U.S. Defense Industry: Delusions of Grandeur

THE BIG STORY

Fraud, Waste, Abuse, and Corruption

U.S. defense faces its most perilous threat yet: a widespread delusion that it fields a capable military-industrial complex.

According to a yearly report by Transparency International, in 2022 the U.S. ranked 24 in the world in terms of perception of public sector corruption. Somalia was in last place, the 180th most corrupt country (which is to say, the most corrupt country), with Syria and South Sudan tying for second-to-most-corrupt. Afghanistan was 150th, Russia was 137th, and Ukraine 116th. Poland, somewhat surprisingly, was 45th. China was 65th.

The perception of corruption is important, but it reflects corruption — it is not corruption itself. In 2021, the perception of Russia placed it as the 136th most corrupt country in the world in the public sector.

Why is this small discrepancy, a fall of one rank, important? Because defense industry is part of the public sector in Russia as in all developed nations, and in 2022, it became apparent that Russia’s military had been crippled by corruption. Widely assumed to be a near-peer competitor of the United States after years of reform and government investment, corruption had left Russia unprepared for a war it started against a much smaller nation. Corruption was endemic to Russia — given Russia’s vast advantages in resources, manpower, and industry, its military had no business performing as wretchedly as it has. Putin was deluded as to his military’s capabilities — and the world has been deluded, too.

Corruption — or, as it is formally known within the military and defense procurement system, “fraud, waste, and abuse” (or FWA) — is a form of delusion. One one level (that of the people engaging in the corruption), it is delusional in that they believe that pursuing their interests and those of the companies or concerns they represent outweighs a productive, transparent, and open system. On another level, it distorts the overall market by frustrating its fair and effective function, and leaving leaders deluded as to the true capabilities of industry. One easy example of such a delusion is the surprise with which the U.S. met its unwillingness or inability (ultimately what’s the difference) to mass-produce 155mm rounds for howitzers. Another example was the recent shocking revelation that pre-positioned stock supposed to be combat-ready was, in fact, anything but — and that the military unit in Kuwait responsible for overseeing the contractors responsible for maintaining that stocks’ readiness had essentially been pencil-whipping reports. The stocks? Not only were they not “combat ready,” they were so unready as to require major overhauls.

In the 155mm ammunition debacle, the culprit is an overall tendency on the part of large defense companies bordering on collusion to misrepresent American military interests as being essentially dependent on wildly expensive projects, rather than on those unprofitable but essential components of a modern military. Instead of cheap production lines with high overhead that generate the material by which to fight a thousand small tactical engagements of which war is composed, the Pentagon gets expensive special operations capabilities that wouldn’t last a month in a high-intensity conflict, or elaborate systems that would become cumbersome and useless if any single component was knocked out by conventional or unconventional means (such as satellites being destroyed), or just badly-designed and unnecessary platforms that create risk without offering any concrete benefit. Whether this is deliberate “fraud” and collusion or incompetence, only those companies can say for sure.

The fiasco of badly-maintained pre-positioned stocks was a case of fraud. It would be better to know that one’s weapons and equipment were unready for use than to learn this during a war; the U.S. was fortunate that the weapons it promised were destined for another country (Ukraine). The contractor responsible for maintaining pre-positioned stocks recently acquired Dyncorps, International, and was made the target of a $1.6 billion class-action lawsuit regarding how it runs its pension plan.

Systemic failures of the U.S. defense industry to provide needed weapons and equipment on the one hand, outright corruption on the other — these both feed into a popular delusion that the United States is prepared to fight and win its next war. Nowhere is this clearer than in a recent story broken by Politico that basically refutes the optimism of earlier reporting on a Pentagon initiative called “Replicator,” intended to produce a cheap drone capable of competing with the Chinese Mavic 3, which this writer can confirm is the industry standard in Ukraine’s war of self defense.

Delusion: the Politico story quotes industry representatives as describing the program as “disorganized and confusing,” and, most critically, unfunded. A program announced in August, which — as with 155mm howitzer ammunition — does not propose to create anything new, merely to produce a thing that already exists more cheaply, is currently beyond the ability of U.S. defense industry to achieve.

Left to their own devices, U.S. defense companies will gladly pour billions into developing groundbreaking new technologies and packages. When publicly directed to create a simple platform within the means of a hobbyist who owns a 3D printer and a journeyman’s understanding of programming, or to make ammunition that was within the technological means of the Germans, English, and French early in the 20th century, there are problems relying on supply chains, problems employing and training enough labor, problems sourcing expertise, problems affording overhead, and problems buying raw materials.

Would it be worse if the U.S. were to fall from 24th in Transparency International’s “perceptions of public sector corruption” standings — or if its rank were to remain unchanged, and people remained complacently deluded as to public sector’s vulnerability? Even transparency and robust oversight have not succeeded in guarding the capabilities necessary for the U.S. to fight a modern war. Transparency and oversight have been a shield — but that shield has, over time, kept people from a terrible truth: there is no longer a reliable U.S. military-industrial complex. Industry has withered on the vine. Absent visionary leadership and energetic reforms, America will remain in this perilous position. Is this the fault of corruption — FWA — or incompetence? And when the shooting starts, will it make a difference?

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