Austin's connection to Raytheon will likely be scrutinized during confirmation

By Tony Bertuca  / December 8, 2020

President-elect Biden has said he intends to nominate retired Army Gen. Lloyd Austin for defense secretary, putting a spotlight on the former four-star's time as a member of Raytheon Technologies' board of directors.

Austin, a 40-year Army veteran who previously served as chief of U.S. Central Command, retired from the military in 2016 and joined Raytheon's board shortly thereafter.

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.

Austin also sits on boards at steel firm Nucor and Tenet Healthcare.

In July, Austin joined Pine Island Capital Partners, a private equity firm where Biden's secretary of state nominee Tony Blinken is a partner, along with former Pentagon policy chief Michèle Flournoy, who had been in the running for the defense secretary job. The firm has drawn scrutiny because of its undisclosed list of clients.

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 vote to authorize a waiver allowing him to serve as defense secretary.

President Trump successfully got a waiver from Congress in 2017 that allowed retired Marine Corps Gen. Jim Mattis to serve as defense secretary. It was the first time such a waiver had been granted in nearly 70 years.

Meanwhile, several recent defense secretaries have been questioned on Capitol Hill about their work for defense contractors, including Mattis, who was previously a General Dynamics board member. Pat Shanahan, who served as acting defense secretary, entered government service after more than 30 years as a Boeing executive.

Most recently, Mark Esper, who served as defense secretary until he was fired by Trump several weeks ago, had previously worked as a Raytheon executive.

During his Senate Armed Services Committee confirmation hearing, Esper traded barbs with Sen. Elizabeth Warren (D-MA) over his work at Raytheon. At the time, Warren said Esper's refusal to commit to recuse himself from all matters involving Raytheon "smacks of corruption, plain and simple."

"I went to war for this country," Esper said at the time. "I served overseas for this country. I've stepped down from jobs that paid me well more than [government work]. Each time, it was to serve the public good."

Esper was later confirmed by vote of 90-8.

Mandy Smithberger, director of the Center for Defense Information at the Project on Government Oversight, said Austin's nomination is unlikely to sit well with some progressive groups, many of whom had also opposed Flournoy for her work with defense contractors.

"Given our endless wars and budgets, it's disappointing to see little indication of real reform," she said.

Dannielle Brian, POGO's executive director, tweeted: "OH COME ON. A General and Raytheon board? Possibly the worst of all options. Bad news for civilian control and any real distance from the military-industrial- complex."

Michael O'Hanlon, an analyst at the Brookings Institution, has a different view.

"If being for U.S. defense industry is wrong, I don't want to be right," he said in an email. "Yes there are occasional scandals and yes there are inefficiencies. And (hopefully) some healthy profits, too. Our defense industry makes the best military equipment in the world, without which we wouldn't be so safe and secure and successful. I would prefer that secdefs have ties to industry and/or the defense [research and development] establishment, moreover, so they understand technology and where it's headed."

Tom Spoehr, a former Army general who now works as a defense analyst at the Heritage Foundation, argued in a recent essay that "critics of defense industry executives working in DOD speculate that these individuals will act to enrich their former pals, fail to hold them accountable, and overlook transgressions."

Except, Spoehr said, "there is zero evidence of such behavior."

Spoehr instead argues that defense officials who have experience working for defense contractors are better equipped than others to push "big defense companies to reduce their prices and ensure the Pentagon receives a better-quality product."

Biden, meanwhile, published a piece in The Atlantic on Tuesday explaining why he chose Austin.

"The fact is, Austin's many strengths and his intimate knowledge of the Department of Defense and our government are uniquely matched to the challenges and crises we face," Biden wrote. "He is the person we need in this moment."

Biden did not mention Austin's work in the private sector, but he did highlight the former general's experience with military logistics, arguing it will be needed to distribute the COVID-19 vaccine to the entire nation.

"The next secretary of defense will need to immediately quarterback an enormous logistics operation to help distribute COVID-19 vaccines widely and equitably," Biden wrote. "Austin oversaw the largest logistical operation undertaken by the Army in six decades -- the Iraq drawdown."