January 03, 2018

Senator Warren Delivers Floor Speech on John Rood Nomination for Undersecretary of Defense for Policy

Warren Announces She Will Oppose All Industry Nominees Who Do Not Fully Recuse from Decisions Involving Prior Employers

Video available here (YouTube)

Washington, DC - United States Senator Elizabeth Warren (D-Mass.) today delivered a speech on the Senate floor on the nomination of John Rood to be Undersecretary of Defense for Policy.  In her speech, Senator Warren raised concerns about Mr. Rood's refusal to commit to not seek a waiver from his ethics agreement and urged her colleagues to reject his nomination.

Senator Warren also made clear that she will not vote to confirm any Department of Defense nominee from industry who does not agree to fully recuse him or herself from matters involving their former employer, without waiver or exception.  

The full text of her remarks is available below.

Remarks by Senator Elizabeth Warren
January 3, 2018

Mr. President:

I rise today to discuss the nomination of John Rood for the position of Undersecretary of Defense for Policy.

I am concerned about the influence of different industries on key positions in government, and today the specific problem under discussion is the influence of the defense industry over the Pentagon.

The defense industry in America is powerful-and profitable. The "Big Five" defense contractors together represented more than $100 billion in government contracts in 2016 alone.  Think about that-5 corporations, $100 billion in taxpayer money in one year.

The defense industry in America is powerful and President Trump has stocked the Pentagon with an unprecedented number of nominees directly from the defense industry. These nominees will oversee all of those government contracts.  They will influence which companies get billions in taxpayer dollars and what exactly those companies have to do to collect their checks. Without strict ethics rules and oversight, these nominees have the power to significantly influence the profitability of their former employers-the same companies that may, once again, be the nominees' future employers AFTER they have finished their government service.

Mr. Rood may be a decent man, but he is the latest example of this trend.  He will come to the Defense Department directly from Lockheed Martin International, where he was most recently a Senior Vice President.

Lockheed is the biggest of the "Big Five" defense contractors.  In 2016, the U.S. Government awarded the company over $40 billion in contracts - that's in just one year.

According to his official bio submitted to the Senate Armed Services Committee, Mr. Rood's responsibilities included "developing and executing strategies to grow Lockheed Martin's international business" and "managing marketing and government relations activities" overseas. In other words, he was responsible for selling Lockheed's products to other countries.

And it seems like he was pretty good at it - Lockheed made over $12 billion, or more than a quarter of its net sales, from its international customers in 2016.

Here's why that matters. According to Lockheed's most recent annual statement, the international division that Mr. Rood managed made about 66% percent of its sales to foreign customers through the Pentagon's Foreign Military Sales program.  This is a program that allows for the sale of U.S. defense products overseas.

In that same report, Lockheed acknowledges that its foreign sales are "highly sensitive" to changes in regulations and "affected" by U.S. foreign policy.  In other words, government officials influence whether Lockheed's foreign military sales barely break even or whether sales shoot through the roof and bring in billions of dollars for Lockheed.

If confirmed as Undersecretary of Policy, Mr. Rood will play a significant role in setting U.S. defense policy and overseeing the regulation of Foreign Military Sales of those very same products, to those very same countries.  If he is given this job with no constraints, Mr. Rood could implement policies that increase Lockheed's profitability-whether that's in the interest of the American people or not.

Chairman McCain and I questioned Mr. Rood about this conflict of interest during his confirmation hearing. I asked him a simple yes-or-no question: would he commit not to seek a waiver from his obligation to recuse himself from Lockheed Martin business, as required by his ethics agreement? That's all I asked.  He hemmed, he hawed, and finally made it clear that no, he would not make that commitment. So I asked him another simple question: would he at least recuse himself from policy discussions about the sale of Lockheed Martin products through the Foreign Military Sales program? The answer was again clear: no, he would not make that commitment either.

I followed up with additional written questions. I asked: Mr. Rood, will you commit not to seek or accept a waiver from your recusal obligations under your ethics agreement? Here is his response:

"I am concerned that a commitment never to seek or accept a waiver could unnecessarily restrict my ability, if confirmed, to take an action that is important to U.S. national security and defense interests should a circumstance arise that is currently unforeseen."  

In other words, no, he would not commit to abide by his own ethics agreement.

Just think for a minute about what that means. President Trump has nominated an industry executive to one of our most senior national security positions, and that individual is unwilling to steer clear of the conflicts of interest involved in doing that job. I think the standard here should be pretty simple. If a nominee cannot do the job to which he has been nominated without seeking a waiver from his ethical obligations, then he should not have that job.

Mr. Rood is not the only Trump nominee with this problem. The President has nominated many other executives from industry to the most senior positions at the Department of Defense.

The Deputy Secretary of Defense was previously a senior vice president at Boeing. He now runs the Pentagon's budget process, including making the final call on which defense programs get funding, and which do not.  

The Secretary of the Army was a senior lobbyist for Raytheon, and even ran Raytheon's Political Action Committee.  

The Undersecretary of the Army, the number two position, was also a vice president at Lockheed.

The Deputy Chief Management Officer previously ran XCOR Aerospace, now a bankrupt developer of rocket engines and space launch systems.

The Undersecretary of Defense for Acquisition, Technology, and Logistics spent her career at Textron, an aerospace and defense contractor.

And I could go on with this list, and I don't doubt that many of these individuals are service-minded, and I know that many have also served honorably in government, both in and out of uniform. I also believe that a strong partnership between government and industry is important to our national defense.

Industry experience, in and of itself, does not disqualify someone from public service.  But there must be balance. When too many top government jobs are filled by industry insiders, we risk corporate capture of the whole policymaking process.

The overrepresentation of defense industry officials at the highest levels of the Department of Defense has real consequences.
It suggests to the American people that only one viewpoint or one experience will dominate our policymaking decisions.  No outsiders, no one with competing points of view need apply.

And the revolving door between industry and government raises questions about who our government serves.  

No taxpayer should have to wonder whether the top policymakers at the Pentagon are pushing defense products and foreign military sales for any reason other than the protection of the United States of America.

No American should have to wonder whether the Defense Department is acting to protect the national interests of our nation or the financial interests of the five giant defense contractors.

And no man or woman in uniform should have to wonder whether their civilian leaders are putting the private financial interests of themselves and their friends ahead of the safety and the interests of our military servicemembers.

The American people have a right to know who their government works for, and that the senior leadership of the Department of Defense is putting our national security first. Everyone has a right to know that.

The readiness and safety of our men and women in uniform is too important for any of us to have to ask those questions. So as a member of the Senate Armed Services Committee, I will not vote to confirm any nominee from industry who does not agree to fully recuse himself or herself from matters involving their former employer for the duration required by their ethics agreement, without waiver and without exception. I think we owe our soldiers, sailors, airmen, and marines at least that much.  

And because he will not make the commitment to abide by his own ethics agreement without waiver or exception, I will be voting against Mr. Rood as Undersecretary of Defense, and I urge other senators to do the same.

Thank you, Mr. President, I yield back.