The first thing commuters saw when stepping into the Metro station beneath the Pentagon in late August was a poster for RTX: the world’s second largest defense contractor, formerly known as Raytheon.
RTX made $30.3 billion in sales to the U.S. government last year, 45% of its total income. To advertise to its biggest customer, why not target government decision-makers in the places they visit most? Thus, the thousands of commuters entering the Pentagon station each day were greeted by more than 60 RTX advertisements plastered across the walls, floors, escalators, and fare gates such that it was physically impossible to pass through the station without seeing one.
This ad campaign wasn’t the company’s first rodeo, either. Ten years ago, RTX placed advertisements in the Pentagon station to promote a satellite control system. That same project is now seven years late and billions of dollars over-cost.
The catch is that, technically, advertisers aren’t supposed to be able to do this, as the Washington Metropolitan Area Transit Authority (WMATA, which operates the greater D.C. metro system) forbids advertisements that “are intended to influence public policy.” But government contractors, reliant on public policy for their survival, are nonetheless allowed to promote their brands and hawk their products to the officials responsible for deciding whether or not to buy from them. A closer investigation into their marketing tactics reveals how companies like RTX and Google have taken advantage of this lax enforcement to hijack DC’s public transportation system for their own gain. WMATA is not just allowing it, they’re profiting from it.
Notes from Underground
As the home to countless government agencies, Washington DC’s population is dense with people whose choices at work can affect the entire world. This has made the capital metro system a magnet for government contractors and other advertisers looking to shape policymakers’ activities.
Yet a systematic analysis of that advertising has proven difficult. WMATA does not make advertising data available to the public, and has yet to respond to multiple requests for the data. A similar request was denied by Outfront Media, the private marketing firm contracted by WMATA to handle transit ads.
So, I obtained what information I could the old-fashioned way — I rode the Metro, a lot. For five consecutive weeks, I visited 11 WMATA Metro stations and recorded the names of every advertiser. All were located within one mile of major policymaking institutions: Capitol Hill, the White House, the Pentagon, and the State Department.
The survey recorded 75 different advertisers, excluding transit agencies. Fifteen received at least $5 million in financial awards from the federal government in fiscal year 2023. Four of those were universities and another was United Airlines, while the remaining 10 were government contractors. Altogether, these 10 contractors received approximately $83.1 billion from the federal government in FY2023.
Nine of the 10 advertising contractors count the Department of Defense (DOD) as their largest government customer: Boeing, CACI, General Dynamics, Google, IBM, KPMG, L3Harris, RTX, and SourceAmerica. Ads for McKesson, which does the vast majority of its government contracting for the Department of Veterans Affairs, were spotted only within the McPherson Square station — two blocks away from the VA headquarters.
While this survey was being conducted, Congress was preparing to meet in committee to negotiate the final version of this year’s National Defense Authorization Act (NDAA), which annually authorizes hundreds of billions of dollars that ultimately go to Pentagon contractors.
The data suggests that contractors are most focused on targeting the Pentagon and Capitol Hill. Contractors made up just 6% of all advertisers in Foggy Bottom-GWU, the only stop near the State Department. In the four stops around the White House, they averaged 9%. Among the three stops closest to Capitol Hill, this number rises to 21%. In the three stations closest to the Pentagon, an average of 46% of all advertisers were contractors.
The Pentagon station, less than 200 feet from the building’s entrance, was 100% occupied by government contractors. In Capitol South, similarly close to the offices of the House of Representatives, one-third of advertisers were contractors. The focus on these two institutions illustrates their importance in keeping contract money flowing: a slim majority of the massive DOD budget goes to contractors each year, and the institution plays a major role in shaping its own budget. The House, meanwhile, is where all budget bills begin. In short, contractor advertising appears to be explicitly targeted at those with the greatest sway over government spending.
Speaking in Tongues
This pattern goes well beyond correlation. Many contractor ads are designed to steer a small number of commuters — agency acquisition officers and congressional appropriations staffers — towards specific government policies. To accomplish this, contractors often use niche language that only their customers would understand. One ad spotted in four stations near Capitol Hill and the Pentagon displayed the tail of a jet above two screens of text: “ENABLES BEYOND BLOCK 4 / ALL THREE F-35 VARIANTS” and “THE SMART DECISION.”
(Photo: RTX ad at the Pentagon City Metro station. Sept. 7, 2023 via Brett Heinz)
This bizarre message, which caught the attention of social media earlier this year, is promoting RTX’s F135 engine. Estimated to cost $26 million each, these upgrades can be added to “all three” versions of the F-35 jet, whose astronomical cost overruns have helped turn it into the most expensive weapons program in human history. Years ago, Lockheed Martin advertised this same plane in stations near the Pentagon with its own twist on a classic neoconservative slogan: “Peace through strength. Lots of strength.” Today, RTX promises that its add-on goes “beyond” the Block 4 upgrade for these planes (which itself is running $5.9 billion over previous cost estimates).
RTX has bragged to investors about the expensive contracts for its F135 engines, but it still faces competition from other contractors. The conflict between the two is set to be addressed by Congress during conference negotiations for this year’s NDAA. To help secure its new revenue stream, RTX placed ads promoting it in places where the people working on the NDAA will most likely see them, using language that only they would understand. RTX did not reply to a request for comment.
In the past, some firms have been transparent about their narrow audiences. Controversial contractor Palantir, which has handled many confidential contracts, once advertised in the Pentagon station with materials reading: “THOSE WITH A NEED TO KNOW, KNOW.
Total Brand Experience
Outfront Media’s pitch to advertisers for the DC market area highlights its large audience of “political leaders, government employees, and corporate contractors.” To help reach them all, they offer a “Rail Station Domination” deal in 13 Metro stations to allow one advertiser to occupy much of the available space within, an opportunity, it says, to “transform commuters’ daily ride into a total ‘brand experience.’”
Outfront’s list of “Domination” stations includes brief descriptions of why they might be attractive to marketers: “US Dept of Defense” for the Pentagon station, and “Capitol Hill” for Capitol South. Two other stations located near various regulatory agencies are listed simply as places to target “Government.” Contractors have long taken advantage of these deals, such as Lockheed Martin’s 2020 “domination” of Capitol South.
The Pentagon station, a prime target for reaching DOD staffers, was one of a kind. The Pentagon is the most expensive station to “dominate” according to Outfront Media data which I obtained, even though it has substantially fewer riders than some of the others. Advertising to the 665,786 commuters estimated to visit the Pentagon station in a four week period costs $198,000 (about 30 cents per commuter), before fees. Yet in Gallery Place-Chinatown, a station in downtown DC farther away from government buildings, it costs only $120,000 to reach more than three times as many people (5 cents per commuter).
These pricing differences suggest that there is a unique value attached to commuters visiting the Pentagon. Another factor is the Pentagon’s unique layout, in which one advertiser can occupy the entire station for weeks on end, without any competition from others on digital screens. The five “domination” stations visited during this survey averaged 13.6 different advertisers over five weeks; the Pentagon featured only two. In the last week of August, every ad space inside the Pentagon station was occupied by RTX. For the entirety of September, it was Google.
(Photo: Lockheed Martin ad at Capitol South Metro station Sept. 26, 2023 via Tori Bateman)
Despite earning little from government contracts last year, Google ran a highly aggressive marketing campaign this September to attract more. Its domination of the Pentagon station featured over 60 ads about their commitment to partnering with the government on cybersecurity policy, one of which implied that the company was already acting in concert with the military: “The U.S. Department of Defense and Google are securing American digital defense systems.”
The company shied away from its nascent attempts to break into government contracting in 2018 after a controversial AI drone deal provoked employee protests. Google executives have more recently reversed course, increased their presence in northern Virginia, and unveiled “Google Public Sector” to fight for more defense contracts. Google Public Sector’s current managing director served as Chief Information Officer at the U.S. Navy until passing through the revolving door in March. The company’s success in winning part of a major software contract late last year suggests its efforts are already paying off.
(Photo: Google ad at Pentagon Metro station. Sept 28, 2023 via Brett Heinz)
At the same time that Google was dominating the Pentagon station, a second ad campaign downtown promoted the “Google Public Sector Forum,” where company executives spoke alongside current Pentagon officials. Reached for comment, the Defense Department emphasized that guidelines were in place to ensure that "DoD personnel participating in public engagements” acted in ways “appropriate and consistent with DoD and U.S. government policies.”
Google’s apparent dual advertising strategy reflects its diverse goals in reaching policymakers: accessing the deep pool of DOD contracting funds, lobbying Congress on a wide variety of legislation, and burnishing its image in the face of a historic anti-trust lawsuit filed against it by the Justice Department earlier this year.
Google and Outfront Media did not reply to a request for comment.
Sitting awkwardly with this phenomenon is a strange fact: according to WMATA policy, “Advertisements that are intended to influence public policy are prohibited.” Ads for specific military equipment are clearly meant to “influence” government acquisitions, which are “public policy” by definition. Nonetheless, Pentagon contractors appear to flaunt this rule with impunity.
While WMATA has declined a number of political ads before, it is still quite common for advertisers to push the limits of what qualifies as “intended to influence public policy.” No one pushes this boundary further than contractors. Prior to the ban’s creation in 2015, contractors openly acknowledged that they hoped to influence public policy. When Northrop Grumman advertised its Broad Area Maritime Surveillance (BAMS) system in the Pentagon station in 2007, a company spokesman said: “There is an ongoing campaign to win the BAMS contract… The Washington, D.C., area is where our customer base is, and we do want to build awareness for our products and services.”
WMATA declined to comment on questions related to the rule due to “pending litigation on this issue.” The American Civil Liberties Union has sued over this and other WMATA policies as violations of advertisers’ free speech rights, and the case was recently approved to move forward.
Further complicating matters is a federal law banning contractors from spending public funds on “influencing or attempting to influence” government officials towards providing them with additional contracts. The rule does not seem to have dissuaded contractors, even those who derive the majority of their revenues from the federal government, from targeted advertising campaigns. (DOD spokesman Jeff Jurgensen emphasized that the agency complies with all relevant acquisitions regulations.)
Advertisers subsidize the DC Metro system by providing revenue that would otherwise need to come from either commuters or the government. WMATA hired Outfront Media to “maximize the revenue potential” of public transit assets, incentivizing the company to always go with the highest bidder. Still, WMATA’s budget for next year projects that Metro ads will only bring in $10.3 million, roughly 0.75% of the system’s total funding. This might save money on the front end, but advertisements encouraging billions in inefficient government spending could easily wind up costing taxpayers more over time, such that direct subsidies to replace WMATA’s revenues from contractor ads could ultimately save money.
The seemingly arbitrary enforcement of WMATA’s ban on ads influencing public policy allows contractors to recycle government funds back into efforts to acquire more government funds. This cycle encourages public officials to make choices based on power and reach, rather than cost-efficiency, fairness, or a rational defense strategy. As long as companies making money from policymakers’ decisions are allowed to advertise in the DC transit system, this corrupt process will continue to thrive.
Brett Heinz is a policy researcher currently serving as a National Security and Foreign Influence Intern at the Quincy Institute for Responsible Statecraft. He previously served as a program assistant at the Center for Economic and Policy Research, where his work focused on analysis of US-Latin America relations.
Google ad in the Pentagon Metro station, Sept. 7, 2023 via Brett Heinz.
The USS Porter fires its Phalanx close-in weapons system during a live-fire exercise in 2018. The USS Gravely used the same missile defense system to shoot down a Houthi missile on Tuesday. (U.S. Navy photo by Mass
A Houthi missile came within seconds of hitting an American destroyer in the Red Sea on Tuesday as U.S.-Houthi hostilities continue to escalate, according to CNN.
The USS Gravely shot down the missile with a rarely used defense system that only hits targets that have made it past longer range defenses, suggesting that other systems failed to stop it first. Previous Houthi strikes had been intercepted at least eight miles away from their target, while this attack reportedly came within a mile of the U.S. ship.
The incident is the first time the U.S. has ever had to use its close-range defenses to stop a cruise missile, according to Fox News.
So far, the Biden administration has stayed mum on how it would respond if a Houthi missile actually hit a U.S. vessel. But, as the Pentagon scales up strikes against targets in Yemen, the White House may be forced to make a decision sooner than it thinks.
American forces have shot down nearly 70 Houthi drones and 20 anti-ship missiles in recent months, according to the War Zone. The Houthis also now claim to be simultaneously firing multiple missiles at their target, raising the chances that one will make it through U.S. defenses.
And there is little reason to believe that the Houthis will stop their Red Sea blockade any time soon, especially if the Israeli war in Gaza continues apace. The militant group has dramatically bolstered its support within Yemen since it began the blockade, with some former enemies now handing over their weapons to the Houthis in a show of support. The group also seems to relish the chance to fight the U.S. directly after spending much of the last decade sparring with Washington via its Saudi proxy.
A successful strike with a cruise missile against a U.S. destroyer could do significant damage to the vessel, which costs roughly $2 billion to produce. Such an attack could also kill U.S. service members, a possibility that would dramatically raise the stakes of U.S. operations in the Red Sea.
A deadly strike by the Houthis would also boost hawkish voices advocating for decisive strikes against Iran and its proxies in the wake of the killing of three American soldiers in Jordan.
This helps to explain why many experts argue that the U.S. should simply stop fighting the Houthis. The Biden administration ought to “discontinue putting our fleet in harm’s way for [a] tertiary interest,” said Austin Dahmer, a national security adviser to Sen. Josh Hawley (R-Mo.).
Others have put it more bluntly. “Washington should start by recognizing that both its economic and national security interests are largely unaffected by Red Sea transit,” wrote Michael DiMino — a former CIA analyst and current fellow at Defense Priorities — in an article for RS. “Any multi-billion-dollar effort to fight a war in Yemen would render no political, economic, or security benefits to the United States.”
Meanwhile, lawmakers continue to express their frustration with the White House’s insistence that it can fight the Houthis without authorization from Congress. The administration says its strikes are defensive and fall short of real war, which means there is no reason to get congressional approval to move forward. But that explanation has failed to satisfy many in Congress, as Sen. Mike Lee (R-Utah) told RS earlier this week.
“The Biden administration’s pattern of engaging in offensive airstrikes without authorization and calling such actions defensive is a warped understanding of the interactions between the legislative and executive branch powers in war making,” Lee said.
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NATO Secretary-General Jens Stoltenberg speaks at the Heritage Foundation on Jan. 31, 2024. (Screengrab via Heritage.org)
NATO chief Jens Stoltenberg has had a busy week in Washington. After meeting with Pentagon officials on Monday, the former Norwegian prime minister sat down with congressional leaders on Tuesday to emphasize his support for a new Ukraine aid package.
But Stoltenberg’s biggest appointment may have come Wednesday, when he took to the stage at the influential Heritage Foundation — a newly minted home for Ukraine skeptics on the right — and made an impassioned plea for continued aid to Kyiv.
“You seek to advance the interest of American citizens and stand up for ideas that strengthen America and the fundamental values that underpin this great democratic nation: freedom, opportunity, and prosperity,” the NATO leader said. “Today, these values are under attack by malign foreign actors seeking to undermine them.”
Stoltenberg’s speech took aim at a range of arguments that have gained purchase on the right over the past year. His pitch is clear: Ukraine aid is a cheap way to create U.S. jobs, kill Russian soldiers, and keep the war away from NATO’s borders.
Europe has provided more than its fair share of support to Ukraine, he argues, noting that the continent has given Kyiv at least $100 billion since the war began. And, Stoltenberg added, around half of NATO allies spent at least 2% of GDP on their military last year, marking progress on a long-held U.S. demand. He also emphasized that NATO has a key role in confronting a rising China — music to the ears of many Beijing watchers on the right.
Add to that the fact that European states have invested billions of dollars in the U.S. economy by purchasing new military hardware from American companies. Stoltenberg reminded the audience that his next stop is a Lockheed Martin factory in Alabama, where American workers are producing Javelin missiles for European buyers.
The NATO chief’s arguments had a palpable urgency to them — little surprise given that the odds of Congress passing new Ukraine funding seem to be decreasing by the day. This, coupled with the fact that the European Union is facing its own struggles over future funding, risks leaving Ukraine to largely fend for itself against a far more powerful foe.
In Washington, the current logjam centers on a potential Senate deal to mollify GOP Ukraine skeptics by instituting a significant overhaul of U.S. immigration policy.
But any compromise that may find its way out of the Senate will likely meet greater resistance in the House, where Speaker Mike Johnson (R-La.) has made clear that new funding for Ukraine would require — at the very least — cuts to other government spending.
The institutional backbone for this strain of GOP thought is, of course, the Heritage Foundation itself. In a brief speech prior to Stoltenberg’s talk, Heritage President Kevin Roberts laid out his own views on the future of Ukraine aid.
“We will not support further funding for Ukraine unless it is military only, matched efficiently by European nations, is transparent and accountable, and follows a clearly articulated strategy for victory,” Roberts said. None of these suggestions are likely to be included in a Senate deal, highlighting the uphill battle facing Ukraine’s supporters.
“I want to be crystal clear,” he continued. “Heritage will not now nor ever support putting a foreign nation's border ahead of our own.” Roberts also slammed early reports of a potential border deal in the Senate, saying they “point to more disordered priorities and Washington games.”
The Heritage leader’s fiery comments suggest that Stoltenberg’s pleas may fall on deaf ears. But that didn’t stop the NATO chief from trying. When asked about NATO’s long-term strategy for the war, he said the goal is to ensure Ukraine’s survival as a state by inflicting such “high costs on Russia that they accept that they will not control Ukraine.”
This argument, while succinctly put, is unlikely to satisfy concerns from budget hawks and restrainers, who fear the possibility of open-ended conflict with sky-high costs. But, as Ukraine’s military capacity continues to degrade, only time will tell if Stoltenberg’s last-ditch effort proved persuasive.
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A pile of Iranian rial banknotes. (Fotokon/ Shutterstock)
After six years of U.S. “maximum pressure,” Iran’s economy continues to defy dire predictions of economic collapse that motivated Trump’s hasty 2018 withdrawal from the Iran nuclear deal (also known as the JCPOA). The Biden administration’s continuation of the same policy since 2021 is similarly based on the logic that the weaker Iran’s economy is, the more likely Tehran will bend to Washington’s will.
The economy’s resilience is evidenced by the fact that in the first nine months of the Iranian fiscal year (March 21 to December 20, 2023), GDP grew by a 6.7% annual rate, and it is very likely to finish the year in two months with a growth rate exceeding the World Bank and IMF forecasts of about 4%.
But, after more than a decade of decline in their living standards, resilience is not what ordinary Iranians are looking for. As a result of Trump’s reimposition of sanctions in 2018, Iran’s economic growth fell by 13.6 percentage points, from a positive annual growth rate of 9.5% during 2016-2017, when the JCPOA had eased U.S. sanctions, to negative 4.1% per year during 2018-2019.
Since 2020, and helped by rising oil revenues, the economy has recovered some, growing steadily, if slowly, by about 4% per year. Even the damage from the Covid-19 pandemic, which was mostly on employment, has been repaired, and employment is now back to its pre-pandemic level. But, as Israel’s war on Gaza continues, renewed tensions and proxy fights with the U.S. could put these fragile gains at risk of a reversal.
This modest growth has done little to dampen deep dissatisfaction with the economy among ordinary Iranians. Living standards have not yet recovered to their pre-Trump level, and inflation remains very high. In 2022, real household expenditures per capita were 7.7% below their 2017 level, far below where Iranians expected to be now based on two decades of rising real consumption before sanctions tightened in 2011.
Inflation is an even larger source of popular discontent. For reasons that are not peculiar to Iranian society, people show more concern with rising prices than real incomes. They are unhappy with rising prices even if their incomes are keeping up with inflation.
In 2018, with poor prospects from oil exports, the rial lost 2/3 of its value in a short time and caused prices to spike. Inflation rose from 8.1% in 2017 to 26.7% in 2018 and has remained above 30% since. Since the beginning of the Iranian year, a new Central Bank governor has tried to reduce inflation to below 30%, a very modest goal, but so far he has not succeeded. Last month, inflation was at 36.5% annual rate despite tightened credit and fiscal austerity, which shows itself in a stagnant real estate market.
This mixed record is what hardliners are presenting to voters in the March 1 parliamentary elections and the record that President Ebrahim Raisi will be defending when he stands for re-election in June 2025. And this is no ordinary re-election because hardliners, who view the Raisi administration as the first “revolutionary government” since the founding of the Islamic Republic, hope to deliver on their promise of economic prosperity. They need to convince voters that their strategy of giving up on the nuclear deal and turning to the East (read China and Russia) can do better than the record of reformist presidents Mohammad Khatami (1997-2005) and Hassan Rouhani (2013-2021), whom they consider pro-west and “neo-liberal”.
Both Khatami and Rouhani were re-elected with bigger margins to their second terms. For President Raisi to do the same in 2025 he needs the robust growth rate of the past year to continue in 2024. As I argued last November, meeting this challenge is an important reason why Iranian hardliners are unwilling to get drawn into the Israel-Hamas conflict.
Darker clouds on the horizon threaten economic recovery
Besides the fact that economies grow faster when they are recovering from a trough, the growth should slow down in 2024. In addition, rising tensions in the region worsen the prospect for growth. Iran may be intent on not getting involved, but protecting its fragile recovery from an expanding regional conflict may be increasingly difficult. Iran’s allies in the “resistance front” in Yemen, Iraq, Syria, and Lebanon are challenging U.S. and Israeli forces. Even if Iran stays out of the fray, the conflict is bound to have a negative effect on Iran’s recovery, if only because Washington would try harder to limit Iran’s oil exports and refuse Iran access to its previously frozen funds.
This month Iran angered Iraq and Pakistan after it bombed two locations in these countries, ostensibly taking revenge for a terrorist attack a month ago in Kerman that killed over 100 bystanders. Adding a third nuclear power to the two that it is already in conflict with – the U.S. and Israel – may show Iran’s military resolve but also increases the risk of conflict.
Rising tensions have caused the rial, which enjoyed months of stability, to lose 10% of its value in the free market just in the past two weeks. If the rial continues to lose value, the task of bringing inflation down to below 30% will become much harder in the coming months.
More lax enforcement of oil sanctions since Biden’s election, intended to keep Iran from increasing its stockpile of enriched uranium and obtain the release of U.S. hostages, has allowed Tehran to sell more oil. More oil revenues have been the largest factor in Iran’s economic recovery. According to the Statistical Center of Iran, in the last three years the value added of the oil and gas sector has grown three times as fast as the GDP. So, if Washington decides to police Iran’ oil exports more aggressively, growth will suffer.
Finally, in the longer run, the financial components of U.S. sanctions prevent Iran from taking advantage of its deep devaluations by increasing its non-oil exports. Devaluations have reduced the cost of unskilled Iranian labor in export markets to about $10 per day, half the average unskilled wage in China. Devaluations helped Iran substitute its own products for imports, but there are limits to this substitution, especially with the domestic demand depressed to fight inflation. A fuller economic recovery from the loss of oil exports requires exporting more manufactures and services, which financial sanctions make costly and difficult.
Iran’s recent diplomatic successes have reduced its isolation but will not translate into economic growth in the short term. In 2023, Iran, aided by China, repaired its broken diplomatic relations with its Persian Gulf neighbors; gained entry into BRICS, an organization that includes rising non-aligned global players; and joined the Shanghai Cooperation Organization that, at least in one observer’s opinion, is a “game changer.” While these developments bode well for Iran’s ability to resist U.S. sanctions in the long run, they are unlikely to translate into more investment and economic growth in the short run.
What these successes have accomplished so far is to convince Iranian hardliners that their strategy of resistance to U.S. pressure has raised the Islamic Republic’s global stature, just as the West has tried to isolate it. They see the emerging multipolar world as one in which unilateral sanctions lose their sting and one that allows Iran to turn its newfound geopolitical capital into economic growth.