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Revolving Door and Defense Contract Awards

Defense Contract Award Protested
    By Walter F. Roche Jr.
    The Los Angeles Times

    Friday 26 October 2007

    Washington - A Defense Department medical services contract worth up to $790 million was awarded last month to a Wisconsin-based company three months after it hired a former Bush administration appointee who had supervised military health programs at the Pentagon for the last six years.

    William Winkenwerder Jr., assistant secretary of Defense for health affairs from 2001 until April, joined Logistics Health Inc. as a director and consultant in June. The firm beat out two other bidders with proposals that ranged from $80 million to $100 million less, records show. Under the new contract, Logistics Health will provide immunizations and physical and dental exams for reservists and National Guard members.

    Logistics Health of LaCrosse, Wis., is headed by another ex-official of the Bush administration - former Secretary of Health and Human Services Tommy Thompson.

    "They stacked the deck," said Fran Lessans, president of Passport Health, one of the losing bidders. Her Baltimore-based firm lost despite a bid projected over five years to cost nearly $100 million less than Logistics Health's winning proposal.

    "It was wired. There is no doubt in my mind," Lessans said of the Defense procurement process.

    Two other firms involved in the bidding have filed formal protests with the Government Accountability Office. A draft copy of one protest letter, reviewed by The Times, cited Winkenwerder's role and complained that the winning bidder may have "gained unequal access to information not available to other competitors" by hiring the former Pentagon official.

    "This creates an organizational conflict of interest and potentially constitutes prohibited contact," the draft letter said.

    Winkenwerder called such allegations inaccurate and untruthful. In e-mail responses to The Times, he said he had nothing to do with the procurement process or the selection of Logistics Health. He also said he had not begun contacts with Logistics officials about the directorship and consulting job until after he had resigned his Defense Department post.

    His role at Logistics Health is to provide advice, he said, "on a variety of issues that are of concern and priority to the company. Government rules do not prohibit such advice in any way."

    The rules bar him from contacting his former Pentagon colleagues on Logistics' behalf, "and I have followed those rules scrupulously. Further I support such rules and place a high importance on strict ethical behavior in all of my conduct."

    Diana Henry, a spokeswoman for Logistics Health, said in a written statement that the company "conducts all of its business activities in a highly ethical and professional manner."

    The contract, awarded in September, supports the Defense Department's Reserve Health Readiness Program. In prepared remarks for a subcommittee of the House Armed Services Committee two years ago, Winkenwerder said the program's goal was "to identify and proactively assist service members in getting needed support for deployment-related concerns." Besides routine exams, the program will provide full medical assessments to reservists and Guard members returning from Iraq and Afghanistan.

    Logistics Health will be paid an estimated $151 million for the first year of a contract that can be renewed annually and extended up to five years at a total cost of about $790 million.

    In other letters of protest filed with the GAO, officials of rival firms also charged that Logistics won the pact despite questions raised about its performance under a previous agreement with the Department of Health and Human Services. That pact, originally awarded in 2001, only applied to the Army, while the new one includes the Navy, Air Force and Marines.

    Kenneth Moskowitz, an attorney for the Pennsylvania-based United States Military Dental Corp., said in an Oct. 12 letter that Logistics' prior performance and practices under the Health and Human Services contract "put reservists and National Guardsmen at possible undue risk."

    He told the GAO that "no one was assigned to specifically monitor the level of care" received by military personnel and that the company operated with "a built-in incentive to lower provider cost for added profit." The Pennsylvania company was a subcontractor for Comprehensive Health Services of Florida, one of the failed bidders.

    A spokesman for the Defense Department, citing the pending protests, declined to respond to a series of detailed questions about the contract and the selection process.

    Records reviewed by The Times show that the Logistics Health bid also survived a major last-minute change when partner QTC Management abruptly withdrew days before the contract was awarded.

    QTC Chairman Anthony J. Principi, another former Bush appointee, was secretary of Veterans Affairs.

    The GAO has until early January to act on the protests.

    The Defense Department gave initial notice of its intent to put the newly expanded program out to bid in October 2006.

    Winkenwerder resigned from his Pentagon post April 16, and his appointment to the Logistics board was announced May 31. It became effective the next day. In announcing Winkenwerder's appointment, Thompson said: "He brings with him a wealth of knowledge and also shares LHI's commitment of helping military members receive the healthcare and support they deserve. He is a tremendous addition to our board of directors."

    The formal notice of the bidding process was issued June 12. Bids were due July 26. On Sept. 10, QTC formally withdrew from the Logistics proposal. And on Sept. 25, the contract was awarded to Logistics.

  -------

Revolving Doors: Evolving Influences 1

By G.F. Scott

October 28, 2007

What constitutes a “Revolving Door” as in corrupted government and industry?   Employees who start in industry and move to government and use their position, authority or influence to aid, or facilitate their former employer in achieving corporate goals is one scenario.  They may be able to influence development and writing of government policies and regulations as well as how government policies and regulations will be implemented and enforced.  Employees who start out in government, and then move to industry using their previous connections, ability to influence, intimidate, or coerce former colleagues, or employees previously supervised in order to aid or facilitate their new employer’s corporate goals is another scenario.   Or someone who starts in government, may be lured, or coerced into acting in industry’s best interests and then later may be offered the high paying pay-off job at the company they helped while they were in federal employ.  Any of these scenarios, potentially ethically challenging, can involve quid pro quo agreements for the benefit of individuals or corporations and may not in the best interest of the taxpayers or our government.  And evidence is available that shows that some employees move back and forth between government and industry positions repeatedly, potentially repeating questionable conflict of interest activities over time.

Nearly always, financial gain is a big component of these types of arrangements.  Because of the risks to government interests there are currently policies in place prohibiting an employee moving from a position of power, authority, influence or oversight concerning a particular contractor, directly to a position in that contractor’s employ.  The purpose of these policies is to avoid the possible compromises or quid pro quo  “deals” that might be arranged which might not be in the taxpayers or government’s best interests.  Generally there are stipulated cooling off periods required, before employees may make certain job movements.

How can one tell if it is just a smart career move or indeed is a revolving door maneuver, complete with the typical manipulation, corruption, and payoff one might expect?  It’s not always an easy thing to identify, until the person proves himself or herself by word and deed what their goals and purposes are.  However, a person’s education, professional experiences, political connections and other elements may be illuminating and an indication of possible conflict of interest.

 

One of the most noted cases of Revolving Door Corruption recently, was that of D.D., who served as a government employee, (USAF), for a number of years, vocally advocating for a particular defense contractor while doing her contracting job, instead of advocating for the benefit of the taxpayers in government defense contracts.  Eventually, D.D. left government employ and resurfaced as an employee of the very company she had championed while managing government defense contracting, which benefited that company.  After information came out and controversy erupted over the infamous “Tanker Deal” D.D., the Defense Contractor’s top acquisition official, and the Defense Contractor’s Chief Financial Officer, M.S. were both fired by the Defense Contractor, and after a legal battle both pled guilty to conflict of interest and ethics crimes and were sentenced accordingly.

Here are some examples of other possible Revolving Door scenarios: 

A.E. started out as a legislative assistant for National Security Affairs for a Representative to the House of Representatives, and then moved on to serve as an employee of the U.S. House of Representatives Committee on Armed Services, where he then spent 13 years learning his craft, and had been promoted to the position of staff director.  From staff director of the House Committee on Armed Services, he was recruited to move to a large Defense Contractor, taking the position of Vice President, Aircraft & Missiles Programs, in the company’s Government Relations office in Washington DC.

His new corporate duties were to be responsible for leading the development and execution of government relations strategies for the company’s programs and issues related to the Department of Defense and in support of the company’s Aircraft & Missiles business unit headquartered in St. Lois, Missouri.  The company states in a press release that their Aircraft and Missiles group manages numerous Air Force, Army, Navy, and Marine Corps programs as well as Aerospace Support programs and the Joint Strike Fighter program as well.   His new employer waxed eloquently about this new employee’s attributes in the same press release, stating “We are proud to have a true professional with such proven leadership skills and extensive experience in Washington D.C., as we strive to become more customer-focused, this employee’s vast knowledge of the defense department’s programs and policies will serve us well.”  It appears A.E. is still in this position, and involved in various activities to plan and coordinate efforts to influence decisions and win contracts for his current defense industry employer.

G.G. started out as a Security Specialist for Defense Investigative Service (now called Defense Security Service), and was over time, promoted to Deputy Director, Industrial Security.  G.G. was very active in professional organizations and in government “reinvention” and reform, including promoting major changes in the relationship between government oversight and industry, particularly in advocating for involving industry in the writing of policy and procedural changes, and reworking how oversight would be allowed to work within the agency.    He was a presenter and active participant at conferences in the security field.  He left his management position at DSS and went directly to the position of Director, Security and Fire Protection and Facility Security Officer at a large defense contractor, at that time based in Seattle.  There is evidence to suggest that he continued to try to influence and/or coerce former colleagues and subordinates in DSS regarding implementation of policy, regulations, and enforcement and oversight activities involving G.G.’s new defense contractor employer. 

      

C.H. founded a business with her partner/husband.  She then became the Deputy Undersecretary of Defense C3I.  She was active in the government “reinvention” activities also in her role of Deputy Assistant Secretary of Defense for Security and Information Operations in the George W. Bush Administration, replacing William Leonard in November 2001.  Prior to taking Leonard’s job, she worked with DARPA (Defense Advanced Research Project Agency), and was a member of the Defense Science Board (DSB).

Subsequently, her company,  “actually a one man shop run by a government consultant,” (her husband), was awarded lucrative contracts in Iraq while she continued to remain in her Defense Department government position.  Her company was hired by SAIC (Science Applications International Corp.), said to be one of the most politically connected government contractors holding government contracts in Iraq.

She subsequently gave testimony about TALON in a hearing before the House Permanent Select Committee on Intelligence, urging it’s purchase and use by the government.  TALON, (a program run by the JPEN program), was developed by CellExchange Inc, which is a defense-contracting partner of SAIC.  C.H. underwent an investigation because of allegations of conflict of interest, but denied anything improper had occurred.

 

Most recently, C.H. has joined the Board of advisors for Cybrinth LLC, which deals in data custody and information security.  She is also on the Boards of Oakley Networks, a leading force in the Insider Threat prevention market and ICx advanced technology and sensor solutions for military and homeland security, all of which are actively seeking government contracts.

Now, consider again the definition of Revolving Door, and the intent of the prohibitions of such activities for government and industry employees.  These are but a few of the examples of questionable government and industry employee movements and activities.  It seems reasonable to question the lack of government enforcement of even current policies intended to avert conflict of interest and other corruptions, let alone the lack of development of new stricter personnel policies to assure ethics in government contracting.

More Revolving Door Contract Impropriety

Defense Contract Award Protested
    By Walter F. Roche Jr.
    The Los Angeles Times

    Friday 26 October 2007

    Washington - A Defense Department medical services contract worth up to $790 million was awarded last month to a Wisconsin-based company three months after it hired a former Bush administration appointee who had supervised military health programs at the Pentagon for the last six years.

    William Winkenwerder Jr., assistant secretary of Defense for health affairs from 2001 until April, joined Logistics Health Inc. as a director and consultant in June. The firm beat out two other bidders with proposals that ranged from $80 million to $100 million less, records show. Under the new contract, Logistics Health will provide immunizations and physical and dental exams for reservists and National Guard members.

    Logistics Health of LaCrosse, Wis., is headed by another ex-official of the Bush administration - former Secretary of Health and Human Services Tommy Thompson.

    "They stacked the deck," said Fran Lessans, president of Passport Health, one of the losing bidders. Her Baltimore-based firm lost despite a bid projected over five years to cost nearly $100 million less than Logistics Health's winning proposal.

    "It was wired. There is no doubt in my mind," Lessans said of the Defense procurement process.

    Two other firms involved in the bidding have filed formal protests with the Government Accountability Office. A draft copy of one protest letter, reviewed by The Times, cited Winkenwerder's role and complained that the winning bidder may have "gained unequal access to information not available to other competitors" by hiring the former Pentagon official.

    "This creates an organizational conflict of interest and potentially constitutes prohibited contact," the draft letter said.

    Winkenwerder called such allegations inaccurate and untruthful. In e-mail responses to The Times, he said he had nothing to do with the procurement process or the selection of Logistics Health. He also said he had not begun contacts with Logistics officials about the directorship and consulting job until after he had resigned his Defense Department post.

    His role at Logistics Health is to provide advice, he said, "on a variety of issues that are of concern and priority to the company. Government rules do not prohibit such advice in any way."

    The rules bar him from contacting his former Pentagon colleagues on Logistics' behalf, "and I have followed those rules scrupulously. Further I support such rules and place a high importance on strict ethical behavior in all of my conduct."

    Diana Henry, a spokeswoman for Logistics Health, said in a written statement that the company "conducts all of its business activities in a highly ethical and professional manner."

    The contract, awarded in September, supports the Defense Department's Reserve Health Readiness Program. In prepared remarks for a subcommittee of the House Armed Services Committee two years ago, Winkenwerder said the program's goal was "to identify and proactively assist service members in getting needed support for deployment-related concerns." Besides routine exams, the program will provide full medical assessments to reservists and Guard members returning from Iraq and Afghanistan.

    Logistics Health will be paid an estimated $151 million for the first year of a contract that can be renewed annually and extended up to five years at a total cost of about $790 million.

    In other letters of protest filed with the GAO, officials of rival firms also charged that Logistics won the pact despite questions raised about its performance under a previous agreement with the Department of Health and Human Services. That pact, originally awarded in 2001, only applied to the Army, while the new one includes the Navy, Air Force and Marines.

    Kenneth Moskowitz, an attorney for the Pennsylvania-based United States Military Dental Corp., said in an Oct. 12 letter that Logistics' prior performance and practices under the Health and Human Services contract "put reservists and National Guardsmen at possible undue risk."

    He told the GAO that "no one was assigned to specifically monitor the level of care" received by military personnel and that the company operated with "a built-in incentive to lower provider cost for added profit." The Pennsylvania company was a subcontractor for Comprehensive Health Services of Florida, one of the failed bidders.

    A spokesman for the Defense Department, citing the pending protests, declined to respond to a series of detailed questions about the contract and the selection process.

    Records reviewed by The Times show that the Logistics Health bid also survived a major last-minute change when partner QTC Management abruptly withdrew days before the contract was awarded.

    QTC Chairman Anthony J. Principi, another former Bush appointee, was secretary of Veterans Affairs.

    The GAO has until early January to act on the protests.

    The Defense Department gave initial notice of its intent to put the newly expanded program out to bid in October 2006.

    Winkenwerder resigned from his Pentagon post April 16, and his appointment to the Logistics board was announced May 31. It became effective the next day. In announcing Winkenwerder's appointment, Thompson said: "He brings with him a wealth of knowledge and also shares LHI's commitment of helping military members receive the healthcare and support they deserve. He is a tremendous addition to our board of directors."

    The formal notice of the bidding process was issued June 12. Bids were due July 26. On Sept. 10, QTC formally withdrew from the Logistics proposal. And on Sept. 25, the contract was awarded to Logistics.

  -------

Andrew K. Ellis: Revolving Door

From The Boeing Company, Press Release

Andrew K. Ellis Joins The Boeing Company in Washington, D.C.

ARLINGTON, Va., Feb. 02, 2000 -- Andrew K. Ellis will join The Boeing Company's Government Relations office in Washington, D.C., as vice president, Aircraft & Missiles Programs.

Ellis, 40, will be responsible for leading the development and execution of government relations strategies for Boeing programs and issues related to the Department of Defense and in support of the company's Aircraft & Missiles business unit headquartered in St. Louis, Missouri. Boeing's Aircraft & Missiles Group manages numerous Air Force, Army, Navy and Marine Corps programs as well as Aerospace Support programs and the Joint Strike Fighter program. He will be the principal focal point between the Aircraft & Missiles Group and the Government Relations office.

Ellis comes to Boeing from the U.S. House of Representatives Committee on Armed Services, where he has served for the past 13 years, most recently as staff director. Previously he was legislative assistant for National Security Affairs for Rep. Duncan Hunter (R-CA).

We are proud to have a true professional with such proven leadership skills and extensive experience in Washington, D.C.," said Chris Hansen, senior vice president, Boeing Government Relations. "As we strive to become more customer-focused, Andy's vast knowledge of the defense department's programs and policies will serve us well."

Ellis holds a bachelor's degree from the University of Vermont and master's and doctorate degrees in International Relations from the University of Southern California.

Gov. to Industry Revolving Door Participants

I ran across the little note about Andrew Ellis,  in an online Alumni publication.  He appears to be another government employee moving directly from government employ to a highly paid position at a defense contractor.  This kind of activity is already against government personnel policy, but seems to be rarely enforced these days.  I wonder how many more we could list here?  Please send in more examples as you come across them.  I will add them to the list.   Thanks!  GFS

Andrew Ellis left his job in the U.S. Congress after 15 years to become vice president of the Washington, D.C., office of the Boeing Company. Class of 1981:  University of Vermont Online Newshttp://www.uvm.edu/~uvmpr/vq/VQSummer02/CN70-80.html 

Carol Haave was a former President of Sullivan/Haave Associates, a business she founded with her husband, Terry Sullivan.  She later became the Deputy Undersecretary of Defense C3I, and her company subsequently was awarded lucrative Iraqi contracts while she remained in her government position.

Greg Gwash, Deputy Director, Industrial Security, Defense Security Service moved directly from that government position with oversight of The Boeing Company to Director, Security and Fire Protection and Facility Security Officer, Boeing- Seattle in 1997. 

DSS Is Broken: Defense Contracting Industry Is Out of Control

With all of the information being posted which shows runaway contractors, fraud and corruption in contracts and in contract oversight and management, particularly in the area of defense contracts, it is interesting to note that currently, the Oversight of such contracts is under the purvey of The Defense Security Service (formerly Defense Investigative Service) who’s employees have the charge of fulfilling their agencies assigned mission to “protect classified information and technology in the hands of industry.”  It would appear that DSS is broken and that this critical mission is no longer being accomplished.  (Someone recently contacted me and told me that the new DSS Director bluntly pretty much stated this when she was a guest speaker at a conference recently, although her statement was not included in the audio record of the conference.)  I checked with someone who had access to the laws and policies and found out the following:

The National Industrial Security Program (NISP)

“DoD 5220.22-M, Chapter 1, Para. 1-101- Authority

The NISP was established by Executive Order 12829.  The Secretary of Defense (SecDef) has been designated Executive Agent for the NISP by the President.

While the SecDef serves as the Executive Agent for inspecting and monitoring contractors, practical day-to-day administration of the program has been, and continues to be, the purvey of the Defense Security Service (DSS).

One of the responsibilities of the DSS is the administration of the Facility Clearance (FCL) program of defense contractors.  DoD 5220.22-M, Chapter 2, Para. 2-102- Eligibility Requirements, Sub Para. c. stipulates “The company must have a reputation for integrity and lawful conduct in its business dealings.”

So why isn’t the Secretary of Defense and the Defense Security Service enforcing this requirement?  They have the authority to revoke a defense contractor’s facility clearance and participation in the NISP until that contractor comes into compliance.  It appears to be used very selectively on small defense contractors, but never as a compliance tool in large defense contractor transgressions.”

So, current law does provide legal means to enforce expectations, policies, and laws regarding the actions of defense contractors, but the expectations, policies, and laws are not being enforced.  In fact, over less than a decade, it has become decidedly out of control.  It appears that Congress is going to have to stand up and take this to the mat, or it will never be wrestled back into control.  It would appear the following must be done:

1.  Corruption within and connected to the Executive, Judicial, and Legislative Branches must be confronted and routed.

2.  Government Agencies must also be audited, removing first appointed managers who are either not doing the job required, or who are actively thwarting the employee’s   efforts to do the oversight work ethically.   This will include on an agency-by-agency basis, determining which employees are a part of the problem and those who may be paralyzed victims of the corruption and the corrupted managers and/or coworkers.

3.  Congressional intervention into defense contractor influence pedaling and lobbying wrongdoing must be accomplished and violations of current laws stopped.

4.  The Government needs to step up to its role as the governing authority.  Far too often contractors, defense contractors in particular have much too much influence into decisions that should be inherently governmental decisions.  This is not to say that defense contractors should not have input into the process.  However the final determination of policy needs to squarely rest on the shoulders of government. 

5.  Government employees who have oversight responsibilities must be uncompromised and independent of pressures either directly or indirectly applied from defense contractors or corrupted employees or managers within the government who are “owned” by those contractors.

6.  The defense contracting community is its own best advocate.  It does not need government workers or agencies advocating on its behalf.  The government should not be trying to be the “friend” of industry.  In business dealings, the government and industry, must maintain appropriate separation because of the legal oversight responsibility government has.  There are currently laws and policies, which have been in place a long time to assure that the lines between contractor and oversight authority are clear and clean.  However, those policies have in some cases been corrupted, and in others ignored, and in all cases where problems are evident have not been enforced.

 

Will all of this be easy?  No, although the path that must be taken is clear.  The heaviest weight in responsibility at this time, due to the apparent level of corruption and dysfunction in the Executive and Judicial branches, falls squarely on the shoulders of the Legislative Branch.  The Senate and House of Representatives must stand up and do the right thing for our country. 

DSS, DOD, Carol Haave?

If you have information or stories about the activities of Defense Security Service (formerly DIS) and former Deputy Undersecretary of Defense and owner of Sullivan/Haave Associates, Carol Haave, and other related areas in DOD and are willing to share it, please contact me. 

I am researching in this area now and would like to speak to people who have personal knowlege of what all has gone on for the past decade or two.

GFS

Ltr to Pelosi,Waxman,Cantwell,Murray,Reichert re: Marion Blakey

August 31, 2007

Dear Speaker of the House, Nancy Pelosi, Chairman Henry Waxman and the Committee on Oversight and Government Reform, Senators Murray and Cantwell, and Congressman Reichert

I have included below information about the activities on Marion Blakey.  This is outrageous.  Marion Blakey should be investigated and prosecuted. 

The corruption exposed by Gerald Eastman and others which Ms. Blakey appears to be connected with needs to be finally examined properly and some real action taken. 

The Federal Whistleblower legislation S.274 must be passed now.  The House and the Senate must see that other Whistleblower reports and complaints must be supported and fully investigated and wrongdoers prosecuted as necessary. 

This kind of corruption must stop. 

Sincerely,

The Revolving Door Revolves...
WASHINGTON, D.C. -

Found on http://moderateman.blogspot.com/2007/08/revolving-door-revolves.html

The Federal Aviation Administration's top official is headed for the door--Washington's revolving door, that is--to become the aerospace industry's head lobbyist.

The Aerospace Industries Association (AIA) has announced that FAA Administrator Marion Blakey will become its new chief executive Nov. 12, replacing the organization's retiring CEO, John Douglass. In her new role, Blakey will be the top voice in Washington for an industry that makes commercial planes and serves as a contractor to the Pentagon. Its most prominent members include Boeing (nyse: BA - news - people ), Northrop Grumman (nyse: NOC - news - people ) and Lockheed Martin (nyse: LMT - news - people ).

A conflict of interest? Possibly. Even though this type of thing happens all the time in Washington, it's certainly a gray area. And it doesn't do much to change the public's belief that politicians and political appointees are in bed with industry.

"Essentially what these members are doing is cashing in on their public service," says Craig Holman, who follows congressional issues for the watchdog group Public Citizen. He notes that political appointees are doing the same thing. "It's because there's just so much money at stake now," he adds.

(Forbes)

To read more information on FAA/Boeing/DOT Wrongdoing and Corruption, visit:  www.thelastinspector.com, and http://whistleblowersupporter.typepad.com or http://360.yahoo.com/flyover_27

Just as we thought: FAA Corruption

The Revolving Door Revolves...
WASHINGTON, D.C. -

Found on http://moderateman.blogspot.com/2007/08/revolving-door-revolves.html

The Federal Aviation Administration's top official is headed for the door--Washington's revolving door, that is--to become the aerospace industry's head lobbyist.

The Aerospace Industries Association (AIA) has announced that FAA Administrator Marion Blakey will become its new chief executive Nov. 12, replacing the organization's retiring CEO, John Douglass. In her new role, Blakey will be the top voice in Washington for an industry that makes commercial planes and serves as a contractor to the Pentagon. Its most prominent members include Boeing (nyse: BA - news - people ), Northrop Grumman (nyse: NOC - news - people ) and Lockheed Martin (nyse: LMT - news - people ).

A conflict of interest? Possibly. Even though this type of thing happens all the time in Washington, it's certainly a gray area. And it doesn't do much to change the public's belief that politicians and political appointees are in bed with industry.

"Essentially what these members are doing is cashing in on their public service," says Craig Holman, who follows congressional issues for the watchdog group Public Citizen. He notes that political appointees are doing the same thing. "It's because there's just so much money at stake now," he adds.

(Forbes)

The Pentagon/Defense Contractor Revolving Door Still Open

Contractor ethics plan quashed in House-Senate negotiations

By Michael Posner CongressDaily February 28, 2006

A Senate plan to officially identify former Pentagon officials who go to work for defense contractors was quietly zapped as the fiscal 2006 defense authorization bill moved out of conference committee last year.

The removal of the provision from the defense bill that would have required the defense companies to report the names of former members and military officers to benefit from government contracts signals the problems likely ahead in changing ethics rules for both lawmakers and lobbyists.

The Senate Armed Services Committee approved in May a provision requiring companies with defense contracts over $10 million to send an annual report to the Pentagon with the names of former defense officials or military officers who received compensation from the contractor.

The ethics plan was approved unanimously by the Senate last November in its version of the defense authorization bill. The proposal also required a review of ethics issues raised by private contractors who perform duties similar to government functions. The House bill did not have those provisions.

As the House and Senate were packing for the Christmas and congressional holidays, the contractor disclosure provisions silently disappeared in a House-Senate conference committee. The conferees approved the $491.5 billion military bill without the contractor ethics rules.

Contractor disclosure apparently got scrubbed after the Pentagon raised objections, according to one top Senate staffer involved in the talks.

The department apparently felt "there were too many people covered" by the provision, and there also was resistance by the House during a short conference meeting prior to the lawmakers' departure for the holidays.

While lacking disclosure provisions, the bill signed into law in January does contain some new reporting requirements.

A House Armed Services Committee aide noted the final bill requires the GAO to review efforts by the Pentagon to assess areas of vulnerability to fraud, waste and abuse.

If the GAO sees a need for contractor reporting, "it's something we'll look at," said the House Armed Services aide. A Senate Armed Services Committee staffer said disclosure issues might surface again.

At the time last year when the Senate considered the disclosure scheme, revealing which former officials work for defense contractors seemed a modest effort at transparency.

It followed numerous recent reports about a "revolving door" between former government officials and firms doing government business.

One of the most notorious cases involved Darleen Druyun, a high-ranking Air Force procurement official overseeing Boeing Co. air tanker negotiations at the same time she was discussing a top Boeing job for herself.

She pleaded guilty to conspiracy charges and was sentenced in 2004 to nine months in prison.

The original Senate contractor disclosure plan was prompted in part by Paul McNulty, former U.S. attorney for the eastern district of Virginia, who testified before the Senate Armed Services AirLand Subcommittee last April that he found limited reporting made it difficult to identify ethics violations and corruption by former Pentagon officials who work for defense contractors.

McNulty, who handled defense corruption and terrorism cases, is now awaiting Senate confirmation as deputy U.S. attorney general.

---------------------------------------------------------------------------------------------------------------------

GFS note:  If you will recall, due to the AG/Justice Dept. investigations and scandals, McNulty resigned from his position not long ago.