On Tuesday, the House of Representatives passed the National Defense Authorization Act (NDAA) and sent the bill to the Senate for a vote. The House’s version of the bill authorizes $768 billion for national defense. Defense experts are warning the Senate that failing to pass the bill will stall Pentagon’s modernization efforts in light of China’s growing military power.
“There are a whole bunch of provisions in this bill to help push the Pentagon in the correct direction, to help make sure that we give them the help they need. Or in some cases the push they need to adapt the technology is going to move us in better direction,” said House Armed Services Committee Chairman Adam Smith, D-Wash.
CBS reports that the House bill “includes $7.1 billion for the Indo-Pacific Deterrence Initiative. The Pentagon has repeatedly called China the ‘pacing challenge’ for the Department of Defense.”
The Washington Post claims the defense bill will allow the Biden Administration to “counter China.” The bill provides “a new framework for countering an ascendant China, one that is intended to better coordinate how the U.S. national security apparatus confronts Beijing and ensures that lawmakers have the tools to determine whether the approach is successful.” Included in the bill is “funding for additional attack submarines that senior Pentagon officials have said are vital for countering China’s powerful maritime forces.”
In light of these new programs designed to counter China, how is the Pentagon ensuring that its government contractors do not have a business relationships with China? Will the technology and equipment developed for the U.S. end up in China? What kind of oversight or regulations protect U.S. defense products?
European company Airbus is one such U.S. contractor that has a relationship with China. On it’s website, the company states it is a “long time supplier and partner to the US Government for industry leading satellite and geospatial intelligence capabilities, space exploration missions, military helicopters and fixed wing aircraft. We are currently executing on multiple contracts with the U.S. Government, including with NASA, DARPA, the National Geospatial Intelligence Agency (NGA), and all of the service branches.”
But Airbus also states on its website that it is a “strategic partner” with China and that it “first established an official presence in China in 1994. Since then, rapid growth has been the hallmark of Airbus’ Chinese operations, with the company having expanded its number of commercial jetliners sold to the country by a factor of 50 in less than two decades.”
Why is the U.S. government doing business in the very sensitive area of defense with a company that is a “strategic partner” with an ascendant China? No less than the U.S. Department of Justice found that between 2013 and 2015, Airbus engaged a business partner in China to bribe Chinese government officials in connection with the approval of certain agreements associated with the purchase and sale of Airbus aircrafts to state-owned and state-controlled Chinese airlines. “Airbus engaged in a multi-year and massive scheme to corruptly enhance its business interests by paying bribes in China and other countries and concealing those bribes,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division.
According to the DoJ, admissions and court documents reveal that Airbus engaged in a criminal conspiracy to knowingly and willfully violate laws by failing to provide accurate information related to commissions paid by Airbus to third -party brokers who were hired to solicit, promote, or otherwise secure the sale of defense articles and defense services to foreign armed forces.
“Airbus engaged in a multi-year and massive scheme to corruptly enhance its business interests by paying bribes in China and other countries and concealing those bribes,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division. “This coordinated resolution was possible thanks to the dedicated efforts of our foreign partners at the Serious Fraud Office in the United Kingdom and the PNF in France. The Department will continue to work aggressively with our partners across the globe to root out corruption, particularly corruption that harms American interests.”
The result of these transgression cost Airbus almost $4 billion in penalties to the U.S., France, and the United Kingdom for violating the Arms Export Control Act (AECA) and its implementing regulations, the International Traffic in Arms Regulations (ITAR), in the United States. Companies like Airbus, with ties to China, should not be eligible for U.S. defense dollars.