Patrick Shanahan, Acting Secretary of Defense, told Congress that he welcomes an inspector general investigation into whether he violated any ethics rules by promoting Boeing Co. products while serving in the Trump Administration.
Shanahan, who came to the Pentagon after spending more than three decades at Boeing, has routinely fended off questions about potential conflicts of interest with the aerospace company that also happens to be one of the largest suppliers for the U.S. military.
His public support for an investigation at Thursday’s Senate Armed Services hearing comes a day after a government watchdog group, called Citizens for Responsibility and Ethics in Washington (CREW), wrote a 9-page complaint to the Pentagon’s inspector general urging the agency to scrutinize the relationship. At issue is whether Shanahan pushed the Pentagon to buy more Boeing-made F-15X fighter jets, which the Air Force does not want, and whether he castigated Boeing-rival Lockheed Martin Corp. during government meetings.
The group cited a Politico report in January that said Shanahan had been promoting Boeing while criticizing the F-35 Joint Strike Fighter, a Lockheed Martin program. The plane was “f-cked up,” he reportedly said, and Lockheed Martin “doesn’t know how to run a program.”
“Acting Secretary Shanahan’s conduct regarding Boeing and its competitors indicate that he may have violated his ethics pledge for the same reasons that they raise significant concerns of an appearance of a lack of impartiality,” CREW Executive Director Noah Bookbinder said in a statement.
Lieutenant Colonel Joe Buccino, a spokesman for Shanahan, denied CREW’s allegations. “Acting Secretary Shanahan has at all times complied with his Ethics Agreement and will continue to do so,” he said. “This agreement mandates that all matters related to the Boeing Company are routed to another Department of Defense official to ensure that there is no potential for a conflict of interest.”
The Defense Department’s Office of Inspector General declined to comment, citing its long-held policy not to confirm or deny the existence of investigations.
In January, Shanahan told reporters that claims of favoritism were “just noise” and he was ”biased toward performance; I am biased toward giving the taxpayer their money’s worth.”
The allegations, however, take on increased importance now that Shanahan, 56, is under serious consideration to become Defense Secretary. He has become the longest serving “Acting Defense Secretary” in the nation’s history: 71 days and counting. He stepped up from the No. 2 spot to take the lead role after James Mattis resigned as Defense Secretary on Dec. 31.
If Trump taps Shanahan to head the Defense Department, Shanahan would be the first Secretary in more than half-century to get the job without previous government experience. With little foreign policy background, he would become Pentagon chief at a time of historic change around the world. He’d have to juggle the continued conflict against terror groups in the Middle East, Russia’s renewed resurgence in Europe and China’s muscular rise in Asia.
However, Trump has repeatedly shown partiality for Boeing since entering the Oval Office. The president has lavished the company with praise as “a truly great company;” touted the company’s products on his Twitter account; and even taken on a role as salesman-in-chief promoting their wares for foreign sales. He’s held events at Boeing facilities in St. Louis and Charleston, S.C.
Trump cultivated a personal relationship with Boeing Chief Executive Dennis Muilenburg before reaching the White House. The pair allegedly negotiated a $3.9 billion deal for two 747 jumbo jets to serve as Air Force One presidential planes.
The president claimed to have saved taxpayers $1.4 billion. “President Trump negotiated a good deal on behalf of the American people,” Boeing said in a tweet.
Boeing has long been part of Washington’s “revolving door” between government, industry and the lobbying world that, critics say, make it hard to tell where one job begins and the other ends. Trump’s former United Nations Ambassador Nikki Haley, for example, is joining Boeing’s board of directors after leaving the Administration more than two months ago. (The company has also hired 19 officials from the Department of Defense since 2008, according to the watchdog Project on Government Oversight.)
William D. Hartung, director of the arms and security project at the Center for International Policy, said the arrangement is odd. “The Trump Administration’s relationship with Boeing is precisely what President Eisenhower was thinking of when he warned of the dangers of unwarranted influence wielded by the military-industrial complex,” he said. “The fact that the acting secretary of defense is a former Boeing executive raises serious questions.”
On Wednesday, Trump announced the Federal Aviation Administration would ground Boeing’s 737 MAX 8 jetliner following two crashes in less than five months in Ethiopia and Indonesia that killed 246 people. The president made the announcement from the White House, an unprecedented move, after speaking with Muilenburg over the phone. The decision to ground the plane only came after most of the rest of the world’s aviation regulators had already decided to ground the plane.
Trump also took to Twitter to say “airplanes are becoming far too complex to fly.”
Shanahan, who previously led Boeing’s commercial plane business, was asked at Thursday’s hearing about whether he had spoken to anyone in the Administration or been briefed about the aircraft. “I have not spoken to anyone regarding the 737 MAX,” Shanahan said, adding: “I firmly believe we should let the regulators investigate the incidents.”
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