Sharing America's Defense Technology with China

While it didn't garner much global attention, one of America's larger multinational conglomerates was recently found guilty of sharing secrets with China, the newest threat to Washington's dominance as the world's sole superpower.

  

Here are the lead pages of the charging letter from the Department of State for Honeywell International Inc.'s alleged violations of the Arms Export Control Act and the International Traffic in Arms Regulations (ITAR) as found on the U.S. Department of State's Directorate of Defense Trade Controls website:

 

Honeywell twice voluntarily reported that it was responsible for ITAR violations between July 2011 and October 2015 and again between June and July 2018.  All of the violations involved the unauthorized exports or retransfers of technical data resulting from the "failure to exercise appropriate internal controls."

 

Between 2011 and 2015, Honeywell Aerospace's Integrated Supply Chain organization sent Requests for Quotations to U.S. and foreign suppliers which contained drawings of parts for which suppliers were asked to supply price quotations.  By March 2017, Honeywell's internal investigation identified 71 ITAR-controlled drawings that had been exported to Canada, Ireland, the People's Republic of China and Taiwan.  These drawings contained engineering prints showing layouts, dimensions and geometries for manufacturing castings and finished parts for (but not limited to) the following aircraft:

 

F-35 Joint Strike Fighter,

 

B-1B Lancer Long-Range Strategic Bomber,

 

F-22 Fighter Aircraft,

 

C-130 Military Transport Aircraft,

 

A-7H Corsair Aircraft,

 

A-10 Aircraft,

 

Apache Longbow Helicopter,

 

M1A1 Abrams Tank,

 

Tactical Tomahawk Missile, and

 

T55 Turboshaft Engine

 

After reviewing the 71 drawings, the U.S. government determined that exports to and retransfers in the PRC of drawings for certain parts and components for the engine platforms for the F-35 Joint Strike Fighter, B-1B Lancer Long-Range Strategic Bomber, and the F-22 Fighter Aircraft harmed U.S. national security.

 

In its second voluntary disclosure Honeywell described additional ITAR violations involving the additional exporting of 2 drawings to Canada, 2 drawings to the People's Republic of China and 23 drawings to Mexico which contained similar technical information as in the first offence for the following aircraft:

  

F-35 Joint Strike Fighter,

 

F/A-18 Hornet,

 

F135 turboshaft engine,

 

F414 turboshaft engine,

 

T55 turboshaft engine, and

 

CTS800 turboshaft engine.

 

In these cases, after reviewing the documents, the U.S. government determined that exports to and retransfers in the PRC of drawings for certain parts and components of the CTS800 gas turbine engine harmed U.S. national security.

  

Charges were laid as follows:

 

Now, let's look at the penalties that were assessed as released by the Department of State on May 3, 2021:

 

A $13 million settlement for a company that had net income of $4.865 billion in 2020 is laughable at best as shown here:

 

 

Just for fun, let's look at Honeywell's  involvement in Washington's political theatre.  Thanks to Open Secrets, here is a summary of Honeywell's campaign contributions going back to 1990:

 

Honeywell's campaign contributions of nearly $4.7 million during the 2020 election campaign put it into 143rd place out of 21,691 contributors in Open Secret's database.

  

Here is a summary of Honeywell's spending on lobbying:

 

Honeywell's lobbying expenditures of $4.7 million put it into 71st place out of 5,561 lobbying groups in Open Secret's database.

  

So, as you can see, if you spend enough money on getting Washington to see things your way, somehow, Washington will find your "sins" nearly forgivable or at least forgivable after you pay a token sum to "buy" your way out of trouble, particularly if you are a key player in the nation's military-industrial complex.

Or, maybe it's all just a happy coincidence.

The Technology Tyrants - How to Buy Influence in Washington

As I have said before, Washington is for sale and Corporate America has proven itself quite willing to buy politicians at just about any cost.  A recent study by Public Citizen, a "nonprofit consumer advocacy organization that champions the public interest in the halls of power" examines two of the largest lobbyists in the hallowed halls of the nation's capital as shown here:  

 

This report is particularly pertinent given the growing power of the technology sector with its near monopoly on social media outlets and the current political and health (i.e. COVID-19) narrative and, in the case of Amazon, its growing presence as the world's retailer.

 

The authors of the study used data provided by the Center for Responsive Politics (i.e. Open Secrets) to analyze how Big Tech has "blanketed Capitol Hill with lobbyists and lavished members of Congress with campaign contributions", in other words, buying influence in Washington that far outstrips the meagre to basically nonexistent influence that voters have on lawmakers....other than casting their vote.

  

Let's look at a bit of history.  Back in 2010, when associations, federations, trade groups and other consolidated corporate spenders are excluded, there was not a single big technology company represented among the top eight lobbyists unless you include Verizon Communications.  In 2017, Google (Alphabet Inc.) rocketed to the top of the list and was the only technology sector representative followed by the usual defense sector players.  In 2020, this changed substantially as shown on this table:

 

Here is another table showing how much each of these corporations spent on lobbying in 2020:

 

 

Here is a graphic that looks back in time at the growth in lobbying expenditures for both Facebook and Amazon compared to two of the more influential members of Corporate America in the past:

 

Now, let's look at overall spending by Big Tech on both lobbying and campaign contributions going back to 2010:

 

During the 2020 election cycle, Big Tech spent 5.2 percent more on lobbying and campaign contributions than it did during the 2018 cycle, hitting a total of $108 million in lobbying 2020.  

  

Let's look at the two biggest technology sector lobbyists and how their spending on lobbying has grown over the past decade:

 

1.) Amazon:

 

2.) Facebook:

 

There is an upside; all of this lobbying creates jobs for one sector of the economy, lobbyists as follows (for 2020):

 

1.) Amazon - 117 lobbyists

 

2.) Google - 97 lobbyists

 

3.) Facebook - 71 lobbyists

 

4.) Apple - 48 lobbyists

 

In 2020, the biggest tech sector behemoths retained the services of 333 lobbyists, up from less than 100 a decade earlier.  It is also important to note that half of the top ten lobbyists who contributed amounts ranging from a paltry $324,258 to a more substantial $571,744 just happened to be lobbyists representing Big Tech in 2020 as shown here:

 

Big Tech also shelled out $3.2 million in campaign funds for representatives on four key Congressional committees that hold jurisdiction over antitrust and privacy legislation including the House Judiciary Committee, the House Energy and Commerce Committee, the Senate Committee on the Judiciary and the Senate Committee on Commerce, Science and Transportation as shown here:

In general, more of the funds went to Democratic members of these Congressional committees with $1.678 million going to the Democratic members and $1.409 million going to the Republican members.

 

Given the dominance of the American technology sector oligopoly, it is not terribly surprising that Big Tech and its lobbyists are willing to throw around tens of millions of dollars to ensure that Washington sees things its way.  Let's close with this quote from the paper's conclusion:

  

"Big Tech’s increasingly dominant role in our economy and everyday lives is worsening social problems that need a political response. Yet as Big Tech converts its enormous economic and social power into political influence, our political system is hamstrung from addressing those increasingly serious issues. This problem is reflective both of Big Tech’s extraordinary wealth and power and a broken political system that works for giant corporations but not the rest of us. It is not susceptible to easy solutions.

 

As I said at the beginning of this posting, Washington is for sale and Corporate America, particularly the technology tyrants, are in a buying mood.

How the Defence Industry Buys Washington

I haven't posted on this specific subject for some time and, given the upcoming midterm elections and the meeting between the leaders of Russia and the United States, I thought it was time to revisit one of the most powerful groups in the United States, the defence industry.  Thanks to Open Secrets, we have ready access to how much the defence sector has contributed to politicians and how much it spends on lobbying.  This is particularly pertinent given the hundreds of billions of dollars that are transferred from American taxpayers to a handful of companies every year. 

Let's start by looking at the defence industrys' contributions to those who are supposed to represent Americans in Washington.  Here is a graphic showing the sector's long-term political contributions:

In total, since 1990, the defence sector has donated $275.739 million to politicians/wannabe politicians with $74.3 million coming from individuals and $182.1 million coming from political action committees (PACs).  With data from only half of 2018 available, we can see that the current mid-term cycle could well be a record year for political contributions given that the former peak was $29.7 million and that we are already at $19.3 million.

Here is how the money has been split between Democrats and Republicans:

Since 1990, $114.8 million has been donated to Democrats (42 percent of the total) and $157.6 million (58 percent) has been donated to Republicans.

Here is a list of the defence companies that are the top contributors in the current cycle and which parties/groups have received these generous gifts:

Here is a listing of the top 20 donors and how their donations are split along party lines for the 2018 cycle:

The donations highlighted in green show those companies that have inconsistent distributions between the support of Democrats - Liberal and Republicans - Conservative outside spending groups.

Here is a summary listing of donations during the current cycle, how the donations are split along party lines for both the House and Senate and the average contributions made to the lucky members that received funding from the defence industry:

Going back to 1990, here is a list of the top twenty recipients of the defence industry's largesse:

Here are the top twenty recipients from the 2016 presidential election cycle:

Not surprisingly, John McCain appears well up in both lists given his position on the Senate Armed Services Committee.

Now, let's look at the other key aspect of Washington, lobbying.  Here is a graphic showing how much the defense industry has spent on lobbying on an annual basis since 1998:

So far in 2018, the defense aerospace sector has spent $20,110,774 ($69.126 million in 2017), the defense electronics industry has spent $9.110,952 ($35,915,369 million in 2017) and the miscellaneous defense sector has spent $5,435,510 ($22,360,639 million in 2017).

Here is a graphic showing the number of defense sector lobbyists, working hard to get Washington to spend your tax dollars:

In total, the defense sector has 786 lobbyists in Washington (in 2018, down from a peak of 1303 back in 2007.  Of the total, 558 or 71 percent are considered "revolvers", that is, they are former White House employees that are now employed as lobbyists, consultants and strategists by K Street.

When we look at the defense sector's actions in Washington, both as political donors and as lobbyists, we can see why one can draw a pretty straight line between Washington and the military-industrial complex.  The defense sector is only too willing to spend hundreds of millions of dollars to buy Washington and those that we elect to serve us in Washington are only too willing to avail themselves of money from the sector of the economy whose job it is to design even more imaginative and high tech ways to kill people.

Buying Influence in Washington - The Health Care Sector

With the Republican mantra "we must repeal Obamacare at all costs" ringing through the halls of Congress and the most recent announcement about its replacement, it's interesting to see exactly who in Congress has been the recipient of largesse from the health care industry, the part of Corporate America which has the most to win and lose in the health care battle.  Thanks to the Center for Responsive Politics, we can now see how much money the members of the 115th Congress have received from the health care sector.  For the purposes of this study, the health care industry includes health insurance and HMOs, health professionals, hospitals and nursing homes, health services as well as pharmaceuticals and health products.   

Let's start by looking at the health care sector donations from 2012 to 2016 for the top 10 Senate Republicans recipients:

The top ten recipients of health care sector donations received a total of $24.106 million over the four year period.

As well, we must keep in mind that Mitch McConnell's handpicked Senate health care working group has the following members, most of whom appear on the listing of major recipients above:

Mitch McConnell

Orrin Hatch

John Cornyn

Pat Toomey

Robert Portman

Lamar Alexander

John Barrasso

John Thune

Mike Enzi

Ted Cruz

Cory Gardner

Mike Lee

These 13 gentlemen have received a total of $18.1 million in campaign contributions since 2012, giving them plenty to think about while they debate America's next kick at the health care "can".

Here is a graph showing the health care sector donations from 2012 to 2016 for the top 10 Senate Democrats recipients:

While not quite as large as their Republican counterparts, the top 10 Democratic Senators received a total of $18.169 million from the health care sector over the four year period.

Here is a graph showing the health care sector donations for the 2016 election cycle for the top 10 House Republican recipients:

The top ten House Republican recipients received a total of $10.726 million in donations during the 2016 election cycle alone.

Lastly, here is a graph showing the health care sector donations for the 2016 election cycle for the top 10 House Democrat recipients:

The top ten House Democrat recipients received a total of $6.484 million in donations during the 2016 election cycle alone.

Obviously, as we can see from this information, the health care business in the United States is vastly influential at the political level and willing to pay handsomely to get access to the hallowed halls of Congress.  The health care sector successfully shaped the Affordable Care Act during the Obama Administration and there is no reason to believe that it will be any less successful at prodding Congress to change the laws to benefit itself under the Trump Administration.  Repealing and replacing Obamacare with the American Health Care Act will certainly make one sector even wealthier than it already is and, at the same time, cost American taxpayers billions of dollars.

Fundraising 2016 - The American Political Pastime

Thanks to the Center for Responsive Politics and their Open Secrets website, we can easily get a glimpse into the money behind the remaining presidential candidates. 

Thus far in the 2016 cycle, all candidates have raised a total of $837 million and Super PACs that support them have raised $462 million for a total of $1.299 billion.  Here is a graphic showing the data for the remaining five candidates:

For completeness sake, here is the same data for the "also rans" who found themselves on the losing side of the primary race:

Let's look at some details for the top three candidates starting with Ms. Clinton.  Here is a graphic showing her fundraising totals and expenditures for her campaign committee as well as her political action committees:

Ms. Clinton's campaign committee has raised $229,303,008 and spent $186,841,222 leaving it with cash on hand of $42.461 million.  Additionally, outside groups have raised $84,815,067 and spent $38,332,454 leaving them with $46.483 million in the bank.  

Here is a graphic showing the source of funds:

Only 20 percent of Ms. Clinton's individual contributions have come from small contributors (i.e. Main Street USA).

Here is a table showing independent expenditures both for and against Hillary Clinton:

Organizations and individuals are allowed to spend unlimited money to either advocate for or campaign against their chosen candidate/target.  

Here is a screen capture showing both the states and metropolitan areas that have, so far, been the top donors to Ms. Clinton's run for the Oval Office:

Lastly for Ms. Clinton, here is a table showing the industries that are the top donors to her 2016 campaign:

Not terribly surprising given her penchant for speaking to the securities/investment/banking sector for quarter of a million dollar plus paydays, the Securities and Investment industry is her largest donor.  This also explains the dominance of New York as the metropolitan area that is, by a wide margin, her biggest financial supporter.

Now, let's look at the same data for Mr. Sanders.  Here is a graphic showing his fundraising totals and expenditures for his campaign as well as his political action committees:

Mr. Sanders' campaign committee has raised a total of $222,191,776 and spent $212,956,384 leaving it with cash on hand of $9.235 million.  Outside groups have raised only $610,185, a tiny fraction of the $84.8 million raised by outside groups supporting Ms. Clinton.

Here is a graphic showing the source of the funds:

Again, in sharp contrast to Ms. Clinton, 60 percent of Mr. Sanders' individual contributions have come from small contributors compared to only 20 percent for Ms. Clinton.

Here is a table showing independent expenditures both for and against Mr. Sanders:

Compared to Ms. Clinton, the anti-Sanders spending has been very small, totalling less than $900,000 compared to Ms. Clinton's anti-Clinton independent expenditures of more than $7.7 million.

Here is a graphic showing both the states and metropolitan areas that have been the top donors for Mr. Sanders' campaign so far:

His geographic spread is much less concentrated than Ms. Clinton.  In her case, she received over $50.5 million from her top donating metropolitan area (New York City) compared to only $4.849 million for Mr. Sanders' top donating metropolitan area (again, New York City).

Lastly for Mr. Sanders, here is a graphic showing the industries that are the top donors to his 2016 campaign:

Again, in sharp contrast to Ms. Clinton, the Securities and Investment industry doesn't even appear on his top 20 donors list which is actually composed of a much broader and more "Main Street" sampling of U.S. industries.

Now, let's look at the campaign financing of the last Republican man standing, Donald Trump.  Here is a graphic showing his fundraising totals and expenditures for his campaign as well as his political action committees:

So far, his campaign committee has raised $63,055,659 and spent $61,766,152 leaving it with cash on hand of $1,289,508.  Outside groups have raised only $3,294,908 and spent $2,963,523, again, a tiny fraction of Hillary Clinton's total outside spending.  

Here is a graphic showing a breakdown of Mr. Trump's campaign financing:

In contrast to his Democratic rivals, Mr. Trump has self-financed his campaign to the tune of $45,703,185 or 72 percent of the total.  Of the remaining 27 percent, 20 percent has come from small individual contributors and 7 percent has come from large individual contributors.

Here is a table showing independent expenditures both for and against Mr. Trump:

Like Ms. Clinton, there is a great deal of independent money being spent against Mr. Trump's campaign.  Thus far, over $63 million has been spent by Mr. Trump's foes, handily beating the anti-Clinton independent expenditures of "only" $7.7 million.

Here is a graphic showing both the states and metropolitan areas that have been the top donors for Mr. Trump's campaign so far:

Here are the industries that have been the top donors to Mr. Trump's campaign:

Given that his campaign is mainly self-funded, I guess we could say that the real estate industry is primarily responsible for most of his campaign funding.

In closing, when you look at the data behind the headline numbers, I find it quite interesting that two of the candidates, Mr. Trump and Mr. Sanders, are running what can best be termed a "grass roots" campaign with Mr. Sanders heavily relying on small donors from a wide range of industries funding his campaign, similar to what Mr. Trump has done if one excludes his self-funding which, in itself, is quite anomalous.  This is in sharp contrast to Ms. Clinton who has appealed strongly to wealthier donors, concentrated in one geographic region and one industry, an industry that has provided the Clinton family with tens of millions of dollars in income outside of the political theatre.