Diary of a Financier

The Ways Lockheed Martin Touches Your Life

In Politics on Thu 13 Jan 2011 at 08:16
  • William Hartung discusses LMT & the “war profiteer” who touches too many of our interactions with our government.
  • I’m holding my LMT long position with a renewed $76 target.

Completely unrelated to my recent LMT investment, I read a piece over at TomDispatch.com, wherein Tom showcases an excerpt by William D. Hartung, “Is Lockheed Martin Shadowing You? How a Giant Weapons Maker Became the New Big Brother.”  Aptly titled, Mr. Hartung’s argument concludes:

When President Eisenhower warned 50 years ago this month of the dangers of “unwarranted influence, whether sought or unsought, by the military-industrial complex,” he could never have dreamed that one for-profit weapons outfit would so fully insinuate itself into so many aspects of American life.  Lockheed Martin has helped turn Eisenhower’s dismal mid-twentieth-century vision into a for-profit military-industrial-surveillance complex fit for the twenty-first century, one in which no governmental activity is now beyond its reach.

It’s a widely recognized notion that I feel obligated to acknowledge, given that I have profited from the profits of this “war profiteer,” Lockheed Martin (LMT).  I would love to delve into the politics of such a military-industrial complex, but I’ll limit my input to two comments:

First, it’s funny how declining superpowers turn to imperialism as their last gasp growth initiative.  Particularly in the United States, our defense spending makes me think that somewhere, someone in Washington made a secular reallocation of the public budget to defense.  Perhaps they were misled by America’s early 20th century economic rise, which was largely attributable to our industrial capacity and thus our status as the international supplier of warstuffs.  My only question is: was this reallocation of the public budget a cause or an effect?  In other words, did it engender today’s anti-American insurgence, or was it a reaction to such attempts on our national security?

Second, considering the proliferation of the public sector, I find it ironic that the demands of our national security & defense be entrusted to private contractors.  The following are government agencies engaged in contracts with LMT:

…the Department of Agriculture, the Bureau of Land Management, the Census Bureau, the Coast Guard, the Department of Defense (including the Army, the Navy, the Marines, the Air Force and the Missile Defense Agency), the Department of Education, the Department of Energy, the Environmental Protection Agency, the Federal Aviation Administration, the Federal Bureau of Investigation, the Federal Technology Department, the Food and Drug Administration, the General Services Administration, the Geological Survey,  the Department of Homeland Security, the Bureau of Indian Affairs, the Internal Revenue Service, the National Aeronautics and Space Administration, the National Institutes of Health, the Department of State, the Social Security Administration, the U.S. Customs Service, the U.S. Postal Service, the Department of Transportation, the Transportation Security Agency, and the Department of Veterans Affairs.

Most of those engagements employ LMT as an upstream supplier, but how nutty is it for our paranoid government to trust the private sector with both the safekeeping of its military intelligence and the dependence of its supply-chain?

Returning to Mr. Hartung’s excerpt, here are some surprising ways in which LMT touches your every interaction with your government:

  1. Taxes- Paying your taxes?  Lockheed Martin is all over it.  The company is even creating a system that provides comprehensive data on every contact taxpayers have with the IRS from phone calls to face-to-face meetings.
  2. Census data processing- The company runs three centers… that processed up to 18 tractor-trailers full of mail per day at the height of the 2010 Census count.  [And] For $500 million it is developing the Decennial Response Information Service (DRIS), which will collect and analyze information gathered from any source, from phone calls or the Internet to personal visits.
  3. Package shipping- Lockheed Martin cameras will scan bar codes and recognize addresses, so your package can be sorted “without human intervention.”
  4. Biometric identification database- Lockheed Martin is in charge of the FBI’s Integrated Automatic Fingerprint Identification System (IAFIS), a database of 55 million sets of fingerprints.  The company also produces biometric identification devices that will know who you are by scanning your iris, recognizing your face, or coming up with novel ways of collecting your fingerprints or DNA.
  5. Spy satellites- Lockheed Martin is also intimately bound up in the workings of the National Security Agency, America’s largest spy outfit… producing spy satellites for the NSA.

And adding to the mayhem, here’s an example of how LMT touches sensitive government intelligence:

…the real scandal the company has been embroiled in involves overseeing an assassination program in Pakistan. Initially, it was billed as an information gathering operation using private companies to generate data the CIA and other U.S. intelligence agencies allegedly could not get on their own.  Instead, the companies turned out to be supplying targeting information used by U.S. Army Special Forces troops to locate and kill suspected Taliban leaders.

The private firms involved were managed by Lockheed Martin under a $22 million contract from the U.S. Army… there were just two small problems with the effort: “The American military is largely prohibited from operating in Pakistan.  And under Pentagon rules, the army is not allowed to hire contractors for spying.”

In one way, it’s all not much different from entrusting someone like Heartland Payment (HPY) with your personal information.  In another way, LMT is like HPY on steroids: entrusted with such all-encompassing information that internally, LMT can set a board full of pieces for a counter-political chess-match.  An investment bank has a Chinese wall to prevent conflicts of interest like the leakage of material non-public information from its investment bankers unto its proprietary traders.  Are we to trust that LMT and its other compadres in the “shadow government” hold themselves to a similar standard?



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