06/26/2013 01:09 pm ET Updated Aug 26, 2013

General Atomics, Recently Penalized for Breach of Contract, Gets $28 Million of Your Tax Dollars

Did you know you can be repeatedly cited for breach of contract and still get $28 million in tax dollars? Neal Blue, owner of General Atomics and purveyor of nuclear power and Predator and Reaper unmanned aerial vehicles (UAVs, otherwise known as drones), knows.

According to the Pentagon, "General Atomics - Aeronautical Systems, Inc., Poway, Calif., has been awarded a $28,289,068 cost-plus-incentive-fee contract for implementation of the Aircraft Structural Integrity Program Phase I to manage the structural integrity of the MQ-9 fleet throughout the aircraft life cycle."

General Atomic's Neal Blue generally isn't the kind of CEO most Americans would want to do business with. In 2011, his company was found guilty of breach of contract by the courts and suffered an $8.9 million judgment against it, and the fine was later compounded when the jury found Blue's company had acted with "malice, oppression and/or fraud" against Dr. Paul banks in a case related to the GA subdivision that manufactures the MQ-9 fleet referenced by the Pentagon.

This is par for the course for Blue and his companies, though. According to CNN Money:

Blue is a razor-sharp businessman, and interviews with dozens of Blue's associates and sparring partners suggest that he will do anything to maximize profit -- even if it means violating agreements. And while some who have locked horns with him simply shrug their shoulders and move on, a few have taken him to court for breach of contract, fraud, and racketeering.

... While Blue won't discuss the specifics of the case [a separate breach of contract case -- not the 2011 case] -- the settlement agreement is confidential -- he doesn't seem concerned by the allegations in the lawsuits. In fact, he is utterly unrepentant.

"If you're a profit-center manager, you look at what are your contractual obligations," Blue says. "It's not your obligation to give as much as possible from your company to someone else... It made more sense to, in essence, just pay the fine."

Quite the upstanding citizen, Blue.

Some important translations from the above Pentagon's contract award announcement above:
  • A "cost-plus-incentive-fee" contract is usually Pentagon-speak for, "the taxpayer is about to get screwed," and
  • The "MQ-9 fleet" is the United States' arsenal of Reaper drones.
In his essay in "The Pentagon Labyrinth," Andrew Cockburn explains why cost-plus contracting is one of the primary ways people like Blue and companies like General Atomics extort the U.S. taxpayer for billions every year:

So long as the contractors are guaranteed a percentage of their costs as profit, they have an obvious incentive to make those costs as great as possible. A contract to produce 100 missiles at a cost of $1 billion can yield a $50 million profit. Ergo, if it suddenly transpires that for reasons beyond man's control the cost of that program zooms to $2 billion, then the profit accordingly leapt to $100 million. It makes no difference if, as is all too likely, the cost of the individual missiles has increased so much that the $2 billion now buys only 50 missiles, or 10, or ultimately just one. The bottom line is unaffected.

In other words, as observed long ago by Ernie Fitzgerald, who battled this culture as an air force official, the contractors are "selling costs," not weapons systems. To the extent that they can improve their "products" by making them more complex and thus more expensive, they prosper.

The MQ-9 Reaper is a weapons program that reflects the personality of its creator. These UAVs, along with Predator drones and others, form the backbone of the targeted killing program used by the U.S. government to kill an American citizen overseas without trial and to conduct "double-tap" strikes people simply guilty of being, "a male of military age in an area where 'militant' organizations are believed to operate." These machines and the programs that utilize them grew in large part out of Blue"s obsession with killing communists in the early 1980s by potentially flying remote-controlled airplanes kamikaze-style into nearby gasoline storage tanks in Nicaragua (presumably killing anyone nearby in a giant fireball). Flying airplanes into non-military targets to cripple and terrorize your enemies. Just let that sink in for a second.

The U.S. government thinks giving Blue and General Atomics $28 million is important enough to merit forgoing possible alternative uses of the money. Let's consider one of those trade-offs for a moment, inspired by President Obama's so-called "climate change moment" this week. That money we just sent to Neal Blue, rather than funding the upkeep of a program that's grossly unconstitutional and certain to incite asymmetrical attacks against Americans, could be used to help save us from climate change.

Those taxpayer dollars sent to Blue's General Atomics would be enough to provide 12,457 households solar-powered electricity for a year, according to the National Priorities Project. Making this and similar investments would be a critical step in reducing a massive source of greenhouse gases in the United States, since, "[i]n 2011, the electricity sector was the largest source of U.S. greenhouse gas emissions, accounting for about 33% of the U.S. total," according to the Environmental Protection Agency (EPA).

Making these investments over other priorities (like, say, I don't know, giving $28 million to an oft-cited scofflaw to build killer flying robots) is critical in the short-term, according to the World Bank, who recently warned that, "[t]he present CO2 concentration is higher than paleoclimatic and geologic evidence indicates has occurred at any time in the last 15 million years." If you're concerned about terrorism, the World Bank's warnings should alarm you, since their report asserts that climate change will be, "inherently unequal and tilted against many of the world's poorest regions, which have the least economic, institutional, scientific, and technical capacity to cope and adapt." That means economic and political instability -- conditions in which extremism and terrorist narratives thrive, especially if you combine it with constant threats of death from above at the hands of a killer drone.

The U.S. is continuing to waste our national resources on war industry CEOs and their weapons instead of focusing on the most critical emergency our species has faced on this planet. Natural selection can't be held at bay forever, and we're failing the test.

At least Neal Blue has another several million dollars, though.