CullmanTimes.com - Cullman, Alabama

Columns

January 1, 2013

COMMENTARY: Excess-Profits Tax on Defense Contractors During Wartime Is Long Overdue

(Continued)

WASHINGTON —

GD has a monopoly on nuclear submarine building, owning for years the Electric Boat Division and buying Newport News Shipbuilding in 1999. In 2001, it bought Motorola's electronic defense business and two years later General Motors's defense division, which made armored vehicles and fit well with GD's division that makes M1 Abrams tanks.

The company, like many of its competitors, hired former Pentagon senior officers and officials to be top executives and board members.

Jay Johnson, a former company president who retired Monday as chairman of the GD board, is a retired admiral and was chief of naval operations from 1996 to 2000. After retiring, he joined the GD board in 2002 while he was an executive of a Virginia gas and power company. Six years later, he became GD's chief executive.

Johnson's successor as chairman, GD President Phebe Novakovic, worked at the CIA in the 1980s and from 1992 to 1997 at the Office of Management and Budget. Her last position there was as deputy associate director for national security, responsible for managing and submitting the president's budget for the Defense Department and U.S. intelligence agencies.

The GD board includes Paul Kaminski, who joined in 1997, shortly after he left the Pentagon following three years as undersecretary of defense for acquisition and technology; retired Gen. Lester Lyles, who was Air Force vice chief of staff and commander of Air Force Materiel Command until he left that service in 2000, three years before joining the GD board; retired Gen. John Keane, who served as Army vice chief of staff until 2003 and joined the board a year later; and most recently, in 2011, retired Gen. James Jones, former commandant of the Marines, Supreme Allied commander and national security adviser to President Barack Obama from January 2009 to November 2010.

The Defense Department revolving door has been spinning at an unusual rate the past 10 years, mainly because the Pentagon has contracted out activities that in the past were normally carried out by service members. Difficult to track but in need of reform are consultant firms created by former service personnel that helped get companies the inside track on Pentagon contracts.

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