A MUTUAL EXTORTION RACKET: THE MILITARY INDUSTRIAL COMPLEX AND US FOREIGN POLICY – THE CASES OF SAUDI ARABIA & UAE BY JODI VITTORI, TRANSPARENCY INTERNATIONAL DEFENSE & SECURITY PROGRAM 2. A MUTUAL EXTORTION RACKET: THE MILITARY INDUSTRIAL COMPLEX AND US FOREIGN POLICY-- THE CASES OF SAUDI ARABIA & UAE CONTENTS Abbreviations .......................................................................................................................................................................................3 Executive Summary .............................................................................................................................................................................4 Cycle of Influence ................................................................................................................................................................................8 Section 1: Introduction ........................................................................................................................................................................9 Section 2: The Role and Importance of the American Defense Sector: Economy, Politics, and Foreign Policy ..................................10 The Economy ..............................................................................................................................................................................10 Politics and Foreign Policy ...........................................................................................................................................................11 The Role of the Defense Sector Called into Question ..................................................................................................................13 Case Study: US Arms Sales and the War in Yemen .....................................................................................................................15 Section 3: Pathways to influence and Corruption Risks in the American Defense Sector ...................................................................19 Lobbying .....................................................................................................................................................................................21 Campaign Finance ......................................................................................................................................................................22 Case Study: the McKeon Group and the Congressional Revolving Door .....................................................................................28 Defense Offsets...........................................................................................................................................................................28 Case Study: The UAE and the Middle East Institute ....................................................................................................................30 “Soft” Influence ...........................................................................................................................................................................31 Conflicts of Interest .....................................................................................................................................................................32 Case Study: Boeing and the Department of Defense ...................................................................................................................33 Corruption ..................................................................................................................................................................................35 Case Study: The United Arab Emirates, George Nader, and Elliott Broidy ....................................................................................37 Section 4: The Consequences – A Never-Ending Cycle of Perverse Outcomes .................................................................................40 Cycle of Influence Model .............................................................................................................................................................41 Case Study: The US Military Industrial Complex and the Saudi-led Campaign in Yemen ..............................................................45 Case Study: The Sonoran Policy Group (SPG) & Lobbying by Middle East Governments ............................................................46 Section 5: Policy Recommendations ................................................................................................................................................47 Key Criteria for Evaluating US Arms Sales ...................................................................................................................................47 Better Alignment of Defense Exports with US Foreign Policy .......................................................................................................48 Recommendations for the Executive Branch .........................................................................................................................49 Recommendations for Congress ...........................................................................................................................................50 Changing the Narrative of Arms Exports ......................................................................................................................................51 Recommendations for the Executive Branch .........................................................................................................................51 Recommendations for Congress ...........................................................................................................................................52 Re-Signing and Ratification of the Arms Trade Treaty ..................................................................................................................53 Limiting Defense Industry and Foreign Governments’ Excessive Influence ...................................................................................54 Recommendations for the Executive Branch .........................................................................................................................54 Recommendations for Congress ...........................................................................................................................................55 TRANSPARENCY INTERNATIONAL DEFENSE & SECURITY PROGRAM 3. ABBREVIATIONS AECA – Arms Export Control Act HLOGA – Honest Leadership and Open Government Act AGEAR – After Government Employment Advisory Repository IG – Inspector general AIA – Aerospace Industry Association IRS – Internal Revenue Service AQAP – Al Qaeda in the Arabian Peninsula JAC – Joint Aviation Command ATT – Arms Trade Treaty LLC – Limited Liability Corporation AWACS – Airborne Warning and Command System MENA – Middle East and North Africa CEO – Chief Executive Officer MIC – Military Industrial Complex CNAS – Center for New American Security MRAP – Mine-resistant ambush protected vehicle COO – Chief Operating Officer NATO – North Atlantic Treaty Organization CREW – Citizens for Responsibility and Ethics in Washington NCIS – Naval Criminal Investigative Service CSIS – Center for Strategic and International Studies NDAA – National Defense Authorization Act DCS – Direct Commercial Sales NDIA – National Defense Industrial Association DEAC – Defense and Aerospace Export Council OSD – Office of the Secretary of Defense D-FL – Democrat from Florida PAC – Political action committee D-IL – Democrat from Illinois PGM – Precision guided munition D-MO – Democrat from Missouri POGO – Project on Government Oversight D-NJ – Democrat from New Jersey PP&B – Programming, Policy, and Budgeting DoD – Department of Defense R-AK – Republican from Alaska DoD/IG – Department of Defense Inspector General R-CA – Republican from California DPB – Defense Policy Board R-KY – Republican from Kentucky DSCA – Defense Security Cooperation Agency R-SC – Republican from South Carolina D-TN – Democrat from Tennessee R-TN – Republican from Tennessee EAIG – Emirates Advanced Investments Group R-WI – Republican from Wisconsin ECSSR – Emirates Center for Strategic Studies and Research SAIC – Saudi Advanced Industries Company EDIC – Emirates Defense Industries Company SALW – Small arms and light weapons FAA – Foreign Assistance Act SEC – Securities and Exchange Commission FCPA – Foreign Corrupt Practices Act SOFA – Status of Forces Agreement FDD – Foundation for Defense of Democracies TACCGG – Transparency, accountability, counter corruption, FMS – Foreign Military Sales and good governance GCC – Gulf Cooperation Council TI – Transparency International GDI – Government Defence Integrity Index (Governance Index TOW – Tube-launched, optically-tracked, wire-guided (type of as renamed in 2019) anti-tank weapon) GDMA – Glenn Defense Marine Asia UAE – United Arab Emirates GI – Governance Index (2015 TI Defense & Security Index) US – United States HE – His Excellency USAID – United States Agency for International Development HI – Huntington Ingalls Corporation 4. A MUTUAL EXTORTION RACKET: THE MILITARY INDUSTRIAL COMPLEX AND US FOREIGN POLICY-- THE CASES OF SAUDI ARABIA & UAE EXECUTIVE SUMMARY This report examines the underlying processes and pathways American workers were employed in the defense sector in 2016 to influence between the American defense export sector, the