What President Dwight D. Eisenhower dubbed the "military-industrial complex" has been constantly evolving over the decades, adjusting to shifts in the economic and political system as well as international events. The result today is a "permanent-war complex," which is now engaged in conflicts in at least eight countries across the globe, none of which are intended to be temporary.
This new complex has justified its enhanced power and control over the country's resources primarily by citing threats to U.S. security posed by Islamic terrorists. But like the old military-industrial complex, it is really rooted in the evolving relationship between the national security institutions themselves and the private arms contractors allied with them.
The first phase of this transformation was a far-reaching privatization of U.S. military and intelligence institutions in the two decades after the Cold War, which hollowed out the military's expertise and made it dependent on big contractors (think Halliburton, Booz Allen Hamilton, CACI). The second phase began with the global "war on terrorism," which quickly turned into a permanent war, much of which revolves around the use of drone strikes.
The drone wars are uniquely a public-private military endeavor, in which major arms contractors are directly involved in the most strategic aspect of the war. And so the drone contractors--especially the dominant General Atomics--have both a powerful motive and the political power, exercised through its clients in Congress, to ensure that the wars continue for the indefinite future.*
The privatization of military and intelligence institutions began even before the end of the Cold War. But during the 1990s, both Congress and the Bush and Clinton administrations opened the floodgates to arms and intelligence contractors and their political allies. The contracts soon became bigger and more concentrated in a handful of dominant companies. Between 1998 and 2003, private contractors were getting roughly half of the entire defense budget each year. The 50 biggest companies were getting more than half of the approximately $900 billion paid out in contracts during that time, and most were no-bid contracts, sole sourced, according to the Center for Public Integrity.
The contracts that had the biggest impact on the complex were for specialists working right in the Pentagon. The number of these contractors grew so rapidly and chaotically in the two decades after the Cold War that senior Pentagon officials did not even know the full extent of their numbers and reach. In 2010, then-secretary of defense Robert M. Gates even confessed to Washington Post reporters Dana Priest and William M. Arkin that he was unable to determine how many contractors worked in the Office of the Secretary of Defense, which includes the entire civilian side of the Pentagon.
Although legally forbidden from assuming tasks that were "inherent government functions," in practice these contractors steadily encroached on what had always been regarded as government functions. Contractors could pay much higher salaries and consulting fees than government agencies, so experienced Pentagon and CIA officers soon left their civil service jobs by the tens of thousands for plum positions with firms that often paid twice as much as the government for the same work.
That was especially true in the intelligence agencies, which experienced a rapid 50 percent workforce increase after 9/11. It was almost entirely done with former skilled officers brought back as contractor personnel. Even President Barack Obama's CIA director Leon Panetta admitted to Priest and Arkin that the intelligence community had for too long "depended on contractors to do the operational work" that had always been done by CIA employees, including intelligence analysis, and that the CIA needed to rebuild its own expertise "over time."
By 2010, "core contractors"--those who perform such functions as collection and analysis--comprised at least 28 percent of professional civilian and military intelligence staff, according to a fact sheet from the Office of the Director of National Intelligence.
The dependence on the private sector in the Pentagon and the intelligence community had reached such a point that it raised a serious question about whether the workforce was now "obligated to shareholders rather than to the public interest," as Priest and Arkin reported. And both Gates and Panetta acknowledged to them their concerns about that issue.
Powerfully reinforcing that privatization effect was the familiar revolving door between the Pentagon and arms contractors, which had begun turning with greater rapidity. A 2010 Boston Globe investigation showed that the percentage of three- and four-star generals who left the Pentagon to take jobs as consultants or executives with defense contractors, which was already at 45 percent in 1993, had climbed to 80 percent by 2005--an 83 percent increase in 12 years.
The incoming George W. Bush administration gave the revolving door a strong push, bringing in eight officials from Lockheed Martin--then the largest defense contractor--to fill senior policymaking positions in the Pentagon. The CEO of Lockheed Martin, Peter Teets, was brought in to become undersecretary of the Air Force and director of the National Reconnaissance Office (where he had responsibility for acquisition decisions directly benefiting his former company). James Roche, the former vice president of Northrop Grumman, was named secretary of the Air Force, and a former vice president of General Dynamics, Gordon R. England, was named the secretary of the Navy.
In 2007, Bush named rear admiral J. Michael McConnell as director of national intelligence. McConnell had been director of the National Security Agency from 1992 to 1996, then became head of the national security branch of intelligence contractor Booz Allen Hamilton. Not surprisingly McConnell energetically promoted even greater reliance on the private sector, on the grounds that it was supposedly more efficient and innovative than the government. In 2009 he returned once again to Booz Allen Hamilton as vice chairman.
The Pentagon and the intelligence agencies thus morphed into a new form of mixed public-private institutions, in which contractor power was greatly magnified. To some in the military it appeared that the privateers had taken over the Pentagon. As a senior U.S. military officer who had served in Afghanistan commented to Priest and Arkin, "It just hits you like a ton of bricks when you think about it. The Department of Defense is no longer a war-fighting organization, it's a business enterprise."
The years after 9/11 saw the national security organs acquire new missions, power, and resources--all in the name of a "War on Terror," aka "the long war." The operations in Afghanistan and Iraq were sold on that premise, even though virtually no al Qaeda remained in Afghanistan and none were in Iraq until long after the initial U.S. invasion.
The military and the CIA got new orders to pursue al Qaeda and affiliated groups in Pakistan, Yemen, Somalia, and several other African countries, parlaying what the Bush administration called a "generational war" into a guarantee that there would be no return to the relative austerity of the post-Cold War decade.