A recent Senate Armed Services subcommittee hearing raised questions of integrity and the so-called revolving door between industry and the Defense Department. The Project on Government Oversight (POGO) was among the witnesses, saying there’s too much industrial influence on Pentagon decisions coming from former officers and high-level civilians. For a summary, Federal Drive with Tom Temin spoke with POGO’s Government Affairs Manager, Dylan Hedtler-Gaudette.

Interview Transcript:

Tom Temin And I thought the revolving door ethics issues were solved a long time ago, but apparently not.

Dylan Hedtler-Gaudette. No, they weren’t solved a long time ago, unfortunately. We still have a pretty pervasive and pernicious challenge around the revolving door and corporate and industry influence, particularly at the Pentagon. Though, I want to be clear, this is not only a Pentagon issue. This is something that affects broadly agency activities across the entire federal government.

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Tom Temin People who leave and go to industry do so under certain ethical restrictions that are in place and certain legal restrictions that are in place. So is your contention that even following the letter of whatever the regulations and the statutes are still results in conflicts of interest?

Dylan Hedtler-Gaudette. That’s correct. Yeah. A lot of the existing rules and restrictions are insufficient to the task. One other particularly frustrating thing specifically around the Pentagon is each NDAA cycle pretty much maybe not every one, but every couple of NDAA cycles, the Pentagon actually goes to Congress and tries to convince them to reduce and remove some of the restrictions and the rules that do exist already.

Tom Temin NDAA, the National Defense Authorization Act, where all of this comes out to play every year.

Dylan Hedtler-Gaudette. Yes, that’s right. I’m sorry. I should try to refrain from the alphabet soup there. Yes, the NDAA is the annual defense policy bill where all of the top line spending levels are set. That’s not actually where money is appropriated, though. That has to happen in the Appropriations Committee. But the top line levels are set and the policies are made. So it’s a pretty critical time and it ends up being somewhat of a feeding frenzy as far as the interest of defense industry players being advanced. And this is where the revolving door really rears its ugly head.

Tom Temin Well, give us some recent examples of where this might have been manifest in Defense Department decisions.

Dylan Hedtler-Gaudette. So one clear example is the F-35 program, which has not even come close to living up to its billing. And there have been hundreds of millions and billions of dollars already spent on the F-35, and it hasn’t even met any of its initial testing requirements. It’s basically an inoperable system at this point. It’s just an extraordinarily expensive pilot program at this juncture, a prototype, if you will. But each year, more money keeps being allocated to that particular boondoggle. And a lot of that has to do with the influence that the defense companies who are responsible for building that plane have when it comes to Congress and when it comes to the Pentagon.

Tom Temin Well, there have been a succession of program managers, typically from the Air Force, to oversee that program, and they have had resets and admonitions to industry. But apparently none of it has really had any fundamental effect.

Dylan Hedtler-Gaudette. Yes. And part of that is a broader problem. The problem is the Pentagon is all over the place as far as people in Congress also not doing what they should be doing around making these responsible decisions. And also, you have a revolving door issue between congressional staff and the very same defense companies that are at play here when it comes to the revolving door at the Pentagon. So it’s all sort of intertwined, enmeshed and it creates bad policy, it creates overspending, it creates waste, fraud and abuse. And that’s really why we’re advocating for new rules and for beefing up existing rules around corruption and integrity and the revolving door.

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Tom Temin And we’ll get to those. I just wanted to ask about one more manifestation of this. I mean, the F-35 is ostensibly a new program and it could be fixed and we would have a great new fighter at some point in the future. But also, your testimony cites the continuance of obsolete programs that –

Dylan Hedtler-Gaudette. I think you’re probably thinking of.

Tom Temin Yes, Well, that yeah. And some of the even I guess maybe the A-10 program and another Air Force jet. But the idea is that the Pentagon itself would like to get rid of these things, but somehow this industry revolving door complex keeps them alive at the expense of other programs.

Dylan Hedtler-Gaudette. Yes. When it comes to the A-10, we actually take the view that we need to keep the A-10 until we’ve developed a suitable replacement. And the problem is right now, we haven’t yet developed a suitable replacement for that close air support capacity that the A-10 provides. And if you mothball a program and you don’t have a suitable replacement already ready to go and you’re putting troops on the ground in real, real danger in any potential war theaters. The A-10 is actually, I don’t think, a very good example, but there are definitely examples of where Pentagon goes to Congress, says, we don’t need any more of these destroyers, we don’t need any more of these planes. But Congress continues to pluck them up and say, well, you’re going to take them and you’re going to like it.

Tom Temin And then they have fewer of the platforms that they wish they had more of that are maybe don’t have such great support.

Dylan Hedtler-Gaudette. That’s right. Obviously, you have opportunity cost. I mean, it does seem like there is somehow an infinite supply of money that we’re able to throw every year at the Pentagon. But there are real opportunity costs there. Every hundred billion dollars you spend on acts means there are a few hundred million you can’t spend more wisely on. Why?

Tom Temin We are speaking with Dylan Hedtler-Gaudette, the government affairs manager at the Project on Government Oversight. All right, so what should change here for the ultimate goal of spending to be more efficient and for decisions to be based more on merit? That’s our goal here.

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Dylan Hedtler-Gaudette. Absolutely. But I say decision making need to be more based on merit and also need to be more based on strategy and not what’s going to boost the profits of the Beltway bandits in the current fiscal year. But as far as what we need to change, you mentioned earlier that there are some rules in place around the revolving door. Specifically, there are cooling off periods. There are some restrictions on what you can do when you leave the Pentagon and you try to seek employment in the private sector. We think those rules and restrictions need to be expanded to include a broader swath of people as they’re leaving right now. They tend to be targeted specifically at acquisition and procurement officials, which is good, you certainly want them included in these restrictions. But the restrictions have to be broader because there is an entire chain of command where decisions are made, you know, across the board. And you have to include a much larger universe of people to really be trying to get at that problem of industry capture and of the revolving door once people leave the Pentagon. So you need to expand who’s covered, You need to restrict more of the kinds of places that people can go to once they leave the Pentagon. We also think there need to be some enhanced recusal requirements when people are coming into the Pentagon, because obviously at the other end of the revolving door, it swings both ways as people coming into government and as people leaving government, so we need those upfront restrictions and rules around what you can work on and who you can talk to when you enter government, but also where you can go to work and who you can speak to once you’ve left government. So those are basic things we need to expand cooling off periods. Right now you either have a one or a two year cooling off period, depending on what level of employment you’re at when you leave the federal government. We think that should be expanded to a couple more years. We also think there need to be some rules around when you’re at the Pentagon, you know you’re actively employed there in some way or another, but there have to be rules around what kind of investments, what kind of financial entanglements you can have while you’re serving in those roles. So right now there is a restriction where you can’t be invested in any of the top ten defense contractors if you’re an acquisition or procurement professional or no at the DoD or if you’re above a certain grade level, we think that needs to be expanded to the top 100 defense contractors. And it also needs to expand to include a broader number of people at the Pentagon.

Tom Temin Well, I mean, general officers typically retire and they go on to boards or think tanks. Is there or should there be or any kind of distinction between what they do? For example, if you’re on a board of a company, you may or may not be involved in decisions on sales and bids and award seeking, whereas if you become an operational executive as opposed to a board member, you might be involved in procurements and bid preparation.

Dylan Hedtler-Gaudette. I think it’s reasonable to try to take an X-Acto knife to these problems and create reasonable thresholds. I think it’s also important to remember, though, that a lot of what happens is a big company in the defense space will hire someone away who has a big name once they’ve retired from the Pentagon, and there’s still a bit of cachet that is being cashed in on. There are some relationships that are being exploited there in some ways. And we also need to really have true transparency around the types of conversations that are happening between a potential employee who’s about to leave DoD and a prospective employer, because that can be a sort of indirect, behind-the-scenes way that some kind of influence can be, peddled, without there being a direct causal relationship between a particular contract, or an award or a procurement decision. But it’s still problematic because it can have an impact on how decisions are made at DoD. If someone, you know, has an eye toward what’s going to happen next, like what’s their next job going to be, and they may be a little bit preferential toward whoever that prospective employer is going to be.

Tom Temin And if people are benefiting from this in the congressional branch and the executive branch, who’s going to be behind these ideas?

Dylan Hedtler-Gaudette. Yeah, that that is the $850 billion question there. Tom. It is hard to get people to really buy in on this in a broad based way, because you’re right, there are so many people who are at the trough, feeding from this particular toxic cocktail of influence and corporate capture. And they’re just a lot of money to be made, a lot of money to be had, a lot of, power to be wielded here. So it is definitely an uphill battle. But we are, we are always here. We’ve been here since the eighties, basically crying out for the same kinds of reforms. We’ve had some successes here and there, some incremental progress. But I’m not going to lie to you and tell you it’s going to be easy because we are up against the full might in force of the military industrial congressional complex for sure.

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