.S. balance of trade, 1960-1988, in current dollars. Source: Office of the Secretary of Defense and the Department of Commerce.

In their simplistic surveys of economic problems, Chandler and other writers overlooked another subtle aspect of the "lost opportunity" factor Melman had pointed out. This was the deterioration brought about by underemployment in defense industry. When a contractor warehoused a team of engineers in order to take advantage of the "full absorption accounting principle," he was letting talent rust. That principle encouraged corporations to keep technical teams together even if they had to be given busywork. The degradation of so many American engineers may be the most devastating hidden effect of our reckless military spending. When I was an engineering student and young engineering practitioner, we were indoctrinated with the idea that engineering is applied economics. Defense manufacturers seem never to have heard it.

Still another strain of military-contractor infection that began to spread through the general body of the nation from the 1970s on was cost justification, which the academics in charge of B-school management training adopted in all its manifestations. The cost-plus-percentage-of-cost concept (politely called "pass-through") spread into the campus courses and from there into many areas of business and industry, most rapidly in administered-price industries.

The health-care industry became one of the chief sufferers. The feverish rise of health-care costs starting in the late 1960s went hand in hand with the hospitals' adoption of cost-plus pricing. Along with that, physicians' billings were now based on an elaborate pricing system that (like the military contractors') was based on an average of past billings -- an average that kept moving higher and higher. The same disease spread to the quasi-public corporations such as the Postal Service, Amtrak, and Comsat.

For a long time I have felt like an eyewitness to the systematic disintegration of everything that made America competitive in the industrial world of the twentieth century. From the factory floor to the boardroom to the rarefied air of high government offices, a slackness of mind has set in. To be tough-minded, economical, and bent on winning is no longer the fashion.

Not that these shoddy, new habits are unresisted or universal; some stubborn and honest people do remain in corporations and the government. In my own area of concern, performance measurement systems are still in place even after years of battering from the cover-up troops. Should-cost worked when we were allowed to use it properly. Whenever we could pry loose enough information to do technical audits, they were valuable. We clung to the concept of work measurement for factories and managed to preserve it in principle. The times when we could persuade the big spenders to permit some competition for a contract, it paid off.

Competition had some interesting facets. In 1985 Congress passed a "reform" act called the Competition in Contracting Act, or CICA. One of its immediate effects was to allow the Pentagon to change the definition of "competitive" in its reporting. Before CICA, competition meant advertised solicitations and sealed-bid responses. Under the new system, even if the rivalry was no more fierce than two sumo wrestlers running the hundred-yard dash, any vying qualified. One striking case of CICA's effects was when a little competition brought the bid from one of our worst-case contractors down by about 80 percent. This contractor still couldn't make, say, a plastic toilet pan for less than $1,000 apiece, and if he ever tried to compete in the world market, the most insignificant Japanese company would eat him up.

And CICA failed to do anything about the grand swindles that hid under the Pentagon's label of competition. A splendid example of this was demonstrated by Ronald Brousseau, Sr., whose remarks were first secretly recorded by the FBI and later amplified in a guilty plea, according to Peter Stockton, who was following the case.

Brousseau was a Northrop buyer who took kickbacks on purchases for the B-2 Stealth bomber. This machine was headed for a $500 million price tag (each), and Brousseau explained part of the reason. Original bids would be "bumped," or increased, so that the seller could pay a kickback, about 25 percent of the bump, and keep the rest. Brousseau explained how he got away with it for so long: "Nobody questions dollars or anything like that. As long as I can show competition or courtesy competition or bullshit competition you know. That's all I gotta be able to show is competition." (All these quotes come from the U.S. Attorney's sentencing memorandum.)

Brousseau's prosecutor further illuminated the practices, describing "courtesy competition" as "a fraudulent arrangement between a buyer and a group of sellers who agree that the suppliers will take turns being the low bidder." Everybody inflates his bid so that the low bid is still fat enough to provide a kickback and a nice cushion of profit for the winner.

It's a beautiful scam, and if it weren't for the occasional FBI operative with a body mike, a safe one. The big corporate contractors have let their own internal controls wither away until they no longer have much ability to check on such schemes. The auditors and purchasing systems evaluators have the comforting multiple-bid documentation to show that competition has taken place and the rest doesn't matter. Brousseau summed it up when he said, "Don't get greedy. You know, a nickel (5 percent) here and a nickel there. Everybody's gonna get fat and everybody's gonna be happy."

Peter Stockton shortly thereafter interviewed a supplier who said he'd been shaken down by most of the big corporate names in his industry. He was willing to testify that what Brousseau had done was common practice in military contracting. But the Edwin Meese Justice Department wouldn't grant Stockton's source immunity in return. The department promised to take some action, but that action never came. Not surprising, inasmuch as Brousseau himself received only light punishment, according to Stockton.

Another subtle and seldom-perceived danger was the growth of the military into a gross and mighty bureaucracy, one of the scariest developments of the 1980s. Reagan, after outbidding Carter with contract gold for the favor of the military party, then supplanted civilians with the Praetorian prefects of procurement. In this he was only following the example of the Emperor Lucius Septimius Severus, who, as he lay dying after a pointless campaign in North Britain, advised his two sons and heirs, "Make your soldiers rich; don't bother about anything else."

Reagan raised the pay and allowances of the military brass to unprecedented levels. With their handsome raises and tax-free allowances, supplemented by taxpayer-financed personal servants, drivers, homes, and executive airplanes, generals and admirals live in multimillionaire style. Even Air Force colonels, so thick on the ground that special jobs have to be concocted for them, cost the taxpayers 40 percent more than equivalent-grade civilians doing the same work. And many, of course, are headed for retirement rewards as executives in the contractor companies they have been cozy with while in uniform or as consultants ("rainmakers" in trade jargon) making sure the big contractors don't want for business.

Edward Gibbon, in his Decline and Fall of the Roman Empire, noted that "an hundred thousand well-disciplined soldiers will command, with despotic sway, ten millions of subjects." Instead of the gladius and the pilum, the dominating weapons of our own military party are rich contracts, jobs, assured profits, power, and prestige. And one more: the power to deny jobs to people in many areas of our society. For example, the loss of a security clearance is often tantamount to the loss of a work permit. I don't intend to imply by this that the military alone is running an "invisible government." The military side of the spending coalition has thus far been satisfied with its perks and has remained a servant of the corporate side. But if one day the power should shift, we are in for more serious trouble.

Where the military exercises a scarcely visible governing power is in its use of National Security Decision Directives (NSDDs). These, as we have seen, can be promulgated by a militarized National Security Council staff and okayed by the president's auto-pen. (And remember, the Nixon v. Fitzgerald decision put the president out of reach for civil damage suits.)

In 1988 The Threat seemed to have lost much of its old black magic, what with perestroika, a medium-range ballistic missile treaty, and the withdrawal of troops from Afghanistan. A Russian landing on Long Island did not seem imminent. The administration started a frantic search for sinister foreign enemies -- even little Threats -- to make continued big military spending seem respectable. But Ortega failed the test, then Noriega failed to build as hoped and even became an embarrassment.

A move was made to throw our armed forces into the war against the drug smugglers, but that was handicapped by increasing evidence that our national security apparatus, or parts of it, had tolerated certain smugglers in certain very suspect ways. In any classic scenario of power taking, the military would be happy to move into enforcement, but our military wanted none of the drug-policing role. Narcs have a hard, nasty job and few showy victories.

***

Another circumstance that separated the United States from the classic banana republic was our highly developed industrial and economic base, dominated by corporate oligarchies rather than oligarch families. The privileged Pentagon contracting corporations took for granted that they would give to their government customer in accordance with their ability, or their mood of the moment. The grateful government would see to it that the ever-malleable contracts were changed to conform to the giants' actual products. And the big corporations would be compensated in accordance with their need, as documented by their actual spending.

Just as the Pentagon contractors' bad work habits and worse management practices were encouraged and spread throughout the United States' corporate body, so did the notion of corporate communism. Every big corporation seemed to think it had a right to be kept alive, no matter how poorly it performed. The sloppier and more unsuccessful the management, the more it insisted on bailouts and protection from competition. The very thought that favored giant business firms should compete for the trade of consumers with free choice was somehow abhorrent to the defenders of privileged status for the big corporations. The suggestion that a changing economic climate demanded that dinosaur companies adapt or die bred panic. The pampered giants had become so grossly fat, so lethargic, and so nonproductive that their most strenuous efforts were periodic campaigns for more public money and more protection.

The evolving corporate welfare system was brilliantly described and analyzed by two British academics, R. E. Pahl and J. T. Winkler, in "The Coming Corporatism" (Economic Affairs, March-April, 1975). By their definition, corporatism is a political-economic system under which government guides privately owned businesses toward four goals: order, unity, nationalism, and "success."

Order, they said, "meant the elimination of the anarchy of the market in all its forms (including extreme success or failure for capital or for labor). This desire for stability emanates from a revulsion against the market processes that lead, on one hand, to the collapse of major companies in important industries ... and, on the other, to excessive speculation and windfall profits."

Unity is the "substitution of cooperation for competition. This desire for collaborative effort arises from a revulsion against the perceived wastefulness of competitive struggles."

Nationalism is the "elevation of 'general welfare' to complete priority over self interest or sectional advantage."

"Success" is the "attainment of national objectives established by the state.... it means giving conscious direction to the economy by establishing priorities and targets and by restricting work done toward alternative objectives. First and foremost, this means the control and concentration of investment and of the allocation of resources."

The authors were writing about corporatism in Britain; American academic writers prefer the more palatable "industrial policy." Pahl and Winkler had a less bland description: "Let us not mince words. Corporatism is fascism with a human face." They went on to say, "An acceptable face of fascism, indeed, a masked version of it, because so far the more repugnant political and social aspects of the German and Italian regimes are absent or only present in diluted form." Corporatism, they said, takes over "the core elements of the economic strategy" of old-fashioned fascism. "Corporatism is a distinct form of economic structure. It was recognized as such in the 1930s by people of diverse political backgrounds, before Hitler extinguished the enthusiasm which greeted Mussolini's variant." That is true; many economists of the 1930s admired Mussolini's reorganization of the Italian economy along corporative and syndicalist lines. By setting up special parastate agencies or "corporations" to replace failing or inadequate private enterprises, he was able to control the important economic sectors. Elitists everywhere found that laudable.

Hitler, with a much more highly industrialized nation, built on and to a great extent integrated the existing large corporations into the government system. The smokestack barons of the munitions industry benefitted greatly, of course.

At first both Italy and Germany seemed to have produced an economic marvel. They had created markets for troubled industries and made jobs for many more workers. Hitler's wehrwirtschaft (roughly, "defense economic system") was very much like our own parastate cartel of giant defense contractors in many respects. It appeared to be a splendid tonic for the economy. Another similarity was that the smokestack barons supported this new order and gave it direction. The Wehrwirtschaftfuhrer role played by Alfried Krupp was similar to that of David Packard in our own day.

Despite the rosy look of prosperity from making more guns than butter, the German and Italian arms economies were nonproductive in a classic economic sense. They did not add much of anything to the infrastructure or to the quality of life, and they weren't competitive in foreign markets. And that meant even more subsidies and protectionism.

In the end, going to war was the only cure. In Hitler's Secret Book, the Fuhrer despaired of competing with the productive capacity and efficiency of the United States, and he spoke of us as "emerging in all fields as the sharpest competition to all European nations fighting ... for the world's markets." He added, "Despite (America's) enormous wages, it no longer seems possible to undercut her prices."

It is tempting to array all the similarities between the 1930s corporate state and today's American military-industrial complex and use them as a predictor of things to come. However, I think the threat we face is from a peculiarly American version of corporatism. In this, our strengths are also our weaknesses. Hitler, Mussolini, and Tojo had no chance of making their vast slave empires work in the long run -- the home bases were too small and inadequate. Ours, in contrast, is the largest economy in the world, if we decided to, we could live very well within our own borders, with perhaps a few raids abroad to secure strategic materials or to prevent Grenada from falling into Cuban hands.

Or to teach somebody like Khadafi a lesson. The morning after the April 1986 bombing of Libya by the USAF, my associate Tom Amlie appeared live on Cable News Network and explained that the raid was necessary: "It's that time of year." In other words, military budget time. "The budget's in trouble; aid to the Contras is in trouble," Tom said. And Khadafi was an ideal enemy. As Tom pointed out, he was "not a Christian, he talks funny, and he is probably guilty of most of the things we accuse him of." Tom then got the hook from CNN, but he had made his point.

Most Americans have a deep respect, almost reverence toward the military, from memories of Washington at Valley Forge to the Marines at Iwo Jima. They don't realize that the combination of Pentagon Praetorians and big-corporation executives has nothing to do with heroism and, in fact, almost nothing to do with war except for the occasional bloody spasm to provide an emotional excuse for more big spending. The only thing the soldiers, sailors, and pilots in combat arms service have in common with the Praetorians is the uniform.

It was only natural that corporatism in America should flourish during the eight-year lease of the White House by a sleepy old actor who loved multimillionaires, but it had been well started under his predecessor, whose notable contribution was a scheme called the President's Executive Interchange Program.

In a personally signed directive, Carter told us that this program was "a positive force for marshalling our human resources. Through this effort, both the public and private sectors jointly contribute to greater sensitivity and responsiveness in the interest of all Americans."

No, he was not offering a sensitivity-training course. He was very gently trying to give us a kind of Mussolini message: "Boundary lines between government and business are blurring. The activities of both have become increasingly similar. Each recognizes the need for closer cooperation to achieve its goals." Those goals were:

To exchange management expertise and innovative techniques; To develop a cadre of executives of experience in both sectors (government and private) who could be called to serve on government advisory panels and in higher appointive positions in future administrations.


It was the perfect definition of institutionalized conflict of interest, which is one of the "unifying" aspects of corporatism.

If Carter's interchange program should reach full flower, imagine the pool of executives and generals who could be called to serve on blue-ribbon commissions. Since not all Pentagon acquisition practices have been made legal, and since some of them still leak out and get a bad reaction in the press and from Congress and the public, we'll need blue-ribbon commissions for some time to come. Somebody has to drag the red herring, paint the whitewash on, pull the wool, stack the deck, and otherwise get the world to overlook whatever must be overlooked.

The Carter-era and Reagan-era moves for tighter "nationa1 security" secrecy is another support for corporatism (as well as for larceny). Congressman Jack Brooks gave a stirring description in testimony before the House Post Office and Civil Service Committee on October 15, 1987:

Most of the (security) classification, in my judgment, is not to keep our enemies from finding out information. It is to keep the American people and the Congress from finding out what in God's world various agencies are doing and how they are throwing away money, wasting it. They preach economy and they throw money away like dirt, and lie and cheat, and hide, and dissemble....

Now, that's what their real complaint is, that the people and the Congress might find out what they are doing. Reprogramming money, wasting money foolishly, not enforcing the law, not enforcing safety provisions, all sorts of things, and they just do not want anybody in a position to know to say publicly that, yes, this did happen. They want these people to shut up and go away.


Yet the secret part of the government keeps adding bulk. Tim Weiner, who won the Pulitzer Prize for his reporting on the "black," or supersecret, budget told a meeting of the Fund for Constitutional Government on April 20, 1988, that one measure of this was the increase in funding for secret programs during Reagan's first seven years. When Reagan took office, the price tag for intelligence and secret military activities was about $12 billion a year. In 1988 it had risen to $35 billion a year. The military portion of that amount had gone from about $2 billion to $18 billion, an increase of 900 percent. That jump suggests how much more the Pentagon, under Reagan, had to cover up. For instance, the Stealth Bomber fiscal atrocities, some of which are beginning to come to light at this writing.

The corporate state always encroaches on individual rights. And one sign of corporatism victorious is court decisions against individual rights in favor of government "security." There is the pernicious practice of making a security clearance and a work permit one and the same, in imitation of the KGB. Take the 1987 case of Navy v. Egan. Egan, a shipyard worker, was denied a security clearance and thus had his job taken away without due process. A majority of the U.S. Court of Appeals panel agreed that Egan was entitled to a fair trial, but Chief Judge Markey dissented. The man couldn't have a trial, he ruled, "because there is no law to apply." The security clearance process, Markey wrote, was "predictive ... judgmental and neither factual nor legal." For the millions of people who needed security clearances to keep their jobs, the single test was the judgment of "responsible military officials."

Markey added that the officials derived their power from the president, and his power flowed from "the President's constitutional mandate to provide for the national defense, U.S. Const., Art. II, Section II." Interestingly, Article II, Section II says nothing of the sort.

When the case went to the Supreme Court on February 23, 1988, the court upheld Judge Markey. This logic, if carried to its conclusion, could permit the (mostly secret) NSDDs to usurp the legislative power of Congress, as usually happens in corporate states. The Reagan administration's push in this direction can be measured by the estimated three hundred or more of these edicts that Reagan issued between February 1981 and mid-1988.

The most dangerous sign of the times in 1988, however, was the slowly gathering consensus in favor of a big budget increase to finance a new spendthrift era at the Pentagon. The Washington Post's lead editorial on April 10, 1988, denounced candidate Jesse Jackson's military spending proposals as a "caricature of a policy" that "no president would try, or, if he did, would not be allowed by either party in Congress to pursue."

And what proposal by the Reverend Mr. Jackson so frightened the Post? A budget freeze like the one sponsored by those dangerous left-wingers Senator Charles Grassley and Representative Denny Smith. The editorialist's notion was a strange anomaly for a newspaper with an excellent reporting staff and plenty of stored information to show what damage irresponsible military spending has done. I called the editorial office to ask for clarification, but I was given no answer.

The adverse consequences of the Pentagon's addictive boondoggling to our economy and true military capability are serious indeed, but the damage to our country's moral fiber is catastrophic. Our Constitution and our laws have been subverted to excuse wrongdoing and to rationalize the wasteful system. Concealment of misdeeds had become an official virtue, and suppression of truth national policy. Sophistry reigns in "intellectual" circles. Government officials, from the majestic office of the president to the lowest, sleaziest procurement office, lie routinely and with impunity in defense of the system. So do leaders of business and academia. Some, though thankfully not most, working people have succumbed to the lure of easy money, of what was called blood money in my youth.

So, the blocks, beams, and lintels of a corporate state are already at the construction site and the foundation has been laid. Anyone who has seen the marble structures built in Rome between 1922 and 1943 will know what it is going to look like. But looks are deceiving: this is meant to be a prison for most of us.

I have a hunch, however, admittedly an overly optimistic hunch, that it will never be built. Part of that hope comes from the fact that the military party is so blunder-prone that even its rites of omerta can't keep the truth from getting out eventually. The June 1988 disclosures of widespread bribery and bid rigging in the acquisition community are just one example. But, even more important, I conjecture that ordinary Americans will stop this sinister architecture from being built on our soil. To use an old and unfortunately debased word, it's truly un-American.

Here is the voice of one working man who figured it out. Greg Nelson, a Lockheed employee, published this view in the October 1987 issue of The Union Member's Review:

We are the only ones worried about layoffs. Lockheed is trying to make as much money as possible right now. They love Star Wars because it's so easy to make big bucks inventing things nobody can check on. Unlike Lockheed, IAM (International Association of Machinists) members are in it for the long term. We want secure jobs and a good retirement. Is that what we get with Star Wars? What does your work experience tell you? Most folks who work here know that producing useful things with all these tax dollars is not what Lockheed is all about. That's why Lockheed is more interested in attendance than production. They don't care what we make, as long as we show up, so they can justify their budget. That's the real "Lockheed way."

What happens when people find out what their tax dollars have been wasted on? They are gonna be pissed, and we are gonna get the axe. It's up to our union to show the way out.

Why doesn't Lockheed and its governmental sugar-daddies care about production? First, they're all getting rich off this scam. They won't get laid off when we do. Second, the government doesn't really need this stuff. It's just the best way to get rich quick. If they really needed all these nuclear bombs and killer satellites, they wouldn't run this place the way they do. They'd fire three-fourths of the white badges (management people) around here and set this place up to get some work done.

They tell us what we make is vitally important for national Defense. If that's true, looking at the way they run Lockheed, we're in big trouble.

Never underestimate the blindness of greed. Beware of the man who gets more money the more he claims to defend the country. That's the guy who got so many people killed in Vietnam. War industries got rich while we were dying, and for what?


I happen to think that a lot of Greg Nelsons have the strength to overwhelm a few David Packards. But if we are going to stop the corporate state from rising on our land, we had best remember the words of the late Supreme Court Justice William O. Douglas, who wrote (in The Douglas Letters):

As nightfall does not come at once, neither does oppression. In both instances, there is a twilight when everything remains seemingly unchanged.

And it is in such twilight that we must be most aware of change in the air -- however slight -- lest we become unwitting victims of the darkness.
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Re: The Pentagonists: An Insider's View of Waste, Mismanagem

Postby admin » Sat Nov 02, 2013 3:00 am

APPENDIX A

White House Memorandum, January 20, 1970

MEMORANDUM

THE WHITE HOUSE

WASHINGTON

January 20, 1970

ADMINISTRATIVELY CONFIDENTIAL

MEMORANDUM FOR: MR. HALDEMAN

FROM: ALEXANDER P. BUTTERFIELD

RE: A. Ernest Fitzgerald

I may be "beating a dead horse" at this late date ... but it was only a few days ago that Alan Woods called to ask if we had arrived at any particular Administration line regarding Mr. A. E. Fitzgerald. And someone else (I can't remember who) asked the same question at about the same time.

You'll recall that I relayed to you my personal comments while you were at San Clemente, but let me cite them once again -- partly for the record -- and partly because some of you with more political horse sense than I will probably want to review the matter prior to next Monday's press conference.

• Fitzgerald is no doubt a top-notch cost expert, but he must be given very low marks in loyalty; and after all, loyalty is the name of the game.
• Last May he slipped off alone to a meeting of the National Democratic Coalition and while there revealed to a senior AFL-CIO official (who happened to be unsympathetic) that he planned to "blow the whistle on the Air Force" by exposing to full public view that Service's "shoddy purchasing practices". Only a basic no-goodnik would take his official business grievances so far from normal channels. As imperfect as the Air Force and other military Services are, they very definitely do not go out of their way to waste government funds; in fact, quite to the contrary, they strive continuously (at least in spirit) to find new ways to economize. If McNamara did nothing else he made the Services more cost-conscious and introspective -- so I think it is safe to say that none of their bungling is malicious ... or even preconceived.
• Upon leaving the Pentagon -- on his last official day -- he announced to the press that "contrary to recent newspaper reports" he was not going to work for the Federal Government, but instead, was going to "work on the outside" as a private consultant.
• We should let him bleed, for a while at least. Any rush to pick him up and put him back on the Federal payroll would be tantamount to an admission of earlier wrong-doing on our part.
• We owe "first choice on Fitzgerald" to Proxmire and others who tried so hard to make him a hero.

cc: Mr. Ehrlichman
Dr. Kissinger
Mr. Klein
Mr. Colson
Mr. Nofziger
Mr. Magruder
Mr. Ziegler
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Re: The Pentagonists: An Insider's View of Waste, Mismanagem

Postby admin » Sat Nov 02, 2013 3:02 am

APPENDIX B

FBI Memorandum, Two Versions, May 23, 1978

UNITED STATES GOVERNMENT

memorandum

DATE: 5/23/78

REPLY TO ATTN OF: SAC, WFO (74-303)

FROM: HANS H. DRIESSNACK, Major General,
United States Air Force
[Illegible]

TO: (00:WFO)

TO: DIRECTOR, FBI

This case was predicated upon a complaint received by SA [delete] of this office in late March of 1978 by A. ERNEST FITZGERALD (Protect).

For the information of the Bureau, Mr. FITZGERALD, since October, 1968, has been known as a "whistle-blower" while employed at the Department of the Air Force, which began in 1965. In 1968, FITZGERALD's biggest complaint had to do with the building of the Air Force C-5A cargo plane by Lockheed. In this Pentagon weapons contract involving Lockheed Corporation, the C-5A had developed huge cost overruns in the amount of 3.4 billion dollars. According to the contract between the Pentagon and Lockheed, if overruns did occur, it would be paid for by the company not the taxpayer. However, FITZGERALD found that the overruns were, in fact, paid by the taxpayers, and brought this to the attention of Senator WILLIAM PROXMIRE. PROXMIRE asked FITZGERALD to testify before his subcommittee to bring this information to the attention of this Congressional hearing, in 1968.

As a result of FITZGERALD's testimony in late 1969 and after his name was out of the headlines, the Air Force fired him. Plus, FITZGERALD found out that he was also black listed by the Air Force and was unable to get a job in his old calling. In 1973, after a series of administrative appeals and law suits, the Civil Service Commission (CSC) ordered the Air Force to reinstate FITZGERALD, but according to FITZGERALD his career today is at a dead end. FITZGERALD is currently suing to collect damages from the individuals who prevented his reinstatement to the Air Force in good standing and also for restoration to his old job or its equivalent. Civil Action Number 74-178, A. ERNEST FITZGERALD, Plaintiff, versus ROBERT C. SEAMANS, JR., Et Al; Defendants, is a current civil action that FITZGERALD has against those currently and formerly in the Air Force. FITZGERALD is suing these individuals, in their capacity as Government employees for the Air Force.

Version 1 of page 2

In April 1974, then Lieutenant-Colonel HANS H. DRIESSNACK, named also as a defendant in this civil action by FITZGERALD, produced a sworn affidavit dated and signed 4/18/74. Through discovery in this civil action, FITZGERALD's attorneys were able to produce an unsigned affidavit by DRIESSNACK with numerous corrections that eventually became his sworn affidavit of 4/18/74.

After reviewing FITZGERALD's civil suit at the U.S. District Court House during April and May, 1978, SA [delete] came across the affidavit of General DUWARD L. CROW dated and signed on 4/19/74. Through the chain-of-command, DIRESSNACK had reported to CROW on 5/7/69 allegations that FITZGERALD was involved in a conflict of interest as a civilian with the Air Force, and the private management firm, Performance Technology Corporation (PTC), which FITZGERALD was formerly President. CROW forwarded DRIESSNACK's allegation on FITZGERALD to his immediate superior, General MC CONNELL, Chief of Staff, which initiated an investigation by the Air Force's Office of Security (OSI).

In DIRESSNACK's signed affidavit of 4/18/74, he states, "I did not discuss these matters again with General CROW (after the meeting of 5/7/69) nor did I ever discuss them with other defendants in this case after the OSI interview."

It is the opinion of WFO that by DRIESSNACK altering his unsigned affidavit into its present form of 4/18/74, and the fact that both DRIESSNACK's and CROW's affidavits appear to be similar, it does give the appearance that DRIESSNACK "discussed these matters with General CROW" prior to submitting the final form of his affidavit dated 4/18/74. If this is the case, WFO feels DRIESSNACK perjured himself.

SA [delete] discussed the above with Assistant U.S. Attorney (AUSA) DONALD E. CAMPBELL, Major Crimes, Washington, D.C., and he advised the facts warrant that a preliminary investigation be instituted at this time.

FBI Headquarters is requested to grant WFO the authority to investigate captioned matter. For the information of FBI Headquarters, Major General DRIESSNACK is currently Director of the Budget for the Air Force, and the complainant A. ERNEST FITZGERALD, a well-known figure in the Washington, D.C. area, has strong ties with Senator WILLIAM PROXMIRE.

WFO indices negative regarding DRIESSNACK.

Version 2 of Page 2

In April, 1974, then Lieutenant-Colonel HANS H. DRIESSNACK, named also as a defendant in this civil action by FITZGERALD, produced a sworn affidavit dated and signed 4/18/74. Through discovery in this civil action, FITZGERALD's attorneys were able to produce an unsigned affidavit by DRIESSNACK with numerous corrections that eventually became his sworn affidavit of 4/18/74.

After reviewing FITZGERALD's civil suit at the U.S. District Court House during April and May, 1978, SA GOLDEN came across the affidavit of General DUWARD L. CROW dated and signed o 4/19/74. Through the chain-of-command, DIRESSNACK had reported to CROW on 5/7/69 allegations that FITZGERALD was involved in a conflict of interest as a civilian with the Air Force, and the private management firm, Performance Technology Corporation (PTC), which FITZGERALD was formerly President. CROW forwarded DRIESSNACK's allegation on FITZGERALD to his immediate superior, General MC CONNELL, Chief of Staff, which initiated an investigation by the Air Force's Office of Security (OSI).

In DIRESSNACK's signed affidavit of 4/18/74, he states, "I did not discuss these matters again with General CROW (after the meeting of 5/7/69) nor did I ever discuss them with other defendants in this case after the OSI interview."

SA GOLDEN discussed the above with Assistant U.S. Attorney (AUSA) DONALD E. CAMPBELL, Major Crimes, Washington, D.C., and he advised the facts warrant that a preliminary investigation be instituted at this time.

FBI Headquarters is requested to grant WFO the authority to investigate captioned matter. For the information of FBI Headquarters, Major General DRIESSNACK is currently Director of the Budget for the Air Force, and the complainant, A. ERNEST FITZGERALD, a well-known figure in the Washington, D.C. area, has strong ties with Senator WILLIAM PROXMIRE.

WFO indices negative regarding DRIESSNACK.
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Re: The Pentagonists: An Insider's View of Waste, Mismanagem

Postby admin » Sat Nov 02, 2013 3:03 am

APPENDIX C

National Security Decision Directive 102,
September 5, 1983

UNCLASSIFIED

Partially Declassified and released on Apr 1, 1986 Under provision of E.O. 12356, by B. [illegible], National Security Council
Partial Text of NSDD 102

September 5, 1983

U.S. RESPONSE TO SOVIET DESTRUCTION OF KAL AIRLINER (U)

INTRODUCTION


This directive defines the measures the United States will undertake to respond to the Soviet Union's shooting down of a Korean Airlines civil airliner, an act that resulted in the loss of 269 lives. This action demands a serious international and U.S. response, with primary focus on action by the world community. This Soviet attack underscores once again the refusal of the USSR to abide by normal standards of civilized behavior and thus confirms the basis of our existing policy of realism and strength. (U).

OBJECTIVES

• Seek Justice. We must consult with, and help to lead, the international community in calling for justice. Civilized societies demand punishment and restitution to deter, and raise the costs of, future egregious acts. We have a responsibility to impress upon the world that the Soviets, at a minimum, owe the international community:
o A full account of what happened, an apology, an admission of responsibility, and appropriate punishments to those responsible. (U)
o Immediate access to the crash site for joint efforts by Korea, Japan, and the United States to recover the bodies of their citizens and, if possible, the wreckage of the Korean airliner (U)
o Firm assurances that the USSR will not use destructive force against unarmed aircraft in the future, including necessary alterations in Soviet procedures for handling cases in which aircraft mistakenly cross its airspace. (U)
o Agreement to provide compensation for the benefit of the aggrieved families and KAL. (U)
• [Deleted]
• Advance Understanding of the Contrast Between Soviet words and Deeds. Soviet brutality in this incident presents an opportunity to reverse the false moral and political "peacemaker" perception that their regime has been cultivating. This image has complicated the efforts of the Free World to illuminate the USSR's true objectives. (U)

ACTION

In order to realize the objectives above, the United States will take the following bilateral and multilateral actions in the areas of diplomacy, aviation security and safety, and regional confidence building:

• Diplomacy and Justice. The following steps should be continued or undertaken immediately to mobilize the international community:
o Conduct intensive efforts to secure coordinated international action. (U)
o Seeks maximum condemnation of the Soviet Union in the U.N. Security Council and provide wide dissemination of statements made in these sessions. (U)
o Announce that the US-Soviet Transportation Agreement will not be renewed and suspend all discussion on the issue of consulates in Kiev and New York and on a new exchanges agreement. (U)
o Continue to conduct a search in international waters, in consultation with Japan and Korea, for the remains of the aircraft. Assure the government of Korea that we will vigorously support their request to conduct, participate in, or observe salvage operations. Indicate our clear willingness and desire to assist the government of Korea in recovering the bodies and flight recorder as appropriate and in accord with international law. (U)
o Make joint request with the government of Japan for Soviet authorization for access to Soviet territorial waters and airspace to search for remains of the downed aircraft. (U).
o Initiate a major public diplomatic effort to keep international and domestic attention focused on the Soviet action and the objectives outlined above. (U)
o [Big Delete]
o Develop an omnibus U.S. claim against the Soviet Union for compensation for the loss of life and property. Offer to present to the USSR similar claims on behalf of the Korean victims. Also coordinate claims with the governments of other countries with citizens on the aircraft to dramatize the USSR's responsibility for its actions. (U)
o Reaffirm the existing U.S. sanctions against Aeroflot that predate the Soviet attack on KAL. (U)
o [Big Delete]

IMPLEMENTATION

The Secretary of State, in concert with the Secretary of Defense, the Secretary of the treasury, the Secretary of Transportation, the Director of Central Intelligence, the Chairman of the JCS, the Direction of USIA, and the Administrator of the FAA, will develop a coordinated action plan to implement the provisions of this Directive. This plan should include a legislative, public affairs, and diplomatic strategy and be forwarded to the Assistant to the President for National Security Affairs by Wednesday, September 7, 1983. (U)

Under the direction of the Secretary of State, an interagency group will continue to evaluate and explore additional possibilities for international and U.S. actions consistent with this Directive. The first report on this continuing effort should be forwarded to the Assistant to the President for National Security Affairs by September 14, 1983. (U)
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Re: The Pentagonists: An Insider's View of Waste, Mismanagem

Postby admin » Sat Nov 02, 2013 3:06 am

Index

Abourezk, James, 100
Absolute immunity issue, 122-23,
124, 125
Accounting. See Cost analysis
and pricing policies
Acquisition Streamlining Panel,
238
Adams, Clark, 177, 179
Adams, Gordon, 300/ 301
Adams, Joe, 60
Adler, Allan, 263, 267-68, 269,
27 1, 272, 273, 275, 276
Adlfinger, AI, 145-46
Advanced Logistics System
(ALS), 79, 154
Advance Medium Range Air-to-Air
Missile (AMRAAM),
170
Aeronautical Systems Division
(ASD), 220, 222
Aerospace Daily, 192
Aerospace Education Foundation
Roundtable, 189
Aerospace Industries Association
(AIA), 280, 292
Agnew, Spiro T., 12, 64
Aiken, George, 41
Airborne Warning and Control
System (AWACS) airplane,
15 6
Air Force Logistics Command
(AFLC), n 78-79, 154,
238
Air Force Magazine, 1 89
Ail Force Plant Representative
Office (AFPRO), 141, 200,
201 , 202-3, 204, 205, 206,
207
Air Force Systems Command
(AFSC), 137, 138, 141, 152,
153, 189, 221, 238
Contract Management Divi
sion (CMD), 141, 143, 144
Air Logistic Centers (ALCs), 77,
78, 150, 151, 154, 155
work measurement system,
79
Air Staff Closet Coalition, 180,
182
Air University Review, 244
Aldridge, Edward, 171, 222, 239,
240
and reorganization, 246-48
Alerting America, 229
Allen, James, 84
Allen, Richard, 229
American Civil Liberties Union
(ACLU), 62
and Fitzgerald's damage suit,
74, 122, 123, 124, 125, 126
and secrecy issues, 266-71,
272, 273, 274-76, 277
and suit against Nixon, 122
American Federation of Government
Employees, 100-101,
102, 276
American Productivity Center
(APC), 190
Amlie, Thomas, 146-47, 149,
157, 309-10
investigation of Hughes Aircraft,
201, 202, 203
investigation of labor charges,
169, 170
investigation of spare parts and
tools, 151, 156, 186, 213,
224
Anderson, Jack, 117, 120, 154
Anderson, Robert, 97
Andrews, Reginald, 218-19, 220,
222
Aney, Russ, 281, 282
Anthony, Robert N., 14, 244,
281
Arizona Star, 201
Armed Services Committee, 181
19
Arthur Andersen and Company,
135, 236, 254
Aspin, Les, 87, 99, 191, 240, 245,
246, 268
and procurement, 283
and secrecy issues, 276
Atlantic Monthly, 293, 294
Aviation Week, 226

B-1 bomber, 97, 98, 99, 234-35,
245
B-2 Stealth bomber, 305, 311
Badhwar, Inderjit "Indy" 103-4,
105, 120
Badin, John, 114, 118
Baker, Howard, 27 6
Balanced budget proposal, 127-
28, 136, 139, 297-300
Balance of trade, 301- 2
Baroody, Bill, 30
Barrett, Mike, 1941 22 I
Barry, Edward, 25 2, 253
Basic Ordering Agreements
(BOAs), 139-40
Bast, Dick, 86
Beary, John F., III, 261, 262
Beckman, Kenneth, 16
Bedell, Berkley, 176-77
Before the Fall, 23
Bell, Griffin, 102, 112, 119
Bennett, , Charles, 234
Berteau, David, 229-30
Bettinger, F., 196
Bevill, Claudia, 250
Bid and proposal expenses
(B & P), 280
Bid rigging. See Bribes, kickbacks,
and bid rigging
Blandford, John, 84-85, 88
Blaylock, Ken, 106
Blaznik, Cecil, 25 3
Blowing the Whistle, 102
Blue-Ribbon Commission on Defense
Management, 226-35
Boddie, John, 239
Bodie, Ken, 103
Bodner, John, Jr., 67, 276
as lawyer for Fitzgerald, 6, 55,
56, 57, 60, 70, 74, 113, 126
Boeing Aircraft Company, 15 6,
157-58, 179, 292
Boren, David, 268
Bork, Robert, 268, 273
Boston Globe, 183, 237, 273-74
Bower, Joseph L., 28 I
Bowsher, Charles, Jr., 135, 254
Boxer, Barbara, 174, 188, 189,
191, 192, 193, 224, 225, 255
and Packard Commission,
232
and secrecy issues, 27 2
Boyd, John, 54
Boyd, Trenton, 14, 16
Braase, Louis, 27 6-77
Brian-Bland, Danielle, 27 1
Bribes, kickbacks, and bid rigging,
4, 46, 231, 237, 287-92, 313
by General Dynamics, 193-94
by Lockheed, 83-85
by Northrop, 83-86, 3°5
Brinkley, David, 235
Brooks, Jack, 133, 261, 262-63,
268, 275, 311
Brouk, Art, 194
Brousseau, Ronald, Sr., 305-6
Brown, Harold, 7-8, 95, 102, 109,
2 69
and C-5A scandal, 8-9, 11, 16
and firing of Fitzgerald, 9-10,
74, 126
and military spending, 38, 96-
97, 98, 99
Broydrick, Bill, 87, 90
Bruce, John, 55
Bryan, Jack, 145, 146, 170
Bryant, John, 195, 232
Bryant, William, 56-571 68, 111,
126, 276
Buchanan, Patrick, 18, 21, 23, 28,
66
and firing of Fitzgerald, 29, 30,
35, 65
Buchen, Philip H., 92
Buck, Kathleen, 29 1
Budget deficits, 293, 295
Budget reform legislation, 230,
233
Bueter, Arnold, 90
Bureau of the Budget, 32, 33,
35
Burns, Hugh, 166, 167
Bush, Bill, 12 5
Bush, George, 92, 97, 264
Bush v. Lucas, 125
Businessmen's Educational Fund
(BEF), 29, 40, 53, 95
Business Week, 97, 228
Butterfield, Alexander, 264
and firing of Fitzgerald, 24, 34,
36
Fitzgerald's damage suit
against, 741 112, 113, 122,
123, 125, 126
Button, Dan, 255
Byrd, Harry, Jr., 70-71
Byrd, Harry, Sr., 71
Byrne, Bill, 234
Byron, Beverly, 246-47

C- 5A transport plane
cost overruns, 3, 5, 8, 9, 10, 17,
22, 36-37, 109, 147, 284
cover-up, 14,16, 17, 30, 115,
227
hearings on, 11, 15-161 36
inefficiency of, 8, 24-25, 227
and insider trading, 27
learning curve price for, 1471
148-49
spare parts: purchases for,
218
C-5B plane, 147, 148-49, 219,
220
Campbell, Donald E., 115, 116,
1171 120
Cannon, Howard, 86, 113
Capitol Hill Military Reform
Caucus, 224
Cappucci, Joseph, 201 35, 192
Fitzgerald's damage suit
against, 112, 116, 118,
119
and Fitzgerald's reinstatement
hearings, 57, 6o, 70
Carlucci, Frank, 129, 135-36,
147, 233, 287, 298-99
and procurement bribes, 289,
291-92
and secrecy issues, 272, 276
Carter, Jimmy, 103, 113, 115,
120, 127, 132, 310
campaign commitments, 96,
97, 98, 102
and civil service reform, 103-6,
1071 108-9, 110, 125-26,
130, 145
Fitzgerald's damage suit
against, 6, 117
and Lockheed, 109-10
military budget/policy, 93-94,
96-98, 991 101, 128, 150,
155, 159
and reorganization, 94
and secrecy/security issues,
110, 264, 311
Carter-Mondale Policy Planning
Group, 95
Carter Reform Act. See Carter,
Jimmy: and civil service reform
Carver, Richard, 174, 183, 1841
185, 187, 188-89, 221, 247
and investigation of Hughes
Aircraft, 205-6, 207-8, 211
and spare parts pricing, 220,
221, 222
and work standards, 239
Casey, Aloysius, 253
Casey, William, 229
Cash flow statements, 281
Catto, Henry E., 261, 266
Cavanaugh, James, 198, 199, 224
Center for Strategic and International
Studies (ICIS), 282-83
Chandler, Colby H., 300, d02,
30 4
Chapin, Bruce, 194, 250, 264
Chapin, Dwight, 30
Chapman, Dudley/Chapman Report,
38, 65
Charles, Robert, 9, 11, 14, 16
Chauhan, Ompal "Om" 141-42,
143, 145-46, 162, 201
and investigation of labor
charges, 170, 171, 179, 191
Checks and balances system,
235-36, 245, 254-55
Chennault, Anna, 87, 88
Chennault, Claire, 87
Chicago Tribune, 35, 36, 37, 291
Christein, Wayne, 166
Christian Science Monitor, 96
Church, Frank, 83, 84, 86
Churchill, Mae, 274
CIA, 181, 182, 183, 262-63
Civilian control of armed forces,
243-46, 249, 257, 25 8
Civil Service Commission
employment statistics, 106,
107
and Fitzgerald case, 39, 55, 56,
57, 62, 69, 70 , 71, 72-73, 74,
125, 126
Civil Service Reform Program,
106
Civil service system, 102-3, 104,
105-6, 146
Clark, Bruce, 117, 119
Clark, Louis, 267
Clark, Richard, 86
Clark, William, 161 233
Clay, Cassius, 104
Clements, William, 90-91
Cleveland Plain Dealer, 27
Clifton Precision, 237
Coalition for a New Foreign and
Military Policy, 99
Coalition to Stop the B-1, 98
Coco, Marie, 272
Code of Ethics, 26-27, 83, 101,
105, 237
Cohen, Felice "Fritzy," 82
Cohen, Victor, 287
Colson, Charles, 1, 2, 6, 36, 66
Colt, AI, 20r
Commercial Appeal, 132
Committee on the Present Danger,
95-96, 229
Committee to Back the President,
128
Competition
courtesy, 305
for military contracts, 282,
300-302, 304-5, 307-8
swindles, 305-6
Competition in Contracting Act
(CICA), 3 0 5
Condon, Edward, 134
Congressional Record, 16, 210
Contractors, 308-309
entertainment expenses, 85-
87
military standard for, 145
self-governance proposal, 231,
232, 237-38, 285, 290
systems, 52
See also specific companies
Contracts, military, 4, 40-43,
307, 309
cost analysis of, 50-52, 53
cost-justifying methods for, 22,
47-50, 236
cost rivalry, 54
cross checking of, 235-36, 245,
254-55
CWAS, 228
multiyear, 239
negotiations for, 46, 53-54
pricing, government, 17
pricing, "should cost" 17, 44,
50, 51, 52, 53, 77, 79, 159,
164, 220, 221-221 228, 304
procurement, r & d, 40-41, 129
protested, 239
shipbuilding, 21, 54
sole-source, 181
tools, 211, 212-18, 282
total package, 228
undefinitized orders, 46-47
and work measurement estimates
44-45, 51
Cook, Kenneth, 61-63, 82
Cooke, D.O., 90, 235
Cooper, Tom, 204
Corcoran, Tommy "the Cork"
88
Corporate communism, 30 7-8
Corporatism, 308-10, 313-14
Cost analysis and pricing policies,
50-51, 149
actual cost, 45-461 159, 164,
219
cost-plus, 47-48, 304
Dollar Model, 76, 182, 183
equal allocation of overhead,
174-75, 176, 177, 211, 226,
284
full absorption accounting,
177-79, 216, 304
learning curve for, 48-49, 77,
143, 147, 148-49
line item integrity, 176, 177,
179-80
should-cost, 17, 44, 50, 51, 52,
53, 77, 79, 159, 164, 220,
221-221 228, 304
Costello, Robert, 280
Cost Estimating Relationships
(CERs), 182
Cost maximizing, 300
Council of Defense and Space
Industry Associations
(CODSIA), 164
Courter, Jim, 191, 192, 193
Cox, Archibald, 75
Crane, Ed, 131, 132
Crow, Duward L. "Pete" 41, 71-72, 112, 113m
115, 116-17
Crown, Lester, 196, 197
Cuba, 309
Curtiss-Wright corporation, 225

Davidson, Jim, 67, 127, 130-3 1
Dawson, Rhett B., 229
Dean, John, 58, 60, 61 , 64, 65,
66-67
DeConcini, Dennis, 116, 119
Defense Authorization Bill, 193
Defense Contract Audit Agency
(DCAA) 87, 143, 144, 145,
199
and GAO, 227-28
labor charges audit, 165, 166,
168, 169, 221
Defense Intelligence Agency
(DIA) 182
Defense Investigative Service
(DIS), 89, 90, 91, 265
Defense Logistics Agency (DLA),
145
Defense Management Challenge,
The, 283-85
DeFrancis, Frank J., 84-85
DeGraffenreid, Kenneth, 260
DeLeon, Rudy, 191
deLuca, Joe, 72
Denfield, Louis, 5
Dent, Harry, 66
Department of Defense (DoD)
fallout funds, 180-8I
labor charges audit, 166, 174,
179
procurement, 179
and spare parts, 219
See also Defense Contract Audit
Agency (DCAA)
Determan, Sally, 124
Devine, Sana, 18
Devine, Tona, 267, 268, 275
Dickinson, Bill, 12, 18, 19, 25,
28, 206, 225-26, 232, 234
as ally of Fitzgerald, 63, 256
Dingell, John, 116, 240, 268
and Fitzgerald's damage suit,
119, 125
investigation of General Dynamics,
194, 195, 196
investigation of Hughes Aircraft,
211, 215
investigation of MX missile,
254, 256
investigation of procurement
pricing, 168, 184, 189, 283,
287
investigation of spare parts,
218-23, 225
and reorganization efforts, 245,
246, 247, 248, 249, 2 54
and secrecy issues, 259-60,
266, 271, 278
Directors and Boards, 135
Dixon, Jack C., 113
Dobrovir, William, 103
Dobrynin, Anatoly, 134, 135
Dole, Robert, 210
Dollar Model, 76, 182, 183
Dollars and Sense, 127, 128
Dollars per standard labor hour
index, 51, 52-53, 78, 79, 149,
156
Donaldson, Sam, 235
Dornan, Robert, 125, 135
Douglas, William 0., 314
Downer, Samuel, 42-43, 76
Driessnack, Hans "Whitey,"
20, 57, 112, 114, 148-49,
156
and Fitzgerald's damage suit,
112, 113-14, 117-18, 119
perjury charges against, 115,
116-17, 118, 120
Dudka, Bette, 171
Duesenberg, R., 196, 197
Duffy, Joe, 24
Dukakis, Michael, 285
Durham, Henry, 42, 73, 130

Economilitary issues in national
policy, 242-43
Edey, Marion, 273
Edwards, J. T. (Jay), 154, 155,
198
Edwards, Jack, 12, 25
Edwards, Willard, 35, 36
Ehrlichman, John, 2-3, 23, 24,
59, 65, 69
and firing of Fitzgerald, 30, 32,
33, 36
Eisenhower, Dwight D., 1, 82,
241
and military-industrial complex,
4, 100, 242, 243, 244,
309
Electronic Industries Association
(EIA), 280
Employment, defense, 302, 304
Engelbeck, Marshall, 170
Engwall, Richard, 192-93
Ensign, Dick, 137, I 54
Equal allocation pricing. See Cost
analysis and pricing policies:
equal allocation of overhead
costs
Ernst and Ernst, 85, 86
Ervin, Sam, 64, 68
Ethics Resource Center (ERC),
237
Evans, David, 291
Executive privilege, 58-59, 60,
61, 63, 64

F-5 Freedom Fighter, 84
F-16 fighter plane, 54, 84, 212,
213, 215
F-17 fighter plane, 84
F-18 fighter plane, 83
F-111 fighter plane, 21, 26, 135,
244
Fairhall, James, 177
Falcon missile, 147
FBI, 67, 91, 115, 254
and Fitzgerald's case, 116,
117
investigation of collusive fraud,
238, 247, 287, 305
and spare parts scandal, 163,
235
Federal Aviation Administration
(FAA), 58
Federal Polygraph Limitation and
Anti-Censorship Act, 262
Federal Register, 275
Federal Times, 101, 103, 117-18,
171
Feinstein, Andrew, 103, 273
Ferguson, D. N., 250-51
Fielding, Fred, 60-65
Fields, James, 283
Fischer, Fred, 161
Fitzgerald, Nell, 68
Five Year Defense Program
(FYDP), 297
Flannigan, Peter, 66
Ford, Gerald, 28, 88, 91, 97, 99
and secrecy/security issues,
91-92, 264
Ford, William, 266
Fortune, 168
Foster, Johnny, 22
Fox, J. Ronald, 50, 283, 284, 285,
287
Frank, Barney, 125
FIaud. See Bribes, kickbacks, and
bid rigging
Frech, Paul, 73
Free, Tim, 29
Freeze, the, 296-97/ 312
Fund for Constitutional Government
(FCG), 95, 103, 104-5,
108, 132, 160, 266-67, 311
Fuqua, Donald, 235, 292
Furlong, Ray, 234

Gag orders. See Standard Form
189 (SF 189)
Gansler, Jacques, 229
Garfinkel, Steven, 113, 260, 264-66, 267,
269, 272, 273-74,
278
Garment, Leonard, 38, 65, 68,
71
Gasch, Oliveri 276, 277
Gay, Lawrence, 87
General Accounting Office
(GAO), 15, 94
audit of General Dynamics,
216, 218
audit of Hewlett-Packard, 227
cost analysis of military contracts,
51, 165, 211, 215
and DCAA, 227-28
General Dynamics, 135, 193, 236
audit of, by GAO, 216, 218
bribes and kickbacks scandal,
193-99, 237
F-16 fighter plane, 84
pricing policy, 211, 216-18, 225
spare parts purchases, 166, 215
General Electric, 179, 182, 236
George, Jim, 222
Germany, 308-9
Gesell, Gerhard, 112, 113, 116, 120, 121, 123
Gileece, Maryanne, 188
Gilliland, Jim, 196
Gilmore, Hugh, 34
Gilpatric, Roswell, 22
Glasser, Ira, 274, 275
Goering, Hermann, 82
Gold, David, 300, 301
Golden, Robert, 115, 116, 120,
287
Goldman, Patti, 277
Goldwater, Barry, 22, 210, 234,
235, 238, 239, 245
Gorbachev, Mikhail, 296
Gore, Albert, Jr., 125
Gore, Albert, Sr., 228
Gorman, Paul, 233
Gottlieb, Sanford, 134
Gould Corporation, 176, 177, 179
Government Accountability
Project (GAP), 263, 267, 272,
273
Government Operations Committee,
261
Grace Commission, 175
Grady, Dan, 121
Grants to contractors, 4, 280
Grassley, Charles, 155, 156, 169-
70, 171-72, 174, 179, 191,
192, 294
Freeze proposal, 186-88, 189,
190, 191, 192, 193, 210, 224,
312
investigation of procurement
bribery, 287, 288, 290
and secrecy issues, 276, 277
Grassley-Boxer bill, 186-88, 189,
190, 191, 192, 193, 210, 224,
312
Greenstreet, Bob, 174
Grenada, 309
Gross, H. R., 29

Haig, Alexander, 23, 30, 69, 75
Haldeman, Robert, 24, 30, 38, 68,
69
and firing of Fitzgerald, 6, 32,
34-35, 36, 68, 69
Hale, Russell, 137, 143, 144, 145,
146, 147, 149, 183-84
and labor charges audit, 166,
168
and spare parts investigation,
151, 15 2, 154, 164
Halperin, Morton, 124
and secrecy issues, 266-67,
268, 269, 270, 272, 273, 274-
75, 277
suit against Nixon and Kis
singer, 122, 123-24
Hamilton, Lee, 162
Hamilton, Peter B., 117
Hamilton, Robert, 20, 55, 73, 74
Hancock, Robert, 15 1, 154
Harlow, Bryce, 18-19, 28, 31, 32,
64
and Fitzgerald's damage suit,
74, 120, 122, 123, 125, 126
Harris, Leslie, 126
Harshman, Dick, 168, 169, 187,
202, 204, 208
Hart, Peter, 286
Harvard Business School Press,
283
Harwood, Richard, 21-22
Hatch, Orrin, 116, 119, 120, 125,
133
Hatch Act, 255
Hatfield, Mark, 250
Haugh, Pat, 142
Hayduck, Ann, 89-90
Health care industry, 304
Heflin, Howell, 171
Hemenway, Russ, 272
Henderson, Tom, 120
Herbert, Jule, 131
Herblock cartoons, 219, 288-
89
Hercules corporation, 287
Herrington, James, 275
Hershow, Sheila, 103, 117-18,
183
Hetu, Herbert E., 229
Hewlett-Packard, 22, 25, 227
Heymann, Philip, 119
Higby, Larry, 34-35
High Priests of Waste, The, 3, 50,
169, 210, 227
Hills, Carla, 233
Hird, Grant, 139
Hitler, Adolf, 308-9
Hitler's Secret Book, 309
Hoewing, Linc, 167
Hoffman, Marty, 68, 71
Hoffman, Nicholas von, 63
Hogan and Hartson, 120, 124
Holifield, Chet, 17, 19, 48, 227,
283
and C-5A scandal, 12-13, 14-
15, 16
Holloway, James, 233
Holmes, D. Brainerd, 97
Hoover, Herbert/Hoover Commission,
242-43
Hoover, J. Edgar, 24
Hopkins, Larry, 255-56
House Armed Services Committee,
191, 225, 231-32, 248,
254
Hovelson, Lisa, 169
Hudson, Henry, 287
Hughes Aircraft Company, 137,
138, 141, 142, 147, 149,
248
cost and quality control problems,
200, 201-2, 203-4,
205, 206-7, 208
cost estimates for Soviet missiles,
182
labor charging policy, 165, 166,
170
Hughes, Harold, 113
Hughes, James, 24
Human Events, 43
Huston, John Charles, 21-22, 23,
28
Hyatt, Brian, 253

Independent research and development
(IR & D), 280
Industrial Management Assistance
Surveys (IMASs), 51
Inflation, 80, 300
Information and Security Oversight
Office (ISOO), 260, 265,
272, 274
Information categories
classifiable, 265, 270, 272, 274,
275
classified, 263, 264-65, 270,
273, 275, 277-7 8
confidential, 259
secret, 259, 264
Inouye, Daniel, 36, 64, 68
Institute for Police Studies, 43
Internal Revenue Service, 65-68
Iran-Contra hearings, 30, 260,
271
Iranian rescue mission, 129
Isbell, Florence, 6
Israel, 81, 99
Italy, 308-9

Jackson, Jesse, 312
Jacobs, Ted, 103, 104, 105
Jacobson, Raymond, 107
Johnson, Lyndon, 5, 7, 18, 23, 95
Johnson, Peggy, 153
Joint Economic Committee (JEC),
17, 27, 39
cost analysis of military contracts,
50, 51, 53, 54
Jones, Thomas, 85
Jonsson, Thorn, 174
Jordan, Hamilton, 95, 102
Jordan, Len, 12, 28
Julyan, David, 121

Kagan, Stan, 138
Kahn, Theodore, 80
Kampelman, Max, 229
Kann, Kurt von, 120, 123, 124
Kaplan, Fred, 183, 237
Kartis, James E., 90
Kassebaum, Nancy, 183, 224
Kaufman, Richard, 8-9, 13, 17,
224
Keating, David, 130
Keegan, George, 97
Keeney, Jack, 120
Kelman, Stephen, 175-76, 177,
279
Kelson, John, 117
Kemp, Jack, 133
Kennedy, Edward, 24
Kennedy, Joe, 268
Kennedy, John F., 7
Kennedy, Max/Project Max, 79,
80, 154
Kephart, Robert, 43, 67
Ketcham, Henry, 283
Khadafi, Moammar, 309
Kimmit, Robert, 260
Kindinger, Ed, 145-46
King, Susan, 121
Kinkaid, Bill, 90
Kirkland, Lane, 96, 229
Kirkpatrick, Jeane, 229
Kirschbaum, Eugene, 114, 118,
119
Kissinger, Henry, 38, 83
and firing of Fitzgerald, 21, 32,
36, 37
Halperin suit against, 122, 123
wiretapping activities, 23, 26,
69, 122
Kissinger v. Halperin, 123
Kitchens, Larry, 222
Klein, Herb, 36
Koch, Charles, 131
Koch, George, 131
Kolesnik, Kris, 186, 191, 210
and labor charges audit, 169,
172, 184, 187, 192
and procurement bribes, 287
and secrecy issues, 272-73,
276
Koontz, Harold, 268
Korean airliner disaster, 160-62
Kotz, Nick, 99
Kraft, Joseph, 96
Kramer, John, 103
Krogh, Bud, 30
Krupp, Alfreid, 309

Laird, Melvin, 19, 22, 23
and C-5A scandal, 16, 25, 37
and firing of Fitzgerald, 20, 30,
36, 60, 65
and Fitzgerald's damage suit,
112, 117
and Fitzgerald's reinstatement
hearings, 68
and military spending, 27-28,
36
Landau, Jack, 268
Lang, John, 10, 11
Latham, Watkins and Hills, 233
Laughter, Sy, 208
Laundered money, 84, 85, 86, 181
Lawrence, Ken, 270-71
Lazarus, Simon, 105, 106
Leahy, Patrick, 118, 119, 121
Learning curve. See Cost analysis
and pricing policies: learning
curve for
Lefevre, E. J., 197
Lehman, John, 194, 209, 229,
235, 287
Levine, Mel, 172, 224, 233
Lewis, David S., 196, 197
Libya, 309-10
Lie detectors (polygraphs), 260,
261-62
Lincoln Club, 136-37
Lindenfelser, James, 229, 248
Ling, James, 42, 43
Ling Temco Vought Corporation,
42
Litton Industries, 287
Lockheed, 132, 313
bailout, 47, 227
bribes by, 83, 85
and C-5A, 3, 8, 10, 11, 17, 27,
54, 73, 147, 218, 227
and C-5B, 147, 148-49, 219,
220
Carter ties with, 109-10
repricing formula, 19-20
spare parts pricing, 218, 219,
220-21
stock market interests, 16
Long, John, 201
Looney, Larry, 219
Los Angeles Times, 161
Lost opportunity factor, 300,
304
Lovelace, A. M., 197
LTV, 182
Lynch, Mark H., 124
Lynsky, John, 221

MacArthur, Douglas, 5, 242
McCarthy, Eugene, 131
McCarthy, Joseph, 125
McCleary, Terrence, 90
McClellan, John, 35
McClendon, Sarah, 32, 33, 34
McConnell, John P., 112, 116
McCracken, Paul, 27, 28
McDaniel, Rodney B., 259
MacDonald, Gorden, 196
McDonald, Robert, 139
McDonnell-Douglas, 84, 182,
237, 287
McFarlane, Robert, 226, 233, 260,
263
McGee, John, 202-3, 205, 207,
209
McGovern, George, 132
McGovern, James, 239, 240
MAC Group, 280-82
McLean, William, 146-47
McLucas, John, 70, 72-73, 89
McNamara, Robert, 71 21, 22, 23,
26, 297
Magruder, Jeb Stuart, 32, 36, 37
Mahon, George, 91
Malek, Fred, 66
Maloney, Fred, 207
Management Accounting, 281
Manned Orbiting Laboratory
(MOL), 21
Marietta Daily Journal, 109
Markey, Howard, 311-12
Marks, Ted, 244
Marsh, Jack, 71
Marsh, Thomas, 137, 138, 143
Martin, Donna, 188, 191-92
Martin Marietta Corporation,
287
Maverick missiles, 137-38, 139,
141, 142, 149, 203, 206, 210
Mavroules, Nick, 191
Mayo, Robert, 20, 28, 32, 33
Media
and Fitzgerald case, 117, 135
and government propaganda,
279-80
and Packard Commission re-
port, 231-32, 237
and procurement practices, 16,
159, 183, 239, 284, 289
and secrecy issues, 268, 272,
278
See also specific newspapers
Meese, Edwin, 195, 253, 273
Mellor, James, 197
Melman, Seymour, 41, 134, 300,
304
Messamore, Claude, 176
Metzenbaum, Howard, 97
Military Airlift Command, 100,
174
Military-industrial complex, 4,
100, 242, 243, 244, 309
Miller, Arnie, 121
Miller, Frank, 151
Miller, Merle, 225
Milwaukee Journal, 43
Minuteman program, 21
Mitchell, John, 34
Mitchell, Parren, 100
Mitchell, Willard, 145, 152, 153-
54
Moffett, Toby, 125
Mohr, Charles, 97
Mollenhoff, Clark (The Boomer),
23, 37, 38, 62, 144
as ally of Fitzgerald, 29, 133,
135
and executive privilege issue,
1-2
and firing of Fitzgerald, 30, 31,
32, 33, 34, 35
and Fitzgerald's reinstatement
hearings, 56, 58, 60-61, 63,
67, 68
Mondale, Fritz, 95, 97, 102, 172
Moon, Sun Yung, 145
Moorhead, William, 12, 13, 15,
16, 25
Moran, Thomas, 72, 79
More Bucks, Less Bang, 160
Morgan, Charles "Chuck," Jr.,
95, 102, 103
and civil service reforms, 104,
105-6
Morgan, Skip, 247
Morris, Anthony, 130
Morrison, Alan D., 103, 124
Morrison, David, 245
Moses, Harry, 109
Moses, Judith, I09
Moss, John, 105
"Motivating the Pentagon Bureaucracy
to Reduce the Unit
Cost of Defense," 95
Matt, Stewart, 95, 103, 104, 131,
132
Murphy, John, 19
Murphy, W. W., 168
Mussolini, Benito, 308-9, 310
MX missile, 249-54, 256

Nader, Ralph, 102
and civil service reforms, 102,
103-4, 107-8
and Fitzgerald's damage suit, 6,
124, 125
and military spending, 82-83
and secrecy issues, 273, 277
National Democratic Coalition,
24, 36
National Journal, 245
National Security Agency (NSA),
262-63
National Security Council, 258,
307
National Security Decision Directives
(NSDDs), 259, 307,
312
NSDD # 84, 260-63, 267, 268,
269, 277
NSDD # 102, 162
NSDD # 219, 233, 234, 238,
259-60
See also Standard Form r89 (SF
r89)
National Security Industrial Association
(NSIA), 236,
280
National Taxpayers Legal Fund
(NTLF), 130-31
National Taxpayers Union
(NTU), 43, 67, 68, 127, 133,
135
and B-1 bomber issue, 98
and balanced budget proposal,
I27-28
and Fitzgerald's case, 133
Project on Military procurement
(PMP), 130-31, 132
National Transportation Safety
Board (NTSB), 161
Navy v. Egan, 311- 12
Nelson, Greg, 313
Newman, Barbara, 119
New Order reorganization plan,
238-40, 245, 247, 248, 249,
254, 256
and secrecy issues, 259
Newsday, 272
Newsweek, 129
New York Times
and Carter budget, 97
and contract pricing, 164
and Fitzgerald's reinstatement
hearings, 61, 63
and military spending, 23
and Packard Commission report,
232
and secrecy issues, 262, 265,
271
Nichols, Bill, 232, 238, 245
and reorganization plans, 246,
248, 249, 254, 255
Nielson, Thomas, 10, 12, 16, 20
Nitze, Paul, 229, 244
Nixon, Richard, 36, 60, 75, 134
and C-5A scandal, 5, 17-18,
36-37
and civil service system, 105
election (1972), 68, 84
and executive privilege, 1, 2-3,
65
and federal merit system, 102-3
and firing of Fitzgerald, 6, 29,
30, 31, 32, 33, 35, 65
and Fitzgerald's damage suit,
74, 112, 120-21, 122, 123,
124, 125
and Fitzgerald's reinstatement
hearings, 6, 57, 58-59, 60,
61, 68, 71, 121
"get tough" policy, 28, 30
Halperin suit against, 122
military spending budget,
policy, 3, 11, 21, 27, 36, 43, 48
and secrecy issues, 110, 264
and Southeast Asia war, 27, 28
Nixon, Richard (cont.)
space program, 21
and Watergate, 64, 65, 120
Nixon papers, 112-13
Nixon v. Fitzgerald, 307
Nixon White House tapes, 120
Nofziger, Lyn, 36
Nogoki, Warren, 185
Noland, John, 124, 125
Nondisclosure agreements. See
Secrecy: oaths
Norden Systems, 287
North, Oliver, 30, 260, 271, 287
Northrop Corporation
audit of, 89, 90, 91
bribery by, 83-86, 305
entertainment expenses, 87,
88, 91
MX missile operations, 249-
54
Nossiter, Bernard, 19-20, 42, 76
Nunn, Sam, 234-35, 268, 287

Obligation authority, 302-4
Office of Management and Budget
(OMB), 128
Office of Special Council (0SC),
145
Office of Special Investigations
(OSI), 20, 114, 116, 253
O'Donnell, Cyril, 268
Omerta concept, 26, 65, 253
Orr, Verne, 136-37, 138, 144,
146, 147
and C-5B, 149
and Fitzgerald, 185
and investigation of Hughes
Aircraft, 202, 203, 204, 205,
211
and investigation of procurement
practices, 166, 167-68,
170, 171, 182, 193, 215, 238-39
pay raise initiative, 146
and spare parts scandal, 156,
157, 164
and spending objectives, 183
Otepka, Otto, 35-36

Packard, David, 313
and firing of Fitzgerald, 30, 31,
33, 60
and investigation of procurement
practices, 227-28, 229
and military spending budget/
policy, 22, 28, 50, 54, 96, 300
review of Fitzgerald's book, 50,
228
See also Packard Commission;
Poindexter/Packard plan
Packard, Duane, 137, 138-39, 146
Packard Commission, 230, 231-32,
233-34, 235, 236, 244-45,
254, 259, 260
Pahl, R. E., 308
Paisley, Melvyn, 287, 292
Parfitt, Colin, 146, 156, 157, 252,
286
as ally of Fitzgerald, 78, 80, 90,
137, 143, 147, 239
and investigation of Hughes,
201
and labor charges audit, 164-65,
169, 174, 177
and procurement costs, 284
and spare parts scandal, 151,
152, 153, 154, 199, 224
Patman, Wright, 39, 84, 85
Patronage, 4-5
Payne, Daniel 0., 90
Peat, Marwick, Mitchell and
Company, 236-37
Pentagon Underground, The,
148, 155
Performance measurement. See
Work measurement
Performance Technology Corporation,
20, 114, 116, 119
Peterson, Peter G., 293-94, 300
Petkus, Peter, 82, 102, 103
Pewitt, James, 112
Pfautz, James C., 181, 182, 183
Philadelphia Bulletin, 99
Philadelphia Inquirer, 96
Phillips, Jim, 119
Phoenix missile, 202, 203, 206,
207, 208, 209
Pincus, Walter, 92
Poindexter, John, 259-60
Poindexter/Packard plan, 233,
234, 235, 237, 238, 244-45,
248, 259, 280, 281, 285, 290
and FYDP, 297, 298
political Economy of National
Security, The, 76
Pollack, Richard, 286
Powell, Jody, 97
Pratt and Whitney, 143, 144, 154,
182
and bribery, 154, 160, 287
FBI investigation of, 198
and General Dynamics hearings,
198-99
pricing policy, 150, 151-52,
153, 155, 156, 162-63, 164,
199, 225
Prepublication review, 260, 262,
269, 274
President's Executive Interchange
Program, 310
President Who Failed, The, 110
Press. See Media
Preston, Raymond C., 163
Prettyman, Barrett, 121, 12 3,
124
Price, David, 263
Price, Mel, 191
Pricing policies. See Cost analysis
and pricing policies
Private Sector Cost Management
Group, 205, 207, 208
Procurement. See Contracts, mil
itary
Profits without production, 41,
300
Program Planning and Budgeting
System (PPBS), 297
Project Maxi 79, 80, 154
Project on Military Procurement
(PMP), 130-31, 132, 151,
160, 237, 239, 271
Proxmire, William, 202
and firing of Fitzgerald, 10-11,
19, 33-34, 39, 65
and Fitzgerald's damage suit,
113, 114-15, 118-19
and Fitzgerald's reinstatement
hearings, 63, 69, 97, 102, 133
and grants to contractors, 280
investigation of C-5A, 8-9, 12,
13, 16, 19, 28, 36, 109, 110
investigation of military spend
ing, 21, 22-23, 24-25, 30, 33,
47, 50, 51, 199, 222
investigation of Northrop, 91
Joint Committee on Defense
Production, 90
Joint Economic Subcommittee,
174, 189
and secrecy issues, 276
Pryor, David, 224, 267, 2721 276
Public Integrity Section (PIS)
of Justice Department, 118-19,
120
Public Interest, The, 175
Puritano, Vincent, 195, 229
Pursley, Robert, 25

Quayle, Dan, 191

Rak, Dan, 238, 248
Ramsey, Nancy, 183
Rand Corporation, 280
Randolph, Bernard, 245, 251
Raskin, Marcus, 43
Rasor, Dina, 130, 132, 148, 155,
156, 188
and secrecy issues, 268-69,
270, 271, 272
Rauh, Carl, 120
Rauh, Joe, 103
Raven-Hansen, Peter, 120, 121,
123, 124
Reagan, Ronald, 86, 127, 132,
134, 229, 233, 287, 306
and balanced budget, 128, 136,
300
and civilian controls, 249
and cross checking of
contracts, 235-36
election (1984), 185
foreign policy, 296
and investigation of General
Dynamics, 195
and investigation of procurement
practices, 226-35
military spending budget,
policy, 4, 29, 121, 128, 129,
130, 139, 144, 150, 155, 159,
169, 172, 185, 186, 199, 210,
224, 225, 230, 282, 293, 297-98,
299
and Packard Commission, 230
and procurement bribery, 289
and secrecy/security issues,
259, 266, 267, 268, 269, 270,
272, 275, 277, 311, 312
and spare parts scandal, 155-
56, 158-59
Reagan Recovery Plan, 129
Redick, Lee, 118
Reed, Robert, 189
Reger, Brenda, 260
Rehnquist, William, 123-24,
125
Reorganization Act. See New Order
reorganization plan
Retired Officer, The, 80
Rey, Charlie, 250
Rhodes, George, 79
Riccioni, Everest, 54
Richard Nixon v. A. Ernest Fitzgerald,
124
Richardson, Elliot, 58, 75
Rickover, Hyman, 50, 53, 54, 194
Riggs, Robert, 85-87, 88, 89-90,
91, 160
Riley, John, 271
Ririe, Jim, 137, 143, 144, 156,
161, 183-84
Rivers, Mendel, 18, 19, 22, 41,
85, 191
Roback, Herb, 17, 19
Roberts, John E., 163, 164, 283
Robertson, Kirk, 272
Roche, R. D., 109
Rockwell International, 97, 99
Roehrig, J. R., 251
Rogers and Wells, 233
Rolling Stone, 96
Roosevelt, Franklin, 88
Roosevelt, Theodore, 11
Ross, Michael, 60
Ross, Rebecca, 113
Roth, William, 133
and labor charges audit, 165-
67, 168, 169, 170, 171, 211
Ruckelshaus, William, 75
Rule, Gordon, 122
Rumsfeld, Donald, 96
Rushford, Greg, 145, 154
Russ, Robert O., 174-75
Russell, Richard, 7I
Ryther, Phil, 58

Safire, William, 23
Sakharov, Andrei, 134
SANE, 133-34
Sansone, Joseph S., Jr., 177
Savy, William A., 84
Sawyer, G. A., 197
SCAM Improvement, 183
Scarret, Tom, 132-33
Schedler, Spencer, 12, 20, 28, 64,
112
Schlesinger, James (Dr. Doom),
229
Dollar Model, 76, 182, 183
firing of, 91
and firing of Fitzgerald, 21, 32-33
and Fitzgerald's reinstatement
hearings, 68
and military spending policy,
28, 33, 38, 75-77, 80-82, 89,
91
and Northrop audit, 90
and work measurement, 79
Schneider, Greg, 102
Scholzen, John, 106
Schroeder, Patricia, 125
Scowcroft, Brent, 233
Seamans, Robert, 16, 21
and C-5A scandal, 10, 12, 15,
17
executive privilege used by, 2
and firing of Fitzgerald, 2, 9-10,
12, 18, 19, 20, 28, 30, 33,
34, 37, 64, 73
and Fitzgerald's damage suit,
112, 126
and Fitzgerald's reinstatement
hearings, 56, 57-58, 59, 64,
69
Secrecy, 3, 4, 6, 90, 91-92, 110
oaths, 92, 258, 260
See also Standard Form 189 (SF
189)
Securities and Exchange Commission
(SEC), 193, 251, 266
and C-5A scandal, 16, 17, 27
Security
clearance, 306, 311-12
leaks. See Standard Form 189
(SF 189)
Shaheen, Mike, 120
Sherick, Joe, 168
Shillito, Barry, 22
Short Range Attack Missile
(SRAM), 21
Should-cost standards for contract
pricing, 17, 44, 50, 51,
52, 53, 77, 79, 159, 164, 221-22,
228, 304
Shoup, David, 22
Sidewinder missile, 147
Sikorski, Gerry, 195-96, 215,
266, 275, 276 '
Silbert, Earl, 1I6, 1I8-19
Silby, Frank, ro 5
Simons, William, 244
Sims, John Cary, 124
Skantze, Larry, 189, 190, 197, 221
and investigation of Hughes
Aircraft, 205, 208
and investigation of MX missile,
251, 252
Slay, Alton, 152, 154
Small Fred, 108-9
Small Business Administration
(SBA), 150-51
Smith, Barney investment brokers,
221
Smith, Denny, 172, 224, 312
SNECMA corporation, 179
Snepp, Frank, 268
Social Security, 294, 295
Sollee, Bill, 55, 56, 64, 69, 74
Solzhenitsyn, Alexander, 134
Southeast Asia war, 23, 27, 28,
29, 42, 91
body counts, 39-40
and military budget, 80, 81,
129, 294
Soviet Union, 43, 83, 129-30,
133-34, 293
invasion of Afghanistan, 98
Korean airliner disaster, 160-62
military budget, 76, 96, 97, 99,
182-83
Space Technology, 226
Spanton, George, 143-44, 146,
155, 162-631 195, 229, 287
and investigation of General
Dynamics, 194, 198-99
and labor charges audit, 165,
166, 168, 169
Spare parts, 186, 211-12
Fitzgerald's investigation of,
151, 152
for MX missile, 249-50
pricing scandal, 139-41, 150,
151-52, 155, I58-59, 232,
282, 283
"20/20" expose of, 154, 155,
156, 159
See also Contracts, military:
tools
Spector, Eleanor, 188
Speed, Thomas, 250, 252
Sperry Corporation, 193
Spinney, Franklin C. "Chuck, "
169, 263, 284
Spratt, John, 290
Sprey, Pierre, 54
Staats, Elmer, 15, 51, 133
Staiman, Herman, 56-57, 58, 60,
61, 64, 69-70
Standard Form 189 (SF 189), 261-69, 272, 273, 274, 275, 278,
298
Standard hour of work, 44-45,
77, 141, 142, 156, 189
See also Dollars per standard
labor hour index
Stapleton, John D., 117
Stempler, Jack, 69, 90
Stennis, John, 113, 118
Stern, Lawrence, 21-22
Stetson, John, 101
Stewart, James 20
Stilwell, Richard G., 261
Stimson, Richard, 144, 164, 188,
209
Productivity/Quality Network,
190, 192, 200
Stockman, David, 128-29
Stockton, Peter, 90, 119
and C-5A scandal, 13-16
and competition bribery, 305,
306
and firing of Fitzgerald, 16,
116-17
and Fitzgerald's damage suit,
120
and investigation of General
Dynamics, 194, 195, 198
and investigation of procurement
practices, 193, 218,
220, 287
and MX missile, 249
and secrecy issues, 264, 266
Stokes, Louis, 268
Stratton, Sam, 255
Stretchouts, 172-73, 282
Sullivan, Gene, 185
Sullivan, Pat, 192, 193
Sullivan, Vincent, 118
Sullivan, William "Crazy Billy, "
23-24, 35
Support equipment. See
Contracts, military: tools
Sweeney, Dan, 272
Sylvester, George, 205, 248
Syslo, J. M., 152
System Program Office (SPO),
14

T-38 training plane, 84
Taft, William Howard, 11
Taft, William Howard IV, 274,
225-26
Tammen, Ron, 90, 121
Tanguy, Robert, 100
Taylor, Maxwell, 22
Taxation, 4, 294, 295, 302
Teagarden, Claude, 58, 63
Technology transfer, 83
Temple, Ralph, 6, 55, 74, 124
Terrill, Delbert "Chip, " 167,
195
Thompson, Bill, 166
Thompson, Charlie, 154-55
Thompson, Paul, 260
Thorson, Eric, 205-6, 207-8, 222
Time, 80, 290
Tojo, Hideki, 309
Tool purchases. See Contracts,
military: tools
Top Secret: National Security
and the Right to Know, 270
Tower, John, 229
Trenton Boyd memo, 14, 16
Triumph of Politics, The, 128
Truman, Harry, 5, 225, 242
TRW Corporation, 182, 253
Tuebner, Hal, 119
TVA, 266
"20/20" program, 154, 155, 156,
159
Tyler, Pat, 195, 196
Tyrrell, Mert, 21, 50

United Technologies, 152
Unisys Corporation, 287, 291-92
Urquart, Gordon, 164

Vance, Cyrus, 95
VanCleve, William R., 229
Vander Schaaf, Derek, 290-91
Vaughn, Robert, 102, 103
Vaught, Wilma, 138
Veliotis, P. Takis, 195, 196
Vietnam war. See Southeast Asia
war

Wacker, Fred, 98
Wade, Jim, 191, 192
Waldie, Jerry, 62, 67, 111
Wall Street Journal, 3, 232
Walters, Johnnie, 66
Warner, John, 287-88, 289
War on Poverty, 160
Warren, Jerry, 7 I
Warren, Joc, 286
Washington Field Office (WFO),
115, 116, 120
Washington Monthly, 107, 177
Washington Post
and C-5A scandal, 16, 19
and Fitzgerald case, 34, 63
and military spending and procurement
bribery, 21, 42, 9 6,
288-89, 29, 299, 312
and reorganization, 246
and secrecy issues, 92, 271
and spare parts scandal, 157-
58, 219, 226
Washington Star, 96, 97, 98
Washington Times, 144, 145
Watergate scandal and hearings,
23, 36, 60, 63, 68, 116, 120
and executive privilege, 2, 65
and national security, 91
Watts, Claudius E. "Bud" III,
246, 25 6-57, 271, 298
Watts, William, 37
Webster, William, 115, 120
Weicker, Lowell, 298
Weinberger, Caspar, 129, 135,
145, 146, 147, 195, 290, 297,
298-99
and investigation of General
Dynamics, 196, 197-98
and investigation of Hughes
Aircraft, 203, 211
and military spending budget,
policy, 169, 174, 210, 225,
226, 235, 240
and New Order, 245
and Packard Commission report,
232, 2331 234
and secrecy issues, 259-60, 261
Weiner, Tim, 311
Weisbrod, Hubert, 85
Weiss, Bernie, 146, 152-53, 168,
176
Weld, William, 286, 287, 289
Welfare system, 308
Wertheim, Mitzi, 95, 101
Westinghouse, 211, 216-18
Westinghouse Electric, 165-66
Westover, Timothy, 207, 208
Wheeler, Winslow, 183
White, Byron, 125
White, Steve, 202, 209
White, William S., 43
White House Years, The, 37
Whittaker, Phillip, 28
Wild Blue Yonder, 99
Will, George, 129, 280
and spare parts scandal, 1155,
177, 235
Willard, Richard, 273, 277-78
Williams, John, 29
Williams, Jon, 213
Willoughby, Will, 209
Wilson, David, 64
Winkler, J. T., 308
Wiretapping, 23, 26, 69, 122, 124
Wirth, Timothy, 225
Witt, Hugh, 71
Woehrle, Chuck, 166, 167, 211
Wolfe, Fred, 254-55
Wolfe, Jim, 184, 185, 199, 263
Wood, Frederick, 2 15
Woodruff, William, 71-73, 78,
79, 88
Woolsey, James, 230
Work measurement, 44-45, 51,
138, 142-43, 145, 187, 191,
305
actual times, 169, 189
by ALC, 78, 79
dollar per standard labor hour
index, 51, 52-53, 78, 79, 149,
156, 187
Military Standard for, 239
should-take times, 44, 52, 139,
140, 141, 142, 169, 189
standard hour of work, 44-45,
77, 141, 142, 156, 189-90
touch labor, 51, 52
Wyden, Ron, 195, 233

Yates, Ronald, 215~I6
Yom Kippur war, 81
Young, Duff, 187

Ziegler, Ron, 34, 36, 37-38, 59,
71
Zill, Anne, 104, 121, 131, 266-67
Zoeckler, Zeke, 244
Zuchert, Eugene, 8
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