By Jack Moore
Federal News Radio

The use of senior mentors — retired military officers or former high-level civilian officials hired as contractors — has dropped precipitously in the year and a half since the Defense Department instituted stiffer conflict-of-interest rules and a pay cap.

A Pentagon inspector general’s report released last week examined whether DoD complied with a 2010 mandate to convert the senior mentors to a more regulated “highly qualified expert,” position.

In a review of the use of senior mentors by the Navy, the Marines and some combatant commands, the IG found the Pentagon has complied with the new rules. However, few of the senior mentors have actually converted to the new positions because they have left DoD altogether.

New rules for outside experts

In April 2010, then-Defense Secretary Robert Gates issued a directive requiring the services to convert senior mentors to the HQE program.

While citing the valuable work of senior mentors and the “specialized expertise” they offer, he also noted the need for them to adhere to ethics laws and regulations. Many of the outside advisers also worked for private-sector companies doing business with the Pentagon at the same they drew a paycheck from the department, according to a 2009 USA Today report.

Gates’ memo directed the services to begin hiring all outside experts using the HQE program by June 20, 2010.

HQEs are hired as federal employees and earn a maximum of about $170,000 a year — equivalent to three- and four-star flag and general officers. They’re required to file financial disclosure reports and barred from divulging sensitive information or participating in official matters that would raise a financial conflict of interest.

In addition, those earning more than $155,000 a year and who have served for more than 60 days, are restricted from representing private-sector clients to DoD for at least a year after they depart federal service.

Few converted, most quit

Overall, the IG report counted 355 senior mentors in the Defense Department in 2010. More specifically, inspectors reviewed the Navy, Marines, Joint Forces Command, U.S. Special Operations Command and U.S. Strategic Command — which together employed 194 of the advisers.

The IG found those services had complied with the new policy. By February 2011, 11 of the 194 reported senior mentors had converted to HQEs (seven of those have since resigned). But the vast majority of those service’s senior mentors — 183 — never converted to the new positions and are now no longer working as senior mentors.

In some cases, this meant steep declines in the number of outside advisers. For example, the Navy had 109 senior mentors on the payroll in 2010. That dropped to zero by February, according to the report.

It turns out, those strict conflict of interest rules appear to have dampened the interest of many of the program’s participants.

Officials told the auditors the new requirements and restrictions, such as disclosing finances and the pay cap, led to their decision to resign rather than to convert to the new program.

Others said the conflict of interest regulations, such as a one-year “cooling-off period” before being allowed to represent private-sector clients to DoD on pending matters would limit their ability to find work in the private sector.

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