Gerry Broome/AP Photo
Gen. Lloyd Austin and then–Vice President Joe Biden at Fort Bragg, North Carolina, April 8, 2009
The coronavirus pandemic has unmasked just how little the annual $721.5 billion Pentagon budget does to protect Americans every day. Yet it still seems impossible to imagine a leader for the Pentagon who isn’t caught up in the military-industrial status quo. The truth is that the U.S. has a tragically limited imagination when it comes to national security.
President-elect Joe Biden’s choice of retired Gen. Lloyd Austin for defense secretary raises a number of concerns. Austin left military service in 2016 and sprinted to cash in, taking lucrative jobs on a number of corporate boards. He has board seats with the weapons maker Raytheon and Nucor steel (supplier of raw material for weapons), and a role in an investment firm that cashes in on the experience of recent government officials. But this isn’t just about Gen. Austin.
The other leading candidates for the powerful position were just as caught up in the business of national security. Michèle Flournoy, formerly the number-three civilian in the Obama Defense Department, consults for defense contractors and serves on Booz Allen Hamilton’s board. Jeh Johnson, the former secretary of homeland security under Obama, sits on the board of Lockheed Martin. The front-runners reflected a diversity of race and gender, but not of ideology or experience. Austin, Flournoy, and Johnson often give lectures or speak to the media, but they rarely disclose their affiliations as board members of defense contractors. The lack of transparency indicates that there is something they are trying to hide.
We’re still learning the extent to which Gen. Austin has been using his recent military experience to help corporations profit. Austin, as a Raytheon board member, has earned at least $1.4 million since 2016, as that company has sold Saudi Arabia the bombs it is using in its war on Yemen. He received another $575,000 in board fees and stock from Nucor, and at least $298,000 from Tenet Healthcare.
Indeed, he has been monetizing his national-security credentials. In late July, he joined a firm called Pine Island Capital Partners. The defense-adjacent private equity firm prides itself on a “deeply connected and accomplished partner group.” Austin got straight to work. “He is already fully engaged, working with us on new investments, bringing his experience and judgement to our portfolio companies, and actively participating in our Investment Committee,” managing partner Phil Cooper wrote in a press release. Pine Island has purchased the company Precinmac (which makes machine components) and InVeris Training Solutions (which provides virtual training sessions for live-fire and other military situations). It is investing in government contractors that will “cash in off the post-COVID contracting environment,” The Daily Beast reported.
Pine Island’s roster of former officials—four retired senators and the former chair of the Joint Chiefs—is particularly prominent for a middle-market investment group. Its chair, John Thain, was once the CEO of Merrill Lynch. And Pine Island is still growing. In November, Pine Island created a publicly offered shell company to raise $200 million for purchasing more defense firms.
Pine Island works closely with WestExec Advisors, the strategic consultancy co-founded by Flournoy and secretary of state nominee Tony Blinken. Pine Island had approached WestExec “very early on” and invited the two former Obama officials to join their board as a way to “leverage even more expertise,” a WestExec staffer told me this summer. Blinken “bought in,” but now he is in the process of divesting as he joins the State Department. Blinken’s nomination must have been a cause for celebration at the firm. “Congrats, Tony,” wrote David Horowitz, a Pine Island partner, in a deleted post on his LinkedIn page. After the Prospect posed questions to Blinken about Pine Island this summer, the Biden campaign said he would be taking a leave of absence from the firm. One imagines that Austin will now follow similar cues.
Of course, there are other issues related to Austin. Nominating a recently retired officer in a role that is meant to be “appointed from civilian life,” according to the law, aggravates the line between civilian and military relations. Trump and his generals broke a long-established taboo, and Biden isn’t repairing it. Democrats who were rankled by Trump’s severing of civilian control of the military and now must assent to giving Biden’s selection a congressional waiver to serve have been put in a tough spot.
This money chase overshadows Austin’s credentials—his oversight of the drawdown of forces in Iraq, his control of Central Command during the fight against the Islamic State. The problem, of course, is that the pay-to-play tendency in national security goes undisturbed, regardless of the occupant of the White House or their political party.
Much larger problems loom. National-security leaders agree that climate change is an existential crisis for Americans and the world, and the Pentagon is the world’s largest polluter as it emits more greenhouse gases than 100 countries combined. But for now, Austin and the Biden transition team are dealing with the appearance of a conflict of interest—not the real national-security crises at hand.
