(C) Common Dreams
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Could We Actually End the CEO Defense Contractor Gravy Train? [1]

['Sam Pizzigati']

Date: 2023-06

Could corporate CEOs anywhere in the universe have a deal much sweeter than U.S. defense contractor chiefs?

The CEO at CybeCys, Inc., a Texas-based defense contractor, might quibble with that question. He isn’t feeling all that much sweetness these days. Last month, federal prosecutors announced a deal that will have this CEO and CybeCys pay over $283,000 in penalties and damages for cheating on two Covid-era federal loan programs.

The CybeCys CEO seems to have transferred hefty chunks of taxpayer dollars into his own personal investment accounts and used those dollars, prosecutors charge, to buy up “securities, exchange-traded funds, and cryptocurrency.”

Federal officials brought all sorts of firepower to bear on this case. The U.S. attorney’s office for the Eastern District of Virginia, the IRS criminal investigation office, and the Small Business Administration’s office of inspector general all had a hand in bringing CybeCys and its CEO to justice.

Need any more assurance that the feds have corporate profiteering off defense contracts under eagle-eye control? How about this: In 2023, under the terms of the 10-year-old Bipartisan Budget Act of 2013, no top exec at a U.S. defense contractor can directly pocket over $619,000 in tax dollars.

Alas, both this $619,000 annual CEO pay “cap” and the CybeCys penalties amount to nothing more than pure show. Federal defense contracting remains among the lushest of playgrounds for America’s rich.

Just how lush a playground? The United States, the Peter G. Peterson Foundation detailed earlier this spring, last year spent more on defense than the next ten highest defense-spending nations combined. The federal budget deal just brokered by the White House and the House majority leader ups that defense spending 3.3 percent. Defense contractors will pocket about half the resulting $886 billion.

A little perspective from Popular Information’s Judd Legum: Just eight years ago, the national defense community had to somehow make do with over $300 billion less.

But making do with “less” doesn’t come easy to that community’s corporate titans, folks like Dave Calhoun, the CEO at Boeing, the nation’s second-largest defense contractor.

This past March, Boeing’s annual filings revealed that poor Calhoun had missed his initial CEO “performance” targets and would not be receiving the $7-million bonus promised his way when the Boeing board hired him in 2020. Calhoun, as a result, had to be content with a mere $22.5 million in 2022 compensation.

The Boeing board clearly agonized over the decision to dock Calhoun that $7 million, so much so, notes Seattle Times aerospace reporter Dominic Gates, that board members earlier this year felt duty-bound to grant their CEO over the next three years an extra stack of shares — “not contingent on company performance” — worth some $15 million at today’s share value.

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[1] Url: https://inequality.org/great-divide/could-we-actually-end-the-ceo-defense-contractor-gravy-train/

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