Gen. Lloyd Austin, Raytheon
Gen. Lloyd Austin III is a retired four-star general who serves on the board of military contractor Raytheon Technologies. If Austin becomes defense secretary, that corporate tie could get complicated. Photo credit: Adapted by WhoWhatWhy from U.S. Army Corps of Engineers / Flickr , US AirForce, Raytheon / Wikimedia, US AirForce, U.S. Department of State / Flickr, and US AirForce

Last month, two progressive members of Congress sent President-elect Joe Biden a letter requesting that he nominate a defense secretary who did not have ties to the defense industry. The most recent secretary of defense under President Donald Trump, Mark Esper, had been a lobbyist for Raytheon, one of the biggest military contractors in the world. 

Their pleas fell on deaf ears. On Wednesday, December 9, Biden announced his new pick for secretary of defense, Gen. Lloyd Austin III. On the left, the response has been mixed — some praise the naming of a Black man as a historic first, while others see trouble looming in Austin’s corporate ties. Because, like Esper before him, Austin has a relationship with Raytheon: he serves on the board of directors. For many in the world of public policy, this is problematic.

“The potential for conflicts is huge,” said William Hartung, the director of the Arms and Security Project at the Center for International Policy, a progressive, nonprofit think tank. Hartung said that if Austin were to recuse himself from those potential conflicts of interest involving Raytheon, he wouldn’t even be able to carry out large parts of a defense secretary’s responsibilities.

Indeed, there is already speculation that conflict-of-interest issues may force Austin to recuse himself from decisions on major contracts for which Raytheon is in the running, like the F-35 Joint Strike fighter.

Moreover, Raytheon is a company that has proven it requires high-level oversight. It sells everything from missiles and jet engines to ejection seats and radar systems to all branches of the US military. According to the Project on Government Oversight (POGO), Raytheon maintains government contracts worth more than $16 billion. (As huge as that is, that number makes it only the fourth biggest US government contractor in 2019.)

Its business dealings extend to allies overseas — and their conflicts.

“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,” said Hartung.

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Raytheon has a long history of questionable and illegal behavior. According to POGO, the company has had 32 cases of misconduct since 1995, incurring $491 million in penalties. 

Now that the incoming Biden administration has thrown its weight behind Austin for defense secretary, let’s look at some of Raytheon’s greatest hits:

    • November 2019: Bruce Casias worked for Raytheon on a US Air Force satellite GPS program. He claimed that he was demoted after raising concerns about being ordered by supervisors to falsely change the status of test procedures. A jury found in Casias’s favor and awarded him $1.04 million in damages. Fraudulently changing test results on key technology could directly affect satellite performance and GPS-based navigation for military ships, planes, and nuclear-weapon systems.
    • April 2013: The State Department reached an administrative agreement with Raytheon addressing 125 civil violations of the Arms Export Control Act (AECA) and the International Traffic in Arms Regulations (ITAR). The violations included inaccurate tracking, valuation, and documentation of controlled hardware, manufacture of such hardware by Raytheon’s foreign partners in excess of the approved amounts, and failure to obtain and submit required documents in a timely manner. Under the terms of a four-year consent agreement, Raytheon will pay a civil penalty of $8 million, half of which was suspended on the condition that Raytheon will spend that amount on remedial compliance measures.
    • June 2008: The court found Raytheon solely liable for contaminating the groundwater at an airport in Herington, KS, with an industrial solvent. The court ordered Raytheon to pay approximately $3.2 million for the Environmental Protection Agency’s cleanup costs.
    • February 2003: Raytheon settled charges that the company had improperly attempted to export military communications equipment to Pakistan between 1992 and 1997 in violation of US law, to the tune of $25 million.
    • May 2004: The company paid out $410 million in cash and stock to settle a class-action securities lawsuit that claimed Raytheon made misleading financial statements and failed to disclose key financial information.
    • March 2000: The Hughes Aircraft Company, a Raytheon subsidiary, paid $2 million to settle alleged violations of the False Claims Act. At issue was defective testing of key technology that could affect military performance. In addition, taxpayers were billed for work that was never done.
    • November 1997: Raytheon had to pay the government more than $2 million to settle charges of “defective pricing,” which in this case meant procurement fraud, kickbacks, and misuse of taxpayers funds.

Many good government groups believe when you put people with strong corporate ties in government office that regulate those same businesses, the public interest will inevitably suffer. And they don’t see Biden’s pick of Austin as the only example of this.

Another example is the selection of former Iowa Gov. Tom Vilsack, who served as secretary of agriculture under Barack Obama and has strong ties to Monsanto, as head of the Department of Agriculture. And Rep. Cedric Richmond (D-LA), a top recipient of oil- and gas-industry money, as director of the White House Office of Public Engagement. That office would be responsible for helping to advance the administration’s agenda on climate change.

For those voters who wanted to drain the swamp in Washington, Biden’s cabinet picks — and their big-money corporate connections — look like a lot more of the same.


Related front page panorama photo credit: Adapted by WhoWhatWhy from Ben Schumin / Flickr (CC BY-SA 2.0).

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