The recent civil unrest in Ferguson, Missouri has pushed police militarization into the national conversation. While Americans remain split on the issue, the line between law enforcement and unofficial martial law continues to blur. Earlier this year, the American Civil Liberties Union shed light on research that shows the frequency of SWAT raids has risen 15-fold since the 1980s. An estimated 80% of small towns now have SWAT teams, compared with 20% three decades ago.
This issue raises two obvious questions:
- How do police departments obtain military-grade equipment?
- Who profits as a result?
Hand-me-downs from the U.S. government are the primary driver of police militarization. As the ACLU explains, three federal programs are responsible for the brunt of it: the Department of Defense's 1033-program, Department of Homeland Security grants, and Justice Assistance grants from the Department of Justice.
The DoD's initiative was created in the 1990s to give excess military equipment to state and local police, either for free or close to it. Its original purpose was to be used to combat the narcotics trade and domestic terrorism, but smaller agencies, far removed from either issue, have stocked up in recent years.
More than 2,000 police departments requested equipment through the 1033-program last year, up from 574 requests in 2009, USA Today estimates. Official statistics report the DoD has moved $4.3 billion in military goods during the program's life -- up from $1 million in 1990 to more than $400 million last year.
DHS and JAG grants, meanwhile, can be allocated to items like armored transports, weapons, and officer wages. The former sent $35 billion to police departments between 2002 and 2011, The Economist says.
Who could profit from police militarization?
Police militarization appears to be a boon to some defense contractors. While the government doesn't release transactional data, it's possible to connect the dots enough to determine the companies likely involved.
According to an application that asks law enforcement officials to fill out their equipment preferences, several types of aircraft are available. The helicopters listed are Textron's Bell OH-58, several Huey variants, and the Hughes OH-6. The fixed-wing models mentioned are the Beechcraft C-12, Cessna 172, and Cessna 182, all from Textron. Peers Lockheed Martin, Boeing, and Raytheon are not specifically listed, but each has taken in more than $5 billion from the DoD this year, AeroWeb reports.
The 1033-program also offers police departments a ground vehicle selection that includes AM General's Humvee and the Mine-Resistant Ambush Protected vehicle. The famed MRAP, as it's called, can cost as much as $600,000, and has been manufactured by Oshkosh, Navistar, General Dynamics, and BAE Systems in the past. A third vehicle, used by SWAT teams in particular, is the Lenco Industries BearCat, which can cost up to $300,000 apiece.
A third of all 1033-program equipment is new, according to the Defense Logistics Agency. So while an exact profit breakdown is not available, it's clear some contractors are coming out ahead from police militarization. As the ACLU remarks, "it appears [the federal government] can simply purchase property from an equipment or weapons manufacturer and transfer it to a local law enforcement."
Jake Mann has no position in any stocks mentioned. The Motley Fool owns shares of General Dynamics, Lockheed Martin, Raytheon Company, and Textron. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.