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Boeing Boeing Boeing has increasingly built its business in recent years upon corporate welfare (e.g. tax subsidies) and military contracts. The company received over $17 billion in defense contracts in 2002, according to the Center for Public Integrity. A $14 billion purchase of McDonnell Douglas in 1997 made Boeing the country's second largest defense contractor and NASA's top contractor. Boeing is also one of the nation's largest exporters with over half its annual sales of military and civilian aviation equipment crossing international borders. Boeing subcontracts its work in virtually every state in the country, which gives the company enough home-district political clout to make any member of Congress think twice before voting to cancel unnecessary or controversial weapons systems. Representative Curt Weldon, (R-PA) used the new surge in Pentagon spending after 9/11 as an opportunity to secure the future of Boeing's troubled V-22 Osprey, which is built by Boeing in his Philadelphia-area district. The V-22, which is designed to take off and land like a helicopter and fly like a plane, has been plagued by a series of crashes that have killed 30 U.S. military personnel, as well as a scandal involving falsification of maintenance records. Even then-Secretary of Defense Dick Cheney tried to cancel the Osprey in the first Bush administration. Boeing also has many lobbyists that are deeply embedded in Washington's networks of power, including Linda Daschle, Senate Minority Leader Tom Daschle's wife, in addition to 17 in-house lobbyists. It also has many ex-politicians and retired military officers in its lobby corps. Chris Williams, a Boeing lobbyist who also lobbies on behalf of TRW and Northrop Grumman, is on the Defense Policy Board along with Richard Perle, who recently announced his resignation as chair of the board due to conflicts of interest, and others with corporate ties. In September 2002, long before the decision to go to war in Iraq was final, Boeing announced that it was building a new "smart bomb" factory to anticipate the huge rise in demand for precision weapons. This preemptive profiteering decision followed a series of orders from the U.S. Air Force and Navy for guided bombs and missiles worth more than a combined $1 billion for Boeing and Raytheon. A 1996 classified GAO report that assessed the accuracy of precision guidance "smart bombs" during the first Gulf War, and an unclassified follow-up report in 1997 found that many of claims about the accuracy of the bombing sorties by the Defense Department and "smart bomb" weapons manufacturers were "overstated, misleading, inconsistent with the best available data, or unverifiable." Thousands of "smart bombs" have been dropped during the current war. On March 23, 14 peace activists were arrested at a protest at Boeing's plant in St. Charles, Missouri, where the company makes its Joint Direct Action Munition tailkits, which turn conventional weapons into smart bombs. Other protests at Boeing have focused on the company's involvement in Star Wars missile defense system. Boeing is the "Lead System Integrator" or main contractor on Star Wars, responsible for ensuring that all component national missile defense parts and systems are developed and integrated successfully. Boeing is also the prime contractor for the Airborne Laser (ABL). Another big corporate welfare deal for Boeing was pushed by Washington Senator Patty Murray and Senator Ted Stevens of Alaska in December 2001. The deal requires the Air Force to lease 100 Boeing 767 converted tanker aircraft. The deal cost taxpayers $20 billion -- more than it would have cost to purchase the tankers outright. In addition to weapons system contracts, Boeing is also pursuing new business opportunities created by the war on terrorism, including contracts to manufacture and install bomb detection machines and train airport screeners. In 2001, Boeing moved its headquarters (and the fewer than 500 jobs that go with it) to Chicago after obtaining a sweetheart deal that resulted after a bidding war between Chicago (with help from the state of Illinois), Dallas and Denver. Chicago pledged $ 3 million in subsidies, tax-increment financing incentives and $19 million in property tax abatements over 20 years, while the state of Illinois kicked in state income tax exemptions and another $41 million in tax credits and benefits. CEO Phil Condit explained the corporate welfare deal this way : "Simply put, we intend to run Boeing as a business that has the flexibility to move capital and talent to the opportunities that maximize shareholder value." For more information see: Last Updated April 3, 2003 |
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