On Tuesday morning, the Senate Armed Service Committee will hold a confirmation hearing to consider three of President Joe Biden’s nominees, including Frank Kendall III, Biden’s pick to serve as Secretary of the Air Force.
In some ways, Kendall is a natural choice. He served as Under Secretary of Defense for Acquisition, Technology and Logistics in the Obama administration. But his activities over the past four years tell a very different story: a trip through the revolving door to lucrative consulting and board membership gigs with two of the Pentagon’s top contractors.
Kendall’s transition from overseeing acquisitions at the Pentagon to working for the companies whose products he procured while in government came with a generous payday. His Public Financial Disclosure Report shows $702,319 in consulting fees from Northrop Grumman, as part of a $300,000 per year consulting contract with the weapons manufacturer, and between $500,000 and $1,000,000 in Leidos stock, a weapons firm and government contractor for which Kendall annually receives approximately $125,000 in cash and $155,000 in stock, in return for his board membership.
Kendall says he will terminate these relationships if confirmed but the flood of money he received from Pentagon contractors after overseeing procurement, and potentially before his appointment as Secretary of the Air Force, offers a clear example of how weapons firms lavish stock and cash on individuals who have made, or will make, procurement decisions.
A 2019 report from the Government Accountability Office found that nearly half of all Defense Department contracts went to United Technologies, Lockheed Martin, Northrop Grumman, General Dynamics, and Boeing. Over half of the defense budget — currently at $740 billion per year — goes to private contractors.
Kendall’s consulting client, Northrop Grumman, expressed blunt truths about its business interests in its April quarterly earnings call. CEO Kathy Warden told investors, “we believe our capabilities will remain well aligned with U.S. national security priorities,” emphasizing that “the Biden administration has signaled that it views competition with China as the most pressing long-term security challenge and will invest in the capabilities needed to maintain U.S. national security advantages.”
On top of cheering on a potential clash between the U.S. and China, Warden praised the $2 trillion “modernizing” of the nuclear arsenal as “aligned with our portfolio.” Quincy Institute Distinguished Fellow Joe Cirincione, an expert on nuclear weapons, observed that the push for costly new nuclear weapons was ultimately driven by “ financial and political profit” and fails to address real national security concerns.
Leidos, for its part, is far less known than Northrop Grumman but regularly makes the lists of top federal contractors and, according to Washington Technology and the Federal Procurement Data System, took in over $8 billion in contracts in 2019.
The company has contracts from a variety of federal agencies but the company’s CEO, Roger A. Krone, also expressed positive sentiments about the Pentagon’s ballooning budget, assuring investors in February that the $740 billion defense budget and Biden’s pending 2022 $753 billion defense budget recommendation is “unlikely to put pressure on defense industry outlays before fiscal year 2023.”
Krone added, “Given the great power competition, and leading national security issues, we do not anticipate major cuts but rather flattish to slightly declining budget numbers with focus on modernization and reprioritization,” effectively endorsing Northrop and other defense contractor’s assessment that a brewing Cold War competition will pad their bottom lines.
Kendall has shown an independent streak and, at least in the past, hasn’t held back from criticizing weapons firms. In 2014, Kendall, who was overseeing acquisitions, declared the over budget and behind schedule F-35 “acquisition malpractice” in a 60 Minutes interview.
Right out of the revolving door, Kendall’s attitude toward his weapons industry clients and employers will face a fresh test with his hearing on Tuesday and likely confirmation as Biden’s Secretary of the Air Force.