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'Pentagon seeks authority to train, equip, and outsource foreign militaries for a NWO'

U.S. Defense Tech Security Called 'Swiss Cheese'


Rep. Duncan Hunter's, R-Calif Remakes at the House Armed Services Committee Hearing on State and Defense Department Interagency Partnership.

As the value of the U.S. dollar declines, investing in U.S. defense firms becomes more attractive to foreign companies. That worries Rep. Duncan Hunter, R-Calif., who fears more foreign ownership will mean more pilfered defense technology secrets.

"This is not irrational fear or veiled protectionism, this is a real national security concern," Hunter assured his colleagues on the House Armed Services Committee April 16. "We are in a period where industrial espionage is on the rise."


But globalization of the defense industry seems inevitable.

"We've got people with lots of cash" in the rest of the world, and American companies "that are desperate for cash." The increase of foreign entities buying U.S. defense companies "is going to be a problem for years to come," Hunter said.

So, how able is the United States to protect its defense secrets from prying foreign investors, the Armed Services Committee wanted to know.

Not very, said witnesses from the Pentagon and the Government Accountability Office (GAO).

A "safety net" of agencies and policies designed to protect classified industrial information "right now is Swiss cheese," said Ann Calvaresi-Barr, the GAO's director of acquisition and sourcing management.

It's not as bad as it was two years ago, said Kathy Watson, director of the Defense Security Service. But improvements are coming slowly.

The DSS is a little-known agency within the Defense Department that determines which defense companies qualify for access to classified information. It awards clearances to company officials and evaluates "foreign ownership, control or influence" over U.S. defense companies.

When she took over as director in 2006, Watson said the DSS was underfunded and understaffed. Today, the agency receives an adequate budget and has been allotted an additional 145 personnel - but so far, only about one-third of the new jobs have been filled, she said.

The agency still relies on paper files scattered among 71 field offices, Watson said. And while it has a computer system and is entering data, "it's not the system of the future," Watson told committee members.

Calvaresi-Barr said a GAO evaluation in 2005 showed that the Defense Security Service did not systematically collect and analyze information to assess the effectiveness of its operations. As a result, the agency does not know whether certain violations are increasing nor can it identify patterns of security violations and then plan how to keep classified information from being compromised, she said.

DSS agents also lacked basic understanding of complex transactions, such as the security implications of foreign hedge funds buying interests in U.S. defense firms. That is increasingly common, and "it's difficult to know where the money is coming from and who the players are," Calvaresi-Barr said.

Watson said DSS employees are receiving more training is those sort of transactions.

The GAO has not re-evaluated the DSS since Watson has begun making reforms, Calvaresi-Barr said. "We are very pleased" to hear that DSS is working to strengthen defense industrial security, she said.

DSS is hardly the only weak link. There are numerous agencies, laws, regulations, policies and processes intended to protect critical defense technology, and among them "there are alarming gaps," Calvaresi-Barr said.

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Outsourcing defense contracts

By Duncan Hunter
March 28, 2008

As American forces confront the global terrorist threat on the battlefields of Afghanistan and Iraq, an equally serious threat exists here at home with the continuous outsourcing and erosion of our defense industrial base. The deterioration of our domestic defense industries, which helped carry us to victory in World War II and the Cold War, represents one of the greatest challenges to our security and the future success of our military forces.

Despite this fact, the list of U.S. defense contracts awarded to foreign competitors continues to grow, most recently with the addition of the French- and German-controlled European and Aeronautic Defense and Space Company (EADS) as the proposed manufacturer of the Air Force's next refueling tanker. The initial $35 billion contract for 179 aircraft was awarded to EADS over the U.S.-based Boeing Co., a leading competitor in the aerospace industry that has built and supported the Air Force's tanker fleet since the Eisenhower administration.

In 2005, the Navy chose an international group primarily composed of British and Italian manufacturers to build the next presidential helicopter, even though Sikorsky Aircraft, an American defense contractor, had manufactured the familiar Marine One helicopter since the Eisenhower years. Only several months earlier, the Brazilian jet maker Embraer was awarded a $6 billion contract to build the new Aerial Common Sensor reconnaissance aircraft.

Even the pistols and medium machine guns our Marines and soldiers are using on the battlefield today are no longer American-made. The 240G machine gun that replaced the venerable M-60, the standard machine gun from Vietnam to the first Gulf War, is manufactured by Fabrique Nationale, a Belgian company. The standard 9mm pistol carried by U.S. service personnel, which replaced the Colt M-1911, a weapon that was in service from 1911 through the late 1970s, is now made by the Italian company Berretta.

These examples clearly illustrate that foreign contractors are assuming a much greater role in the development and maintenance of America's defenses. But as we become increasingly dependent on other countries for military resources and innovative technologies, we are becoming less capable of meeting our own critical defense needs.

In fact, when I was chairman of the House Armed Services Committee and American troops began taking casualties from roadside bombs on the streets of Iraq, I sent out my team to locate more steel to armor and better protect their tactical vehicles. They found only one company left in the United States that could still produce high-grade armor plate steel.

The danger of this dependency also became evident when the Swiss company Micro Crystal refused to provide our military with components for the effective deployment of Joint Direct Attack Munitions (JDAM), otherwise known as smart bombs, during the first phase of the Iraq war. Because the Swiss government objected to American action in Iraq, it ordered the company to stop the shipment of JDAM components.

Given that our military relies on this weapons system to strike with precision and limit the potential for collateral damage, this could have cost time and lives. We were fortunately able to find alternative components through a domestic manufacturer, though it took several months.

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Population control

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