The Old Revolving Door Still Swings: Does It Matter?

WASHINGTON: One of the time-honored tenets of many Pentagon observers is that senior officials should not benefit from their experience working for or with the military when they leave government service because it’s unethical, drives costs up and is just, well, not right. (And same goes for them leaving industry to work for the government…) The folks at the Project on Government Oversight (POGO), an activist group that keeps an eye on Pentagon and other government spending, published a report documenting the extent of movement from the Pentagon and Congress to the defense industry. POGO’s major findings: There were 645 instances of the top 20 defense contractors in fiscal year 2016 hiring former senior government officials, military officers, Members of Congress, and senior legislative staff as lobbyists, board members, or senior executives in 2018 (see chart below). Since some lobbyists work for multiple defense contractors, there are more instances than officials. Of those instances, nearly 90 percent became registered lobbyists, where the operational skill is influence-peddling. At least 380 high-ranking Department of Defense officials and military officers shifted into the private sector to become lobbyists, board members, executives, or consultants for defense contractors. Of the Department of Defense officials POGO tracked through the revolving door, a quarter of them (95) went to work at the Department of Defense’s top 5 contractors (Lockheed Martin, Boeing, Raytheon, General Dynamics, and Northrop Grumman). Military officers going through the revolving door included 25 Generals, 9 Admirals, 43 Lieutenant Generals, and 23 Vice Admirals. Perhaps the most interesting insight POGO offers is not about colonels and generals going to work for defense contractors and somehow warping the decision process. Instead, it’s about the senior industry officials who go to work at the Pentagon, and leave to go to work for industry after they serve. “Top contractors have been over-represented in Department leadership. At the beginning of his Administration, President Obama issued an ethics executive order banning lobbyists form working in agencies they lobbied during the previous two years, only to issue the first waiver shortly thereafter to his first Deputy Secretary of Defense, William Lynn, who was previously a Raytheon lobbyist. The last Deputy Secretary for that Administration, Bob Work, joined Raytheon’s board shortly after he retired from the government. President Donald Trump’s Secretary of Defense, James Mattis, was a former board member of General Dynamics. His Deputy Secretary, Patrick Shanahan, came from Boeing, the Pentagon’s second largest contractor,” the report notes. Is This Really A Problem? Andrew Hunter But let’s have some fun here. Is POGO right that these numbers and examples indicate any sort of problem? Two of the most experienced experts in acquisition policy, who dealt with this issue quite a bit on Capitol Hill and at the Pentagon, did not have kind words for the POGO analysis. “I find this report to be wildly overblown,” Andrew Hunter, a defense acquisition expert at the Center for Strategic and International Studies, says in an email. “They start from the premise that a range of legal activities should be illegal, and then try to name and shame people who’ve complied with the law. Pretty shoddy in my opinion.” Bill Greenwalt, who wrote many of the new acquisition laws passed two years ago and served on the Senate Armed Services Committee staff for many years, called the issues raised by POGO “a tempest in a teapot.” Greenwalt argues that industry, the military and the taxpayer benefit from the back and forth of experienced people. “The acquisition system is now so complex and designed to negate any undue influence to achieve fairness that it can be argued that the hiring of these senior officials has no effect whatsoever on acquisition decisions. If this is the case, then why hire them in the first place? The answer is that acquisition system is so complex that, for a company to merely compete, it needs to hire some of these officials just to understand how the system works and effectively not waste money bidding on government contracts they have no chance on winning,” he writes. “The cost of this system’s complexity is a national travesty and illustrates the need for further acquisition reform, but it is the case that even more revolving door and ethics restrictions will merely serve to magnify the acquisition problem. The net result of limiting the free flow of talent will be greater costs to the taxpayer, less competition, and less innovation being brought forward by both the government and the private sector.” Bill Greenwalt Hunter adds that existing laws “are pretty stringent. They create a substantial disincentive to people coming to work for DoD, because anyone taking an appointment is effectively limiting their future employment, and the more stringent revolving door requirements are, the more limiting working for DoD becomes.” Hunter echoes Greenwalt’s observations about the need for specialized knowledge to cope with a highly complex system. On top of that, he said, a “very rigorous contracting process, policed by a robust bid protest system, to ensure that source selections are not influenced by personal connections,” means there isn’t much ability to get away with unethical or illegal behavior. “In my view, today’s system appropriately distinguishes between illegal activity, which does sometimes occur, and legal activity which should be allowed.” Of course, there have been bad actors who’ve managed to do illegal and unethical things. Top of the charts in the last quarter century was the 2003 Boeing tanker scandal involving Darleen Druyun, then the top Air Force acquisition official. More recently, we’ve seen the Navy’s Fat Leonard scandal, involving prostitutes, fine dining and other illegal emoluments offered to Navy personnel who helped a Malaysian contractor use classified information to gouge the service. Greenwalt conceded that such bad things happen but argued against tarring everyone. “There will always be a small subset of individuals who fall on the wrong side of the law in exercising government procurements — some through stupid mistakes and some through willful actions. Still I have no doubt that the Justice Department will be willing to use its discretion to prosecute law-breaking whether it be in the Fat Leonard case or in other contract fraud cases,” Greenwalt says in his email. “However, to extrapolate from a small population of bad actors to all current and former government workers is just wrong. To assert that no-one can be ethical after leaving the government is perhaps a sign of the times when many have such a low opinion of human nature and government employees.” Greenwalt turned the issue around, asking: “How much does it harm national security if we make sure that the people that are most knowledgeable about defense are not employable after they leave government or, on the other side, if senior industrial officials who understand how the private sector works are so restricted by conflict of interest rules and potential reputational damage that they will never be able to or want to serve their government?” He argues, “one can serve in many capacities, and frankly it is more valuable to the nation that people like Bill Perry and David Packard once spent time on both sides of the government industry divide. One has to be careful that concerns about both the revolving door and conflict of interest rules are not in effect a means of achieving unilateral disarmament that is being actively exploited by our enemies to keep the right people from being in the right positions to address our national security issues.” Perhaps the biggest and least discussed points of access for the swamp (since that is what we’re talking about here) are those that pass through Congress. POGO summarizes them neatly as the influence of “campaign contributions, lobbyists, earmarks, industry-sponsored trips, and contracts structured to garner political support for specific contractors’ programs also undermine the fairness and effectiveness of the procurement system.” POGO gives President Trump credit for having spoken out about that conflict of interest: “I think anybody that gives out these big contracts should never ever, during their lifetime, be allowed to work for a defense company, for a company that makes that product,” then-President-elect Trump said. That seems unlikely, given how heavily the White House has relied on people with extensive industry experience to find top Pentagon officials.

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The Old Revolving Door Still Swings: Does It Matter?

Posted on November 6, 2018

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