Foreign Military Sales

2010 – ITT Corporation

 

 

WHEREAS the United States exports weapons and related military services through foreign military sales (government-to-government), direct commercial weapons sales (U.S. companies to foreign buyers), equipment leases, transfers of excess defense articles and emergency drawdowns of weaponry.

 

The United States government requested $4.54 billion in Foreign Military Financing for Fiscal Year 2008 including $3.9 billion for the Near East region (the recent 10-year agreement to increase military aid to Israel and proposed sales to Saudi Arabia may increase that amount).  The U.S. government also entered into $32 billion of Foreign Military Sales agreements in Fiscal Year 2008. 

 

In a number of recent United States combat engagements (e.g., the first Gulf War, Somalia, Afghanistan and Iraq), our troops faced adversaries who had previously received U.S. weapons or military technology.  Also, during 2006-2007, U.S. arms and military training played a role in 20 of the world’s 27 major wars, and thirteen of the top 25 U.S. arms recipients in the developing world were either undemocratic governments or regimes guilty of ongoing human rights abuses.   

 

In the United States government’s Fiscal Year 2008, ITT Industries was ranked the 11th largest Department of Defense contractor with $4.4 billion in contracts. (Government Executive, August 15, 2009)

 

On March 27, 2007, our company announced that it would pay a $50 million fine and plead guilty to two violations of the International Traffic in Arms Regulations (ITAR), one for improper handling of sensitive documents, and one for making misleading statements to the State Department’s Directorate of Defense Trade Controls (DDTC).

 

RESOLVED: Shareholders request that the Board of Directors provide, within six months of the 2010 annual meeting, a comprehensive report, at reasonable cost and omitting proprietary and classified information, of ITT Industries’ foreign sales of military and weapons-related products and services.

 

Supporting Statement: We believe with the American Red Cross that the “greater the availability of arms, the greater the violations of human rights and international humanitarian law.”

 

Global security is security of all people. Weapons sold to one country can subsequently become a threat to our own security, as we have seen several times in our recent history.

 

We believe that this report will assist shareholders in assessing the effectiveness of newly instituted company procedures to prevent further violations of ITAR.  The ability of our company to grow its military-related business depends upon the highest of ethical standards.

 

Therefore, we believe it is reasonable that the report include:

 

1. Processes used to determine and promote foreign sales;

2. Criteria for choosing countries with which to do business;

3. A description of procedures used to negotiate foreign arms’ sales, government-to-government and direct commercial sales and the percentage of sales for each category; and

4. For the past three years, categories of military equipment or components, including dual use items exported, with as much statistical information as possible; categories of contracts for servicing/maintaining equipment; offset agreements for the past three years; and licensing and/or co-production with foreign governments.

 

We urge a vote in favor of this reasonable resolution.