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Nine members of the Defence Policy Board have ties to defence contractors Of the 30 members of the Defence Policy Board, the government-appointed group that advises the Pentagon, at least nine have ties to companies that have won more than $76 billion in defence contracts in 2001 and 2002. Four members are registered lobbyists, one of whom represents two of the three largest defence contractors. The board's
chairman, Richard Perle, resigned yesterday, March 27, 2003, amid
allegations of conflicts of interest for his representation of companies
with business before the Defence Department, although he will remain
a member of the board. Eight of Perle's colleagues on the board
have ties to companies with significant contracts from the Pentagon. Members of
the board disclose their business interests annually to the Pentagon,
but the disclosures are not available to the public. "The forms
are filed with the Standards of Conduct Office which review the
filings to make sure they are in compliance with government ethics,"
Pentagon spokesman Maj. Ted Wadsworth told the Centre for Public
Integrity. The companies
with ties to Defence Policy Board members include prominent firms
like Boeing, TRW, Northrop Grumman, Lockheed Martin and Booz Allen
Hamilton and smaller players like Symantec Corp., Technology Strategies
and Alliance Corp., and Polycom Inc. Defence companies
are awarded contracts for numerous reasons; there is nothing to
indicate that serving on the Defence Policy Board confers a decisive
advantage to firms with which a member is associated. According to
its charter, the board was set up in 1985 to provide the Secretary
of Defence "with independent, informed advice and opinion concerning
major matters of defence policy." The members are selected
by and report to the Under Secretary of Defence for Policy-currently
Douglas Feith, a former Reagan administration official. All members
are approved by the Secretary of Defence. The board's quarterly
meetings-normally held over a two-day period-are classified, and
each session's proceedings are summarized for the Defence Secretary.
The board does not write reports or vote on issues. Feith, according
to the charter, can call additional meetings if required. Notices
of the meetings are filed at least 15 days before they are held
in the Federal Register. The board,
whose list of members reads like a who's who of former high-level
government and military officials, focuses on long-term policy issues
such as the strategic implications of defence policies and tactical
considerations, including what types of weapons the military should
develop. Michael O'Hanlon,
a military expert at The Brookings Institution, told Time magazine
in November 2002 that the board "is just another [public relations]
shop for Rumsfeld." Former members said that the character
of the board changed under Rumsfeld. Previously the board was more
bi-partisan; under Rumsfeld, it has become more interested in policy
changes. The board has no official role in policy decisions. The agendas
for the last three meetings, which were obtained by the Centre,
show a variety of issues were discussed. The Oct. 10-11, 2002 meeting
was devoted to intelligence briefings from the Defence Intelligence
Agency and other administration officials. One of the first items
on the agenda was an ethics brief by the Office of the General Counsel. In December
2002, a two-hour intelligence briefing, strategy, North Korea, and
the Defence Advanced Research Projects Agency were on the agenda.
In February 2003, the topics discussed on the first day included
North Korea, Iran and Total Information Awareness, the controversial
Pentagon research programme that aims to gather and analyze a vast
array of information on Americans. As the Center previously reported,
research for the program is being conducted by private contractors. Richard Perle,
who has been a very public advocate of the war in Iraq, resigned
the chairmanship of the Defence Policy Board after being criticized
in recent weeks because of his involvement in companies that have
significant business before the Defence Department. He did not return
the centre's phone calls. In a March
24 letter, Rep. John Conyers, the ranking Democrat on the House
of Representatives Judiciary Committee, asked the Pentagon's inspector
general to investigate Perle's role as a paid adviser to the bankrupt
telecommunications company Global Crossing Ltd. The Hamilton, Bermuda-based
company sought approval of its sale of overseas subsidiaries from
the Committee on Foreign Investment in the United States, a government
panel that can block sales or mergers that conflict with U.S. national
security interests. Rumsfeld is a member of the Committee. Perle reportedly
advised clients of Goldman Sachs on investment opportunities in
post-war Iraq, and is a director with stock options of the U.K.-based
Autonomy Corp., whose customers include the Defence Department. "Mr. Perle
is considered a 'special government employee' and is subject to
government ethics prohibition-both regulatory and criminal-on using
public office for private gain," Rep. Conyers wrote in the
letter obtained by the Centre. Potential conflicts
not limited to Perle Perle, however,
is not the only Defence Policy Board member with ties to companies
that do business with the Defence Department: Retired Adm.
David Jeremiah, a former vice chairman of the Joint Chiefs of Staff
who served over 38 years in the Navy, is a director or advisor of
at least five corporations that received more than $10 billion in
Pentagon contracts in 2002. Jeremiah also sat on the board of Getronics
Government Solutions, a company that was acquired by DigitalNet
in December 2002 and is now known as DigitalNet Government Solutions.
According to a news report by Bloomberg, Richard Perle is a director
of DigitalNet Holdings Inc., which has filed for a $109 million
stock sale. Retired Air
Force Gen. Ronald Fogleman sits on the board of directors of companies
which received more than $900 million in contracts in 2002. The
companies, which all have longstanding business relationships with
the Air Force and other Defence Department branches, include Rolls-Royce
North America, North American Airlines, AAR Corporation and the
Mitre Corp. In addition to being chief of staff for the Air Force,
Fogleman has served as a military advisor to the Secretary of Defence,
the National Security Council and the President. He also served
as commander-in-chief of the U.S. Transportation Command, commander
of Air Mobility Command, the 7th Air Force and the Air Component
Command of the U.S./ROK Combined Forces Command. Retired Gen.
Jack Sheehan joined Bechtel in 1998 after 35 years in the U.S. Marine
Corp. Bechtel, one of the world's largest engineering-construction firms, is among the companies bidding for contracts to rebuild Iraq. The company had defence contracts worth close to $650 million in 2001 and more than $1 billion in 2002. Sheehan is currently a senior vice president and partner and responsible for the execution and strategy for the region that includes Europe, Africa, the Middle East and Southwest Asia. The four-star general served as NATO's Supreme Allied Commander Atlantic and Commander in Chief U.S. Atlantic Command before his retirement in 1997. After his leaving
active duty, he served as Special Advisor for Central Asia for two
secretaries of Defence. Former CIA director James Woolsey is a principal in the Paladin Capital Group, a venture-capital firm that like Perle's Trireme Partners is soliciting investment for homeland security firms. Woolsey joined consulting firm Booz Allen Hamilton as vice president in July 2002. The company had contracts worth more than $680 million in 2002. Woolsey told the Wall Street Journal that he does no lobbying and that none of the companies he has ties to have been discussed during a Defence Policy Board meeting. Previously, Woolsey worked for law firm Shea & Gardner. He has held high-level positions in two Republican and two Democratic administrations. William Owens,
another former high-level military officer, sits on boards of five
companies that received more than $60 million in defence contracts
last year. Previously, he was president, chief operating officer
and vice chair of Science Applications International Corporation
(SAIC), among the ten largest defence contractors. One of the companies,
Symantec Corp., increased its contracts from $95,000 in 2001 to
more than $1 million in 2002. Owens, who served as vice chairman
of the Joint Chiefs of Staff, is widely recognized for bringing
commercial high technology into the U.S. Department of Defence.
He was the architect of the Revolution in Military Affairs (RMA),
an advanced systems technology approach to military operations that
represents a significant change in the system of requirements, budgets
and technology for the U.S. military since World War II. Owens serves
on the boards of directors for several technology companies, including
Nortel Networks, ViaSat and Polycom. Harold Brown,
a former Secretary of Defence under President Jimmy Carter, and
James Schlesinger, who has served as CIA director, defence secretary
and energy secretary in the Carter and Nixon administrations, are
two others that have ties to defence contractors. Brown, a partner
of Warburg Pincus LLC, is a board member of Philip Morris Companies
and a trustee of the Rand Corporation, which respectively had contracts
worth $146 million and $83 million in 2002. Schlesinger, a senior
adviser at Lehman Brothers, chairs the board of trustees of the
Mitre Corp., a not-for-profit that provides research and development
support for the government. Mitre had defence contracts worth $440
million in 2001 and $474 million in 2002. Chris Williams
is one of four registered lobbyists to serve on the board, and the
only one to lobby for defence companies. Williams, who served as
a special assistant for policy matters to Defence Secretary Rumsfeld
after having been in a similar capacity for Sen. Trent Lott (R-Miss.),
joined Johnston & Associates after leaving the Pentagon. Although
the firm had represented Lockheed Martin prior to Williams' arrival,
the firm picked up two large defence contractors as clients once
Williams was on board: Boeing, TRW and Northrop Grumman, for which
the firm earned a total of more than $220,000. The firm lobbied
exclusively on defence appropriations and related authorization
bills for its new clients. Johnston & Associates is more often
employed by energy companies; its founder, J. Bennett Johnston,
is a former Democratic senator from Louisiana who chaired the Energy
Committee. None of the
members with ties to defence contractors responded to requests for
comment. The board's
membership also contains other well known Washington hands, including
some who are registered lobbyists. Richard V. Allen, a former Nixon
and Reagan administration official, who is now a senior counselor
to APCO Worldwide, registered as a lobbyist for Alliance Aircraft. Former Congressional representative Tillie Fowler joined the law firm Holland & Knight in 2001. She served eight years in the U.S. House of Representatives where she was a member of several committees including the House Armed Services Committee and the Transportation Committee. In 2002 she lobbied for such clients as the Minnesota Department of Transportation and the American Plastics Council. Thomas S. Foley
is a partner at Akin, Gump, Strauss, Hauer & Feld law firm,
which he joined in 2001. He was the U.S. ambassador to Japan from
1997 to 2001 and was the Speaker of the House of Representatives
from 1989 to 1994, after being a representative since 1965. Foley
is a registered lobbyist, but has no defence clients.
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