EDO Corporation
The EDO Corporation engages in the design and manufacture of products for defense, intelligence, and commercial markets. It also provides related engineering services to the United States and allied governments, and their prime defense contractors. The company has two segments, Electronic Systems and Communications; and Engineered Systems and Services. The Electronic Systems and Communications segment provides electronic force protection equipment; interference cancellation technology; airborne electronic warfare systems; reconnaissance and surveillance systems; other specialized electronic systems; command, control, communications, and computers products and services; and antenna products. The Engineered Systems and Services segment offers aircraft armament systems, integrated composite structures, mine countermeasure systems, sonar systems, and flight line products to integrated systems and structures, undersea warfare, and professional services markets. The company was founded by Earl Dodge Osborn in 1925 and is headquartered in New York City.
Criticism of EDO Corp. in the U.S.A.
On 25th July 2006 the Washington Post published an journalistic investigation by R. Jeffrey Smith and Renae Merlethat [1]which exposed links between a purported independent defence think tank The Institute of Defense Analysis (IDA)[2] that had been appointed as an advisor to a US Congress military procurement committee, and one of the Directors of EDO Corp.-former military commander Dennis C. Blair [3].Blair also sits on the Council [4]of the UK based International Institute for Strategic Studies. The newspaper report was based on evidence gathered by a non profit government corruption watchdog group called the Project on Government Oversight(POGO) which published a detailed report on the same day entitled Preying on The Taxpayer: The F22 Raptor (Link to POGO report here)which details the evidence of corruption and the links between IDA, EDO Corporation and Lockheed Martin.
The POGO report describes how IDA produced a study for the US Congress entitled F-22 A Multiyear Procurement Business Case Analysis that advised the US Government to continue production of the Lockheed Martin F22 Raptor which the US Government then did by a legislative amendment on the basis of the report's findings, which led to an extra cost of between US$10 -US$15 Billion to the US taxpayer. The multiyear procurement extended the production life of the Lockheed Martin F22 Raptor by 3 years overturning a previous decision to phase out the fighter plane because of safety and peformance problems and huge expense.
In Testimony of POGO's Danielle Brian before the Senate Armed Services Airland Subcommittee on the F-22A Multiyear Procurement Proposal that took place on 25th July 2006, Ms Brian said:
POGO’s investigators began exploring how IDA could have found evidence to support a multiyear procurement, even though they acknowledged “this form of contracting bears significant risks.” What we found shocked us, as well as former high-level employees of IDA. The current President of IDA, Admiral Dennis C. Blair, also sits on the Board of an F-22A subcontractor named EDO Corporation, as well as another defense contractor. He and his family own 1,787 shares of stock and 30,000 stock options in EDO , according to documents EDO submitted to the Securities and Exchange Commission. These shares and stock options are currently worth well over half a million dollars, should he choose to exercise those options. EDO has received contracts for almost $90 million from Lockheed Martin for supplying the AMRAAM vertical ejection launcher for the F-22A.
While Admiral Blair was not an author of the IDA report, we understand that because of IDA standard operating procedures, he likely would have reviewed this report before it was made available to the government. We do not know if Admiral Blair recused himself, or in any way affected the outcome of the IDA report. I would submit, however, that there is an appearance of a conflict of interest -- given his substantial personal financial interest and his fiduciary responsibility to EDO -- in the continued funding of the F-22A. This raises reasonable questions about the independence of IDA’s analysis.[5]
On 27th July 2006 the Washington Post reported that Dennis C. Blair had told them in letters he would resign from the board of EDO Corporation 'as soon as possible'.[6]
Protest and Criticism of EDO Corp. in the UK
On the morning of 17th July 2006 anti-war/pro-Palestine solidarity activists completely blockaded [7][8] EDO's Brighton, UK subsidiary EDO MBM Technology Ltdin protest at the company's supply of weapons technology to the Israeli military being used to attack Gaza and in the Israel-Lebanon conflict 2006. EDO MBM make the Zero Retention Force Arming Unit[9]which is used on the Elbit VER-2[10] and VER-4 Bomb Racks of the Israeli Air Force (IAF) F16.Israel uses the Lockheed Martin F16 [11] as its main fighter and airstrike weapon and it has been used in what many believe to be war crimes in Gaza[12] and Lebanon[13]. Although the Brighton subsidiary company deny it, campaigners also believe EDO MBM make parts for the Lockheed Martin Hellfire missiles[14] used by Israel in extra-judicial assassination in Gaza, but more generally by US forces in Iraq and Afghanistan [15]. On 19th July 2006 protesters staged a 'Horrors of War' demonstration outside the factory recreating scenes of violence and mutilation that result from aerial bombardment.[16] These protests and direct actions are just the latest in an ongoing campaign against the Brighton factory by local residents of Brighton and their supporters that began in 2004 . EDO was targeted because it represents the most direct link between the Iraq War (through its supply of equipment to the UK and US forces), the Occupation of Palestine (through its supply to the Israeli military), and the UK city which holds itself out as being the first in the country to be awarded UN Peace Messenger City status [17] [18]. As a result of the contradiction the city council came close in July 2005 to passing a motion of censure against EDO. [19].The council eventually passed a watered down amendment to the motion that censored all mention of the company and instead resolved to raise a UN peace flag above the town hall on one day each year.There have been numerous protests and direct actions since 2004 arguing that EDO MBM should close or convert its factory to civilian use.
The Rome Statute of the International Criminal Court brought into UK domestic law by the ICC Act makes it an offence for UK citizens and residents to act in complicity with war crimes and any War of Aggression. In related public order criminal trials, protesters against EDO have consistently argued that the company is acting unlawfully by assisting these crimes, in particular those committed by the UK/US forces in Iraq and the Israeli forces in occupied Palestine. Magistrates have been unwilling to hear the ICC Act argument.
The EDO Injunction Case
The ongoing protests led EDO MBM in April 2005 to try[20]but fail[21] to gain a high court injunction against protesters on grounds of 'harassment'. The intended injunction brought under the Protection from Harassment Act 1997, applied to all protesters and not just those named in the court papers and thus created a public outcry as a draconian, disproportionate and unjustified measure used by a US arms company against UK anti-war protesters.
The High Court proceedings at the Royal Courts of Justice did open a up a defence of 'preventing war crimes' to the defendants, that allowed them to put the ICC Act argument that was taken seriously for the first time by the High Court, where it had been previously been dismissed by the magistrates in Brighton.
Although a defence argument that protesters could have been justified in harassing employees of the company to stop a war crime being committed, was rejected by Judge Walker in a preliminary issues trial of November 2005, the Judge accepted a further defence argument was open, that if protesters could show they were acting reasonably in the circumstances on an objective evidential basis, then there was a defence that any harassment, if it had taken place was justified. The defendants had collated a dossier of evidence that outlined the links between EDO and war crimes which included statements given by witnesses in Palestine, and reports from journalists and human rights groups on war crimes in Iraq and Palestine. A High Court judge had earlier praised the detailed document as 'admirable'. The UK Govt. Attorney-General instructed barrister David Perry for the Treasury Solicitors Office to defend the legality of the war on Iraq, and bolster EDO's case for the injunction. Perry described the protests as 'a mask for anarchy' and suggested that the protesters belief that EDO MBM should were complicit in war crimes was imaginary. The Judge did not accept the Government barrister's argument that allowing for the honest belief of protesters that war crimes had taken place was dangerous.
In Feruary 2006 in an out of court settlement 7 defendants who had been represented by lawyers agreed a minimal deal that they would not do certain things they had never done or had any intention of doing on condition defendants costs of the case were paid by EDO and EDO paid their own costs, and most importantly that the injunction against all other protesters other than those in court was lifted. This settlement effectively ended the blanket injunction against all protests at the EDO MBM factory in Brighton, but not the legal action which continued against three remaining defendants who refused to accept a deal or the large lump sums they were offered by EDO Corporation to sign.
If the trial had taken place evidence of EDO's complicity in war crimes would have been brought to light, but EDO's legal team then dropped the whole case after a damning High Court judgement in March 2006 that agreed with complaints from defendants that EDO had failed to prepare for what had been ordered by the court to be a speedy trial. The judge had ordered this as the interim injunction created serious infringements of protester's ECHR human rights to free speech and association.
The final surrender by EDO included agreement to pay all costs to remaining defendants and discontinuence against all defendants who had not even come forward to fight the action and thereby prevented EDO from seeking default costs against these unlocated protesters.
As a result of the collapse of the year long court battle, EDO Corp. suffered huge legal costs. Their legal team, from the firm Lawson Cruttenden and Co., were found by a High Court Judge to have abused the legal process by delaying a full trial. [22] The legal costs of the Injunction case led to an unexpected 1st quarter loss reported in results published on 27th April 2006. [23].
Evidence Of Collusion Between Sussex Police And EDO
In the course of the High Court court battle a temporary interim injunction was imposed until a full trial could deal with the full facts of the case. The restrictions on protests and the aggressive strategy of Sussex Police led to dozens of arrests and public order criminal charges against protesters. Two protesters spent up to a week in Lewes prison on remand as a result of arrest for alleged breaches of the injunction. Others were arrested after allegations that they had assaulted police or obstructed them in the enforcement of the injunction. After evidence came to light in the High Court that Sussex Police may have colluded with EDO Corporation to exaggerate the threat posed by by demonstrators to the safety of employees, defence solicitors in related criminal cases began to probe at this possibility. In what appeared to be a domino effect The Crown Prosecution Service then began to drop all criminal charges against all protesters in all related cases in an effort to protect the confidentiality of internal police documents which may have helped defence lawyers prove such collusion had taken place[24]. In July 2006 13 official complaints against Sussex Police were filed by protesters alleging police collusion with the arms company.[25]
Negative Economic Effects of EDO MBM Legal Action on EDO Corporation
With the massive surprise negative results on 27th April EDO's NYSE share price then dropped some 20-25% over the next three months as shareholders became unhappy by the company's failure to meet its expected targets [26] losing EDO an estimated US$100 Million in market value. The drop followed other stocks in the same industry but to a far more negative degree than any other single company. On 17th July 2006 EDO Corp was listed by Forbes website in a monthly overview of its Beltway Index of stock performance as the worst performing stock of the past year[27]. In both 2004 and 2005 EDO Corp. had been listed by Forbes as one of the fastest growing companies in America. The reversal in the EDO Corporation's fortunes can be directly traced to the successes of the anti-war movement campaign against them. The campaign continues [28] .
EDO (UK) Chairman Sir Robert Walmsley Slease Investigation
On 1st August 2004 The Independent reported that Sir Robert Walmsley, Former Chief of Procurement at the UK Ministery of Defence, had been called in by a UK government watchdog to answer questions on his appointments to the board of Directors of General Dynamics and EDO Corporation.. Walmsley had been in charge of procurement when his department had awarded General Dynamics a lucrative contract for the UK military Bowman (communications system) project. An extract from the newspaper report follows which quotes part of the of watchdog Advisory Committee on Business Appointments report.
"Contracts on that programme, valued at £2bn, were awarded to the company during the last two years of Sir Robert's time as the chief of defence procurement," noted the committee in its annual report placed in the House of Commons library last month. "We were therefore concerned that the appointment could be perceived as a reward."
In the Independent report UK Prime Minister Tony Blair was said to have dismissed the watchdog recommendations that tighter rules were needed over such issues.[29]In a later report published by the Independent on 26 December 2004 Blair was alleged to have helped 'Mandarins' such as Walmsley gain top jobs in the private sector in defiance of anti-corruption committees. [[30]
- Sir Robert Walmsley has also been linked to controversy over the Al Yamamah arms deal with Saudi Arabia which was conducted in such secrecy that government National Audit Office reports into the deal remain classified.The deal has been associated with bribery and corrupution allegations and is still the subject of an ongoing investigation. Police have been denied access to an NAO report because it is classified.
A Daily Telegraph report on 7th July 2006 revealed from a list documents released under the Freedom Of Information Act that there had been two classified NAO reports rather that one as previously thought.[31] The revelation came about through the title of one of the documents "Letter from Sir Robert Walmsley, Chief of Defence Procurement to C&AG [NAO head Sir John Bourn] responding to recommendations in draft audit findings - 30 March 1998".which apparently refers to a draft of the second secret NAO report.
EDO Corporation Political Affiliation and the 'Earmarking' scandal
In the United States, EDO Corporation have made payments from its Political Action Committee to election funds of both Republican and Democratic candidates, but these have tended to be politicians who are on important Government military defence and procurement committees. Controversy has arisen over contributions to Senators Hilary Clinton and Charles Schumer [32]who have then backed 'Earmark' government contracts soon afterwards.
The original story was reported in the New York Sun here.[33]
An extract follows:
A review of the contributions that were made by donors affiliated with New York contractors who ended up winning earmarks suggests that many of the donations are targeted to at least get the attention of the lawmakers who are in the best position to help.
The fact that contractors do look to curry favor with committee members was underscored last month when a Republican of California who was a member of the House Armed Services Committee, Rep. Randy "Duke" Cunningham, admitted to taking $2.4 million in bribes.
Two New York congressmen sit on the House Armed Services Committee: Rep. John McHugh, a Republican of Watertown, and Rep. Steven Israel [34][35], a Democrat of Long Island. Many of the companies and executives who won earmarks this year donated money not only to Senator Clinton, who sits on the Senate Armed Services Committee, and to Mr. Schumer, but also to Mr. Israel. And several of those designated for earmarks gave to members of the Joint Defense Appropriations Conference Committee, which wrote the New York projects into the defense spending bill.
Highlights of the earmarks announced by the Mrs. Clinton and Mr. Schumer include:''
* $1.8 million in taxpayer money to EDO Corporation, an Amityville defense contractor that makes aircraft equipment. The company's political action committee has given $17,000 to Mr. Israel over the past four years and $15,000 to Rep. John Murtha, a Democrat of Pennsylvania who is the ranking Democrat on the House Appropriations Committee's Subcommittee on Defense. EDO's political action committee also gave $1,000 to Mr. Schumer's campaign committee and $853.44 to Boulevard Caterers in Farmingdale for food at a fundraiser for Mr. Schumer. The company spent $1,145 on food for one of Mr. Israel's fund-raisers in April 2001.
EDO Corp. also has close links [36] [37]to the influencial Washington lobby group The Cohen Group [38]set up by the former US Secretary of Defense under Bill Clinton, called William Cohen.