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For decades, the Defense Department has used taxpayer money to send elite military officers to work for some of the Pentagon’s top private contractors. As Freddy Brewster reveals in today’s featured story below, an exclusive new report shows that private interests have used this fellowship program as a backdoor opportunity to reach top military brass and lobby for billion-dollar contracts. Also: - LISTEN NOW: On this week’s bonus episode of Lever Time for paid subscribers, longtime Democratic strategist Mark Longabaugh explores the growing public discontent with the Democratic Party — which the Biden team could be ignoring at its own peril.
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Rock the boat.
The Pentagon’s 30-Year Lobbying Swindle
By Freddy Brewster
 (AP Photo/Marcio Jose Sanchez/Elise Amendola) [View in browser] For nearly three decades, the Department of Defense has used taxpayer money to send elite military officers to work for some of the Pentagon’s top private contractors. The public-private arrangement has allowed corporate lobbying disguised as policy recommendations to reach the highest branches of the Defense Department, according to an exclusive report from the Quincy Institute for Responsible Statecraft shared with The Lever. From 1995 to 2021, more than 315 military officers with elite ranks as high as colonel and rear admiral have been placed at top weapons manufacturers such as Boeing, Raytheon, and Lockheed Martin, as well as other companies with billion-dollar government contracts. The arrangement has also coincided with a dramatic rise in Defense Department spending on private contractors valued in the trillions of dollars. The arrangement, called the Secretary of Defense Executive Fellows program, sends officers with promising military careers to work for top corporations in the defense, tech, finance, and other industries for one year. These fellows then report on how the Defense Department could incorporate some of these companies’ business practices and policies. The program has helped place corporate interests at the very heart of U.S. military strategy. The report from Quincy Institute, a nonprofit think tank, is the first detailed examination of the Secretary of Defense Executive Fellows (SDEF) program. The report casts doubt on the integrity of the fellowship program, calling it a “de facto lobbying tool” for private companies and a “taxpayer-funded revolving door” where more than 40 percent of the fellows have gone on to work for government contractors at some point in their post-military careers. “Decades of SDEF recommendations have consistently focused on reforms that would both benefit corporations and bolster their influence over the [Defense Department],” the report found. Nearly a third of the fellows were assigned to the top 50 government contractors, and 15 percent went to work for Boeing, General Dynamics, Lockheed Martin, Northrop Grumman, and Raytheon — the top five military contractors. These five defense companies spent more than $830 million lobbying the Defense Department and other federal entities during the same years they had fellows, regulatory filings show. At the end of their program, the fellows detail their experience and, at times, promote core company talking points in front of some of the highest-ranking officials in the military, including vice chiefs of staff. The arrangement represents “an unbelievable opportunity” for Pentagon contractors, Benjamin Freeman, one of the authors of the Quincy Institute report, told The Lever. “Lobbyists would salivate over the opportunity to provide a briefing to [Defense Department] leadership at that level,” he added. “This is better lobbying than any money could buy for these companies. When it’s somebody who’s a military officer coming back to the [Defense Department] and saying those same talking points, people are going to take that up much more than they would if these kinds of words are coming from a lobbyist.” Decades of fellow recommendations have repeatedly urged the Defense Department to outsource services to private contractors, which has coincided with a dramatic rise in Pentagon spending. Since 2001, the Pentagon has spent more than $14 trillion, with up to half of that going to private contractors, according to a 2021 report from the Watson Institute at Brown University. In roughly that same time period, nearly one million people have been killed — including roughly 432,000 civilians and 7,053 U.S. military members — due to U.S. military interventions in Afghanistan, Iraq, Syria, and other countries. The Secretary of Defense Executive Fellows program represents a stunning example of how intertwined the Defense Department and private defense contractors are and how the Defense Department has come to embrace the military industrial complex, said Brett Heinz, lead author of the report. “You have both an immense military and an immense arms industry, and not only is it a business relationship, it’s closer than that, it’s the arms industry influencing the military’s operations itself,” Heinz told The Lever. “It’s bringing these two entities together in such a way that blurs the lines between what public interest is and what private interest is.” According to the Quincy Institute report, there is no publicly available data on how much the Pentagon spends on the fellowship program. The Defense Department did not respond to a request for comment. “Outsource Everything Not Core To DOD”William J. Perry, who served as secretary of defense under President Bill Clinton, and James Roche, Air Force secretary under President George W. Bush, helped launch the Secretary of Defense Executive Fellows program in 1995 as “a long-term investment in transforming our forces and capabilities,” the Defense Department says on its website. Perry said that the military needed to “build a cadre of officers who understand not only the profession of arms, but also the… revolutionary changes in information and related technologies,” the report found. In 2004, Roche resigned from his role as Air Force secretary amid a government investigation that found he improperly used his position to help a colleague obtain a job at his former employer Northrop Grumman, a weapons manufacturer that works with the Pentagon.
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The fellowship program grew from just five fellows in its inaugural 1995 cohort to about 19 in 2021, according to the Quincy report. Each branch of the military is represented in the program and fellows have included colonels, lieutenant colonels, and rear admirals — ranks that often require 20-plus years of service to achieve. At the end of their yearlong program, fellows issue written reports for academic credit and give presentations to top Defense Department officials on some of the key takeaways during their time with the companies. These written reports and presentations serve as both policy recommendations for the Defense Department and a subtle lobbying tool for the companies the fellows have worked at. “It is undeniable that many of these recommendations would provide clear financial benefits to the host companies that they originate from, sometimes in shockingly bold ways,” the Quincy Institute report states. According to the Quincy report, one of the most common recommendations for the Defense Department is to outsource the Department’s essential functions. An early cohort recommended that the Defense Department should “outsource everything not core to [the Defense Department].” Other cohorts have recommended that information technology, medical services, research and design, finance and accounting, and personnel administration should all be outsourced. The fellowship’s 2013 cohort recommended repealing a Defense Department rule that prevents the agency from spending more than 50 percent of its military depot maintenance budget on contractors. Boeing and Lockheed Martin both sponsored fellows in the cohort and both lobbied the Defense Department and other federal entities in 2013 on depot policy and maintenance issues, lobbying disclosures show. Defense Department contractors receive roughly half of the agency’s budget to provide various services and products ranging from weapons manufacturing to data storage, and yet fellows in the program routinely reported to leadership that contractors needed more funds, the report found. Fellows from cohorts in the mid-2010s said that Defense Department contracts were “driving industry away” due to low profit margins and that the Defense Department should “view profit as necessary… to create a win-win,” the Quincy Institute report found. Other fellows have recommended that the Defense Department do more business with the companies they worked for — such as the health care giant CVS Health, the mining and construction equipment manufacturer Caterpillar, and the railroad conglomerate Norfolk Southern. “The case for this program is that these are the future leaders of the military,” said Freeman at the Quincy Institute. “That this could really be a jumping board for them, [but] we found a different story.” Weapons Manufacturers Reap The BenefitsWeapons manufacturers have been the program's top beneficiaries, with the largest military contractors — Boeing, General Dynamics, Lockheed Martin, Northrop Grumman, and Raytheon — receiving more than 45 fellows throughout the years. Weapons manufacturers have spent more than $2.5 billion on lobbying since 2001 and, in the last half decade, have hired roughly 700 lobbyists per year to urge federal lawmakers, agencies, and regulators to enact their preferred policies, according to a study from Brown University. The Brown University researchers found that the Defense Department has spent more than $14 trillion since the U.S. invasion of Afghanistan and warned that “exaggerated estimates of the military challenges posed by China have become the new rationale of choice in arguments for keeping the Pentagon budget at historically high levels.” Additionally, a 2023 Government Accountability Office investigation found that the Defense Department lacks reliable data and accounting systems to identify “efficiencies and potential cost savings among service requirements on contracts totaling billions of dollars.” Some program fellows have advocated for the Defense Department, Congress, and other agencies to ease restrictions on international weapons sales. A 2012 Northrop Grumman fellow and later a 2018 Lockheed Martin fellow recommended that the Defense Department consider revising the International Traffic in Arms Regulations, which governs the sales and export of military equipment to foreign countries. Lockheed Martin lobbied Congress on International Traffic in Arms regulations in 2008, according to lobbying data. Other weapons manufacturers — including Raytheon and Textron Systems — that have sponsored fellows have also lobbied the Defense Department and Congress on foreign military sales policies, disclosures show. The Quincy Institute report found that the “most self-serving company” seeking to loosen arms sales restrictions was the European Aeronautic Defence and Space Company, now known as Airbus. Airbus’ 2010 fellow urged the Defense Department to work with Congress and the State Department to ease foreign military sales restrictions and modify the “criteria for which export licenses are required,” the report states. The following year, Airbus lobbied the Defense Department, the Air Force, the Army, the Navy, Congress, and other federal agencies on “Foreign military sales,” “Arms Export Control Act,” and other issues. 💡 Follow us on Apple News and Google News to make sure you see our stories first, and to help make sure others see our breaking news as well. Bad Ethics, Neocons, And LawsuitsThe Secretary of Defense Executive Fellows program begins with a three-week orientation that has featured an array of speakers with a right-wing, neoconservative ideology, including some who helped craft the disastrous foreign policy of the George W. Bush administration, the report found. Steven Emerson, the infamous founder of the Investigative Project on Terrorism, a research nonprofit focused on “radical Islamic terrorist groups” that allegedly placed informants in an Ohio-based Muslim advocacy group in 2021, has spoken at the program’s orientation on at least four occasions. During one of those appearances, Emerson lectured on “The Stealth Jihad: Radical Fundamentalism Infiltration.” “Two days after Emerson spoke at the 2011 SDEF orientation, neo-Nazi Anders Behring Breivik killed 77 people in a terrorist attack in Norway; his manifesto cited Emerson twice,” noted the Quincy Institute report. Many of the companies where the fellows were placed have faced legal action from the Justice Department, including for submitting false payment claims to the Pentagon, a Lever review found. L3Harris Technologies, a communications equipment manufacturer, agreed to pay nearly $22 million to resolve allegations that it “knowingly submitted… false claims to the Department of Defense by including in contract proposals the cost of certain parts twice,” the Justice Department announced in 2023. L3Harris also paid $13 million to resolve allegations that it violated arms-trafficking laws in 2021 — the same year the company sponsored two program fellows. Lockheed Martin agreed to pay nearly $18 million to resolve multiple allegations that it violated federal law by submitting fraudulent government contracts. Pratt & Whitney, a subsidiary of weapons manufacturer Raytheon, agreed to pay more than $52 million to settle allegations for selling defective jet engine parts. 3M, a company that makes a variety of products including dental tools and Post-It Notes, agreed to pay $6 billion in 2023 to settle nearly 260,000 lawsuits brought by current and former military service members claiming they experienced hearing loss due to defective hearing protection 3M sold to the Defense Department. Additionally, the Defense Department has sent fellows to companies at the heart of the 2008 financial crisis and the ongoing opioid epidemic, including Morgan Stanley, JPMorgan, and McKinsey & Company. Military veterans were particularly hard hit by the 2008 financial crisis, and military veteran opioid overdose deaths increased by more than 50 percent from 2010 to 2019. The Defense Department also sent a fellow to work with Enron as the company was embroiled in an accounting scandal that eventually led to its bankruptcy and criminal charges for some of its executives. In his 2001 written report, the Enron fellow noted that some of his recommendations came from Enron staffers, but the Quincy report found that he didn’t disclose this information in his presentation to top Pentagon officials. The Quincy Institute researchers said they could only find evidence of the Defense Department enacting one of the policies the program’s fellows have recommended over the years: To expand its work with private contractors. To address their concerns about the Secretary of Defense Executive Fellows program, the Quincy Institute researchers recommend that the Defense Department consider post-employment restrictions for fellows that would prevent them from working for the same companies they were assigned to. The authors told The Lever that such a rule would help prevent the revolving door between public institutions and private companies, which has allowed nearly half of the program’s fellows to go on to work for government contractors. “[The SDEF program] has become a reliable method for corporations to disguise self-interested policy aspirations as helpful recommendations for [the Defense Department],” the researchers wrote. “If this program is to continue, [the Defense Department] must act forcefully to address and minimize the unsettling conflicts of interest embedded within [the program].”
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