The Revolving Door from the Pentagon to the Private Sector

What do Lockheed Martin, Boeing, General Dynamics, Raytheon, and Northrop Grumman have in common? Each of these corporations is one of the top five largest defense contractors in the nation. In 2011 alone, the Department of Defense committed to spending nearly $100 billion with just these five companies. To put that in perspective, that is about the same amount spent on the entire federal education budget for 2011.

But these defense contractors have one other interesting statistic in common: Between 2009 and 2011, at least nine of the top-level generals and admirals who retired took positions with these five companies. In fact, 70 percent of the 108 three-and-four star generals and admirals who retired during this time period took jobs with defense contractors or consultants. These startling statistics are just some of the insights revealed in a new report and accompanying short film released yesterday by Citizens for Responsibility and Ethics in Washington (CREW) and Brave New Foundation. Entitled Strategic Maneuvers, the report reveals the extent of the Pentagon's revolving door phenomenon, in which retired high-ranking generals and admirals cash in on their years of military experience by taking lucrative jobs with the defense industry.

The term "revolving door" refers to persons with government experience moving to jobs in the private sector, and vice versa. But how do these retirees bring value to their new employers? While much is unknown about the behind-the-scenes workings at these private companies, it appears retired generals utilize their relationships, networks, and insider knowledge to help these companies win lucrative defense contracts, which may or may not be the best use of our taxpayer dollars.

With the possibility of massive cuts to the military's budget, defense contractors and consultants are scrambling to position themselves on the winning side. In the calculus of procuring remunerative contracts, retired generals and admirals are a valuable commodity. In fact, there is at least one consulting firm, Burdeshaw Associates, which allows any businesses in need to rent-a-general who can help secure contracts. The recent numbers show the continuation of an unsettling trend first identified in a 2010 Boston Globe investigation that revealed the number of retired three-and-four star generals and admirals moving into defense industry jobs rose from less than 50 percent between 1994 and 1998 to a stratospheric 80 percent between 2004 and 2008.

Three-and-four star generals and admirals certainly earn their stars and stripes from their dedicated service in the U.S. military, but some are now moving through the revolving door to cash in on their years of experience and connections. For example, by retiring from government service and sitting on the board of just one company, a former top military commander can earn more than his yearly government salary for attending just a few meetings. Potential earnings increase when these officials take on greater roles with these companies. In at least a few cases, these retirees have continued to advise the Department of Defense while also collecting a paycheck from the defense industry.

If there is one thing Americans can agree on, it is that those who have served in the military and protected our country deserve our praise, thanks and recognition. Still, how can we be sure the Department of Defense is receiving unbiased counsel from retired officials whose livelihoods now depends on maximizing profits for their new employers? In addition, how can we trust our current military leaders to give unbiased assessments about our national security needs when golden parachute job opportunities in the private sector are part of the equation?

While the retired generals and admirals moving into the private sector in general do not appear to be breaking any rules, their path does raise important questions about the intersection of national security and the interests of defense companies that stand to make billions of dollars. With defense contractors vying for the experience and contacts only retired top military officials can provide, these retired generals and admirals have seen their potential earnings skyrocket.

The revolving door is unlikely to stop spinning anytime soon unless we pressure our lawmakers to pass new laws to manage these retirees' potential conflicts of interest. Our current national debate about pending cuts to the defense budget will have ramifications for future generations. But, thanks in part to the role of esteemed former military leaders pushing to retain contracts of their defense industry employers, some of the programs saved may not be those best serving the public interest.

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