John F. Kelly, the retired Marine Corps general nominated by Donald Trump to be secretary of homeland security, did not disclose his position as a vice chairman at a lobbying firm called the Spectrum Group on his federal ethics forms made public this week.
The failure to disclose the position may run afoul of federal law requiring Senate-confirmed nominees to reveal potential conflicts of interest to the lawmakers and the public.
“He came on as a vice chairman in the end of last year,” said Esther Lofgren, the vice president of the Spectrum Group, when reached for comment.
Asked for details regarding Kelly’s work at the firm, including his compensation and client roster, Lofgren said she had been consumed with meetings surrounding Kelly’s confirmation hearings, which began on Tuesday, and that she would follow up by email. She did not respond to any further requests for comment. The Intercept could not reach Kelly by phone, and he did not return an email requesting clarification over the issue.
An official from the Trump transition team guiding Kelly’s nomination, who said he did not have permission to speak on the record, said the retired general did not list his lobby job with the Spectrum Group because “the Spectrum Group is affiliated with DC Capital Partners,” a private equity firm that retained Kelly in April of last year and that owns a controlling stake in the Spectrum Group. The official said Kelly has not received any payments from the Spectrum Group. “Every intention we had was to be as fully transparent as possible,” the official said.
The Spectrum Group, however, is a “completely separate company,” according to Kasey Dezelick, the executive assistant at DC Capital Partners. Business registration records show that the two firms are distinct entities. And they are not remotely in the same line of business. DC Capital Partners, which Kelly listed, focuses on “equity investments in middle market companies that provide differentiated and innovative service.” The Spectrum Group, which Kelly did not list, specializes in lobbying and government affairs.
In a call organized by the Trump transition official, T. Gail Dady, a partner at DC Capital Partners, said that Kelly “had agreed to come on board as vice chairman and help out” at the Spectrum Group. “That was late in the fall and so that never actually happened. … There was no contract signed and he received no compensation other than, you know, having a couple of meetings and initially agreeing that this was something he would do. … It didn’t come to fruition, if they hadn’t nominated him and stolen him away from me, then yeah, it would have moved forward.”
In his disclosure form published this week, Kelly listed $37,500 of income from DC Capital Partners in the period since April 2016, labeling it “Fees, Member Board of Directors.” There is no mention of Spectrum Group on the form or in his ethics letter.
Office of Government Ethics rules require nominees to list all organization positions and memberships, even if they are uncompensated. There are exceptions for “honorific” positions, but Kelly’s position at the Spectrum Group is advertised as a business position and his association with the firm was clearly being used to generate client interest in the firm.
The Spectrum Group heavily publicizes Kelly’s association with the firm on its website. Kelly is currently listed on a section of the Spectrum Group website that advertises “insights” into the Trump transition, including “FY2017 budget to defense priorities, to Executive and Congressional changes.”
Kelly’s professional biography page on the Spectrum Group’s website said he “leads the Border Security Team and supports clients working in security, border security and South and Central America with his extensive expertise in the defense sector, operational and logistics support, diplomatic relations and security.” The Security Team at Spectrum Group, the practice group that employs Kelly, is also led by Kristi Rogers, the wife of former Congressman Mike Rogers, R-Mich., a defense hawk with close ties to industry.
(After queries from The Intercept on Tuesday, Kelly’s biography and leadership page were deleted from the company’s website on Wednesday. A cached version of the biography can be viewed here, and a screengrab is shown below. Kelly’s name was also deleted from the Security Team section of the site, though that page may also still be viewed via a web archive here. Other sections of the site still contain Kelly’s name and the services he provides to the Spectrum Group’s clients.)
The Spectrum Group is a “strategic advisory and government relations firm” that maintains a wide roster of former government officials who provide advice and to clients seeking business deals and policy goals. The firm touts its experience in “comprehensive government affairs, lobbying, and advocacy,” with a specialty in security and defense issues. Leadership includes retired Gen. Anthony Zinni, a chairman at the firm, as well as retired Gen. John Campbell.
Kelly retired from his position as the head of U.S. Southern Command in January 2016. His financial disclosure form, first reported by The Intercept on Tuesday, lists a number of jobs he assumed over the course of 2016: with DynCorp International and Flatter & Associates, both defense contractors; at Beacon Global Strategies, a consulting firm that serves the defense contracting industry; and at DC Capital Partners.
But Kelly’s role with the Spectrum Group is nowhere to be found on his financial disclosure report nor his letter to the designated ethics official at the Department of Homeland Security informing the department that he will resign his private sector positions once confirmed.
“If Gen. Kelly joined Spectrum Group before filing his disclosure report, he should have disclosed not only his position and any related income, but also the specific foreign and private interests that paid $5,000 or more for his services,” says Bryson Morgan, an attorney with Caplin & Drysdale who previously served as an official at the Office of Congressional Ethics, the agency that oversees nominee disclosure forms.
The Trump transition official who refused to speak on the record would not say whether Kelly would submit amended forms. He insisted that Kelly was not hiding his role with the lobbying firm, and in fact had volunteered that he had a relationship with the group in a recent meeting with Capitol Hill staffers.
Lobbying records show that the Spectrum Group represents the WinTec Arrowmaker, a contractor that provides technical training to the military. Registration forms show the firm has been contracted to represent the Winchester Ammunition Division, a subsidiary of the Olin Corporation, a major ammunition supplier to the military, though forms indicate that the Spectrum Group did not engage public officials over the last year for the client.
Other clients may work with the Spectrum Group without disclosure, since most forms of business advocacy do not fall under the requirements of the Lobbying Disclosure Act.