'Colossal Backdoor Bailout': Outrage as Pentagon Funnels Hundreds of Millions Meant for Covid Supplies to Private Defense Contractors

Instead of adhering to congressional intent by building up the nation's inadequate supply of N95 masks and other equipment to combat the Covid-19 crisis, the Pentagon has funneled hundreds of millions of dollars in appropriated taxpayer funds to private defense contractors for drone technology, jet engine parts, Army uniform material, body armor, and other purposes not directly related to the pandemic.

As the Washington Post reported Tuesday morning, the Department of Defense--headed by former Raytheon lobbyist Mark Esper--"began reshaping how it would award the money" just weeks after Congress in March approved a $1 billion fund under the Defense Production Act to help the nation "prevent, prepare for, and respond to coronavirus."

"The Trump administration has done little to limit the defense firms from accessing multiple bailout funds at once and is not requiring the companies to refrain from layoffs as a condition of receiving the awards," the Post noted. "Some defense contractors were given the Pentagon money even though they had already dipped into another pot of bailout funds, the Paycheck Protection Program."

As the U.S. still faces major shortages of testing supplies and N95 masks six months into the pandemic, the Post reported that the Pentagon has used congressionally approved funds to dish out $183 million to Rolls-Royce and other companies to help "maintain the shipbuilding industry," tens of millions for "drone and space surveillance technology," and $80 million to "a Kansas aircraft parts business."

A subsidiary of Rolls-Royce also received $22 million from the Pentagon "to upgrade a Mississippi plant," according to the Post.

Mandy Smithberger, a weapons industry analyst at the Project on Government Oversight, told the Post, "This is part and parcel of whether we have budget priorities that actually serve our public safety or whether we have a government that is captured by special interests."

The Pentagon's misuse of taxpayer funds aimed at addressing the Covid-19 pandemic has drawn a rebuke from the Democrat-controlled House Appropriations Committee, which characterized the Defense Department's rewards to defense contractors as a clear violation of congressional intent.

"While the Department plans to execute a portion of that funding for personal protective equipment (PPE) as intended by Congress, most of the funds will be used to address the impact of Covid-19 on the [defense industrial base], which was not the original intent of the funds," the committee said in a July report (pdf).

Pentagon officials insisted to the Post that the funds were allocated appropriately, citing the need to "protect key defense capabilities from the consequences of Covid," but Slate's Elliot Hannon argued the Defense Department's generous taxpayer-funded gifts to private corporations amount to little more than "a colossal backdoor bailout for the defense industry."

Pointing to the Pentagon's handouts to Rolls-Royce and other major companies, Hannon wrote, "That doesn't exactly sound like PPE."

Correction: A previous version of this article mischaracterized Rolls-Royce.