DoD in Catch-22 when dealing with EADS

Yossarian was moved very deeply by the absolute simplicity of the clause of Catch-22 and let out a respectful whistle.

‘That’s some catch, that Catch-22,’ he observed.

 ‘It’s the best there is,’ Doc Daneeka replied.[1]

The reality of industrial globalization means that the United States will increasingly rely on foreign suppliers of military equipment. That’s not necessarily a bad thing, as long as we know that our global suppliers want to be true defense partners, are trustworthy, and will compete fairly to provide the best value for American taxpayers and the best products for American warfighters.

The Department of Defense (DoD) has rightfully welcomed the move toward globalization. But, with the large-scale entry of the European Aeronautic, Defense and Space (EADS) consortium into the U.S. market, DoD is finding itself in a procurement Catch-22 that would have even Joseph Heller, the creator of the phrase, in awe.

The catch in this case holds that even though DoD personnel are sworn to protect our country, they must award contracts regardless of the political actions of companies from what the Defense Acquisition Guidebook calls “friendly foreign countries.” Though it seems crazy to buy products from a company such as EADS whose owners, executives, and workers politically undermine American defense and foreign policy, this catch makes it not only rational but legally binding.  

Espionage, bribery and other dirty practices.

[Milo:] ‘But it’s not against the law to make a profit, is it? So it can’t be against the law for me to bribe someone in order to make a fair profit, can it? No, of course not!’ He fell to brooding again, with a meek, almost pitiable distress. ‘But how will I know who to bribe?’  

‘Oh you don’t worry about that,’ Yossarian comforted…‘You make the bribe big enough and they’ll find you. Just make sure you do everything right out in the open. Let everyone know exactly what you want and how much you’re willing to pay for it. The first time you act guilty or ashamed, you might get into trouble.'[2] 

The French government owns 15 percent of EADS, and its industrial policy consists of espionage, bribery and other actions to give its favored companies an unfair advantage over American firms. By making EADS a substantial defense supplier, the United States would be rewarding the French government for years of espionage and bribery that inflicted billions of dollars’ of damage on the American aircraft industry and betrayed any trust that they would have earned as credible defense partners.

The EADS idea of leveling the playing field in many cases is to bribe corrupt officials into buying its products instead of American ones. EADS, its precursors, and its subsidiaries have been the subject of bribe related scandals in Belgium, Canada, India, Kuwait, Switzerland, Syria[3], and most recently Austria where one of its lobbyist is accused of paying 87,000 euros ($117,00) to the wife of the Austria Air Force general overseeing a $2.7 billion contract won by an EADS subsidiary.[4]

Former CIA Director R. James Woolsey confirmed seven years ago that Airbus bribed foreign officials to buy its planes. In a Wall Street Journal op-ed addressing European complaints about our Echelon electronic intelligence program, Woolsey said that the U.S. was not using Echelon to spy on European companies to steal their trade secrets. "They don’t have much worth stealing. Instead we were looking for evidence of bribery," Woolsey said. He confirmed that Echelon was aimed partly at Airbus: "That’s right, my continental friends, we have spied on you because you bribe." Woolsey added:

• "Your companies’ products are often more costly, less technologically advanced or both, than your American competitors’. As a result you bribe a lot."
• "When we have caught you at it, we haven’t said a word to the U.S. companies in the competition. Instead we go to the government you’re bribing and tell its officials that we don’t take kindly to such corruption. They often respond by giving the most meritorious bid (sometimes American, sometimes not) all or part of the contract. This upsets you, and sometimes creates recriminations between your bribers and your bribees, and this occasionally becomes a public scandal…"[5]

The Economist detailed EADS/Airbus bribery in an important 2003 article, and cited a European Parliament report that confirmed the company’s corrupt practices.[6] The U.S. has a tough enough time guarding against fraud and corruption among domestic suppliers, where the abuse is usually on the part of individuals and not seemingly corporate policy.

Trying to supply America’s adversaries with weapons.

Milo shook his head with weary forbearance. ‘And [they] are not our enemies,’ he declared. ‘Oh, I know what you’re going to say. Sure, we’re at war with them. But [they] are also members in good standing of the syndicate, and it’s my job to protect their rights as shareholders. Maybe they did start the war,… but they pay their bills a lot more promptly than some allies of ours I could name.’ [7]    

EADS tried to circumvent US law in bid to help Chavez. Last year, the Center for Security Policy cited EADS for its sales to Venezuelan dictator Hugo Chavez and in January, 2006, the U.S. invoked international arms trade regulations to stop EADS from selling its Spanish-built EADS CASA C-295 and CN-235 transport and patrol planes to Chavez. Under the regulations, known as ITAR, other countries cannot sell military products containing American-made components to third countries without U.S. approval. Since the EADS CASA planes contain dozens of U.S. parts, including engines and unique turboprops, the White House notified EADS and Spain of its objections. 

Rather than stop doing business with Chavez, as a reliable U.S. defense partner would be expected to do, EADS immediately tried to circumvent ITAR by stripping out the American-made equipment and trying to find non-U.S. replacements. Only when it was clear that EADS could not come up with the substitute components did the deal officially fall through, in an October, 2006 announcement – nine months after President Bush invoked ITAR.  

Working to arm China. Since the 1989 Tiananmen Square Massacre, the European Union nations have largely stopped their military cooperation and arms sales to Beijing. Over the past few years though, EADS owners in France and its workers in Germany and Spain have agitated to end the embargo. This desire to fully open the technological floodgates was most recently evinced in March by French Defense Minister Michele Alliot-Marie, who while in Japan, continued to declare that the ban was "illogical" and "paradoxical." In fact, she later stated that China’s burgeoning military might was not a threat but that, "what is important is for China’s military power to be put to the service of peace."[8] The French government is no mere shareholder in EADS; President Jacques Chirac has used his influence to hire and fire the company’s top executives and to intervene in management decisions. 

Even with the current EU arms embargo EADS has found ways to supply Beijing’s armed forces. The company has engaged in dubious endeavors that have direct military or dual-use potential. For example, EADS subsidiary Eurocopter – which has long been partnered with China, has agreed to joint "development" with Beijing of a 16-seat, 6 ton helicopter known as the EC175.   Industry sources indicate that the new design will give the Chinese access to "the very latest technological advances in the cockpit and avionics," and can be used for both civilian and military purposes.[9] What’s more, this is not the first time that Eurocopter has materially contributed to China’s military growth. A 1980s-model helicopter, known as the "Dauphin" by the French and the Z-9 by the Chinese, is still used by the PLA as a tactical troop transport, as well as a communications, fire direction and electronic warfare platform.[10]   

Weapons and nuke parts to Iran. As if selling advanced military equipment to China was not bad enough, EADS is also marketing its wares to the Islamic Republic of Iran. In 2005, for example, Eurocopter representatives attended an air show in that country and were seen attempting to sell what they said were "civilian" helicopters. However, astute observers noticed that EADS’ promotional videotape for the show was labeled "Navy" and that that it prominently featured a military helicopter.[11] EADS official Michel Tripier when questioned why they were ignoring U.S. policy to isolate Iran said, "As a European company, we’re not supposed to take into account embargoes from the U.S.."

Perhaps even more worryingly, there are concerns that EADS may be inadvertently aiding the Iranian nuclear program. As late as 2005, the company was selling Nickel 63 and so-called "Tritium Targets" – both crucial to triggering a nuclear explosion – to the South Korean firm Kyung-Do Enterprises. Reportedly, unbeknownst to EADS, the South Koreans were then reselling the nuclear parts a company called Parto Namaje Tolua, a front for the state-owned Iranian firm Partoris. [12]  Even if the sale was an accident, it is extremely vexing that EADS did not take the time to verify the end-user of the nuclear materials. 

Pro-American marketing and advertising, Anti-American workforce.

‘You’ll be all right,’ Yossarian assured him with confidence. ‘If you run into trouble, just tell everybody that the security of the country requires a strong domestic Egyptian-cotton speculating industry.’  

‘It does,’ Milo informed him solemnly. ‘A strong Egyptian-cotton speculating industry means a much stronger America.’ 

[Yossarian:] ‘Of course it does. And if that doesn’t work, point out the great number of American families that depend on it for income.’

 [Milo:] ‘A great many American families do depend on it for income.’

 ‘You see?’ said Yossarian. ‘You’re much better at it than I am. You almost make it sound true.’ [13]

If you exchange the words Egyptian-cotton industry with European Aerospace-lobbying industry in Heller’s passage above, you would have a good summation of how EADS has been trying to justify its activities and market itself to the American public.

In recent years, EADS has been building assembly and service facilities in Alabama and securing the support of targeted congressional delegations. "The company has been busy building U.S. domestic political support for a program that would ultimately involve billions of dollars and thousands of jobs," Air Force magazine reported in June, 2006. "The company also has been recruiting talent with the technical know-how (and political connections) to get deals done in Washington."[14]

Senator Murray denounced the EADS propaganda campaign to make the company look less French and more American. "EADS and Airbus have launched a deceptive PR and lobbying campaign to convince the U.S. government that it is essentially an American company," she said in May, 2004.[15]

In reality the amount of American jobs EADS plans to create is miniscule compared to the huge number of jobs it provides to anti-American labor unions that form the backbones of some of Europe’s most powerful socialist parties.

Many EADS unions are militantly Anti-American and Anti-NATO.

Anti-American union workers in Germany. The German socialist IG Metall union represents workers at Airbus Deutschland. Faced with losing thousands of jobs to the current Airbus reorganization, IG Metall is hoping EADS aircraft will start winning large DoD contracts. But the union, as a matter of policy and pride (its flag is still the Soviet-era red banner), openly shows hatred of the United States. The May 2005 cover of its magazine Metall contains a cartoon of a bloodsucking insect grinning and tipping its Uncle Sam hat while it ripped American businesses as "bloodsuckers" and "parasites."[16] When the liberal Free Democratic Party tried to get them to renounce the grotesque depiction, IG Metall Chairman Juergen Peters responded by calling the insect cartoon "a good caricature" of Americans.[17]

EADS CASA workers in Spain: On the wrong side. In Spain, where the EADS CASA division manufactures a variant of the CN-235 for the Coast Guard’s Deepwater program and its stretch C-295 companion, the aircraft workers are even more militant than the Germans.

The EADS CASA’s main union, the General Confederation of Workers (CGT), is virulently opposed to the war on terror, to the United States, and to the NATO alliance. Its red-and-black anarcho-Marxist flag indicates an alliance of two forms of extremism, and its official Rojo y Negro (Red and Black) newsletter shows a militancy seldom seen any more in industrialized democracies.

• Stirring up extremism in Mexico. The CGT appears to back any radical movement in Mexico that opposes the Mexican government and the United States. The union openly supports both anarchist and communist causes in Mexico that seek to destabilize the southern border of the U.S. The union has its own "CGT Solidarity with Chiapas" committee to back the Marxist Zapatista guerrillas in the south of Mexico,[18] and publishes communiqués by the Clandestine Revolutionary Committee Indigenous Command of the Emiliano Zapata National Liberation Front (EZLN).[19]
• Globalizing Latin American protests against the United States. The CGT promotes the international networking of protests against the President of the United States. Last month the CGT spread anti-Bush propaganda to spread opposition to the American president’s visit to South America as it denounced American "plans of imperialism for the region."[20]  
• Militantly anti-NATO . The CGT is steadfastly opposed to the NATO alliance – not simply to alliance policies, but to the very existence of the collective security system itself. In February, the CGT held a major anti-NATO protest in Seville, at the EADS CASA manufacturing hub where the company expects to do most of its future Pentagon work. The demonstration coincided at the NATO leaders’ summit, with the CGT denouncing the alliance as the "global armed wing of the capitalist powers and their multinationals."[21] 

Running from responsibilities.

‘But you can’t just turn your back on all your responsibilities and run away from them,’ Major Danby insisted. ‘It’s such a negative move. It’s escapist.’

Yossarian laughed with a buoyant scorn and shook his head. ‘I’m not running away from my responsibilities. I’m running to them.’ [22]

EADS has the technology and resources to be a valuable partner in the defense and security of the United States. But if EADS is to be trusted – if Americans are to be comfortable buying its products and services – then the company, its owners, and its workers will have to live up to their responsibilities as America’s partner and change some of their ways.

Also, just as Yossarian finally realizes that the Catch-22 he is confronted with is a made up bureaucratic absurdity, the Pentagon and Congressional overseers, need to finally realizes the folly of this self-created procurement catch and that they, at a minimum, have the responsibility to take into account the actions, if not the politics, of foreign suppliers.