Shanahan left Boeing last week, promises recusal

By Marjorie Censer / June 12, 2017 at 10:41 AM

Patrick Shanahan, nominated to serve as deputy defense secretary, says in a new letter that his Boeing employment ended June 7 and that he will "not participate personally and substantially" in matters in which Boeing is a party.

The June 7 letter, sent to a Pentagon ethics official, lays out the steps Shanahan will take to avoid conflicts of interest.

"Following my departure from the Boeing Company, I will receive a lump sum annual cash incentive payment, as well as a cash performance award payment, for the work I performed up to the date of my departure from the Boeing Company," Shanahan writes. "These payments will be pro-rated based on service time. These payments will be made within 30 days of leaving the Boeing Company, and are consistent with payments made to other departing Boeing executives. The Boeing Company will use an objective formula to calculate these payments. If these payments are not made before I assume the duties of Deputy Secretary of Defense, they will be forfeited."

He notes that he will not participate in matters in which Boeing is a party or represents a party unless authorized in writing.

Shanahan writes that within 90 days of his confirmation, he will divest all of his common stock and vested stock options in Boeing.

"Until I have divested all of these financial interests, I will not participate personally and substantially in any particular matter that to my knowledge has a direct and predictable effect on the financial interests of the Boeing Company, unless I first obtain a written waiver . . . or qualify for a regulatory exemption," Shanahan writes.

He also names 87 entities in which he has interests, including defense contractors BAE Systems, CACI International, L3 Technologies and Orbital ATK. Shanahan writes that he will divest his interest in those entities within 90 days of confirmation and will not participate in matters that have a direct effect on a particular entity until he has divested it.

The letter was first reported by Politico.

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