Our tax dollars seem to work very hard enriching the few, while millions remain unemployed. While 1 in 6 need food assistance. While 71% earn less than $42,000 a year.
Folks, you and I paid for the creation of companies that have enriched their founders, CEOs, and shareholders to provide us with security. It's kind of crazy, if you ask me. Our sweat equity (taxes) funds the National Security Complex that is now mostly owned by private equity firms that are rolling in our dough.
Why don't we enjoy any of the profits from these companies?
Where's the fund that, at the very least, pays us back for our investments that enabled these companies to launch and then thrive?
Why are the "public, private partnerships" a one way street? It seems to have morphed into a Private (us)/Private Equity Partnership via acquisitions. Really? Has it gotten out of hand?
There are so many questions. And one could argue that we are paying for our security. If so, why are so many Americans in such dire straights and insecure?
Do you feel secure?
We passed the beyond the Rubicon Eisenhower warned us about, in my opinion.
Where is the "partnership" in Public/Private Partnerships?
Usually in a partnership, both contribute funds and sweat equity to build something and, when that something becomes profitable, both partners share in the profits.
Not so the Public-Taxpayer/Private Partnerships. Let's listen to Eisenhower's prescient words and warning:
Five decades later, this complex,.....
...has morphed into a new type of public-private partnership—one that spans military, intelligence, and homeland-security contracting, and might be better called a “national security complex.” (Ref 2)
The National Security Complex
It's a huge, privatized industry. We pay for hundreds of companies to start-up and become profitable to protect us from men living in caves and their millions of minions. To protect us from cyber attacks, and a host of other nefarious means to harm us.
Is this reassuring?
Five dozen of these security contractors have organized themselves into the International Peace Operations Association (IPOA).
After Blackwater came under worldwide scrutiny for its massacre of unarmed Iraqis in central Baghdad on Sept. 17, 2007, the firm left IPOA, whose code of conduct for “peacekeeping” operations it had flagrantly ignored.
Blackwater created a new association of private military contractors called Global Peace and Security Operations—conveniently without any potentially embarrassing code of conduct.
(Ref 2)
Private contractors are also in control of the core of the complex’s information and intelligence systems. Information and communications technology is the fastest-growing sector in government contracting.
The DHS’s expanding involvement in cybersecurity, information systems, and electronic identification programs, for example, is adding billions of dollars annually to the national security boom.
(Ref 2)
Are we getting what we pay for?
Let's look at Lockheed Martin's IT performance, as an example:
2006: $305 MILLION PROGRAM TO BE THE CENTERPIECE OF FBI IT INFRASTRUCTURE
SEABROOK, Md., March 16th, 2006
And it was a failure, it would seem:
The project, known as Sentinel, is already two years behind schedule at only halfway completed, noted the inspector general (IG) of the Department of Justice (DOJ) in an interim report Thursday. The Sentinel program also is about $100 million over budget, according to IG estimates.
Did Lockheed Martin get to keep the $305 million? Will it be paid the additional $100 million?
Oh my! You just never know where a look-see will end up.
Forgive me as I deviate, sort of. Lockheed Martin's EIG Group (the IT division) has been sold to the Veritas Capital, a private equity firm?
Veritas Capitalis a private equity firm specializing in investments in leveraged recapitalizations, buyouts, and growth capital investments.
The firm seeks to invest in companies involved in technology and outsourcing services to the government, primarily in the areas of defense and aerospace; media; security; and infrastructure.
Freaking mind boggling, quite frankly.
It appears that our National Security is profitably traded on Wall Street. This will be the story hereinafter:
Through mergers and acquisitions, our national security could end up in the hands of just a few private equity firms. Is that a good trend?
Of course, we all know about the revolving Military/National Security Revolving Door:
As of 2004, Five of the past nine defense secretaries, excluding those who are in the current administration, have ties to private equities.
Ponder the power these private equity firms wield:
Veritas Capital Management is the 41st largest defense contractor and second only to the Carlyle Group among private equity firms.
...Veritas' roster includes
Adm. Joseph W. Prueher, ex-commander-in-chief of the U.S. Pacific Command and former U.S. ambassador to China;
Gen. Barry R. McCaffrey, Gulf War I veteran and former U.S. Southern Command chief ;
Admiral Leighton W. ("Snuffy") Smith, former commander-in-chief of Allied Forces in Southern Europe ;
Gen. Anthony C. Zinni, former commander-in-chief of the U.S. Central Command ; and
Gen. Richard E. Hawley, former commander of Air Combat Command at Langley Air Force Base, Va.
http://www.businessweek.com/...
WOW! That's impressive....and POWERFUL.
Robert McKeon launched Veritas Capital with his partner, Thomas Campbell, in 1992.
In 2005, Veritas Capital purchased DynCorp. The profits Veritas made with DynCorp are amazing. DynCorp's profits soared due to the wars in Iraq and Afganistan.
In 2006, DynCorp went public.
The leveraged buyout also helped rip apart their relationship.McKeon ended up very rich, personally earning $350 million, or seven times his investment, and in control of a company that has emerged as the biggest winner in the war game.
And McKeon is about to get a whole lot richer from just the DynCorp deal:
McKeon personally received a $5 million deal fee when the DynCorp purchase took place, court documents say. He took his initial $48 million investment off the table through a dividend associated with DynCorp’s IPO.
Last year the private equity investors sold $177 million of DynCorp stock, probably giving McKeon about $80 million of proceeds.
McKeon’s remaining shares will be cashed out if this new deal goes through for some $170 million.
He also stands to get some $20 million more through performance fees associated with the exit of the Veritas fund from DynCorp.
McKeon is known to live a frugal life, which is a comfort. I guess it's more about the game than the gain. Hopefully, it's not about the power, unless of course he hopes to free the world of poverty and want.
Cerebrus is buying DynCorp with financing:
Debt Financing
Cerberus plans to use as much as $1.17 billion in bank debt to finance its buyout of DynCorp.
Bank of America Corp.
Citigroup Inc.,
Barclays Plc; and
Deutsche Bank AG
committed to provide a senior secured credit facility consisting of a $565 million term loan and a $150 million revolving credit line, DynCorp said today in a regulatory filing.
The banks also agreed to back $455 million in senior unsecured term loans
.
It's good to know the banks are financing someone these days!
This is interesting:
Defense Secretary Donald H. Rumsfeld was an investor in 2001, according to government ethics disclosures........While co-founder William L. Richter deals with investors, and lieutenants such as former Vice-President Dan Quayle jet around the globe to seal deals,
There have been 68 announced acquisitions of aerospace and defense companies in the past 12 months with an average size of about $261 million including net debt, according to data compiled by Bloomberg. The average premium of 23 deals for which information was available was 68 percent.
ibid
Who else did Veritas Capital purchase or already owns:
UPDATE 1-Veritas Capital to buy CPI Int'l for $19.50/share/$525,000,000 November 26, 2010
Veritas Capital also owns Aeroflex Inc, a provider of microelectronic and testing equipment to aerospace markets, and Vangent, which provides information management and business processing services. (ibid)
Veritas Capital Spending $815 Million on Division of Lockheed Martin
Posted October 13, 2010 2:57 PM
New York equity firm Veritas Capital owns McNeil Technologies (providing linquistic services w/DynCorp)
Now Cerebrus has purchased DynCorp. I wonder how cozy these equity firms are? Banks we bailed out funded this purchase. With our money? If not ours, whose?
Who has Cerebrus acquired?
DynCorp is Cerberus’s third acquisition announced this year, according to data compiled by Bloomberg.
Cerberus agreed on March 25 to buy Caritas Christi Health Care, a hospital operator affiliated with the Archdiocese of Boston, in a private-equity deal valued at $830 million.
Cerberus agreed on March 4 to invest $400 million in GeoEYE Inc., a Dulles, Virginia-based provider of satellite imagery. Some of its satellite bandwidth is used for national security.
Cerberus filed to take public Freedom Group Inc., a Madison, North Carolina-based maker of firearms, in October.
Since 2006, Freedom has bought gunmakers Remington Arms Co., Bushmaster Firearms International LLC, DPMS Firearms LLC and Marlin Firearms Co., according to a regulatory filing.
ibid
IAP Worldwide Services, a Cape Canaveral, Florida-based company Cerberus bought in 2004, has grown from less than $100 million in revenue to more than $1 billion, according to a person familiar with its operations. IAP helps the government with disaster-relief supplies to civilians and maintenance services for military bases.
It bought facility-management operator Johnson Control World Services in 2005 and
G3 Systems Ltd. the following year. G3 provides government services in Europe and the Middle East, according to IAP’s Web site.
Cerberus also owns Tier 1 Group, a Jacksonville, North Carolina-based company that provides weapons and military training, and Tokyo-based Radia Holdings, a temporary staffing company that serves the U.S. government.
Read more: http://www.thirdage.com/...
Well, that's just two private equity firms. And I doubt we can really access all that these two private equity firms have, are, and will acquire. However, it is obvious that they hold a great deal of power.
The WashingtonPost did a great job reporting on who is doing what with their Report:
Top Secret America, however, I don't think the Post connected the dots between contractors and private equity firms.
http://projects.washingtonpost.com/...
It's old news, perhaps, that Wall Street players are playing Monopoly with national security service companies that you and I pay for with our sweat equity; however,
Who is taking the time to dig in and find out whether or not our National Security has landed in too few hands?
And, if so, what could that mean for our individual security?
If Wall Street profits and gains via security companies performance(s), and our individual security cuts into those gains, which would suffer?
Wall Street Gains or Us?
I know I am far from the first to do so, but I sometimes wonder if we aren't really paying for these companies to protect the rights of Multi-National Banks and Corporations.
Maybe that's why the banks financed Cerebrus's purchase of DynCorp. Who knows?
So much is kept secret from us, now that we have outsourced our security to......private hedge/equity firms?
How can our own government departments assure we are not getting ripped off?
Can the GAO really police the complexity that has become our privately operated National Security Industrial Complex? I think not. Worse than herding cats, I would guess.
And the revolving door doesn't exactly elicit everyone to keep their pencils sharp, do you think?
Good grief! I guess we can be thankful that we are being kept safe from the larger threats of so-called terrorists and cyber attackers; however,
Looking around, I can't help but notice that we are not protected from things that affect each and everyone of us every day. Threats to our individual well-being.
We are open to be scammed 24/7 if we are not wary. Even TV ads for what seem to be scams. Not enough protections there.
We were certainly not protected from the horrendous paid and suffering caused by the unregulated Housing Debacle.
Rising prices for everything while wages remain stagnant are might even be declining.
We were not protected from the fraudsters on Wall Street that destroyed our economy.
Our jobs certainly received no protections in return for the taxes we paid when we had a job.
99ers are now facing homelessness and hunger because the GOP refuses to continue to provde them with unemployment benefits, especially the over age 50 99ers.
The list is long. There are so many things we are not protected from. But the lack of protection for the basics to sustain life stand out: Clean and Healthy water and air and home and food for everyone, not to mention health care.
Somewhere along the line, the feathers we shed working year after year seem to be used to feather the nests of Wall Street private equity firms and former government employees, at the same time our nests are being ripped out from under us.
This really needs to change, and quickly before what we are paying for turns against us, if it hasn't already.
Ref 1: Washington Post
Ref 2: Dollars and Sense, 03/10/2010
Ok, not my best work, but the questions are important. Perhaps others can contribute.
The story is just too huge, when you start to follow the connectivity of one acquisition to another, and all the subsidiaries, etc.
Confusion hides sin.
S.I.N. The Acronym
S incere
I ntegrity
N egated
written by: SonjaPoet aka War On Error
http://poetrypoem.com/...