Not Quite a Conspiracy: Networks of Power

Dwight D. Eisenhower coined the term

"military-industrial complex" to describe the uncomfortable closeness between big corporations and the state

By Marc Pilisuk and Jennifer Achord Rountree | 2008-07-01 12:00:00

Some items are hotly contested in political campaigns. Others do not make the cut. Should war and military preparedness continue? Should all people have the right to derive resources from their own communities sufficient to sustain healthy lives before wealthy conglomerates are permitted to usurp those resources?

Will military force be used to protect this domination of resources? Will electoral and legislative processes be made free of the influence of big money? Could the vast resources used to promote enmity be used to promote empathy? Absent such debate, bloody wars will continue, real wages will push downward, more people will be displaced and reappear in forced migrations as refugees, sweatshop laborers, and casualties of hunger and preventable illness.

The absence of these items from the larger public agenda is not an accident. It is a product of a social system created and maintained by humans, some decidedly more influential than others. This system is inordinately influenced by a small, interconnected group of corporate, military, and government leaders. They have the power to instill fear, to protect and to increase their excessive fortunes, and to restrict information, particularly about their own clandestine dealings. The activities of this elite go mainly unseen,. From time to time it is important to revisit the hidden levers of that larger system. We miss the hope of changing a violence-producing social order if we do not understand who benefits from it and how they keep this system going.

Networks of Power

Network analysis plots the actual exchanges and links from one party to another. The resulting web helps to uncover a latent structure showing who is linked to whom and is particularly useful in the study of power.

Take Gordon England. He was appointed US Secretary of the Navy in 2001. Here he was responsible for more than 800,000 military and civilian personnel and an annual budget of more than $120 billion. He joined the Department of Homeland Security in 2003. Prior to joining the Bush administration, England was an executive of General Dynamics responsible for two major corporate sectors, Information Systems and Technology and International Contracting. Previously, he was chief executive of the Combat Systems Group, president of Fort Worth Aircraft (later Lockheed), president of General Dynamics (GD), and the principal of a mergers and acquisition consulting firm.

Such corporate-government connections are common. But corporations are also connected with one another. One can track the board memberships of England's GD colleagues as well as the accounting and law firms that serve GD. Among the GD board are retired generals and admirals, directors of major financial firms (Morgan Chase, investment banking), the food industry (Sara Lee), and pharmaceuticals (Schering Plough). The web of interconnections extends even further. With high level government and corporate officials one finds multiple links to certain financial institutions, law firms, accounting firms, and trade organizations like the Petroleum Institute or Pharma. The networks include links to managers of major media corporations, to research centers and think tanks. People central in these powerful networks are sought after by boards of universities and major medical centers where they can help to attract donors as well as play a part in assuring the supply of trained persons to run and to serve the greater society. This is not a new story, but one that has developed over time. Increasing concentrations of power are rarely discussed. However, the radical popular movements of the 1960s brought a concerted response on the part of the largest corporations to expand their scope of power.

Effects of concentrated corporate growth and expansion

In the 1970s major officers of large corporations in the US and Great Britain formed what Michael Useem calls the "inner circle," a semi-autonomous network designed to promote the interests of corporate capitalism. This network of select corporate officials clearly distinguished the interests of the large corporate investors as a class and provided a corporate logic for centralized advocacy. The group of corporate officials took on an increasing role in consultations with the highest levels of governments. As a result, their privileged status was secured, their growth unprecedented, and they have turned much of government into a contracting cow.

No sector of society escapes corporate intrusion. But the defence sector has an entirely symbiotic relationship to government. In fact if we think of government not as an elite group of officials but as the manager of the needs of citizens and taxpayers, the relation is better described as parasitic. The Center for Public Integrity examined more than two million defence contracts. Half of the Department of Defense budget goes to private contractors, 60% awarded without competitive bidding. Not surprisingly, many companies have been involved in massive overcharging. The dollars flow from government to corporations but also from corporations back to government in the form of campaign contributions, positions as lobbyists and consultants to government officials once they leave office. The corporate personnel who move in and out of government have helped to situate the US as a promoter of both direct military violence and of the trade policies that produce the anguish of poverty and structural violence -- all in a relatively risk-free environment for the corporations. Helen Caldicott noted, "In the charmed circle of US capitalism, Lockheed Martin-, Boeing-, and Raytheon-manufactured munitions destroy Iraq; George Shultz's Bechtel Corporation and Dick Cheney's Halliburton rebuild Iraq; and Iraqi oil pays for it all."

For a powerful industrial elite to steer a policy process with self-serving deals of this magnitude, one needs more than the pressures of independent corporate lobbyists. One also needs such other elements as think tanks and advisory boards that come together in the role of architects for new policy. One also needs elite clubs to assure camaraderie and loyalty to the shared interests of the corporate beneficiaries.

Elite clubs: Building networks of power

Elite brokers of power share two unspoken rules. First, they know what is best for others. Second, their private transactions are better hidden and are conducted in secret. Their hidden societies create face-to-face familiarity that eases the flow of favors and positions across the inner network and promise confidentiality. They do not enact particular laws, declare wars or determine who wins in an election. They do however, create a powerful consensus that reverberates when parts of this inner group meet as members of the National Association of Manufacturers, as CEO's of the Business Roundtable, as the Council of Foreign Relations, as contractors of the K Street lobbyists, as funders of the think tanks they have formed, and as members of presidential Cabinets to shape particular policies and to promote them.

In the early 1970s socioologists exposed the power of members of the Bohemian Club, a secretive organization that still exists.1 Here we shall consider two current groups, Sull and Bones, and The Bilderbergs.

The Order of Skull and Bones

The Order of Skull and Bones, previously known as the Brotherhood of Death, dates back to 1832. The Ivy League has many societies. This one at Yale University is especially notable not only for its gothic ritual and utmost secrecy, but also because of its membership, which Alexandra Robbins has revealed.2 Former Bonesmen have included many of the most powerful families in politics and business, including the families Rockefeller, Taft, Harriman, Kerry, and Bush. Bonesmen have filled the Senate, the Defense Department, the CIA, and the CFR, and have owned and managed banks, investment firms, major newspapers and communications companies.

The society's iconography (a skull and bones with the numbers 322) and rituals (which occur inside a building known as "The Tomb") have added to the organization's mystique. This has provided fodder for conspiracy theorists and intrigue for Hollywood films. With initiation rites rumored to include masturbation inside coffins, it is easy to understand why.

Whatever their initiatory process may be, it appears to have served a purpose. It deepens the fraternal bonds between initiates, sanctifies the legacy of the "patriarchs" that came before them, and perpetuates this network of power.

George W. has utilized Skull and Bones member connections just as his father and grandfather before him. When he formed his first company, Arbusto Energy Inc., he sought the financial assistance of Bonesman uncle Jonathan Bush and William H. Draper III (Bones 1950). Bonesman Stephan Adams spent $1 million on billboard ads for Bush's 2000 campaign. At least 58 Bonesmen contributed at least $57,972 to Bush's campaign with others donating money in their wives' names.

In the family tradition, George W. has also "returned the favor" to his clubmates. According to Robbins, in November 2001 he appointed Edward McNally (Bones 1979) to the newly formed Office of Homeland Security. Robert D. McCallum, Jr., (Bones 1968) was named assistant attorney general, civil department.3 This position, notably, represents the federal government in cases such as fraud, international trade, patents, bankruptcies, and foreign litigation. Bush Jr. also has named Bonesmen as foreign emissaries.

The Bilderberg Group

Less visible than Skull and Bones is the Bilderberg Group. Its origins illustrate the network of corporate power. At the beginning, board members of the Rotterdam Bank worked with the President of UniLever and with CIA director Walter Bedell Smith (in the Eisenhower administration). The latter recruited Charles D. Jackson, special assistant for psychological warfare to the President and president of the anti-communist Committee for a Free Europe. Jackson was formerly a publisher of Fortune magazine and director of Time/Life. Jackson appointed the president of the Burroughs Corporation and member of the Committee for a National Trade Policy, as US chair of the Bilderberg group. The founders chose the invitees, drawn from corporate and government officials in the European NATO countries plus Sweden to the first Bilderberg conference.

The original members on the American side included: George Ball, head of Lehman Brothers and a former State Department official, and David Rockefeller of the Trilateral Commission and head of Chase Manhattan Bank. Others included members of the Business Council, the International Chamber of Commerce, and Dean Rusk, future US Secretary of State and former president of the Rockefeller Foundation. Current members of Bilderberg include: Donald Rumsfeld, former US Secretary of Defense and former World Bank president; Paul Wolfowitz, and Peter Sutherland, chairman of Goldman Sachs and British Petroleum and former Commissioner of the European Union.

The Bilderberg Group's members are among the most prominent leaders in the world in financing, business, academia, and politics. The group maintains complete secrecy with annual meetings (sometimes semi-annual) at different five star resorts completely sheltered from the public and the press. The meetings provide discussions on timely subjects. At a recent meeting, one prominent topic was what to do about Venezuelan president Hugo Chavez. Rather than voting on any particular action, the meetings are organized on the principle of reaching consensus.

Parties to the Skull and Bones, the Bilderberg Group, and other elite clubs are comfortable when they meet again as members of the equally elite but less secret Council of Foreign Relations, which is now shaping neo-liberalism, privatization, and the war on terror. The CEOs of the top corporations who meet as the Business Roundtable have common experiences to share while they promote unfettered corporate growth. Their think tanks and PR units create the needed public messages to support their agenda. The National Association of Manufacturers and an army of professional lobbyists will work with unlimited resources to push their legislative and electoral agenda. They have daily access to congress and the oval office, under both Democratic and Republican administrations. After their elite meeting they return to their corporate and government posts. Here we sample just three: Bechtel, Carlyle, and Halliburton.

The Bechtel Group

Bechtel has conducted 22,000 projects in 140 nations on all seven continents. During the 1980s they had a major Saudi Arabian client, the Bin Laden Construction Company.4

Bechtel has many ties to government.. In the 1970s, Bechtel hired Caspar Weinberger (who in 1980 left the company to become Reagan's Defense Secretary). Others have included former Atomic Energy Commission chief Robert Hollingsworth, former general and NATO commander Jack Sheehan, and Richard Helms, a CIA director known for his involvement with the attempted assassination of Fidel Castro and the overthrow of Salvador Allende. The exchange has been in both directions with government officials moving into Bechtel positions and Bechtel officers moving into government.

The highest profile government link was George Shultz, treasury secretary to Nixon. Shultz bounced back as executive vice president of Bechtel, then on to secretary of state, and back to Bechtel's board of directors. As chairman of Morgan Chase, Shultz was involved in loaning $500 million to Saddam Hussein to buy weapons; Bechtel was one of the companies that sold them. As chair of the Committee for the Liberation of Iraq, Shultz wrote a piece in the Washington Post entitled "Act Now; The Danger is Immediate," advocating a preemptive strike.

The Carlyle Group

The Carlyle Group is a Washington, DC based corporation that produces nothing but makes billions in the investments, mergers, and acquisitions of defence companies. With military outsourcing, a niche market was created for private firms. The Carlyle Group found success by purchasing underperforming defence companies and selling them at a large profit. With the 1997 sale of BDM International, Inc., the group made a 650% profit.

Links between high-ranking government offices and Carlyle include Secretary of Defense Frank Carlucci, chairman of Carlyle at the time of the United Defense sale, former Secretary of State James Baker, and G. H. Bush.5


In Vietnam, in Kosovo, in the Persian Gulf War and in Iraq, Halliburton has been found by the Government Accounting Office to have overcharged in the billions, been unable to account for huge sums, and billed for work not done. In each case the media and congress helped to bury the reports. This year Congressman Henry Waxman initiated a congressional investigation. The Pentagon rejected 12 separate requests for information by Waxman and thwarted a UN investigation. With the announcement of the company headquarters' move to Dubai, Halliburton's top executives would be out of reach of US law enforcement agencies in the event that indictments are handed down. Dubai has no extradition treaty with the United States.

In 1992, as Defense Secretary, Cheney hired Kellogg, Brown and Root, a subsidiary of Halliburton, to write the privatization report that would create advance contracts for corporations to work immediately following a military or natural disaster. Just recall the Blackwater guards who showed up in Iraq and in New Orleans. It strains credulity to learn that corporations are paid to write the policies that will call for their own services and remove liability from their performance. Three years later, Cheney became CEO of the company. During Cheney's years as CEO, the company donated $1.2 million to political parties and congress, and spent over half a million on lobbying.6

Progressives support important reforms to assist those who are left out and the helping professions do wonders to help people cope with gross deprivations and violence. But we rarely help entire communities to overcome the injustice they face and to reclaim the wealth and decision-making power that has been usurped from their control. Ironically, it is the very rich who have locked themselves in gated communities. What keeps the rest of us out of their meetings and secret societies is a political process that limits what democracy can accomplish. Unless we change it, we can expect more global violence. If we do not uncover it we have little chance to change it.

This is an excerpt from a longer article. The theme is further developed in Who Benefits from Global Violence and War: Uncovering a Destructive System (2008) by Marc Pilisuk with Jennifer Achord Rountree. Westport, CT: Greenwood Praeger.


j. Van der Zee (1974). The Greatest Men's Party on Earth: Inside the Bohemian Grove. New York: Harcourt Brace Jovanovich; G.W. Domhoff (2005c). Social cohesion & the Bohemian Grove: The power elite at summer camp. Who Rules America? Retrieved September 24, 2006 from <>.

2 Alexandra Robbins (2002). Secrets of the tomb: Skull and Bones, the Ivy League, and the hidden paths of power. Littleton, Brown, and Company, 162-163.

3 ibid.

4 Bechtel (2006) September 2006 <>.

5 Ismail, M. A. (2006). Investing in War: The Carlyle Group profits from government and conflict. Retrieved September 22, 2006 from http://www.publicintegrity. org/pns/report.aspx?aid=424.

6 Helen Caldicott (2002) The New Nuclear Danger: George W. Bush's Military-Industrial Complex. New York: The New Press, 2002.

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