War On Terror, Inc.

Categories: The Money Trail

If you haven’t heard of L-3 Communications, you’re not alone. The company, which is located just a few blocks from the United Nations headquarters, didn’t even exist ten years ago. Today, it’s the sixth-largest defense contractor in the nation, with billions of dollars in federal contracts to provide electronic border surveillance and intelligence and interpreter gigs for the occupation of Iraq. The War on Terror has been very, very good to the company.

But sometimes a good deal just goes south. In 2005, L-3 Communications borrowed almost $3 billion to buy Titan, a San Diego-based company that provided all the interpreters and translators for the military in Iraq. The “linguist” business should have made L-3 a nice chunk of change, as the next contract, which was to be renewed in late 2006, was estimated to be worth $4.6 billion.

But as the Abu Ghraib scandal expanded, L-3’s leaders found they had bought something else with the company: liability. Lawyers for the Center for Constitutional Rights filed a lawsuit against Titan for its role in the Abu Ghraib interrogations, and L-3 had to spend a wad on lawyers and deal with a public relations crisis. Then, in December 2006, the Pentagon decided to give the linguist contract to L-3’s rival, the Washington DC-based Dyncorp. Billions of dollars in potential revenue vanished overnight.

Or so you’d think. But what does a good defense contractor do when things don’t go their way? Stall for time.

L-3’s officials immediately protested the decisions with the Government Accountability Office, and Pentagon officials were forced to spend almost a year reviewing the case. Meanwhile, since L-3’s interpreters were already on the ground, they got to keep the contract—and its revenue—on an interim basis. A few weeks ago, the Pentagon’s representatives concluded that their initial decision was perfectly sound and awarded the contract once again to Dyncorp.

Last week, according to the Wall Street Journal, ( ) L-3’s leaders filed yet another protest, which will inevitably drag the case out for months once more, as the company keeps raking in the interim contract’s profits.

Now, that’s you fight the War on Terror!


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