PDB Afternoon Bulletin | October 24th, 2024: Raytheon Pays Nearly $1 Billion For Defrauding Pentagon & Turkey Retaliates Over Terror Attack
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It's Thursday, 24 October. Look at that. We are making our way towards the end of another month. Welcome to the PDB Afternoon Bulletin. I'm Mike Baker. Your eyes and ears on the world stage. Let's get briefed. First...

Defense contractor Raytheon, you've probably heard of them. Well, they've been ordered to pay nearly $1 billion, with a B, $1 billion in restitution for engaging in a large-scale campaign to defraud the Department of Defense. Yes, the U.S. Department of Defense defrauded by a U.S. defense contractor. Go figure.

Oh, as well as for accepting bribes from the Qatari government. Gets even better. Then, an update on yesterday's terror attack in Turkey, as the Turkish Air Force retaliates with a wave of airstrikes against Kurdish targets in Iraq and Syria. Because, as you know, well, we didn't already have enough conflict in the world.

But first, our afternoon spotlight. U.S. defense contractor Raytheon has been taking some incoming fire, facing allegations that they engaged in a campaign to defraud the Department of Defense while accepting bribes from a government official in Qatar to score new contracts.

Well, that doesn't sound very patriotic. The arms maker allegedly massively inflated the price of certain government contracts over the past decade, costing the U.S. government more than $100 million.

They're also accused of violating the Foreign Corrupt Practices Act, the Arms Export Control Act, and the International Traffic in Arms Regulations. Raytheon is now ready, apparently, to put those criminal allegations behind them, recently agreeing to pay more than $950 million in restitution to resolve the case. And that's according to a report from The Hill.

Now, even for one of the top U.S. defense contractors, it's an impressive sum. So, you ask, how did the company end up with this self-inflicted wound? Well, the case centers on three Patriot missile systems that Raytheon sold to the Department of Defense between 2011 and 2013 as part of a roughly $619 million contract.

Investigators with the Department of Justice unearthed emails from 2013 revealing that Raytheon had told the Pentagon that the cost of the project had unexpectedly increased by roughly $100 million. Oops, it's a rounding error. In reality, however, the costs had actually decreased, a fact that Raytheon allegedly obscured from the Department of Defense.

Then, in 2017, Raytheon allegedly misled the Air Force regarding the cost of operating and maintaining a new radar surveillance system, inflating the contract by roughly $11 million. Wow, it's good work if you can get it. All told, Raytheon's fraud cost the government $111 million between those two deals.

But Raytheon's dealings didn't end there. In a federal case brought against the arms maker in New York, Raytheon is accused of gaining lucrative defense contracts through bribes paid to a high-ranking official of Qatar's Air Force between 2012 and 2016. They then concealed those bribes by falsifying documents to the government in violation of multiple laws governing foreign arms deals.

Of course, let's be realistic, the vast majority of foreign defense contractors operating out there in the big wide world, well, they're regularly passing fat stacks under the table to secure lucrative contracts from other governments.

Raytheon apparently forgot that U.S. companies are prescribed from that sort of behavior. Look, the Foreign Corrupt Practices Act for U.S. companies dealing overseas is very clear on what you can and can't do. There's no confusion there.

In a statement, officials with the DOJ said, quote, such corrupt and fraudulent conduct, especially by a publicly traded U.S. defense contractor, erodes public trust and harms the DOD, businesses that play by the rules, and American taxpayers. But come on, that statement implies that the public has trust in defense contractors. Look, passing bribes to some Qatari senior official to score contracts is bad, not to mention illegal.

But it's not as egregious as knowingly defrauding your own government and taxpayers by massively overcharging for your work.

For their part, representatives for Raytheon said they were, quote, "...taking responsibility for the misconduct that occurred," the misconduct, that's nice, "...with the nearly $1 billion resolution with the DOJ." In addition to the payment, Raytheon agreed to enter into a three-year deferred prosecution agreement and to hire independent compliance monitors to ensure that they are following anti-fraud practices.

But the case, now this may or may not surprise you, the case has not damaged Raytheon's future prospects to secure government contracts. The arms maker, now part of the parent defense contractor RTX, was awarded a two-year $676 million contract on Thursday of this week to continue building tow anti-armor missile systems for the U.S. Army.

See, basically, despite the grift and illegal behavior, the U.S. military still needs things to go boom, and there's not that many companies out there capable of meeting their requirements. Coming up, an update on the terror attack in Turkey as the Turkish Air Force retaliates with a wave of airstrikes against Kurdish targets in Iraq and Syria. I'll be right back.

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Following a deadly terror attack at Turkish aerospace industries that left five dead, Turkey retaliated with airstrikes on Kurdish targets in Iraq and Syria, killing dozens of militants. The strikes represent a sharp escalation in Turkey's long-running conflict with the Kurdistan Workers' Party, known as the PKK, and its Syrian affiliate, the YPG.

As we've been tracking on the PDB, Wednesday's attack on the company, a critical player in Turkey's defense sector, which produces aircrafts and drones and military technology, saw armed assailants storm the facility, killing five people and wounding more than 20. Turkish officials quickly labeled it a terrorist incident, with initial reports linking it to the PKK. That's a Kurdish separatist group that has waged an insurgency against the Turkish government for decades.

In response, Turkey's Ministry of National Defense announced Thursday that it conducted airstrikes on 47 targets across northern Iraq and Syria. In a statement, the ministry reported, "...all kinds of precautions were taken to prevent civilian harm." Now, the airstrikes hit 29 positions in northern Iraq and 18 in northern Syria, targeting military, intelligence, and infrastructure facilities belonging to the PKK and the YPG.

According to the ministry, 59 militants were, quote, neutralized.

However, the US-backed Syrian Democratic Forces, known as the SDF, report the strikes resulted in civilian casualties, claiming that 12 civilians, including two children, were killed in northern and eastern Syria, with 25 others wounded. The revelation from the SDF underscores the complexity of the conflict, as Turkey continues its military operations in areas where Kurdish forces are interwoven with civilian populations.

The Turkish interior minister identified one of the attackers as a PKK member accompanied by a female accomplice. The attack occurred during broader political tensions in Turkey, particularly over the future of PKK leader Abdullah Öcalan, who has been imprisoned since 1999.

Comments by the leader of the Nationalist Movement Party the day before the attack sparked speculation about a potential parole deal for Öcalan if he renounces violence and disbands the PKK. However, the attack likely derailed any such discussions. At a memorial ceremony in Istanbul for Wednesday's attack victims, the defense minister vowed no PKK militant would escape Turkish forces.

He reiterated, Turkey's campaign against the PKK will continue until all its militants are eliminated. President Erdogan of Turkey condemned the, quote, heinous terror attack during a meeting with Russian President Putin at the BRICS summit in Russia, emphasizing that the attack undermines Turkey's peace.

Iraq's embassy in Ankara also denounced the terrorist attack, expressing solidarity with Turkey. Earlier this year, Iraq announced a ban on the PKK, signaling its own concerns about the group's activities. To date, no group has officially claimed responsibility for the attack.

And that, my friends, is the PDB Afternoon Bulletin for Thursday, 24 October. Now, if you have any questions or comments, please reach out to me at pdbathefirsttv.com. And of course, to listen to the show ad-free, well, become a premium member of the President's Daily Brief by simply visiting pdbpremium.com. It is very simple.

And with tomorrow being Friday, as I'm sure you were aware, that means that the Crack PDB production team is busy in our high-tech underground command center putting together the latest episode of our extended weekend show, the PDB Situation Report.

Now, this week's guests will include my old friend and former colleague Buck Sexton of the Clay Travis and Buck Sexton Show, along with the always insightful and excellent Gordon Chang. We'll be talking about U.S. politics, the Ukraine conflict, China's war footing and P. Diddy. I kid you not.

The new episode hits the airwaves at 10 p.m. on Friday evening on The First TV, and of course can be found on our YouTube channel, that's at President's Daily Brief, and all podcast platforms. I'm Mike Baker. I'll be back tomorrow. Until then, stay informed, stay safe, stay cool.