The American Conservative magazine, in a lengthy report by Andrew Cockburn, said that “the U.S. government exists to buy arms at home and sell arms abroad” was never truer than today. The U.S. defense budget is soaring to previously undreamed-of heights and overseas weapons deals are setting new records.
Thus a Lockheed Martin-Raytheon team recently dispatched to Riyadh to negotiate the finer points of the ongoing $15 billion deal for seven Terminal High Altitude Area Defense (THAAD) batteries jointly manufactured by the two companies, found themselves facing not Saudis across the table, but a team of executives from the Boston Consulting Group. This behemoth, which has $7.5 billion in global revenues, is just one of the firms servicing Mohammed “Bone Saw” Bin Salman’s vicious and spendthrift consolidation of power in the kingdom.
Previously, control in this area had been distributed among different factions of the ruling family, thus enabling each to enjoy the financial rewards (read: kickbacks) traditionally attendant to such deals. But MBS has made it his business, in every sense of the word, to cut out potentially rival middlemen by centralizing all Saudi defense business under the umbrella of the General Authority of Military Industries, with management in the trustworthy (he hopes) hands of close relatives and henchmen such as Mutlaq bin Hamad Al Murashid, the Princeton-trained nuclear engineer charged with developing the Saudi nuclear program.
So-called “offset” agreements have long been a feature of major weapons export deals in which the exporter undertakes to award sub-contracts for the weapon system in the purchasing country, or else offer some other quid quo pro in the form of business or technology transfer. Their massive expansion in recent times, as highlighted in the BCG paper, brings an additional benefit for all parties involved. But it comes at a risk of sending U.S. defense jobs overseas, and opens up security vulnerabilities, since sensitive technology is now being shared with foreign arms manufacturers abroad. Of course, if the Riyadh based BCG office (“always buzzing with a motivating and inspiring vibe,” according to the corporate website) had the true interests of Saudi Arabia at heart, they would have thrown the THAAD sales force out on their ears. THAAD is a system distinguished not only by its enormous cost ($1 billion plus per six-launcher battery), but also by its total uselessness for the Saudis.
As its name suggests, the THAAD aims to intercept incoming short range or medium range ballistic missiles arcing down into the top of the atmosphere 25 to 90 miles up and no further away than 125 miles. The THAAD’s radar must therefore “acquire”–spot– the actual missile warhead, distinguishing it from nearby broken up pieces of its spent booster rocket or from decoys deliberately launched with it. This alone should be reason enough for the Saudis to toss the deal, but even if the system could perform as advertised. The Patriot and Hawk batteries already in place are of course no better suited to confront low altitude threats, which are inevitably masked by ground clutter.
Even if the attackers had been obliging enough to send in ballistic missiles with a high-altitude trajectory, the THAAD would have offered little succor, since its infra-red seeker, as noted, cannot distinguish between actual warheads and decoys. Nor would the Russian S-400 system cheekily offered by Putin in the aftermath of the attack have fared better, and for many of the same reasons. The report was concluded with saying that Boston Consultants and others advising the Saudi regime must have little interest in drawing attention to such tiresome details.