From Staffer to Contractor: Stopping the Pentagon's Revolving Door

As Congress prepares to consider the annual Department of Defense authorization bill and other military spending legislation totaling more than $700 billion, the need for more aggressive scrutiny is abundantly clear. At a time when we have a $9.3 trillion national debt and large unmet social needs, oversight of these enormous and ever-increasing sums has failed to keep up.

The Pentagon's procurement and budgeting processes are rife with problems. For example, the Government Accountability Office (GAO) has identified $295 billion in cost overruns on 72 major weapons systems, even as the Pentagon can't balance its books or keep track of its vast inventory. These problems can lead to bizarre results, such as the fact that the Pentagon has hundreds of millions of dollars in spare parts now on order that are already marked for disposal. Despite huge cost overruns, major contractors have received $8 billion in performance bonuses that have been paid out regardless of the results of their work. These abuses of the public trust - and the public purse - are simply unacceptable.

These are complex problems that will require multi-faceted solutions. A good place to start would be by slowing down the "revolving door" that allows high-level Pentagon bureaucrats and military officers to go to work for major defense contractors.

The problems with the revolving door are two-fold. First, officials looking forward to employment in the arms industry may favor certain companies in hopes of getting lucrative job offers after leaving government service. Second, once they have moved into the private sector, these former government employees can use their specialized knowledge and inside contacts to give an unfair advantage to their new employer.

These are far from abstract problems. In one high-profile case, Darleen Druyun, a senior Air Force contracting official, secured jobs with the Boeing Corporation for herself, her daughter, and her son-in-law at the same time that she was in charge of negotiating a $20 billion lease deal with the company. Both Ms. Druyun and Boeing's Chief Financial Officer pled guilty to fraud charges and served jail time as a result.

The Boeing scandal was uncovered in time to save the taxpayers from a corrupt employment deal, but how many other scandals go undetected? In a study released this week, the GAO reported that as of 2006, 2,435 former generals, admirals, procurement officials and senior civilian leaders in the Pentagon were working in the defense industry. The GAO believes that more than 400 of these were working on defense contracts related to their former agencies, but under current reporting requirements, there is no way to tell whether these individuals have conflicts of interest. That is because neither the contractors nor the Pentagon are required to report on post-government employment of key military and civilian government personnel.

The restrictions that do exist to curb the influence of the revolving door are riddled with loopholes. The general thrust of the regulations is to prevent senior Pentagon officials and personnel involved in weapons acquisition from lobbying their former agencies for one to two years after they leave the government. That doesn't mean they can't work "behind the scenes" to help their new employers get a leg up on weapons contracts, nor does it prevent them from lobbying Congress. Without any real reporting requirements, how are government regulators going to detect conflicts of interest in the first place?

A related problem is the growing use of private contractors to carry out government functions such as developing contract requirements, advising on award fees for other contractors, and interpreting regulations. At over two-thirds of defense agencies surveyed by the GAO, there were more private contractor employees involved in key offices than there were government employees. Other than restrictions on bribery and criminal fraud, these private contractors are not covered by conflict-of-interest statutes that apply to government employees. A contractor employee can even have a personal financial stake in a decision that he or she is helping the government to make without running afoul of any current law or regulation.

If we are ever going to get a handle on waste in Pentagon contracting, we need to beef up revolving-door laws - including new requirements for reporting of post-government employment. At a minimum, we need to subject private contractors involved in basic Pentagon decision-making to the same standards that apply to government employees. Otherwise, the Pentagon will continue to misspend untold billions of dollars that could have been applied to urgent national priorities.