In a 2009 press release, Honeywell International proudly proclaimed that “the USAF’s recent announcement to procure a total of 319 MQ-9 Reaper aircraft will result in additional TPE 331-10 engine orders worth more than $400 million over program life.”
Given the Pentagon’s plan to build 401 Reapers by 2021, it appears that Honeywell will have sold half a billion dollars in engines for the world’s most numerous, and possibly most hated, killer drone. With contracts for guidance and targeting equipment for the Reapers, as well as for training and maintenance contracts, the Reaper-related sales could approach a billion dollars.
While Honeywell might attribute these sales to its “(history of) providing operators with innovative technology for higher performance, enhanced reliability, and reduced cost of operations,” the truth may have as much to do with money and politics as technology.
More specifically, a look at the relationship between President Barack Obama and David M. Cote (pronounced KOH-tee), chair and CEO of Honeywell International, as well as Honeywell’s power on Capitol Hill, raises questions about influences that have led to Obama’s drone war campaign, which, arguably, has been a disaster not only for those for those killed by it but for the rule of international law and the cause of reducing organized violence.
In 2008, Cote dramatically increased Honeywell’s campaign contributions, throwing $3.34 million in Honeywell money into the Fall elections, nearly double the amount Honeywell had spent in the 2006 elections or any previous elections.
In addition, although Cote is a Republican and Honeywell contributions had previously favored Republicans, in 2008 Honeywell funding was weighted toward Democrats. For example, Honeywell executives and its political action committee gave Barack Obama $47,295, compared to $28,910 for John McCain. Hillary Clinton got $25,243.
Similarly, the $5 million of Honeywell campaign money in the 2010 elections slightly favored Democrats and exceeded the amounts given by larger competitors Boeing and Lockheed Martin.
In 2012, the nearly $7 million in Honeywell campaign spending slightly favored Republicans, including the presidential election: $53,820 – Romney; $47,626 – Obama. The company’s $5 million in spending so far in the 2014 elections has favored Republicans.
Honeywell’s campaign spending pattern was similar to that of other aerospace weapons makers, but there was a more dramatic increase in Honeywell’s spending from pre-2008 levels compared to the election spending of other major aerospace weapons makers.
Honeywell’s power to do business in Washington is, of course, reinforced by the money it puts into lobbying, which in 2009 increased by about $2 million a year above an average of $5 million over the five previous years. Open Secrets.org notes:
“Honeywell International routinely spends close to $7 million each year on federal lobbying efforts aimed at dozens of agencies including both chambers of Congress, the Department of Defense and the Federal Aviation Administration…”
Bucks for “Buck”
A major focus for campaign spending and lobbying on Capitol Hill by Honeywell and other aerospace weapons makers is the House Armed Services Committee and its chairman, Congressman Howard “Buck” McKeon, who is also the chairman of the House’s Unmanned Systems Caucus. The caucus lobbies for the drone industry inside the Congress.
The House Armed Services Committee is particularly influential in selection of weapons for government funding. This often includes defining military goals that justify building, using and maintaining weapons, which in turn generate profits, campaign contributions and jobs in the districts of committee members.
(What is not said by members with respect to these jobs is that the same amount of money would generate more jobs if it were spent on health services, education or renewable energy. http://www.peri.umass.edu/fileadmin/pdf/published_study/PERI_military_spending_2011.pdf)
In 2012 the Pentagon wanted to end Northrop Grumman’s Global Hawk surveillance drone project to save money, but Northrop lobbyists and McKeon succeeded in saving the program. The Los Angeles Times reported in 2013 that McKeon “said he worked to keep the program alive because the drone is a valuable tool for spying, and he wanted to protect the billions of dollars the government has already spent on the technology.”
The Times also pointed out that Northrop “has been one of McKeon’s largest campaign donors” and spent $71.5 million in total lobbying in 2012.
Honeywell has spent about $1.7 million in campaign contributions to the members of the House Armed Services Committee since 2008, according to Open Secrets, and $55,000 went to McKeon. This article in Roll Call lists some of the ways that McKeon spends the money from Honeywell and the other influence buyers. http://blogs.rollcall.com/moneyline/chairman-mckeon-dines-off-his-pac-and-northrup-grumman/?dcz=
It is likely that Honeywell and the primary Reaper drone contractor, General Atomics, have been busy shoring up Congressional support for the Reaper drone program after a January 2013 report in Foreign Policy by Winslow Wheeler entitled: “Will Chuck Hagel Stand Up to the Drone Lobby?”
Wheeler, a military specialist who worked in the Congress and the Government Accountability Office and is now engaged by the Project on Government Oversight, reviewed the sparse public data on the use of drones in Afghanistan and found:
“They (drones) may, indeed, be here to stay, but that will be based on politics and hype, not performance in Afghanistan – and perhaps the affinity of some for what drones are doing in Pakistan and Yemen under CIA control.”
What the Reaper and its predecessor the Predator are doing in Pakistan and Yemen, and other countries, is assassination, preemptive killing without due process, violating international and U.S. law.
One of “Obama’s Corporate Favorites”
Within the framework of Honeywell campaign spending and lobbying, Cote has apparently entered into a relatively small group of corporate executives who are in a position to have a powerful influence on presidential decisions. In November 2011, the Huffington Post reported:
“Of Obama’s corporate favorites, General Electric’s CEO Jeff Immelt and Honeywell CEO David Cote have served in the highest-profile public positions associated with the administration…Cote has received far less public scrutiny than Immelt, although he may have greater influence over U.S. economic policy.”
In December 2012, the Wall Street Journal (WSJ) reported:
“When the president invited a few CEOs to discuss the fiscal cliff three weeks ago, the staff seated Mr. Cote directly across from Mr. Obama. Afterward, Mr. Cote did on-camera interviews on the North Lawn.”
According to the WSJ, Cote acted as a key broker in the “fiscal cliff” negotiations between Obama and Congress, and the article pointed out:
“Mr. Cote’s efforts could benefit his business. Absent a cliff deal, deep cuts in federal spending on defense and many other programs kick in. Success in averting them could help Honeywell, an aerospace and defense contractor that draws 10% of its $38 billion in annual sales from the government.
“Mr. Cote also is getting on a first-name basis with power players and earning goodwill, goals that can take companies millions in campaign cash and lobbying fees to achieve.”
Cote’s involvement in Washington is directed not only at getting more business for Honeywell but also at protecting Honeywell and himself from as much taxation as possible. Sourcewatch.org reports that:
“Honeywell paid an average negative tax rate of -.7 billion dollars from 2008 to 2010, according to Citizens for Tax Justice (Huffington Post reported that Honeywell “secured a $471,000 tax benefit in 2010.), and (Honeywell) underfunds its employee pension fund by - $2.764 million in 2011. (Honeywell’s 2013 annual report indicates the firm has reduced its pension liability by cutting back on benefits.) The Institute for Policy Studies has estimated that Cote’s personal savings from the Bush tax cuts are $2,529,490.”
The Big Three
Cote’s political entrée and power is very likely based not only on Honeywell’s political spending but on his involvement, which appears to be unique among his peers, in what appear to be the three most powerful industries controlling the federal government – weapons, energy and finance. These are industries with a mutual interest in the use of organized violence to protect investment.
Honeywell was listed as 11th largest U.S. arms maker in 2012 by Business Insider, with total military sales of $5.4 billion. The company makes parts not only for the Reaper drone but many other weapons produced by other companies, such as Boeing’s CH-47 Chinook helicopter. It also makes parts for nuclear weapons. In addition, Honeywell sells military support services. For example, in 2012, Honeywell was awarded a $31 million Marine/Army contract for the withdrawal, repair and maintenance of military equipment from Afghanistan.
With respect to oil and gas, Honeywell provides a variety of support services for the industry and has offices in 59 countries http://honeywell.com/worldwide/Pages/worldwide.aspx, including all major oil producing nations, as well as some nations associated with oil and gas production, such as Kazakstan. There, Honeywell says, one of its tasks is to service and maintain “security systems for the export pipeline of the Caspian Pipeline Consortium.”
Cote’s involvement in the weapons and energy businesses is likely what got him selected as a senior advisor to KKR & Co., a $73 billion private equity firm that invests in fossil fuels, including fracking, as well other businesses.
Notably, in May 2013, KKR hired retired Army General and former head of the CIA, David Petraeus, to head up a newly formed KKR Global Institute. Petraeus, was a strong proponent of drone use in Afghanistan and elsewhere, and doubtless his views on drones will be magnified by the financial power of KKR.
KKR’s press release on the Petraeus hiring says: “…KKR is a global firm investing in new and emerging markets that have new risks and opportunities. The KKR Global Institute will be the nexus of KKR’s focus on the investment implications of these issues.”
Cote’s weapons and eenergy connections may also have gotten him appointed to the board of directors of JPMorgan Chase & Co, a global financial services firm with assets of $2.4 trillion; he served there from 2007 to 2013.
His fellow board members included: Lee Raymond, former ExxonMobil chief; James A. Bell, former executive vice president of the Boeing Company; James S. Crown, on the board of weapons maker General Dynamics; and Michael Neal, former vice chairman of General Electric.
Cote resigned from the JPMorgan Chase board in 2013 after criticism that he and two fellow board members, who were on the board’s risk management committee, had not protected the firm from billions in trading losses in 2012. The New York Times reported that Institutional Shareholders Services, or I.S.S., “an influential shareholder advisory service” urged JPMorgan Chase shareholders to vote against reappointing the three directors.
“Mr. Cote,” the NYT reported, “as chief executive of Honeywell International, heads an industrial company, not a financial firm, I.S.S. noted, leaving him potentially lacking relevant experience.”
All three of the criticized board members were re-elected by the JPMorgan Chase shareholders, but Cote and another of the trio quit the board after the vote.
However, in March 2014, Cote was elected as a director of the Federal Reserve Bank of New York, the most prominent of the 12 regional Federal Reserve Banks in terms of setting U.S. monetary policy. In addition, the New York Federal Reserve Bank can assist in supporting failing financial companies, as it did in 2008, when it financed a take over of the collapsing Bear Stearns investment bank by JPMorgan. This happened at a time when Jamie Dimon, head of JPMorgan, sat on the board of the Federal Reserve Bank of New York.
In his seat at the bank board Cote is in a position to know a great deal about the financial health and goals of some of the world’s largest banks and brokerage businesses.
In an NYT column, economist Simon Johnson, raised a question about the wisdom of the New York Fed electing Cote to its board: “…given persistent legitimate concerns regarding how the financial system is overseen – including the role of the New York Fed – why would the Board of Governors agree to install someone (Cote) closely associated with JPMorgan Chase and with one of the biggest failures of risk management in recent years?”
A press officer of the Federal Reserve Bank of New York promised repeatedly to check with the bank’s legal department for the name of the person who nominated Cote for election to the board, but the information was never provided.
It seems inexplicable when the policies of our governmental institutions appear calculated to perpetuate war, financial malfeasance, and continued reliance on energy sources that threaten to destroy the human species through environmental cataclysm.
As in many cases though, matters are clarified greatly if one follows the money. Examining the political and professional life of David M. Cote at the nexus of the immensely powerful military, financial, and extractive industries, it becomes clear that money has subverted our most important governmental institutions to such an extent as to make these institutions little more than accessories to the enrichment of Cote and other members of our nation’s rising plutocracy.
Syed Wali Shah, age 7, killed in a U.S. drone attack in Pakistan August 21, 2011.