Update at 4:35 PM EST to reflect comment from the Defense Department.
WASHINGTON ― U.S. President Donald Trump’s nominee for defense secretary, Mark Esper, must “take additional steps” to wall himself off from his previous role as the top lobbyist for defense contractor Raytheon, according to Sen. Elizabeth Warren.
Warren, a Democratic presidential hopeful from Massachusetts and a Senate Armed Services Committee member, sent a letter to Esper on July 11, saying that she asked him to extend his commitment to recuse himself from all matters related to Raytheon and that he had refused. The commitment, part of a 2017 ethics agreement, is set to expire in November.
“I am troubled by your unwillingness to fully address your real and perceived conflicts of interest, and write to ask that you reconsider your refusal to extend your Raytheon recusal through the duration of your tenure at DoD," Warren said in the letter, which she made public Monday.
Warren said she came away from a meeting with Esper last week “extremely disappointed by your unwillingness to take the steps needed to clear any ethics cloud related to your former lobbying work for Raytheon.”
“I asked that, like former Acting Secretary Patrick Shanahan, you extend your recusal commitment through the duration of your tenure at the DoD ... and take additional steps to eliminate any real or perceived conflicts of interest. You indicated you would not do so,” Warren said.
According to Chief Pentagon Spokesman Jonathan Hoffman, Esper assured Warren he is fully committed to following his signed ethics agreement, all applicable ethics laws, and the president’s Ethics Pledge--and he hasn’t previously sought a waiver or exception for them.
“Dr. Esper is fully committed to upholding the integrity and impartiality of the Department of Defense in the highest tradition of the Nation that we serve,” Hoffman said Monday. The Pentagon had yet to reply to Warren as of Monday afternoon.
Esper was vice president of government relations for Raytheon, the third-largest defense contractor in the United States, from 2010-2017, when he was confirmed as Army secretary. The Senate Armed Services Committee is set hold a confirmation hearing for Esper as soon as Tuesday, after Trump formally nominates Esper.
It would be a significant challenge for Esper to stay away from all decisions related to Raytheon, whose highly varied defense business spans the Department of Defense. The Massachusetts-based firm is a major supplier of guided missiles as well as the Patriot missile defense system, whose sales to foreign governments is geopolitically important.
Warren made five requests that would likely complicate Esper’s job: extend his recusal through his tenure at the DoD; expand it by covering all decisions ― including budget, policy, contracting and strategy ― to include Raytheon or its competitors; commit not to seek any waivers; update his screening agreement to eliminate any loopholes; and provide SASC with a list of steps he would take to address real or perceived conflicts and how that may affect DoD decisions.
When Esper first took office as Army secretary, he agreed that for two years he would disqualify himself from matters related to Raytheon and not seek waivers. But since he was named acting defense secretary last month, he has set out circumstances where he could seek waivers, in a document Bloomberg first reported last week.
Esper’s internal guidance, called a “screening agreement,” was updated June 24 with help from the the Standards of Conduct Office, which oversees ethics issues at the Pentagon.
In it, Esper agreed that on matters with a “direct and predictable effect” on Raytheon, he should be disqualified “personally and substantially” and the matters referred to an alternate official. If that official and an ethics officer believe the government’s interest in Esper’s participation is “so important that it cannot be referred to another official,” Esper would seek a waiver.
Warren’s letter to Esper last week said this caveats “seem to nullify” his commitment.
“Your screening arrangement memo, if unchanged, would appear to allow you to participate in decision that affect Raytheon’s financial standing and should disqualify you from serving as Secretary of Defense, even in an acting capacity,” she said.
But a key concern with extending Esper’s recusal is that it could unnecessarily limit his ability, if confirmed, to personally engage defense contractors and “hold them accountable for any failures or shortcomings that may arise in the future,” one defense official said.
“Personal and direct engagement by DoD senior officials with the senior leaders of a defense contractor regarding a troubled program conveys the seriousness of the matter, and can be the best way to achieve a program turnaround that ultimately benefits the Warfighter and the taxpayer,” the official said.
In the memo, Esper also said he “may be allowed to be present in meetings and receive information regarding Raytheon when necessary to remain informed about matters of critical importance to national security and Department of Defense programs and budget.”
Legal ethics restrictions, Esper said, would not “preclude me from participating in a personal or official capacity in any social, ceremonial or similar event” involving Raytheon personnel; likewise, “broad budget and strategy discussions about acquiring or improving a general defense capability that is not specific to a particular weapons system or program,” he added.
The Office of Government Ethics will require Esper to sign a new ethics agreement when he is nominated, Pentagon officials told reporters July 9. That agreement would set forth Esper’s legal obligations both under the ethics laws as well as an ethics pledge Trump established by executive order.
If Warren’s requests are not met, she could withhold her consent to advance Esper’s nomination to the Senate floor, though it could be overcome by the required sixty votes.
Warren, in May, introduced legislation called the Anti-Corruption and Public Integrity Act, which is partly aimed at closing the revolving door between the Pentagon and the defense industry. At the time, she asked the DoD Inspector General to investigate allegations Shanahan used his position in the department to benefit Boeing, where he worked for many years.
“I am concerned by the cozy relationship between giant defense contractors, the DoD, and the White House, which is precisely why I introduced the Anti-Corruption and Public Integrity Act, which would ban you from working at DoD for six years after lobbying for Raytheon, and the DoD Ethics and Anti-Corruption Act,” Warren said in the letter.
Joe Gould is senior Pentagon reporter for Defense News, covering the intersection of national security policy, politics and the defense industry.