In advance of his Jan. 19 nomination hearing, retired Army Gen. Lloyd Austin, whom President-elect Biden has picked to lead the Defense Department, has disclosed the extent of his financial relationships with defense contractors Raytheon Technologies and Booz Allen Hamilton, as well as other companies he has worked for since leaving the military.
Austin is a member of Raytheon's board of directors. If confirmed as defense secretary, he expects a cash payout between $750,000 and $1.7 million when he divests his shares in the company and associated entities, according to financial disclosure documents first reported by Bloomberg.
"The cash payout will be determined based upon the closing value of stock of each company as of the date of my resignation," Austin wrote in his government ethics agreement. "Until I have received the cash payout from Raytheon, I will not participate personally and substantially in any particular matter that to my knowledge has a direct and predictable effect on the ability or willingness of Raytheon, to provide this payment to me unless I first obtain a written waiver."
Austin also promises to recuse himself for one year from decisions involving Raytheon.
Austin joined the board of United Technologies Corp. upon retiring from the Army in 2016. He became a director on Raytheon's board when the company acquired United Technologies in April 2020.
In 2016, Austin received $380,000 in total compensation from Raytheon; $338,000 in 2017; $336,000 in 2018; and $351,000 in 2019, according to the company.
If confirmed, Austin will also leave the board of Booz Allen Hamilton, where has made at least $200,000, according to his disclosure documents.
In addition, the retired general will close Austin Strategy Group, his private consulting firm, and part ways with Pine Island Capital Advisors, a firm that includes other members of Biden's team.
Austin also sits on boards at steel firm Nucor and Tenet Healthcare and will divest himself from those companies as well.
While it is the Senate's job to confirm presidential appointments, Austin's nomination will receive additional scrutiny in the House as it has been less than seven years since he retired from the military and the full Congress must grant him a waiver allowing him to serve as defense secretary. His House hearing is slated for Jan. 21.
Recent defense secretaries also have a history of working for defense contractors.
Retired Marine Corps Gen. Jim Mattis, who was President Trump's first defense secretary, was previously a General Dynamics board member. Pat Shanahan, who served as acting defense secretary, joined the Trump administration after more than 30 years as a Boeing executive. Mark Esper, who served as defense secretary until he was fired by Trump several weeks ago, had previously worked as a Raytheon executive.