Published on Thursday, May 31, 2001 in Newsday



by Patrick J. Sloyan

 

WASHINGTON - Executives from some of the nation's largest defense contractors have been tapped by the Bush administration for Pentagon jobs overseeing a defense budget that now gives the lion's share of $94 billion in taxpayer money to their former employers.

Those with the inside track for top-level Pentagon posts come from Lockheed-Martin, General Dynamics and Northrop-Grumman, companies that get a combined $27.6 billion a year from the Pentagon.

These are the very same corporations that sell more than a third of the aircraft, ships, electronics and high- dollar weapons that account for most of the $60 billion a year now spent on Pentagon procurement. And, these companies get the biggest chunk of the additional $34 billion earmarked for research and development, including a hefty rise in such spending for Bush's controversial defense against ballistic missiles.

The selections by Bush and Defense Secretary Donald Rumsfeld illustrate another trend emerging with the top-level Pentagon nominations. While the Constitution calls for civilian control of the military, the administration has picked a retired Navy captain to head the Air Force and a former Army general to oversee the Army.

While Rumsfeld's aides defended the selections, some Pentagon officials bridled because of their daily battles with poor contractor performance and cost overruns. "They are bringing in the sharks," said Chuck Spinney, an Air Force system analyst. But Spinney conceded that Rumsfeld was caught in the predictable bind of finding experts for a new administration.

Bush plans to nominate Albert Smith, a Lockheed-Martin vice president, for the newly elevated position of undersecretary of the Air Force, according to Defense Department officials.

Already selected were Gordon England, vice president of General Dynamics, for Navy secretary and James G. Roche, the 23-year retired Navy man and an executive with Northrop-Grumman, for the new post of Air Force secretary.

In addition, retired Brig. Gen. Thomas E. White has been named Army secretary. The service secretaries would serve as Rumsfeld's executive committee, with new stature and powers. Service secretaries over the years have lost influence as they were removed from the military chain of command.

The selections were defended by Rear Adm. Craig Quigley, Defense Department spokesman, who contends Rumsfeld was merely selecting the best qualified and most experienced persons for the positions.

"In all cases, the president tries to find, using the recommendations of his cabinet officials and others, to find the person that he feels is best suited to hold the position," Quigley said.

William Hartung of the World Policy Institute noted that both Bush and Rumsfeld are attempting to establish a corporate-style structure in Washington.

"They probably could find some very qualified executives who are not in the defense industry," Hartung said. "After all, the defense firms don't have the best reputations for controlling costs." The Pentagon should shop around at Massachusetts Institute of Technology or similar institutions for expertise to oversee controversial technology embraced by Bush's ballistic missile defense plan, Hartung said.

As the No. 2 at the Air Force, Lockheed-Martin's Smith would assume a crucial position in charge of overseeing which companies would get hundreds of billions of dollars in the coming decade if Congress approves the missile defense program. Lockheed-Martin is slated to get $15 billion this year in defense contracts for aircraft, naval systems, space boosters and an array of other programs.

"A big change here is making the Air Force [the] executive agent for space," the defense chief said, noting that the Air Force deputy also would direct the spy satellite systems of the National Reconnaissance Office jointly with the Central Intelligence Agency and the Pentagon.

At Lockheed-Martin, Smith was in charge of the Space Systems Division, a likely front-runner for the Pentagon's new anti-missile programs. Currently, most of Lockheed-Martin's $7 billion in space system sales are to the National Aeronautics and Space Administration.

Smith worked in so-called "black," or super secret, programs at the National Reconnaissance Office during the Reagan administration before returning to Lockheed-Martin. Bush is expected to send his name to the Senate soon.

Most members of the Senate Armed Services Committee have major defense programs in their states and provide votes crucial to defense industry cash flow. Even though the collapse of the Soviet Union has left the United States without a major enemy since 1989, purchases of ships, aircraft and other weapons have more than doubled in the past decade.

That has resulted in record profits for firms such as General Dynamics, which makes ships and submarines for the Navy. In turn, defense industry executives have made millions.

As General Dynamics' executive vice president, England held more than 71,000 shares of the firm's stock valued at $5.3 million in January, according to federal records. England and the others will be forced by the Senate Armed Services Committee to sell their stock as well as investments in any other defense-related companies.

The rules assume that once the stock is sold the potential for any conflict of interest is then legally eliminated.

During his Senate confirmation hearing, England did not seem to understand those ground rules. When asked, England said he would refuse to make decisions about certain topics involving General Dynamics. "So if there's a conflict with prior knowledge or involvement, then I would certainly recuse myself," England said. "I can't do this for my whole tenure, of course." England's response annoyed the ranking Democrat on the Armed Services panel, Michigan Sen. Carl Levin. Levin wants England to watch out for General Dynamics programs vital to his state. "We need to work with you to exactly define your role in those decisions affecting General Dynamics," he said.

To Maine Sen. Susan Collins, England vowed to support shipbuilding programs such as the General Dynamics project at Bath, Maine. "Shipbuilding is high on my agenda," England said.

Incoming Air Force Secretary Roche comes from the ranks of the Pentagon's third-largest defense contractor, Northrop-Grumman, which, with the acquisition of Litton Industries, now has $5 billion a year in defense contracts.

At Northrop-Grumman, Roche was president of its Electronic Sensors & Systems Sector, which makes radar and avionics for the B-2 Spirits, the stealth bombers that cost $500 million each. He directed development and manufacture of a radar for the F-22 Raptor, a $200 million a copy Air Force fighter-bomber.

During his Senate Armed Services Committee confirmation hearings, Roche made clear he would battle on behalf of products for his former company. He noted Northrop-Grumman had made some new, "exquisite" developments for the B-2.

"My team makes the radar for the F-22," Roche said in vowing to push the program as Air Force chief . "I've been closely associated with the program for a number of years. It not only works, but as an aircraft it has the capacity to change war." His testimony was hailed by Sen. Jean Carnahan (D-Mo.), whose state provides the only base for the B-2.

England and Roche may wind up playing influential roles behind closed doors on the Pentagon decision involving the merger of Newport News Shipbuilding, builders of aircraft carriers and nuclear-powered submarines. England's former firm, General Dynamics, has offered $2 billion for Newport News but the offer has been overtaken by Roche's Northrop-Grumman.

None of the senators expressed concern about former military officers overseeing the Army and Air Force. The only comment came from the committee chairman, Sen. John Warner (R-Va.).

"I think you're the first sailor in history ever to take over the Department of the Air Force," Warner teased Roche.

However, some constitutional experts were concerned that Bush was violating tradition if not the wishes of the Founding Fathers. "The Founders had intended civilian control of the military," said Mike Gerhardt, law professor at Virginia's College of William and Mary. "Most presidents have taken that very seriously. But it has been more of a tradition." Gerhardt said he was more concerned about the conflicts between the individual Bush appointees and their ties to defense contractors. It made him think of President Dwight D. Eisenhower's warnings about the drain of taxpayer dollars for priorities set by the military, defense industry and Congress.

"I'd be very dubious about their judgments," Gerhardt said.

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