With Patrick Shanahan, the Military-Industrial Complex Is Alive and Well
By: War Is Boring
Tags: Congress, Boeing, Wib Politics

With Patrick Shanahan, the Military-Industrial Complex Is Alive and Well

Amid ethics concerns, Boeing exec is headed to the Pentagon

by MANDY SMITHBERGER

Pres. Donald Trump recently named Boeing executive Patrick Shanahan to be deputy secretary of defense, marking the second defense-contractor nominee this administration has named to a Pentagon post.

The appointment raises a number of potential conflict of issues the public and Congress should examine — including how difficult it will be for Shanahan to recuse himself from the business and interests of his former employer.

When Pres. Barack Obama named a defense-industry official — then-Raytheon lobbyist William Lynn — POGO joined open government groups in opposing the nomination because of the substantial conflict his appointment created.

The Senate Armed Services Committee required him to recuse himself from programs he personally lobbied on, specifically the DDG-1000 Zumwalt-class destroyer, AMRAAM air-to-air missile, F-15 airborne radar, Patriot “Pure Fleet” program, Future Imagery Architecture program and Multiple Kill Vehicle.

Previous industry experience doesn’t always mean a bad deal for taxpayers. For example, Shay Assad went from being an executive at Raytheon to a pro-taxpayer director of defense pricing who was aggressive enough to earn himself the title of “most hated man in the Pentagon” by those who wanted to stick to their business-as-usual ways.

But it does require careful oversight to make sure there isn’t improper influence, and that public officials are committed to doing what’s best for our military effectiveness at an affordable price.

Under Trump, Shanahan would be required to sign Trump’s ethics executive order that prohibits him from working on matters related to former employers or clients for two years. As was true of the Obama ethics executive order, Trump’s order includes a waiver provision that can be signed by the President or his designee.

But unlike the Obama pledge, the waiver provision does not include criteria for when a waiver can be granted or a requirement to publicly disclose the waiver.

As detailed below, there are a number of matters related to Boeing that could create potential conflicts of interest that undermines the fairness of Pentagon policies and acquisition programs should Shanahan be confirmed.

Boeing is the second largest contractor for the Department of Defense, having received $25 billion in fiscal year 2016. Among the major Boeing weapon programs DoD currently oversees is the $43.5 billion KC-46 tanker — already $2 billion over cost — and the $62 billion V-22 Osprey.

Shanahan’s own career at Boeing included managing the Apache and Chinook helicopter programs, the V-22 program, and three years leading its ballistic-missile defense program, including a Ground-Based Missile Defense system the Union of Concerned Scientists found cost taxpayers $40 billion and still has no proven track record of being an effective countermeasure.

Boeing is also half of a joint venture with Lockheed Martin called United Launch Alliance, the prime contractor for the Air Force’s Evolved Expendable Launch Vehicle program, which has come under Congressional criticism for cost overruns that more than doubled the cost of the program and having an unfair monopoly.

The DoD is also currently evaluating alternatives for the F-35 Joint Strike Fighter program, including comparing the platform to Boeing’s F-18 — which could result in substantial benefits for Boeing.

Concerns about the revolving door between defense contractors and the Pentagon go beyond specific acquisition programs, however, and include policies that impact government oversight of companies’ operations. According to the Center for Responsive Politics, Boeing is one of the top spenders on lobbying, ranking seventh.

A review of Boeing lobbying disclosure forms filed for the last year reveal a number of defense policy areas that taxpayers should monitor for potential conflicts of interest.