[Senate Hearing 118-640]
[From the U.S. Government Publishing Office]
S. Hrg. 118-640
PUBLIC INTEGRITY AND ANTI-CORRUPTION LAWS
AT THE DEPARTMENT OF DEFENSE
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON
PERSONNEL
OF THE
COMMITTEE ON ARMED SERVICES
UNITED STATES SENATE
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
__________
APRIL 26, 2023
__________
Printed for the use of the Committee on Armed Services
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via: http://www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
60-359 PDF WASHINGTON : 2025
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COMMITTEE ON ARMED SERVICES
JACK REED, Rhode Island, Chairman
JEANNE SHAHEEN, New Hampshire ROGER F. WICKER, Mississippi
KIRSTEN E. GILLIBRAND, New York DEB FISCHER, Nebraska
RICHARD BLUMENTHAL, Connecticut TOM COTTON, Arkansas
MAZIE K. HIRONO, Hawaii MIKE ROUNDS, South Dakota
TIM KAINE, Virginia JONI ERNST, Iowa
ANGUS S. KING, Jr., Maine DAN SULLIVAN, Alaska
ELIZABETH WARREN, Massachusetts KEVIN CRAMER, North Dakota
GARY C. PETERS, Michigan RICK SCOTT, Florida
JOE MANCHIN III, West Virginia TOMMY TUBERVILLE, Alabama
TAMMY DUCKWORTH, Illinois MARKWAYNE MULLIN, Oklahoma
JACKY ROSEN, Nevada TED BUDD, North Carolina
MARK KELLY, Arizona ERIC SCHMITT, Missouri
Elizabeth L. King, Staff Director
John P. Keast, Minority Staff Director
_________________________________________________________________
Subcommittee on Personnel
ELIZABETH WARREN, Massachusetts,
Chairman
RICHARD BLUMENTHAL, Connecticut RICK SCOTT, Florida
MAZIE K. HIRONO, Hawaii MIKE ROUNDS, South Dakota
TIM KAINE, Virginia DAN SULLIVAN, Alaska
TAMMY DUCKWORTH, Illinois TED BUDD, North Carolina
(ii)
C O N T E N T S
_________________________________________________________________
April 19, 2023
Page
Public Integrity and Anti-Corruption Laws at The Department of 1
Defense.
Members Statements
Statement of Senator Elizabeth Warren............................ 1
Statement of Senator Rick Scott.................................. 3
Witness Statements
Wilkerson, Colonel Lawrence B., USA (Ret.), Former Special 5
Assistant to the Chairman of The Joint Chiefs of Staff.
Brian, Danielle, Executive Director and President, Project on 10
Government Oversight.
Krass, The Honorable Caroline D., General Counsel, Department of 57
Defense; The Honorable Carrie F. Ricci, General Counsel,
Department of The Army; The Honorable John P. Coffey, General
Counsel, Department of the Navy; The Honorable Peter J. Beshar,
General Counsel, Department of The Air Force.
Questions for the Record......................................... 80
(iii)
PUBLIC INTEGRITY AND ANTI-CORRUPTION LAWS AT THE DEPARTMENT OF DEFENSE
----------
WEDNESDAY, APRIL 26, 2023
United States Senate,
Subcommittee on Personnel,
Committee on Armed Services,
Washington, DC.
The Subcommittee met, pursuant to notice, at 3 p.m., in
room 222, Russell Senate Office Building, Senator Elizabeth
Warren (Chairman of the Subcommittee) presiding.
Subcommittee Members present: Senators Warren, Kaine,
Scott, and Budd.
OPENING STATEMENT OF SENATOR ELIZABETH WARREN
Senator Warren. I am pleased to welcome you all to today's
hearing to receive testimony on public integrity and anti-
corruption laws at the Department of Defense (DOD). The people
who choose to serve at the Department of Defense are talented
and dedicated professionals who are committed to their mission
of keeping American lives safe.
Like all Americans, I appreciate their service and I
appreciate their commitment to our Nation. But respect for
these individuals cannot blind us to an ugly underbelly at DOD.
There has long been a too cozy relationship between the
Department and the increasingly powerful group of defense
contractors that reap huge profits from hundreds of billions of
dollars in Government contracts.
The appearance and the reality of the Pentagon being
captured by the defense industry undermines our public
confidence and threatens our National Security. Every year, the
Department of Defense receives more discretionary taxpayer
dollars from the Federal budget than any other part of
Government.
DOD and the defense industry often defend the enormous
Pentagon budget by pointing out that it supports substantial
investments in development and research to make our country
more innovative and more competitive, but that story does not
fit the facts.
A recent DOD study reported that defense contractors'
Federal investments are increasingly going to their
shareholders rather than being invested in more research and
development.
In fact, from 2010 to 2019, big defense companies spent 73
percent more on stock buybacks and dividends than they did
during the previous decade. Because Federal contracts are so
profitable for defense companies, these companies want the
inside track on how to win those contracts.
A preferred strategy is to hire former Pentagon employees
to put together the bids and then to present them to their
former colleagues in Government. After all, if a defense
industry staffer used to work in the next cubicle over from a
Pentagon acquisitions officer, there is a better chance that
the industry staffer can get his phone calls and emails
returned. A better chance the industry staffer can schedule a
sales pitch.
A better chance that the sales pitch will go well, and with
all the latest intelligence on what the Department wants to
fund, the industry staffer who just left the Department of
Defense, has the best possible chance of turning former
friendships into dollar signs for the defense industry.
This model is not hypothetical. A 2019 analysis by the
Government Accountability Office (GAO) found that the
Pentagon's 14 largest contractors have on staff 1,700 former
Department of Defense senior civilian and military officials--
1,700 former DOD people using their DOD contacts on behalf of
the defense industry.
That is an entire small town working full time just to
gather in Government contracts for the defense industry. Now,
those who defend the revolving door between the Pentagon and
the defense industry say that these Government employees are
hired for their expertise. But again, the facts belie that
story.
In fact, a new analysis released today by my office, which
is right here, check out the graphics, found that 91 percent of
Government employees hired by the top defense industries don't
become top executives. Nope, 91 percent of the Government
employees hired by the top defense industry companies become
registered lobbyists for their new employers.
The biggest weapons contractors all have former senior
Pentagon officials on their board. Their star-studded cast
includes Lockheed Martin with a former Chairman of the Joint
Chiefs of Staff and a former DOD General Counsel on their
board. Boeing with a former Chief of Naval Operations.
Raytheon with a former Deputy Secretary of Defense and Vice
Chairman of the Joint Chiefs. General Dynamics with a former
Secretary of Defense, and Northrop Grumman with a former Air
Force Chief of Staff and Chief of Naval Operations. It is clear
that these companies think that the best way to succeed is to
buy influence with the DOD.
Influence peddling occurs in multiple forms. Instead of
going to work directly for a single giant defense industry
contractor, some former military officers hang out a shingle
when they retire and offer their services to foreign
governments. They rake in the cash. A former Navy SEAL earned
$258,000 a year as a special operations adviser for Saudi
Arabia.
An Air Force colonel received $300,000 a year to work for a
Russian-owned satellite company. These foreign governments
claim they are buying advice, but no one is fooled. In reality,
they are purchasing favors, influence, and a good name for
themselves in Washington, whether that is in America's National
Security interest or not. Ethics lapses take other forms as
well.
The Wall Street Journal reported on DOD and other Executive
Branch officials who own stock in companies that stood to
benefit from their official activities. In one case, a Pentagon
official owns stock in Alibaba while weighing in on whether the
United States Federal Government should bar other Americans
from investing in Alibaba because of its ties to the Chinese
Government.
The worst part, the DOD signed off on the official's work
and didn't see a problem. Ethics requirements are essential to
safeguard the integrity of the Pentagon's work, but too often,
legislation has moved our ethics laws in the wrong direction.
Last year's National Defense Authorization Act (NDAA) got
rid of a requirement for the DOD Inspector General to report on
certain aspects of the Department's ethics compliance. A few
years ago, I barely defeated a proposal that DOD advocated for
writing into Federal law that would have further watered-down
lobbying restrictions on former Pentagon officials. We need
more oversight of ethics enforcement, not less.
I was concerned to see that DOD's written testimony for
today's hearing claims that DOD specific rules can be, and I
quote, ``counterproductive'' and ``undermine rather than
promote a shared commitment to ethics.'' What undermines this
commitment is DOD fighting laws passed by Congress instead of
enforcing those laws.
Now, to be clear, problems of undue influence are not
unique to the Department of Defense. I have introduced
comprehensive legislation to address ethics failures both at
DOD and across the Federal Government.
But failure to strengthen ethics laws elsewhere in
Government is not an excuse for tolerating terrible ethics
lapses at DOD. Ultimately, these conflicts of interest hurt
competition, and they create an uneven playing field.
At today's hearing, I want to hear from our witnesses about
the threats posed by conflicts of interests, whether current
protections in Federal law are sufficient to protect those
conflicts, the process for approving retired National Security
officials who are working for foreign governments, and any
other areas where law and policies could and should be
strengthened.
In 1959, Congress held 25 hearings to investigate the
revolving door between defense contractors and senior military
officials. General Omar Bradley, our country's first Chairman
of the Joint Chiefs of Staff, testified that he did not believe
any former Government official should, ``bring any influence''
to win contracts for a company.
The generation that fought World War II took ethics
responsibility seriously and we should do the same. When
defense contractors have an outsized influence over the
Pentagon, or when senior leaders see no issue with selling
their credentials to the highest bidder, our National Security
is compromised and it is time to put a stop to this.
So, to our witnesses, I say thank you and welcome for
appearing. I want to turn to Ranking Member Scott for his
comments to open this hearing.
STATEMENT OF SENATOR RICK SCOTT
Senator Scott. Sure. First, I want to thank Chair Warren.
First of all, I look forward to reading your report. I want to
thank Chair Warren for one, to make sure individuals and
industry do not exploit American taxpayers to gain unfair
advantage over others or jeopardize our National Security.
My understanding is that under current law, former
Department of Defense employees, whether military or civilian,
are held to a higher standard of ethical conduct than former
employees of any other Federal agency.
Also, my understanding that DOD employees are subject to
standard conflict of interest rules for which violations are
punishable by jail time. They are also subject to enhanced
restrictions on post Government appointment.
They are enforced through a variety of civil punishments,
including recoupment of pension payments. I know there have
been some recent reports in the press about perceived issues
with DOD ethics rules.
You can also read in these articles evidence that our
current rules are working. In all the media reports, personnel
had undergone a rigorous screening process from the Department
of Defense and State to read them waivers to work.
In fact, much of this reporting reveals that in many
circumstances, applicants are denied by the Government, and the
individuals discussed in the articles have been extensively
vetted and cleared. This is supported by a report issued by the
GAO in September 2021.
Additionally, in Section 1073 of Fiscal Year 2023 National
Defense Authorization Act, a study is required to evaluate
these issues. I think Chair Warren was instrumental in that. I
hope we will wait for the results of that study before imposing
any additional requirements on the DOD.
Now, let me be clear, I think it is wrong and we do not
want individuals or industry to exploit situations to gain
unfair advantage over others or jeopardize the interest of our
National Security. It is important that we not let people game
the system and should never tolerate someone doing so in a way
that risks National Security. I think it is important the two
things exist at the same time.
One, military and civilian personnel should be able to
pursue meaningful employment to further advance U.S. National
Security interests. Two, DOD must be able to protect against
and punish unethical behavior without making service so much a
sacrifice that we drive away those we truly need to protect our
country.
While it appears that we are doing a good job of this right
now, I think it is important to always do exactly what Senator
Warren is doing and be an advocate for improvements and second
looks. We should be constantly reviewing policies and spending,
and everything else that Government does to make sure it is
working the right way.
Again, I want to thank Chair Warren for holding this
hearing today. I would also like to address my concerns
regarding one of our witnesses today. I appreciate Colonel
Wilkerson's service to our country, but I am highly troubled by
his repeated and longstanding criticism in the harshest terms
of Israel and those who disagree with the Colonel.
I am referring to his repeated public statements calling
Israel an apartheid State, certain that controls United States
foreign policy. Clearly, the Obama, Iran deal blows that
assertion out of the water. Israel did not support that deal.
Colonel Wilkerson has also suggested that Israel, not Syria,
used chemical weapons, and has asserted the United States
should never have recognized the State of Israel because it has
been a disaster for us and the world.
I think countries like Jordan, which also wouldn't exist
without Israel's help, and the Abraham Accords states would say
differently. I would like to think those countries around the
world whose trade, economy, and security have improved because
of their ties to Israel, like India, would also disagree with
the Colonel.
The Colonel's continued attacks against former U.S.
Government officials fails to add to reasonable debate that can
improve policymaking. As to the Colonel's references to former
Government officials he thinks are too close to Israel and
favor too much, I remind us all that every country represents
itself to the United States Government and each of us to
attempt to influence our directions, our decisions, as do
interest groups and private companies.
I hardly think those representing Israel or its interests
deserve more scrutiny than anyone else. I am particularly
bothered by what appears to be an obsession by Colonel
Wilkerson with the Jewish State of Israel and some of the most
ardent defenders who, of course, are Jewish Americans.
With the Colonel's past comments, it makes it difficult to
have high expectations he will be able to contribute to our
hearing today. With that, thank you to the witnesses for
appearing before the Subcommittee today. I look forward to your
testimony and want to thank Chair Warren for hosting this
meeting.
Senator Warren. I want to thank my partner here, Senator
Scott, and we will get started with our panels. We are going to
have two panels today. The first panel consists of outside
witnesses to provide their perspective on where current ethics
and public integrity laws are falling short.
We will have Lawrence Wilkerson, Retired Colonel and Former
Special Assistant to Chairman of the Joint Chiefs of Staff,
Colin Powell, and we will have Danielle Brian, Executive
Director of the Project on Government Oversight.
Mr. Wilkerson, I am going to recognize you first. With
apologies, I am going to go vote, handing the gavel over to
Senator Scott, and I will return as quickly as I can. In the
meantime, it is up to you.
STATEMENT OF COLONEL LAWRENCE B. WILKERSON, USA (RET.), FORMER
SPECIAL ASSISTANT TO THE CHAIRMAN OF THE JOINT CHIEFS OF STAFF
Mr. Wilkerson. Well, thank you, Madam Chairwoman, and
Ranking Majority, or Minority Leader, and also the two
Senators, at least one now who are in attendance, my own
Senator from Virginia, Senator Tim Kaine.
Let me respond to some remarks that were just made by the
minority leader. George Washington was the one who opined first
and most powerfully that any nation that ties its interests
totally with the interests of another nation is bound to be
punished for it. Of course, he was talking about France at the
time, but that is applicable to any relationship that the
United States might have with a friend, ally, non-NATO ally, or
whatever.
Let me thank you for asking me to come here today to talk
about this. I think this is a serious issue, but I want to put
it in some context, if I may, with a few minutes that I have
and take it to a wider writ, if you will, but with pertinence
and relevance, to be sure.
We have been at war for more than 20 years. I see in
Houston, Los Angeles, San Francisco, Chicago, where I was last
week, soldiers of all components, marines and others walking
around in battle dress uniform. First of all, I can tell you
that would have been anathema to my old boss, Colin Powell, but
it is not what we are. We are not a Republic that has soldiers
in the street dressed for combat all the time.
Twenty years of war plus and trillions of dollars spent,
and yet we have nothing like was created on the 1st of March
1941 and created essentially by SR71, and called essentially a
committee to investigate the national Defense Program and
chaired by, of course, Harry Truman, who said, ``this is going
to be my main task,'' to ensure the big man doesn't get away
with things that hurt the little man.
Typical Harry Truman language, and that Senate
investigating committee did enormous service for America. It
pointed out many problems with an existential conflict, if you
will. That is to say, one that we had to win on two fronts, in
the Pacific and in Europe. Great service done by Harry Truman.
I would say it was as great a service as he did as in the
Executive Office. We have nothing like that today.
I know the rejoinder would be we have all kinds of
committees like the Senate Budget Committee, Senate
Appropriations Committee, Armed Services Committees in the
House and the Senate to do this or do that, but nothing like
this, which is focused on what I call the National Security
budget, which, ladies and gentlemen, is over $1.6 trillion
annually now.
That is including everything that should be under National
Security. That is a lot of money. That is a huge amount of
money. We have even got CBO [Congressional Budget Office]
reports that postulate it might take all discretionary Federal
spending in a few years just to pay for defense if we keep up
at this rate.
So, contributory to this and to these policies is another
story I will relate to you about Norman Augustine. Many of you
probably know who Norman Augustine is. He was head of the Red
Cross. He was CEO [Chief Executive Officer] of Lockheed Martin.
He was Assistant Secretary of Defense for Defense and
Engineering. He was head of the Defense Science Board. His
portfolio goes miles, associated mostly with National Security.
Norm told Colin Powell and others of us when President H.W.
Bush decided to downgrade the defense industrial base in the
armed forces by about 25 to 30 percent, depending on what you
are talking about. Norm said, ``you know what you are going to
get with the defense contractors, don't you?''
``You are going to get six or seven that run everything,
and they are going to monopolize, and they are going to build
shoddy products and charge you a maximum price. That is what is
going to happen,'' and by God, that is pretty much what has
happened.
The Chairman actually indicated that in some ways, with the
stock sell offs and the share price increases and all the money
going to the CEO and the VPs [Vice Presidents], and the CFO
[Chief Financial Officer] rather than to the floor workers and
such--Halliburton, I think, by some estimates, made $44 billion
off Afghanistan and Iraq alone.
When there is that much influence out there from the
defense contractors, it is not like you call up, for example,
Vice President Dick Cheney and say, ``give me a war,'' but
there is a hell of a lot more influence for National Security
decisionmaking whose objective is just that.
That is what these Generals and Admirals and others
contributed to by constant movement through what we call a
revolving door and out to help that industry. Thank you.
[The prepared statement of Mr. Lawrence B. Wilkerson
follows:]
Prepared Statement by Colonel Lawrence B. Wilkerson
In late August 1993, I was helping Colin Powell move into his new
home in McLean, Virginia. We were admiring a beautiful over-and-under
shotgun that Mikhail Gorbachev had given Powell when he was Ronald
Reagan's final national security advisor, and at the same time we were
resting momentarily in the lobby of the spacious new house, having
unloaded quite a few items to that point. I took the moment to ask
Powell an important question--for both of us.
``What's next for you, boss?''
He looked at me with that enigmatic, slight smile of his and said
he didn't know. I followed up with a matter-of-fact statement that he
could emulate one of his heroes, George Marshall, and shoot for a
cabinet position, SecDef or SecState.
He answered with words that stunned me somewhat and that I will
never forget.
``I'd need several millions of dollars to do that. You can't go
after a cabinet position such as those without lots of money--
particularly if you're a Black man with 300 Jamaican cousins, at
least.''
Again he smiled--more widely--as I logged that trenchant thought
without comment on what it meant, if true, for our democracy, both in
terms of millionaire cabinet officers and the feeling that Blacks
needed more insurance-for-the-future than Whites.
Then he followed up with a statement that did not stun me and with
which I completely agreed and about which I felt similar disgust.
``One thing's for certain'', he said. ``I won't be a beltway
bandit.''
I knew precisely what he meant.
Powell and I had had several pithy conversations over the previous
four and a half years about flag officers who departed the Pentagon, or
other high perches in the military, and went almost directly to defense
contractors or similar corporate entities and traded their
``rolodex's'' for six-figure salaries and perks. Rather than rolodex,
today the term would be ``cellphone contact list''.
We both knew why they were hired by the likes of Lockheed, Grumman,
Raytheon, Boeing, Booze Allen, SAIC, CACI, United Technologies (now
merged with Raytheon), and so on. They were hired for the high-level
people they knew and could influence, from their contemporaries still
on Active Duty to the key people in other government departments and
agencies, to the Saudi, Japanese, Korean, European, Israeli and other
potentates and near-potentates, in uniform and in mufti, with whom they
had worked during Active service. Those related to Saudi Arabia seemed
particularly egregious and compromised, partly if not largely because
so much money, both above-board and ``dark'', could be in play.
Both Powell and I held such flag officers (and not a few Colonels/
Navy Captains) in some disdain.
We both knew that the lives to which they had become accustomed
were difficult to shed, both from a power perspective and a standard of
living point of view. But we also believed there were several other
ways to provide for a rough continuation of such lifestyles rather than
prostrating oneself and one's honor to the beltway bandits, which is
precisely what we both labeled them--and not just in humor.
One could contend that we also knew there might be one or two
officers who could go, say, to Lockheed, accept a position that paid
six or seven times what they had earned in the military, and still make
sound decisions and give sound advice and not put national interests in
jeopardy. Adding in a very robust flag officer retired pay, they were,
as we described it, sitting pretty--and maintaining their honor and
dignity. But--and it's a huge ``but''--we both thought we could count
such officers on one hand.
Call it a deterioration of ethics in the military officer corps,
the lure of filthy lucre, the lifestyle preferences, the elixir of
continued power and influence, call it what you will, we knew that the
Army did not usually produce many giants of integrity, as sometimes the
American people seemed to think. We knew too that Hamilton and Madison
had been right when they said men were no angels--and that's why
governments were instituted and the rule of law established.
And we often talked about how the process had become just too easy,
that what had begun to be called the ``revolving door'' was well-
lubricated and passing through it took almost no effort and carried
little stigma at all. And, usually, came with quite a few perks.
Later, when we both were growing old, we had occasion to comment on
one particularly egregious example that appalled us both. Powell opened
his criticism with a blow to the solar plexus of the general officer
involved, because he had been a staff member for Powell when Powell was
chairman of the Joint Chiefs of Staff.
This officer, in 2002 and 2003 and later, was not only working for
a media outlet and being paid, he was also advising the boards of one
or two of the defense contractors in position to benefit enormously
from the 2003 Iraq War.
From his media perch, he advocated strenuously for the war and for
its positive progress after ``the statue came down'' (the apparent end
of combat). It was very hard to believe this particular officer
actually thought the war would be a cakewalk, and certainly not the
post-hostilities phase because we all knew there were simply too few
troops for the war and far too few for the war's aftermath. Indeed,
Powell had even discussed such matters with the officer in question
earlier as well as with the Commander of Central Command, General
Franks.
Both Powell and I, with some expressed disgust, concluded this
officer was shilling for the war to increase share prices--which
subsequently rose dramatically--as well as fulfill and secure his well-
compensated media role.
This is only one example, perhaps one of the most egregious, but
only one.
For instance, both Powell and I discussed the number of USAF
officers who pushed for the F-35 while in uniform and then went to work
in some way for one of the several contractors involved. What troubled
us most was that on the inside, so to speak, they knew of the cost
overruns, the shoddy performance, the outright lies being offered about
the logistics package and the associated costs, but they went right out
and took positions with the contractors and became an integral part of
the deceit.
Likewise as the mission of Close Air Support (CAS) arose with
regard to the F-35. These officers knew well that the USAF would never
risk such an expensive aircraft supporting soldiers on the ground; yet
they joined the chorus asserting the F-35 would perform CAS missions,
perform them well, and thus the very best airframe for that purpose,
the A-!0 Warthog, could be retired. That made us furious. We also knew
that even if the F-35 were somehow committed to CAS, it would perform
the mission atrociously, risking unnecessarily soldiers' lives. Both
Powell and I had discussed the ``Roles and Missions'' debate numerous
times--including going over the Key West Agreement as one of our first
actions upon Powell's assuming the position of CJCS; so, we knew the
history of the debates and how often CAS had fared very poorly in them
since WWII. For both of us, this was a sacred matter of soldiers' lives
on the ground.
Both Powell and I realized how having partisan flag officers, more
interested in making money and securing their futures than in the very
best defense of sound policies and procedures, was putting not only
vast resources at risk but more substantially, lives on the
battlefield.
Let me provide an example of how this revolving door situation
actually confronted me.
As a colonel, I had only a couple of offers from contractors as I
departed the Army with 31 years of service. I believe this was largely
because to the contractor empire I became a lost entity, so to speak.
After Powell's 4-year chairmanship, I was asked by the Marine Corps
Commandant, General Charles Krulak, to go to Quantico, VA and ``make
his new war college joint.'' Having served with Marines before--and
truly revering them--and having been on the faculty of the Naval War
College in Newport, RI, as well as being a graduate of both that
school's junior and senior courses, I knew the Navy and its Marine
Corps very well. I accepted the Commandant's offer and served at
Quantico for 4 years and was ``ceremoniously'' retired from the Marine
Corps at Quantico and administratively, with no fanfare, retired from
the Army at Ft. Myers (I wasn't even present).
And to their credit, the two contractors that did discover me at
Quantico followed all the rules in making me an offer, i.e., they made
it post-both retirements.
Later, when I became Secretary of State Powell's chief of staff, I
was approached--illegally--while I was still in office and
propositioned. Twice.
Actually, in both instances the individual who was supposed to make
me an offer, tried to do so but in both cases I cut him off, cited the
rules, and politely asked him to leave my office. With some obvious
embarrassment, both gentlemen did so with no debate. From their
countenances and parting apologies, however, I could tell my actions
were wholly unexpected.
I relate this personal story simply to demonstrate how widespread
such a recruiting practice is and how eager the defense industry is to
get its hands on you if you are serving in high places. An acquaintance
of mine, a West Point graduate and Army colonel upon his retirement,
eventually accepted an offer not too dissimilar to one of those made to
me and wound up serving his ``security contractor''--headed by a
retired US Army four-star flag officer--in the Ministry of Defense in
Tbilisi, Georgia and making hundreds of thousands of dollars as a
consequence. His wealth at this stage vastly exceeds my own.
The practice of stepping through the revolving door is well in
place. It is, in my view, pernicious, corrupting, and damaging to the
interests of the country.
There is an indirect aspect of this revolving door story that needs
mentioning too because it is at the least contributory to the problem.
Powell and I discussed this issue several times as well.
The issue is there are too many flag officers.
The ``bloat of flags'', as we used to call it, is frankly
incredible.
One statistical indicator, which I find overwhelmingly convincing,
is a simple set of ratios: in WWII, with roughly 12 million Americans
in service, the ratio of flag officers to ``the ranks'' was one to six
thousand. Today, with all Service components comprising roughly two
million Americans (and one must be careful here in writing
``Americans'' because a recruiting procedure today enlists non-
Americans with a promise of eventual citizenship), the ratio of flag
officers to ``the ranks'' is one to 14 hundred. A dramatic difference.
Today we have brigadier generals performing tasks, exercising
authority and managing roles that in the past majors and lieutenant
colonels performed quite well.
Additionally, we have unnecessary three-and four-star positions,
even in ostensibly leadership and management roles.
But the staff officer ranks are by far the worst in this regard,
whether the positions are inside the U.S. or on the increasingly
bloated staffs of organizations such as the NATO military alliance.
One Navy Captain, writing in 2019, had this to say:
A cursory examination of the historical record makes
clear that the number of flag officers serving in the
United States Navy operates independently from either
the number of ships in service or the number of
personnel in uniform. Today, the number of flag
officers seems to be more a political concoction or a
runaway administrative outgrowth, but has little to do
with the sea or the ability to sustain combat
operations on it.
I would agree wholeheartedly and apply the description to each of
the other Services in addition to the Navy, with its Marine Corps being
somewhat of an exception. I say somewhat because it too has had some
inexplicable growth in numbers.
And I am well aware that I keep describing the Marines Corps as if
it were an integral part of the Navy and that any one of the present
crop of Commandants would likely smack me for that description. The
leaders of the Marine Corps today by and large consider the Corps a
separate and independent entity in their heart of hearts--and the
Congress has afforded them ample evidence of late to that effect,
particularly by adding a Marine four-star to the Joint Chiefs of
Staff--a decision this body might regret in a real war, say, with
China. Unity of command has long been a principle of war and what is
the Marine Corps divorced from the Navy except another Army?
For a comprehensive look at what violating unity of command does to
a military, see the eminent naval historian Dr. Craig Symonds' new book
(2022), Nimitz at War, which relates the history of the Pacific Theater
in WWII. Because Franklin Roosevelt would not intervene with Admiral
King, Admiral Nimitz, and General Douglas MacArthur and establish and
empower one overall commander in the Pacific, America suffered tens of
thousands of casualties needlessly.
Clearly, today's bloat of flag officers contributes to, if nothing
else, the sheer number of retired flag officers available to defense
and security contractors. I would contend that it also contributes to
the less than stellar character of some of these individuals because,
as I have earlier intimated, the ranks of solid-character Americans fit
for such lofty service are not replete with individuals. There are some
flag officers I have known whom I would not follow to a tea party let
alone in a war.
I vividly recall Powell's debriefing me on a call he had just
received from Senator Chuck Hagel when the Senator was a member of the
Senate Armed Services Committee.
The Senator told Powell that he--the Senator--was looking over the
proposed promotion lists of two-stars to three-stars and three-stars to
four-stars.
Hagel, Powell informed me, was angry. He told Powell that there was
not a single individual on the prospective four-star list that he would
want as a Service Chief, a Unified Command Commander, or a Chairman.
Same with the prospective three-star list should any of them be so
fortunate to make it to four. ``What is wrong?'' Hagel asked Powell.
Powell then engaged the Senator in a somewhat lengthy and complex
discussion of how the various Service personnel systems were simply not
working very well when it came to who did and who did not make flag
rank--and, more seriously, that the crop of prospects was not
necessarily the best ever.
Now, I had known Powell and worked for him directly about 3 years
at that juncture of our 12 professional years together and I knew him
even at that early stage to be somewhat of a historian when it came to
American history, particularly military history.
``In our history,'' I asked him, ``has it ever been any better in
decades of no significant war?''
``You've got a point,'' he responded. ``But it's not as if we
haven't had plenty of combat practice.''
``Yea,'' I responded. ``And we haven't actually won a war in half a
century-plus--except that little fracas in the Gulf in 1990-'91,
kicking Saddam's Army out of Kuwait.'' (After all, my mother did not
raise a complete fool. . . . ).
``So what should I have told the Senator?'' Powell asked.
``Precisely what you did tell him--the truth as you see it. After
all, the Constitution assigns the Congress the responsibility to look
after the armed forces, the Army in particular, as it's raised as the
occasion demands. Since they provide for a navy, their diligence
perhaps should be more acute in that direction.''
``It isn't any better there, and you know it.'' Powell conjectured.
``So what should we do?'' I pleaded. ``Pray for a big war?''
``Probably the only thing that would change the situation,'' he
said, sadly.
*****
These are my thoughts and, clearly, I have conveyed some of the
thoughts, as expressed to me, of General and Secretary of State Colin
Powell as well. We had many conversations about such matters but, other
than a real war to cleanse the ranks, we had no real solution--that is,
a politically possible solution--to offer.
We often remarked on just how many such people, the majority of
them flag officers, General George Marshall had to root out and release
from service in the late 1930's. The exigencies of a looming world war
demanded it. I would not wish for that solution, but it just might be
the only one that would work.
I'm pleased to answer any questions you might have, if I'm able to
do so.
STATEMENT OF DANIELLE BRIAN, EXECUTIVE DIRECTOR AND PRESIDENT,
PROJECT ON GOVERNMENT OVERSIGHT
Ms. Brian. Thank you, Chairman, and thank you, Senator
Scott, for inviting me to testify today. I want to focus on
three legal but corrupting phenomena that undermine integrity
at DOD.
The revolving door, as has been mentioned now, while some
important reforms were passed in the 2018 and 2022 NDAAs, there
really remain some significant loopholes. Let me give you three
examples and why they matter.
When the Chief of Naval Operations announced his intention
to retire nine littoral combat ships, he stated that one more
dollar in that system would result in a less capable, less
lethal, and less ready Navy.
But an intense lobbying campaign led by former Navy
officials who had gone to work for companies with contracts to
support those ships successfully prevented the Navy's
retirement of five of those ships.
Now, current lobbying restrictions did not prevent this
because they only prohibit a very narrow definition of lobbying
activities for very senior officials. When then Undersecretary
of Defense Pete
Aldridge served on the Pentagon's Defense Acquisition Board, he
helped decide that the Air Force's F-22 program should proceed.
Two months later, he joined the board of Lockheed Martin,
the maker of the F-22. After only 6 years, Defense Secretary
Gates canceled production of that aircraft, saying they weren't
relevant to current wars. The revolving door laws did not apply
to Aldridge because he was too senior to be considered an
acquisition official.
When Lieutenant General Heebner was Assistant to the Army
Chief of Staff Shinseki, they announced moving to an all-
wheeled army away from tracked vehicles. One month later,
General Heebner was hired to become Senior Vice President of
General
Dynamics, and you guessed it, the maker of the wheeled Stryker
vehicle.
Now, as we are supplying Ukraine with equipment to defend
themselves, we are sending over 40-year-old tracked Bradley
fighting vehicles because they are preferable for the offroad
mobility, especially in mud. Revolving door restrictions did
not apply to
General Heebner because he became an executive and not a
lobbyist for the company.
These examples demonstrate the impact of the revolving
door. This is not just a nicety. It is about military readiness
and effectiveness, and whether we are actually putting our
troops' interests and our National Security first.
My written testimony includes specific recommendations to
close these and other loopholes. The second phenomenon,
undermining the integrity of DOD is the occurrence of former
U.S. Military and Reserve personnel receiving waivers of the
Constitutional Emoluments Clause to work for foreign
governments.
POGO's [Project on Government Oversight] investigation that
was concurrent with the Washington Post identified more than
500 instances of these waivers over 10 years. Shockingly, the
State Department is even approving waivers to work for
countries notorious for serial human rights violations,
including for former National Security adviser James Jones, who
reportedly increased his work for Saudi Arabia even after their
horrifying murder of United States resident and journalist
Jamal Khashoggi.
These waivers have most frequently benefited the United
Arab Emirates (UAE), which had 280 former United States
Military on their payroll during that timeframe. Our
investigation even found four people who were approved to work
for entities owned by the Chinese Government.
We have several recommended reforms in my written
testimony, but there should be no waivers for former U.S.
military personnel going to work for countries identified by
the State Department as guilty for a pattern of human rights
violations, or which are our country's rivals, and finally,
ownership of defense stocks by senior officials.
Currently, only acquisition officials are banned from
owning stock in the top ten defense companies. But until a few
years ago, this Committee, the Senate Armed Services Committee,
required every nominee to divest all stock from any defense
contractor before being confirmed.
I have brought with me two examples of ethics agreements
from officials who agreed to this committee's requirements in
2010 and 2014 to divest from and not invest in any company
identified as a DOD contractor as a condition of their
confirmation.
In the short term, I encourage the Committee to revive that
rule, but Congress should codify a more expansive plan. If the
Congress does accomplish this suite of reforms, it will
increase public confidence in the integrity of the DOD, and
more importantly, it will improve our military readiness and
capability, and we at POGO would be thrilled to help you do so.
[The prepared statement of Ms. Danielle Brian follows:]
Prepared Statement by Danielle Brian
Chairwoman Warren and Ranking Member Scott, thank you for inviting
me to testify today. The subject of this hearing is one of the primary
reasons my organization was created.
Founded in 1981, the Project On Government Oversight (POGO) is a
nonpartisan independent watchdog that investigates and exposes waste,
corruption, abuse of power, and when the government fails to serve the
public or silences those who report wrongdoing. We champion reforms to
achieve a more effective, ethical, and accountable Federal Government
that safeguards constitutional principles.
We made our mark in the 1980's by investigating Pentagon waste,
fraud, and abuse, spotlighting overspending on $640 toilet seats,
$7,600 coffee makers, and $435 hammers.\1\ Four decades later, things
have mostly changed for the worse and this hearing on public integrity
at the Department of Defense (DOD) could not have come at a better
time. Congress can and must act to improve the laws that are meant to
ensure policymakers spend tax dollars pragmatically and are acting in
the interest of our national security.
---------------------------------------------------------------------------
\1\ Project On Government Oversight, Defense Waste and Fraud
Camouflaged as Reinventing Government (September 1999), 5, https://
docs.pogo.org/report/1999/report-19990901.pdf.
---------------------------------------------------------------------------
Improving these laws will require tackling three legal--but
corrupting--phenomena that skew public policy for personal and private
gain. We have practical solutions for each of these persistent
problems. First, close remaining loopholes to slow the revolving door
between the Pentagon and defense companies. Second, end the rubberstamp
approval of former military personnel working for foreign governments,
and third, mitigate the risk and appearance of financial conflicts of
interest for senior Pentagon officials.
slow the revolving door between pentagon and defense contractors
The United States spends more on defense than the next nine
highest-spending countries combined, including our principal rivals,
Russia and China.\2\ The military budget proposal submitted by the
Biden administration for 2024 totals some $842 billion and stands to be
the largest appropriations of military funds since 1960.\3\
---------------------------------------------------------------------------
\2\ ``The United States Spends More on Defense than the Next 9
Countries Combined,'' Peter G. Peterson Foundation, accessed April 21,
2023, https://www.pgpf.org/blog/2022/06/the-united-states-spends-more-
on-defense-than-the-next-9-countries-combined.
\3\ Department of Defense, ``Department of Defense Releases the
President's Fiscal Year 2024 Defense Budget,'' Press Release, March 13,
2023, https://www.defense.gov/News/Releases/Release/Article/3326875/
department-of-defense-releases-the-presidents-fiscal-year-2024-defense-
budget/; ``U.S. Military Spending/Defense Budget 1960-2023,''
Macrotrends, accessed April 21, 2023, https://www.macrotrends.net/
countries/USA/united-states/military-spending-defense-budget.
---------------------------------------------------------------------------
This money represents the intent of this Congress to maintain the
most capable and advanced military in the world. But it also presents
opportunities for waste, mismanagement, and predatory abuse. Recent
history has borne this out time and again. Now is the time to eliminate
opportunities for corruption. Congress took important steps to address
this problem in the National Defense Authorization Acts (NDAAs) for
fiscal years 2018 and 2022,\4\ but more work must be done to close the
remaining loopholes.
---------------------------------------------------------------------------
\4\ 10 U.S.C., Chapter 49, ``Miscellaneous Prohibitions and
Penalties,'' Notes, https://www.law.cornell.edu/uscode/text/10/
subtitle-A/part-II/chapter-49.
---------------------------------------------------------------------------
The past 20 years of major weapons systems development from the
Pentagon and its industry partners has been a litany of failures. The
F-35 Joint Strike Fighter, the littoral combat ship, the Zumwalt-class
destroyer, and the Ford-class supercarrier have all suffered major and
costly challenges.\5\ These systems have cost American taxpayers
hundreds of billions of dollars, and they still don't fulfill their
intended missions even after years of delays and retrofits.\6\ These
setbacks have burdened our armed forces with decades of opportunity
costs. Taxpayer money could instead have gone to systems that actually
work as intended.
---------------------------------------------------------------------------
\5\ Geoff Wilson, Project On Government Oversight, ``Ushering in a
New Generation of Accountable Defense Spending,'' Baker's Dozen:
Thirteen Crucial Issues Policymakers Can Act on Now, February 2, 2023,
https://www.pogo.org/report/2023/02/bakers-dozen-thirteen-crucial-
issues-policymakers-can-act-on-now#heading-9.
\6\ Dan Grazier, ``The F-35 and Other Legacies of Failure,''
Project On Government Oversight, March 19, 2021, https://www.pogo.org/
analysis/2021/03/the-f-35-and-other-legacies-of-failure.
---------------------------------------------------------------------------
Defense companies and their lobbyists, rather than practical
military strategy, have guided significant budgetary and strategic
decisions by Congress, over the objections of top military leaders. And
it is no secret that the defense industry owes this success in no small
part to defense companies having hired former military and civilian DOD
personnel to shape the lobbying efforts. According to OpenSecrets, in
the last Presidential election cycle in 2020 the defense industry spent
over $100 million on lobbying.\7\
---------------------------------------------------------------------------
\7\ OpenSecrets, ``Defense Summary,'' https://www.opensecrets.org/
industries/indus.php? Ind=D.
---------------------------------------------------------------------------
A 2018 POGO report identified 380 instances of high-ranking former
Pentagon officials who transitioned from the DOD to private companies
between 2008 and 2018 and almost immediately became lobbyists, board
members, executives, or consultants for defense contractors. These
instances included work performed for defense contractors by 25 former
generals, nine former admirals, 43 former lieutenant generals, and 23
former vice admirals.\8\ Nearly 90 percent of these former officials
bgecame registered lobbyists, where the operational skill is influence-
peddling.\9\
---------------------------------------------------------------------------
\8\ Project On Government Oversight, Brass Parachutes, 9, https://
s3.amazonaws.com/docs. pogo.org/report/2018/
POGO_Brass_Parachutes_DOD_Revolving_Door_Report_2018-11-05.pdf.
\9\ Project On Government Oversight, Brass Parachutes, 9-10 [see
note 8].
---------------------------------------------------------------------------
In clashes between industry lobbying and military judgment, the
lobbyists all too often win. We saw this in 2022 when the Navy
attempted to retire nine Freedom-class littoral combat ships, with
Chief of Naval Operations Admiral Mike Gilday telling the Senate
Appropriations Subcommittee on Defense that he ``refused to put an
additional dollar against that system.'' \10\ He also said that, while
keeping these ships in service would allow for a ``larger Navy,'' it
would also be a Navy that was ``less capable, less lethal, and less
ready.'' \11\ The Navy justified cutting these ships, which have faced
significant problems with their powerplants as well as failures to
develop weapons and systems for their hulls, by showing that their
early retirements would save some $4.3 billion over the next 5 years
that could be used to support more pressing Navy priorities.\12\
---------------------------------------------------------------------------
\10\ Senate Appropriations Subcommittee on Defense Hearing on the
fiscal year 2023 Navy and Marine Corps Budget Request, 117th Cong. (May
26, 2022) (Remarks of Admiral Mike Gilday, Chief of Naval Operations)
https://www.navy.mil/Press-Office/Testimony/display-testimony/Article/
3046510/senate-appropriations-subcommittee-on-defense-holds-hearing-on-
the-fiscal-year/.
\11\ Senate Appropriations Subcommittee on Defense Hearing, Remarks
of Admiral Mike Gilday [see note 10].
\12\ Eric Lipton, ``The Pentagon Saw a Warship Boondoggle. Congress
Saw Jobs,'' New York Times, February 4, 2023, https://www.nytimes.com/
2023/02/04/us/politics/littoral-combat-ships-lobbying.html.
---------------------------------------------------------------------------
In a recent investigation, the New York Times reported that ``A
consortium of players with economic ties to the ships--led by a trade
association whose members had just secured contracts worth up to $3
billion to do repairs and supply work on them--mobilized to pressure
Congress to block the plan, with phone calls, emails and visits to
Washington to press lawmakers to intervene.'' \13\
---------------------------------------------------------------------------
\13\ Lipton, ``The Pentagon Saw a Warship Boondoggle. Congress Saw
Jobs'' [see note 12].
---------------------------------------------------------------------------
Lobbying efforts like this are often led by former career DOD
officials and retired military officers, who have managed to turn their
military connections and flag ranks into lucrative careers in the
private sector. That was the case with the littoral combat ships. A
nearly 20-year retired Navy veteran, Timothy Spratto, led the lobbying
effort to thwart their retirement. At the time, Mr. Spratto was general
manager of BAE Systems' Jacksonville, Florida, shipyard where the
littoral combat ships on the East Coast are serviced and which recently
won part of a $1.3 billion Navy contract to do repairs on the
vessels.\14\ According to his LinkedIn page, Spratto's last role before
leaving the Navy was ``Assistant Chief of Staff, Material Readiness and
Assessments, Naval Surface Forces Atlantic''--the exact sort of
position he would later lobby to gin up support for underperforming
ships.\15\ According to the New York Times, the lobbying effort started
almost immediately after the Navy announced its plans to retire nine of
the ships, ``with a burst of phone calls to Capitol Hill, local
officials in Jacksonville, and the Navy's ship-maintenance division.''
\16\
---------------------------------------------------------------------------
\14\ Lipton, ``The Pentagon Saw a Warship Boondoggle. Congress Saw
Jobs'' [see note 12].
\15\ ``LinkedIn page for Timothy Spratto,'' LinkedIn, accessed
April 18, 2023, https://www.linkedin.com/in/tbspratto/.
\16\ Lipton, ``The Pentagon Saw a Warship Boondoggle. Congress Saw
Jobs'' [see note 12].
---------------------------------------------------------------------------
Mr. Spratto was not alone in this effort. Take, for example,
retired Rear Admiral James A. Murdoch, who served as program executive
officer for the littoral combat ship program from 2011 to 2013. After
his retirement, he became the international business development
director for ship and aviation systems at Lockheed Martin, one of the
prime contractors that built the failing Freedom-class littoral combat
ships.\17\ Or retired Captain Tony Parisi, who penned an op-ed in 2022
for Real Clear Defense titled ``Don't Give Up the Ship,'' which
defended continuing the littoral combat ship program but failed to
mention that he was a member of the General Dynamics team responsible
for training crews to operate the ships.\18\ While writing an op-ed
would not trigger post-employment restrictions even if they had covered
Captain Parisi (whose rank placed him below their coverage), this
contribution to the fight illustrates how the defense industry can
deploy the credibility of prior military service to sway public
opinion. In the end, this lobbying effort was successful in undermining
the Navy and preventing five of the ships from being retired.\19\
---------------------------------------------------------------------------
\17\ Project On Government Oversight, Brass Parachutes, 19 [see
note 8].
\18\ Lipton, ``The Pentagon Saw a Warship Boondoggle. Congress Saw
Jobs'' [see note 12].
\19\ Lipton, ``The Pentagon Saw a Warship Boondoggle. Congress Saw
Jobs'' [see note 12].
---------------------------------------------------------------------------
Existing restraints on lobbying the Pentagon after leaving
government are clearly inadequate. Despite the reforms Congress has
made in recent years, none of the previously mentioned activities would
have been prohibited.\20\ This is either because post-government
employment restrictions don't apply to most military personnel below an
O-7 rank and most civilian personnel below the Senior Executive Service
level; the ban that applied to Rear Admiral Murdoch was only for 1
year; or because an activity like writing an op-ed isn't considered
lobbying and the prohibitions only apply to narrowly defined lobbying
activities and contacts.\21\ These weak guardrails risk prioritizing
the financial interests of former senior officials and arms contractors
over our national security.
---------------------------------------------------------------------------
\20\ 10 U.S.C., Chapter 49, ``Miscellaneous Prohibitions and
Penalties,'' Notes [see note 4].
\21\ 10 U.S.C., Chapter 49, ``Miscellaneous Prohibitions and
Penalties,'' Notes [see note 4].
---------------------------------------------------------------------------
Congress should strengthen the post-government employment
restrictions for former uniformed and civilian defense personnel. And
those restrictions should not be limited to former contracting
officials, who are not the only individuals influencing the
Department's acquisition decisions. Senior officials make strategic
decisions that can influence the Department's budgetary requests,
contracting plans, and policy formulation. Officials with no direct
role in procurement activities make recommendations and decisions that
can shape departmental needs that drive acquisition decisions. While
the final call on which bidder receives a particular contract award may
not be theirs to make, these officials can influence the criteria that
will ultimately determine which companies are eligible to compete for
contracts or are likely to succeed. Other officials can shape day-to-
day decisions affecting the delivery of contracted services or the
evaluation of performance.
In 2017, information technology expert Deap Ubhi helped shape the
early direction of what would become the Joint Enterprise Defense
Infrastructure (JEDI) contract. A civilian worker for the Pentagon, Mr.
Ubhi did market research for the JEDI project in his last 2 months on
the job. He eventually recused himself from the project and, 2 weeks
later, went to work for Amazon in October 2017.\22\ When his
participation in the project and employment negotiations with Amazon
came to light in 2018,\23\ the contract, which DOD had awarded to
Amazon, was upended.\24\ Another bidder, Oracle, challenged the award.
That revolving door case was among the reasons the contract bid was the
subject of costly protests, court-ordered holds and investigations, and
finally cancellation of the contract.\25\ The reforms Congress later
passed in 2021 to extend recusals would have prevented this
calamity.\26\
---------------------------------------------------------------------------
\22\ Karen Weise and Thomas Kaplan, ``Giant Military Contract Has a
Hitch: A Little-Known Entrepreneur,'' New York Times, March 20, 2019,
https://www.nytimes.com/2019/03/20/technology/military-contract-deap-
ubhi.html.
\23\ Aaron Gregg, `` `Once an Amazonian, always an Amazonian':
Former Pentagon official's business ties draw scrutiny,'' Washington
Post, December 18, 2018, https://www. washingtonpost. com/business/
2018/12/18/once-an-amazonian-always-an-amazonian-former- pentagon-
officials-business-ties-draw-scrutiny/.
\24\ Alex Emmons, ``Amazon Offered Job to Pentagon Official
Involved with $10 Billion Contract it Sought,'' Intercept, June 3,
2019, https://theintercept.com/2019/06/03/amazon-defense-department-
jedi-contract/.
\25\ Aaron Gregg and Jay Greene, ``Fierce backlash against Amazon
paved the way for Microsoft's stunning Pentagon cloud win,'' Washington
Post, October 30, 2019, https://www.washingtonpost.com/business/2019/
10/30/fierce-backlash-against-amazon-paved-way-microsofts-stunning-
pentagon-cloud-win/.
\26\ 10 U.S.C., Chapter 49, ``Miscellaneous Prohibitions and
Penalties,'' Notes [see note 4].
---------------------------------------------------------------------------
Two additional examples also stand out. As undersecretary of
defense for acquisition, technology, and logistics, Edward ``Pete''
Aldridge was head of the Defense Acquisition Board that made the
controversial decision to pursue procurement of the Lockheed Martin F/
A-22 fighter jet. Two months after he ensured Lockheed would be awarded
the contract, he secured a position on the company's board of
directors.\27\ The Procurement Integrity Act only bars those directly
involved with contracting decisions at a granular level from receiving
compensation from a contractor for a year after they leave government.
It fails to cover higher level officials whose decisions steer the
director of contracting efforts.\28\ When Mr. Aldridge left DOD to work
for Lockheed Martin, a spokesperson for the company emphasized that the
compensation restriction did not apply to him. As a director, Mr.
Aldridge received a $75,000 retainer and $75,000 in Lockheed Martin
stock.\29\ After only 6 years then-Secretary of Defense Robert Gates
canceled production of the F-22, stating, ``The more they buy of stuff
we don't need, the less we have available for the stuff we do need. . .
It ain't a complicated problem.'' \30\
---------------------------------------------------------------------------
\27\ Renae Merle, ``Lockheed Adds Director Fresh from the
Pentagon,'' Washington Post, June 27, 2003, https://
www.washingtonpost.com/archive/business/2003/06/27/lockheed-adds-
director-fresh-from-the-pentagon/1f65541e-56c7-42be-892b-d2c416f33739/.
\28\ 41 U.S.C. Sec. 2104 (2023), https://www.law.cornell.edu/
uscode/text/41/2104.
\29\ /Merle, ``Lockheed Adds Director Fresh From the Pentagon''
[see note 27].
\30\ Greg Jaffe, ''Gates Makes Impassioned Case for Ending F-22
Program,'' Washington Post, July 17, 2009, https://
www.washingtonpost.com/wp-dyn/content/article/2009/07/16/AR200907
1603872.html.
---------------------------------------------------------------------------
So far, we've given examples from the Navy and Air Force to
illustrate the weaknesses of current revolving door restrictions on
senior officials. Let us round things out with one from the Army. Army
Lt. General David K. Heebner was a top assistant to Army Chief of Staff
General Eric Shinseki. Three months before Heebner retired, the Army
announced it was ``prepared to move to an all wheel formation as soon
as technology permits,'' in a shift away from tracked vehicles. General
Dynamics, which manufactures the wheeled Stryker, was the beneficiary
of this new vision, essentially putting United Defense, which produced
tracked vehicles, out of the running. Just 1 month after the Army
announced the plan to procure more wheeled vehicles, General Dynamics
revealed that it had selected Lt. General Heebner to be its senior vice
president of planning and development.\31\ While the Stryker remains in
service, the battle in Ukraine has demonstrated the benefit of having
tracked vehicles for the purpose of off-road mobility.\32\
---------------------------------------------------------------------------
\31\ Revolving Door Working Group, ``The Government-to-Industry
Revolving Door,'' 32 [see note 26].
\32\ Lara Seligman, Lee Hudson, and Paul McLeary, ``Pentagon weighs
sending Stryker combat vehicles to Ukraine,'' Politico, January 9,
2023, https://www.politico.com/news/2023/01/09/pentagon-stryker-combat-
vehicles-ukraine-00077083.
---------------------------------------------------------------------------
The law did not prevent these former senior officials from going to
work for these companies. Additional restrictions Congress later
enacted also would not have prevented these trips through the revolving
door. Congress must do more. There is no time to delay in making the
necessary reforms to give the public confidence that our weapons
procurement decisions and military budget are crafted with integrity
and put genuine national security needs first.
Very real national security challenges face us today, but not all
of them need high-tech answers or the investment of hundreds of
billions of dollars in exquisite new weapons systems. It is critical
that lawmakers do all in their power to ensure that decisions regarding
the largest part of our annual discretionary spending, on which our
national security depends, are made without bias or undue influence
from corporate or self-interests.
In 2017, lawmakers included a provision strengthening revolving
door restrictions on senior Defense Department officials in Section
1045 of the fiscal year 2018 NDAA.\33\ That provision expanded post-
government restrictions related to lobbying for military officers at
the O-7 level and above, as well as their civilian counterparts in
Senior Executive Service and Executive Schedule positions. Except for
the secretary, these officials were previously covered by a 1-year
restriction on communicating with, or appearing before, their former
employing components of the Defense Department.\34\ (The secretary was
already covered by a longer and broader restriction.) The new provision
expanded the scope of the restriction to cover contacts with any part
of the Department--not just the former employing components--and to
cover behind-the-scenes work, such as research and preparation for
lobbying contacts.\35\ For officials at the O-9 level and above, as
well as civilians at Executive Schedule Level III and above, the new
provision also extended the length of the restriction to 2 years.\36\
POGO supported this important legislation.\37\ We applauded its passage
as a remarkable advancement in protecting the government against former
officials seeking undue influence over the government on behalf of
their new employers and clients.\38\
---------------------------------------------------------------------------
\33\ 10 U.S.C., Chapter 49, ``Miscellaneous Prohibitions and
Penalties'' [see note 4].
\34\ 18 U.S.C. Sec. 207(c) (2023), https://www.law.cornell.edu/
uscode/text/18/207. Regulations of the Office of Government Ethics
designate various components of the Department of Defense as separate
agencies for the purpose of applying the statutory post-employment
restrictions only to communications and appearances before the
component that previously employed a former senior or very senior
employee. 5 C.F.R. pt. 2641, app. B, https://www.law.cornell.edu/cfr/
text/5/appendix-B_to_part_2641.
\35\ 10 U.S.C., Chapter 49, ``Miscellaneous Prohibitions and
Penalties'' [see note 4].
\36\ 10 U.S.C., Chapter 49, ``Miscellaneous Prohibitions and
Penalties'' [see note 4].
\37\ Daniel Van Schooten, Mandy Smithberger, and Scott Amey, ``POGO
Tells National Defense Authorization Act Conferees to Prioritize Troops
and Taxpayers, Not Contractors,'' Project On Government Oversight,
October 13, 2017, https://www.pogo.org/letter/2017/10/pogo-tells-
national-defense-authorization-act-conferees-to-prioritize-troops-and-
taxpayers-not-contractors.
\38\ Scott Amey, ``Defense Lobbying Ban Might Drain the Pentagon
Swamp,'' Project On Government Oversight, March 12, 2018, https://
www.pogo.org/analysis/2018/03/defense-lobbying-ban-might-drain-
pentagon-swamp.
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However, established interests inside the Pentagon had a different
reaction. The Department dragged its feet on implementing the law for
over 2 years, stalling until March 2020 before releasing a policy. \39\
Even before issuing this policy, the Pentagon requested a legislative
rollback that would strip the behind-the-scenes lobbying restriction
and narrow the scope of the no-contact ban to only the former
official's former employing component.\40\
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\39\ Office of the General Counsel of the Department of Defense,
DOD Instruction 1000.32, ``Prohibition of Lobbying Activity by Former
DOD Senior Officials,'' March 26, 2020, https://irp.fas.org/DODdir/DOD/
i1000_32.pdf.
\40\ Katie Porter and Jackie Speier, ``The Pentagon's Proposal to
Fill the Swamp,'' Lawfare, June 10, 2020, https://www.lawfareblog.com/
pentagons-proposal-fill-swamp.
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POGO and other watchdogs objected to this effort to weaken
government ethics in the DOD, and the measure failed.\41\ However,
Pentagon leaders may try again. If they do, Congress should reject the
rollback.
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\41\ John M. Donnelly, ``Pentagon Looks to Undo Parts of McCain
Anti-Lobbying Law,'' Roll Call, April 14, 2020, https://rollcall.com/
2020/04/14/pentagon-looks-to-undo-parts-of-revolving-door-law/.
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The fiscal year 2022 NDAA added another ethics restriction, now
requiring those coming into the Defense Department to recuse for 2
years from any particular matter involving specific parties in which a
former employer is a party or represents a party.\42\ The recusal
obligation should be expanded beyond ``particular matters involving
specific parties'' to any ``particular matter'' affecting the former
employer. But we can't stop there.
---------------------------------------------------------------------------
\42\ 10 U.S.C., Chapter 49, ``Miscellaneous Prohibitions and
Penalties'' [see note 4].
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Congress should enact several additional commonsense measures to
slow the revolving door between the Pentagon and the military
industrial complex and build a more transparent, accountable, and
capable national security policy.
First, lawmakers must close remaining loopholes in current ethics
rules, which give former high-ranking officials room to evade post-
government employment restrictions.\43\ The primary post-government
employment law, 18 U.S.C. Sec. 207, mainly covers traditional lobbying
activities (contacts with parts of the Department of Defense). But it
should cover behind-the-scenes work of all types, to prevent former
officials from selling their expertise and insider knowledge to defense
contractors, as well as to remove the temptation of future employment
prospects for current defense officials making decisions that affect
contractors.\44\ Another loophole in that law allows the Office of
Government Ethics to designate separate components of the DOD for
treatment as distinct Federal agencies, meaning former officials can
contact any part of the DOD other than their former employing component
without restriction. While the fiscal year 2018 NDAA may have closed
this loophole, 18 U.S.C. Sec. 207 should be amended to incorporate
that change.\45\
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\43\ Project On Government Oversight, Brass Parachutes, 11 [see
note 8].
\44\ 18 U.S.C. Sec. 207(c) [see note 34].
\45\ 18 U.S.C. Sec. 207(c) [see note 34]; 5 C.F.R. pt. 2641, app.
B [see note 34].
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The Procurement Integrity Act imposes a 1-year post-government
employment bar on a former defense official receiving compensation for
employment with a defense contractor that holds a contract award worth
more than $10,000,000.\46\ However, the restriction applies only if the
former official served in one of several specified procurement-related
capacities with respect to the contract.\47\ This restriction should be
expanded to apply to all former senior and very senior employees of the
Department of Defense in the chain of command of covered procurement
officials, not just to those who were directly involved in
procurements. This change would track the concept of a restriction
applying to certain matters under a former employee's ``official
responsibility,'' which is used in 18 U.S.C. Sec. 207(a)(2). The
prohibition as to employers should apply to all divisions, affiliates,
and subcontractors of a contractor, and language in the law making it
applicable to work as a ``consultant'' should be amended to explicitly
refer to attorneys, lobbyists, and other representatives or advisors to
defense contractors. \48\ The loopholes in these restrictions leave
room for defense contractors to stack the decks in their favor by
bringing former high-ranking officials onto their boards and into
executive suite offices, or by otherwise engaging in advocacy that has
the impact of lobbying but is not explicitly banned.
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\46\ 41 U.S.C Sec. 2104(a)(1) [see note 28].
\47\ 41 U.S.C Sec. 2104(a)(1) [see note 28].
\48\ 41 U.S.C Sec. 2104(a) [see note 28].
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Second, Congress should extend the post-government ban on lobbying
the DOD. For generals, admirals, and career members of the Senior
Executive Service, this restriction should last 4 years; for political
appointees at the Senior Executive Service level and above, the
restriction should last either 4 years or until the end of the
Presidential administration, whichever is longer. As discussed
previously, the recent reforms extended that ban to 2 years for former
military officials at the O-9 level and above and their civilian
counterparts. But a 2-year ban on lobbying the Department of Defense
should also apply to former military officials at the O-7 and O-8
levels, and their civilian counterparts in Senior Executive Service and
Executive Schedule positions.
Presidents George H.W. Bush, Bill Clinton, Barack Obama, Donald J.
Trump, and Joe Biden all issued ethics Executive Orders or standards of
conduct at the start of their presidencies, addressing these ethics
issues for their administration. Presidents Clinton and Trump extended
the post-government employment lobbying ban on their appointees to 5
years, and President Biden extended the lobbying ban on his appointees
to 2 years or the duration of his administration, whichever is
longer.\49\ It is time for Congress to codify what the public clearly
wants from their government.
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\49\ Project On Government Oversight, ``Comparing Ethics Orders:
Biden's Is on Top, But it Could be Stronger,'' January 28, 2021,
https://www.pogo.org/resource/2021/01/comparing-ethics-orders-bidens-
is-on-top-but-it-could-be-stronger.
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We are well aware of the objection that expanding post-employment
restrictions would make it impossible for former Pentagon officials to
find post-government work. But there are terrific examples of senior
government officials finding lucrative work in the private sector by
leveraging their management experience without exploiting the
relationships they developed inside the government. One example is the
Bush administration's Deputy Secretary of Energy Kyle McSlarrow, who
went on to run the National Cable and Telecommunications Association
(now known as NCTA--The Internet & Television Association) after
leaving government.\50\ Other famous examples include former Secretary
of Defense Robert Gates, who became the president of the Boy Scouts of
America and then chancellor of William & Mary after leaving the
government.\51\ There's also former Secretary of State, Defense, and
Army Chief of Staff George C. Marshall, who served as president of the
American Red Cross and chairman of the American Battle Monuments
Commission.\52\
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\50\ ``Kyle McSlarrow, Senior Vice President, TPX Business Planning
and Development, Comcast Cable,'' Comcast, accessed April 18, 2023,
https://corporate.comcast.com/news-information/leadership-overview/
kyle-mcslarrow.
\51\ Erin Zagursky, ``Robert M. Gates to be reappointed as W&M
Chancellor,'' William & Mary News Archive, September 20, 2018, https://
www.wm.edu/news/stories/2018/robert-m.-gates-to-be-reappointed-as-wm-
chancellor.php.
\52\ The George C. Marshall Foundation, ``Marshall and the Red
Cross,'' September 22, 2017, https://www.marshallfoundation.org/
articles-and-features/marshall-and-the-red-cross/; American Battle
Monuments Commission, ``History,'' https://www.abmc.gov/about-us/
history.
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Third, Congress should require defense contractors to certify that
their employees are in compliance with the requirements of Section 1045
of the NDAA for fiscal year 2018.\53\ Specifically, Congress should
enact a law mandating that the secretary of defense issue regulations
requiring each offeror that submits a bid or proposal in response to a
solicitation issued by the DOD to include in such bid or proposal a
representation that all covered individuals receiving compensation from
such offeror are in compliance with the requirements of that section.
The Government Accountability Office recommended in 2021 that the DOD
issue regulations containing this requirement, and the DOD agreed with
the recommendation and committed to do so.\54\ There is no reason
Congress should not make this certification a statutory requirement.
---------------------------------------------------------------------------
\53\ 10 U.S.C., Chapter 49, ``Miscellaneous Prohibitions and
Penalties'' [see note 4].
\54\ Government Accountability Office, Post-Government Employment
Restrictions: DOD Could Further Enhance Its Compliance Efforts Related
to Former Employees Working for Defense Contractors, GAO-21-104311
(2021) Recommendations, https://www.gao.gov/products/gao-21-104311.
---------------------------------------------------------------------------
Finally, Congress should increase transparency regarding government
ethics compliance by current and former defense officials. Congress has
mandated that the DOD issue written guidance on post-government
employment restrictions to departing senior and very senior employees
and retain that guidance in the After Government Employment Advice
Repository, but the public has little access to that guidance.\55\
Congress should require the DOD to make that guidance public by posting
it in a centralized data base on the website of the Office of
Government Ethics.
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\55\ ``Defense Federal Acquisition Regulation Supplement; Senior
DOD Officials Seeking Employment with Defense Contractors'' (DFARS Case
2008-D007), 74 Fed. Reg. 59913 (November 19, 2009), https://
www.govinfo.gov/content/pkg/FR-2009-11-19/pdf/E9-27849.pdf.
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This is data that is already collected and processed by government
administrators, following a congressional mandate in 2008.\56\
Furthermore, this information is not private or classified, and can be
accessed by a Freedom of Information Act (FOIA) request or by some
cursory searching on websites like LinkedIn. POGO has maintained a
similar ``proof of concept'' data base to demonstrate a relatively
simple and inexpensive way to strengthen Federal contractor
accountability.\57\ The United Kingdom also maintains a public data
base for its former appointees and government officials.\58\ The public
has a strong interest in seeing the formal ethics opinions in DOD's
secret data base. These opinions are the first line of defense against
intentional or inadvertent misconduct by covered former DOD officials,
and their publication would go a long way toward assuring taxpayers
that military procurement decisions are being made based on merit and
not preferential treatment.
---------------------------------------------------------------------------
\56\ 74 Fed. Reg. 59913 [see note 56].
\57\ ``Pentagon Revolving Door Data base,'' Project On Government
Oversight, last modified January 31, 2023, https://www.pogo.org/data
base/pentagon-revolving-door.
\58\ Cabinet Office, ``Business Appointment Rules Advice,'' last
updated April 5, 2023, https://www.gov.uk/government/publications/
cabinet-office-business-appointment-rules-advice.
---------------------------------------------------------------------------
Along the same lines, we recommend releasing other ethics records
pertaining to top political appointees in the DOD and other agencies on
the Office of Government Ethics' website. While the public can request
these records under the Freedom of Information Act or, in some cases,
under government ethics laws, practical obstacles limit public access
to these records. Because the public has no way of knowing when the
government has issued an ethics waiver, for example, a member of the
public would not know to request a copy of the waiver or where to file
the request. Obtaining other records, like ethics screening
arrangements, through FOIA requests is a slow process that, in many
cases, can only be employed effectively through costly litigation.
But the public's need to know when the government is excusing
officials from compliance with ethics laws and regulations or how the
government is implementing recusals outweighs any interest an
individual official may have in keeping such matters hidden from the
public. A law mandating the creation of a centralized data base could
exclude records containing classified information or records of
individual ethics counseling, other than legally mandated issuances
like the post-employment guidance in the After Government Employment
Advice Repository.\59\ Therefore, the increased transparency and public
accountability would not come at any cost to government effectiveness.
---------------------------------------------------------------------------
\59\ 74 Fed. Reg. 59913 [see note 56].
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We think that it is important to close this section by noting that
U.S. military personnel have complied with more serious restrictions
than what we are proposing in more demanding times than these. U.S.
Navy and Marine Corps personnel were barred from being employed by Navy
contractors under U.S. law from 1896 into the 1960's.\60\ That broad
restriction specified, ``No payment shall be made from appropriations
made by Congress to any officer in the Navy or Marine Corps on the
Active or retired list while such officer is employed by any person or
company furnishing naval supplies or war material to the Government.''
\61\ Despite this ban, the U.S. Navy and Marine Corps underwent an
incredible technological and doctrinal modernization that allowed them
to claim victory in the two largest wars ever fought.
---------------------------------------------------------------------------
\60\ 10 U.S.C. Sec. 6112 was repealed by Pub. L. 87-649,
Sec. 14c(36), September 7, 1962, 76 Stat. 501, https://
uscode.house.gov/statviewer.htm'volume=76&page=501.
\61\ 34 U.S.C. Sec. 883, 1896, https://tile.loc.gov/storage-
services/service/ll/uscode/uscode1925-00103/uscode1925-001034016/
uscode1925-001034016.pdf.
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The revolving door has been a growing problem for a long time. The
Government Accountability Office has been issuing reports on the
problems with the DOD revolving door since at least 1986.\62\ POGO has
also pushed for specific reforms since the 1980's.\63\ We know what the
problems are. They have been studied, reported on, evaluated, and
reevaluated. Now is the time for Congress to finish what it has started
by implementing additional reforms.
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\62\ Government Accountability Office, DOD Revolving Door; Many
Former Personnel Not Reporting Defense-Related Employment, GAO/NSIAD-
86-71 (March 1986), https://www.gao.gov/assets/nsiad-86-71.pdf.
\63\ Danielle Brian-Bland and Dina Rasor, ``Lies, Half-Truths, and
Misrepresentations: How the Military Gets Its Money,'' Yale Law &
Policy Review, Vol. 5, No. 1 (1986): 102-119, https://www.jstor.org/
stable/40239235.
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End Rubberstamp Approval of Former Military Personnel Serving
Foreign Powers
The second problem of outside influence we would like to bring to
Congress's attention involves the influence of foreign governments. In
the earliest days of the republic, the founders understood the dangers
of foreign government influence. That is why they took care to enshrine
a safeguard in the Constitution against foreign influence over
government officials--the Emoluments Clause. The Emoluments Clause
prohibits anyone holding ``an office of profit or trust,'' which
includes retired military personnel and members of the reserves, from
receiving payments from foreign governments unless Congress
consents.\64\
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\64\ Congressional Research Service, ``Foreign Government
Employment by Armed Services Retirees,'' IF12276, January 5, 2023,
https://crsreports.Congress.gov/product/pdf/IF/IF12276/7; Department of
Defense, Standards of Conduct Office, ``Application of the Emoluments
Clause to DOD Civilian Employees and military personnel,'' White Paper,
accessed April 19, 2023, https://dodsoco.ogc.osd.mil/Portals/102/
emoluments_clause_applications.pdf.
---------------------------------------------------------------------------
Congress has granted limited consent to receive such payments for
individuals who obtain waivers, first from their employing services and
then from the Department of State.\65\ The statutory designation of the
State Department as the final approving authority comes with the duty
to wield the waiver power responsibly, putting national interests
before an individual's profit-seeking activities.\66\ But, in practice,
that is not what State Department officials appear to have done.
---------------------------------------------------------------------------
\65\ 37 U.S.C. Sec. 908, https://www.law.cornell.edu/uscode/text/
37/908.
\66\ 22 C.F.R. Sec. Sec. 3a.2 and 3a.3 (2023), https://
www.law.cornell.edu/cfr/text/22/part-3a.
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A POGO investigation, concurrent with an investigation by the
Washington Post, revealed that the State Department all but
rubberstamps these approvals. Between April 2010 and August 2020, over
500 retired and reserve U.S. military personnel received authorization
to work for foreign countries.\67\ The governments of some of those
countries are notorious for human rights violations and their
activities raise questions of potential national security issues.
---------------------------------------------------------------------------
\67\ Julienne McClure, ``State Dept. Is Quietly Approving Former
Servicemembers' Work for Foreign Interests. That's a Problem,'' Project
On Government Oversight, October 18, 2022, https://www.pogo.org/
investigation/2022/10/state-dept-is-quietly-approving-former-
servicemembers-work-for-foreign-interests-thats-a-problem; Craig
Whitlock and Nate Jones, ``Retired U.S. Generals, Admirals Take Top
Jobs with Saudi Crown Prince,'' Washington Post, October 18, 2022,
https://www.washingtonpost.com/investigations/interactive/2022/
veterans-us-foreign-jobs-saudi- arabia/.
---------------------------------------------------------------------------
This is true of the government of Saudi Arabia, one of the top
employers at issue in these waivers. The State Department has expressed
concern about the authoritarian government's record of abuses, citing
``unlawful or arbitrary killings, including extrajudicial killings;
enforced disappearances; torture and cruel, inhuman, or degrading
treatment or punishment by government agents; harsh and life-
threatening prison conditions; arbitrary arrest and detention;
political prisoners or detainees; [and] transnational repression
against individuals in another country.'' \68\ In 2018, Saudi leaders
ordered the brutal murder of Jamal Khashoggi, a United States resident
employed by the Washington Post.\69\
---------------------------------------------------------------------------
\68\ State Department Bureau of Democracy, Human Rights, and Labor,
2022 Country Reports on Human Rights Practices: Saudi Arabia, (2022),
https://www.State.gov/reports/2022-country-reports-on-human-rights-
practices/saudi-arabia/.
\69\ Shane Harris, Souad Mekhennet, John Hudson, and Anne Gearan,
``Turks tell U.S. officials they have audio and video recordings that
support conclusion Khashoggi was killed,'' Washington Post, October 11,
2018, https://www.washingtonpost.com/world/national-security/turks-
tell-us-officials-they-have-audio-and-video-recordings-that-support-
conclusion-khashoggi-was-killed/2018/10/11/119a119e-cd88-11e8-920f-
dd52e1ae4570_story.html.
---------------------------------------------------------------------------
There are also concerns about Saudi Arabia's ties to our
international rivals. The White House has accused the Saudi Government
of taking measures to help Russia fund its murderous campaign in
Ukraine.\70\ The monarchy has also reportedly relied on Russian and
Chinese negotiators to work toward reestablishing diplomatic ties with
Syria and Iran.\71\
---------------------------------------------------------------------------
\70\ Jackie Northam, ``The White House accuses Saudi Arabia of
aiding Russia and coercing OPEC oil producers,'' NPR, October 13, 2022,
https://www.npr.org/2022/10/13/1128523146/saudi-arabia-russia-opec-oil-
cut-biden-congress-washington.
\71\ Summer Said, Benoit Faucon, and Michael Amon, ``Saudi Arabia,
Syria Close to Resuming Ties in Russia Brokered Talks,'' Wall Street
Journal, March 23, 2023, https://www.wsj.com/articles/saudi-arabia-
syria-close-to-resuming-ties-in-russia-brokered-talks-a340b817; Abby
Sewell, ``Saudi Arabia, Syria may restore ties as Mideast Reshuffles,''
Associate Press, March 24, 2023, https://apnews.com/article/saudi-
arabia-syria-restore-relations-192c4b2086b34288bdd530e06fc4a32a.
---------------------------------------------------------------------------
Yet former National Security Advisor James Jones and former head of
the National Security Agency Keith Alexander, both of whom are retired
military officers, have served the Saudi monarchy with the State
Department's blessing.\72\ There is not much higher in the ranks of
former U.S. Government insiders a foreign power could hope to reach
than these two individuals.
---------------------------------------------------------------------------
\72\ Whitlock and Jones, ``Retired U.S. Generals, Admirals Take Top
Jobs with Saudi Crown Prince'' [see note 68].
---------------------------------------------------------------------------
Mr. Jones increased his involvement with the Saudi Government after
the murder of Mr. Khashoggi.\73\ The killing did not discourage Jones's
company from applying to do more work for the regime. According to the
Washington Post, former four-star Air Force General Charles Wald, who
worked for Mr. Jones, said, ``We asked ourselves, are we basically
turning a blind eye toward immorality?'' \74\ The answer to that
question is yes. And the State Department joined them in ignoring that
immorality.
---------------------------------------------------------------------------
\73\ Whitlock and Jones, ``Retired U.S. Generals, Admirals Take Top
Jobs with Saudi Crown Prince'' [see note 68].
\74\ Whitlock and Jones, ``Retired U.S. Generals, Admirals Take Top
Jobs with Saudi Crown Prince'' [see note 68].
---------------------------------------------------------------------------
Topping even Saudi Arabia as an employer of former U.S. military
personnel is the United Arab Emirates (UAE). The State Department
approved nearly 280 waivers permitting former military personnel to
work for the regime in the UAE.\75\ Over three-quarters of those
waivers authorized work for EDGE Group or one of its subsidiaries, a
defense conglomerate owned by the Emirati State. This year, EDGE's CEO,
Mansour AllMulla, boasted that his company has ``excellent
relationships with a lot of partners in China, Russia, and with the
different countries.'' \76\
---------------------------------------------------------------------------
\75\ McClure, ``State Dept. Is Quietly Approving Former
Servicemembers' Work for Foreign Interests. That's a Problem'' [see
note 68].
\76\ Agnes Helou, ``EDGE Group CEO Talks Acquisitions, Chinese and
Russian Cooperation and Autonomous Systems,'' Breaking Defense,
February 21, 2023, https://breakingdefense.com/2023/02/edge-group-ceo-
talks-acquisitions-chinese-and-russian-cooperation-and-autonomous-
systems/.
---------------------------------------------------------------------------
The State Department has identified a litany of ``significant''
human rights violations by the UAE's rulers, including reports of
arbitrary arrests, torture, and disappearances, as well as harassment
of human rights organizations.\77\ Despite such concerns, the State
Department essentially rubberstamped waiver requests from former
military personal to work on behalf of the UAE.
---------------------------------------------------------------------------
\77\ State Department Bureau of Democracy, Human Rights, and Labor,
2022 Country Reports on Human Rights Practices: United Arab Emirates,
(2022), https://www.State.gov/reports/2022-country-reports-on-human-
rights-practices/united-arab-emirates/.
---------------------------------------------------------------------------
Former Defense Secretary James Mattis received one of these
waivers. That was during a brief gap in Federal employment, between his
service as a Marine Corps four-star general and his appointment as
secretary of defense. He did not disclose his work for the Emirati
Government in the financial disclosure report he filed upon being
nominated for defense secretary, though a departmental spokesperson
claims he told the Senate Armed Services Committee about it.\78\
---------------------------------------------------------------------------
\78\ Mandy Smithberger, ``Generally Concerning,'' Project On
Government Oversight, August 2, 2017, https://www.pogo.org/
investigation/2017/08/generally concerning.
---------------------------------------------------------------------------
As secretary, General Mattis was leading the Department of Defense
when former President Trump decided to support a blockade of Qatar by
the UAE.\79\ Whatever position then-Secretary Mattis may have taken
regarding the blockade behind closed doors, having a former UAE
military advisor leading our military at that time risked an erosion of
public confidence in the government's decisions and jeopardized
relations with America's allies.
---------------------------------------------------------------------------
\79\ Julian Borger, ``Qatar Blockade Exposes Rifts in Trump
Administration's `Peculiar' Foreign Policy,'' Guardian, June 24, 2017,
https://www.theguardian.com/us-news/2017/jun/24/qatar-blockade-trump-
administration-foreign-policy.
---------------------------------------------------------------------------
Another example involves Charles Bolden, retired United States
Marine Corps major general and former administrator of the National
Aeronautics and Space Administration (NASA). While leading NASA in
2016, then-Administrator Bolden negotiated a cooperation agreement with
the UAE.\80\ Following his departure from government, the State
Department authorized him to work as a member of the Emirati Space
Advisory Committee in 2018. He had expressed his interest in fostering
collaboration between the U.S. and UAE as early as 2010, so his work on
the 2016 agreement may have been an earnest effort to pursue legitimate
policy objectives.\81\ But without greater public awareness of the
relationships involved or the negotiations, his work for the UAE so
soon after leaving government creates an appearance problem that
threatens public trust.
---------------------------------------------------------------------------
\80\ National Aeronautics and Space Administration, ``NASA, UAE
Sign Significant Outer Space, Aeronautics Cooperation Agreement,''
Press Release 16-058, June 12, 2016, https://www.nasa.gov/press-
release/nasa-uae-sign-significant-outer-space-aeronautics-cooperation-
agreement.
\81\ McClure, ``State Dept. Is Quietly Approving Former
Servicemembers' Work for Foreign Interests. That's a Problem'' [see
note 68].
---------------------------------------------------------------------------
These episodes illustrate the potential for conflicts of interest.
The State Department's permissive approach to dispensing foreign
government emolument waivers creates a perverse
incentive for officials to consider currying favor with foreign
governments before they leave the military. This temptation could lead
to misusing their positions in the hopes of reaping rewards after they
leave their posts. The Washington Post reported that some former top
officials received six-and seven-figure payments working for foreign
governments, ``far more than what most American service members earn
while on Active Duty.'' \82\
---------------------------------------------------------------------------
\82\ Whitlock and Jones, ``Retired U.S. Generals, Admirals Take Top
Jobs with Saudi Crown Prince'' [see note 68].
---------------------------------------------------------------------------
The effects of these waivers even touches on one of the most hotly
debated issues in Congress today: the strategic challenge to the United
States from China. Between April 2010 and August 2020, at least four
emoluments waivers were approved for former U.S. military personnel to
work for organizations with ties to China.\83\ This is despite the fact
that the DOD and Secretary of Defense Lloyd Austin have described China
as ``America's pacing threat,'' with other DOD officials clarifying
that ``China is the only country that can pose a systemic challenge to
the United States in the sense of challenging us, economically,
technologically, politically and militarily.'' \84\
---------------------------------------------------------------------------
\83\ McClure, ``State Dept. Is Quietly Approving Former
Servicemembers' Work for Foreign Interests. That's a Problem'' [see
note 68].
\84\ Jim Garamone, ``Official Talks DOD Policy Role in Chinese
Pacing Threat, Integrated Deterrence,'' Department of Defense, June 2,
2021, https://www.defense.gov/News/News-Stories/Article/Article/
2641068/official-talks-DOD-policy-role-in-chinese-pacing-threat-
integrated-deterrence/.
---------------------------------------------------------------------------
Beyond the problem of the State Department's permissiveness with
waivers, there is also the issue of transparency. In theory, the public
should have access to these waivers to monitor the risks the State
Department is choosing to create. But it took protracted FOIA
litigation by both POGO and the Washington Post to secure the release
of these waivers, with the State Department and the Department of
Justice fighting against it. If those agencies had put as much effort
into considering these waivers as they put into keeping them from the
public, there might be fewer waivers.
After we prevailed in the FOIA case, the documents still left
questions unanswered. Many of them were heavily redacted. The
government redacted names of officials receiving the waivers in 80
percent of the waivers generally and 98 percent of the waivers for work
on behalf of the UAE.\85\ Even without redactions, the waivers were
short on details. In some cases, they identified the employing entity
but not the foreign country for which the work was to be performed. And
in cases of firms with numerous clients, identifying the client nation
from the waiver was often impossible.
---------------------------------------------------------------------------
\85\ McClure, ``State Dept. Is Quietly Approving Former
Servicemembers' Work for Foreign Interests. That's a Problem'' [see
note 68].
---------------------------------------------------------------------------
When highly visible former members of U.S. military leadership
appear on television, give quotes to reporters, or publish opinion
pieces, they enjoy the trust of a public that assumes their proven
loyalty is solely to the interests of our own country. But if they are
working for a foreign government, or hope to work for one in the
future, that trust may be misplaced. The public should know of their
divided interests. Unfortunately, the State Department has left the
public without tools to identify these conflicts of interest if the
former officials in question fail to share that information.
This lack of transparency thwarts public oversight. Without knowing
the name of a former official being granted a waiver, the public does
not know what expertise and insider knowledge is being put to use
abroad. Without knowing which country is buying that former official's
services, the public cannot gauge the risks created. And without
knowing what services a former official will provide, the public has no
way to scrutinize whether divided loyalties could have influenced an
official's prior work for our own government. These are not risks
Americans should bear in ignorance.
But there are things Congress can do to improve the situation. This
year, POGO published a list of recommendations on how to deter foreign
influence.\86\ We recommend that Congress:
---------------------------------------------------------------------------
\86\ Dylan Hedtler-Gaudette, ``How to Deter Foreign Influence and
Protect Government Integrity,'' Project On Government Oversight,
February 22, 2023, https://www.pogo.org/resource/2023/02/how-to-deter-
foreign-influence-and-protect-government-integrity.
---------------------------------------------------------------------------
Enact substantive prohibitions on former government
officials (including but not limited to the military) seeking and
obtaining employment with certain problematic foreign countries or
entities controlled by those countries. The list of prohibited
employers should include adversaries, serial human rights abusers,
regimes that do not respect religious freedom, and other authoritarian
and malign governments and the entities controlled by those
governments.
Enact a 5-year ban or a ban that lasts for the duration
of a president's administration, whichever is longer, on former senior
and very senior DOD employees covering both representational activity
and behind-the-scenes assistance to foreign governments, foreign
political parties, and foreign business entities.
Require expanded waiver applications to include more
substantive details and information about potential foreign employers,
including the precise nature of the role, any preexisting relationships
or communications between the applicant and the prospective employer,
compensation, and additional relevant information.
Require submission of comprehensive waiver application
data to Congress on a regular basis and make those reports available to
the public within a reasonable timeframe. This reporting should come
from the Department of Defense and Department of State, and should
include complete articulation of the methodology and procedures for
assessing and rendering decisions on waiver applications.
Require a retrospective analysis and subsequent report on
previously approved waivers and any conflict of interest or national
security concerns that were either flagged at the time and not resolved
or that were flagged and adjudicated. This report should also
specifically address any waivers in which the Department of State
flagged International Traffic in Arms Regulations (ITAR) concerns, what
the exact nature of those concerns were, and how they were resolved.
Impose robust financial penalties for those retired and
reserved officials who violate the law by not obtaining a waiver prior
to working on behalf of a foreign interest or who have otherwise
violated the rules in place around seeking employment with foreign
interests.
Require the Government Accountability Office to
periodically audit the emoluments waiver system and its efficacy as
well as any ongoing concerns around the potential corrupting impact of
former U.S. Government officials working on behalf of foreign
interests.
POGO urges the committee to undertake the work of implementing our
recommendations by advancing legislation. The American people deserve
nothing less that the protection these solutions would provide.
Reduce Risk and Appearance of Financial Conflicts of Interest for
Senior Pentagon Officials
The final corrupting phenomenon we recommend Congress address is
the possibility and the appearance of ongoing financial conflicts of
interest that exist because of an inadequate ban on stock ownership by
certain defense officials.
The law currently prohibits specified defense officials from owning
or purchasing stocks in the top 10 companies doing business with the
Pentagon during the previous five fiscal years.\87\ Those 10 companies
claim a disproportionate chunk of contract awards--over 38 percent. But
in fiscal year 2022, the top 100 contractors accounted for 61 percent
of obligated contract dollars.\88\ Most of those companies rely on the
Pentagon as their largest or, in some cases, only customer.\89\
Expanding the ban to cover these 100 companies would significantly
reduce the risk as well as the perception of conflicts of interest.
---------------------------------------------------------------------------
\87\ 10 U.S.C. Sec. 988 (2023), https://www.law.cornell.edu/
uscode/text/10/988.
\88\ Defense and Security Monitor, ``Top 100 Defense Contractors
2022,'' Forecast International, February 22, 2023, https://
dsm.forecastinternational.com/wordpress/2023/02/22/top-100-defense-
contractors-.
\89\ ``Top 100 for 2022,'' Defense News, https://
people.defensenews.com/top-100/.
---------------------------------------------------------------------------
Furthermore, the current prohibition only applies to senior
acquisition officials. As we mentioned earlier, other senior officials
who are not designated as acquisition officials can significantly
impact the fortunes of companies. Their ability to hold stock in
companies that do business with the DOD damages public faith in the
Department. Applying the prohibition to more senior officials would
help restore the public's trust.
With so much money and the security of the Nation at stake, the
public deserves to know that legal safeguards are sufficient to prevent
the temptation of lucrative investment returns from compromising our
national defense.
Contractor interactions with defense personnel create risks of
conflicts of interest, as well as the potential for insider trading
based on information gleaned from these interactions. There is no way
for Congress or the public to know how often these risks materialize
under the current circumstances. This creates an appearance problem for
the DOD because the public cannot rule out the possibility of conflicts
of interest and insider trading. Banning more senior officials from
owning stocks in a wider array of defense contractors can significantly
reduce both the risks of insider trading and the appearance of these
possible conflicts.
This simple measure would bolster public confidence in defense
programs. Congress should apply the stock ownership prohibition to all
senior and very senior employees covered by subsections (c) and (d) of
18 U.S.C. Sec. 207, and expand the current prohibition to the top 100
defense contractors. Broadening the scope of this stock ownership ban
to cover more senior officials and more of the top companies working
with the Pentagon would strengthen the public's faith in the DOD while
reducing the risks of financial conflicts of interest.
Senior leaders in the government have ample alternatives for
investing without jeopardizing national security or public trust,
including diversified mutual funds, diversified exchange-traded funds,
and the Thrift Savings Plan's portfolio investments. Demonstrating the
viability of this approach, this committee used to require nominees for
Senate-confirmed positions to commit to divesting all defense
contractor stock in their ethics agreements, and there is no reason to
believe that this practice affected the quality of Pentagon
leadership.\90\
---------------------------------------------------------------------------
\90\ Ethics agreements of Department of Defense nominees used to be
explicit as to the requirement to divest contractor stocks, a
requirement we believe came from the policy of the Senate Armed
Services Committee at the time. See Letter from Robert Work (nominee
for the position of Deputy Secretary) to Stephen Preston, General
Counsel and Designated Agency Ethics Official, Department of Defense,
February 7, 2014, 1 (``During my term of office, neither my spouse nor
I will invest in any company identified as a Department of Defense
contractor or any other entity that would create a conflict of interest
with my Government duties. I understand that if any company in which my
spouse or I invest enters into a contract with the Department of
Defense, my spouse or I will be required to divest that interest.''),
https://www.documentcloud.org/documents/23784690-dod-robert-o-work-
2015ea; Letter from Dr. Jonathan Woodson (nominee for the position of
Assistant Secretary of Defense for Health Affairs) to Jeh Johnson,
General Counsel and Designated Agency Ethics Official, Department of
Defense, April 23, 2010 (similar language), https://
www.documentcloud.org/documents/23784697-dod-02542-jonathan-woodson-ea.
---------------------------------------------------------------------------
conclusion
Major General Smedley Butler, who twice won the congressional Medal
of Honor while serving 33 years in the United States Marine Corps,
wrote after World War I, ``War is a racket. It always has been. It is
possibly the oldest, easily the most profitable, surely the most
vicious. . . It is the only one in which the profits are reckoned in
dollars and the losses in lives. A racket is best described, I believe,
as something that is not what it seems to the majority of people. Only
a small `inside' group knows what it is about. It is conducted for the
benefit of the very few, at the expense of the very many. Out of war a
few people make huge fortunes.'' \91\
---------------------------------------------------------------------------
\91\ Smedley D. Butler, War is a Racket, (New York: Round Table
Press, INC., 1935), 1-2.
---------------------------------------------------------------------------
Echoing these comments, President Dwight D. Eisenhower warned in
his 1961 farewell address that ``we must guard against the acquisition
of unwarranted influence, whether sought or unsought, by the military-
industrial complex. The potential for the disastrous rise of misplaced
power exists and will persist. We must never let the weight of this
combination endanger our liberties or democratic processes. We should
take nothing for granted. Only an alert and knowledgeable citizenry can
compel the proper meshing of the huge industrial and military machinery
of defense with our peaceful methods and goals, so that security and
liberty may prosper together.'' \92\
---------------------------------------------------------------------------
\92\ Dwight D. Eisenhower, ``President Dwight D. Eisenhower's
Farewell Address,'' (speech, the Oval Office, Washington, DC, January
17, 1961), https://www.archives.gov/milestone-documents/president-
dwight-d-eisenhowers-farewell-address.
---------------------------------------------------------------------------
There is too much at stake now to do nothing. This Congress is in a
position to make a real impact. We urge Congress to pass legislation
that more effectively slows the revolving door between the Pentagon and
defense contractors while simplifying the rules; deters the possibility
of foreign influence by ending the rubberstamp approval of former
military personnel working for foreign governments; and expands the
stock ownership prohibition to reduce the risk and perception of
financial conflicts of interest for senior Pentagon officials.
Our aspirational American values of government ethics and taxpayer
accountability are all touched by these reforms. And in a very real
sense, the strength of our military and our readiness are also directly
undermined when policymakers make decisions based not on actual need,
but on what is best for the bottom line of defense contractors.
Congress should move to ensure that the United States military, the
servicemembers who wear its uniforms, and the citizens who depend on
their service are all provided for by a system that prioritizes our
national security and results over private gains.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Senator Warren. Thank you very much, and it is good to be
back with you. I am going to recognize myself here for first
round of questions. Decisions made at the Department of Defense
and other Federal agencies should be based on one thing and one
thing only, what is in the best interests of the American
public.
But big defense contractors have a different set of
incentives. They are responsible to their shareholders, and
that means their job is to make as much as they can in profits.
Mr. Wilkerson, you have decades of experience in Republican and
Democratic Administrations, both in uniform at DOD, ultimately,
as Special Assistant for the Chairman of the Joint Chiefs,
Colin Powell, and as a civilian in the State Department.
You have seen the relationship between the Federal
Government and private industry up close and personal. Now,
there are a lot of different ways that industry seeks to
influence decisionmaking at the Pentagon, and a key one is by
use of the revolving door.
So, Mr. Wilkerson, let me just ask you, were you lobbied by
former colleagues who were hoping to influence your
decisionmaking when you worked either at the Pentagon or at the
State Department?
Mr. Wilkerson. I was at both places. I was asked legally,
in view of the administrative instructions I received when I
became Director and Deputy Director of the Marine Corps War
College in Quantico, Virginia.
In other words, they came to me after I retired. In State,
it was quite the opposite. I had to tell them midsentence, as
it were, stop. Motion my staff assistant come in. ``Escort this
gentleman out, please, because he is getting ready to make an
offer of employment to me, and I can't, you know, listen to
it.''
That was my administrative instructions when I did my
financial disclosure form and went through the White House
background investigation and everything else. I knew that I
could not entertain an offer for civilian employment post my
position until I was out of it.
Senator Warren. I am just making sure I am following you as
we go through this. You are saying while you were still working
for the Government, that there were defense contractors who
were pretty clearly willing to step over the line to try to
make you an offer of employment while you were still a
Government employee?
Mr. Wilkerson. Yes, ma'am.
Senator Warren. How about on the other side? Were they
lobbying you about contracts, other things?
Mr. Wilkerson. Not directly. It is a little bit more
pernicious than that. For example, when I would sit down at
lunch with Turki al-Faisal, who at that time was head of Saudi
intelligence, with David Ignatius from the Washington Post on
the other side of me, and listen to the conversation at the
table, I knew there was influence being peddled.
Was there an exchange of money? I don't know. I myself was
offered a couple of thousand dollars from the Saudi official in
order to do this, that, and the other thing, and I told him
simply, I can't take it. If there is a really, truly pernicious
relationship with flag officers, and I am sad to say, colonels
too, I am sad to say it seems to be dominating the Air Force.
It is everywhere, but in the Air Force, it is really bad.
It is Saudis, going to work for the Saudis in whatever it is
they do for the Saudis. I spent a lot of time in this building
lobbying to get the Senate to pass and then in the House to get
the House to pass the legislation under the War Powers
Resolution that would get us out of the war in Yemen.
We got it passed in both houses. Unfortunately, President
Trump vetoed it. I encountered people all the time who were
being influenced by Saudi money that was exercised, if you
will, in order to keep that vote from being successful.
Senator Warren. Let me just back it up a little bit. I very
much appreciate your firsthand account here. To ask you that
based on your experience in Government, I just want to focus on
the part about why defense contractors, not just foreign
governments, but defense contractors like Boeing or Raytheon,
why is it they want to hire former Pentagon employees to work
for them as lobbyists?
What do they see is the benefit? Why is it better to have
someone who, for instance, they could hire people whose
profession is lobbying, someone who is lobbying in another
field, say, for the last 10 years? They don't want that. They
will take somebody who has never lobbied before, but who has
been employed at the Pentagon. Why is that?
Mr. Wilkerson. Well, there are a number of reasons for
that. I think the No. 1 reason is because they know people who
are their contemporaries who are in the building, as it were,
or wherever it happens to be.
They also know that that individual usually 06, 07, 08, or
up, has contacts elsewhere in the defense contracting business.
Now really just about roller decks [contact lists], and they
know that that person knows how to work those contacts.
If it is a specific program like the F-35, for example,
with which I am somewhat familiar, then you get people who are
very familiar with that on the inside, know all about the lies
that you have been telling the Federal Government with regard
to the program, and we will come out and reinforce those lies,
deceit, if you will, from their position with your business. It
is a very insidious, pernicious thing.
Senator Warren. I take it that this is really why Federal
law has long recognized the importance of trying to insulate
the work of the Federal Government from the influence of
private industry. We have been driving in this direction for a
long time, just not very successfully.
Federal law requires that Government officials, depending
on where you are, wait 1 year or 2 years based on their
seniority before lobbying their former agency. I think this is
called a cooling off period.
Ms. Brian, let me ask you about this. You run an
organization called POGO that works as a nonpartisan Government
watchdog. Is a 2-year cooling off period sufficient to address
concerns about conflicts of interest?
Ms. Brian. It is a step in the right direction, Chairwoman,
but it is not enough. It has been clear to us that you really
need to, especially when you are talking about political
appointees, look to the end of an Administration, the length of
the time of an Administration, which is often four or even
longer, depending on if the person is reelected.
This is something that we have done an analysis of the past
Presidential ethics orders all the way back to President
Clinton. Each President has had some form of ethics order,
often applying as much as a 5-year cooling off period.
But we do think a 4-year or at least to the end of the
Administration when it comes to those appointees is important.
I would love to include for the record, sort of our evaluation
of those various considerations and how they could be applied
through legislation.
Senator Warren. Without objection.
Ms. Brian. Thank you.
----------------------------------------------------------------------------------------------------------------
President President President President President POGO
---------------------------------- Biden Trump Obama Bush Clinton Proposed
Ethics
----------------------------------------------------------------- Reforms
-------------
To add
consistency
and
continuity
to the
Executive
Branch
ethics
Executive Action EO 13770 EO 13490 Restatement EO 12834 program,
EO 13989 (revoked by (revoked by of existing (revoked by POGO urges
EO 13983) EO 13770) ethics laws EO 13184) Congress to
codify the
best
practices
from
previous
presidential
ethics
Executive
Orders.
----------------------------------------------------------------------------------------------------------------
Post-Government Employment Ban on Applies to Applied to Applied to None Applied to Applies to
Lobbying as a Registered all all all former all former
Lobbyist ``appointee ``appointee ``appointee senior senior and
s,'' for 2 s,'' for 5 s,'' for ``appointee very senior
(or, in the case of POGO's years after years the s,'' for 5 employees
proposal, ban on assisting a leaving duration of years
registered lobbyist) office or Applied to administrat For
for the ``lobbying ion Applies to ``appointees
duration of activities' lobbying '' who are
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ion, respect to lobbying or senior or
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some cases was limited official'' the
than the by a and any non- For former administrati
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ethics that appointees whichever is
pledge created new who served longer
restriction loopholes in the
beyond Executive For a former
Applies to those in Office of senior
lobbying the LDA, the employee who
contacts including a President, is a
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official'' , which or employee senior
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restriction which the For a former
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not supply President had employee who
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than 5
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also applies
to behind-
the-scenes
assistance
to any
registered
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is making or
preparing to
make a
contact the
former
employee
would be
prohibited
from making.
Includes an
exception
for public
interest
lobbyists
who are not
lobbying on
behalf of
for-profit
organization
s
----------------------------------------------------------------------------------------------------------------
Ban on Communicating with the Extends the Merely Extended None None 2 years for
Appointee's Former Agency on 1-year post- restated the 1-year all former
Behalf of Others with Intent employment the post- senior and
toPInfluence restriction existing employment very senior
applicable restriction restriction appointees
to senior under 18 applicable
appointees U.S.C. Sec. to former During this
under 207(c) senior period, no
18.U.S.C. appointees contact with
Sec. under 18 any part of
207(c), U.S.C. Sec. appointee's
which 207(c), former
applies which department
only to the applied or agency,
former only to the regardless
employee's former of OGE
own agency, employee's separate
from 1 year own agency, ``component'
to 2 years from 1 year '
to 2 years designations
Expands the
restriction
to prohibit
communicati
ons with
senior
White House
staff
----------------------------------------------------------------------------------------------------------------
Ban on Behind-the-Scenes For former None None None None 2-year ban
Assistance to Lobbyists appointees on behind-
who are the-scenes
former assistance
senior or by all
very senior former
employees, senior and
a 1-year very senior
ban on employees to
assisting others who
others, are
behind-the- undertaking
scenes, in contacts or
undertaking lobbying
contacts or activities
lobbying that they,
activities themselves,
that they, would be
themselves, prohibited
would be from
prohibited undertaking
from
undertaking Congress has
done this
for DOD
officials,
and it
should be
expanded
government
wide. Public
Law 115-91,
Sec. 1045
----------------------------------------------------------------------------------------------------------------
Ban on FormerPAppointee Working Applies to Applies to None None Applies to For all
for any Foreign Government or all all all former
Foreign Political Party to ``appointee ''appointee ``appointee senior and
Influence U.S. Policy s,'' for 2 s,'' a s,'' a very senior
years after permanent permanent employees,
leaving ban ban for 5 years
government applicable applicable or the
or for the to any to any duration of
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ion, registratio registratio whichever is
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cover appointees assistance
activities who were to foreign
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registratio trade foreign
n under the negotiation political
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additional, foreign
President ban on business
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this assistance This reform
restriction to foreign should
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term, so it political on working
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effectively foreign foreign
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a lifetime rescinded reporting
ban this requirements
restriction
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term, so it
was
effectively
only a
prohibition
until the
end of the
administrat
ion and not
a lifetime
ban
----------------------------------------------------------------------------------------------------------------
Ban on Appointee Accepting Gifts Applies to Applies to Applies to None None For all
from Lobbyists or Lobbying all all all senior and
Organizations ``appointee ``appointee ``appointee very senior
s,'' ban on s,'' ban on s,'' ban on employees, a
gifts from gifts from gifts from ban on gifts
registered registered registered from
lobbyists lobbyists lobbyists lobbyists or
or lobbying or lobbying or lobbying lobbying
organizatio organizatio organizatio organization
ns for ns ns s. The rules
duration of should be
appointment expanded to
apply to
registered
lobbyists
and to any
for-profit
corporation
that is a
client of a
registered
lobbyist to
avoid
arbitrary
distinctions
between
companies
that do
their own
lobbying and
companies
that
outsource
lobbying
A $20 de
minimis gift
exception
should be
applied to
ease
enforcement
----------------------------------------------------------------------------------------------------------------
Ban on Appointee Handling Matters For all For all For all None None For all
Involving Former Employers or ``appointee ``appointee ``appointee officials,
Clients s'' a ban s'' a ban s'' a ban for 2 years
on on on
participati participati participati Require
ng in a ng in a ng in a recusal from
particular particular particular any
matter matter matter ``particular
involving involving involving matter''
particular particular particular (not merely
parties in parties in parties in ``particular
which the which the which the matter''
former former former involving
employer or employer or employer or specific
client is a client is a client is a parties)
party or party or party or affecting
represents represents represents any
a party, a party, a party, organization
for 2 years for 2 years for 2 years , including
from the from the from the a trade
date of date of date of organization
appointment appointment appointment , for which
and and and the officer
reaching reaching reaching or employee
back to back to back to has served
employers employers employers as an
and clients and clients and clients employee,
of the of the of the officer,
appointee appointee appointee director,
during the during the during the trustee, or
2-year 2-year 2-year general
period period period partner in
prior to prior to prior to the past 2
appointment appointment appointment years
----------------------------------------------------------------------------------------------------------------
Ban on Handling Matters on Which Applies to No Applies to None None N/A to
the Appointee had Lobbied all employment all public
``appointee ban. ``appointee interest
s.'' s.'' lobbyists
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ng in the matter ng in the matter
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falls, but nearly falls, but employment
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have by define agency that
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the Trump g issue appointee
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interpretat area'' because the definition
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``particula than a
r matter of ``particular
general matter of
applicabili general
ty.'' applicabilit
y.''
----------------------------------------------------------------------------------------------------------------
Golden Parachute Ban Prohibits None None None None Either:
``golden
parachute (a) a
payments'' complete ban
in cash or on anything
in kind (if of value
offered as given by a
a direct former
substitute employer,
for a cash unless the
payment), appointees
whether can
given demonstrate
before or they would
after have
entering received it
government, if they had
unless the not gone
appointees into
can show government
they would
have or
received it
if they had (b) a 4-year
not entered recusal from
the United any
States ``particular
Government matter''
(including
But it does particular
not matters of
prohibit general
the applicabilit
accelerated y) affecting
vesting of the
unvested financial
stock interests of
options or the former
unvested employer
restricted (which would
stock (or mean
similar essentially
unvested treating the
assets) appointees
prior to as if they
entering continued to
government hold stock
in their
It also former
does not employer,
apply if which would
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employer them under
offers the the conflict
item to of interest
individuals law from
entering participatin
government, g in any
as long as work focused
the item on the
would also industry in
be which the
available former
to someone employer
going into operates)
state
government
----------------------------------------------------------------------------------------------------------------
Hiring Based onPQualifications, Included Included Included None None Include
Competence, andPExperience hiring
requirements
Also require
training on
merit
systems
principles
and whistle
blower
protection
In addition,
prohibit
participatio
n in
personnel
actions
against
career
federal
employees
outside the
appointee's
immediate
chain of
command,
absent
written
documentatio
n of the
reason for
the
appointee's
involvement,
which must
be provided
to the
employee
----------------------------------------------------------------------------------------------------------------
Public Disclosure All ethics None. OGE None Pledges and For all
pledges and Pledges and required to waivers appointees,
waiver waivers file a filed with make
certificati filed with public appointee's publicly and
ons appointee's report on agency promptly
required or agency the available in
authorized administrat a
by the ion of the centralized
executive pledge. database on
order shall Pledges and OGE's web
be filed waivers site all
with the filed with ethics
head of the appointee's pledges,
appointee's agency ethics
agency. agreements,
Waivers waivers
must be (including
made public conflict-of-
within 10 interest
days waivers and
standards of
This conduct
transparenc waivers,
y extensions,
requirement approvals,
does not authorizatio
apply to ns,
conflict-of- certificatio
interest ns, and all
waivers or other
to legally
standards operative
of conduct ethics
waivers records to
ensure
strict
compliance
with ethics
commitments.
An exception
would exempt
records
containing
classified
information,
information
pertaining
to ongoing
law
enforcement
activities,
and
individual
guidance
that is not
required by
law to be
issued
In addition,
OPM should
make
publicly
available a
real-time
listing of
all
political
appointees
(by name,
title,
agency,
agency
component,
date of
appointment,
and date of
termination)
on its
official web
site
----------------------------------------------------------------------------------------------------------------
Report to the President Requires None Required None None Require OGE
reporting OGE to to report to
on ethics report to the
executive the President on
order President the
administrat on ethics administrati
ion and executive on of any
necessary order ethics
recommendat administrat executive
ions on ion, which order and a
procurement was variety of
lobbying released laws and
and publicly on regulations
presidentia OGE's web pertaining
l pardons. site to ethics
It also and require
requires a OGE to make
report on that report
the public
material
assistance
ban
extending
to
employees
``involved
in the
procurement
process''
for any
contract
under their
responsibil
ity in the
last 2
years of
their
government
service
----------------------------------------------------------------------------------------------------------------
Lobbying Defined The act of LDA``to act . None Meant Expand the
a definition . . as a knowingly definition
registered except registered communicati to go beyond
lobbyist ``lobbying lobbyist'' ng or the current
activities' under the appearing limitations
' did ``not LDA before any on
include officer or registered
communicati employee of lobbyists to
ng or any cover anyone
appearing executive with a
with regard agency on financial
to: a behalf of conflict of
judicial another interest,
proceeding; (except the closing
a criminal United loopholes
or civil States) and adopting
law with intent a single
enforcement to standard
inquiry, influence that will
investigati apply to
on, or Exceptions lobbyists
proceeding; included: for moneyed
or any 1. Lobinterests,
agency for state those who
process for or local secretly
rulemaking, government advise them
adjudicatio 2. Certain and the
n, or judicial, people they
licensing, criminal, work for--
as defined civil, or all those
in and administrat who might
governed by ive affect
the proceedings public
Administrat 3. Work for policy for
ive a college, private gain
Procedure hospital,
Act, as research Include an
amended, 5 institution exception
U.S.C. 551 or not-for- for public
et seq.'' profit interest
organizatio lobbyists
n
4. Lobbying
for
internation
al
organizatio
ns, if the
Secretary
of State
approves
5. Furnishi
ng
scientific
or
technologic
al
information
6. Testimon
y under
oath
pursuant to
18 U.S.C.
Sec.
207(j)(6).
----------------------------------------------------------------------------------------------------------------
Executive AgencyPDefined As defined As defined As defined None As defined As defined
by 5 U.S.C. by 5 U.S.C. by 5 U.S.C. by 5 U.S.C. by 5 U.S.C.
Sec. 105, Sec. 105, Sec. 105, Sec. 105, Sec. 105,
and and and and and includes
including included including included the EOP,
the EOP, the EOP, the EOP, the EOP, USPS, USPRC,
USPS, USPS, USPS, USPS, but not GAO.
USPRC, but USPRC, but USPRC, but USPRC, but Covers the
not GAO. not GAO. not GAO. not GAO. entire
Covered the Excluded Covered the Excluded agency
entire separate entire separate
agency agency agency agency
components components
as as
designated designated
by OGE by OGE
----------------------------------------------------------------------------------------------------------------
Administration Agency Agency Agency None Agency Agency
heads, in heads are heads, in heads are heads, in
consultatio required to consultatio required to consultation
n with OGE, establish n with OGE, establish with OGE,
are rules to are rules to are required
required to ensure required to ensure to establish
establish pledges are establish pledges are and publish
rules to signed and rules to signed by rules to
ensure ensure ensure appointees ensure
pledges are compliance pledges are and trade pledges are
signed, with the signed, negotiators signed,
ensure order ensure and ensure ensure
compliance within the compliance compliance compliance
with agency with with the with waivers
waivers in waivers in order in written
written written within the ethics
ethics ethics agency agreements,
agreements, agreements, and ensure
and ensure and ensure that spousal
that that employment
spousal spousal issues and
employment employment other
issues and issues and conflicts
other other are
conflicts conflicts addressed in
are are written
addressed addressed ethics
in written in written agreements.
ethics ethics Agencies are
agreements. agreements. also
OGE will OGE will required to
assist assist provide OGE
agencies in agencies in with copies
adopting adopting of ethics-
rules rules related
related to related to documents
the EO and the EO and for public
other other posting in a
ethics ethics centralized
requirement requirement public
s, and s, and database
report to report to
the the
President President
----------------------------------------------------------------------------------------------------------------
Waiver Authority Granted to Granted to Granted to None Granted to Bar
the OMB the the OMB the retroactive
Director, President Director or President waivers,
if or their their and had to require
certified designee designee, be written
in writing and took if certified justificatio
that the effect when certified by the ns for why
restriction a in writing President the waiver
is certificati that the in writing is in the
inconsisten on is restriction that the national
t with the signed by is waiver was interest,
purpose of the inconsisten in the and place
the President. t with the public them on
restriction A copy was purpose of interest. OGE's web
or it is in provided to the The waiver site within
the public the agency. restriction would be 10 days
interest But no or it is in published
(national legal the public in the
security or standard interest Federal
economic was (national Register
exigent established security or and given
circumstanc for issuing economic to the
es). Goes the waiver, exigent appointee
beyond the which meant circumstanc and agency
Obama it could be es). No
pledge in issued for requirement
identifying any reason to release
circumstanc or no waivers
es in which reason at publicly.
a waiver all. No (In
may be requirement practice,
granted. to release the Obama
Also the waiver administrat
requires publicly. ion
that the (In released
waiver must practice, them.)
be made the Trump
public administrat
within 10 ion
days released
unsigned,
undated,
retroactive
waivers.)
----------------------------------------------------------------------------------------------------------------
Receiving postgovernment None None None None None A
compensation from a contractor restriction
who receive Federal contracts in on the post-
excess of $10 million government
employment
41 U.S.C. Sec. 2104 receipt of
(Procurement Integrity Act) compensation
from a
contractor
currently
applies only
if the
former
official
served in
one of
several
specified
procurement-
related
capacities
with respect
to a
particular
contract.
This
restriction
should be
expanded to
apply to all
former
employees in
the chain of
command of
any covered
official,
not just
those who
were
directly
involved in
procurements
. The
prohibition
as to
employers
should apply
to all
divisions,
affiliates,
and
subcontracto
rs of a
contractor,
and language
in the law
making it
applicable
to work as a
``consultant
'' should be
amended to
explicitly
refer to
attorneys,
lobbyists,
and other
representati
ves or
advisors to
contractors
----------------------------------------------------------------------------------------------------------------
Financial Holdings Restriction None None None None None For all
senior and
very senior
employees,
restrict
financial
holdings
(including
their
spouses and
minor
children's
holdings) to
Treasuries,
diversified
mutual funds
and similar
non-
conflicting
assets, with
exceptions
for
financial
interests in
a spouse's
employer,
personal
residences
and other
non-
commercial
individual
residences
(whether
occupied
personally
or rented
out), as
well as
limited
exceptions
for pre-
existing
family
trusts
----------------------------------------------------------------------------------------------------------------
Outside Employment and Work None None None None None For all
Commitment Ban senior and
very senior
employees,
bar them
from
engaging in
compensated
outside
employment
for the
duration of
their
appointment,
with limited
exceptions
for family
trusts
(e.g., a
trust for
the
appointee's
immediate
family,
trusts for
family
members who
cannot care
for
themselves,
etc.)
----------------------------------------------------------------------------------------------------------------
Special Government Employee Rules None None None None None Develop
and Procedures rules and
procedures
to require
formal
written
designation
of special
government
employee
status at
the time of
appointment,
which must
be filed
with OPM and
in the
absence of
which an
employee
will not be
deemed a
special
government
employee
Also provide
that any
special
government
employee who
serves more
than 130
days in a
365-day
period will
be converted
automaticall
y to a
regular
employee
status or
terminated
Require OPM
to create a
public
database of
all special
government
employees
(identified
by name,
title,
agency
component,
appointment
date, and
termination
date). The
database
would
exclude FACA
committee
members and
certain
other
classes of
SGEs who are
determined
by OGE to
have no
significant
policy
making or
implementing
authority
(e.g.,
seasonal
workers in a
gift shop,
summer
inters,
lifeguards,
etc.)
Close the
loophole in
5 U.S.C.
Sec.
13103(f)(8)
that exempts
SGE's in the
EOP from
public
financial
disclosure
----------------------------------------------------------------------------------------------------------------
Discretionary Trusts None None None None None Provide that
all senior
and very
senior
employees
must
disclose the
holdings of
discretionar
y trusts to
the same
extent that
they would
disclose the
holdings of
trusts for
which they
are vested
beneficiarie
s
----------------------------------------------------------------------------------------------------------------
Agency Heads None None None None None Provide that
OGE must
review and
certify the
financial
disclosure
reports and
ethics
agreements
of any
agency heads
whose
positions do
not require
Senate
confirmation
(e.g., CDC
Director,
Postmaster
General,
etc.) before
they begin
serving in
the position
----------------------------------------------------------------------------------------------------------------
Senator Warren. You know, one of the common arguments that
some of my colleagues make about cooling off periods is that if
we lengthen them, it will make it tougher to recruit talented
people to work at DOD.
Now, I always want to pause when I hear that argument and
say, think about that for a minute. The claim is if somebody
knew that Federal law would prevent them from becoming a
lobbyist after they left their Federal job, that they would
choose not to come to work at the DOD in the first place.
Mr. Wilkerson, based on your experience, if we told people
who were in line for top Pentagon jobs that they would need to
wait 4 years instead of 3 years or 2 years before they could
become lobbyists after they left that job, do you think this
would make it harder for DOD to attract the talent that they
need?
Mr. Wilkerson. I don't, and I go back to Admiral Spruance,
Admiral Nimitz, Admiral Halsey, General Eisenhower, and a host
of other characters whom we all know from World War II who
weren't so motivated. They didn't have that incentive to do
what it was they did, which was quite phenomenal, if you think
about it.
Senator Warren. Is it your experience or your sense that
extending our cooling off period would strengthen or weaken our
National Security?
Mr. Wilkerson. I don't know what the exact time would be
that would be most effective, but I think it is a measure. It
is a measure. Frankly, I would rather see the military
reinstitute what I got at the Naval War College from Admiral
Stockdale and a guy by the name of Joe Brennan, which was
ethics and military service, and be a subject of a seminar, for
example, that had standing room only crowds in it, because that
is not something we teach as a country anymore.
Senator Warren. Fair point. Fair point. I am going to do
one last question, because I am way over time. I was filling in
while everybody was voting here. But my last question is to
you, Ms. Brian.
POGO has been around for over 40 years, that you have been
looking at this issue, you have been investigating these
problems for nearly that long. Do you think we need more
studies before we take steps to strengthen Pentagon ethics
requirements?
Ms. Brian. My plea is not for us to do any more studying.
As you mentioned, POGO ourselves have been doing this work
since the 1980's with analysis, the GAO has at least 40 years
of reports, more than 40 years of reports studying this, the
Inspectors General have as well.
We don't really need to be studying this anymore. We really
do know the problem here, and we just need to fix the problem.
If I could add to the point, you raised before about those who
might not want to come into Government or into the Defense
Department, if they know they can't become lobbyists
afterwards, I would argue I don't want them in the Defense
Department then, and I am glad that they are reluctant to go
in.
Senator Warren. Right. Thank you. You know, I just want to
close this by saying I have a bill that would combat giant
defense contractors capturing the Pentagon by making some
ethics reforms.
We should close influence peddling loopholes so the
definitions of lobbying capture all of the work that
corporations do to try to tilt the system in their favor. We
should extend recusal periods for people who come to DOD from
giant Pentagon contractors, and we should require more public
reporting on these companies about their hiring a former
Department of Defense official.
A good place to start this is by extending those cooling
off periods for at least 4 years, and with that, I apologize to
my colleagues for going so long and turn this over to Mr.
Scott.
Senator Scott. Thanks, Senator Warren. Thank you all for
being here. I am sorry I had to leave when you were in your
presentation, but do you have specific recommendations that you
would make?
So here is an example. Do you think we ought to prevent a
former DOD personnel that--working for a defense contractor, if
they had nothing--if they are going to do work in an area or
even lobby an area that had nothing to do with their job in the
military ahead of time?
Ms. Brian. No, no I don't.
Senator Scott. Okay.
Ms. Brian. Actually, I am glad you came back, Senator,
because I did want to respond to something you had in your
opening statement about the fact the DOD does have more--which
is true, there are more ethical or conflict of interest
restrictions for a DOD. But I think that is a good thing. DOD
has such an important mission. Yes, so I think that is okay.
Senator Scott. Yes, it is a pretty big budget. There was a
GAO study in, I guess, 2021 that said there is something like
1.1 million people get out of the service in between 2014 and
2019, but only about 1,700 were former DOD senior acquisition
officials ended up working for defense contractors. Does that
sound right?
Ms. Brian. It sounds correct. But I don't think it is
right. I mean, I think it is terrible.
[Laughter.]
Senator Scott. That is not exactly why I asked the
question----
[Laughter.]
Senator Scott. Do you think that is about the right number?
What we should be looking at is what happens, what the impact
of those 1,700, right?
Ms. Brian. Well, that GAO report only looked at the top 14
contractors and there are about 100,000 DOD contractors. I
really would have preferred if DOD----
Senator Scott. Do you think the number is quite a bit
bigger?
Ms. Brian. But I think that it is important to know those
were the 14 biggest ones, and I think that as the Chairwoman
reflected, that is a lot of people for 14 companies.
Senator Scott. Let's say you have somebody that has a
successful military career or worked at DOD and things like
that, whatever they did. What do you think they should do when
they finish? Because they clearly have gained a lot of
knowledge. Do you think they should be completely eliminated
from being able to work in defense or for a defense contractor?
What should they do with their time?
Ms. Brian. I think it really depends on the circumstance of
what their position was when they were at DOD. But for the vast
majority of cases, they have a world of opportunities without
having to trade on their influence peddling.
I think it is important to remember that in the private
sector, almost every company now has non-compete clauses where
you can't go to the competitor, which those clauses that are
being upheld in the courts are quite narrow in their scope.
I think that is the same thing in this case where if a
person had been involved, for example, in deciding that the F-
22 program should go forward, they should not be allowed to go
to Lockheed. That doesn't mean there aren't a world of other
companies they could go to work for.
Senator Scott. Yes. Colonel, Israel is a big and very
important to a lot of citizens of Florida, as you would expect.
You have stated that Israel will be gone in 20 years. You said
that, I think last year, a year before, so why would you
believe that, and why do you think that?
Mr. Wilkerson. Because Bibi Netanyahu is the leader. If he
weren't the leader, I wouldn't say that.
Senator Scott. It is only because--well, he probably wasn't
the leader for a while there.
Mr. Wilkerson. Oh, he has been the leader for a long time.
He worked with Marc Rich to get discounted oil and break our
sanctions in Iraq for Israel as the finance officer, if you
will.
Senator Scott. You have said the recognition of Israel was
a mistake. Do you think when you look at the Abraham Accords
and the success, we have had with those, do you think--and
there is a lot of countries now benefiting from Israel. Do you
think that our recognition of Israel is, or continues to be, a
mistake?
Mr. Wilkerson. What worries me the most right now, Senator,
is a change in the unified command plan, because I know how the
military fought that change for over half a century. I know how
Colin Powell would have fallen on his sword over that change.
That puts Israel for the first time in its history and
Central Command's history in the area of responsibility (AOR),
the area of responsibility with all the Arab countries. Had we
done that when we put together the 600,000 man coalition that
included the French, the Syrians, and others in the first Gulf
War, it would have collapsed right away.
The Abraham Accords is not sufficient enough, nor the
rapprochement between Tehran and Riyadh to convince me that
that change should have been made unless we are planning on war
with either Israel leading and us following, or us leading and
Israel holding our coat, or together.
That is the only reason, as a military professional of 31
years and a student of the Unified Command Plan (UCP) in
particular, a document signed by the President would be changed
to that effect.
Senator Scott. Thank you, Chair.
Senator Warren. Thank you. Senator Kaine.
Senator Kaine. Thanks for doing this hearing. I really
appreciate it. It is an interesting day to be having discussion
about Israel because it is the 75th independence anniversary
today.
I think Israel and the United States have been great
allies. You talked about President Truman. That was one of his
proudest accomplishments was the recognition of Israel, and
that----
Mr. Wilkerson. Over George Marshall's objections----
Senator Kaine. He did. He said, the person he most admired
in the world, George Marshall, told him not to do it, but he
had the strength as a guy with a high school degree from----
Mr. Wilkerson. I am a fan of Israel, Senator----
Senator Kaine.--to stare down--well, just let me finish. He
had the strength to stare down a guy who had won the Nobel
Peace Prize and say, yes, but I think this is the right thing
to do. That doesn't mean you can't criticize Israel. It doesn't
mean we shouldn't also recognize the huge protests that are
going on in Israel----
Mr. Wilkerson. Yes.
Senator Kaine.--right now are the sign of a functioning
democracy. Peaceful----
Mr. Wilkerson. Gives me hope.
Senator Kaine. I wish we could get as many Americans to
peacefully protest about some things that I wish would change.
There is some very hopeful signs, challenging signs. No country
is perfect. I have a lot of questions I want to ask.
I am troubled by The Washington Post reporting that says 95
percent of the time when somebody who is a retired military
officer asks for a waiver to work for a foreign government, the
answer is yes.
That is just--without even knowing the details of the
individual cases, that percentage strikes me as very troubling.
It reminds me of the challenge we got into with military
housing a few years ago.
In the military housing contracts, the base commanders had
the authority to decide at the end of the year whether the
housing, the private housing companies got a bonus or not, and
they were giving the bonus like 98 percent of the time.
All you needed to know is to look at that and then know
there is going to be a huge problem. Of course, there was. That
problem was actually facilitated by actions that this Committee
sadly took a few years before when we shrunk the size of
headquarters staff in an arbitrary across-the-board way.
What that meant was a lot of people, like folks running
housing programs, got shrunk. You have to be careful when you
do something like that. But I am really troubled by this 95
percent number, and it just seems to me like that is a symptom
of something that is wrong. What is the fix for that?
Ms. Brian. Well, Senator, this is only happening because
the Congress has actually given the authority to the State
Department to authorize these waivers. So, this is a perfect
place for congressional oversight to look into.
What are the standards that the State Department is
applying? In our written comments, we have a lot of additional
recommendations that include more transparency.
We had to litigate, and so did The Washington Post, in
order to even get the very, very redacted waivers that we were
able to accomplish. Not only is this happening with alarming
frequency, it is happening under a veil of secrecy as well.
Senator Kaine. I know Ms. Brian you said we don't need more
studies. I hate just study after study after study. I like
action. But there are nuances here and I wonder what you would
think.
In terms of more restrictions for people leaving the
Pentagon and going to work for businesses in the defense space,
does it matter what level they are?
Would you set it and have a higher level of restriction for
higher level officials, lower level restriction for people
junior in their career?
Ms. Brian. Oh, absolutely. One of the things that is ironic
about the current restrictions is many of them apply to more
junior people than they do to the more senior people.
I think if the Senate were to focus really just on those
more senior people, I think you would have really a lot of
important loopholes being closed.
Senator Kaine. Then to a point that was raised by the
chairwoman in her opening. You know, if it is about sharing
expertise, but the overwhelming majority of people who go are
going into lobbying or adjacent influencing rather than
providing expertise in the design of a program, you could also
have limitations that might not stop you from joining but might
stop you from joining in a kind of a lobbying or influencing
capacity.
Ms. Brian. Absolutely.
Senator Kaine. I was supervising the maintainers of a
particular air platform, okay, doing things that would enable
that platform to require less maintenance. Okay, that would be
a good thing. That would be a sharing in expertise. But going
into influence and Government relations, you might draw some
distinctions there.
Ms. Brian. Absolutely. You will see in our breakdown of the
kinds of loopholes to be closed. It really is about closing the
access of influence peddling, is really the central problem.
Senator Kaine. Right, and to your point, Madam Chair, I
think the way we define lobbying--we define it pretty narrowly
now and pretty--and smart lawyers and others can figure out how
to lobby without it being lobbying, and that probably requires
us to be a little more diligent as well. I yield back.
Senator Warren. Senator Budd.
Senator Budd. Thank you, Madam Chair. Again, thank the
witnesses for being here today. I think we all can agree that
maintaining the trust of the American people is a fundamental
aspect of public service, and the trust is earned, not given.
But I am deeply concerned with the message that the
American people are being sent today about the men and the
women in uniform, as well as senior leadership across the
Department of Defense.
I think this message is a wrong one, in my opinion. I am
deeply concerned about the message that is being sent to those
considering raising their right hand in defense of this Nation.
There is a certain undertone to some of the testimony we have
already heard. Frankly, the fact that we are having this
hearing, I think that makes a statement.
We are told to beware the Beltway bandits, the likes of
specifically to name a few, Lockheed, Grumman, Raytheon, and
Boeing. The American companies that, yes, they make a profit,
but they also create jobs, they innovate, they help deter our
adversaries, and they maintain American peace and prosperity.
We are told of a, ``deterioration of ethics in the military
officer corps,'' the lure of filthy lucre, the lifestyle
preferences, the elixir of continued power and influence.
That, again, ``the Army does not usually produce many
giants of integrity.'' I couldn't disagree more. The military
has produced giants like Washington, Eisenhower, Nimitz, and
Stockdale, Colonel, some that you mentioned earlier.
For the last 20 years, All-Volunteer Force has transformed
into a generation of combat leaders, some of whom are now
general and flag officers or senior civilian leaders in the
Pentagon.
The American people have invested heavily in these leaders
with years of training and professional military education.
Particularly at a time we are already facing a recruiting
shortage, we should be wary of telling prospective recruits
that their would-be leaders are corrupt or that they should
give the Nation decades of service--or should they give the
Nation decades of service, that their future career options
would or should be limited.
Now, I am not arguing that there are no bad apples, but it
seems to me that any insinuation that senior military leaders
are inherently corrupt or easily influenced by defense
contractors or foreign powers, I think that is just wrong.
Colonel Wilkerson, how is accepting a job that uses your
well-earned knowledge, experience, and judgment pernicious and
I am quoting here, ``pernicious, corrupting, and damaging to
the interests of the country?'' Briefly, please.
Mr. Wilkerson. A specific example, Senator, would be those
people who work against, for example, the idea that the A-10
Warthog is a better close air support aircraft for my fellow
infantrymen than the F-35, which any infantryman knows will
never come down to provide close air support for them. Should
it do it from altitude, it will be ineffective, and yet we are
getting rid of the very best platform for that that we have
ever created, the A-10, principally because we have people who
are pushing the F-35 so hard.
I really have a hard time blaming them because it is
costing astronomically and they have got to have something to
prove that that aircraft is worth it. But I don't want the GIs
on the battlefield and the marines on the battlefield to have
to suffer for that.
Senator Budd. Thank you, Colonel. Again, you want to
evaluate those on a case-by-case basis.
Mr. Wilkerson. Yes.
Senator Budd. I would agree with that. Madam Chair, I have
a series of articles regarding past comments made by Colonel
Wilkerson. I would like to submit it for the record.
Senator Warren. Without objection.
[The information referred to follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Senator Budd. Thank you. Colonel Wilkerson, on the issue of
foreign influence, you have been quoted as saying, ``the Jewish
lobby, and American Israel Public Affairs Committees (AIPAC) in
particular, played an outsized influence in the run up to the
Iraq war.''
You have called Israel, one of our closest allies, an
apartheid State. It just concerns me that with comments like
those, are we supposed to take your testimony here today
seriously, particularly when you talk about foreign influence?
But again, I appreciate you being here. And Madam Chair, I
yield back.
Senator Warren. Thank you. I want to do a second round of
questions for anybody who wants to do it. As I mentioned in my
opening statement, and Senator Kaine referred to it, there is a
recent investigation by The Washington Post and POGO that found
that hundreds of retired military officers have gone to work
for foreign governments.
Senator Grassley and I launched our own bipartisan
investigation, and it was not intended to be partisan. We wrote
to the Department of Defense. We asked for detailed information
about DOD's processes for how they approved of this work and
how much these retired officers expected to receive in payment
from foreign governments.
What we discovered is that the approval rate from DOD is in
excess of 95 percent, as you underscored, Senator Kaine, and
that the officers themselves made a lot of money. An Air Force
general working for Saudi Arabia was getting paid $24,000 a
month, which just about doubled what he was already receiving
from his military pension.
What troubles me in particular about this is how hard it is
to get the information. Senator Grassley and I were successful
because we were able to bear down on it with some Senate elbow
grease on this.
But the information is not made public. The Washington Post
and POGO had to dig this out in other ways. So now that we have
got this information, I just want to do a little bit more on
the summary. High approval rates by DOD. Mr. Brian, can you
just say a word about the kinds of countries that are employing
our former generals, colonels, admirals?
Ms. Brian. Well, the thing that was most shocking to me was
when we are talking about countries not only that are serial
violators of human rights, the United Arab Emirates, for
example, with 280 of these people on their payroll.
But the fact that we were able to find four people who were
approved to work for entities owned by China, which is
obviously a rival to our country, that to me, was--what
standard are they using to approve these?
Senator Warren. Right. A little troubling about the
particular countries that are being approved here. The number
of retired officers working for foreign governments was made
public by your outside investigation.
Can you just say a word about what it would mean if we
required from the get-go that any employment by a former high-
level Department of Defense official by a foreign government
had to be made public and available for anyone in the public to
see? What would be the consequence of that, in your view?
Ms. Brian. I think it would be extremely valuable, in part
because remember, these people are not just on the payroll, but
as you noted, some of them are very high level, including
former National Security Advisor or the head of the NSA
[National Security Agency].
Then they are also commenting in the media, but it is not
also identified in their comments that they are on the payroll
of a foreign country. They are just acknowledged as a former
National Security official, and so, the public needs to know
and the Congress needs to know who is paying you for these
comments.
Senator Warren. Just to make clear, so everybody is kind of
following what happens here. Does the U.S. Government place
restrictions on our ability as a Government to help countries,
for example, that are identified as having terrible human
rights records or to help the Chinese Government, for example?
Ms. Brian. I mean, there is certainly all kinds of
considerations that the State Department and DOD go into before
they are evaluating whether those agreements are agreed to. But
in this case, clearly, that is not what is happening.
Senator Warren. Well, I am particularly concerned that what
has happened is there has been--this has become a way to bypass
those restrictions and to be able to communicate with and
influence government and evade the sanctions or the
restrictions that are otherwise in place. So, thank you again
very much.
Thank you for initiating this study and bringing this to
light so that Senator Grassley and I could followup and we
could do more to highlight what is happening here. Senator
Scott, do you have anything more? Senator Kaine?
All right. With that, thank you very much, both of you, for
being here, and I call up the second panel.
[Pause.]
Senator Warren. Our second panel will consist of counsels
from the Department and from the military services. Caroline
Krass is General Counsel for the Department of Defense. Carrie
Ricci is General Counsel of the Army. Shaun Coffey, or John P.,
sorry, Coffey is General Counsel of the Department of the Navy,
and Peter Justice Beshar is General Counsel of the Department
of the Air Force.
Thank you all for being here today. I understand you have
one joint statement that will be delivered by Ms. Krass.
STATEMENT OF THE HONORABLE CAROLINE D. KRASS, GENERAL COUNSEL,
DEPARTMENT OF DEFENSE; THE HONORABLE CARRIE F. RICCI, GENERAL
COUNSEL, DEPARTMENT OF THE ARMY; THE HONORABLE JOHN P. COFFEY,
GENERAL COUNSEL, DEPARTMENT OF THE NAVY; THE HONORABLE PETER J.
BESHAR, GENERAL COUNSEL, DEPARTMENT OF THE AIR FORCE
Ms. Krass. Thank you very much. Chairman Warren, Ranking
Member Scott, and distinguished Members of the Senate Armed
Services Committee, Personnel Subcommittee, I want to thank you
for the opportunity to testify today.
I would also like to thank the General Counsels of the
military departments who are testifying alongside me. As you
just introduced them, Carrie Ricci, Army General Counsel, John
Coffey, Navy General Counsel, and Peter Beshar, Air Force
General Counsel.
I value their strong partnership in reaffirming DOD's
commitment to ensuring that all personnel carry out their
duties and responsibilities ethically. In these remarks, I
would like to highlight two principles in particular.
First, DOD's strong commitment to ethical conduct. And
second, the comprehensive set of existing ethics laws and
regulations across the Executive Branch that create a clear,
consistent, and balanced framework appropriately tailored to
promote integrity and to prevent conflicts of interest. I have
submitted a longer written statement for the record. Let me
begin with DOD's commitment to ethical conduct.
As the largest Government agency, DOD has approximately 3
million personnel, filling nearly 675 distinct occupations
worldwide. Across this vast and varied enterprise, DOD remains
deeply committed to ensuring that our personnel carry out their
duties ethically and free from any actual or perceived
conflicts of interest.
The DOD ethics program embraces a tone from the top model,
with participation from the highest levels of DOD leadership,
including the Secretary of Defense, who consistently
communicates his expectations to all of us regarding ethical
conduct.
As one of my many duties, I serve as the Department's
primary designated agency ethics official. We have 16
additional designated agency ethics officials and more than
3,000 ethics officials at every level, each of whom is required
to be an attorney.
Together, we administer strong ethics programs designed to
facilitate compliance through extensive training and enhanced
financial disclosure reviews, as well as to identify and
address potential violations.
DOD's financial disclosure programs help detect and prevent
potential conflicts of interest, with a focus on individuals
whose position or duties creates a potential for conflicts of
interest. Our ethics attorneys provide extensive guidance,
including assisting individuals in comprehending the often
intricate and overlapping patchwork of post-Government
employment laws that apply to DOD employees in particular.
In fact, GAO released a 2021 report recognizing the
effectiveness of DOD's programs in preventing violations of
those post-Government employment laws. The report also noted
that both DOD and defense contractors benefit from the
contractors' employment of former Government officials by
leveraging the general knowledge and skills that these
officials developed during their Federal service and improving
communications between industry and the Government.
I would now like to touch upon the existing framework of
comprehensive ethics laws and regulations that we work to
uphold every day. Executive Branch-wide criminal ethics laws
and implementing regulations create a clear, consistent, and
balanced framework that is appropriately tailored to promote
integrity and to prevent conflicts of interest.
They are also supported by years of interpretive guidance
from the Office of Government Ethics, the Department of
Justice, and the Federal Courts. Generally, these laws and
regulations prohibit an employee from participating in
particular matters that would affect the employee's financial
interests, to include the financial interests of their family
members or certain other entities with which they have or have
had an outside relationship.
Importantly, these laws and regulations require a nexus
between an employee's duties and the financial interest or
relationship in order for a conflict of interest to arise.
In addition, under the Executive Branch-wide ethics
regulations, incoming Government employees have a 1-year
cooling off period from interacting with their former employer,
and a criminal statute restricts former Government employees
from communicating back to the Government on matters in which
they were personally and substantially involved.
This time-tested standard protects against undue influence
without unreasonably interfering with the ability of veterans
and other public servants to use their education, skills, and
expertise to earn a living and support their families following
service to our country.
I believe there is always room for improvement, and DOD
supports well-coordinated and integrated efforts to enhance
Executive Branch-wide laws. But imposing additional ethics
restrictions that apply only to DOD can be counterproductive,
if they diverge from longstanding and well-known Executive
Branch-wide ethics laws.
They can create unnecessary complexity and confusion and
may also put us at a disadvantage from our recruitment and
retention perspective. Recognizing these concerns in the Fiscal
Year 2023 NDAA, Congress directed an independent review of the
impact that DOD specific ethics laws may have on recruiting and
retention.
This review is underway and the Department looks forward to
sharing the results with you when it is complete. Finally, my
colleagues will be happy to discuss with the Committee the
processes for evaluating requests from retired servicemembers
regarding foreign government employment or compensation.
To help ensure a consistent approach across DOD, the
Undersecretary of Defense for Personnel and Readiness recently
directed the military services to conduct a 90-day assessment
of those processes and to provide any recommendations for
improvement. The Department looks forward to briefing the
Committee on the results.
In closing, I would like to thank you for holding this
important hearing today, and to reiterate DOD's commitment to
maintain the public's trust as we defend the Nation. My
colleagues and I look forward to answering your questions.
[The prepared joint statement of The Honorable Caroline
Krass follows:]
Prepared Statement by The Honorable Caroline Krass
Chair Warren, Ranking Member Scott, distinguished Members of the
Senate Armed Services Committee Personnel Subcommittee: Thank you for
the opportunity to testify today.
I would also like to thank my colleagues the General Counsels of
the Military Departments who are testifying alongside me--Carrie Ricci,
Army General Counsel; Sean Coffey, Navy General Counsel; and Peter
Beshar, Air Force General Counsel.
The Department of Defense is deeply committed--from the very top of
the Department down--to ensuring that all personnel carry out their
duties and responsibilities ethically. Existing Executive Branch-wide
ethics laws establish clear, consistent, and balanced standards for our
personnel to follow from the time they are hired and continuing after
they depart. DOD works extraordinarily hard to promote compliance with
both the letter and spirit of these laws, and we have earned a strong
reputation for administering effective training and compliance programs
across the Department.
Today, I look forward to showcasing DOD's strong ethics program and
explaining the comprehensive ethics rules that apply to current and
former DOD personnel. My colleagues will also be happy to discuss the
screening processes implemented by the Military Services when approving
requests from military retirees to engage in foreign government
employment--approval processes that culminate in final review and
approval by the Secretary of State.
dod's commitment to ethical conduct
As the largest Government agency, with approximately three million
military and civilian personnel who fill nearly 675 distinct
occupations across the globe, DOD does business with close to 30,000
organizations that range from traditional defense contractors and
universities to non-profit organizations. \1\ DOD personnel work in
offices and laboratories, shipyards and airfields, medical facilities,
and schools. They serve in the Army, Marine Corps, Navy, Air Force,
Space Force, and Defense Agencies while supporting a common mission:
``to deter war and ensure our Nation's security.'' \2\
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\1\ See, e.g., ``DOD Vendors with Contracts Over $25,000,'' January
2023, available at https://dodsoco.ogc.osd.mil/Portals/102/Documents/
Conflicts/2023 percent2025K percent20covering
percent20FY2022.pdf'ver=f7CHvUlbGeU percent3d.
\2\ See U.S. Dep't of Defense, ``About,'' available at https://
www.defense.gov/About/.
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Across this vast and varied enterprise, DOD remains deeply
committed to ensuring that all of our personnel carry out their duties
and responsibilities ethically and free from actual and perceived
conflicts of interest. It is imperative to uphold the highest ethical
standards and maintain public trust as we execute our vital mission.
DOD's highly regarded ethics program helps ensure that we live up
to these high standards. Alongside my many other duties, I serve as the
primary Designated Agency Ethics Official (DAEO) for the Department of
Defense. DOD has 16 additional DAEOs throughout the Department. The
DAEOs are the most senior attorneys in their respective DOD departments
and agencies. My Standards of Conduct (SOCO) team has deep expertise
and provides additional connective tissue for the DAEOs and ethics
officials throughout DOD. I am very proud of their commitment to
excellence. Together, we oversee an ethics program comprised of more
than 3,000 ethics attorneys embedded at every level across DOD, around
the globe and at sea.
To assist DOD employees in following existing ethics laws and
regulations, we implement extensive training programs across the
Department. We also administer strong compliance programs. When there
is reason to believe that there has been a failure to comply with
applicable ethics laws and regulations, DOD policies establish clear
guidelines for transmitting such cases to the Inspectors General or
criminal investigative services, who investigate and, where
appropriate, refer the matter to the Department of Justice for
prosecution.
The DOD ethics program embraces a ``tone from the top'' model, with
participation from the highest levels of DOD leadership. The Secretary
of Defense consistently communicates his expectations regarding ethical
conduct and values-based decisionmaking. Shortly after his
confirmation, the Secretary issued an ethics message to the DOD
workforce on the importance of practicing and exercising ethical
decisionmaking in the same manner and with the same alacrity that we
practice and exercise other professional skills. \3\ The Secretary
followed this with a video ethics message, a series of training
sessions for senior leaders which he personally led, and regular
meetings with ethics officials.
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\3\ Secretary of Defense Memorandum, ``Reaffirming Our Values and
Ethical Conduct,'' March 1, 2021, available at https://
media.defense.gov/2021/Mar/02/2002591989/-1/-1/1/SECRETARY-OF-DEFENSE-
REAFFIRMING-DOD-VALUES-AND-ETHICAL-CONDUCT.PDF.
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Our extensive ethics training program helps realize the Secretary's
vision. Office of Government Ethics (OGE) regulations require ethics
officials to provide every new Executive Branch employee, including
military officers, with initial ethics training within 3 months of
joining the Executive Branch. \4\ DOD has extended this training
requirement to all enlisted personnel, who must complete initial ethics
training within 180 days of entering Active Duty. In 2021, DOD ethics
officials provided initial ethics training to more than 160,000 new DOD
personnel. \5\
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\4\ See 5 C.F.R. Sec. 2638.304; see also DOD 5500.07-R, ``Joint
Ethics Regulation,'' Sec. 1-209 (2011) [hereinafter JER]. OGE's
regulation requires Senate confirmed Presidential appointees (``PAS''
officials) to receive in-person initial ethics training within 15 days
of appointment. See 5 C.F.R. Sec. 2638.305. Ethics Agreements for DOD
PAS officials require this training within seven days.
\5\ OGE publishes DAEO agency responses to the OGE Annual Agency
Ethics Program Questionnaire on its website. These Questionnaires are
submitted to OGE on February 1 of each year and cover data for the
preceding calendar year. Data for the 2023 Questionnaires (covering
calendar year (CY) 2022) has not yet been published, as OGE reviews and
processes the information prior to publication. Some data used in this
statement therefore derives from Questionnaires submitted by DOD DAEOs
in February 2022 (covering CY 2021). These numbers do not include
personnel assigned to certain intelligence agencies, as information
concerning the number and composition of such personnel is classified.
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OGE regulations also require that personnel who file a financial
disclosure report receive annual ethics training on conflict of
interest and other ethics laws. \6\ DOD further requires all Defense
Acquisition Workforce personnel to receive annual ethics training,
regardless of whether they are required to file a financial disclosure
report. \7\ In 2021, DOD ethics officials delivered annual ethics
training to more than 140,000 financial disclosure filers.
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\6\ See 5 C.F.R. Sec. Sec. 2638.307, 308.
\7\ See Under Secretary of Defense (Acquisition, Technology &
Logistics) Memorandum, ``Mandatory Annual Ethics Training for the
Defense Acquisition Workforce,'' January 15, 2014.
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DOD's extensive financial disclosure program helps employees,
supervisors, and ethics officials detect and prevent potential
conflicts of interest. The program focuses on individuals whose
position or duties create a potential for conflicts of interest, such
as senior personnel or those involved in the acquisition process. These
personnel are required to file a report within 30 days of assuming
their position and on an annual basis thereafter. In 2021, these DOD
personnel filed approximately 150,000 financial disclosure reports (OGE
Forms 278e and 450). All senior personnel are required to report
certain transactions no later than 45 days after the transaction
occurs, \8\ and last year they filed more than 3,600 of these periodic
transaction reports (OGE Form 278T).
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\8\ See 5 U.S.C. Sec. 13105(l).
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OGE regulations require ethics officials to review and certify all
financial disclosure reports within 60 days of receipt. \9\ DOD goes
further by requiring that a supervisor, who is most familiar with the
employee's duties, first review each report. \10\ Ethics officials
followup with employees when potential conflicts of interest are
identified, taking steps to ensure that any such conflicts are avoided
or resolved. If a supervisor or other official receives credible
information indicating that an employee violated the conflict of
interest rules, the matter is referred to the appropriate authorities.
---------------------------------------------------------------------------
\9\ See 5 C.F.R. Sec. 2634.605.
\10\ See JER, supra note 4 Sec. Sec. 7-206, 7-306.
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All senior DOD personnel who file public financial disclosure
reports must certify annually that they are both aware of post-
Government employment disqualification requirements and that they have
not violated them. \11\ And the Defense Federal Acquisition Regulation
Supplement (DFARS) requires contractors to certify that former
employees working on a DOD contract are complying with applicable post-
Government employment ethics laws. \12\
---------------------------------------------------------------------------
\11\ See id. Sec. 8-400.
\12\ See DFARS Sec. 252.203-7005.
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To assist current and former DOD employees with comprehending the
often intricate and overlapping patchwork of post-Government employment
laws, DOD ethics counsel devote considerable resources to providing
written guides, meeting individually with current and former personnel,
and issuing formal opinions when current employees arrange for new
employment. When DOD personnel leave the Department, DOD ethics
officials help ensure that they are aware of the relevant post-
Government employment ethics laws, including by providing tailored exit
briefings and written advice. Former DOD personnel continue to reach
back to DOD ethics officials for advice on the application of post-
Government employment laws after their departure.
In 2021, GAO released a report on DOD's post-Government employment
restrictions. \13\ The report recognized the effectiveness of DOD's
compliance measures for preventing violations of laws and regulations
relating to post-Government employment. The report did not suggest that
additional DOD-specific restrictions are either necessary or in the
Government or public interest. Instead, GAO noted that ``both DOD and
defense contractors benefit from the contractors' employment of former
Government officials. For example, contractors benefit from the
knowledge and skills that former DOD officials developed at DOD. DOD
benefits from improved communication.'' \14\ Moreover, GAO found that
fewer than 2 percent of former DOD senior and acquisition officials
work for the 14 biggest defense contractors. Between 2014 and 2019,
approximately 1.5 million people left employment with DOD, and only
about 1,700 (0.1 percent) of those were former senior or acquisition
officials who worked at one of the 14 biggest defense contractors.
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\13\ U.S. GOV'T ACCOUNTABILITY OFF., GAO-21-104311, Post-Government
Employment Restrictions: DOD Could Further Enhance Its Compliance
Efforts Related to Former Employees Working for Defense Contractors
(2021).
\14\ Id. at 6.
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existing comprehensive ethics laws and regulations
Executive Branch-wide ethics laws and regulations create a clear,
consistent, and balanced framework that is appropriately tailored to
promote integrity and prevent conflicts of interest when Executive
Branch personnel enter and exit government employment.
All Executive Branch employees are subject to a number of ethics
statutes and regulations intended to prevent conflicts of interest. For
example, the governing Federal criminal statute, 18 U.S.C. Sec. 208
(Section 208), prohibits Executive Branch employees from participating
in any particular matter that could affect their financial interests.
OGE regulations, 5 C.F.R. Sec. Sec. 2635.501-03, prohibit Executive
Branch employees from participating in matters that could cause the
public to question their impartiality. Both the criminal statute and
the impartiality regulation require a nexus between an employee's
duties and the financial interest for a conflict of interest to arise.
Section 208 broadly prohibits any Executive Branch employee from
participating personally and substantially in any particular matter in
which the employee knows that they have a financial interest that would
be directly and predictably affected by the matter, or in which the
employee knows that a person whose interests are imputed to the
employee has a financial interest directly and predictably affected by
that matter. An imputed financial interest can arise from a spouse,
minor child, general partner, or any organization in which the
Executive Branch employee serves as an officer, director, trustee,
general partner, or current/prospective employee.
Any waiver of Section 208's requirements requires approval by a
supervisor, in consultation with an ethics official and OGE. \15\ OGE
requires agencies to report, as part of an annual ethics program
questionnaire, the number of statutory conflict of interest waivers
granted in the previous calendar year. In DOD, such waivers are
generally available only when no other reasonable alternative exists
and are granted infrequently. For example, between 2017 and 2022, only
one very limited waiver was granted. \16\
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\15\ See 5 C.F.R. Sec. 2640.301 (providing the requirements for
issuing an individual waiver under 18 U.S.C. Sec. 208(b)(1)).
\16\ This waiver was granted for approximately 1 month to bridge
the period between when the employee initiated divestiture of an
investment fund with potentially conflicting holdings and the final
redemption date.
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In addition, the longstanding cornerstone of Executive Branch-wide
restrictions related to post-Government employment, 18 U.S.C. Sec.
207, permanently prohibits all former Executive Branch personnel from
representing a non-Federal entity (NFE) to any officer or employee of
any agency within the executive, legislative, or judicial branches, as
well as to any Federal court or court martial on a particular matter
involving specific parties in which the former employee personally and
substantially participated during Government service. \17\ And for 2
years after leaving Government service, all former Executive Branch
personnel are prohibited from representing an NFE to any officer or
employee of any agency within the executive, legislative, or judicial
branches, as well as to any Federal court or court martial on a
particular matter involving specific parties that was pending under the
former employee's official responsibility during the last year of
Government service. \18\
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\17\ See 18 U.S.C. Sec. 207(a)(1).
\18\ See id. Sec. 207(a)(2).
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My SOCO team has prepared Attachment A, which contains a more
detailed overview of the ethics compliance regime that applies to DOD
personnel in relation to four topics: (1) incoming employee
restrictions; (2) stock ownership; (3) seeking future employment in the
course of Government service; and (4) post-Government employment.
importance of clear, consistent, and balanced ethics laws
Clear, consistent, and balanced ethics laws are essential to
ensuring compliance and maintaining the public's trust. Clear laws are
easy for personnel to understand and follow. Consistent laws fit within
the overall statutory framework for regulating ethical conduct within
the Executive Branch using common terminology and definitions to
prevent confusion. Balanced laws are carefully tailored to avoid
conflicts and preserve public trust, respect an individual's ability to
use their professional education and experience after leaving
Government service, and acknowledge the Government's interest in
recruiting and retaining personnel with requisite experience and
skills.
The existing Executive Branch-wide ethics laws generally satisfy
these criteria. On top of this longstanding body of law, we also
benefit from years of detailed interpretive guidance provided by OGE,
the Department of Justice, and the Federal courts. These time-tested
standards protect against undue influence without unreasonably
interfering with the ability of veterans and other public servants to
use their education, skills, and experience to earn a living and
support their families following service to the country. Other laws,
such as the Procurement Integrity Act, are aligned with the intent and
language used in these criminal conflict of interest laws and provide
additional protections. Together, these laws take a clear, consistent,
and balanced approach to preventing conflicts of interest while
preserving DOD's ability to leverage the expertise of current and
former personnel.
There is always room for improvement, of course, and DOD supports
well-coordinated and integrated efforts to enhance Executive Branch-
wide ethics laws. We have concerns, however, that additional DOD-
specific ethics laws \19\ can be counterproductive. DOD-specific
statutes can introduce unnecessary complexity and confusion,
particularly where they introduce terms and definitions that are
incongruent with the existing Executive Branch ethics framework, and as
a result they may ultimately undermine rather than promote our shared
commitment to ethical conduct. DOD-specific laws may also put the
Department at a disadvantage in recruiting and retaining expertise and
can deter the top talent we need from participating in public-private
talent exchanges.
---------------------------------------------------------------------------
\19\ See Attachment A (describing the DOD-specific statutes in more
detail).
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Recognizing that DOD-specific ethics laws could adversely affect
DOD's participation in talent and knowledge exchange, recruitment, and
retention, Congress has directed an independent review of the
application and impact that DOD-specific ethics laws may have on these
capabilities. As required by the fiscal year 2023 NDAA, we have entered
into an agreement with an independent federally Funded Research and
Development Center to conduct this study. The study will consider
whether the enactment of DOD-specific ethics laws harms DOD's ability
to share knowledge between Government and industry; is consistent with
existing laws that apply to all Executive Branch employees; creates
confusion; and could impact recruiting and retention.
Once this comprehensive review is complete, I look forward to
sharing the results with the Committee.
foreign government employment
The U.S. Constitution places restrictions on the acceptance of
foreign government employment by retired military personnel. The
Emoluments Clause of the Constitution prohibits any person holding an
``office of profit or trust''--which includes Service members even
after they retire from the Service--from accepting compensation from a
foreign government, or an entity controlled by a foreign government,
without congressional consent. \20\
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\20\ U.S. CONST. art. I, Sec. 9, cl. 8.
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Congress has consented to the receipt of foreign government
compensation by military retirees in some circumstances. Federal law
allows the Military Department Secretaries to approve requests from
military retirees to accept foreign government employment, subject to
final review and approval by the Secretary of State. \21\ Congress
requires DOD to report annually the number of retired Flag and General
Officers who have received approval to accept foreign government
employment. Since 2015, the Military Services have approved an average
of 10 requests from retired Flag and General Officers each year. \22\
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\21\ See 37 U.S.C. Sec. 908. In most cases, the Secretaries of the
Military Departments have delegated their approval authority to another
senior official.
\22\ 37 U.S.C. Sec. 908, as amended in 2019, requires the
Secretaries of the Military Departments, in consultation with the
Secretary of State, to report the number of General and Flag Officers
who receive approval to accept foreign government employment, including
the name of the foreign government, the duties to be performed, and the
total amount of compensation. The Military Departments reported 68
approvals for General and Flag Officers from CY 2015 through CY 2019; 5
in CY 2020; 5 in CY 2021; and 3 in CY 2022.
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Military Service Procedures
Each Military Service has implemented its own process for reviewing
requests from military retirees for approval to accept foreign
government employment. At a minimum, each Service requires review by a
legal counsel and a senior human resources officer or other senior
official prior to forwarding to the Secretary of State for final
approval. The Secretary of State is the ultimate approval authority for
foreign government employment. Applications not approved by the
Services are not forwarded to the Secretary of State for review.
To help ensure a consistent approach throughout the Department, the
Undersecretary of Defense for Personnel and Readiness recently directed
the Military Services to assess their processes for reviewing requests
for approval of foreign government employment by military retirees. The
Military Services were directed to report the results of this
assessment within 90 days, including any recommendations for
improvement. The Department looks forward to briefing the Committee on
the results of this assessment.
Compliance with the Emoluments Clause is an individual
responsibility and penalties for non-compliance are a personal
financial liability. If the Department becomes aware of a potential
violation of the Emoluments Clause, that potential violation is
investigated by the Military Service. If a determination is
subsequently made that the individual failed to obtain required advance
approval for foreign government employment, that individual will owe a
debt to the United States equal to the amount of compensation the
individual received from the foreign government. Collection action,
which may include offset of retiree pay, can be taken to satisfy the
debt.
Other Foreign Government Employment Laws
The primary criminal statute that governs post-Government
employment, 18 U.S.C. Sec. 207, prohibits former senior and very
senior Executive Branch personnel from representing or aiding a foreign
entity with the intent to influence any employee of the Government or
Member of Congress, and prohibits behind-the-scenes assistance, for 1
year after leaving the relevant position, office, or employment. \23\
Any U.S. citizen who provides defense services to a foreign government
may also be required to comply with State Department's International
Traffic in Arms Regulations (ITAR). \24\ And Congress has required the
Intelligence Community (IC) to restrict certain Executive Branch
personnel and contractors assigned to IC elements from accepting
employment with foreign governments, with oversight provided by the
Director of National Intelligence and regular reporting to Congress.
\25\
---------------------------------------------------------------------------
\23\ See 18 U.S.C. Sec. 207(f); see also 5 C.F.R. Sec.
2641.206(a) (implementing the basic prohibition in 18 U.S.C. Sec.
207(f)).
\24\ See 22 U.S.C. Sec. 2278; see also 22 C.F.R. Parts 120-130.
For an overview of ITAR and the underlying authorities published by the
State Department, see https://deccs.pmddtc.State.gov/
deccs'id=ddtc_public_portal_itar_landing.
\25\ See, e.g., 50 U.S.C. Sec. 3073a.
---------------------------------------------------------------------------
conclusion
DOD shares this Committee's commitment to maintaining the public's
trust as we defend the Nation. My colleagues and I look forward to
answering your questions.
attachment a
This Attachment details the ethics compliance regime that applies
to DOD personnel in four areas: (1) incoming employee restrictions; (2)
stock ownership; (3) seeking future employment in the course of
Government service; and (4) post-Government employment.
Incoming Employee Restrictions
Restrictions related to former employment seek to balance the need
to maintain public trust with the Government's need to benefit from the
knowledge and expertise that employees bring from prior employment with
industry, academia, and other non-Federal entities (NFEs).
A criminal statute, 18 U.S.C. Sec. 208 (Section 208) provides that
a conflict of interest can arise from former employment if an Executive
Branch employee retains a financial interest in their former employer,
such as owning company stock. \26\
---------------------------------------------------------------------------
\26\ See 18 U.S.C. Sec. 208(a).
---------------------------------------------------------------------------
Even absent a criminal conflict of interest, OGE regulations
recognize that certain circumstances involving a member of an
employee's household, or other ``covered relationships,'' could cause
the public to question the employee's impartiality. All Executive
Branch employees are prohibited from participating in a particular
matter involving specific parties that they know is likely to affect
the financial interests of a member of their household, or in which
they know a person with whom they have a ``covered relationship'' is or
represents a party to the matter if the employee or an agency designee
determines that a reasonable person would question their participation.
\27\ The regulatory definition of a ``covered relationship'' is broad
and includes, inter alia, former and prospective employers of certain
family members. \28\ If an Executive Branch employee raises an
impartiality concern, an agency designee, generally a supervisor, can
authorize that employee to participate in the matter only when the
Government interest in the employee's participation outweighs the
concern that a reasonable person may question the integrity of the
agency's programs and operations. \29\
---------------------------------------------------------------------------
\27\ See 5 C.F.R. Sec. 2635.502.
\28\ See id. Sec. 2635.502(b)(1).
\29\ See id. Sec. 2635.502(d).
---------------------------------------------------------------------------
Without prior authorization, Executive Branch employees may not
work on matters where their former employer is, or represents, a party
for 1 year--the ``cooling off'' period. \30\ For civilian political
employees, the current Administration's Ethics Pledge imposes a further
2-year restriction on participating in particular matters involving a
former employer or client for whom the employee performed services in
the 2-years prior to appointment. \31\
---------------------------------------------------------------------------
\30\ See id. Sec. 2635.502(b)(1)(iv).
\31\ Exec. Order No. 13989, 86 Fed. Reg. 7029 (Jan. 25, 2021).
---------------------------------------------------------------------------
In the National Defense Authorization Act (NDAA) for fiscal year
2022, Congress enacted an additional 2-year statutory prohibition
specific to DOD personnel. \32\ That statute bars DOD personnel from
participating in a matter in which their former employer is a party for
2 years and appears to combine standards from Section 208 and the OGE
impartiality regulations. \33\ Combining language from the criminal
statute and the impartiality regulation creates a new and distinct
standard substantively different from the standards that apply to all
Executive Branch employees. While DOD has provided interpretive
guidance and training to help personnel understand how the overlapping
recusal standards apply, multiple standards create confusion and make
it difficult even for well-intentioned employees to implement and
understand applicable recusal requirements. \34\
---------------------------------------------------------------------------
\32\ See National Defense Authorization Act for Fiscal Year 2022,
Pub. L. No. 117-81, Sec. 1117, 135 Stat. 1541, 1955-1956 (2021)
][hereinafter fiscal year 2022 NDAA].
\33\ See id.
\34\ See SOCO Advisory 22-01, ``Guidance Regarding Section 1117 of
the National Defense Authorization Act for Fiscal Year 2022,'' (Jan.
11, 2022), available at https://dodsoco.ogc.osd.mil/Ethics-Program-
Resources/DOD-Ethics-Guidance/SOCO-Advisories/2022-SOCO-Advisories/.
---------------------------------------------------------------------------
As required by OGE regulations, financial conflicts of interest and
impartiality responsibilities are addressed in the ethics training that
new employees receive upon joining DOD. \35\ In accordance with OGE
policy guidance, very senior personnel of the Executive Branch who have
broad responsibilities inform their staffs in writing of their recusal
from matters involving a former employer and implement rigorous
screening processes to ensure that such matters are assigned to another
appropriate employee. \36\
---------------------------------------------------------------------------
\35\ 5 C.F.R. Sec. 2638.304(e).
\36\ OGE Memorandum DO-04-012 (June 1, 2004).
---------------------------------------------------------------------------
Stock Ownership
Existing conflict of interest laws, together with DOD's robust
training and screening processes, maintain an appropriate balance
between individual property ownership rights and the public interest in
avoiding conflicts.
Section 208 provides that a criminal conflict of interest can arise
when an Executive Branch employee, or their spouse or minor child, owns
more than a de minimis amount \37\ of stock in a company and the
employee is asked to take an official action that could affect the
financial interest of that company. All Executive Branch employees have
a duty to monitor their financial interests for any potential conflicts
of interest that may arise between their financial holdings and their
official duties. When a potential conflict of interest is identified,
Executive Branch employees must either recuse themselves from taking
any action that could affect the financial interest of the company in
which they hold stock or divest the stock holding.
---------------------------------------------------------------------------
\37\ Federal regulations allow Executive Branch employees to
participate in particular matters when the disqualifying financial
interest arises from stock ownership with an aggregate market value
that is less than an established regulatory de minimis amount, to
include the holdings of the employee, the employee's spouse, and minor
child(ren). See 5 C.F.R. Sec. 2640.202.
---------------------------------------------------------------------------
DOD civilian officials appointed by the President, by and with the
advice and consent of the Senate and DOD personnel in key acquisition
positions face additional restrictions. These personnel are prohibited
from owning more than a de minimis amount of stock in the largest ten
defense contractors based on contract awards. \38\ Linking this
restriction to a publicly available list of contracts awarded by DOD
provides transparency and consistency, while allowing these personnel
and their financial advisors to effectively ensure compliance with the
requirement.
---------------------------------------------------------------------------
\38\ In 2019, Congress enacted 10 U.S.C. Sec. 988, which
memorialized some of the Senate Armed Services Committee (SASC)
policies requiring these personnel to divest of certain stock holdings.
These personnel may not own or purchase, above OGE's regulatory ``de
minimis'' amount, the ``stock of a company that is one of the 10
entities awarded the most amount of contract funds by the Department of
Defense in a fiscal year during the five preceding fiscal years.''
Referencing contracts awarded rather than revenue received allows the
Department and its employees to consult a list of companies that the
General Services Administration compiles annually and is publicly
available. The list of companies who are among the top ten defense
contractors captures all entities holding more than 1.5 percent of the
total contracting dollars awarded by DOD. It generally includes some
combination of the same 11 contractors, though unanticipated events--
like the COVID-19 pandemic--may occasionally result in changes.
---------------------------------------------------------------------------
Merely owning stock in a defense company is not enough to create a
potential conflict of interest for DOD personnel--there must be some
nexus between an employee's financial interests and their official
duties. For example, a senior official at the Defense Commissary Agency
may have conflicts with a major dairy supplier but has no conflict of
interest with an aircraft manufacturer. Imposing broader divestiture
requirements in addition to existing conflicts laws can create
confusion without advancing important Government or public interests.
Such requirements can also potentially prevent DOD from recruiting and
retaining top talent and expertise.
Seeking Employment
Several statutes and regulations that apply across the Executive
Branch seek to prevent even the appearance of partiality once Executive
Branch personnel have had contact with an NFE regarding post-Government
employment.
Section 208 provides that a criminal conflict of interest can arise
when Executive Branch personnel begin negotiating for future employment
with an NFE. \39\ ``Negotiation'' means ``discussion or communication
with another person, or such person's agent or intermediary, mutually
conducted with a view toward reaching an agreement regarding possible
employment with that person.'' \40\ Once negotiations have commenced,
and during any time in which an employee has an arrangement for future
employment with an outside organization, they are prohibited from
participating in any particular matter that could affect the financial
interests of that organization.
---------------------------------------------------------------------------
\39\ See 18 U.S.C. Sec. 208(a).
\40\ 5 C.F.R. Sec. 2625.603(b)(i) (noting that the same definition
also applies for 18 U.S.C. Sec. 208(a)).
---------------------------------------------------------------------------
In addition to the statutory prohibition, ethics regulations
require Executive Branch employees to recuse from matters that could
affect the financial interests of any NFE with whom they are seeking
employment. \41\ ``Seeking'' is a lower threshold than ``negotiating''
and includes, inter alia, ``unsolicited communication to any person, or
such person's agent or intermediary, regarding possible employment with
that person.'' \42\
---------------------------------------------------------------------------
\41\ See 5 C.F.R. Sec. 2635.604(a)(1).
\42\ 5 C.F.R. Sec. 2635.603(b) (excluding unsolicited
communication ``for the sole purpose of requesting a job application''
from this example).
---------------------------------------------------------------------------
Two additional statutes cover certain Executive Branch personnel
seeking employment with an NFE. First, senior Executive Branch
personnel must file a statement notifying their ethics counselor of any
negotiation or agreement for future employment or compensation within
three business days after commencement of the negotiation or execution
of the agreement. \43\ Second, the Procurement Integrity Act imposes
restrictions on Executive Branch personnel who personally and
substantially participate in procurement for a contract in excess of
the simplified acquisition threshold (currently $250,000) and are
contacted by a bidder regarding non-Federal employment, or are seeking
employment with a bidder. Such personnel must report the contact in
writing and either reject the offer or disqualify themselves from
further personal and substantial participation in that procurement.
\44\
---------------------------------------------------------------------------
\43\ See Stop Trading on congressional Knowledge (STOCK) Act of
2012, Pub. L. No. 112-105, Sec. 17, 126 Stat. 291, 293-94 (2012) (5
U.S.C. Sec. 13103, note).
\44\ See 41 U.S.C. Sec. 2103 (explaining that the agency could
authorize the official to resume participation in the procurement, in
accordance with 18 U.S.C. Sec. 208, on the grounds that: (1) the
person is no longer a bidder or offeror in that procurement; or (2) all
discussions regarding possible employment with the bidder or offeror
have been terminated without an agreement or arrangement for
employment).
---------------------------------------------------------------------------
When seeking employment, as in other contexts, DOD personnel face
additional restrictions specific to the Department. Section 1117 of the
fiscal year 2022 NDAA (Pub. Law No. 117----81) prohibits DOD personnel
from participating in a matter in which a prospective employer is or
represents a party to the matter. \45\ The Executive Branch-wide
restrictions discussed above already prohibit DOD personnel from
participating in any matter that could affect the financial interest of
a prospective employer.
---------------------------------------------------------------------------
\45\ See fiscal year 2022 NDAA, Pub. L. No. 117-81, 135 Stat. 1541,
1955-56 (2021).
---------------------------------------------------------------------------
Post-Government Employment
All former Executive Branch personnel are subject to ethics
restrictions that aim to prevent improper influence \46\ and use of
non-public information \47\ following Government service. These laws
seek to both preserve public trust and allow former Government
personnel to appropriately use their professional experience after
leaving Government service.
---------------------------------------------------------------------------
\46\ See 18 U.S.C. Sec. Sec. 203, 207; see also 41 U.S.C. Sec.
2104; 5 C.F.R. Sec. 2641.
\47\ See 18 U.S.C. Sec. 1905; see also 18 U.S.C. Sec. Sec. 641,
793, 794; 50 U.S.C. Sec. 783.
---------------------------------------------------------------------------
Executive Branch-wide restrictions related to post-Government
employment are extensive. As discussed above, 18 U.S.C. Sec. 207
prohibits all former Executive Branch personnel from representing an
NFE on a particular matter involving specific parties to any officer or
employee of any agency within the executive, legislative, or judicial
branches on which the former employee personally and substantially
participated during Government service. And for 2 years after leaving
Government service, all former Executive Branch personnel are
prohibited from representing an NFE to any officer or employee of any
agency within the executive, legislative, or judicial branches, as well
as to any Federal court or court martial on a particular matter
involving specific parties that was pending under the former employee's
official responsibility during the last year of Government service.
\48\
---------------------------------------------------------------------------
\48\ See 18 U.S.C. Sec. Sec. 207(a)(1), (a)(2).
---------------------------------------------------------------------------
For 1 year after leaving the Government, former senior Executive
Branch officials may not represent an NFE to any personnel at their
former agency, regardless of the matter. \49\ This one-year period
extends for an additional year (to 2 years total) for any former
Secretary of Defense, as well as other very senior personnel of the
Executive Branch. \50\ During the covered periods, the law broadly
restricts any communication or appearance by former Executive Branch
personnel with the intent to influence official action. For 1 year
after leaving Government, former senior and very senior Executive
Branch officials may also not knowingly aid, advise, or represent a
foreign government or foreign political party, with the intent to
influence any officer or employee of the United States or any Member of
Congress. \51\
---------------------------------------------------------------------------
\49\ See id. Sec. 207(c).
\50\ See id. Sec. 207(d).
\51\ See id. Sec. 207(f).
---------------------------------------------------------------------------
Outside of 18 U.S.C. Sec. 207, procurement integrity laws provide
additional restrictions for certain former Government personnel. Former
Government personnel are prohibited from accepting compensation from a
contractor for 1 year if they served in certain positions or made
certain decisions relative to an acquisition valued greater than $10
million. \52\ The current Administration's Ethics Pledge imposes
further post-Government employment restrictions on all civilian
political appointees. \53\
---------------------------------------------------------------------------
\52\ See 41 U.S.C. Sec. 2104.
\53\ See Exec. Order No. 13,989, 86 Fed. Reg. 7029 (Jan. 25, 2021).
---------------------------------------------------------------------------
While extensive, these Executive Branch-wide laws are appropriately
and narrowly targeted to prevent conflicts of interest between a former
employee's position and duties and their subsequent non-Federal
employment. Especially for a Department with nearly 675 distinct
occupations across the globe, a targeted approach is critical. A former
senior Air Force acquisition official in post-Government employment
with an aircraft manufacturer presents vastly different potential
conflict of interest concerns than a former senior official from the
Defense Human Resources Agency seeking post-Government employment with
the same company.
Former DOD personnel are also subject to additional DOD-specific
statutory requirements.
For example, former DOD personnel who served in certain positions
or took certain actions on an acquisition valued over $10 million
during their last 2 years of service are required to obtain a written
ethics opinion before accepting compensation from any defense
contractor regardless of whether there was a nexus between the former
employee's duties and their prospective employer. \54\ There are
currently nearly 30,000 defense contractors. The written opinions are
maintained for 5 years in a central DOD data base called the After
Government Employment Advice Repository. Maintaining these opinions in
a secure Government system ensures their ready availability to ethics
officials and Inspectors General, while protecting the privacy and
security interests of current and former DOD personnel.
---------------------------------------------------------------------------
\54\ See National Defense Authorization Act for Fiscal Year 2008,
Pub. L. No. 110-181, Sec. 847, 122 Stat. 3, 243-44 (2008).
---------------------------------------------------------------------------
Former senior DOD personnel are also subject to additional
restrictions on certain communications back to the Government. Section
1045 of the fiscal year 2018 NDAA created a confusing patchwork of DOD-
specific restrictions for ``covered individuals'' who are former DOD
officers in the grade of O-7 and above, or an equivalent civilian
level. \55\ The applicability of the restrictions depends upon the
subject and nature of the proposed contact; the appointment status of
the person to whom the contact is directed; and the agency within which
the intended recipient works. By contrast, 18 U.S.C. Sec. 207 bars
communication with all Federal personnel in the former senior
official's prior agency without regard to the appointment status of the
person to whom the contact is directed.
---------------------------------------------------------------------------
\55\ See National Defense Authorization Act for Fiscal Year 2018,
Pub. L. No. 115-91, Sec. 1045, 131 Stat. 1283, 1555-56 (2017).
Senator Warren. Thank you very much. So, I am going to
start with the first round of questions, and I just want to say
how glad I am to have all four of you here today, that we have
four general counsels for the Department of Defense, the Army,
the Navy and the Air Force.
The four of you are the top lawyers at the Pentagon, and it
is your job to oversee compliance with our ethics laws. I am
deeply grateful for your work. I obviously believe it is very
important, and I appreciate your being here to explain to us
and to say publicly how these laws work.
What I want to do is I just want to kind of run through
some examples and make sure I understand exactly how some of
these pieces go. One of the key guardrails in our conflict of
interest laws says that if an official is, ``personally and
substantially involved'' in a Pentagon program and then leaves
to go to work for a defense contractor, they are permanently
barred from coming back and lobbying the Pentagon on behalf of
the company on issues related to the program that they used to
work on.
Boy, do I get what we were trying to accomplish with that
and I think that is terrific. I just want to look at maybe some
loopholes in that.
Ms. Krass, let's say that a Pentagon official helped write
the contracts between the Pentagon and Lockheed Martin for a
multibillion-dollar weapons program. Under current law, as
written, would that person be prohibited from leaving the
Pentagon and joining Lockheed Martin's board?
Ms. Krass. Thank you, Senator. I absolutely share your
commitment to maintaining the public's trust and to avoiding
any appearance of conflicts. Applying these laws is very
context dependent and fact specific, but in general, the
procurement integrity laws would prevent an acquisition
official from accepting any compensation from a defense
contractor for----
Senator Warren. So, anybody who helped write these
contracts. When Jim Mattis was told that he couldn't represent
Theranos on a particular matter, but that he was free to go
join their board of directors, that was okay.
Ms. Krass. I can't opine on that particular situation but--
--
Senator Warren. That is what happened.
Ms. Krass. But if, generally speaking, somebody has left,
if they have worked on a particular matter involving specific
parties, they may not come back to the Government on that
particular matter.
Senator Warren. But they can join the board of directors of
the company that is talking to the Government.
Ms. Krass. As I mentioned, if they are a former acquisition
official, then they would not be able to, if they were involved
in a contract of $10 million or more.
Senator Warren. So, you don't think Jim Mattis was involved
in any contracts worth $10 million or more? This is just public
record.
I am just going by what's public here. It looks like to me
there is a big loophole for people who go off and just join the
board of directors, which, by the way, is a pretty good job.
Because it turns out, according to their SEC [Securities
Exchange Commission] filings, Lockheed paid its board members
more than $300,000 a year.
It is a nice gig, so let me ask you another one. Ms. Krass,
under our current ethics laws, would this person be allowed to
be a consultant paid by Lockheed Martin, to advise Lockheed
Martin on how to respond to DOD in order to win future
contracts from the Pentagon, so long as they personally didn't
come in and lobby. Would that be okay?
Ms. Krass. They would not be able to--and again, these are
all context dependent.
Senator Warren. I understand that and we will keep that as
a running objection.
Ms. Krass. Okay. But they would not be allowed to use any
proprietary information or any other non----
Senator Warren. The point is--the question I am asking is,
can they come in? Can they consultant and tell you how to do it
as long as they are not the ones who show up in the office?
Ms. Krass. I think under existing laws, they have to be
careful not to use any proprietary or other nonpublic
information.
Senator Warren. Right, but otherwise, they get to do that.
Let me try one more. Under current ethics laws, could this
former Pentagon official's consulting work include helping
Lockheed Martin develop a public campaign to win new contracts,
including targeting former colleagues, again, so long as they
don't do any direct lobbying themselves? Would that be okay?
Ms. Krass. I think that, again, the same laws would apply
in terms of not being able to use any proprietary----
Senator Warren. I understand that. But the question I am
asking is, can they come and do this under the current rules?
You sound like you are reluctant to say yes, but we know it is
happening. It is in the public domain. We have already read
these stories. People have testified to it directly.
Ms. Krass. What I can say is that on the DOD side of the
equation, we are committed to--and our officials are committed
to upholding the ethics laws and making sure that they are
not----
Senator Warren. I understand that you are committed to
upholding them as written. I am not trying to give you a hard
time here. I am just trying to see how effective what is
written and what you have got to deal with.
I get it that you can't enforce laws that don't exist. What
I am trying to do is figure out from the point of view of the
Congress whether or not we need to do a little more with those
laws so that there aren't as many holes in them.
Let me try another one. Mr. Beshar let's say that Raytheon
hires this colonel 1 week after--oh, I have got one. I am
sorry, I set it up wrong. Let's say we have an Army colonel who
worked at the Defense Security Cooperation Agency, DSCA, which
is responsible for overseeing arms sales to foreign countries.
Mr. Beshar, let's say that Raytheon hires this colonel 1
week after he retires from the military to help them lobby to
speed up approval of a Patriot weapons system that will make
them a lot of money. He reaches out to the Air Force, you get
where I am going with this, for a meeting. Is there any reason
an Air Force official can't take that meeting?
Mr. Beshar. Senator Warren, Ranking Member Scott, Senator
Kaine, I appreciate the opportunity to be here today. I am
joined this morning by a number of my colleagues from the
Ethics Department within the Air Force, and they provide a
vital service to the Department and they do it well. To your
specific example, provided that the hypothetical colonel is not
subject to a lifetime bar or a 2-year----
Senator Warren. That is my question. Is he subject to a
lifetime bar if he goes over and lobbies the Army instead of
DSCA?
Mr. Beshar. Yes, and assuming that he is not subject to
such a bar or a supervisory bar, then he could have such a
meeting, because at that 06 level he is not subject to the
cooling off period.
Senator Warren. Okay. I am just trying to get how skinny
this thing is. The last question I want to ask is about the one
we were talking earlier about going to work for Saudi Arabia
and other foreign countries.
I just have a question around that, and maybe, Ms. Krass,
you are the one to ask this. When this more than 95 percent
approval rating that is coming through on the DOD approval of
our high-ranking military officials going to work for foreign
governments, I just want to ask, is there any requirement under
current law for the Pentagon to consider whether this work
would enhance the National Security of the United States of
America?
Ms. Krass. Yes, Senator Warren. The way that the system, as
you, I am sure you well know, is set up is that the Emoluments
Clause precludes accepting compensation or from working for a
foreign government in Congress has consented--I mean, unless
Congress consents, and Congress has consented to that in
certain circumstances when the Secretary of the military
department has approved and the Secretary of State has
approved.
Senator Warren. I understand that and I appreciate it, and
I am way over time and my colleagues are being very generous
with me.
The question I am trying to ask you is, is there anything
that requires the Pentagon to look at whether or not it is in
our national interest to permit this general or admiral to go
work for a foreign country?
Ms. Krass. What I would like to do is to defer to any one
of my colleagues, perhaps----
Senator Warren. Mr. Coffey?
Mr. Coffey.--because in fairness to Ms. Krass, Congress
delegated the approval authority to the military--the
Secretaries and really don't include the Secretary of Defense.
Although always happy to get----
Senator Warren. Fair enough. Fair enough.
Mr. Coffey.--guidance from her friends on the third deck.
Senator Warren. Glad to have the help.
Mr. Coffey. Which we get a lot. The answer is, yes. In the
Department of the Navy, there are--the standard is, would
approving the employment be inimical to the National Security
interests of the United States? That is sort of the headline.
Senator Warren. Okay. That is inimical though.
Mr. Coffey. Yes, it is. There are four sub-standards, which
I am happy to share with you of the Department.
Senator Warren. Okay.
Mr. Coffey. But remember, we are talking about whether
somebody who has served their country and has retired, what
restrictions, if any, we are going to put on their employment.
Senator Warren. Right.
Mr. Coffey. Obviously, we have the Emoluments Clause and
then we have permission from Congress if two Federal entities,
two Executive Branch entities approve it.
Senator Warren. Right.
Mr. Coffey. The Department of the Navy and Secretary of
State. So, the questions that are posed, and there is a very
rigorous process, which I am happy to share with you either
today during questions, or questions for the record afterwards.
But among the questions that in the Navy and the Marine Corps--
are the following, whether the foreign civil employment will
adversely affect----
Senator Warren. Okay, I get adversely--you heard my
question. You can just answer my one question. Do you, as part
of your routine questions, ask, does having this admiral or
general go work for a company that works for the People's
Republic of China or for Saudi Arabia or for the UAE, enhance
the National Security for the United States of America? Is that
one of your questions?
Mr. Coffey. Among the only files that I have reviewed, I
have seen that discussion. For example----
Senator Warren. Okay. Is that one of the questions you are
internally required to ask? This shouldn't be that hard.
Mr. Coffey. It is certainly in all of the various files
that I have looked at, it is there. Ultimately the State
Department decides whether it is in the interest of the United
States and whether it should be approved. But it is----
Senator Warren. That is what I am trying to get at. If
anybody is actually looking at that. You are telling me it is a
question that you answer each time, and the 95 plus percent
that you approved, you believed that it would enhance the
national interests of the United States of America for that
general or that admiral to go work for the UAE or Saudi Arabia.
Is that right? That is what you are telling me?
Mr. Coffey. Madam Chair, what I am saying is that the
standard is a negative standard. It is the opposite of what I
said before. However, in the files that I reviewed----
Senator Warren. That was the question I asked.
Mr. Coffey. That is where, and I will just say that Under
Secretary Cisneros has directed each of the Mil-Dep Secretaries
to take 90 days to look at this and come up with whether we can
do this a better way. I can tell you we are all jumping in on
that. I have had a chance to look at how Army does it, how Air
Force does it. We think we can improve it. We are looking at
that.
Senator Warren. Please understand, I am not your enemy here
and I am not the enemy of the people who are sitting behind
you.
I am grateful for the work you do. I just want you to have
the tools so that you are getting backed up by the
U.S. Congress and that you are not in a position where the
standard is so flimsy or where there are so many exceptions
that there are other ways to accomplish what it is that we
clearly didn't want to have happen.
I am just really concerned. I see a 95 percent plus
approval rating to go work for countries like Saudi Arabia and
the UAE, and countries that have terrible human rights abuses,
and I think, ``how could that be good for the United States of
America?'' That, to me, has to be our standard. I just want to
get us in the right place. Senator Scott.
Senator Scott. Thank you, Chairwoman. First of, thanks to
each of you for being here. I appreciate the fact you guys were
willing to go through the horrible confirmation process that
each of you went through, I wouldn't want to do that. I don't
know if it is worse than an election.
Senator Warren. It is not----
[Laughter.]
Senator Scott. Have any of you approved anybody, since you
have been there, do you know of anybody that has been approved
to work for China? To go to work for or either the government
of China, an entity controlled by the government of China, or a
company majority owned by Chinese officials? Do you know of
any?
Ms. Ricci. The Army does not.
Senator Scott. You don't have any?
Mr. Coffey. Nor does the Navy, Senator.
Mr. Beshar. I believe we are in the same position, Senator.
Senator Scott. Okay. I don't want you to breach of
confidence, but without naming a name, could you give me an
example of where somebody got turned down.
Because you heard what we were told, that 95 percent of the
people are getting approved, right. I don't know if that is
good or bad. You could argue--I mean, I think Senator Kaine
would say that it seems a little high, right.
Maybe just everybody is doing a really good job of
compliance, right. So, give me an example of people who have
gotten turned down.
Mr. Coffey. I will start. Again, I am going to be very
generic. An applicant was denied in part because of the
counterintelligence diligence that had been done and it felt it
would be adverse to the National Security, if it were approved.
Mr. Beshar. Senator Scott, I thought it might be helpful to
briefly describe the way we have changed our process at the
Department of the Air Force.
In 2020, we overhauled the protocols and the policy for
approving or reviewing foreign government employment. There are
three changes in particular that were made. First was to create
a board, a three-person board for the first time that would
review these applications.
Second was to articulate a clear standard. Some of the
questions that Senator Warren asked, would this potential
engagement be embarrassing to the United States is an example,
has a proper counterintelligence assessment been performed by
the Air Force Office of Special Counsel, and has the country in
question taken actions that would be contrary to the interests
of the United States.
The third important change was putting a 3-year temporal
limit on any approvals that are granted so that the individual,
after 3 years, if they wanted to continue, would have to come
back into the process to the Department of the Air Force.
Senator Scott. Okay.
Ms. Ricci. Senator Scott, in the Army, there have been some
of these approvals and we have found that we have had to--there
have been denials for people with derogatory information in
their files that would reflect negatively on the United States
and would also make them susceptible to foreign influence.
I also want to add, I know that Senator Warren mentioned
the UAE and Saudi Arabia. I have looked at the approvals in the
files, and they are largely connected to our foreign military
sales programs.
The vast majority of Army personnel who have been approved
have not been general officers. They have been maintainers who
have been hired by these countries to help maintain the
equipment that through security cooperation, the Government has
determined it is in our interest for these--to make these sales
to these countries.
These soldiers who are now retired have been able to find
employment with them, maintaining the same equipment that they
maintain for the Army. That has been the majority of our
approvals.
Senator Scott. So, have you--I assume what you guys do
every day, you have the process you talked about. You have a
process and you go through the process. Have any of you come to
a point where you say, ``I don't think we should do this, but I
don't have the authority to not allow it to happen?'' Have you
ever felt like that in any case where you think, ``no, we
shouldn't really be doing this, but you can't stop it?''
Mr. Beshar. Senator Scott, very briefly. We have had
instances where individuals have withdrawn because of some of
the rigors of the process. Also, the concept broadly that the
Congress has really created a two-pronged approval.
The focus of the Department of the Air Force is more on
security and counterintelligence, whereas the State Department
is the final approval authority, is a bit more on the foreign
policy considerations.
Ms. Ricci. Yes, Senator Scott, I have not felt that way at
all. In fact, the Army has undertaken a review of our
regulation because we want to strengthen our requirements, and
our requirements currently exceed what is required under the
statute.
Mr. Coffey. I concur. I don't feel that way. I do think
taking a hard look at how we do things and see if we can
tighten things up and get on the same page as our sister
departments is a good exercise and we are doing that now.
Senator Scott. Have you felt like--just and I don't think
you guys were there for any of it, but have you felt like there
is a difference between administrations and how this is
handled? Has it changed much, you know, when you guys came in?
Mr. Coffey. On foreign government employment, sir?
Senator Scott. Yes.
Mr. Coffey. Certainly, preparing for the hearing today,
none of us were here in the prior Administration. I certainly
did not detect any material difference in how things were
treated. Perhaps that is consistent with the 95 percent
approval rate.
Senator Scott. Have you seen anything different?
Ms. Ricci. I have not seen anything different in the Army.
There was a dip in applications because of the COVID period.
There was about a 2-year period where we had far fewer. But
comparing the before and the current, I have not seen any
change in how they are treated or evaluated.
Senator Scott. Do you guys feel any pressure from anybody
to be more lax or be more strict? Is there any political
pressure at all that you guys ever feel?
Ms. Ricci. Senator, not at all. In fact, I will say that in
the Army we have individuals, we have individuals who come
forward even when they know it is not a foreign government, but
it is a company working in that foreign government, out of an
abundance of caution.
We encourage that and we find that this is very helpful. We
just are pleased to say that there is a high compliance rate.
That probably speaks to why so many are approved, because it is
a self-reporting requirement and these are responsible
individuals seeking solid employment.
Senator Scott. You make the argument that people have been
in the military probably are real followers, to a great extent.
Ms. Ricci. Exactly. Yes, yes.
Senator Scott. Thanks.
Senator Warren. Senator Kaine.
Senator Kaine. Just to pick up on it, the 95 percent figure
I just find very troubling. This is different than Committee on
Foreign Investment in the United States (CFIUS), but there is
some an analog and I am sure that the CFIUS approval rate is at
95 percent based on my own experience and working with American
companies, where there is going to be some investment by, you
know, a Chinese food company into Smithfield Foods.
The degree to which that gets scrutiny enough from two
sources but from multiple sources, is pretty intense. I bet the
approval rate is at 95 percent. I credit that, (A) probably
people don't apply if it is a stretch, okay. So, a lot of
military folks wouldn't push the envelope; (B) they withdraw
maybe in the middle of the process and that is not counted as a
turn down, so that reduces the number; and (C) that--Ms. Ricci,
I appreciate you pointing out this maintainer point. If the
U.S. is approving foreign military sales of a platform and
there is a specific need to maintain that platform, that would
seem to be an obvious case where it might be warranted.
But I just still am troubled by a 95 percent approval
rating. There is just something odd about that to me. I am not
surprised that it may not be different among Administrations,
but I applaud the fact that the DOD is now doing a 90-day
assessment of this, because that seems unusual.
I wondered if Congress were just to do one thing in this
and say, and if approved, there must be some report to Congress
about it and it should be public. I wonder if that might change
either, (A) who applies or, (B) what gets approved, or both.
But this is helpful. Let me ask you one other thing.
A number of us have filed a bill to restrict the ability of
Members of Congress to trade in stocks because we get all kinds
of information, sometimes classified, sometimes not, but
information that the general public doesn't get that could
affect our ability to trade stocks.
I have cosponsored a bill with Senator Merkley and others,
and there are other bills out there that essentially attempt
the same thing. From an ethics standpoint within the service
branches, what is the normal protocol to analyze whether
people's financial holdings pose conflicts of interest in the
work that they do?
Mr. Coffey, you jump to the mic. You look like you are
moving to the mic first, so I am going to ask you.
Mr. Coffey. I think Mr. Beshar looked over me and--well, I
think it starts with the Criminal Code, 18 USC 208 which states
that you are not to participate in any matter that might affect
you or your family's financial status.
That is a pretty, pretty stark rule. I know there has been
a lot of talk about whether you make certain laws applicable
down to 06s or below, etcetera, but that law applies to
everybody, regardless of you are an acquisition or anything
else. So, then you have more specific laws specifically
directed at stocks.
All of us had to divest if we owned any defense stocks to
de minimis, or for the well-counseled people, to zero, and
ensure that we are just crystal clean on that. From my
perspective, and I am very proud of the ethics program with the
Department of the Navy, we have 900 ethics counselors.
From day one, you are told about ethical behavior. We have
annual reviews. We have 41,000 people who file financial
disclosure forms, every one of which is reviewed by a
supervisor who knows what they are working on and can detect
whether there is any nexus between their financial status and
what they are working on.
I think we have in place a clear, consistent, and balanced
program. We can always improve it. Whatever you give us in
terms of laws, we will vigorously enforce. But I think the
current State of play, as the GAO found in the 2021 report, was
we have a pretty effective program.
Frankly, there are some benefits when I am sitting across
from somebody who served to know that they can explain to their
fellow board members or others at the company why we need that
tech data for that F-35. That, and I would like to think that
they are in there explaining to their fellow board members this
is why they are being pains in the butt, it is because they
really need it.
I think like the GAO found, there are some benefits to
having veterans in the Pentagon who have been in private
industry. I wasn't in the defense industry, but I can see the
benefits of it and vice versa for people who have retired, and
in order to make a living, go work for the defense Industry.
Senator Kaine. I will just hand it back to the Chair. I can
see benefits, too. I mean, I can definitely see benefits both
directions, but I just want there to be appropriate guardrails
so that the benefits of expertise are not overcome by abuses,
even if not ill-intended. There can be kind of an unintentional
slippage toward abuse, and I think we need to guard against
that. But thank you all, and I will hand it back to you, Madam
Chair.
Senator Warren. Thank you, Senator Kaine. In fact, I want
to followup on Senator Kaine's questions. I take this one kind
of personally. A few years ago, I pushed hard for a law that we
passed that barred many Department of Defense officials from
owning more than $15,000 in stock in the largest defense
contractors. It is a law that you all are now out there
enforcing.
That law also says that senior officials who work on
contracts can't own or buy large amounts of stock in
contractors that were the top ten recipients of DOD dollars in
the last 5 years. And for everyone, DOD is supposed to make
sure that no one is working on a project that has stock
holdings that could create a conflict of interest, going into
your general point about this. But I want to talk a little bit
about the big gaps here.
We saw a recent Wall Street Journal report that highlighted
the case of the DOD policy official who owned somewhere between
$15,000 and $50,000 of stock in the Chinese company Alibaba,
who was actively working on a policy about whether Alibaba's
ties to China meant that the company should be on a list of
companies that Americans could not invest in.
Two weeks after the official purchased the stock, Alibaba
got what it wanted. It was omitted from the list of prohibited
companies, and the company's stock increased immediately by 4
percent. A nice return in a very short period of time.
Ms. Krass, Alibaba is not a defense contractor, so current
law did not prevent this DOD official from owning its stock.
But ethics officers still should have spotted that his
possession gave him insider information that could boost his
personal finances, going to the point that Mr. Coffey made, and
could influence the advice that he was giving to the
Government, a possible conflict of interest here.
I understand, you were not at DOD when this happened. But
why didn't DOD officials pick up that this was a conflict of
interest? There clearly is a conflict here, right?
Ms. Krass. Senator, absolutely. I agree that employee may
not participate in any matter in which they have a financial--
--
Senator Warren. Why didn't they pick this up?
Ms. Krass.--and they need to either have recused themselves
from those matters or they need to have divested of the
financial interest so as to avoid the problem. As you
mentioned, I was not at the Department at the time, and I am
happy to take back any questions that you have on that.
Senator Warren. I guess that is, I don't know?
Ms. Krass. What I do know is that my team works extremely
hard, as Mr. Coffey indicated.
Senator Warren. I understand that. Let me ask about another
loophole. Stock ownership limits apply to certain senior
Department officials, but they do not apply to everyone. Would
the Chief of Staff to Secretary Austin or the Chief to the
Chairman of the Joint Chiefs of Staff be allowed to own $30,000
in Lockheed Martin, DOD's top contractor?
Ms. Krass. In the review of a financial disclosure form,
any potential conflicts are identified and it is determined
whether or not an employee would need to divest the stock
because they can't perform their duties appropriately, if they
were to continue to hold the stock and recuse themselves. There
is the other option to recuse. If it would interfere with the
employee's performance of their official duties in a
significant way----
Senator Warren. The person has come to you for advice. Are
they covered by the current statute? This is somebody who is
not confirmed by the Senate and is not an acquisitions officer.
Are they covered by this rule?
Ms. Krass. By 18 USC 208, everybody is covered by that
rule.
Senator Warren. You are saying you would tell them they
have to divest the stock?
Ms. Krass. Yes. I would either have them divest or recuse
depending on what the scope of their official duties would be.
Senator Warren. Okay. I hope that is the advice that you
are giving. Let me ask one more. If the Chief of Staff to
Secretary Austin helps make decisions about whether or not
their boss should meet with the company. They don't give advice
on acquisitions, but they decide who gets access. This is the
gatekeeper. Does that change whether or not they can own
$30,000 of Lockheed Martin stock?
Ms. Krass. They would still--that is beyond the de minimis
amount and they would not be able to participate in a decision
about whether to recommend a meeting unless they had divested
of the stock.
Senator Warren. Okay, I hope that is the case. That is not
what public reporting seems to indicate, but I hope that is the
case.
I want to do one more and then I will quit, and hand this
over to Senator Scott. Some of the recent biggest procurement
fights have been between smaller but still huge tech companies
like Oracle, Microsoft, Amazon, who are all fighting over which
company was going to get the $10 billion Joint Enterprise
Defense Infrastructure (JEDI) contract, which would have
provided cloud computing for DOD.
One of the Pentagon officials involved in deciding which
company got the contract owned Microsoft stock. Now, Microsoft
had received $400 million in DOD contracts, which is not high
enough for them to be listed in the prohibited stock list.
DOD is just supposed to keep an eye out for problems if
they pop up here. The official disclosed that she owned
Microsoft stock to DOD, she disclosed it to DOD. Did anyone at
DOD say that this was a problem given her acquisitions' role?
Ms. Krass. Again, as we were discussing, you----
Senator Warren. This is a matter of public record.
Ms. Krass. Yes, but I was receiving my tenure, Senator, and
I cannot speak to the specifics of that, but I would be happy
to, again, take any questions.
Senator Warren. Well, I will just tell you the answer, no.
It was not raised by DOD. DOD did not have a problem with this.
Ultimately, in this case, the person was referred for
prosecution.
But I am concerned about the process here. I am concerned
that we are keeping too narrow. I understand the overall rule
is a conflicts rule, but I am concerned that we are too narrow
in what we look at and how we define it and whether we get
enough disclosure that these pop up and we can see them.
Then I am concerned about the fact that we don't have
public reporting of this so that, quite frankly, somebody to
look over your shoulder and say, I get it, I see what is
happening here, and here is where I disagree, and we need to
tighten up the laws. That is the part that I am worried about,
and that is what this is about today. Senator Scott.
Senator Scott. Do you think more public disclosure would be
helpful? I got to be honest, I was Governor of Florida for 8
years, everything was public. You just got used to it. Every
text, every email, everything was public record. So, it is--
life is actually, for me, I came to the conclusion life is
easier. Everybody knows everything. So, what do you all think?
Ms. Krass. Yes, I will start and then invite my colleagues
to join me. I think that as we think about increased
transparency, we of course have already published financial
disclosure form reports. But I think we just need to always be
mindful of any privacy interests that are at stake.
Of course, the Privacy Act does not apply between us, you
know, as branches of Government, but it does apply to us as the
Executive Branch in disclosing individuals' information, and so
we just need to be mindful of that.
Senator Scott. They didn't worry about it when I was
Governor. I mean, every text, every email, everything is
public. So, you learn to be smart.
Ms. Krass. I try to write my emails as if they might become
public just in case.
Senator Scott. Yes. Do you all think more transparency
would be helpful?
Mr. Coffey. Well, as a general principle, it is hard to
disagree with that, but I do think there are privacy interests
involved.
I look forward to seeing what the independent commission
comes up with that Congress has directed to see what they come
up with on that idea. Senator Warren, to make you feel better,
I certainly think that the Department of the Navy breeds
ethical behavior. We had a big black eye a few years ago with
Glenn Defense Marine Asia (GDMA).
We set the tone at the top and it is--from the day you get
in the door and when you are leaving, it is about ethical
behavior. We have bad eggs. We are big department.
You are going to have a couple of bad eggs, but I can tell
you, when I hear someone wants to come to see the Secretary,
the answer is, if you see that person, you are going to see
everybody in that industry.
You are not going to play favorites, and we have a lot of
ethical advisers at the Secretariat and all up and down the
chain of command. I just want to leave you with some comfort
that we are being very vigorous in our enforcement of the
ethics laws.
If you decide to give us some new ones, all we ask for, at
least on my part, is that they be clear so we can advise our
people. That they be consistent----
Senator Scott. It is easier, right?
Mr. Coffey. Yes.
Senator Warren. We are very much in that direction. But let
me just ask you, privacy interests, what is the privacy
interest, and you work for the Department of Defense, and you
own defense industry stock. What is the privacy interest?
Mr. Coffey. Well, again, I think in part the trial lawyer
keeps thinking about causation and the link. There needs to be
a link between the financial interests of the person to the
Department of Defense and what they do----
Senator Warren. No. If you are a lawyer, you understand
appearance of impropriety. We don't ask for lawyers or judges
to actually prove that this person has a conflict of interest.
We talk about the appearance and why the appearance matters,
because our job is to build public confidence.
You build public confidence when everybody knows that every
email is going to be disclosed. You build public confidence
when you say if you want to invest, have at it, but don't
invest in Department of Defense stocks if you work for the
Department of Defense.
That one is just a no, and if that so crimps your investing
style, then go work somewhere else. I just don't get why this
is a privacy issue. I don't know what is there. Sorry, I
interrupted, Senator Scott.
Senator Scott. Now, we have to disclose everything. Run for
office. They expect you to disclose everything.
Senator Warren. My taxes are online.
Senator Scott. Have you referred anybody--any of you refer
to anybody for criminal prosecution?
Mr. Coffey. As a department? Certainly. The answer is yes.
Senator Scott. You have while you have been there?
Mr. Coffey. Yes, and I will say that as a result of The
Washington Post articles, and we have checked and some of the
people in the article did not apply, and we are proceeding
accordingly. I will just leave it there.
Senator Scott. Okay. Anybody else?
Mr. Beshar. We are in a similar position, Senator Scott,
and I very much like the way you opened the hearing by saying
that there is always opportunity for improvement. I think any
leader should have the mindset of continuous improvement.
A number of the studies that are being done, whether it is
the review by Undersecretary Cisneros, what he has directed on
foreign government employment, or it is the 1073 review that
will look into really the post-Government employment
restrictions and where is the right balance to be struck. I
think all of us are trying to have an open mind about how we
can make our protocols and procedures as appropriate as we can.
Senator Scott. Have you have had to? Have you had to refer
anybody--?
Ms. Krass. I have not.
Ms. Ricci. I have not during my tenure.
Senator Scott. Okay. Just to finish, the question about
Alibaba, could you just get us information, if there is--you
might not be able to find any information, but if you do, can
you get it to Senator Warren and me?
Ms. Krass. Yes.
Senator Scott. I mean, I think it is pretty interesting,
right, so technically--you shouldn't be able to do that. I mean
if those are the facts. This is something that was written, so
if those are the facts, those are the facts, right. Okay, thank
you. Thanks for doing your job, by the way.
Senator Warren. Yes, and I do. I appreciate the work that
you all do. I just want to give you the tools so you can do it
even better. I want to thank all of our witnesses for their
testimony today on the first and second panel.
I also want to thank Jon Clark, and Gary Leeling, and Andy
Scott, and Sofia Kamali, and Noah Sisk, and Jenny Davis, and
Sean O'Keefe, and Katie Magnus, and Brendan Gavin for their
work in putting together today's hearing. These hearings take a
lot of work, and I appreciate all that they have done.
We just go into this with a mindset of we want to do
better. We want to have complete confidence that when the
Department of Defense submits a budget, it is because the
Department of Defense and its top officials believe this is
what is best for the United States of America, this is not
something that helps out some particular individual in their
personal financial circumstances.
That is all we are looking for here, is the best way to
tell that to the American people. Appreciate your work, and
with that, we close this hearing. We are done. Thank you.
[Whereupon, at 4:44 p.m., the Subcommittee adjourned.]
[Questions for the record with answers supplied follow:]
Questions Submitted by Senator Elizabeth Warren
stock trading restrictions
1. Senator Warren. Ms. Krass, has the Department of Defense (DOD)
reviewed Reed Werner's ownership of Alibaba stock given his reported
official activities that would impact the company?
Ms. Krass. From 2019 to 2021, Mr. Werner served as the Deputy
Assistant Secretary of Defense (DASD) for South & Southeast Asia, which
is comprised of the following countries:
India, Bangladesh, Bhutan, Diego Garcia, Maldives, Nepal, Sri
Lanka, Brunei, Burma, Cambodia, East Timor, Indonesia, Laos, Malaysia,
Philippines, Singapore, Thailand, and Vietnam. (https://
policy.defense.gov/OUSDP-Offices/ASD-for-Indo-Pacific-Security-Affairs/
)
Mr. Werner's official area of responsibility and authority did not
extend to China, as there is a separate DASD for China. The then-Deputy
Secretary of Defense approved DOD's list of Communist Chinese military
companies submitted to Congress in accordance with section
1237(b)(4)(B) of Public Law 105-261, as amended, based on the
recommendation of the then-Under Secretary of Defense for Acquisition
and Sustainment (USD(A&S)). The Acting Assistant Secretary of Defense
for Indo-Pacific Security Affairs at the time, David Helvey, concurred
with the USD(A&S)'s recommendation, and his position was informed by
the DASD for China at the time, Chad Sbragia. DASD Werner did not play
a role in this recommendation. The Department has reviewed the
allegations in the Wall Street Journal's October 11, 2022 article and
is taking appropriate action.
2. Senator Warren. Ms. Krass, has DOD concluded any ethics laws
were violated by Reed Werner? If so, what actions has DOD taken?
Ms. Krass. See response to question 1 above.
3. Senator Warren. Ms. Krass, how many DOD personnel have disclosed
to DOD that they own stock in defense contractors that are prohibited
by 10 U.S.C. 988?
Ms. Krass. Relevant reports filed in the Office of Government
Ethics (OGE) Integrity.gov public financial disclosure system covering
calendar years 2020 to 2023 indicate that 35 individuals reported
holding stock valued in excess of the de minimis amount in an entity
appearing on the Top Ten List for the relevant reporting period. None
of these individuals were covered officials and therefore did not hold
stock in violation of 10 U.S.C. Sec. 988.
4. Senator Warren. Ms. Krass, are any specific actions taken when
DOD personnel disclose they own stocks prohibited by 10 U.S.C. 988?
Ms. Krass. Officials subject to 10 U.S.C. Sec. 988 are required to
file the OGE 278e Public Financial Disclosure Report annually, as well
as to submit OGE 278-T Periodic Transaction Reports promptly upon the
purchase, sale, or exchange of certain securities, including stocks. In
addition to requiring review by ethics officials, DOD requires
supervisory review of these financial disclosure reports to identify
any potential conflicts of interest with the filer's duties. If an
official subject to Section 988 comes into possession of a prohibited
stock (for example, through inheritance), ethics officials will advise
the individual of the requirement to divest promptly and work with the
individual to ensure that appropriate recusals and screening
arrangements are in place until divestiture is accomplished.
5. Senator Warren. Ms. Krass, in the past 10 years how many times
has DOD requested personnel divest stock ownership to avoid a real or
perceived conflict of interest?
Ms. Krass. DOD has effective measures to safeguard against
conflicts of interest. Federal statutes and implementing regulations
prohibit personnel from participating personally and substantially in
any particular matter that would have a direct and predictable effect
on their actual or imputed financial interests. The mechanisms for
preventing conflicts of interest include recusal, divestiture and re-
assignment. Where a potential conflict of interest exists, ethics
officials will work with the individual and his or her supervisor to
determine the most appropriate mechanism under the applicable
circumstances. , DOD does not maintain a comprehensive historical data
base of these actions, which are specific to the individual and
circumstances at the time. However, individuals who are required to
divest of a security may request a certificate of divestiture from the
Office of Government Ethics (OGE). OGE publicly posts certificates of
divestiture obtained by senior officials on its website at: https://
oge.gov/Web/OGE.nsf/Officials%20Individualpercent20
Disclosures%20Search%20Collection
6. Senator Warren. Ms. Krass, in the past 10 years have there been
any instances in which personnel refused to divest or take other
actions for prohibited stock ownership? What action occurred if so?
Ms. Krass. I am not aware of any instances in which personnel
refused to divest or take other actions for prohibited stock ownership.
DOD has effective measures to safeguard against conflicts of
interest. Federal statutes and implementing regulations prohibit
personnel from participating personally and substantially in any
particular matter that would have a direct and predictable effect on
their actual or imputed financial interests. The mechanisms for
preventing conflicts of interest include recusal, divestiture and re-
assignment. Where a potential conflict of interest exists, ethics
officials will work with the individual and their supervisor to
determine the most appropriate mechanism under the applicable
circumstances.
7. Senator Warren. Ms. Krass, how many DOD personnel in acquisition
positions have disclosed to DOD they own stock in companies that were
the top 100 contractors for DOD in fiscal year 2021?
Ms. Krass. DOD is a large organization with a diversity of missions
among its 2.8 million personnel across three military departments and
33 distinct agencies and components, including an acquisition workforce
of almost 190,000 personnel. This diversity means that potential for
conflicts of interest, even for acquisition personnel, vary widely
depending on an employee's organization and actual duties. DOD has over
3,000 ethics officials located around the world at every level of the
Department to train and advise DOD acquisition and other personnel.
Contracting officers and certain other acquisition personnel are
required to file financial disclosure reports, which are reviewed by
the employee's supervisor prior to review and certification by ethics
officials. Financial disclosure systems do not track and report data
concerning assets listed by individuals in a specific job series.
However, DOD's financial disclosure review procedures are effective in
preventing and addressing conflicts of interest, particularly when
combined with DOD's extensive training programs, active mitigation
through recusal, divestiture, or reassignment, and, when necessary,
enforcement.
post-government employment restrictions
8. Senator Warren. Ms. Krass, how many opinions are currently in
DOD's After Government Employment Advice Repository (AGEAR)?
Ms. Krass. As mandated by Section 847 of the National Defense
Authorization Act (NDAA) for Fiscal Year 2008, Pub. L. No. 110-181
(``Section 847'') the Department of Defense is required to retain
written requests and opinions in AGEAR for 5 years for certain
``covered officials'' who, within 2 years of leaving DOD, expect to
receive compensation from any defense contractor. Since 2018,
approximately 1,300 post-Government employment opinions have been
retained in AGEAR.
9. Senator Warren. Ms. Krass, how many opinions in DOD's AGEAR
concluded the individual had a lifetime ban on certain post-government
activities?
Ms. Krass. Under 18 U.S.C. Sec. 207(a)(1), all Executive Branch
employees have a lifetime criminal ban on representing others on
particular matters involving specific parties in which they
participated personally and substantially during their Government
service.
Section 847 of the NDAA for fiscal year 2008 requires certain DOD
officials to request and receive a written opinion regarding the
applicability of post-employment restrictions before receiving
compensation from any DOD contractor. Section 847 applies to current
and former DOD officials who participated personally and substantially
in an acquisition with a value in excess of $10 million (``the
Acquisition'') while serving in: (1) an Executive Schedule position;
(2) a Senior Executive Service position; (3) a general or flag officer
position; or (4) in the position of program manager, deputy program
manager, procuring contracting officer, administrative contracting
officer, source selection authority, member of the source selection
evaluation board, or chief of a financial or technical evaluation team.
The same type of participation that triggers the section 847
requirements also triggers a lifetime criminal ban under 18 U.S.C.
Sec. 207(a)(1). Thus, all DOD officials subject to Section 847 will
also have a lifetime criminal ban from representing a prospective
employer (or any Non-Federal Entity (NFE)) back to the Government with
regard to the Acquisition. Furthermore, depending on the DOD official's
position and/or participation relative to the Acquisition, the DOD
official may also have a ban from accepting any compensation from the
prime contractor for that acquisition for 1 year under the Procurement
Integrity Act, 41 U.S.C. Sec. 2104.
10. Senator Warren. Ms. Krass, what entities or programs do
opinions in AGEAR cite as having a lifetime ban on certain post-
government activities?
Ms. Krass. The lifetime criminal ban under 18 U.S.C. Sec.
207(a)(1) is triggered by personal and substantial participation in
``particular matters involving specific parties,'' and such matters
include all contracts and acquisitions regardless of value. Section 847
requires written post-Government employment opinions for certain DOD
officials who participated in acquisitions over $10 million and plan to
work for a DOD contractor to be stored in AGEAR. Thus, all individuals
requesting and receiving an opinion that is stored in AGEAR have, at a
minimum, a lifetime ban relative to the acquisition(s) triggering
section 847. While the post-Government employment opinion or request
stored in AGEAR is required based on participation in a $10-million
acquisition, that specific acquisition may not be relevant to the DOD
official's prospective employment with a DOD contractor. Because
section 847 requires certain DOD officials to receive a written opinion
before accepting compensation from any DOD contractor, there may be no
actual nexus between the DOD official's participation in the
acquisition that triggered the section 847 requirement and their
prospective employment with a DOD contractor.
11. Senator Warren. Ms. Krass, how many individuals has DOD advised
in AGEAR that they have a lifetime ban on certain post-government
activities?
Ms. Krass. All DOD officials who have requested and received
opinions in AGEAR will have, at a minimum, a lifetime ban on
participation in the acquisition in excess of $10 million that
triggered their requirement to request and receive a written post-
employment opinion in AGEAR.
12. Senator Warren. Ms. Krass, what percentage of individuals who
received ethics opinions included in AGEAR were advised they have a
lifetime ban on certain post-government activities?
Ms. Krass. One hundred percent. See response to question 11 above.
13. Senator Warren. Ms. Krass, Ms. Ricci, Mr. Coffey, and Mr.
Beshar, in the past 10 years how many times has your agency received
reports of possible violations of post-government ethics restrictions?
Ms. Krass, Ms. Ricci, Mr. Coffey, and Mr. Beshar. Allegations of
ethics violations may be reported in a variety of ways, with the
Inspectors General (IGs) and criminal investigative services typically
receiving reports directly through mechanisms such as the DOD Hotline:
https://www.dodig.mil/Components/Administrative-Investigations/DOD-
Hotline/Hotline-Complaint/
Information concerning such complaints is maintained by the IGs and
investigative services. In addition, ethics officials report
information in their possession concerning disciplinary actions and
certain referrals to DOJ as part of the Annual Agency Ethics Program
Questionnaire that DOD submits to the Office of Government Ethics (OGE)
each year. These Questionnaires are published on OGE's website.
Since 2015, as part of the Annual Agency Ethics Program
Questionnaire, OGE has asked ethics officials to separately report how
many disciplinary actions were taken based wholly or in part on
violations of post-Government employment restrictions governed by 18
U.S.C. Sec. 207 and subpart F of 5 C.F.R. 2635. Since 2015, the
respective Offices of the General Counsel of the DOD and the Military
Departments reported approximately 15 instances of disciplinary actions
that were based wholly or in part on violations of post-Government
employment restrictions.
14. Senator Warren. Ms. Krass, Ms. Ricci, Mr. Coffey, and Mr.
Beshar, in the past 10 years how many times have reports of possible
violations of post-government ethics restrictions been substantiated
and what actions were taken as a consequence?
Ms. Krass, Ms. Ricci, Mr. Coffey, and Mr. Beshar. Allegations of
ethics violations may be reported in a variety of ways, with the
Inspectors General (IGs) and criminal investigative services typically
receiving reports directly through mechanisms such as the DOD Hotline:
https://www.dodig.mil/Components/Administrative-Investigations/DOD-
Hotline/Hotline-Complaint/
Information concerning such complaints is maintained by the IGs and
investigative services, to include data relating to whether the
allegations are substantiated or not. In addition, ethics officials
report information in their possession concerning disciplinary actions
and certain referrals to DOJ to the Office of Government Ethics each
year as part of the Annual Agency Ethics Program Questionnaire. These
Questionnaires are published on OGE's website.
Since 2015, as part of the Annual Agency Ethics Program
Questionnaire, OGE has asked ethics officials to separately report the
number of referrals made to the DOJ of potential violations of criminal
post-Government employment restrictions governed by 18 U.S.C. Sec.
207, along with the number of referrals that DOJ accepted for
prosecution. Since 2015, the respective Offices of the General Counsel
of the DOD and the Military Departments reported fewer than 5 referrals
of potential violations of criminal post-Government ethics restrictions
to DOJ. Of those referrals, DOJ declined to accept any for prosecution.
15. Senator Warren. Ms. Krass, Ms. Ricci, Mr. Coffey, and Mr.
Beshar, in the past 10 years how many times has your agency received
reports of possible violations of post-government lobbying and
representational restrictions?
Ms. Krass, Ms. Ricci, Mr. Coffey, and Mr. Beshar. Allegations of
ethics violations may be reported in a variety of ways, with the
Inspectors General (IGs) and criminal investigative services typically
receiving reports directly through mechanisms such as the DOD Hotline:
https://www.dodig.mil/Components/Administrative-Investigations/DOD-
Hotline/Hotline-Complaint/
The respective Offices of the General Counsel of the DOD and the
Military Departments are not aware of any complaints involving an
allegation of a possible violation of post-Government lobbying and
representational restrictions, as set forth in section 1045 of the NDAA
for fiscal year 2018.
16. Senator Warren. Ms. Krass, Ms. Ricci, Mr. Coffey, and Mr.
Beshar, in the past 10 years how many times has your agency
substantiated reports of possible violations of post-government
lobbying and representational restrictions and what actions were taken
as a consequence?
Ms. Krass, Ms. Ricci, Mr. Coffey, and Mr. Beshar. Allegations of
ethics violations may be reported in a variety of ways, with the
Inspectors General (IGs) and criminal investigative services typically
receiving reports directly through mechanisms such as the DOD Hotline:
https://www.dodig.mil/Components/Administrative-Investigations/DOD-
Hotline/Hotline-Complaint/
The respective Offices of the General Counsel of the DOD and the
Military Departments are not aware of any complaints involving an
allegation of a possible violation of post-government lobbying and
representational restrictions, as set forth in section 1045 of the NDAA
for fiscal year 2018.
17. Senator Warren. Ms. Krass, Ms. Ricci, Mr. Coffey, and Mr.
Beshar, in the past 10 years how many times have you referred DOD
officials to the Department of Justice, Inspectors General, or U.S.
attorneys for alleged violations of ethics laws?
Ms. Krass, Ms. Ricci, Mr. Coffey, and Mr. Beshar. Allegations of
ethics violations may be reported in a variety of ways, with the
Inspectors General (IGs) and criminal investigative services typically
receiving reports directly through mechanisms such as the DOD Hotline:
https://www.dodig.mil/Components/Administrative-Investigations/DOD-
Hotline/Hotline-Complaint/
Information concerning such complaints is maintained by the IGs and
investigative services. In addition, ethics officials do report
information in their possession concerning disciplinary actions and
certain referrals to DOJ to the Office of Government Ethics each year
as part of the Annual Agency Ethics Program Questionnaire. These
Questionnaires are published on OGE's website.
As part of the Annual Agency Ethics Program Questionnaire, ethics
officials reported the number of referrals made to the DOJ of potential
violations of the criminal conflicts of interest statutes (18 U.S.C.
Sec. Sec. 203, 205, 207, 208 and 209). Based on a review of available
records from the past 10 years, in total, the respective Offices of the
General Counsel of the DOD and the Military Departments referred
approximately 62 potential violations of the criminal conflicts of
interest statutes to DOJ. Of those referrals, DOJ accepted
approximately 16 for prosecution. DOJ declined to accept approximately
42 for prosecution and 4 referrals were still pending as of the date of
submission for the corresponding Annual Agency Ethics Program
Questionnaire.
18. Senator Warren. Ms. Ricci, Mr. Coffey, and Mr. Beshar, how many
of the retired military personnel approved to work for foreign
governments in the past 10 years were personally and substantially
involved in decisions that would impact the country they were approved
to work for?
Ms. Ricci, Mr. Coffey, and Mr. Beshar. In determining whether to
recommend Department of State approval of a request for foreign
government employment, the Military Departments evaluate a number of
criteria related to national security, regardless of whether a retired
service member participated personally and substantially in a matter
involving the foreign government. This information can include
information about the duties performed in a foreign country.
19. Senator Warren. Ms. Ricci, Mr. Coffey, and Mr. Beshar, how many
of the retired military personnel approved to work for foreign
governments in the past 10 years attended meetings with embassy
officials or foreign agents employed on behalf of the country they were
approved to work for?
Ms. Ricci, Mr. Coffey, and Mr. Beshar. In determining whether to
recommend Department of State approval of a request for foreign
government employment, the Military Departments evaluate a number of
criteria and other information related to national security. This
information can include information about the duties performed in a
foreign country. The Department of State is the final approval
authority for foreign government employment of retired military
personnel and does not require applicants to list meetings with embassy
officials or foreign agents.
20. Senator Warren. Ms. Ricci, Mr. Coffey, and Mr. Beshar, retired
General Jim Mattis was the commander of Central Command and later
received approval to work with the United Arab Emirates, a country that
had been in his area of responsibility as commander. How many other
military personnel your service approved to work for foreign
governments were approved for work for foreign governments they
deployed to or were in their area of responsibility during their
Military Service?
Ms. Ricci, Mr. Coffey, and Mr. Beshar. In determining whether to
recommend Department of State approval of a request for foreign
government employment, the Military Departments evaluate a number of
criteria and other information related to national security. This
information can include information about the duties performed in a
foreign country. The Department of State is the final approval
authority for foreign government employment of retired military
personnel and does not require applicants to list prior deployments or
areas of responsibility.
21. Senator Warren. Ms. Ricci, Mr. Coffey, and Mr. Beshar, how many
military personnel sought approval for work on behalf of foreign
governments before they were officially retired?
Ms. Ricci. Although Army regulations would allow a servicemember to
submit a request for approval before their retirement date to begin
foreign government employment after their retirement, I am not aware of
any such requests.
Mr. Coffey. None. The Department of the Navy (DON) does not process
foreign government employment authorization requests until the
servicemember is no longer on Active Duty.
Mr. Beshar. None. The Air Force Personnel Center does not allow
members to apply prior to retirement. They must follow the guidance in
Air Force Instruction 36-2913, which states that those on Active Duty
are ineligible to apply for approval or accept employment with a
foreign government or entity.
22. Senator Warren. Ms. Ricci, Mr. Coffey, and Mr. Beshar,
personnel who had or continue to have access to classified information
are more likely to intentionally or unintentionally share our most
sensitive national security information with foreign governments if
they are on their payroll. What oversight processes are in place to
make sure this employment doesn't compromise classified information?
Ms. Ricci. Consistent with the requirements of DODM 5200.02,
Procedures for the DOD Personnel Security Program, the Department of
the Army has established procedures to ensure that, upon termination of
employment with the Federal Government, servicemembers have their
access to classified information terminated, receive a security
debriefing, and complete a security termination statement as required.
Retirees requesting approval of foreign government employment are
required to complete a written questionnaire, which includes questions
relating to the applicant's access to classified information during
their Military Service. As part of the application to approve foreign
government employment, all applicants are required to complete
internet-based TARP (Threat Awareness and Reporting Program) training
and submit a certificate of completion before the application can be
processed. All applicants are required to sign the Classified
Information Nondisclosure Agreement (Standard Form 312), certifying
knowledge of their commitment to safeguard classified information and
acknowledging that any unauthorized disclosure of classified
information may constitute a violation, or violations, of United States
criminal laws.
Mr. Coffey. Consistent with the requirements of DODM 5200.02,
Procedures for the DOD Personnel Security Program, the Department of
the Navy has established procedures to ensure that, upon termination of
employment with the Federal Government, servicemembers have their
access to classified information terminated, receive a security
debriefing, and complete a security termination statement as required.
Retirees requesting approval of foreign government employment are
required to complete a written questionnaire, which includes questions
relating to the applicant's access to classified information during
their Military Service. All applicants are required to sign the
Classified Information Nondisclosure Agreement (Standard Form 312),
certifying knowledge of their commitment to safeguard classified
information and acknowledging that any unauthorized disclosure of
classified information may constitute a violation, or violations, of
United States criminal laws.
Mr. Beshar. Consistent with the requirements of DODM 5200.02,
Procedures for the DOD Personnel Security Program, the Department of
the Air Force has established procedures to ensure that, upon
termination of employment with the Federal Government, servicemembers
have their access to classified information terminated, receive a
security debriefing, and complete a security termination statement as
required. Retirees requesting approval of foreign government employment
are required to complete a written questionnaire, which includes
questions relating to the applicant's access to classified information
during their Military Service. All applicants are required to sign the
Classified Nondisclosure Agreement (Standard Form 312), certifying
knowledge of their commitment to safeguard classified information and
acknowledging that any unauthorized disclosure of classified
information by them may constitute a violation, or violations, of
United States criminal laws.
23. Senator Warren. Ms. Ricci, Mr. Coffey, and Mr. Beshar, how many
times have the services received allegations that retired military
personnel who work for foreign governments improperly shared classified
information over the past 10 years?
Ms. Ricci. Records relating to reports of allegations of improper
sharing of classified info have a 6-year record retention period. Since
2016, my office received one allegation about an Army officer who
intended to work for a foreign government in a manner that likely would
have involved classified information, however, the Army in conjunction
with the FBI, prevented this individual from entering into this
employment. The officer had not submitted an application for foreign
government employment.
Mr. Coffey. The DON is not aware of any allegations regarding the
improper sharing of classified information by personnel employed by a
foreign government.
Mr. Beshar. The Department of the Air Force (DAF) is not aware of
any allegations regarding the improper sharing of classified
information by personnel employed by a foreign government.
24. Senator Warren. Ms. Ricci, Mr. Coffey, and Mr. Beshar, how many
retired military personnel the services approved to work for foreign
governments had active security clearances at the time they were
approved?
Ms. Ricci, Mr. Coffey, and Mr. Beshar. While this information is
not separately tracked or readily available, each of the Military
Departments requires retired servicemembers applying for approval of
foreign government employment to provide information about the security
clearance the applicant held while in military service. Most personnel
leaving military service lose their security clearance upon retirement,
although DOD 5200.02M provides a process by which retired personnel may
be granted a security clearance. Retirees requesting foreign government
employment authorization are required to complete Standard Form 312,
certifying knowledge of their commitment to safeguard classified
information and acknowledging that any unauthorized disclosure of
classified information by them may constitute a violation, or
violations, of United States criminal laws.
25. Senator Warren. Ms. Ricci, Mr. Coffey, and Mr. Beshar, is there
any kind of work your services would categorically deny if retired
military personnel requested to perform that work on behalf of a
foreign government?
Ms. Ricci, Mr. Coffey, and Mr. Beshar. In determining whether to
recommend Department of State approval of a request for foreign
government employment, the Military Departments evaluate a number of
criteria and other information related to national security. Every
application is evaluated on the unique facts and circumstances
presented in the application. The Under Secretary of Defense for
Personnel and Readiness has asked the Military Departments to assess
for sufficiency the information and criteria applied in reviewing
applications for approval of foreign government employment. The
Department of Defense looks forward to briefing the Committee on the
results of this assessment.
26. Senator Warren. Ms. Ricci, Mr. Coffey, and Mr. Beshar, are
there any countries your services would categorically reject retired
military personnel working on behalf of?
Ms. Ricci, Mr. Coffey, and Mr. Beshar. In determining whether to
recommend Department of State approval of a request for foreign
government employment, the Military Departments evaluate a number of
criteria and other information related to national security. Every
application is evaluated on the unique facts and circumstances
presented in the application. All applications receive a security and
intelligence review. The Under Secretary of Defense for Personnel and
Readiness has asked the Military Departments to assess for sufficiency
the information and criteria applied in reviewing applications for
approval of foreign government employment. The Department of Defense
looks forward to briefing the Committee on the results of this
assessment.
27. Senator Warren. Ms. Ricci, Mr. Coffey, and Mr. Beshar, what is
your service's check list for reviewing, approving, and denying foreign
government employment?
Ms. Ricci. See Table 2-1 in AR 600-291, ``Foreign Government
Employment,'' which describes the Army FGE application process:
https://armypubs.army.mil/epubs/DR_pubs/DR_a/ARN30208-AR8_600-291-
000-WEB-1.pdf.
The Under Secretary of Defense for Personnel and Readiness has
asked the Military Departments to review the information and criteria
applied in reviewing applications for approval of foreign government
employment. The Department of Defense looks forward to briefing the
Committee on the results of this assessment.
Mr. Coffey. The DON does not have a check list, but rather has a
process for reviewing foreign government employment requests. DON
military retirees seek Service approval for foreign government
employment by submitting applications to the delegated approving
official within each Service. Applications include detailed questions
concerning the nature of the proposed employment and a refreshed
acknowledgement of non-disclosure obligations. Upon receipt of an
application, each Service (i.e., Navy, Marine Corps) conducts detailed
reviews, to include reviewing retiree records for adverse or reportable
information and/or a review conducted by Naval Criminal Investigative
Service (NCIS), and a review of the proposed employment by security and
counterintelligence experts. The delegated approving official then
weighs: (1) whether the foreign government employment will adversely
affect the foreign relations of the United States; (2) whether the
foreign government employment will enable a foreign government to exert
an undue influence upon the United States; (3) whether the foreign
government employment will jeopardize the security of the United
States; and (4) whether the foreign government employment will violate
any laws of the United States. Foreign government employment that would
be inimical to the national interest is not approved. Requests approved
by the Service are forwarded to the Department of State for final
review and approval. The Under Secretary of Defense for Personnel and
Readiness has asked the Military Departments to review the information
and criteria applied in reviewing applications for approval of foreign
government employment. The Department of Defense looks forward to
briefing the Committee on the results of this assessment.
Mr. Beshar. The factors considered by the DAF are listed in
paragraph 3.5 of Air Force Instruction 36-2913:
https://www.retirees.af.mil/Portals/53/documents/FGE/
AFIpercent2036-2913. pdf'ver=2016-08-17-112414-970).
The Under Secretary of Defense for Personnel and Readiness has
asked the Military Departments to review the information and criteria
applied in reviewing applications for approval of foreign government
employment. The Department of Defense looks forward to briefing the
Committee on the results of this assessment.
28. Senator Warren. Ms. Ricci, Mr. Coffey, and Mr. Beshar, when was
the last time this process was updated and are there regular reviews of
the process? How often do those reviews occur if so?
Ms. Ricci. AR 600-291 was last updated in September 2020. The Army
is currently in the process of revising this AR. The Under Secretary of
Defense for Personnel and Readiness has asked the Military Departments
to review the information and criteria applied in reviewing
applications for approval of foreign government employment. The
Department of Defense looks forward to briefing the Committee on the
results of this assessment.
Mr. Coffey. The Secretary of the Navy delegated FGE approval
authority to the Chief of Naval Personnel and Commandant of the Marine
Corps. These officers regularly review their internal processes and
procedures (including questionnaires) and, as needed, update the
process and procedures to account for new challenges, employment
trends, and efforts to better elucidate information relevant to
decisionmaking. The Under Secretary of Defense for Personnel and
Readiness has asked the Military Departments to review the information
and criteria applied in reviewing applications for approval of foreign
government employment. The Department of Defense looks forward to
briefing the Committee on the results of this assessment.
Mr. Beshar. The Department of the Air Force substantially revised
its AFI governing FGE in July 2020. AFI 36-2913 is currently undergoing
review and update. The Under Secretary of Defense for Personnel and
Readiness has asked the Military Departments to review the information
and criteria applied in reviewing applications for approval of foreign
government employment. The Department of Defense looks forward to
briefing the Committee on the results of this assessment.
29. Senator Warren. Ms. Ricci, Mr. Coffey, and Mr. Beshar, will you
share with this Committee the results of your service's review that was
directed by the Under Secretary of Defense for Personnel and Readiness
within 100 days?
Ms. Ricci, Mr. Coffey, Mr. Beshar. The Department of Defense looks
forward to briefing the Committee on the results of the assessment
directed by the Under Secretary of Defense for Personnel and Readiness.
__________
Questions Submitted by Senator Mazie K. Hirono
red hill accountability
30. Senator Hirono. Mr. Coffey, critical to public integrity and
anti-corruption is confidence that the appropriate action will be taken
when misdeeds or inappropriate behavior are identified. Any perceptions
of lack of accountability for our leaders calls into question the
foundations of the entire system, and rightly so. We're seeing this
play out in real time following the Red Hill water contamination
crisis. To date, the Navy has not publicly held anyone accountable for
a disaster that impacted almost 100,000 people. Mr. Coffey, can you
please tell me why the people of Hawaii are still awaiting
accountability for a crisis that occurred over 18 months ago?
Mr. Coffey. The Navy takes accountability seriously and understands
that the citizens of Hawaii deserve to know what actions the Navy takes
in regard to the spills that have occurred at the Red Hill Bulk Storage
Facility. A consolidated disposition authority (CDA) was assigned to
review and take any required administrative or disciplinary actions
against U.S. Navy servicemembers associated with the original fuel
spills from May and November 2021. While those decisions were being
reviewed and finalized, a subsequent Aqueous Film Forming Foam (AFFF)
spill occurred in March 2023. The CDA was tasked in May 2023 to review
this additional AFFF spill investigation together with the 2021 fuel
spills investigations to ensure that all appropriate actions are taken.
Once these reviews and actions are finalized, the Navy will ensure that
the public is made aware of the accountability actions taken by the
Navy.
31. Senator Hirono. Ms. Krass, accountability is critical to the
public's faith in our military. As such, how does the Department ensure
individuals responsible for misdeeds are held accountable?
Ms. Krass. The Secretary is committed to rebuilding trust with the
people of Hawaii, our service members, civilians, and their families.
Accountability is an important part of that rebuilding process, and the
Navy is conducting accountability reviews for both Navy personnel and
Navy contractors at Red Hill. The Department is confident that the
Navy, upon completion of its processes, will take appropriate measures
to ensure accountability for the spills at Red Hill.
career development for acquisition officials
32. Senator Hirono. Ms. Krass, there is a pronounced need for both
the Pentagon and the defense industrial base to move faster as the
country competes with its pacing threat. Though necessary to ensure
ethical guard rails and avoid conflicts of interest, it is in the best
interest of the country to have decisionmakers that understand both
industry and the DOD. Ms. Krass, how can the Department of Defense
better support career development, which may include industry
exchanges, while preserving public trust in the system?
Ms. Krass. The Department is committed to upholding the ethics laws
by avoiding circumstances that would create an appearance of
preferential treatment or conflicts of interest. There is widespread
recognition that both the Government and industry benefit from
exchanges of personnel, as evidenced by laws such as 10 U.S.C.
Sec. 1599g that facilitate personnel exchanges with the private sector.
Executive Branch ethics laws and regulations appropriately balance the
need to preserve the public trust with the Government's interest in
participating in such exchanges. DOD personnel participating in
industry exchanges remain subject to Federal ethics laws and
regulations during their detail to industry, just as industry personnel
who are detailed to the DOD are subject to Federal ethics laws and
regulations during their detail. Even after leaving DOD, former DOD
personnel and industry personnel who have been detailed to DOD are
subject to, at a minimum, a ban on representing a non-Federal entity
back to DOD on a particular matter in which they participated in
personally and substantially. Additionally, exchange participants are
typically required to file financial disclosure reports, which are
reviewed by their DOD supervisors prior to certification by ethics
officials, to assist in identifying and preventing any conflicts of
interest with their outside financial interests, to include continued
employment and participation in employer benefits.
consultants for foreign governments
33. Senator Hirono. Ms. Krass, I have supported changes to the
Federal Acquisition Regulations to specifically create a prohibition on
people who provide consulting services to the DOD from entering
contracts with entities who are simultaneously providing consulting
services to the governments of our adversaries, including China,
Russia, and Iran, North Korea and others. Existing conflict of interest
provisions do not account for this specific type of conflict of
interest. Would the Department of Defense support this change to the
Federal Acquisition Regulations?
Ms. Krass. As indicated in the question, the current Federal
Acquisition Regulations (FAR) do not address potential conflicts of
this sort. The Department would give serious consideration to such a
proposal.
34. Senator Hirono. Ms. Krass, Is it important for there to be a
waiver process in certain instances?
Ms. Krass. Waivers may be necessary and appropriate in certain
circumstances, such as to permit continued contracting for certain
national security requirements and to avoid unwelcome second and third
order effects or unintended consequences. Any modification to the FAR
should provide for waiver authority on a case-by-case basis that the
Department may exercise at a senior level of approval.
__________
Questions Submitted by Senator Roger Wicker
conflict of interest allegations
35. Senator Wicker. Ms. Krass, Ms. Ricci, Mr. Coffey, and Mr.
Beshar, during the hearing, there were questions concerning how the
Department addressed conflict of interest allegations against Ms. Stacy
Cummings relative to the JEDI cloud procurement. Can you clarify DOD's
processes for identifying and preventing conflicts of interest and what
actions, if any, DOD took with regard to the allegations against Ms.
Cummings?
Ms. Krass, Ms. Ricci, Mr. Coffey, and Mr. Beshar. Ms. Cummings was
an acquisition policy official (Deputy Assistant Secretary of Defense
(DASD) for Acquisition Enablers from 2019 to 2021 and was the acting
Principal DASD for Acquisition in September 2019) who was asked to sit
in on discussions considering a potential change to the JEDI
acquisition strategy. Ms. Cummings had not previously been involved in
the acquisition. Acquisition counsel advising on the JEDI procurement
requested to view financial disclosure reports for officials
participating in these discussions and identified Ms. Cummings'
potential conflict of interest. Once it was brought to her attention,
Ms. Cummings promptly recused herself from any further meetings
relating to the acquisition and divested the stock that created the
conflict of interest. In accordance with DOD policy, the DOD Standards
of Conduct Office (SOCO) made the required referral to the DOD
Inspector General (IG). The DOD IG found that while a technical
conflict of interest violation occurred, it was identified early and
Ms. Cummings was not able to impact the outcome of the procurement. The
DOD IG referred the case to the Department of Justice, which declined
to prosecute. The IG recommended that Ms. Cummings receive additional
counseling and training, which was conducted.
post-employment rules for senior employees
36. Senator Wicker. Ms. Krass, Ms. Ricci, Mr. Coffey, and Mr.
Beshar, testimony provided at the hearing appeared to indicate that
senior government employees may be subject to less restrictive post-
government employment restrictions than non-senior employees. If
accurate, this concerns me. Can you explain what post-employment rules
apply to senior employees and how they are different from the rules
that apply to non-senior employees?
Ms. Krass, Ms. Ricci, Mr. Coffey, and Mr. Beshar. All former senior
Executive Branch personnel are subject to greater restrictions than
former non-senior personnel. Former senior DOD personnel are also
subject to greater restrictions beyond those that apply to former
senior personnel who served in other Executive Branch agencies.
All former Executive Branch personnel are subject to ethics
restrictions that aim to prevent improper influence after leaving
Government service. These laws seek to both preserve public trust and
allow former Executive Branch personnel to appropriately use their
professional experience after leaving Government service.
All former Executive Branch personnel, to include former senior
personnel, are subject to criminal bans under 18 U.S.C. Sec. Sec.
207(a)(1) and (a)(2) that prohibit them from representing their new
employer (or any non-Federal entity (NFE)) back to the Executive or
Judicial branches:
1) Permanently on matters in which they participated while in
Government; and
2) For 2 years on matters that were pending under their former
official responsibility.
All former Executive Branch personnel are also subject to the
Procurement Integrity Act, 41 U.S.C. Sec. 2104, which prohibits
personnel from accepting compensation from a prime contractor for 1
year if they served in certain acquisition roles or personally made
certain decisions on acquisitions valued over $10 million, as defined
in the Act.
Additional laws apply to former senior Executive Branch officials.
In addition to the post-Government restrictions that apply to all
former Executive Branch personnel, several more restrictive criminal
bans under 18 U.S.C. Sec. Sec. 207(c)-(f) apply exclusively to all
Executive Branch former senior personnel:
1) For 1 year after leaving a senior position, all former senior
personal are prohibited from representing a non-Federal employer to
their former agency on any official matter;
2) For 1 year after leaving a senior position, all former senior
personal are prohibited from aiding, advising, or representing a
foreign government or foreign political party, with the intent to
influence any officer or employee of any Federal department, agency, or
Member of Congress; and
3) For 2 years after leaving a very senior position, former very
senior personnel are prohibited from representing a new employer to
their former agency on any official matter.
Finally, former senior DOD officials are subject to the additional
restrictions in Section 1045 of the NDAA for fiscal year 2018, which
can apply for up to 2 years. Section 1045 prohibits such officials from
participating in certain communications back to individuals holding
specific positions throughout the Executive Branch. Rather than the
bright line representational bans under 18 U.S.C. Sec. 207, the
applicability of Section 1045 restrictions depends upon the subject and
nature of the proposed communication; the appointment status of the
person to whom the contact is directed; and the agency within which the
intended recipient works.
__________
Questions Submitted by Senator Dan Sullivan
dod ethics requirement
37. Senator Sullivan. Ms. Krass, in your joint testimony, you
reviewed the extensive number of laws and regulations that govern the
conduct of current and former Department of Defense employees. You also
noted the small amount of former DOD senior officials and acquisition
officials who work for the 14 largest defense contractors: between 2014
and 2019, 1.5 million people left DOD employment and only 1,700 or 0.1
percent of those were former senior or acquisition officials who went
to work at one of the 14 largest defense contractors. You expressed
concern with DOD-specific ethics requirements that do not apply across
the Executive Branch. That said, you noted that the DOD was complying
with the Fiscal Year 2023 NDAA's requirement to have a federally Funded
Research and Development Center conduct a study of whether DOD-specific
ethics laws would harm DOD's ability to share knowledge between
Government and industry, if that would be consistent with existing laws
applicable to all Executive Branch employees, if it would create
confusion, and if it would impact recruiting and retention. In your
opinion, do the existing laws and regulations applicable to current and
former Department of Defense officials adequately balance the need to
access top talent while also protecting against improper influence?
Ms. Krass. I look forward to sharing the results of the independent
review required by the NDAA for fiscal year 2023 with the Committee. I
believe it is important to assess the potential impact of ethics
restrictions that apply only to current and former DOD personnel, and
not to all Executive Branch employees. DOD supports ethics laws that
are clearly written, consistent with the larger body of Federal ethics
law, and correctly balance the interests of the Department and our
personnel.
The longstanding, well-established, Executive Branch wide ethics
laws and regulations take a balanced approach to effectively mitigate
perceived conflicts of interest while allowing for circumstances that
present little risk of potentially inappropriate influence. These laws
strike an appropriate balance between preserving public trust and
allowing former government personnel to apply their education and
professional experience to earn a living after leaving government
service. Clear, consistent, and balanced ethics laws are essential to
ensuring compliance and maintaining the public's trust, while fostering
recruitment and retention of high-quality personnel.
The Executive Branch-wide laws and regulations also create clear
restrictions that are easy to understand and follow, to include:
1) A permanent ban on participating in any particular matter that
would have a direct and predictable effect on the employee's actual or
imputed financial interests.
2) A 1-year cooling-off period before any new Federal employee can
work on any matters affecting a former employer or client.
3) A permanent ban that prohibits all former Executive Branch
personnel from representing their employer (or any other Non-Federal
Entity (NFE)) back to the Executive or Judicial branches in matters on
which they participated while working for the Government.
4) A 2-year ban that prohibits all former Executive Branch
personnel from representing their employer (or any other NFE) back to
the Executive or Judicial branches in matters that were pending under
their responsibility during their last year working for the Government.
5) A 1-year ban that prohibits all former senior Executive Branch
personnel from representing their employer (or any other NFE) back to
their former agency.
In 2021, GAO found that only a very small percentage of former
senior DOD personnel (0.1 percent) actually work for the largest
defense contractors after leaving Federal service.\1\ Additionally, GAO
determined that:
1) DOD and industry have effective programs to detect and prevent
violations of post-government employment laws;
2) DOD has improved practices to help ensure compliance with post-
government employment restrictions; and
3) Industry's practices promote awareness of and compliance with
ethics laws.
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\1\ U.S. GOV'T ACCOUNTABILITY OFF., GAO-21-104311, Post-Government
Employment Restrictions: DOD Could Further Enhance Its Compliance
Efforts Related to Former Employees Working for Defense Contractors
(2021).
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