Mattis duped by Theranos; The swamp's revolving door at the Pentagon

In The American Conservative, Kelley Beaucar Vlahos reports,

Before he became lionized as the “only adult in the room” capable of standing up to President Trump, General James Mattis was quite like any other brass scoping out a lucrative second career in the defense industry. And as with other military giants parlaying their four stars into a cushy boardroom chair or executive suite, he pushed and defended a sub-par product while on both sides of the revolving door. Unfortunately for everyone involved, that contract turned out to be an expensive fraud and a potential health hazard to the troops.

In 2012, while he was head of Central Command, the Marine General pressed the Army to procure and deploy blood testing equipment from a Silicon Valley company called Theranos. He communicated that he was having success with this effort directly to Theranos’s chief executive officer. Even though an Army health unit tried to terminate the contract due to its not meeting requirements, according to POGO, Mattis kept the pressure up. Luckily, it was never used on the battlefield.

Maybe it shouldn’t be a surprise but upon retirement in 2013, Mattis asked a DoD counsel about the ethics guiding future employment with Theranos. They advised against it. So Mattis went to serve on its board instead for a $100,000 salary. Two years after Mattis quit to serve as Trump’s Pentagon chief in 2016, the two Theranos executives he worked with were indicted for “massive” fraud, perpetuating a “multi-million dollar scheme to defraud investors, doctors and patients,” and misrepresenting their product entirely. It was a fake.

But assuming this was Mattis’s only foray into the private sector would be naive. When he was tapped for defense secretary—just three years after he left the military—he was worth upwards of $10 million. In addition to his retirement pay, which was close to $15,000 a month at the time, he received $242,000 as a board member, plus as much as $1.2 million in stock options in General Dynamics, the Pentagon’s fourth largest contractor. He also disclosed payments from other corporate boards, speech honorariums—including $20,000 from defense heavyweight Northrop Grumman—and a whopping $410,000 from Stanford University’s public policy think tank the Hoover Institution for serving as a “distinguished visiting fellow.”

Never for a moment think that Mattis won’t land softly after he leaves Washington—if he leaves at all. Given his past record, he will likely follow a very long line, as illustrated by POGO’s explosive report, of DoD officials who have used their positions while inside the government to represent the biggest recipients of federal funding on the outside. They then join ex-congressional staffers and lawmakers on powerful committees who grease the skids on Capitol Hill. And then they go to work for the very companies they’ve helped, fleshing out a small army of executives, lobbyists, and board members with direct access to the power brokers with the purse strings back on the inside.

Welcome to the Swamp.

...To get a sense of the demand, according to POGO (Project on Government Oversight), which had to compile all of this information through Freedom of Information requests, there were 625 instances in 2018 alone in which the top 20 defense contractors (think Boeing, General Dynamics, Lockheed Martin) hired senior DoD officials for high-paying jobs—90 percent of which could be described as “influence peddling.”

...If a system is so motivated by personal gain (civil servants always mindful of campaign contributions and private sector job prospects) on one hand, and big business profits on the other, is there room for merit or innovation? One need only look at Lockheed’s F-35 joint strike fighter, the most expensive weapon system in history, which was relentlessly promoted over other programs by members of Congress and within the Pentagon despite years of test failures and cost overruns, to see what this gets you: planes that don’t fly, weapons that don’t work, and shortfalls in other parts of the budget that don’t matter to contractors like pilot training and maintenance of existing systems.

...“Are we approving weapons systems that are safe or not? And are we putting [servicemembers’] lives on the line” to benefit the interests of industry?

...current acting DoD Secretary Patrick Shanahan spent 31 years working for Boeing, which gets about $24 billion a year as the Pentagon’s second largest contractor. He was Boeing’s senior vice president in 2016 just before he was confirmed as Trump’s deputy secretary of defense in 2017. Last week he recused himself from all matters Boeing, but he wasn’t always so hands off. At one point, he “prodded” for the purchase of 12 $1.2 billion Boeing F-15X fighter planes, according to Bloomberg.

But the revolving door is so much more pervasive and insidious than POGO could possibly catalogue. So says Franklin “Chuck” Spinney, who worked as a civilian and military officer in the Pentagon for 31 years, beginning in 1968. He calls the military industrial complex a “quasi-isolated political economy” that is in many ways independent from the larger domestic economy. It has its own rules, norms, and culture, and unlike the real world, it is self-sustaining—not by healthy competition and efficiency, but by keeping the system on a permanent war footing, with money always pumping from Capitol Hill to the Pentagon to the private sector and then back again. Left out are basic laws of supply and demand, geopolitical realities, and the greater interest of society.

...Unfortunately, there is little incentive in Capitol Hill or at the Pentagon to do the very least: pull the purse strings, close loopholes, encourage real competition, and end cost-plus practices.

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