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The Pentagon’s Revolving Door Keeps Spinning: 2021 in Review

(Illustration: Renzo Velez / POGO)

The revolving door is commonplace at the Pentagon, where many government officials tasked with overseeing the purchase of weapons systems and equipment go on to work for companies in the private sector — the same companies that design and build this equipment for our armed forces. In a review of the limited information available to the public about the Pentagon’s revolving door activity for 2021, the Project On Government Oversight (POGO) identified a total of 36 individuals who left the Pentagon to join private defense or defense-adjacent firms. Defense contractors that hired former Pentagon officials received over $89.3 billion in contract obligations from the Pentagon during fiscal year 2021. Several individuals joined multiple firms, including former acquisition chief Ellen Lord, former Defense Intelligence Agency Director Robert Ashley, and former acting Under Secretary of the Navy James Geurts. In total, there were 46 instances of companies in the defense and national security sector hiring former high-ranking Pentagon officials in 2021.

A striking recent example of the Pentagon revolving door at work involved private defense contractor Boeing hiring Heidi Grant, who most recently served as the director of the Defense Security Cooperation Agency (DSCA), the agency within the Department of Defense (DOD) tasked with reviewing and advocating for foreign military sales. From 2017 to 2020, the DSCA’s portfolio averaged $50.9 billion annually. Quite literally overnight, Grant became Boeing’s lead on the firm’s defense, space, and government services portfolio. Boeing is one of the top five federal contractors with the Pentagon, and as recently as 2019 it also ranked as the third largest American exporter of arms.

Unbeknownst to the American people, Grant was negotiating a contract to join Boeing while also publicly touting the firm’s F15-QA fighter jets as “the most capable fighters in the world” and “a transformational leap in capability.” POGO learned from a DOD spokesperson that Grant notified the agency that she was involved in contract negotiations with Boeing as early as July 29, 2021. Grant ultimately revolved just a single day after she left her government post.

The Pentagon revolving door provides government officials with a tempting opportunity to use their public office for private gain: Essentially, these officials may seek to line their own pockets by doing favors for former or potential employers. Such conflicts of interest create a greater risk of corporate favoritism, ineffective weapons and programs, bad deals, and bloated budgets. As a result, the practice can lead to misguided national security and defense policy and possible risks to the safety of U.S. service members.

Recent reforms included in the 2022 National Defense Authorization Act (NDAA) will close several loopholes, but there remains much more to do, especially as the American people prepare to pay for a staggering $770 billiondefense budget in fiscal year 2022.

The Impact of the Revolving Door

The effects of high-ranking Pentagon officials revolving to the private sector with such high frequency cannot be overstated. First, the practice can lead to corporate favoritism and inefficient spending. A startling figure highlighted by the Costs of War Project is the consolidation of contracts going to the country’s top defense contractors, where “one-quarter to one-third of all Pentagon contracts in recent years have gone to just five major weapons contractors: Lockheed Martin, Boeing, General Dynamics, Raytheon, and Northrop Grumman.” Lockheed Martin, the top federal contractor, received an astonishing $75 billion in defense contracts in fiscal year 2020 alone. This revenue is over one and a half times the entire budget of both the State Department and the United States Agency for International Development. And Lockheed Martin’s now-infamous F-35 fighter jets, which are known for their major designs flaws, are estimated to cost taxpayers a staggering $1.727 trillion over the program’s lifespan. Collectively, the top five companies received over $286 billion during fiscal years 2019 and 2020 alone. Despite many instances of these defense contractors overbilling the federal government, designing faulty systems, and knowingly polluting the environment, these very same firms continue to rake in billions in taxpayer dollars.

According to a September 2021 Costs of War Project report, the increased reliance on private contractors in the post-9/11 era is striking. There are numerous examples of private contractors overcharging for their services, installing faulty electrical wiring overseas, and defrauding the U.S. military. One such example of fraud involved a government contractor that provided food to U.S. troops stationed in Afghanistan. The firm, Supreme Foodservice, would ultimately hire a former director and retired lieutenant general whose former agency awarded the company a no-bid $4 billion contract extension. In 2014, Supreme Foodservice ended up pleading guilty to charges of fraud and has since paid nearly $300 million in fines.

Lockheed Martin, the top federal contractor, received an astonishing $75 billion in defense contracts in fiscal year 2020 alone.

Second, the close alignment between private sector profits and military decision-making risks distorting defense policy, ultimately costing taxpayers. For example, a 2018 Cato Institute analysis found that the U.S. routinely sells weapons to regimes engaged in human rights abuses and deadly conflicts abroad, and even found cases of U.S. service members fighting enemies who were able to obtain U.S.-manufactured weapons. In addition, in a 2018 audit, the Government Accountability Office (GAO) found that the Pentagon routinely waives the bill for foreign military sales, passing those costs along to the taxpayer. This raises questions about whether government officials are making decisions in the best interest of the American public, or in the interest of their own potentially lucrative post-retirement career with weapons manufacturers in the private sector.

Finally, according to the Costs of War Project report on post-9/11 military spending, more than half of the 2019 defense budget — or $370 billion — went to military contractors. The nonprofit Center for Responsive Politics found that defense contractors spent tens of millions of dollars lobbying the federal government in the lead-up to the U.S. withdrawal from Afghanistan, where workers employed by contractors outnumbered troops more than two to one. One major defense contractor was even funding a think-tank that publicly opposed the withdrawal from Afghanistan.

POGO’s Revolving Door Database: A Year in Review

POGO created the Pentagon Revolving Door Database to highlight the conflicts of interest posed by senior civilian and high-ranking military officers joining the private defense sector. Using publicly available news sources, company press releases, and social media posts, we track when companies announce the hiring of former senior officials and military officers from the Department of Defense. To be included in the database, an individual must be a high-ranking Pentagon official and join a firm that receives at least $10 million annually in Defense Department contracts or a consulting or lobbying firm that does business with prominent defense contractors. Inclusion in the database does not imply a former official broke any ethics laws, but it does serve to highlight the frequency with which the lines between the Pentagon and the defense industry become blurred, potentially distorting defense policy.

In the three years POGO has maintained the Pentagon Revolving Door Database, we have identified at least 170 companies hiring a total of 479 former senior Pentagon officials and officers. The top five defense contractors have attracted a large number of former Pentagon personnel. POGO found that Raytheon and Northrop Grumman had each hired at least 24 former Pentagon personnel, Boeing hired at least 23, and General Dynamics hired at least eight. Lockheed Martin alone hired a staggering 44 former Pentagon officials that POGO has been able to identify over the past three years. Altogether, POGO has identified at least 29 generals, 64 major generals, 60 lieutenant generals, 11 admirals, 28 vice admirals, and 50 rear admirals who went through the revolving door in the past three years.

In the three years POGO has maintained the Pentagon Revolving Door Database, we have identified at least 170 companies hiring a total of 479 former senior Pentagon officials and officers.

After leaving government, there are three paths into the private sector that former defense officials often pursue: defense contractors, consulting firms, and lobbying firms. Defense contractors include weapons manufacturers such as Lockheed Martin, Northrop Grumman, and Boeing, which design and build systems such as fighter jets, surface-to-air missiles, and anti-aircraft weapons used by our armed forces. Consultants advise clients, providing them with insider knowledge of the best practices to get the Pentagon to award their firms with lucrative contracts. And finally, lobbyists actively meet with the government officials tasked with passing legislation on Capitol Hill or carrying out policies at a particular government agency. An important distinction between lobbyists and consultants is that lobbyists must disclose their clients, what agencies they contact, and the issues they work on. Consultants often keep these ties secret, and those ties are usually only made public once an individual seeks employment in the federal government.

In 2021, there were 46 instances of companies in the defense and national security sectors hiring former high-ranking Pentagon officials, and of those 46 instances, POGO found that defense contractors hired 23 officials, consulting firms hired 14, lobbying firms hired six, and trade associations and private equity firms in the defense and national security sectors hired two and one individuals, respectively.

Throughout 2021, the revolving door was observed across several branches of the military, and revolvers included retired officers with a variety of high ranks. POGO found that 10 Navy officers, nine Army officers, and three Air Force officers revolved to the private sector. Of these 22 senior officers, five were lieutenant generals, five were vice admirals, four were major generals, one was a rear admiral, and one was a general.

In reviewing the 36 officials who left the Pentagon to join private defense or defense-adjacent firms in 2021, several individuals pose particularly striking conflicts of interest, illustrating the problems posed by the revolving door. Most notably, a former lead advocate for the Navy budget joined one of the Navy’s largest defense contractors, two former service secretaries at the Pentagon joined a consulting firm whose founders are prohibited from lobbying due to their own close ties to the Defense Department, and a former general counsel for the U.S. Army joined a top lobbying firm, ultimately registering as a lobbyist herself.

Former Navy Chief of Legislative Affairs Joins Huntington Ingalls Industries

One common avenue for Pentagon officials to go down post-government is to work for the very weapons manufacturers that do business with the Pentagon. This presents a clear conflict of interest, as merely working on a contract at the DOD for a particular firm can be seen as a way to cash in after leaving a government post. In POGO’s database, we have highlighted numerous cases of individuals joining contractors that were awarded lucrative contracts with their former agencies, including Darrel K. Williams joining Leidos Holdings and Samuel Greaves joining Boeing.

One recent example involves the hiring of retired Navy Rear Admiral James Loeblein to serve as the corporate vice president of customer affairs at Huntington Ingalls Industries, a firm that designs, builds, and maintains nuclear and non-nuclear ships for the U.S. Navy and Coast Guard.

Loeblein most recently served as the Navy’s chief of legislative affairs, essentially serving as the “Navy’s lead advocate on Capitol Hill.” In 2018, Loeblein described his position with the Navy as key to “provid[ing] the background information that the secretary of the Navy and chief of naval operations use when they defend the Navy budget.” In a press release announcing Loeblein’s hiring, Huntington Ingalls touted his “extensive naval experience” and “strong background in defense policy development and Navy staff operations and strategy.”

Ultimately, Huntington Ingalls said that Loeblein will “be responsible for outreach to executive branch principals” in order to advance the portfolio of the firm, but he has not registered as a lobbyist for Huntington. Muddying the water for possible conflicts of interest, Loeblein brings to Huntington a clear competitive advantage, given his previous connections defending the U.S. Navy budget on Capitol Hill and his long history of working with members of Congress serving on the Senate Armed Services Committee.

Loeblein did not respond to POGO’s request for comment.

POGO identified several other high-ranking Navy officials joining the firm, including former Director of Communications to the Assistant Secretary of the Navy Danny Hernandez and former Commander of the Naval Air Forces DeWolfe Miller.

Two Former Service Secretaries Join Consulting Firm Pallas Advisors

Another career option former Pentagon officials often explore is consulting. Consulting firms, which aren’t required to disclose who they work with, often advise defense contractors on how to win government contracts. Pallas Advisors is an emerging firm in this space that hired two former service secretaries from the Pentagon, cashing in on their experience in the Office of the Secretary of Defense.

Notably, there remains very little publicly available information regarding the firm, as consultants are not required to disclose the names of their clients or what issues they work on and who they contact. What we do know is that Pallas Advisors was founded in 2018 by Sally Donnelly and Tony DeMartino, who both served as advisors to then-Secretary of Defense James Mattis. Donnelly and DeMartino are prohibited from lobbying due to ethics restrictions on former political appointees. The firm advertises that its team “has decades of experience throughout the national security enterprise.” Pallas also touts that its experts bring a “first-hand understanding of policy and decision-making processes across the US Government.”

Within two years of its founding, Pallas Advisors made its first big-time hire in May 2020, appointing former Secretary of the Navy Richard V. Spencer to serve as the managing director of Pallas Ventures, a private investment fund set up by the firm. When reached for comment at the time, Spencer wrote in an email to POGO that he “support[s] a cooling off period across the board.” In this context, a “cooling off period” refers to the length of time that a Pentagon official must wait before engaging in certain types of work for a firm that does business with the DOD. Spencer said that he differentiates between a board member position and a lobbying position, emphasizing the need for lobbyists to have a 3-5 year “cooling off” period. He added, “I did not feel comfortable having a ‘2 year cooled’ former Flag/Gen officer representing a contractor in a meeting where contracts were being discussed. It’s too soon and it’s a lottery ticket in my opinion.” In an article for Defense News, POGO’s director of the Center for Defense Information, Mandy Smithberger, was quoted raising similar concerns, explaining that former Pentagon officials are merely bringing “their connections and influence.”

However, given insufficient restrictions on consulting, it’s commonplace for the activities of consulting firms to go largely unreported. In June 2021, Pallas Advisors appointed former Secretary of the Army Ryan McCarthy to co-lead the firm’s private equity portfolio alongside Spencer. McCarthy is no stranger to the revolving door, as he previously served as a special assistant to then-Secretary of Defense Robert Gates and returned to the Pentagon after years at defense contracting giant Lockheed Martin, where he worked on the F-35 Joint Strike Fighter program.

McCarthy did not respond to POGO’s request for comment.

Adding to the potential conflicts of interest, the firm’s former board member, Ronald Moultrie, was selected by the Biden administration to serve as the under secretary of defense for intelligence and security. Moultrie joined a plethora of Biden officials who came directly from consulting firms with direct ties to defense contractors and other firms operating in the national security space, raising worries that these former consultants are now in position to set and execute policy that could benefit their former clients. For example, WestExec Advisors, a firm co-founded by former Under Secretary of Defense for Policy Michèle Flournoy and current Secretary of State Antony Blinken, hired two former defense officials from the Trump administration: Under Secretary of Defense for Intelligence Joseph Kernan and Jen Stewart, who served as chief of staff to then-Secretary of Defense Mark Esper. In 2021, it was made public that WestExec’s clients have included prominent defense contractors Boeing and McKinsey & Company. This raises additional concerns that individuals could favor their former clients when awarding contracts at the Pentagon.

Former Army Acting General Counsel Joins Lobbying Firm Covington & Burling, LLP

Many former government officials also go on to work for lobbying firms that have extensive ties to the defense industry. Lax ethical regulations allow former government officials to register as lobbyists immediately after leaving the Pentagon. Lobbyists seek to improve the bottom line for their clients and can prove instrumental to defense companies. For example, POGO previously reported on how lobbyists representing defense manufacturers — and even foreign governments — were influential in convincing the Trump administration to loosen decades of precedent that restricted the export of military drones. POGO identified six individuals who joined a lobbying firm, including former Army acting General Counsel Michele Pearce.

In May 2021, Pearce joined Covington & Burling’s Public Policy practice. According to Pearce’s Covington biography, she advised senior Army officials — including the secretary — on acquisition and contracting practices regarding the implementation of artificial intelligence and hypersonic systems, as well as reforming ethics rules. According to the Center for Responsive Politics, the firm’s clients have included prominent defense contractors Northrop Grumman, Microsoft, and BAE Systems. In 2021, Covington & Burling represented a total of eight clients in the defense and aerospace sectors.

Pearce quickly registered as a lobbyist — a position where her previous experience working on acquisition and contracting practices for the U.S. Army would give her a distinct advantage. According to lobbying disclosures, she represents defense contractors Bombardier Aerospace, Atlas Air Worldwide Holdings, Inc., and Goodyear Tire on “defense-related issues.” In 2021, Bombardier’s subsidiary, Learjet, Inc., received its largest contract contributions from the Pentagon, raking in over $70 million. Atlas Air Worldwide Holdings and Goodyear Tire received $13.4 million and nearly $8.7 million, respectively. Pearce also works on appropriations and procurement issues regarding Bombardier, among other clients, contacting the U.S. Air Force.

In addition, Pearce lobbied on behalf of Atlas Air in regards to the evacuation of U.S. citizens and refugees from Afghanistan in August 2021, which the firm supported in collaboration with the U.S. Civil Reserve Air Fleet at the U.S. Air Force. Despite current ethics laws, this lobbying work is legal given that Pearce was contacting officials at the Air Force, rather than her former agency at the U.S. Army. POGO supports closing this loophole by extending the cooling-off period to include lobbying restrictions across the federal government.

Pearce did not respond to POGO’s request for comment.

The Need for Robust Ethical Reform

President Joe Biden recently signed into law one of the largest defense budgets in U.S. history. POGO and civil society allies urged Congress to include several key amendments in the final version of the national defense authorization bill which would target many of the existing loopholes that allow the revolving door to spin. An important amendment from Representatives Jackie Speier (D-CA), Jan Schakowsky (D-IL), Katie Porter (D-CA), and Dean Phillips (D-MN) required the Department of Defense to implement recommendations from a September 2021 GAO audit, which found that 14 major weapons manufacturers hired more than 1,700 recent former “senior civilian and military officials, such as a general or admiral or former acquisition officials” between 2014 and 2019.

With President Biden having just signed one of the most expensive defense bills in U.S. history into law, the time to make robust ethical reforms and close the revolving door is now.

Another amendment, from Representatives Phillips, Tom Malinowski (D-NJ), and Schakowsky, extended the recusal periods — when an official removes themselves from working on a project due to potential conflicts of interest — from one year to four years for private industry officials who are seeking to enter public service at the DOD. And the DOD has improved some practices in regards to the revolving door, such as “issuing and maintaining ethics opinion letters (written opinions DOD provides to its former officials seeking private sector employment)” and “training to increase DOD employee awareness about and understanding of [post-government employment],” as detailed in the September 2021 GAO audit. However, POGO has testified as recently as May 2021 on the need for the DOD to continue strengthening key transparency measures.

Despite important provisions that were incorporated into the final version of the national defense bill, there remain other loopholes that lawmakers must close in order to end the revolving door, mitigating the conflicts of interest that waste taxpayer dollars and compromise national security. POGO supports broader reforms across the federal government, including installing lobbying restrictions for up to two years for anyone leaving the federal government, regardless of whether or not they lobby their former agency. With President Biden having just signed one of the most expensive defense bills in U.S. history into law, the time to make robust ethical reforms and close the revolving door is now.