Biden Defense Secretary Nominee Lloyd Austin Comes Under Fire for Industry Connections

“If General Austin were to recuse himself from decisions ... involving Raytheon he could not carry out large parts of his job.”

WASHINGTON, DC - SEPTEMBER 16:  Gen. Lloyd Austin III, commander of U.S. Central Command, prepares to testify before the Senate Armed Services Committee about the ongoing U.S. military operations to counter the Islamic State in Iraq and the Levant (ISIL) during a hearing in the Dirksen Senate Office Building on Capitol Hill September 16, 2015 in Washington, DC. Austin said that slow progress was still being made against ISIL but there have been setbacks, including the ambush of U.S.-trained fighters in Syria and the buildup of Russian forces in the country.  (Photo by Chip Somodevilla/Getty Images)
Gen. Lloyd Austin III, prepares to testify before the Senate Armed Services Committee about the ongoing U.S. military operations to counter the Islamic State in Iraq and the Levant during a hearing on Capitol Hill, in 2015 in Washington, D.C. Photo: Chip Somodevilla/Getty Images

Last month, two progressive members of Congress sent President-elect Joe Biden a letter requesting that he commit to nominating a secretary of defense with no previous ties to weapons manufacturers. The letter, from Rep. Mark Pocan, D-Wisc., and Rep. Barbara Lee, D-Calif., cited President Donald Trump’s Defense Secretary Mark Esper — a former lobbyist for Raytheon, one the country’s largest defense contractors — and called on Biden to adopt a different standard and find a nominee with “no prior employment history with a defense contractor.”

But on Tuesday, Biden announced that he will nominate retired four-star Gen. Lloyd Austin III, once the top commander of U.S. forces in the Middle East and now a member of the board of directors at Raytheon. The company has been in the spotlight during the Trump administration in part because it supplies air-to-ground munitions for Saudi Arabia’s war in Yemen, and Austin’s role with Raytheon could be central to his confirmation fight.

Austin oversaw U.S. operations in the Middle East until March 2016, a year after the Saudi-led intervention began. He retired from the military the next month and later joined the board of United Technologies, a defense contractor that merged with Raytheon earlier this year. In 2019, Raytheon proceeded with an $8 billion arms sale to Saudi Arabia and the United Arab Emirates, which included air-to-ground munitions. After congressional Democrats blocked the sale on human rights grounds, the Trump administration helped force the sale through by declaring a state of emergency.

“Raytheon manufactures the bomb components that are used in Yemen. He bears a direct responsibility,” Phyllis Bennis, who directs the New Internationalism Project at the Institute for Policy Studies, told The Intercept. “He was making money as a board member of this company that is directly responsible for the death and destruction there.”

William Hartung, the director of the Arms and Security Project at the Center for International Policy, told The Intercept that picking Austin was “tantamount to making the position of secretary of defense the ‘secretary of defense contractors.’”

“The potential for conflicts is huge,” Hartung said. “Raytheon is deeply involved in controversial programs from unworkable missile defense projects to nuclear weapons — the new nuclear-armed cruise missile — to precision-guided bombs that have killed untold numbers of civilians in Saudi Arabia’s brutal war in Yemen. If General Austin were to recuse himself from decisions on programs and policies involving Raytheon, he could not carry out large parts of his job as defense secretary.”

Austin was reportedly selected from a pool of other leading contenders with ties to top weapons companies: Michèle Flournoy, the former undersecretary of defense for policy, joined the board of Booz Allen Hamilton in 2018, and Jeh Johnson, the former secretary of Homeland Security under President Barack Obama, sits on the board of Lockheed Martin.

One of only a few African Americans to ever become a four-star general in the Army, Austin was the first African American in charge of a regional combatant command, overseeing U.S. forces in the Middle East. And if confirmed, he will be the first Black secretary of defense. The Congressional Black Caucus leaned heavily on Biden to select either him or Johnson, who is also Black.

“When you’re talking about orders that might violate international law or lead to the death of civilians, you want somebody who is willing to push back. That doesn’t sound like him.”

Austin was formerly the commander of U.S. forces in Iraq, where he oversaw major troop withdrawals under Obama, before becoming the top U.S. commander in the Middle East. In the U.S. campaign against the Islamic State, he reportedly pushed for more restrictive rules of engagement in an effort to reduce civilian casualties, but faced scrutiny from congressional Republicans who wanted the military to intervene in Syria.

“I’ve never met the man, but people who have worked with him say it will be easy for the White House with him in charge,” said Bennis. “That is, he’s unlikely to challenge his commander-in-chief. When you’re talking about orders that might violate international law or lead to the death of civilians, you want somebody who is willing to push back. That doesn’t sound like him.”

In contrast with other military leaders during the Obama administration, like Gens. David Petraeus or Stanley McChrystal, who maintained high profiles and sometimes clashed with the White House, Austin is known as a quieter presence. He earned the trust of many in Obama’s inner circle, including Biden.

In an op-ed in The Atlantic on Tuesday, Biden said that Austin “played a crucial role in bringing 150,000 American troops home from the [Iraqi] theater of war.”

“Pulling that off took more than just the skill and strategy of a seasoned soldier. It required Austin to practice diplomacy, building relationships with our Iraqi counterparts and with our partners in the region. He served as a statesman, representing our country with honor and dignity and always, above all, looking out for his people,” Biden wrote.

“I am certain that General Austin will find other ways to serve his country in retirement,” Obama said as the general exited the government in 2016. But since he left the military more than four years ago, Austin has formed extensive private-sector ties that could surface during his confirmation hearing. In addition to Raytheon, he joined the board of directors of the steel production company Nucor Corporation, Tenet Healthcare Corporation, and Guest Services Inc., a hospitality management company.

And both Austin and Antony Blinken — Biden’s nominee for secretary of state — have ties to Pine Island Capital Partners, a large investment firm that has raised hundreds of millions of dollars for acquisitions in defense companies this year, according to the New York Times.

Led by John Thain, the chief executive of Merrill Lynch at the time of its collapse in 2008, Pine Island boasts of an “experienced investment team with a group of deeply-connected and accomplished former senior government and military officials,” according to its website. In documents filed with the Securities and Exchange Commission, the firm notes that its team not only has “extensive connections to industry leaders,” but “unusual access to information.” Just last month, Pine Island raised $218 million to finance investments in “businesses in the defense, government service and aerospace industries.”

Austin joins an increasing number of generals and top military officials who exit to the private sector, holding lucrative positions at top companies. One 2018 study by the Project on Government Oversight tracked 380 cases of former military officers and Department of Defense officials who, in the previous years, became board members, executives, lobbyists, or consultants with defense companies.

Private-sector work was the subject of intense scrutiny during the confirmation hearing of Esper, Trump’s last defense secretary. Prior to joining the Trump administration in 2017 as army secretary, Esper worked as a senior lobbyist for Raytheon. He faced sharp questioning from Sen. Elizabeth Warren, D-Mass., over whether he would fully recuse himself from matters involving Raytheon as defense secretary.

When Esper did not commit to fully recusing himself from any decision involving Raytheon, Warren said that it “smacks of corruption, plain and simple.” It is unclear whether Senate Democrats will hold Austin to the similar standard, but his role with Raytheon could create ethics complications.

Austin is slated to face a rocky confirmation process, not only due to his business ties, but also because his nomination already was criticized as a violation of civil-military relations. By law, the secretary of defense position is a civilian position and not supposed to be held by recently retired officers. The rule is meant to emphasize civilian control over the military, and Austin has not yet undergone a legally required seven-year “cooling off” period. Austin’s confirmation will require Congress to waive that requirement — just as they did with Trump’s first defense secretary, retired Gen. James Mattis.

That puts Senate Democrats is a difficult position. Seventeen voted against granting Mattis the waiver, and the top Democrat on the Armed Services Committee, Sen. Jack Reed, D-R.I., said at the time that he was unlikely to support a similar waiver in the future. In a statement on Tuesday, Reed said that he would review the nomination carefully. “One cannot separate the waiver from the individual who has been nominated,” the statement said.

Warren told CNN on Tuesday that she would oppose Austin’s nomination on the grounds that Congress shouldn’t grant waivers to recently retired generals.

“The principle of civilian control of the military is important. It’s not a guarantee that a civilian will be any more conscious of the consequences of war, but the prohibition should not be waived lightly,” said Bennis.

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