Why President Eisenhower’s Dire Warning Is Still Relevant


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It’s been well over five decades since the sitting President of the United States issued a grave warning to his fellow Americans as part of his farewell address. Amid the Cold War, the president focused his words on the many threats facing our nation, including the influence of our chief global rival in imposing their ideology and military might.

But Eisenhower also warned against another powerful force that threatened to undermine our democracy.

“In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.”

From today’s perspective, his choice
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of words might seem unusual, especially coming from a heralded general, but it makes perfect sense when you consider the history of American mistrust toward powerful institutions with an inherent lack of accountability. For those familiar with the industry Eisenhower spoke of, it also is a very insightful, prophetic statement that resonates deeply today.

Many Americans might not realize that our military relies heavily on private companies to aid and assist our armed services by providing several services and goods. This is not unique to our military - our government relies on companies to provide many services from building roads to providing health care. The United States often places its faith in the companies to live up to their end of any given deal. However, contractors can sometimes fall short in holding up their end of the bargain.

Defense contractor fraud is surprisingly common. From 2001 to 2011, as the wars in Iraq and Afghanistan were in full swing, over $30 billion was lost to fraud, abuse, and waste by defense contractors. Fraudulent practices include overbilling for weapons, supplies or services, and delivering substandard products to our military.

Fraud is committed by the biggest players of the defense contractor world, including Lockheed Martin and Northrop Grumman. These companies have paid multimillion-dollar settlements in legal actions that allege millions of dollars in fraud, yet they continue to receive contracts from the U.S. government that are worth billions.

Catching fraudulent contractors in the act has proven to be a difficult task for our government. One of the biggest resources for investigators is information provided by whistleblowers, who are often employed by the companies committing the fraud. These whistleblowers file claims through the False Claims Act, which enables private citizens to file a lawsuit on behalf of the government. In the 2015 fiscal year alone, over $1 billion was recovered in settlements and judgments involving the False Claims Act, much of which came from lawsuits filed by whistleblowers against defense contractors.

Despite the efforts of investigators and whistleblowers, fraud is still a major problem; and our government’s reliance on contractors shows no signs of letting up anytime soon. Fortunately, there are signs that contractor fraud is still being taken seriously by our officials. In December of 2016, Congress extended protections for whistleblowers from retaliation by their government contractor employers, an encouraging sign to potential whistleblowers that the government is on their side.

Fraudulent defense contractors cost taxpayers billions of dollars and take advantage of deals that are supposed to provide vital goods and services to the men and women of our armed services. Defense is a thriving industry, the contracts keep coming, and the military industrial complex is alive and well.

ABOUT THE AUTHOR: Bert Louthian
Bert Louthian is a whistleblower attorney in South Carolina who focuses on helping those who have been wronged or who have witnessed wrongdoing to come forward to report fraud.

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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.

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