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.
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