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June 30, 2004

The Revolving Door Spins Away

by Jim Lobe

Hundreds of U.S. military and government officials routinely leave their posts for jobs with private contractors who deal with the government, a process that has eroded the lines between government and the private sector, according to a report released by a watchdog group on Tuesday.

"There is a revolving door between the government and large private contractors where conflict of interest is the rule, not the exception," said the report by the Project on Government Oversight (POGO), a Washington-based group that monitors military expenditures.

"The revolving door has become such an accepted part of federal contracting in recent years that it is frequently difficult to determine where the government stops and the private sector begins," adds the report, titled "The Politics of Contracting."

The document says that the current contracting system where current and former public servants use their positions for private gain means powerful private contractors can potentially rig the system in their own favor.

The group examined the current top 20 federal government contractors from January 1997 through May 2004 and found that in fiscal year 2002, those top 20 contractors received over 40 percent of the 244 billion dollars in total contracts awarded by the federal government.

The group says that it also identified 291 instances involving 224 high-ranking government officials who moved to the private sector to serve as lobbyists, board members or executives of the contractors.

The report found that at least one-third of the former senior government employees who went to work for or served on the board of a government contractor were in official positions allowing them to influence government contracting decisions, and that accountability rules were not enough to control them.

"Generally, revolving door laws do not apply to the most senior policymakers who ultimately have the most power in shaping programs and policies that benefit contractors," says the report.

The issue is gaining interest in the U.S. Congress. Arizona Senator John McCain, a leading Republican, is expected to hold hearings in mid-July that would be the first congressional oversight of the revolving door question in nearly a decade.

But the report says that some congressmen are also part of the revolving door practice. At least two-thirds of the former members of Congress who are lobbying or have lobbied for the top 20 government contractors, served on authorization or appropriations committees that approved programs or funds for their future employer or client during their tenure in Congress.

Among the companies benefiting from the tolerated practice are top U.S. defense contractor Lockheed Martin, which now employs 57 former senior officials; aerospace giant Boeing, which employs 33; Air Force contractor Northrop Grumman at 20; Raytheon at 23; and General Dynamics which employs 19.

The nonprofit watchdog gave the example of Richard Perle, a former Pentagon official who served as assistant secretary of defence in the Ronald Reagan administration and was a member of the Defense Policy Board from 1987-2004, serving as its chair from 2001 to 2003.

He resigned as chairman in March 2003, after a conflict of interest controversy involving a consulting job he took with the bankrupt telecommunications firm, Global Crossing Ltd.

The report says that during the summer of 2003, Perle expressed his support for a Boeing tanker contract – a deal that would direct billions of dollars to the company. His support for the tankers came just 16 months after Boeing pledged to invest $20 million with Perle's venture capital firm, Trireme Partners, notes the report.

The report also cites how Pentagon official Darleen Druyun, who supervised and directed the management of the Air Force's weapons acquisition program, moved through the revolving door to become Boeing's deputy general manager for missile defense systems.

"Darleen Druyun is the poster child for the ills of the revolving door," said the report.

The report recommends "revolving door protections," especially when it comes to high-level officials.

The group wants Congress to pass laws prohibiting political appointees and people who develop rules and determine requirements from being able to seek employment from contractors who significantly benefited from the policies formulated by the government employee.

The group also recommended that the government close a loophole that allows former government employees to work for a department or division of a contractor different from the division or department that they oversaw as a government employee.

"It is time for Congress to put its foot in the revolving door to stop conflicts of interest," said Scott Amey, POGO's general counsel. "Legal loopholes need to be closed, conflicts of interest and ethics laws need to be simplified, and the entire process needs to be opened to public scrutiny."

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  • Jim Lobe, works as Inter Press Service's correspondent in the Washington, D.C., bureau. He has followed the ups and downs of neo-conservatives since well before their rise in the aftermath of the September 11, 2001 attacks.

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