- Of the 30 members of the Defense 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 defense contracts in 2001 and 2002. Four
members are registered lobbyists, one of whom represents two of the three
largest defense contractors.
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- 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 Defense 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.
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- 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 Center for
Public Integrity.
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- The companies with ties to Defense 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.
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- Defense companies are awarded contracts for numerous
reasons; there is nothing to indicate that serving on the Defense Policy
Board confers a decisive advantage to firms with which a member is associated.
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- According to its charter, the board was set up in 1985
to provide the Secretary of Defense "with independent, informed advice
and opinion concerning major matters of defense policy." The members
are selected by and report to the Under Secretary of Defense for Policy-currently
Douglas Feith, a former Reagan administration official. All members are
approved by the Secretary of Defense. The board's quarterly meetings-normally
held over a two-day period-are classified, and each session's proceedings
are summarized for the Defense 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.
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- ADDITIONAL RESOURCE
- For additional information, visit the Web site of PBS'
<http://www.pbs.org/now/politics/conflictofinterest.html>"Now
With Bill Moyers."
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- 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 defense policies and
tactical considerations, including what types of weapons the military should
develop.
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- 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.
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- The <http://www.public-i.org/dtaweb/downloads/story_01_032803_doc_meetings.pdf>agendas
for the last three meetings, which were obtained by the Center, show a
variety of issues were discussed. The Oct. 10-11, 2002 meeting was devoted
to intelligence briefings from the Defense 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.
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- In December 2002, a two-hour intelligence briefing, strategy,
North Korea, and the Defense 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 program that aims to gather and analyze a vast array of information
on Americans. As the Center <http://www.public-i.org/dtaweb/report.asp?ReportID=484&L1=10&L2=10&L3=0&L4=0&L5=0>previously
reported, research for the program is being conducted by private contractors.
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- Richard Perle, who has been a very public advocate of
the war in Iraq, resigned the chairmanship of the Defense Policy Board
after being criticized in recent weeks because of his involvement in companies
that have significant business before the Defense Department. He did not
return the Center's phone calls.
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- 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.
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- 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 Defense
Department.
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- "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 <http://www.public-i.org/dtaweb/downloads/story_01_032803_doc_letter.pdf>wrote
in the letter obtained by the Center.
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- Potential conflicts not limited to Perle
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- Perle, however, is not the only Defense Policy Board
member with ties to companies that do business with the Defense Department:
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- 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.
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- 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 Defense 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 Defense, 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.
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- Retired Gen. Jack Sheehan joined Bechtel in 1998 after
35 years in the U.S. Marine Corp.
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- Bechtel, one of the world's largest engineering-construction
firms, is among the companies bidding for contracts to rebuild Iraq. The
company had defense 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 Defense.
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- 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 Defense Policy
Board meeting. Previously, Woolsey worked for law firm Shea & Gardner.
He has held high-level positions in two Republican and two Democratic administrations.
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- William Owens, another former high-level military officer,
sits on boards of five companies that received more than $60 million in
defense contracts last year. Previously, he was president, chief operating
officer and vice chair of Science Applications International Corporation
(SAIC), among the ten largest defense 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 Defense. 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.
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- Harold Brown, a former Secretary of Defense under President
Jimmy Carter, and James Schlesinger, who has served as CIA director, defense
secretary and energy secretary in the Carter and Nixon administrations,
are two others that have ties to defense 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 defense contracts worth $440 million in 2001 and $474 million in 2002.
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- Chris Williams is one of four registered lobbyists to
serve on the board, and the only one to lobby for defense companies. Williams,
who served as a special assistant for policy matters to Defense 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 defense 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 defense 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.
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- None of the members with ties to defense contractors
responded to requests for comment.
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- 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.
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- 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.
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- 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 defense clients. +++
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- http://www.publicintegrity.org/dtaweb/report.asp?ReportID=513&L1=10&L2=10&L3=0&L4=0&L5=0
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