The Defense Industry’s Inside Man In The Pacific Arms Race

When a Biden envoy negotiated new, far-reaching agreements with the Pacific islands, he failed to disclose that he was also advising a powerful consulting firm whose clients stood to gain. As Jonathan Guyer reveals in today’s featured story, this glaring conflict of interest could have a wide-scale impact on these Pacific Island nations, not to mention the world at large as the U.S. and China vie for military dominance in the region.

Rock the boat.

(AP Photo/John Hamilton-U.S. Army/Shizuo Kambayashi)

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When Biden’s presidential envoy Joseph Yun landed in the Marshall Islands in June 2022, he took every precaution.

Everyone involved wore teal N95 masks. Yun kept his distance from his Marshallese hosts, who exchanged handmade gifts without physical contact, the U.S. military base’s newspaper Kwajalein Hourglass reported. Concerns around COVID-19 had delayed Yun’s trip and related negotiations over pacts with the Marshall Islands, the Federated States of Micronesia, and Palau — strategic islands in the Pacific where the United States and China are vying for military dominance.

But the Biden administration has been less cautious about the ethical quandary presented by Yun’s role. At the same time that Yun was America’s chief negotiator in the Pacific, he was also listed as a senior adviser to The Asia Group, an ultra-connected Washington consulting firm composed of former government leaders who advise major corporations and military contractors. He led talks that are likely to deliver a lucrative advantage to the consulting firm where he currently works and the powerful defense contractor it represents in the Pacific.

Yun’s efforts, and his potential conflicts of interest, could have a wide-scale impact on both the 2.3 million who call the region home, not to mention the world at large. As Washington and Beijing ratchet up tensions in the region that resemble a new Cold War, these Pacific Island nations may be small in size, but have massively outsized consequences for U.S. power. 

Just last week, President Joe Biden announced a new defense partnership with Japan and the Philippines last week in response to China’s interests in the Indo-Pacific, and a top Australian official called the region the site of the “biggest arms race” since World War II. 

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The Asia Group engages in influence-peddling, and several top Biden appointees come from the firm. But since it’s not technically a lobbying firm, it manages to evade scrutiny — and lobbying disclosure laws — by design. The firm mostly keeps its clients secret, even as it advocates on their behalf in backrooms with policymakers in Washington and world capitals. And they’re not required to divulge anything. A former employee told me that the work that The Asia Group does for clients is “innately corrupt.”

The Biden administration sees the Pacific through the lens of American military power, much like his predecessors. From 1946 to 1958, the U.S. tested 67 nuclear weapons in the Marshall Islands and the area has continued to be the site of U.S. weapons testing ever since.

The agreements Yun negotiated, which were just signed into law, give the U.S. military continued exclusive access to the Marshall Islands, Micronesia, and Palau in exchange for billions in U.S. aid going to the independent nations. These accords may significantly benefit one of The Asia Group’s major recent clients, Lockheed Martin. The military contracting giant operates the Ronald Reagan Ballistic Missile Defense Test Site in the Marshall Islands, and another U.S. base on the islands is home to what Lockheed calls “the world’s most advanced radar.” 

Just under half of the gargantuan $850 billion U.S. military budget goes to military contractors, and companies like Lockheed are some of the biggest beneficiaries of hawkish American policies in the Pacific.   

Backroom Deals

Unlike what is federally mandated for most political appointees, Yun held a special designation as a presidential envoy and was not required to publicly disclose his clients, income, and investments. The potential appearances of a conflict alone were plentiful, as Yun continued to hold meetings at The Asia Group’s office.

Yun wrote by email that his government role “was reviewed by State Legal/Ethics and approved, because there was no conflict of interest or any overlap, and I agreed to recusal if we came across any such overlap.” He added that his advisory work for The Asia Group “involved no defense sector work” and “involved no Pacific islands.” 

The State Department defended the arrangement. “There is no legal prohibition on Department of State employees holding outside employment in most circumstances,” a spokesperson wrote in an email to The Lever. 

But ethics lawyers still have concerns. Yun, listed throughout as a member of The Asia Group’s “team,” has kept his clients secret, and the terms of his government service did not require public disclosure. 

“If I were the ethics adviser at the State Department… I would tell him he can’t have anything to do with those areas of the world where the firm is doing consulting business,” Richard Painter, the chief White House ethics lawyer from 2005 to 2007, told me. “I just don’t like it. I wouldn’t allow it.”

Yun’s employer, The Asia Group, is no ordinary Washington firm. Its co-founder, Kurt Campbell, is the long-standing Asia czar of the Democratic establishment. After three years in the White House directing China policy, Campbell moved to the State Department in January and is now one of its two deputy secretaries, its number-two position. The other deputy secretary, Richard Verma, was previously vice chairman of The Asia Group, where he led the firm’s South Asia business, advising Facebook, the Pharmaceutical Research and Manufacturers of America lobbying group, and Walmart.

Campbell’s network of diplomats blurs the line between official and private life. On a 2018 episode of the firm’s podcast, Tea Leaves, Campbell warmly introduced Yun as a friend and traced his decadeslong path, including serving as ambassador to Malaysia and holding one of the toughest diplomatic jobs imaginable, negotiating with North Korea.

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Campbell paused for effect. “Joe’s most extraordinary career accomplishment — joining us at The Asia Group,” he said, “bringing his expertise and knowledge to help our clients further their interests.” 

The Asia Group has since removed the episode from its website.

In a statement sent to The Lever, the Asia group noted, “Amb. Yun assists on TAG’s Korea and Southeast Asia work, helping clients better understand risks and opportunities in those regions.” 

The firm did not respond to detailed follow-up questions.

“Innately Corrupt”

Call it a Rolodex firm. The Asia Group is one of a handful of influential Washington consulting outfits for out-of-office government appointees going through the revolving door. Before becoming secretary of state, Antony Blinken cofounded the firm WestExec Advisors, sustaining a tradition of corporate work pioneered by Henry Kissinger and continued by Madeleine Albright and Condoleezza Rice.

National security officials make millions advising the world’s most recognizable companies. In the last several decades it’s become normal for former government leaders to do this and then return to government. 

The Asia Group promises access: The national security adviser will return your calls and take the meeting, according to the former Asia Group employee. And some of that door-opening is for foreign dignitaries. Campbell himself has ferried the former prime minister of Thailand to meetings around Washington.

The firm’s focus is on the military and aerospace sectors, and they’ve worked for General Electric, Northrop Grumman, and Raytheon. In 2020, The Asia Group advertised that it helped “a leading U.S. defense company in Australia for a multibillion-dollar contract,” and ethics disclosures filed by Campbell and his colleagues who have gone into government show that it also works for automakers, Big Banks, and Big Tech. The firm has expanded far beyond Washington to offices in China, India, Japan, and Vietnam — and later this year it will open an outpost in Hong Kong.

Since the firm doesn’t technically lobby, no federal or state disclosures are required. The Asia Group does not share its client list, creating a shield of secrecy that allows Campbell’s team to quietly work for individuals like billionaire casino magnate Steve Wynn and businessman Philip Falcone, who was convicted of securities fraud.

The Asia Group is an egregious example of the ethical gray zone posed by officials revolving to and fro, but it’s not the only one. More than 30 top national security officials in the Biden administration hail from Blinken’s firm, and dozens of senior national security officials have revolved in and out of Albright’s consulting operation, the Albright Stonebridge Group.

Consultants are so ubiquitous in Washington that when Yun testified to Congress about the Pacific island agreements in October, he sat next to Asia Group alum Siddharth Mohandas, who was then the Pentagon’s top Asia official. Biden also appointed the firm’s president, Rexon Ryu, to the Defense Policy Board, a group of influential outside advisers to the secretary of defense.

“As a patriot, I find what I witnessed there to be terribly corrupt and untoward, and I cannot believe my country is going to put someone like that into a position of immense power,” the former Asia Group employee told me. 

“We Live In Fear, Fear Of The Bombs”

With the U.S. and China engaged in hostile competition, Pacific Island nations are caught in between, their very sovereignty a contested arena between the two superpowers. 

The combined population of Marshall Islands, Micronesia, and Palau is less than 200,000, and their hundreds of islands cover more than the length of the continental U.S. Soviet-era U.S. bases have taken on increased significance as the U.S. monitors China’s maritime activities. 

“The most important thing we get out of them is, of course, access to their land, their air, and their water,” Yun told the Heritage Foundation last year. “It’s crucially important.”

Threat-mongering around war with China drives a lot of business for firms like The Asia Group. In Campbell’s nomination hearing in December for the deputy secretary role, he pushed for the compact. 

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“I will simply say to the Senate that literally China is waiting at the moment that we are unable to fulfill our commitment,” he said. The agreement “keeps these countries in our purview,” Campbell continued, and the U.S. needs it for its security or, “you can expect literally the next day that Chinese diplomats, military, and other folks on the plane, landing in each of these states trying to secure a better deal for China.”

In March, Congress passed the agreements and Biden signed them into law as part of the omnibus spending bill. The accords lock in the U.S. military’s exclusive presence in the three Pacific Island nations over the next 20 years in exchange for more than $7 billion in U.S. aid. 

The U.S. military applauded the passing of the agreements, and senior Defense official Ely Ratner told the Senate that the military, beyond the existing missile and space testing sites, is “exploring opportunities for new cooperation.”

For Van Jackson, a former defense strategy adviser in the Obama Pentagon, the compacts are modern-day imperialism. Since these island nations are by and large poor — with low gross domestic product and few options for trade except for with China — they are dependent on the U.S. government for investment, services, and all matters of national security. 

“It is a vestige of the musty imperial days,” he told me. “America has full veto control over them.”

The U.S. notoriously tested dozens of nuclear weapons on the Marshall Islands in the 1940s and 50s, poisoning a generation and making whole areas unlivable. In 1954, the U.S. used the area to conduct the largest nuclear test in history, Castle Bravo. Since the 1980s, the U.S. has provided about $2 billion in compensation to the Marshallese as well as related development assistance.

In the Marshall Islands, the nuclear legacy remains visceral. In 2022, Yun visited Runit Dome, where the U.S. dumped 30,000 tons of nuclear waste in the late seventies. A school choir welcomed the U.S. delegation and sang, “We live in fear, fear of the bombs, guns, and nuclear.” 

Nuclear reparations, climate change, and the environment were sticking points in the negotiations Yun oversaw, and the Marshallese nearly walked out. But the much smaller country didn’t have leverage or an alternative. 

“Part of Joe Yun’s job was to play hardball with them, effectively treat them like North Korea on this issue,” Jackson, now a professor at Victoria University of Wellington in New Zealand, explained.

The compact agreements are important to clients of The Asia Group. There’s a strong chance that Lockheed Martin will land a resulting contract for an over-the-horizon radar system in Palau, whose construction experts say will cause serious environmental damage. Lockheed already operates a missile defense system with advanced radar in Guam as part of a $528 million contract. 

It’s a criminal offense, under federal law, for government employees to knowingly participate “personally and substantially in a particular Government matter” that has a direct and predictable economic effect on their employer’s financial employer. 

“We would never let someone come into a government job and keep a job with a law firm or a consulting firm,” Painter, who now teaches at the University of Minnesota, told me. “If you come into government, you quit your day job,” Painter said. “Otherwise, all the firm’s conflicts become yours.”

The fact that there are serious ethical concerns about foreign policy leaders in the Biden administration reveals the limitations of current government ethics rules. It also reveals the limits of those officials’ foreign-policy thinking. The U.S. has a troubling legacy in the Pacific islands region, and it keeps testing new missiles in the Marshall Islands and expanding its military footprint — ultimately enriching the very corporations drawn to The Asia Group’s services.

“You’re advocating for and implementing a foreign policy that generates military requirements that benefit the clients of your firm,” Jackson told me. “The conflict of interest is very in your face.”

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