The Politics of Contracting

Related Content: Revolving Door
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June 29, 2004 | By: Scott H. Amey, J.D.

Table of Contents

   Chart 1. Money Spent by the Top 20 Federal Contractors to Influence Decisions and Secure Future Contracts FY 1997 - 2004
   Chart 2. Senior Government Officials Turned Current or Former Contractor Executives, Directors, or Lobbyists 1997 - 2004
   A. When the Revolving Door Undermines Confidence in Government Contracting
      1. Druyun & Boeing
         a. The Tanker Lease
         b. Godmother of the C-17
      2. Aldridge & Lockheed Martin
         a. The Controversial F/A-22
         b. The Space Commission
      3. Heebner & General Dynamics' Stryker
      4. Floyd & Lockheed Martin's HC-130P
      5. Perle & Boeing
   B. Federal Advisory Boards
      1. Defense Policy Board
      2. Defense Science Board
   C. Lobbying: The Retirement Community for Members of Congress
      1. Rep. Robert Livingston (R-LA) (ret.)
      2. Rep. Vic Fazio (D-CA) (ret.)
   D. "Consultants:" Lobbyists by Another Name
   A. Revolving Door Regulations: A Spaghetti Bowl
   B. Revolving Door Loopholes
   C. Recent Presidential Attempts to Slow the Revolving Door
      1. The Bush Administration
      2. The Clinton Administration
      3. Lack of Congressional Oversight
   D. Lack of Enforcement
      1. Agency Oversight
      2. Prosecutions
   Chart 3. Enforcement of the Revolving Door
   E. Revolving Door Violations
   F. Defenders of the Revolving Door
   A. The Revolving Door
   B. Money & Contracting
   C. Federal Advisory Boards
   D. Lobbying
The Politics of Contracting - The Top 20 Contractors
The Politics of Contracting - The Top 20 Contractors - pdf version

I. Executive Summary

Throughout 2003 and 2004, there was extensive media coverage involving Pentagon official, Darleen Druyun, who landed a high-level position with defense contractor Boeing after currying favor with the company through contracting decisions. At the time of her hiring in early 2003, the Project On Government Oversight (POGO) called Druyun's move to Boeing the worst case of the revolving door in recent memory. Yet, her new position received little attention from the media or policymakers, demonstrating a resounding lack of concern for the real and perceived abuses by federal officials going through the revolving door to the private sector. In order to more fully understand the revolving door and political influence that the federal government's top contractors exert over decision-making, POGO launched an investigation and presents its findings here.

POGO examined the current top 20 federal government contractors from January 1997 through May 2004. In FY 2002, those top 20 contractors received over 40% of the $244 billion in total contracts awarded by the federal government. For each of those contractors, POGO's investigation documented campaign contributions, lobbying expenditures, government contract awards, and examples of federal officials moving through the revolving door to those companies. POGO's report provides individual profiles of each company. The primary findings include:

  • By examining corporate press releases and filings, POGO identified 291 instances involving 224 high-ranking government officials who shifted into the private sector to serve as lobbyists, board members or executives of the contractors. POGO found that at least one-third of the high-ranking former government employees who went to work for or to serve on the board of a government contractor were in agency positions allowing them to influence government contracting decisions. Generally, revolving door laws do not apply to the most senior policymakers who ultimately have the most power in shaping programs and policies that benefit contractors.

  • At least two-thirds of the former Members of Congress who are lobbying or have lobbied for the top 20 government contractors served on Authorization or Appropriations Committees that approved programs or funds for their future employer or client while they served in Congress. Those committees included: Armed Services, Appropriations, Intelligence, Ways and Means, and Commerce. Since 1997, Lockheed Martin - the contractor receiving the most federal award dollars - has hired twice as many former Members of Congress than the next closest contractor.

  • In the last three completed election cycles and the current cycle (as of December 2003), the top 20 contractors, and their employees, made $46 million in campaign contributions and spent almost $400 million on lobbying. Their political expenditures have helped to fuel $560 billion in federal contracts. Since 1997, the contractors have spent (on average) 8 cents on campaign contributions and lobbying expenditures for every $100 they have received from the federal government in contract awards. Of course, not all money spent on lobbying and political contributions can be directly tied to government contracts.

  • In FY 2003, out of nearly 23,000 white collar crime or official corruption cases prosecuted by the Department of Justice, only 12 (0.5%) involved revolving door allegations and only two revolving door cases resulted in convictions.

  • Until 1976, government contractors were barred from making contributions to a political party, committee, or candidate for public office.

  • Previously, the Department of Defense (DoD) kept statistics of former civilian and military employees hired by private contractors. In 1996, however, revolving door laws were "simplified" and, as a result, ending any illusion of transparency of DoD's revolving door.

After interviewing government officials and reviewing revolving door statutes, POGO concluded that federal conflict of interest and ethics laws are a tangled mess. Government employees struggle with a decentralized system of ethics laws and regulations - a multiple-layer system so convoluted that ethics officers and specially-trained lawyers hired to enforce them have pushed for a more simplified system.

At the same time, revolving door protections are weakest against abuse by high-level officials. Two of POGO's recommendations would, if implemented, correct flaws in the system, which led to high-profile scandals in recent years:

  • Prohibit, for a specified period of time, political appointees and Senior Executive Service policymakers (people who develop rules and determine requirements) from being able to seek employment from contractors who significantly benefitted from the policies formulated by the government employee.

  • Close 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. That loophole allowed Darleen Druyun to land a well-paid position at Boeing after currying favor with the company for many years in her capacity as a Pentagon procurement official.

POGO has 11 additional recommendations that would correct other revolving door weaknesses.

II. Introduction

Each [executive branch] employee has a responsibility to the United States Government and its citizens to place loyalty to the Constitution, laws and ethical principles above private gain. To ensure that every citizen can have complete confidence in the integrity of the Federal Government, each employee shall respect and adhere to the principles of ethical conduct set forth in this section, as well as the implementing standards contained in this part and in supplemental agency regulations.1

While a worthy goal, the "basic obligation of public service" stated above is undermined by the frequency of government employees leaving to work for federal contractors. Depending on whether the government employee is going to work for a contractor or leaving private industry to work for the government, they are placed in positions when they had or will oversee or regulate their current or former employer. This practice, known as the revolving door, is not a new phenomenon. On May 8, 1965, President Lyndon B. Johnson issued Executive Order (E.O.) 11,222 which instructed agencies to establish "standards of ethical conduct for government officers and employees."2 The purpose of this and other conflict of interest and ethics laws was to protect the integrity of the government's system of buying goods and services from contractors. President Johnson stated that "every citizen is entitled to have complete confidence in the integrity of his [or her] government."3

American taxpayers have witnessed a series of mega-mergers that have transformed large government contractors into a small universe of formidable lobbying and influence-peddling machines. The politics of contracting have become so pervasive and entrenched, even Congress is rarely able to stem its power. Additionally, relaxed federal contracting laws and regulations, and frequently inadequate oversight of the entire contracting system, have added to federal contractors' influence over the way the U.S. government (the largest consumer in the world) buys goods and services. In particular, many unneeded or ill-conceived weapons systems are purchased and sweetheart deals are made because of conflicts of interest that have become endemic to the system.

POGO has examined the top 20 federal government contractors from Fiscal Year (FY) 2002 (view Chart 1 Money Spent by the Top 20 Federal Contractors to Influence Decisions and Secure Future Contracts FY 1997 through 2004).4  

This chart listing the rankings of Chart 1. Money Spent by the Top 20 Federal Contractors to Influence Decisions and Secure Future Contracts FY 1997 through 2004

Since 1997, the federal government has awarded over one trillion dollars to federal contractors. In FY 2002, the federal government spent over $244 billion on contracts for goods and services on behalf of the American public. Over 40% of the $244 billion was awarded to the top 20 federal government contractors. Furthermore, the top 10 contractors received nearly 35% of contract dollars in FY 2002. POGO investigated the top 20 government contractors examining examples of the revolving door, campaign contributions, lobbying expenditures, and government contract award dollars. (Appendix A)

Companies spend an exorbitant amount of money to influence the awarding of government contracts. Since 1997, the top 20 contractors contributed over $46 million in total campaign contributions, of which $25 million was political action committee (PAC) contributions. For example, Lockheed Martin ranks 1st among federal contractors in total campaign contributions since 1997, contributing over $7.3 million, with $3.7 million coming from its PAC. The University of California, which ranks 6th among federal contractors in contract awards, ranks 1st in individual contributions since 1997, contributing $1.4 million.

Contractors also lobby Members of Congress to support future government contracts and favorable laws. Since 1997, the top 20 government contractors have spent over $390 million in lobbying expenditures. General Electric, which ranks 17th among federal contractors in contract awards, ranks 1st in lobbying expenditures since 1997, spending over $84 million.

Although the amounts spent by government contractors on political contributions and lobbying are sizeable, they are a small investment for the return. Since 1997, the top 20 contractors have received nearly $560 billion in government contract dollars - meaning they spent an on average of 8 cents on campaign contributions and lobbying expenditures for every $100 they received from the federal government in contract awards. Lockheed Martin, the largest recipient of contract awards, has spent only 4 cents per every $100 awarded by the government - half as much as the average contractor. Of course, not all money spent on lobbying and political contributions is directly tied to government contracts - for example, contractors seek favorable tax policies and environmental regulations.

Another way contractors gain influence is to hire civil servants or political appointees with access to inside people and information away from their government positions, often offering higher salaries, bonuses, or other inducements. In some cases, highly-skilled and well-connected former senior government officials, many of whom have worked for the Department of Defense (DoD) or in Congress, enter the private sector as executives or lobbyists, or on the boards of directors of government contractors - a practice known as the "revolving door." (Appendix A)

The revolving door has become such an accepted part of federal contracting in recent years that it is frequently difficult to determine where the government stops and the private sector begins. The incidence of senior federal employees going to work for the federal contractors over which they had authority creates six critical problems:

(1) It provides a vehicle for public servants to use their office for personal or private gain at the expense of the American taxpayer;

(2) It creates an opportunity for government officials to be lenient toward or to favor prospective future employers;

(3) It creates an opportunity for government officials to be lenient toward or to favor former private sector employers, which the government official now regulates or oversees;

(4) It sometimes provides the contractor with an unfair advantage over its competitors due to insider knowledge that can be used to the benefit of the contractor but to the detriment of the public;5

(5) It has resulted in a highly complex framework of ethics and conflict of interest regulations. Enforcing these regulations has become a virtual industry within the government, costing significant resources, but rarely, as the record shows, resulting in sanctions or convictions of those accused of violating the rules; and

(6) The appearance of impropriety has two significant negative implications. First, it exacerbates public distrust in government, ultimately resulting in a decline in civic participation. Second, the vast majority of career civil servants do not use their government jobs as stepping stones to high paying jobs with government contractors, and it demoralizes them to see their supervisors and co-workers do so.

The revolving door is a story of money, information, influence, and access - access that ensures that phone calls get through to policymakers and meetings get scheduled. The American taxpayer is left with a system that sometimes compromises the way the government buys goods and services from its contractors. This report will discuss the practice of senior government officials leaving public service to work with government contractors; the complex system of ethics and conflict of interest laws; and the connection between campaign contributions and lobbying expenditures, and contract awards, which creates an appearance that the government is not for the people, but for the biggest contributors.

The DoD, pursuant to 10 U.S.C. §§ 2397-2397c, kept statistics of former civilian and military employees hired by private contractors.6 (Appendix B) However, that statute was repealed in 1996 and, as a result, ending any illusion of transparency of DoD's revolving door. POGO attempted to find current revolving door statistics by contacting the Office of Government Ethics (OGE) and DoD, but both agencies stated that they do not keep those records. Each year there are approximately 2,500 senior government officials and military officers who serve in positions that directly affect government programs and policies.7 Of that pool of employees, POGO focused on those officials who left the government and went to work for the top 20 government contractors - offering a snapshot of the revolving door. Because the government no longer records post-employment statistics, it is unclear whether the revolving door is spinning faster. Nonetheless, it is clear that this is a government-wide problem that has become commonplace. The chart below summarizes the number of former senior government officials who went to work for the top 20 government contractors between January 1997 and May 2004.

Chart 2.

Senior Government Officials Turned Current or Former Contractor
Executives, Directors, or Lobbyists 1997 through 2004

(Based on contract dollars
in FY 2002)
Total # of Executives
Total # of Directors,
or Trustees
Total # of Lobbyists
1. Lockheed Martin
2. Boeing
3. Northrop Grumman
4. Raytheon
5. General Dynamics
6. University of California
7. United Technologies
8. Computer Sciences Corp.
9. Bechtel
10. Science Applications International Corp. (SAIC)
11. Carlyle Group
12. TRW
13. AmerisourceBergen
14. Honeywell International
15. Health Net Inc.
16. British Nuclear Fuels (BNFL)
17. General Electric
18. L3 Communications
19. California Institute of Technology
20. BAE Systems

According to POGO's investigation, at least one-third of the high-ranking former government employees who went to work for or serve on the board of a government contractor were in agency positions allowing them to influence government contracting decisions.

At least two-thirds of the former Members of Congress who are lobbying or have lobbied for the top 20 government contractors served on the Authorization or Appropriations Committees that approved programs or funds for their future employer or client while they served in Congress. Those committees included: Armed Services, Appropriations, Intelligence, Ways and Means, and Commerce. Since 1997, Lockheed Martin has hired twice as many former Members of Congress as the next closest contractor.

POGO's investigation into former senior government officials who work or worked with the top 20 government contractors included employees listed on contractors' web sites, government filings (i.e., Lobbying Reports and Securities and Exchange Commission 10K annual reports), and contractor documents. In addition, POGO contacted government ethics officials at OGE and DoD who provided conflict of interest and ethics guidance and offered suggestions on improving the system.

III. Revolving Door Case Studies

The revolving door is the entry point for many senior government officials leaving public service to work for a private company. In some cases, the door revolves full circle and former government officials reenter government service. The question is: What is it that makes former government officials attractive as a new hire to a federal contractor?

Too often, when it comes to government contracts, "[t]he message is: if you really want to win an important contract, hire someone who has inside information; not necessarily source selection information on the current procurement, but information relating to the predecessor contract or the incumbent contractor. In a close competition, it may prove critical to success, and the risk of adverse action if anyone protests is minimal."8

In an April 19, 2004, Federal Times investigative report on the impact of the revolving door, government officials explained the inherent conflict of interest when government auditors pass through the door to the other side.9 One Defense Contracting Management Agency (DCMA) official stated: "People who have been in those kinds of positions know where the holes are .... They know where we don't have any teeth."10 Another DCMA employee stated that former government employees turn to contractors for one reason: "They're doing it for the money."11

A. When the Revolving Door Undermines Confidence in Government Contracting

The following section includes some of the most troubling revolving door examples that highlight real and apparent conflicts of interest. Only one case, however, has been found to have involved illegality, and that case was only uncovered as an ancillary part of a larger investigation. Instead, these examples reflect the widely accepted relationships that lead to systemic problems with the way the government buys hundreds of billions of dollars of goods and services from its contractors. Because of the prevalence of the revolving door, federal contracting decisions are frequently and almost unavoidably influenced by private and personal agendas, despite enormous government resources committed to compliance with existing laws and regulations.

Inclusion in this report is not meant to suggest illegality or misdeeds. Instead, this report illustrates the frequency and extent to which revolving door relationships - and questionable practices created by them - unduly influence the federal contracting process in a way few outside this clubby system ever realize. The revolving door raises a more difficult, but equally important ethical conundrum: How is the public interest served when many of these relationships and procedures lack the transparency that should characterize all such taxpayer-funded business transactions?

1. Druyun & Boeing 
   a. The Tanker Lease

Darleen Druyun is the poster child for the ills of the revolving door. Druyun supervised, directed, and oversaw the management of the Air Force's weapons acquisition program before she moved through the revolving door to become Boeing's Deputy General Manager for Missile Defense Systems. E-mails between Druyun's daughter and Boeing officials revealed how parties violated the conflict of interest and ethics system.

On January 6, 2003, when Druyun left the government to work for Boeing, POGO issued a press release, stating: "Ms. Druyun is now officially an employee of the company whose interests she so ardently championed while she was supposedly representing the interests of the taxpayers."12 Subsequent disclosures showed that she was negotiating the terms of her Boeing employment while she was handling the Boeing tanker lease, estimated to be worth nearly $30 billion.13

On November 24, 2003, Boeing fired Druyun and Chief Financial Officer Mike Sears in connection with possibly illegal discussions of matters involving Boeing while Druyun was a government employee.

On March 9, 2004, Boeing released an independent review of its procedures and practices for hiring current and former government employees.14 The review, headed by former Senator Warren Rudman, examined Boeing's written policies and procedures and the extent to which company employees followed them. The report found that:

  • Boeing had an "excessive reliance ... on government and former government employees to monitor their own compliance with relevant laws." That reliance created risks for willful violators and those who failed to understand the "complicated" conflict of interest and ethics rules;15

  • Boeing had "erratic maintenance of pre-hire records for new employees" and therefore it could not ensure government employees were disqualified from working on company issues;16

  • Boeing lacked an "effective mechanism for ensuring that government and former government hires undergo appropriate [internal conflict of interest] reviews for changes in position."17

The report concluded that, "through additional training, safeguards, and centralized oversight and control," Boeing could "substantially reduce the chances of a recurrence - and to substantially increase the chances of detecting any recurrence that nonetheless arises before Boeing commits to the employment."18

On April 20, 2004, Druyun pled guilty of conspiracy to defraud the United States, which carries a maximum penalty of five years imprisonment, a $250,000 fine, full restitution, a special assessment, and three years of supervised release.19 (Appendix C)

In February 2004, Secretary Rumsfeld testified that the Department of Defense Inspector General (DoD IG) was expanding its investigation into the possible inappropriate influence exerted by former and current government officials to broker the tanker lease. In addition to investigating Darleen Druyun, the DoD IG is considering expanding its inquiry into whether or not personnel including retired Navy Admiral David Jeremiah and former Air Force Chief of Staff General Ronald Fogleman, both on the Defense Policy Board and both paid Boeing consultants, applied undue pressure to seal the Boeing tanker deal.

b. Godmother of the C-17

While still with the U.S. Air Force, Druyun (who referred to herself as the Godmother of the C-17) was a staunch supporter of the December 2000 proposal to acquire additional C-17 Boeing cargo aircraft under circumstances that would result in a $200 million annual giveaway to the company. The proposal would have made the airlift plane a commercial item, which, in contracting terms, means that the product would be exempt from important contract oversight requirements. Although the acquisition proposal would have been a financial bonanza for Boeing, it would also have ultimately placed billions of taxpayer dollars at risk of abuse.

2. Aldridge & Lockheed Martin
   a. The Controversial F/A-22

Edward C. "Pete" Aldridge is the former Undersecretary of Defense for Acquisition, Technology, and Logistics. He was also head of a DoD review board which made the decision to pursue procurement of the F-22. In January 2003, Aldridge approved the contract for the controversial F/A-22 program.20 Two months later, he secured a position on the Board of Directors of Lockheed Martin - the federal government's top contractor and maker of the F/A-22. On March 15, 2004, the General Accounting Office (GAO) released a report documenting that the cost for the F/A-22 program continues to skyrocket, while DoD failed to justify why this aircraft is needed given current and projected threats.21

b. The Space Commission

On January 27, 2004, President Bush signed an Executive Order establishing the Commission on Implementation of United States Space Exploration Policy. Days later, President Bush announced that Aldridge would chair the nine-member Commission. Senator John McCain (R-AZ) spoke out against Aldridge's appointment, asserting that the former top weapons buyer and current Lockheed board member had too many conflicts of interest to serve as a Commission member. Because Lockheed is one of NASA's largest contractors, Aldridge is placed in a position to influence public policies that could benefit the company he serves. Aldridge remains the chair.

3. Heebner & General Dynamics' Stryker

Army Lt. General David K. Heebner was a top assistant to the Army Chief of Staff, General Eric Shinseki, and played a significant role in drumming up support and funding for Shinseki's plan to transform the Army.

One of the key elements in Shinseki's transformation "vision" was a plan to move the Army away from tracked armored vehicles toward wheeled light-armored vehicles. In October 1999, only three months before Heebner retired, Shinseki's "Army Vision" statement called for an interim armored brigade: "We are prepared to move to an all-wheel formation as soon as technology permits." General Dynamics, which manufactures the wheeled Stryker, was the beneficiary of this new vision, essentially putting United Defense, which produced tracked vehicles, out of the running.

General Dynamics formally announced the hiring of Heebner, as Senior Vice President of Planning and Development, on November 20, 1999, only one month after Shinseki announced his "army vision" and more than a month prior to Heebner's official retirement date of December 31, 1999. The $4 billion Stryker contract was awarded to General Dynamics in November 2000. Heebner was present in Alabama for the April 2002 rollout of the first Stryker and was recognized by Shinseki for his work in the Army on the Stryker project.

The DoD IG investigated Heebner in 2001, and recently stated:

In conducting that review, we found that we had completed a preliminary inquiry into similar allegations regarding LTG [Lieutenant General] Heebner's post-retirement employment over two years earlier. The preliminary inquiry established that, by notice of disqualification dated July 28, 1999, LTG Heebner advised the Army Vice Chief of Staff and the Army Standards of Conduct Office of his intent to seek employment with General Dynamics and eleven other corporations. In providing that notice, LTG Heebner recused himself from participating in official matters that involved any of those corporations.22

4. Floyd & Lockheed Martin's HC-130P

In 1997, Air Force General Bobby O. Floyd led the government's investigation into a fatal HC-130P Hercules plane crash. According to press reports, in October 1998, Floyd was investigating the crash and was contacted by the plane's manufacturer, Lockheed Martin.23 He filed a letter of recusal, which disqualified him from taking any official actions involving Lockheed, in November 1998. Despite that recusal, Floyd continued to investigate the crash until March 1999.24 Despite the appearance of impropriety, the Air Force concluded that Floyd did not violate conflict of interest or ethics laws.25 Floyd then joined Lockheed Martin Aircraft & Logistics Centers in May 1999 as Deputy General Manager of the Greenville Aircraft Center. He was promoted to Vice President and General Manager of the Center in May 2000, then to President and General Manager of Logistics for the Centers in November 2001.

5. Perle & Boeing

Richard Perle served as Assistant Secretary of Defense in the Reagan Administration and was a member of the Defense Policy Board from 1987-2004, serving as its Chair from 2001-2003. He resigned as Chairman in March 2003, after a conflict of interest controversy involving a consulting job he took with the bankrupt telecommunications firm, Global Crossing Ltd.

During the summer of 2003, Perle expressed his support for the Boeing tanker deal - a deal that would direct billions of dollars to Boeing. His support for the tankers came just sixteen months after Boeing committed to invest $20 million with Perle's venture capital firm, Trireme Partners.26

In a recent Washington Post article described Perle as the "ultimate insider" and discussed the inherent nature of the revolving door and the access that it provides. William Happer, a former Energy Department official stated that the revolving door is "an old American tradition, and Richard Perle I think is doing it in an honest way. He's one of hundreds and hundreds who do it."27 Perle denied Happer's characterization that he was hired by any company because of his connection to policymakers. Subsequently, Perle contradicted himself when recounting the role he played in assisting a company in its effort to obtain a foreign contract:

"Was [his contact with foreign ambassadors] a result of my influence? Yeah, it was. It was a result of the fact that they, the people I went to, knew me so they took my phone call."28

B. Federal Advisory Boards

One major conflict of interest and ethics concern is the government's use of advisory committees to formulate new government policies. In many cases, advisory board recommendations have overshadowed the analysis by internal government and independent overseers, such as the GAO. For example, rather than using advisory board recommendations as a secondary resource to evaluate future policies and programs, evaluations by the Defense Policy Board and Defense Science Board have become the definitive solution. As a result, those recommendations are oftentimes implemented by the government.

Trouble arises because, for the most part, advisory committee members [also known as "special government employees" (SGEs)] also concurrently work for federal contractors and, as a result, personal and employer financial interests may be at stake.29 Advisory committee members include former government officials who have passed through the revolving door and other private contractor officials . This "old boys" network creates a shared culture with common values, common ways of thinking, and common economic incentives.

Advisory board members are prohibited from using their official title, position, organization name, or authority associated with their government appointment to imply a government endorsement of any non-federal product, service, or enterprise.30 Nevertheless, advisory board members are in a position where they may support a specific policy that would benefit their private employer. In addition, an advisory committee member has the benefit of being privy to the government's future needs and can advise his or her employer or client about likely future policies or programs.

Despite the possibility that advisory committee policies may be driven by contractors seeking procurement awards, conflict of interest and ethics laws have waiver and exemption provisions for advisory board members. For example, 18 U.S.C. § 207(j) provides exemptions that could apply to advisory committee members and § 208(b) provides exemptions from financial conflict of interest restrictions when the "interest is not so substantial as to be deemed likely to affect the integrity of the services which the Government may expect from such officer or employee."31

Due to the inherent conflict of interest that is created by placing private contractor executives and directors on government advisory boards, POGO examined the members of the Defense Policy Board and the Defense Science Board to determine who passed through the revolving door and therefore had the direct ability to promote government policies that would ultimately provide their employers with contract award dollars.

1. Defense Policy Board

Members of the Defense Policy Board (DPB) are selected by the Undersecretary of Defense for Policy with the approval of the Secretary of Defense. They offer advice and opinions concerning matters of defense policy, including a focus on strategic planning, research, and analysis on weapons systems. DPB members, primarily employed by defense contractors,32 have access to classified information and to senior government policymakers.

The following is a list of current and former (since 1997) DPB members who also serve or served as an executive, board member, lobbyist or consultant for one of the top 20 contractors:

  • Norman A. Augustine, Former Undersecretary of the U.S. Army; Chairman of the Board of Directors of Lockheed Martin

  • Harold Brown, Former Secretary of Defense; Former Secretary of the Air Force; Trustee for California Institute of Technology

  • Former Sen. Daniel R. Coats (R-IN), Lobbyist for Carlyle Group and General Electric (Verner, Liipfert, et al.); Lobbyist for Lockheed Martin (Piper Rudnick - formerly known as Verner, Liipfert, et al.)

  • Admiral William J. Crowe, Jr., U.S. Navy (Ret.), Former Chairman of the Joint Chiefs of Staff; Board of Directors of British Nuclear Fuels; Board of Director of General Dynamics

  • General Ronald Fogleman, U.S. Air Force (Ret.), Former Chief of Staff of the U.S. Air Force; Former Joint Chiefs of Staff; Former Commander-in-Chief of the US TRANSCOM - Commander of the 7th Air Force; Boeing consultant

  • Former Rep. Thomas S. Foley (D-WA), Former Speaker of the House of Representatives; Advisory Board Member for Carlyle Group

  • Admiral David E. Jeremiah, U.S. Navy (Ret.), Member of the National Defense Panel; Member of the President's President's Foreign Intelligence Advisory Board; Member of the National Reconnaissance Office Advisory Panel; Chairman of the National Space Commission; Member of the Defense Science Board Task Force on Human Resources; Member of the Commission to Assess the Ballistic Missile Threat to the U.S.; Former Vice Chairman - Joint Chiefs of Staff; Former Commander-in-Chief of the U.S. Pacific Fleet; Boeing consultant

  • James Schlesinger, Former Secretary of Defense; Former Secretary of Energy; Former Central Intelligence Agency Director; Board of Directors of British Nuclear Fuels

  • Lt. General Jack Sheehan, U.S. Marine Corps (Ret.), Former North Atlantic Treaty Organization Supreme Allied Commander - Atlantic; Former Commander-in-Chief, U.S. Atlantic Command; Bechtel Executive

  • Christopher A. Williams, Former Acting Undersecretary of Defense for Policy, U.S. Department of Defense; Former Special Assistant to the Secretary of Defense; Former Advisor to Senate Majority Leader Trent Lott; Former Deputy Staff Director and Budget Director, Senate Select Committee on Intelligence; Former Professional Staff Member, House Armed Services Committee; Department of Defense Transition Team of President-elect George W. Bush; Executive Secretary of the U.S. Negotiating Group on Space Arms; Executive Secretary of the Special Independent Review of the Strategic Defense Initiative Program; Lobbyist for Boeing and Northrop Grumman (Johnston & Associates)

2. Defense Science Board

The Defense Science Board (DSB) is one of the most influential advisory committees when it comes to defense strategy, as it advises the Secretary of Defense, the Deputy Secretary of Defense, the Undersecretary of Defense for Acquisition, Technology, and Logistics (DATL), and the Chairman of the Joint Chiefs of Staff. The DSB is made up of approximately 35 members and six senior fellow members, all of whom are chosen by the DATL Undersecretary. DSB members have knowledge and experience in the fields of science, technology, and its application to military operations, research, engineering, manufacturing, and the acquisition process. Members work for both defense contractors and the federal government.

DSB advises DoD on defense strategy rather than specific procurement issues. The Board's Charter states: "No matter shall be assigned to the Board for its consideration that would require any Member of the Board to participate personally and substantially in the conduct of any specific procurement or place him or her in the position of acting as a 'procurement official,' as that term is defined pursuant to law." This Charter, not withstanding, the DSB was tasked to review the underlying premises of the Boeing tanker lease.

The following is a list of current and former (since 1997) DSB members who also serve or served as an executive, board member, or lobbyist for one of the top 20 contractors:

  • E. C. "Pete" Aldridge, Jr., Former Undersecretary of Defense for Acquisition, Technology, and Logistics; Board of Directors of Lockheed Martin

  • Herbert W. Anderson, U.S. Army (Ret.), Former Member of President's National Security Telecommunications Advisory Committee; Former Member of Security of the Air Force Advisory Group; Northrop Grumman Executive

  • Norman A. Augustine, Former Undersecretary of the U.S. Army; Chairman of the Board of Directors of Lockheed Martin

  • General Michael P. C. Carns, U.S. Air Force (Ret.), Former U.S. Air Force Vice Chief of Staff; Former Director of Joint Chiefs of Staff; Board of Directors of DynCorp

  • Major General John P. Casciano, U.S. Air Force (Ret.), Former Director of U.S. Air Force's Intelligence, Surveillance, and Reconnaissance; SAIC Executive;

  • John H. Clark, Former Program Manager of the Department of Defense emerging paperless medical logistics supply chain; Former Head of the U.S. Army's Medical Logistics System; SAIC Executive

  • Dr. Robert S. Cooper, Former Board of Directors of Defense Advanced Research Project Agency (DARPA); Board of Directors of BAE Systems

  • Former Rep. Thomas J. Corcoran (R-IL), Lobbyist for General Electric and Lockheed Martin (O'Connor & Hannan)

  • John M. Deutch, Former Director of the Central Intelligence Agency; Former Deputy Secretary of Defense; Former Undersecretary of Defense, Acquisition, and Technology; Board of Directors of Raytheon

  • General Russell E. Dougherty, U.S. Air Force (Ret.), Former Commander-in-Chief of Strategic Air Command; Former Chief of Staff of Allied Command Europe; Board of Directors of DynCorp

  • James W. Evatt, Former Director of Special Programs, DCS Research, Development and Acquisition; Former Director of Low Observable Technology for DoD; Former Commander of the 2nd Bombardment Wing (consisting of B-52, KC-135 and KC-10 aircraft); Former Special Assistant for B-1B, DCS Research, Development and Acquisition; Boeing Executive

  • Jamie S. Gorelick, Member of the 9-11 Commission; Former Deputy Attorney General; Former General Counsel of the Department of Defense; Board of Directors of United Technologies

  • Richard L. Haver, Administration's Transition Team for Intelligence; Former Special Assistant to the Secretary of Defense for Intelligence; Northrop Grumman Executive

  • Robert W. Helm, Former Assistant Secretary of Defense (Comptroller); Northrop Grumman Executive

  • General George A. Joulwan, U.S. Army (Ret.), Former Supreme Allied Commander to Europe; Former Special Assistant to the President; Former Commander-in-Chief of the U.S. European Command; Board of Director of General Dynamics

  • Paul G. Kaminski, Former Undersecretary of Defense for Acquisition and Technology; Board of Directors of General Dynamics

  • Richard J. Kerr, Former Deputy Director of the Central Intelligence Agency; Board of Directors of BAE Systems

  • Donald C. Latham, General Dynamics Executive

  • Lt. General George K. Muellner, U.S. Air Force (Ret.), Former Principal Deputy for the Office of the Assistant Secretary of the Air Force for Acquisition; Boeing Executive

  • Philip A. Odeen, Former Deputy Assistant Secretary of Defense; Former Chairman of the National Defense Panel; Board of Directors of Northrop Grumman

  • William J. Perry, Former Secretary of Defense; Board of Director of United Technologies and Boeing

  • Dr. William Schneider, Jr., Chairman of the Defense Science Board; Member of the Commission to Assess the Ballistic Missile threat to the U.S. (the Rumsfeld Commission); Chair of the Department of State's Defense Trade Advisory Group; Former International Planning Service employee; Former Chair of the President's General Advisory Committee on Arms Control & Disarmament; Former Undersecretary of State for Security Assistance, Science, and Technology; Board of Directors of BAE Systems

  • Albert E. Smith, Former member of the Central Intelligence Agency; Lockheed Martin Executive

  • Admiral William O. Studeman, U.S. Navy (Ret.), Northrop Grumman Mission Systems Executive

  • Major General Jasper A. Welch, Jr., U.S. Air Force (Ret.), Former Defense Policy Coordinator for the National Security Council; Board of Directors of SAIC

C. Lobbying: The Retirement Community for Members of Congress

A lobbyist promotes their clients' agendas by "educating" Members of Congress and using government agency connections to pressure policymakers. Lobbying firms have become the most popular retirement community for former Members of Congress, illustrated by the nearly 90 former Members of Congress hired to lobby for the top 20 government contractors since 1997.

According to a recent study authored by Dr. Adolfo Santos, a Professor of Political Science at the University of Houston, the number of former Members of Congress who have become registered lobbyists jumped from 11 in 1955 to approximately 135 in 1994.33 These are former policymakers with vast government connections - hired guns who know whom to approach in order to promote a contractor's agenda. Dr. Santos asserted:

Of greatest significance is the role of post-congressional lobbying. Those who went on to become lobbyists remained significantly more active during their last term in office than those who did not become lobbyists. Controlling for other factors, post-congressional lobbyists sponsored on average 2.2 more bills than those representatives that did not become lobbyists for the time period and criteria considered. This modest, statistically significant increase suggests that the behavior of members of Congress may be dependent on their post-congressional ambitions. Members of Congress who expect to become lobbyists sponsor more bills during their last term, while those who do not expect to become lobbyists sponsor fewer.34

The occurrence of former Members of Congress and government officials becoming lobbyists has become a Washington institution. The public has become complacent to concerns of influence peddling as can be seen by these two examples of lobby shops - one Republican and one Democratic.

1. Rep. Robert Livingston (R-LA) (ret.)

Former House Appropriations Committee Chairman Robert L. Livingston (R-LA) created his own lobbying firm, The Livingston Group, in 1999. The Livingston Group lobbies for Lockheed Martin, Raytheon, Northrop Grumman (three of the top five government contractors), and General Electric. The Livingston Group's overview boasts: "The firm has an extensive network of over 40 principals, consultants and international associates - including Republican and Democratic former Members of Congress, staff, Administration officials, staff of Governors, other state and local representatives and corporate executives."35 It further claims: "Whether preserving competitive advantages or opening doors to new market opportunities, The Livingston Group's network of experienced consultants, principals and international associates invests a range of core competencies to achieve the client's objectives."36

2. Rep. Vic Fazio (D-CA) (ret.)

Former House Member Vic Fazio (D-CA) and the lobbying firm of Clark & Weinstock present a great example of the influence and access that lobbyists provide to their clients. Fazio, who anchors Clark & Weinstock's Washington, D.C. office, was a senior member of the House Appropriations and Armed Services, Budget, Ethics and House Administration Committees and Chairman of the House Democratic Caucus. He represented Lockheed Martin, General Electric, and Health Net and currently serves on Northrop Grumman's Board of Directors.

Clark & Weinstock's web site declares that it "help[s] clients enhance their relationships and positioning with the institutions, individuals, and audiences that will influence the outcome of business objectives."37 Clark & Weinstock also asserts that its Washington D.C. office "is uniquely positioned to advocate client concerns before the highest levels of the Administration and both Houses of the Congress, including both the Majority and Minority leadership teams."38

D. "Consultants:" Lobbyists by Another Name

Another example of the detriments of the revolving door are illustrated in the recent Boeing tanker lease case. An internal e-mail shows the power wielded by government contractors. Boeing's Vice President of Aircraft & Missiles Programs, Andrew Ellis, sent an e-mail to the President and Chief Executive Officer of the Integrated Defense Systems, Jim Albaugh, which stated that the company was using its paid consultants Donald Fogleman and David E. Jeremiah, who also sit on the Pentagon's Defense Policy Board, to "engag[e] in osd [Office of the Secretary of Defense] circles." The e-mail also stated that Boeing officials had met with Dr. William Schneider, the Chairman of the Defense Science Board, who Ellis believed was supporting the tanker deal and lobbying for it in the Office of the Secretary of Defense. (Appendix D)

The e-mail concluded that Boeing had "ghost" authored several published editorial
Days after the Administration's policy shift, Defense Secretary Donald Rumsfeld ordered the General Counsel's office to investigate whether senior government officials are complying with agency regulations when they seek contractor jobs.

2. The Clinton Administration

One of the most recent dramatic shifts in revolving door policies was temporarily promulgated by President William J. Clinton who strengthened conflict of interest laws on the day of his inauguration, January 20, 1993. By signing E.O. 12,834,52 also known as the "Senior Appointee Pledge," Clinton placed numerous post-employment restrictions on senior executive agency appointees. Specifically, the order extended the one-year ban to five-years, prohibiting former employees from lobbying their former agencies after they left office. Additionally, former employees of the Executive Office of the President (EOP) were prohibited from lobbying any other executive for which that the employee had "personal and substantial responsibility as a senior appointee in the EOP."

On December 28, 2000, one of his last days in office, Clinton revoked the "Senior Appointee Pledge."53 In protest, Senator Charles Grassley (R-IA) stated: "I hope that President Clinton acts in the remaining days of his presidency to reverse the mistake made by revoking the order against the revolving door.... Using the power of the presidency to reverse a policy he put in place to help ensure integrity in government service undermines the public's confidence in political leadership.54

3. Lack of Congressional Oversight

It has been fourteen years since the Congress has looked into the adequacy of restrictions on government personnel, particularly from the Pentagon, taking jobs with contractors. Interestingly, in the five years between 1986 to 1990, the GAO issued six reports on the DoD's revolving door.55 Those investigations determined that the procurement integrity law exempted many former DoD personnel from reporting requirements, that many DoD employees did not file required post-employment reports, and that DoD contractors did not include all former personnel covered by DOD reporting regulations. Furthermore, congressional attempts to strengthen revolving door legislation were defeated.56

D. Lack of Enforcement

For many years, the government's enforcement of revolving door laws has been lax. Several factors appear to contribute to the almost complete absence of criminal investigations and prosecutions in this important area. A major challenge is that federal conflict of interest and ethics laws are complex and ambiguous. Additionally, revolving door violations can be difficult to prove, especially because the communications between the government employee and a future employer are not transparent. It is important to remember that the Druyun/Boeing case was only uncovered because of a related Senate investigation that uncovered internal e-mails. Another factor that limits prosecutions is that government attorneys hesitate to prosecute politically connected and well-funded entities, given the government's relatively limited resources. Moreover, the public has become inured to the revolving door, generally accepting that its practice is simply how things are done.

1. Agency Oversight

Conflict of interest and ethics concerns usually are reported to the government agency for initial review. Therefore, agencies are responsible for investigating and, if necessary, reporting revolving door violations to the Department of Justice (DOJ). A recent study by the Department of Interior Inspector General (DOI IG) illustrates the negligence on the part of agencies in their treatment of conflict of interest and ethics concerns.

The DOI IG stated that it "found both evidence of and the perception that [DOI's] leadership did not take ethics seriously."57 The report further stated that the conflicted government employee is "ultimately responsible for ensuring compliance with a recusal agreement," but neither they nor agency ethics screeners "received adequate training or reliable advice."58 The DOI IG concluded:

Framed in the context of a train wreck waiting to happen, the Department of the Interior was presented with its most complex set of ethical issues with Mr. J. Steven Griles' appointment,59 at a time that, following years of neglect, demise, and compartmentalization, the ethics program was wholly incapable of addressing them.

As with most political appointees, Mr. J. Steven Griles likely viewed himself as an honest advocate of his administration's agenda. Since political appointees tend to believe that they are good people doing good things for the American public, they sometimes characterize any reasonable review or critique of their ethical behavior as prompted by partisan politics. The federal ethics rules are designed, when properly executed, to both guide and protect the well-intentioned political appointees. Fortunately, the threshold for the criminal ethics statutes is high enough to prevent most appointees from ever reaching it. The most difficult area, however, is the expansive gray area in between, that of "appearances."

Time and time again, the Office of Inspector General has heard from those charged with providing political appointees at the Department with ethical advice that appearance concerns are left to the appointee, reasoning that the appointee is in the best position to make those determinations. This myopic view presumes that the neophyte political appointee fully understands not only the federal government's byzantine ethical standards but also fully appreciates and understands the "fishbowl" mentality of Washington, D.C.

By answering ethics questions from a purely legal perspective, the provider of such advice builds in an inherent defense, should such advice subsequently fail to protect. The resulting disservice to a political appointee is profound. After all, it is not the career of the ethics official or advising SOL attorney that is on the line.

Between the Ethics Office and SOL, the combined failure of the ethics "team" in the Department to provide rigorous ethics advice to the political leadership - leaving them, instead, to assess appearance concerns from their own, subjective perspective, rather than that of the "reasonable person" - is, at once, both cowardly and disingenuous. Unfortunately for the appointee, the "reasonable person" standard is a much harsher judge of their conduct than is their well-intentioned subjective perspective. And thus, Mr. Griles and others now find themselves in a highly defensive posture against a cacophony of charges - even if no actual conflicts are found, the cries against the appearance of conflicts of interest drown out any acquittal - when solid, courageous, thorough advice at the outset might well have prevented these appearance problems altogether.

The wholesale failure of the ethics program at the Department emanates from a fundamentally flawed design crafted over time by a cast of negligent architects. Unfortunately, it also threatens to leave a trail of fallen political appointees in its wake.60

2. Prosecutions

Even when agencies are on top of conflict of interest and ethics issues, little action is taken by federal prosecutors. The number of revolving door investigations, prosecutions, and convictions that have been initiated in recent years are documented by DOJ data obtained under the Freedom of Information Act by the Transactional Records Access Clearinghouse (TRAC).61 The government entities theoretically responsible for enforcing revolving door laws include DOJ, the Federal Bureau of Investigations (FBI), agency Inspectors General, and OGE.62

As illustrated below in Chart 3, during the last nine years only a small handful of revolving door cases have been initiated, let alone resulted in a conviction. Although the total number of revolving door cases is minimal, the downward trend for this nine-year period is notable. Despite the increase in the number of total referrals and convictions for all federal matters, there is a significant decline in the number of revolving door referrals. In the most recent available year, FY 2003, of the 153,399 matters referred for prosecutions in federal court for any crime, over 22,785 involved white collar crime and official corruption. Out of those subcategories, only 12 (.05%) involved revolving door allegations and only two revolving door cases resulted in convictions.

Chart 3.

Enforcement of the Revolving Door
Fiscal Year
Referrals for Prosecutions (Official Corruption & White Collar Crime) 35,549 29,196 26,983 25,699 24,956 23,876 23,808 21,925 22,785
Referrals for Prosecution (Revolving Door)63
Referrals with Prosecution Declined (Revolving Door)64
Convicted After Prosecution (Revolving Door)

Also troubling is that the government declined to prosecute nearly all (28 out of 30) of the revolving door cases. Of those declined cases, approximately eight were disposed of after an investigation lasting no longer than one hour and fourteen were dropped because of lack of evidence of criminal intent or weak/insufficient admissible evidence. For a case to make it out of an agency and be formally referred to DOJ for prosecution is a significant step. Clearly the agency concluded that there was sufficient evidence to make the referral. A question worth exploring is why the DOJ found such a significant proportion of these referrals not worthy of prosecution.

E. Revolving Door Violations

Despite the loopholes in the current revolving door laws, there have been a few successful prosecutions. The following cases, which involve three of the top 20 contractors, were prosecuted by the DOJ:

  • 2001 - Jon D. Glassman, the former State Department Deputy for International Coordination of the Task Force for Military Stabilization in the Balkans, paid $10,000 for violating the one-year ban on contacting the U.S. Embassy in Bosnia. At the time of the violation, Glassman was working for Northrop Grumman and was promoting air defense radar systems.65

  • 2000 - Mark A. Boster, the former Deputy Assistant Attorney General of the Justice Department's Information Resources Management Office, paid a $30,000 settlement for communications he made with his former office while working for Science Applications International Corporation (SAIC).66
  • 1999 - Allen L. Krum, a Senior Intelligence Service employee assigned to the CIA's National Reconnaissance Office (NRO), paid a $48,700 settlement for taking action in a contracting matter with Lockheed Martin in which his wife received Lockheed stock that earned her a $48,700 profit.67

F. Defenders of the Revolving Door

Defenders of the revolving door point out that there is nothing inherently improper or illegal when a contractor hires a former government official. Steven Kelman, a former Administrator for the Office of Federal Procurement Policy in the Office of Management and Budget, left the federal government for a teaching position at Harvard University. Since leaving government service, Kelman has become one of the more prominent proponents for the so-called "benefits" that the revolving door provides to the American taxpayer. Kelman, himself, is a lobbyist for Accenture (formerly Andersen Consulting), a recent entry into the government contracting big leagues.

Kelman argues that "the government is better off because many contractors (particularly in the defense and information technology industries) have significant numbers of ex-government employees."68 Kelman bases his opinion on two premises: that "post-employment opportunities based on knowledge of the government one has gained increases the attractiveness of government service for talented people," and that "the presence of these ex-employees increases the odds a contractor will perform well and deal honestly with its government customer."69 He admits, however, that an ex-government employee's "presence on a contractor team surely does make it easier for the contractor to win business from those at the agency who knew, or knew of, the ex-employee."70 Subsequently, Kelman asserts: "This shouldn't be seen (until proven otherwise) as unjustified 'cronyism.' For it to be unjustified, the contract would need to be awarded to the firm without good reason to expect that contractor, with the ex-employee involved, would provide the best value for the governmentt."71

In Washington Post editor Steven Pearlstein's July 7, 2003 column, entitled "A Revolving Door? So What?," he dismisses the revolving door phenomenon as a threat to good government, instead hailing it as a practical competitive solution for awarding government defense contracts.72 He bases his argument on the following assertions. First, the revolving door is so prevalent that no single federal contractor has an advantage over another. Second, the government contracting system works better because procurement officials go to work for contractors. Third, although the United States' defense arsenal is "hardly cheap, [it] is unmatched anywhere else in the world."73

Despite those assurances, POGO's investigation provides examples where questionable decisions have been linked to the revolving door and do not serve the federal government or the taxpayer well. and, in fact, makes it difficult for the public to determine where the government stops and the private sector begins.


Corporations contracting with the federal government received $244 billion dollars in contract awards in FY 2002, to provide the government with goods or services to support the United States' military and civilian needs. For example, since FY 1997, Lockheed Martin has received contract awards totaling $141 billion. (Appendix A) One factor that may influence contract awards is the amount of money spent by contractors to guarantee future government business. depicts the large sums of money that are contributed to federal candidates by the top 20 federal contractors, their total lobbying expenditures, and their contract awards. For example, since 1997, Lockheed Martin ranks first in total campaign contributions (contributing over $7.3 million) and contract awards (receiving over $141 billion).

The statistics leave the impression that by supporting Members of Congress and lobbying for certain programs or laws, government contractors can secure billions of dollars in government business. Indeed, if these expenditures did not result in more federal dollars flowing to the contractor, why else would they spend these millions?

The days when government contractors were barred from making contributions to a political party, committee, or candidate for public office were not that far in the past. That ban was the law of the land until 1976.74 Violations of the law resulted in a fine up to $5,000, imprisonment for up to five years, or both.75 The provision disallowing government contractors from making political contributions prevented:

1. The use of federal funds for political purposes;

2. Contractors from using money to obtain a contracting windfall; and

3. Corruption and bribery of federal officials.

In 1976, however, Congress amended the law prohibiting government contractors from making campaign contributions.76 The change allowed government contractors to establish a "separate segregated fund ... for the purpose of influencing the nomination for election, or election, of any person to Federal office."77 In other words, although a contractor is prohibited from making campaign contributions from company coffers, the contractor may form a PAC, which collects "voluntary" employee donations and then makes contributions to federal candidates. In addition to PAC contributions, contractor stockholders, officers, and employees may make individual contributions (not exceeding $2,000 for the primary and general election for a total of $4,000 per election cycle) to a federal candidate.78 These contributions are identified as coming from that individual's employer, allowing the company to "take credit" in the eyes of the candidate. Therefore, federal contractors distribute hundreds of thousands of dollars in campaign contributions including PAC contributions, individual contributions, and, until the 2004 election cycle, soft money contributions.79 In 2002, the McCain-Feingold Act (the Bipartisan Campaign Reform Act) banned soft money contributions. The United States Supreme Court upheld the soft money ban in 2003.80


A. The Revolving Door

1. Simplify the complex system of laws, Executive Branch regulations, department and agency regulations, executive orders, and agency directives that add ambiguity to government ethics laws. Repeal the multi-tiered system of laws and regulations and incorporate required provisions in a clear and consistent model rule of ethical conduct for the entire federal government;

2. Prohibit, for a specified period of time, political appointees and Senior Executive Service (SES) policymakers (people who develop rules and determine requirements) from being able to seek employment from contractors who significantly benefitted from the policies formulated by the government employee;

3. Require government officials to enter into a binding revolving door exit plan that sets forth the programs and projects from which the former employee is banned from working. Like financial disclosure statements, these reports should be filed with the Office of Government Ethics and available to the public. This requirement would benefit government employees who are unaware of or confused by post-government restrictions or who have multiple post-employment bans covering different time periods. It would also enhance public trust in the government;

4. Require recently retired government officials and their new employers to file revolving door reports attesting that the former government employee has complied with his or her revolving door exit plan;

5. Prohibit government employees from overseeing or regulating their former private sector employer;

6. Close the loophole that allows 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;

7. Establish an Executive Branch-wide law for federal government employees, requiring notification of recusal or disqualification to a supervisor;

8. The Office of Government Ethics should provide enhanced oversight of private sector employees who enter public service. Those types of revolving door cases should receive enhanced oversight because government officials may be placed in positions in which they regulate or oversee programs and policies that may affect their private employer.

B. Money & Contracting

1. Congress should restore the pre-1976 prohibition on contractor campaign contributions thereby assuring the American public that contractors' contributions are not driving contracting decisions.

C. Federal Advisory Boards

1. Remove or modify conflict of interest and Freedom of Information Act exemption and waiver provisions for advisory board members and ensure that unclassified portions of board meeting minutes are publicly available; and

2. Enact Executive Branch-wide law requiring federal advisory committee members to recuse or disqualify themselves from any discussion on matters where they or their private employer or client have a significant financial interest. This disclosure or recusal statement, including name, title and employer should be filed with the Office of Government Ethics and made publicly available;

D. Lobbying

1. Increase the one-year ban on lobbying for Members of Congress and their senior staffers who have a nexus between authorizations or appropriations authority over their post-government employer; and

2. Paid contractor consultants should be required to register with the Office of Government Ethics. Many former government employees are hired to promote a contractors agenda and the current system does not prove any transparency of those actions.


The Project On Government Oversight would like to thank all those who have helped compile information used in this report.

Nadia Asancheyev
Rebecca Kleinman
Jane Black
Seth Morris
Jill Carlson
Political Money Line
Center for Responsive Politics
Lauren Robinson
Jacob Dagger
Caleb Rowe
Chuck Detling
Nick Schwellenbach
Ella Hoffman
Anay Shah
Amelia Kegan
Transactional Records
Access Clearinghouse
Sam Widdoes







Appendix A  The Politics of Contracting

Appendix B  Pentagon "revolving door" turning faster: Hiring of top officials by contractors up 491%, Cleveland Plain Dealer, Aug. 17, 1986.

Appendix C  Plea Agreement and Statement of Facts, United States v. Druyun, Apr. 20, 2004.

Appendix D  Boeing E-mail from Andrew K. Ellis to Jim Albaugh, Jan. 23, 2003.

Appendix E  Journalistic Integrity: Full Disclosure, Defense News, Nov. 3, 2003.

Appendix F  Summary of Federal Conflict of Interest and Ethics Laws.


1. 5 C.F.R. § 2635.101(a) (2004) ("Basic obligation of public service").

2. See 48 C.F.R. § 3.101-3(a) (2004).

3. Exec. Order No. 11,222, 30 Fed. Reg. 6439 (May 8, 1965), available at

4. Top 200 Government Contractors, Government Executive Magazine, Aug. 2003, at 24, available at

5.An unfair advantage can extend beyond the narrow legal definition in 48 C.F.R. § 9.505(b) (2004), which states:

[A]n unfair competitive advantage exists where a contractor competing for award for any Federal contract possesses --
(1) Proprietary information that was obtained from a Government official without proper authorization; or
(2) Source selection information (as defined in 2.101) that is relevant to the contract but is not available to all competitors, and such information would assist that contractor in obtaining the contract.

6. John S. Long, Pentagon 'revolving door' turning faster: Hiring of top officials by contractors up 491%, Cleveland Plain Dealer, Aug. 1986, at 25.

7. The 2,500 senior government officials include military officers ranking O-7 and above, DoD Senior Executive Service (SES) officials (including the Office of the Secretary of Defense, Air Force, Army, and Navy), and presidential appointees, available at,, and

8. Lieutenant Colonel Richard B. O'Keeffe, Jr., Where There's Smoke ... Who Should Bear the Burden When a Competing Contractor Hires Former Government Employees?, 164 Mil. L. Rev. 1, 22 (2000), available at

9. David Phinney, Defense's Revolving Door: When Managers Join Contractors, Good Oversight Takes a Hit, Auditors Say, Federal Times, Apr. 19, 2004, available at

10. Id.

11. Id.

12. POGO Alert - The Pentagon's Self-Proclaimed "Godmother of the C-17" Takes a Top Position with the Aircraft's Manufacturer, January 6, 2003.

13. See CRS Report for Congress, The Air Force KC-767 Lease Proposal: Key Issues for Congress, Aug. 29, 2003, at 6.

14. Paul, Weiss, Rifkind, Wharton, & Garrison LLP, A Report to the Chairman and Board of Directors of the Boeing Company Concerning the Company's Policies and Practices for the Hiring of Government and Former Government Employees, Feb. 26, 2004, available at; see

15. at 28-29.

16. Id. at 30.

17. Id.

18. Id. at 35.

19. Plea Agreement, United States v. Druyun, No. 04-150-A (E.D. Va.) (Druyun was released on $25,000 personal-recognizance bond and her sentencing is set for Aug. 6, 2004).

20. In 2002, the Air Force changed the designation of the F-22 to the F/A-22 Fighter.

21. GAO, Tactical Aircraft: Changing Conditions Drive Need for New F/A-22 Business Case, GAO-04-391 (Mar. 15, 2004), available at

22. Letter from Joseph E. Schmitz, DoD Inspector General, to the Honorable Todd Russell Platts (Feb. 11, 2004) p. 1.

23. Bryan Denson, Air Force Finds No Violation In King Inquiry, The Oregonian, May 25, 1999, at E01.

24. Id.

25. Id.

26. David S. Hilzenrath, Perle Article Didn't Disclose Boeing Tie, The Washington Post, Dec. 5, 2003, at E1.

27. David S. Hilzenrath, The Ultimate Insider: Richard N. Perle's Many Business Ventures Followed His Years as a Defense Official, The Washington Post, May 24, 2004, at E9.

28. Id.

29. 18 U.S.C. § 202(a) (2004) ("'Special government employee' shall mean an officer or employee of the executive or legislative branch of the United States Government, of any independent agency of the United States or of the District of Columbia, who is retained, designated, appointed, or employed to perform, with or without compensation, for not to exceed one hundred and thirty days during any period of three hundred and sixty-five consecutive days, temporary duties either on a full-time or intermittent basis"; see DoD Directive 5500.7-R - Joint Ethics Regulation (JER) ch. 1-232 (1996) (defining special government employee), available at

30. 5 C.F.R. § 2635.702; DoD JER 5500.7-R ch. 3-209 (1997).

31. 18 U.S.C. §§ 207(j)(1) (working for the U.S. government); 207(j)(4) ("special knowledge" of a topic); 207(j)(5) ("exception for [providing] scientific or technological information"); 207(k)(1)(A) (presidential waivers); 208(b)(1) ("interest is not so substantial as to be deemed likely to affect the integrity of the services which the Government may expect from such officer or employee"); 208(b)(2) ("the financial interest has been exempted from the requirements ... as being too remote or too inconsequential to affect the integrity of the services of the Government officers or employees to which such regulation applies;"); 208(b)(3) (exemption for "special government employees" serving on an advisory committee within the meaning of the Federal Advisory Committee Act (codified by 5 U.S.C. Appendix 2)); and 208(d)(1) (exemptions for SGEs should be available to the public).

32. Defense Policy Board Advisory Committee Charter (Aug. 31, 2003) ("Membership will consist primarily of private sector individuals with distinguished backgrounds in national security affairs, but may include no more than four (4) government officials."), available at

33. Dr. Adolfo Santos, Post-Congressional Lobbying and Legislative Sponsorship: Do Members of Congress Reward Their Future Employers?, LBJ Journal of Public Affairs, Vol. 16, Issue 1, Fall 2003, at 56-57, available at

34. Id. at 61.

35. See

36. See

37. See

38. Id.

39. Journalistic Integrity: Full Disclosure, Defense News, Nov. 3, 2003, at 28.

40. Major Kathryn Stone, The Twlight Zone: Postgovernment Employment Restrictions Affecting Retired and Former Department of Defense Personnel, 142 Mil. L. rev. 67, at 136-137 (1993).

41. DoD JER 5500.7-R ch. 1-100 (1994), available at

42. DoD JER 5500.7-R ch. 1-500 (1994), available at

43. 41 U.S.C. § 423 (2004).

44. 18 U.S.C. § 207 (2004).

45. 18 U.S.C. § 208 (2004).

46. 41 U.S.C. § 423(d)(2); see 48 C.F.R. § 3.104-3(d)(3) (2004) (allowing former government officials to work for a "division or affiliate" different from that which the official worked with during their government service).

47. 5 C.F.R. § 2635.604(a) (2004) ("Obligation to disqualify").

48. 18 U.S.C. § 208; see 5 C.F.R. §§ 2635.402(c)(1)-(2), 2635.502(e)(1)-(2), 2635.604(b)-(c) (2004) (all providing that employees with conflicts "should notify the person responsible for his assignment.... an employee may elect to create a record of his actions by providing written notice to a supervisor or other appropriate official."). (Emphasis added).

49. 5 C.F.R. §§ 3601.105(a)-(c) (2004) (providing that disqualifying financial interests, disqualification to ensure impartiality, and disqualification from matter effecting prospective employees, employees "shall [despite provisions in 5 C.F.R. §§ 2635.402, 502, 604] provide written notice of disqualification to his supervisor upon determining that he will not participate in the matter"). (Emphasis added).

50. Andrew H. Card, Jr., Assistant to the President and Chief of Staff, Memorandum for the Heads of Executive Departments and Agencies, Policy on Section 208(b)(1) Waivers with Respect to Negotiations for Post-Government Employment, Jan. 6, 2004, at 1.

51. Id. at 1-2.

52. Exec. Order 12,834, 58 Fed. Reg. 5911 (Jan. 20, 1993).

53. Exec. Order 13,184, 66 Fed. Reg. 697 (Dec. 28, 2000).


55. See DOD Revolving Door - Many Former Personnel Not Reporting Defense-Related Employment (GAO/NSIAD-86-71, Mar. 1986), available at, DOD Revolving Door - Relationships Between Work at DOD and Post-DOD Employment (GAO/NSIAD-86-180BR, July 1986), available at, DOD Revolving Door - Post-DOD Employment May Raise Concerns (GAO/NSIAD-87-116, Apr. 1986), available at, Implementation of the DOD Revolving Door Legislation, Statement by Martin M. Ferber, Director Manpower and Logistics Issues, National Security and International Affairs Division (GAO/T-NSIAD-89-17, Mar. 15, 1989) available at, DOD Revolving Door - Processes Have Improved but Post-DOD Employment Reporting Still Low (GAO/NSIAD-89-221, Sept. 1989), available at, DOD Revolving Door - Few Are Restricted From Post-DOD Employment and Reporting Has Some Gaps (GAO/NSIAD-90-103, Feb. 1990), available at

56. Multiple revolving door acts were proposed which attempted to expand coverage of post-employment restrictions on government officials. See H.R. 2160, 108th Cong. (2003); H.R. 3434, 104th Cong. (1996); H.R. 1576, 104th Cong. (1995); H.R. 3941, 103d Cong. (1994); H.R. 1593, 103d Cong. (1993); H.R. 1201, 99th Congress (1985).

57. U.S. Department of the Interior, Office of Inspector General, J. Steven Griles, PI-SI-02-0053-I, Report of Investigations (2004), p. 138, available at and

58. Id. at 141-42.

59. See also id. at 3 (J. Steven Griles is the Deputy Secretary of the Department of Interior (DOI). Prior to his appointment in July 2001, Griles lobbied for numerous energy and environmental industry groups, which he now oversees).

60. Id. at 143-44.

61. TRAC is a data gathering, data research and data distribution organization associated with Syracuse University. "The purpose of TRAC is to provide the American people and institutions of oversight such as Congress, news organizations, public interest groups, businesses, scholars and lawyers with comprehensive information about federal staffing, spending, and the enforcement activities of the federal government." Available at

62. OGE is also responsible for the procedures and requirements that order certain executive branch employees to file financial disclosure statements. 5 U.S.C. §§ 101-11 (2004); see 5 C.F.R. §§ 2634 (2004) et seq.

63. TRAC's search included the government's most prevailing revolving door laws, including 18 U.S.C. § 207 (2004) (restricting post-government employment), 208 (2004) (prohibiting certain financial interests), 216 (2004) (the "punishment for an offense under section [18 U.S.C. §§] 203, 204, 205, 207, 208, or 209") and 41 U.S.C. § 423 (the "Procurement Integrity Act").

64. The referrals disposed of in the specified year include referrals received in prior years that have not had a disposition and therefore "referrals with prosecution declined" exceed "referrals for prosecution."

65. See

66. See

67. See

68. Steven Kelman, Evolving Door, Government Executive, Mar. 2004, at 65.

69. Id.

70. Id. at 66.

71. Id.

72. Steven Pearlstein, A Revolving Door? So What?, Washington Post, July 7, 2003, at E01.

73. Id.

74. Pub. L. No. 92-225 § 611(a), 86 Stat. 10-11 (1972).

75. Id. at § 611(b).

76. Pub. L. No. 94-283 § 322, 90 Stat. 492-93 (1976).

77. Id. at § 322(b); see 2 U.S.C. § 441c(b) (repealed), 11 C.F.R. § 115.3(a) (2004).

78. 11 C.F.R. § 115.6 (2004).

79. "Soft money contributions are supposed to be used only for state and local political activities - such as voter registration, get-out-the-vote drives, and bumper stickers - and for such generic party-building activities as TV ads supporting the Democratic and Republican platforms, but not naming specific candidates. Typically, however, the funds pay for much more - including office overhead, the purchase of expensive computer equipment, and other behind-the-scenes expenses - thus freeing up other contributions to the party to be used directly to support candidates." The Center for Responsive Politics, available at

80. McConnell v. Fed. Election Commn., 540 U.S. ___, 124 S. Ct. 619, 157 L. Ed. 2d 491 (2003), available at

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