Vietnam War Defense Contractor Profiteering Reaches Peak as Congressional Investigations Expose Waste and Corruption

Defense contractor profiteering from the Vietnam War reaches extraordinary levels as the RMK-BRJ construction consortium alone holds contracts officially estimated to reach at least $900 million by November 1967. Over 60% of all construction work in South Vietnam during the war is accomplished by this single consortium, which operates with minimal oversight despite massive expenditures of taxpayer funds.

The RMK-BRJ consortium (Raymond International, Morrison-Knudsen, Brown & Root, and J.A. Jones Construction) holds 5,560 pieces of construction equipment valued at $115 million plus 1,000 pieces of rented equipment by March 1967. The value of construction materials available totals $185 million. The scale of the operation is unprecedented for private contractors in a war zone.

In 1966, Illinois Representative Donald H. Rumsfeld charges the Johnson administration with awarding contracts that “are illegal by statute.” He urges investigation into the relationship between the private consortium and the Johnson administration, particularly the “President’s Club,” to which Brown & Root has contributed tens of thousands of dollars in campaign contributions. Rumsfeld argues: “Under one contract, between the U.S. Government and this combine, it is officially estimated that obligations will reach at least $900 million by November 1967…why this huge contract has not been and is not now being adequately audited is beyond me. The potential for waste and profiteering under such a contract is substantial.”

The Senate Permanent Subcommittee on Investigations begins examining alleged corruption or graft in connection with loss of shipments into Vietnam, including foreign aid materials, Post exchange products, and military construction materials. The investigation uncovers losses from Post exchanges and RMK-BRJ construction materials. By 1966, a $200 million shortfall in funding for military construction by RMK-BRJ becomes apparent—money that has simply disappeared without adequate accounting.

Major defense manufacturers profit enormously from the war. Lockheed, Boeing, General Dynamics, Sikorsky, Chrysler, General Motors, and numerous other corporations receive massive contracts for aircraft, vehicles, weapons, and equipment. During the Cold War era, industrial giants like Boeing, General Dynamics, and Raytheon receive 60% of their income from the Department of Defense, making them essentially dependent on military spending for survival.

The National Action/Research on the Military-Industrial Complex (NARMIC), affiliated with the American Friends Service Committee, forms in 1969 specifically to uncover defense profiteers behind the U.S. war machine. Researchers focus on defense companies because “those were the war profiteers from Vietnam.” They compile lists of the top 100 defense contractors, documenting what they manufacture and where their plants are located—information that attracts massive public attention.

Companies like Honeywell make millions from the war while producing weapons like cluster bombs and anti-personnel mines that cause enormous civilian casualties. The moral implications of profiting from such weapons begin to generate public opposition and protests targeting defense contractors directly.

The scale of contractor involvement extends beyond weapons manufacturing to virtually all aspects of the war effort. Food companies, construction firms, technology companies, and service providers all participate at various levels through government contracts. The privatization of war support functions creates profit opportunities across multiple industries while reducing direct government accountability.

The lack of adequate auditing and oversight enables systematic waste and likely fraud. Contracts awarded through political connections rather than competitive bidding inflate costs. Cost-plus contracting arrangements incentivize inefficiency since contractors profit more from higher expenses. The absence of accountability mechanisms allows losses of hundreds of millions of dollars in equipment and materials without consequences.

The Vietnam War establishes templates for war profiteering that persist in subsequent conflicts. The pattern of politically connected contractors receiving massive no-bid or limited-competition contracts, inadequate oversight enabling waste and fraud, cost-plus arrangements that reward inefficiency, and the revolving door between government and defense contractors all become standard features of military procurement.

The defense industry’s political influence prevents meaningful reform despite congressional investigations exposing problems. Campaign contributions, lobbying expenditures, and the economic importance of defense contracts in congressional districts create political incentives to maintain high military spending regardless of waste or strategic necessity. In 2010, the defense industry spends $144 million on lobbying and donates over $22.6 million to congressional candidates—a pattern established during the Vietnam era.

The Johnson administration’s close relationship with Brown & Root (later part of Halliburton) foreshadows the Cheney-Halliburton relationship during the Iraq War. The same company profits from both conflicts through politically connected contracts, demonstrating continuity in military-industrial complex operations across decades.

The Vietnam War profiteering experience shows how wars create massive profit opportunities for politically connected corporations while taxpayers bear the costs and risks. The absence of accountability for waste and fraud, combined with the political power of defense contractors, ensures that profitable wars continue regardless of strategic outcomes or public opposition.