The revolving door keeps on spinning
This article first appeared in the Nonzero Newsletter and is republished with the authors’ permission.
Shortly after taking office, President Biden made headlines by putting new restrictions on the “revolving door” between government and private sector jobs. Among the most notable rules were a temporary ban on lobbying after leaving office and a requirement that appointees wait at least two years before working on matters connected to previous clients or employers.
Luckily for the Blob, these seemingly strict rules haven’t stopped Biden from recruiting people who spent the Trump years cashing in on their government experience. Many of Biden’s top foreign policy aides—including Secretary of State Antony Blinken, Secretary of Defense Lloyd Austin, UN Ambassador Linda Thomas-Greenfield, and National Security Adviser Jake Sullivan—waited out Trump’s presidency by working for defense contractors or opaque outfits known as “strategic consultancy firms,” which rarely disclose clients and often work on behalf of multinational corporations and foreign governments.
The potential conflicts of interest don’t stop there. As Biden continues to fill mid-level foreign policy posts, it’s worth taking a look at the background of some recently announced or reported nominees who haven’t been confirmed yet.
Frank Kendall, Biden’s nominee for Air Force Secretary. Kendall represents a particularly egregious example of the revolving door. After retiring from military service in 1994, he worked as an executive at Raytheon, a major weapons maker, and later became a consultant for various defense companies. He came back into government as head of acquisitions at the Defense Department under President Obama, then, when Trump took office, quickly began working for a weapons manufacturer that had received a big Pentagon contract during his tenure.
The contract went to Northrop Grumman for production of the B-21 bomber. Since he left office, the firm has paid him over $700,000 in consulting fees, according to Eli Clifton of the Quincy Institute. Kendall also spent some of the Trump years working with Leidos, a major defense contractor that won a $4 billion IT contract with the Pentagon during Kendall’s time in government. He holds at least $500,000 in Leidos stock and has earned $125,000 per year for his work on the firm’s board, according to Clifton.
If confirmed, Kendall vows, he’ll divest himself of this stock. Great—but since he’ll keep the proceeds, this will still be another example of him getting money from companies that received government contracts on his watch. And this history will give us reason to worry that as Air Force secretary his performance will be corrupted by his anticipation (whether conscious or unconscious) of repeating that process a few years hence.
Kendall went before the Senate earlier this week for his confirmation hearing. Notably, he faced scrutiny for remarks he made about the F-35 fighter program during his spell in the Obama administration. At the time, he was critical of the expensive and ineffective program, which he called “acquisition malpractice.” But after a few years working for Northrop Grumman, which says it “plays a critical role in the development, demonstration and production of this multirole fighter,” Kendall has changed his tune. The real issue, he told Senator Jim Inhofe, is that the government is not buying enough of the $100 million planes to drive costs down.
Absent from the hearing were any questions about whether Kendall’s ties to weapons makers constitute a conflict of interest. Kendall is set to sail through confirmation on his way to the Pentagon. He’ll feel right at home working under Secretary Austin, who served on the board of Raytheon during his time out of government.
Nick Burns, Biden’s reported nominee for ambassador to China. Foreign policy wonks know Burns for his long, distinguished career as a diplomat. After several decades in the Foreign Service, Burns worked his way up to ambassador to NATO and was later promoted to the number three role at the State Department under President George W. Bush.
But few note his work for the Cohen Group—a strategic consultancy firm that advises defense contractors and other companies looking to do business in Asia. According to Jonathan Guyer of the American Prospect, Burns has met with high-level Indian officials on behalf of the firm, whose clients have included arms makers seeking access to the Indian market.
Burns also works for Entegris, a chemical company whose products are used in the production of microchips. Between consulting fees and stocks, he has received over $5 million in compensation for his work with the firm, which has significant business interests in China and Taiwan. As Guyer points out, Burns could hardly have picked a more sensitive business to work in during his time out of government, given recent calls to stop relying on China for microchip manufacturing.
Julie Smith, Biden’s reported nominee for ambassador to NATO. Smith has spent the bulk of her career working on transatlantic policy in government and at prominent think tanks, leaving little doubt that she is qualified for this role. And she has worked as a senior adviser to Blinken since he took office earlier this year, which should set her up for a smooth transition to her new job.
But Smith’s time at WestExec, a strategic consultancy firm founded by Blinken and Michèle Flournoy, merits scrutiny. The firm’s name is a reference to West Executive Avenue, the road that runs along the West Wing, and the company advertises itself as bringing “the Situation Room to the Board Room.” Here’s how the New York Times describes its business model:
“WestExec’s business plan accommodates the revolving door between the influence industry and government by offering services that draw on government expertise without triggering lobbying laws that would require its officials to disclose their clients’ identities or specific issues before the government.”
This transparency loophole makes it hard to know exactly what Smith did during her time at WestExec. However, the firm has admitted to having clients in the defense industry (while saying it doesn’t represent any foreign governments).
The loophole has already worked to the advantage of the numerous other WestExec alums on Biden’s team, who have disclosed clients only selectively. Indeed, the firm was seen by some as a “government-in-waiting” for the Biden administration. While WestExec resists this characterization, it did make sure to add a clause in its lease that would let it break the lease without penalty if its principals got jobs in the Biden administration.
Besides Blinken and Smith, high-profile WestExec alumni on Biden’s team include White House Press Secretary Jen Psaki, Director of National Intelligence Avril Haines, Deputy Attorney General Lisa Monaco, and Ely Ratner, Biden’s nominee for Assistant Secretary of Defense for Indo-Pacific Security Affairs.
Among the Biden foreign policy team’s stated goals is to fight corruption abroad. And certainly there’s plenty of that to fight; lots of countries are plagued by egregious self-dealing of a kind that has never taken root in the US. Still, we’d be in a better position to lecture others if we took more seriously the flagrant conflicts of interest that infest our own government.