Where de­fense con­trac­tors, the U.K. mil­i­tary elite, and army ath­letes mix

De­fense ▶ The U.K. in­vites con­trac­tors to sup­port army ath­let­ics ▶ “It’s as clean as we can make the damn thing”

Bloomberg Businessweek (North America) - - Contents -

Cham­pion cy­clist Ryan Perry, a Bri­tish army cap­tain, was un­char­ac­ter­is­ti­cally tipsy the night of Nov. 25, but no one could blame him for en­joy­ing the Cham­pagne. Stand­ing on the stage of a grand 15th cen­tury hall in Lon­don, the 28-year- old cra­dled a crys­tal plaque nam­ing him the army’s sports­man of the year. Seated in front of him was one of the Bri­tish mil­i­tary’s most in­flu­en­tial of­fi­cers, the chief of the gen­eral staff, or CGS. “Yes­ter­day I was rid­ing around Burn­ley in the wind and rain,” Perry told the crowd, re­fer­ring to his sea­side home­town. “Tonight I’m drink­ing Cham­pagne with CGS.”

At­tend­ing the ban­quet were ex­ec­u­tives from at least 20 con­trac­tors for the U.K.’S Min­istry of De­fence—in­clud­ing U.s.-based arms man­u­fac­tur­ers Boe­ing, Lock­heed Martin, and Raytheon. They raised glasses with se­nior mil­i­tary of­fi­cials, many of whom are di­rectly in­volved in spend­ing some of the $268 bil­lion in de­fense pro­cure­ment the U.K. has planned for the next decade. The con­trac­tors paid for the black-tie din­ner in the his­toric Guild­hall.

The cor­po­ra­tions are spon­sor­ing the din­ner through Team Army, a char­ity es­tab­lished in 2011 af­ter an an­tib­ribery law went into ef­fect in the U.K. The law was en­acted fol­low­ing a string of high­pro­file cor­rup­tion cases, in­clud­ing some in de­fense deals. Team Army’s role is to be in the mid­dle of what were once un­of­fi­cial big-dol­lar trans­ac­tions be­tween gen­er­als and de­fense com­pa­nies. “It’s as clean as we can make the damn thing,” says La­mont Kirk­land, a gen­eral who ran the army’s box­ing, rugby, and win­ter sports pro­grams be­fore re­tir­ing to lead the char­ity.

Arms makers and other con­trac­tors pay Team Army as much as £70,000 ($104,000) for mem­ber­ships. The mem­bers spon­sor ta­bles or buy tick­ets for Cham­pagne re­cep­tions and other fêtes. Cor­po­rate suites at premier soc­cer games, rugby matches, and horse races are also used to raise money. Con­trac­tors are in­vited to spend time at the events with the top brass who buy their wares.

The char­ity uses money from the con­trac­tors to fund mil­i­tary sports pro­grams, Par­a­lympics, and elite mil­i­tary ath­letes. Top-draw com­pe­ti­tions, in­clud­ing the an­nual army-navy rugby match at Lon­don’s 82,000-seat Twickenham Sta­dium, are used for more fundrais­ing. Al­though the of­fi­cial num­bers won’t be pub­lic un­til 2016, Team Army raised a record amount this year, Kirk­land says. Since 2011 the char­ity has amassed about $4.5 mil­lion for mil­i­tary sports.

When Kirk­land com­manded the army’s 4th Di­vi­sion and si­mul­ta­ne­ously ran army sports pro­grams, he says he saw a sys­tem rife with con­flicts. Gen­er­als di­rectly so­licited money from their con­trac­tors to spon­sor in­di­vid­ual sports or events, while some com­pa­nies of­fered funds on their own.

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