Wednesday, January 18, 2006

A Contract to Throw a Party For

Hey folks, before I begin this entry, I thought I’d explain the lack of an entry in a month. I got out of the habit of blogging around the end of term with essays and exams and that mood kept hold of me over Christmas. I’m not really feeling it right now, so since this is a small venture that has likely a handful of readers I feel I can take time off whenever I want, for as often as I want. So, that’s what I did. I probably will continue to do that, as I’m not in a blogging mood really, but maybe this entry will spark me back to life.

Anyhow, a lot of US soldiers are dying in Iraq. The merits of this war have been debated countless times and I won’t rehash them for you. However, I will play a game of “Follow the Bouncing Money.”

First, the money gets awarded to DHB Industries Inc. It comes from the US government in the form of a defence contract to provide body armour to the US troops in Iraq. To quote the press release:

DHB Industries Inc. (AMEX: DHB), which principally operates in the field of body armor, announced today that its subsidiary, Point Blank Body Armor has received a new delivery order for $30.1 million from the United States Army for its Interceptor™ OTV (Outer Tactical Vests) System.

Commenting on today's announcement, General (Ret.) Larry R. Ellis, DHB's President, said, "We are pleased the U.S. Army continues to see the effectiveness and the value that our advanced body armor provides in this challenging marketplace. We look forward to working with the U.S. Army to bring new and innovative products to our deployed soldiers. Our goal is to be the preeminent supplier of body armor for the military and law enforcement communities worldwide."

Secondly, the money goes to David Brooks, the CEO of DHB Industries.

2004 was a banner year for CEOs and a dismal year for workers, according to a new report from the Institute for Policy Studies and United for a Fair Economy, Executive Excess 2005: Defense Contractors Get More Bucks for the Bang.

The ratio of average CEO pay (now $11.8 million) to worker pay (now $27,460) spiked up from 301-to-1 in 2003 to 431-to-1 in 2004.

If the minimum wage had risen as fast as CEO pay since 1990, the lowest paid workers in the US would be earning $23.03 an hour today, not $5.15 an hour.

The report found that CEOs are individually profiting from the Iraq War, with huge average raises at the biggest defense contractors.

At the 34 publicly traded US corporations among the 2004 top 100 defense contractors with 10% or more of their revenues from defense contracts – companies such as United Technologies, Textron, and General Dynamics – average CEO pay increased 200% from 2001 to 2004, versus 7% for all CEOs.

For example, David H. Brooks, CEO of bulletproof vest maker DHB Industries, earned $70 million in 2004, 13,349% more than his 2001 compensation of $525,000. Brooks also sold company stock worth about $186 million last year, spooking investors who drove DHB’s share price from more than $22 to as low as $6.50. In May 2005, the US Marines recalled more than 5,000 DHB armored vests after questions were raised about their effectiveness. By that time, Brooks had pocketed over $250 million in war windfalls.

Since September 11, the ratio between median pay for defense CEOs and pay for military generals has nearly doubled to 23-to-1, up from 12-to-1 just three years earlier. The pay ratio between defense CEOs and army privates soared to 160-to-1, up from just 89-to-1 in 2001.

So David Brooks gets $70 million a year; a rise of 13,349%. Just let those numbers sink in. A 13,349% rise from a $525,000 annual salary. He also sold $186 million worth of stock. So Brooks gets exclusive contracts from the US government and suddenly becomes a multi-millionaire making astronomically more than he did a few years ago.

So what does Mr. Brooks do with the money? Throw a party for his kid, is the correct answer. I had heard about this extravangza before, but I had never realized it was for David Brooks’ kid. Anyhow, the details follow.

History will forever record Elizabeth Brooks' bat mitzvah as "Mitzvahpalooza."

For his daughter's coming-of-age celebration last weekend, multimillionaire Long Island defense contractor David H. Brooks booked two floors of the Rainbow Room, hauled in concert-ready equipment, built a stage, installed special carpeting, outfitted the space with Jumbotrons and arranged command performances by everyone from 50 Cent to Tom Petty to Aerosmith.

I hear it was garish display of rock 'n' roll idol worship for which the famously irascible CEO of DHB Industries, a Westbury-based manufacturer of bulletproof vests, sent his company jet to retrieve Aerosmith's Steven Tyler and Joe Perry from their Saturday gig in Pittsburgh.

I'm also told that in honor of Aerosmith (and the $2 million fee I hear he paid for their appearance), the 50-year-old Brooks changed from a black-leather, metal-studded suit - accessorized with biker-chic necklace chains and diamonds from Chrome Hearts jewelers - into a hot-pink suede version of the same lovely outfit.

The party cost an estimated $10 million, including the price of corporate jets to ferry the performers to and from. Also on the bill were The Eagles' Don Henley and Joe Walsh performing with Fleetwood Mac's Stevie Nicks; DJ AM (Nicole Richie's fiance); rap diva Ciara and, sadly perhaps (except that he received an estimated $250,000 for the job), Kenny G blowing on his soprano sax as more than 300 guests strolled and chatted into their pre-dinner cocktails.

"Hey, that guy looks like Kenny G," a disbelieving grownup was overheard remarking - though the 150 kids in attendance seemed more impressed by their $1,000 gift bags, complete with digital cameras and the latest video iPod.

While I guess it’s his right to spend his money on whatever he wants, if that isn’t symbolic of the excesses that plague modern Western societies then I don’t know what is. However, the soldiers on the ground in Iraq could tell you more about the problems surrounding the US government’s defence contracts than I could. Actually, some of them can’t.

A secret Pentagon study has found that as many as 80 percent of the marines who have been killed in Iraq from wounds to the upper body could have survived if they had had extra body armor. Such armor has been available since 2003, but until recently the Pentagon has largely declined to supply it to troops despite calls from the field for additional protection, according to military officials.

The ceramic plates in vests now worn by the majority of troops in Iraq cover only some of the chest and back. In at least 74 of the 93 fatal wounds that were analyzed in the Pentagon study of marines from March 2003 through June 2005, bullets and shrapnel struck the marines' shoulders, sides or areas of the torso where the plates do not reach.

Thirty-one of the deadly wounds struck the chest or back so close to the plates that simply enlarging the existing shields "would have had the potential to alter the fatal outcome," according to the study, which was obtained by The New York Times.

For the first time, the study by the military's medical examiner shows the cost in lives from inadequate armor, even as the Pentagon continues to publicly defend its protection of the troops.

….

"Our preliminary research suggests that as many as 42 percent of the Marine casualties who died from isolated torso injuries could have been prevented with improved protection in the areas surrounding the plated areas of the vest," the study concludes. An additional 23 percent might have been saved with side plates that extend below the arms, while 15 percent more could have benefited from shoulder plates, the report says.

In all, 526 marines have been killed in combat in Iraq. A total of 1,706 American troops have died in combat there. The findings and other research by military pathologists suggests that an analysis of all combat deaths in Iraq, including those of Army troops, would show that 300 or more lives might have been saved with improved body armor.

Someone should tell Mr. Brooks that improving his company’s body armour may be a better use of money than his daughter’s bar mitzvah. What an asshole.

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