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Project on Government Oversight

Revolving Door Needs Repair

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May 23, 2008

In a report released earlier this week, the GAO detailed numerous problems and concerns with Defense Department officials going to work for defense contractors. The GAO's study, which didn't focus on ethics violations (see 18 U.S.C. 207 and 41 U.S.C. 423(d)), revealed that the revolving door is spinning with former DOD officials working on defense contracts over which they had oversight responsibilities or decision-making authorities while at DOD. The GAO also found very little accurate data on the revolving door, and a disclosure system that was repealed in the mid-1990s. Specifically, the report found:

In 2006, 52 major defense contractors employed 86,181 of the 1,857,004 former military and civilian personnel who had left DOD service since 2001. This number includes 2,435 former DOD officials who were hired between 2004 and 2006 by one or more of the contractors and compensated in 2006. These officials had previously served as generals, admirals, senior executives, program managers, contracting officers, or in other acquisition positions which made them subject to restrictions on their post-DOD employment. We found 1,581 of the 2,435 former DOD officials--about 65 percent--were employed by seven of the contractors: Science Applications International Corporation (SAIC), Northrop Grumman, Lockheed Martin Corporation, Booz Allen Hamilton, Inc., L3 Communications Holding, Inc., General Dynamics, and Raytheon Company.

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While there may be proper justification for their post-government employment with a contractor, when we extrapolate from this sample, we estimate that at least 422 individuals' post-government employment could have been working on defense contracts under the responsibility of their former agency, office, or command. In addition, we estimate that at least nine individuals could have not been performing services under the same defense contracts for which they had program oversight responsibilities or decision-making authorities while at DOD. The information we obtained from contractors was not designed to identify post-government employment improprieties (such as whether required duration of the restrictions--cooling-off period--had not passed) and contractors provided justification for the employees' work on the contracts for those in the sample. Nonetheless, our results indicate that defense contractors may employ a substantial number of former DOD officials on assignments related to their former DOD agencies or their direct responsibilities.

It was concerning that the contractors only identified 1,263 former DOD officials compared to the 2,435 that were the subject of the GAO study. Because of the risk of conflicts of interest, and the appearance of conflicts of interest, the GAO recommended that the Secretary of Defense determine if changes to procurement policies and additional reporting requirements are needed.

Senator John McCain (R-AZ) and POGO have recommended revolving door changes in the past. Senator McCain has proposed contractor disclosure requirements in previous Defense Authorization bills, only to have them stripped by the House. In 2004, POGO published an investigative report, The Politics of Contracting, which found that individuals move seamlessly between government and contractor positions, potentially subverting the contracting process. Additionally, we found that the system was accepted and entrenched. POGO made many recommendations, including simplifying the complex laws, improving reporting procedures, and closing the loophole allowing former government employees to work for a department or division of a contractor different from the division or department that they oversaw as a government employee.

Hopefully, the latest GAO report will persuade Congress to jam the revolving door and restore some of the public's faith in the contracting process. Critics claim the one bad apple theory, but the more the issue is ignored, the more the public will see one bad orchard.

Founded in 1981, the Project On Government Oversight (POGO) is a nonpartisan independent watchdog that champions good government reforms. POGO’s investigations into corruption, misconduct, and conflicts of interest achieve a more effective, accountable, open, and ethical federal government.

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