EADS is Welcome to Compete for U.S. Defense Contracts – But First It Must Clean Up Its Act

Issue #3: Trying to supply America’s adversaries with weapons. 

Last year, the Center for Security Policy cited EADS for trying to have it both ways – arming Venezuelan dictator Hugo Chavez with the same CN-235s it was selling the U.S. Coast Guard and was trying to sell the Pentagon.¹³

EADS tried to circumvent U.S.law in bid to help Venezuela’s despot, Hugo Chavez. 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 comply – 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.  To be sure, EADS lobbyists told Senate staffers that the company was not going to go through with the sale. A top EADS official even pledged that the company would not violate American laws and regulations.¹⁴

EADS engineers and executives were busy doing just the opposite, however.  As the Venezuelan government made clear, EADS went to work seeking the right replacement components. Senior Venezuelan officials, including the defense minister and the ambassador to Spain, told the press in July and October 2006 that the deal was still in the works.¹⁵

Leading Senators intervened. Senator Jon Kyl (R-AZ) appreciated the problem immediately and sent a “Dear Colleague” letter voicing his concerns: “Despite objections by the Bush administration, Spanish-owned Construcciones Aeronauticas SA (CASA) proceeded with the sale, removing US components from the aircraft so the US could not use the International Trade in Arms Regulations to block the sale….This case underscores the need to establish a comprehensive policy that holds foreign military suppliers accountable for cooperating with hostile regime that compromise US security.”¹⁶ The result of this letter was that a bipartisan group of four senators – Kyl, Johnny Isakson (R-GA), Bill Nelson (D-FL), and Rick Santorum (R-PA) – formally wrote their concerns to the Defense Department and to President Bush.¹⁷

It was only when EADS was unable to come up with the substitute components that the deal officially fell through – 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 fully to 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.”¹⁸

Even with the current EU arms embargo, EADS has found ways to supply Beijing’s armed forces. It 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.¹⁹ What is 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.²⁰

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, EADS representatives attended an air show in that country and were seen attempting to sell “civilian” helicopters made by Eurocopter.  A company spokesman obfuscated, saying “The emphasis here is on civil helicopters.  We are not offering military helicopters here.”²¹ However, astute observers noticed that the company’s promotional videotape for the show was labeled “Navy” and that that it prominently featured a military helicopter.²² When confronted with this, EADS representative Michel Tripier could only state, “As a European company, we’re not supposed to take into account embargoes from the U.S.^”23

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.  Unbeknownst to EADS, the South Koreans were then reselling the nuclear parts to a company called Parto Namaje Tolua, a front for the state-owned Iranian firm Partoris.²⁴ Even if the sale was an accident, however, it is extremely worrying that EADS did not take the time to verify the end-user of the nuclear materials.

We need to ask ourselves: What does the U.S. gain by partnering with a company that aids the military ascendance of actual and potential geopolitical foes?