In Search of Pentagon Officials Not Captured by Industry

President-elect Joe Biden promises the “most ethically rigorous administration in American history,” according to a spokesman. But with the nomination of retired general and Raytheon board member General Lloyd Austin III as secretary of defense, the strength of that promise is quickly faltering. And while some may see concerns about industry ties as a purity test, we’ve seen that disregard from presidents and Congress for these concerns creates preventable problems and encourages the revolving door between the Pentagon and the defense industry to continue to spin with impunity.

First things first: Secretaries of defense who came from the defense industry were a rarity. As the New York Times recently pointed out, until the Trump administration we hadn’t had a secretary of defense come directly from a major defense contractor for 30 years (going back to the Reagan administration, when Defense Secretary Caspar Weinberger came from Bechtel). Presidents seemed to have little trouble finding qualified candidates from Congress, the non-defense business community, or other executive branch offices. That’s one of many reasons it’s so disappointing that the top three names the incoming Biden administration floated to lead the world’s most expensive military sat on boards of major defense contractors.

Austin, the nominee who won Biden’s approval, marks an important milestone in choosing the first Black man to lead the Department of Defense. It’s a change that’s overdue, and particularly poignant as the military continues to confront systemic racism. The lack of diversity in national security leadership is a major problem that must be confronted. Prior to the incoming Biden administration, neither a woman nor a Black person had ever been nominated for this role. All three of Biden’s main choices were attempts to address this disparity. The lack of racial diversity is acutely evident in Congress in general, and even more so on the committees that are tasked with overseeing the department.

But Biden’s nomination of Austin also raises a number of concerns. First, he sits on the board of Raytheon, one of the top five contractors for the Department of Defense. In that role he has received $1.4 million in compensation since joining the board in 2016. He is also a partner at Pine Island Capital Partners, a private equity firm that boasts “a group of deeply-connected and accomplished former senior government and military officials.” In layman’s language, they leverage the revolving door between the government and private sector to try to get more contracts for their clients. When it comes to conflicts of interest, Austin will have to divest his financial interests in, and recuse himself from matters involving, Raytheon and other defense companies he’s worked with. In the case of Raytheon, that recusal is becoming increasingly difficult as the defense behemoths consolidate, and the vast majority of contract dollars goes to fewer companies. Just this year Raytheon completed its merger with United Technologies, another giant in the defense world, further reducing the number of defense contractors.

Recusal isn’t a panacea. During the Trump administration, then-Deputy Secretary of Defense Patrick Shanahan, a former Boeing executive, admirably committed to not only recuse himself from Boeing matters for the required cooling-off period, but also for as long as he served in the Department of Defense. As we wrote at the time, his connections to Boeing raised a number of potential conflict issues. And soon enough, he was accused of being biased in favor of his former company when he made accurate criticisms of Lockheed Martin’s F-35 production, and was later investigated by the Department of Defense inspector general for his remarks. Though he was cleared, the perception of bias undermined his credibility and authority, as well as the credibility of the department.

In some cases, maneuvering around ethical restrictions was so insurmountable that a waiver was issued. That’s what happened with William Lynn, the first deputy secretary of defense under President Barack Obama. Obama pledged he wouldn’t have any lobbyists in his administration, and then he nominated former Raytheon lobbyist Lynn, issuing him the first waiver. (Lynn wasn’t the only one; the Washington Post counted 65 former lobbyists in the Obama administration as of August 2014.) It’s little surprise that when Lynn left the government he went right back into the defense industry as the chief executive officer for DRS Technologies, which, while not a top contractor, still did $1.1 billion in business with the Pentagon the year Lynn joined the company.

Insufficient transparency regarding conflicts can also raise questions. While it never came up in Jim Mattis’s confirmation hearing for the secretary of defense position, it turned out he was an unpaid military advisor to the United Arab Emirates. Had that information been in the public record (Mattis’s spokesperson claimed the Senate Armed Services Committee knew through confidential disclosure forms, but the committee did not confirm that to POGO), the committee might have asked how that relationship might inform his perspective on U.S. support of the war in Yemen, for example. He was also on the board of General Dynamics—another top-five defense contractor—and although that was in the public record, there was still very little scrutiny of that potential conflict of interest. It’s unsurprising that he boomeranged right back to General Dynamics’ board after he resigned from the Defense Department. He also joined the Cohen Group, a business consulting group with a number of defense and aerospace companies for clients, as a senior counselor. As the Huffington Post reported, while it’s not clear if he’s being paid for it, he is lobbying Congress on behalf of the group in support of a $23 billion arms sale to the United Arab Emirates.

To be sure, we’re not arguing against having any former industry representatives in government service. Officials can use their industry experience to become vigilant watchdogs on behalf of taxpayers. For example, former Raytheon executive Shay Assad’s pursuit of reforms to help reduce costs helped make him “the most hated man in the Pentagon.” That’s why our top recommendations for how to handle revolving door issues are disclosure of potential conflicts, recusal, and transparency around any waivers.

But the Lynn and Mattis cases show that current ethics laws and executive orders are far from sufficient to stop senior Pentagon officials from seeming to trade on their status and access for their private gain. If Austin does the same, he will continue the corrosion at the Pentagon.

The other significant issue is that Austin is only recently retired and has not been out of the military for the required seven years. Civilian control of the military is a bedrock principle of our democracy and built into our Constitution, and his nomination does not align with that. For him to serve as Pentagon chief, Congress would need to waive the cooling-off requirement. As many others have pointed out, that prohibition should not be waived except under extraordinary circumstances. As the Congressional Research Service points out, the Founding Fathers felt a “desire to ensure that the military reflected, and was subordinate to, the will of the people.” Selecting leaders from the ranks of the recently retired could entice more military officers to lobby for political jobs and further risk blurring the lines between military and political service. It also raises questions about whether someone who spent their career obeying the orders of the commander-in-chief will be able to speak truth to power when they disagree with the president. Elevating a general to a civilian position also continues what the bipartisan, and hardly dovish, National Defense Strategy Commission called an “unhealthy trend in which decision-making is drifting away from civilian leaders on issues of national importance.”

In an article explaining his decision, Biden says “the next secretary of defense will need to immediately quarterback an enormous logistics operation to help distribute COVID-19 vaccines widely and equitably.” If this is what the president-elect was looking for, surely there are people outside of the defense industry with such expertise.

There has been a lot of nonsense in defense of the new normal, including that corruption and industry capture is “the price you pay” for selecting experienced and qualified people. But failing to strengthen ethics laws and close myriad loopholes is clearly exacerbating the problem, and it is creating the impression that the only legitimate candidates must have defense industry experience to be qualified. To the contrary, successful past choices show that the pool of candidates can and should be much larger. We don’t expect our officials to be pure, but we don’t think it’s unreasonable to expect transparency, integrity, and civilian control of our federal government and military.

The Department of Defense has a critical mission. That said, it receives a disproportionate amount of taxpayer dollars. It’s important to make sure that we have a system for making national security and spending decisions that avoids even the appearance of conflicts of interest.

In the past we have not opposed nominees with ties to industry because we thought the conflicts of interest posed by those ties could be managed. Increasingly, it looks like that hope is unrealistic. Officials with such deep and enduring ties to the defense industry are unlikely to be able to adequately avoid potential conflicts of interest.