In addition to my two decades as a member of the Massachusetts House, I’ve also had the honor of serving in the United States Army. My background as a lawmaker and an attorney allowed the Army to put me to use as a subject matter expert in the concept of rule of law.
Generally speaking, rule of law is the concept of society being governed not by dictators or autocrats, but by agreed-upon statutory schemes. My military service brought me to places like Iraq, Afghanistan, the Congo, and even the United States Capitol earlier this year in response to the attempted insurrection.
Now, we have a new administration in charge of the federal government, and like millions of my fellow Americans, I am hopeful that the rule of law will once again win the day. After all, it is only the rule of law – and that our leaders are accountable to the rule of law – which separates the United States from those places where I served in uniform.
One recent area of concern for me is our Nation’s antitrust laws. These regulations were put in place to ensure fairness and competitiveness in our economy. Antitrust rules seek to block monopolies or prevent companies from controlling such massive power that they are no longer accountable to consumers, customers, and even lawmakers.
Under the Trump administration, we saw the antitrust laws being perverted in order to advance the ambitions of one man: Donald Trump. The most notable being the Department of Justice blocking the merger of Time Warner and AT&T because the president objected to his coverage on CNN, owned by Time Warner. Again, this is reminiscent of governments led by men and women, not laws.
However, I was recently encouraged to see the news out of New York state, which has stepped up to be the vanguard of the antitrust movement. The 21st Century Anti-Trust Act has proposed legislation that has received support from 15 state and national labor and policy groups that wrote a letter to legislators supporting their effort to “rein in many abusive tactics corporations use against other firms and workers that are difficult to challenge under current antitrust law and precedent.” The act would replace the current “consumer welfare” standard with an “abuse of dominance” standard so those with a 40 percent market share would face stricter scrutiny.
This new standard would be of particular interest in the first big test of the Biden administration, which is currently considering whether or not to block the proposed acquisition of Aerojet Rocketdyne, by Lockheed Martin.
In December 2020, defense contractor Lockheed Martin announced its plan to acquire Aerojet Rocketdyne in a $4.4 billion deal. Lockheed Martin touts this acquisition as a strategic move to bolster our nation’s defense. In reality, this deal could possibly eliminate any serious and impactful competition for the development of new missile technology.
This is because Lockheed Martin is not the only contractor that Aerojet provides propulsion technology to; Lockheed, Boeing, Raytheon Technologies, and Northrup have all partnered with Aerojet for their technology, and these competitors will virtually be eliminated from the field if Lockheed and Aerojet combine.
Some have claimed that these real concerns over limits on suppliers are irrelevant or overblown, but we have already seen this play out in 2018 with the blundered Northrop Grumman acquisition of Orbital ATK. This merger made Aerojet the last independent Solid Rocket Motor provider in the country and is currently under investigation by the FTC to determine whether Northrop, “violated an order requiring the company to sell its solid motor rocket engines on a non-discriminatory basis to all competitors for missile contracts,” for an $80 billion project they won that Boeing had to forfeit to them.
Lastly, not to pick on Lockheed Martin, but they have a track record that should give the FTC and the Pentagon serious pause, before allowing them to get bigger and dominate missile technology, the most expensive weapons systems we procure. Lockheed is behind the Joint Strike Fighter debacle, the costliest defense program in history, that has been plagued by cost overruns and stunning levels of technological failures. Lockheed is also part of Launch Alliance, the program that failed to send affordable and reusable rockets to space. Remember, Launch Alliance was outperformed by Elon Musk’s Space X, which will ultimately save taxpayers hundreds of millions of dollars.
If the Biden administration wants a return to antitrust laws being sensibly enforced, and ensure a competitive marketplace in our defense sector, I strongly urge the president and his team to block this acquisition between Lockheed and Aerojet.
This article was first published on Inside Sources (June 17, 2021)