Odd Bedfellows

07.09.12

Assad Supplier Finmeccanica Did Business With the Pentagon

The Italian arms giant that sold communications gear to the Syrians also did big business with the Pentagon. Aram Roston reports.

As Hillary Clinton pushes for tough global sanctions against Syria, here’s a reminder that the international arms business makes for strange bedfellows: The Italian company that just admitted to selling a sophisticated communications system to the Assad regime also does billions of dollars of business with the U.S. military. And tangling the case even further is the fact that the company’s chief U.S. subsidiary is run by the man who was the second in command at the Pentagon for most of Obama’s presidency.

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Aram Roston on an Assad supplier's ties to the U.S.

News that the giant firm Finmeccanica had sold a secure emergency radio network to Syria’s government through a subsidiary named SELEX Elsag first emerged Thursday from a disclosure by the embattled WikiLeaks organization. Finmeccanica quickly admitted to the deal, which it said was made in 2008. In a statement emailed to The Daily Beast by Finmeccanica spokeswoman Angelica Falchi, the company emphasized that the high-tech system wasn’t sold to Syria’s military. “This system was intended for use by emergency and rescue organizations (‘public safety’),” the statement said. “The supplied Tetra technology was designed precisely for this purpose—that is exclusively for civil, and not military use. Any other use that was carried out is beyond the control of SELEX Elsag.”

John Pike, an arms expert who founded GlobalSecurity.org, told me he is skeptical that the Syrian government, now accused of torture and repression on a massive scale, can make distinctions in how the security forces might use the communications system. “It’s the domestic-security people there,” he said, “who are rounding people up and slashing their throats. Any internal police or emergency management people who are not involved in that, Bashar would be asking why they aren’t!” William Hartung, an arms trade expert with the Center for International Policy, agreed. “I think the system could definitely be applied to the police for repression,” he told me.

Coincidentally, in 2008, the same year Finmeccanica says it sold the system to Syria, it also bought a massive American defense contractor called DRS Technologies for $5.2 billion. DRS and other Finmeccanica subsidiaries have been involved in major U.S. projects such as development of the C-27J medium-haul cargo plan and the manufacturing of communications gear.

And Pentagon contracts continue to flow to the company. Consider a recent sampling: three months ago, DRS won a $514 million U.S. Army contract for rangefinders to mount on soldiers’ rifles so they can tell how far away their targets are. Before that, in December 2011, it won a $691 million U.S. Navy subcontract for “combat and sonar systems” for submarines. And just three months before that, it won a contract worth almost $1 billion for alarm systems to secure perimeters for all kinds of Army bases.

DRS’s American management has come through Washington’s old-fashioned revolving door.

Though owned by an Italian firm, DRS’s American management has come through Washington’s old-fashioned revolving door. In March 2012, Finmeccanica hired William Lynn, who had recently resigned as the powerful deputy secretary at the Pentagon, to oversee its U.S. operations. Lynn had been a controversial figure at the Defense Department because he was a former lobbyist for U.S. defense giant Raytheon. President Obama appointed him back in February 2009, granting Lynn a waiver from his promise not to install lobbyists in government posts.

To be fair, Lynn didn’t join Finmeccanica until years after the company’s transaction with Syria. A spokesman for DRS referred me to the Finmeccanica press release and declined to answer any questions.

“Corporate holdings have gotten to be so complicated and diverse,” Pike said, “that it’s not an issue of whether you are going to find problems like this, it’s just a question of when and how big a problem it’s going to be.”