Tuesday, February 23, 2016

Non-Compete Clause For Admirals

One of the common frustrations cited in discussions of uniformed military leadership is the blatant conflict of interest represented by Admirals and Generals who retire and then take positions on the boards of defense industry companies.  It doesn’t take much imagination to see the conflict of interest.  Is an Admiral more or less likely to be offered a lucrative board position if he supports the company’s product offering while he is in active service?  Of course he’ll be more likely to get a position if he supports the product!  Unfortunately, that lessens the likelihood that he’ll kill flawed programs while actively serving. 

Our uniformed leaders are intense pressure from the defense industry and Congressmen who have a vested interest in the manufacturing/jobs opportunities of defense programs as it is.  To add on the pressure of prospective board positions is asking a lot of our leaders.  Well, actually, it’s not.  It’s just asking that they act with honor, integrity, and courage – you know, the kind of stuff that’s routinely expected from the job position.  Clearly, though, we have far too few men of honor, integrity, and courage in the upper ranks since we have lots of flawed programs and almost no uniformed nay-sayers.  Once in a while we get an Admiral or General who speaks out about something – after they retire!  What good does that do?  Where were these people while they were still serving?  I give no credit to someone who speaks out after they retire.  That’s just a lack of courage and conviction.

All right, I could rant on about this all day but the problem is evident and further complaining won’t accomplish anything.  So, what can realistically be done?  Sure, I’d like to fire every serving Admiral and General but that’s not realistic.  Plus, more would take their place and the problem would continue.  I’d like to investigate and arrest them all but, again, that’s not realistic although it would be effective.  So, what can be done?

One simple solution is to ban Admirals and Generals from joining defense industry companies.  There is precedent, of a sorts, for this.  In industry, mid and upper level employees have to sign a non-compete clause as a condition of their employment.  The non-compete document prohibits them from working in the same field for which they are currently working for a period of time, typically one to several years.  Thus, an employee can’t join a company, accumulate detailed technical knowledge about a product, and then quit and go work for a competitor for more money and do the same job.

A similar non-compete clause for Admirals and Generals would ban them from working for defense companies and eliminate the conflict of interest while serving.  They’ll still be under pressure from defense companies but at least there won’t be the lure of lucrative board positions to influence their decisions.  Maybe then, bad programs will be more likely to die.

Will this solve all our procurement problems?  No, not by a long shot!  It will, however, eliminate one obvious problem and at no cost.  It’s a simple document that Admirals and Generals would have to sign as a condition of employment and it’s realistic and easy to implement.  It would be step in the right direction.

17 comments:

  1. Especially since a O8 Rear Admiral Upper half after 30 years gets over $100,000 a year in retirement pay. They are not exactly starving and living in a cardboard box

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  2. So you do realize that there are ethics laws that cover post-government employment, including lifetime bans ... Every senior government official is required to meet with Legal regarding these restrictions and is given a post-employment letter that specifically highlights their individual restrictions. For example ...

    Restrictions on Post-Government Employment
    Ethics Guide

    Post-Government Employment (FAQ)

    Post-Government Employment Under the Ethics Pledge (FAQ)

    PGE Summary Guide

    (AFTER YOU LEAVE FEDERAL SERVICE)

    After you leave Federal service, 18 U.S.C. § 207 imposes certain post-Government employment restrictions that may limit the type of work you may perform for your new employer for certain periods of time. (See 5 C.F.R. § 2641.) The Procurement Integrity Act (see 41 U.S.C. § 2104 and 48 C.F.R. §§ 3-104.1 through .09) imposes additional restrictions for certain employees who participated in costly procurement work. Former employees who are carrying out official duties as an employee or as an elected or appointed official of a tribal organization or intertribal consortium are not subject to 18 U.S.C. § 207 restrictions if they advise the Government in writing of any personal and substantial involvement they had as a Government employee in connection with the matter. (See 25 U.S.C. § 450i(j).)

    Lifetime Restriction [18 U.S.C. § 207(a)(1)]

    If you participated personally and substantially in any particular matter (grants, contracts, licenses, permits, applications, litigation, etc.), involving specific parties, you may never communicate with the intent to influence on behalf of any non-Federal entity, to any Federal department, agency, or court regarding that same particular matter.

    Two-Year Restriction [18 U.S.C. § 207(a)(2)]

    For matters under your official responsibility during your last year of Government service, you are restricted for two years after you leave Government service from representing any non-Federal entity to any Federal department, agency, or court regarding those matters.

    One-Year Restriction on Aiding and Advising [18 U.S.C. § 207(b)]

    For one year after Government service terminates, you may not aid or advise any non-Federal entity (other than the United States) concerning any ongoing trade or treaty negotiation in which you participated personally and substantially during your last year of Government service.

    So it may seem that a Flag Officer leaves the Pentagon on Fri and goes to work for a "Boeing" on Monday, but this is far from the truth. Much of it depends on their individual roles while in Government service and if they were involved with contractual actions.

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    1. All of which did not prevent Boeing from hiring

      Admiral Edmund P. Giambastiani, Jr.
      Director Since 2009

      Seventh Vice Chairman of the U.S. Joint Chiefs of Staff; Former NATO Supreme Allied Commander Transformation; Former Commander, U.S. Joint Forces Command. Admiral Giambastiani served as Seventh Vice Chairman of the U.S. Joint Chiefs of Staff from 2005 to 2007

      http://www.boeing.com/company/general-info/corporate-governance.page

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    2. Six weeks after he retired, the head of the USMC joined a major V-22 parts supplier.

      General James F. Amos, USMC, (ret.) Joins LORD Corporation Board of Directors

      http://www.prnewswire.com/news-releases/general-james-f-amos-usmc-ret-joins-lord-corporation-board-of-directors-300016280.html

      Military retirees are still members of the reserve force. I'd like them to have to request release from the reserves for certain jobs, with a lifetime loss of retired pay.

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    3. While the V-22 was reviewed for cancellation in 2001, there was heavy political lobbying to save it. The Boeing effort was led by General Richard Hearny, the former head of Marine Aviation, who retired in 1996 and was Vice President for business development at Boeing. The lobby effort mccorklefor Boeing's partner, Bell Helicopter, was led by its Vice President for government relations, General Terrence R. Dake, who retired from the Marines in 2000 after heading Marine Aviation. The effort at Headquarters Marine Corps was led by the head of Marine Aviation, General Fred McCorkle (right).
      Soon after retiring from the Marines in October 2001, McCorkle joined the board of directors and as a senior advisor for GKN Aerospace Services (V-22 fuel tanks). He also serves on the Rolls-Royce North America board of directors (V-22 engines), and is a member of the board of directors of Lord Corporation (V-22 components). In addition, he has served as a consultant for Boeing Aerospace (V-22 maker) and Optical Air Data Systems (V-22 low airspeed indicator).

      While these Generals receive an $8000 a month retirement check from the Marines, a tradition emerged in which the head of Marine Aviation is financially rewarded after retirement for not rocking the boat. General Clay Comfort said that his older generation of retired Generals consider this practice despicable.

      http://www.g2mil.com/V-22survive.htm

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    4. The laws you cited seem to be focused on former govt employees turning around and lobbying which is not what we're discussing, here. We're talking, essentially, about kickbacks to former Generals and Admirals (by way of board directorships) for their assistance in promoting a company's products during their active duty time.

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    5. For what I've seen in the past, rules are made to be broken, usually with impunity, especially if you got them stars on your shoulders.

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  3. A friend of mine retired as a Marine O-5 F-18 pilot and he works for Amazon managing a warehouse / distribution center. He's not influence peddling. With some exceptions, most officers of flag rank get to that rank by being yes men, politicians and putting their careers over the welfare of their men and their country. When they retire, it's time to really cash in. Putting sailors in an LCS when their may be a war is an example of greed run amok.

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  4. As an overall reply, fact of the matter is that there are laws and these laws are being followed. Are there loop holes and some individuals that have specific personal interests in mind? Sure ... Every industry and walk of life has the same challenges. What it boils down to is personal integrity while wearing the uniform or representing the federal government. That is the problem, not the system or the laws that govern it.

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    1. I am not aware of any law preventing a former General or Admiral from taking a board of director position for a company that he was involved with during active service. The laws you cited do not prevent it. If you know of such a law let me know. Otherwise, I'm sticking with the position that there is no such law and my post suggestion stands.

      To your point about personal integrity, if our senior military leadership had that we wouldn't be talking about this. Does it seem likely that not a single General or Admiral has spoken against the F-35? Does it seem reasonable that there is not one person who feels that the F-35 is not the greatest project ever conceived by mankind? No likely! If these people had any integrity they'd be speaking out or resigning in protest.

      You're correct that integrity (or lack thereof) is the problem but I'm offering a legislative solution since our military clearly lacks integrity.

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    2. I believe there is a 2 year clause about working on something after overseeing it in the federal executive branch

      However. It doesn't stop them from bring consultants just employees

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    3. I'm not aware of a 2 year clause. Can you cite the law?

      Even if true, 2 years just means a slight delay in collecting the payback for promoting the company's product. The ban needs to be lifetime.

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  5. Basically we have a system of legalized corruption here. Admirals and generals are allowed to use their influence to buy favorable weapons.

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  6. CNO ... We live in the land of the free and the home of the brave, and we have free speech. Anyone who has traveled abroad and seen a different construct knows how lucky we are. So, with that, you have to accept the good with the bad. Yes, there is nothing that prevents a former Flag / Senior Government official from taking a board position as you mention above, but the matters you formally participate in on behalf of the non-government entity to the government are restricted. So, if I sign the multi-year contract for the purchase of 200 JSF as a government rep can I work for LM; sure I can. Can i then represent back to the government as a LM employee the F-35; nope.

    It is not as clean as we may want it but there are restrictions and safeguards in place that for the most part do control bad behavior. As for Senior military making disparaging remarks after retirement, not really sure how to answer that one. Best I can say is that while in uniform, you are dealt a lot of lemons and try your best to make lemonade. Afterwards, do you say it was all a farce and I sold you snake oil? Gets back to personal integrity. Stand for what you believe in and just like you have the right to free speech, believe we have to also respect the right to remain silent.

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    1. The issue is not free speech. The issue is conflict of interest. That's a well established legal and political precedent. Conflict of interest is considered inherently "evil". Generals/Admirals making decisions about programs from companies that they will later sit on the boards of directors for is a blatant conflict of interest.

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  7. Disagree ... First, how would an FO/GO know that he/she was going to have a conflict of interest? And, if they did, they are obligated to recuse themselves; I have seen it happen. Secondly, they are obligated to following the law after they retire and again, if they knowing have a conflict, they must now recuse themselves as industry officials. If people are going to be morally unethical and/or break the law, not much we can do about that.

    Agree to disagree.

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    1. You may have misunderstood my proposition. I'm not suggesting that Adm/Gen do anything different while serving, only that they be prohibited from taking defense industry positions after they leave service. Simple as that. That way, there can't be any conflict of interest and no one can even be tempted.

      Secondly, if people are going to break the law, there is quite a bit we can do about it - we arrest them and put them on trial!

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