The Department of Defense’s Office of Inspector General says acting Defense Secretary Patrick Shanahan is in full compliance with his ethics agreements and official obligations — turning back allegations that he took actions to promote Boeing, his former employer, and disparage its competitors.
The findings of a weeks-long investigation, issued today, seem likely to clear what might have been an obstacle standing in the way of Shanahan taking on the Pentagon’s post on a permanent basis.
Shanahan, who spent much of his 31 years at Boeing managing commercial airplane programs, won Senate confirmation to become assistant defense secretary in 2017 and took over as acting defense secretary after James Mattis’ departure at the end of last year.
When Shanahan came to the Pentagon, he pledged to recuse himself from any matters involving Boeing. But in January, Politico quoted two unnamed former government officials as saying that he repeatedly praised Boeing and trashed Lockheed Martin during high-level internal meetings. One former official quoted him as describing Lockheed Martin’s F-35 fighter program as “f—ed up” and complaining that the company “doesn’t know how to run a program.”
Such reports led the inspector general’s office to launch its investigation in March.
The office said investigators interviewed Shanahan and 33 witnesses, and reviewed more than 5,600 pages of unclassified documents as well as about 1,700 pages of classified documents related to the allegations and the relevant weapons systems.
In the resulting 43-page report, investigators said Shanahan’s criticism of the F-35 program didn’t appear to violate his ethics agreements:
“Specifically, with regard to the alleged comments about the aircraft made by Boeing and its competitors, we concluded that Mr. Shanahan did not “repeatedly dump” on the F-35 aircraft in meetings. Rather, we determined that Mr. Shanahan’s comments related to the F-35 program and its performance, and were consistent with other comments about problems in the F-35 program made by other senior DoD officials.”
The report said that some witnesses recalled hearing Shanahan refer to his experience with commercial aircraft programs during discussions about driving costs down and improving performance, but that the witnesses didn’t take such comments as promoting Boeing.
“In my experience, he’s been very careful not to say something like, ‘At Boeing we would do it this way,’ ” Air Force Gen. Paul Selva, vice chairman of the Joint Chiefs of Staff, was quoted as saying in his testimony. “What he would do is say, ‘In commercial industrial engineering processes or system design processes, here are the things I have learned.’ ”
The report also delved into the mechanics of meetings that Air Force Secretary Heather Wilson and Shanahan conducted with SpaceX CEO Elon Musk in December 2018, after SpaceX’s proposal for a launch services contract was turned down.
Wilson thought Shanahan should have avoided meeting with Musk, because Boeing had won out over SpaceX for one of the contracts (by virtue of Boeing’s partnership with Lockheed Martin in United Launch Alliance). Other Pentagon officials, however, told Shanahan that he could meet with Musk as long as the contract wasn’t discussed. Here’s what the report had to say about Shanahan’s hourlong meeting with Musk on Dec. 6, 2018:
“A member of Mr. Shanahan’s staff attended and summarized the meeting in a memorandum for the record (MFR). According to the MFR, Mr. Musk discussed increased competition from China, his plans to self-fund and launch communication satellites, and his production experience at Tesla. Mr. Musk also noted that SpaceX was not successful in the recent Air Force competition for a launch service contract and that SpaceX had written a poor proposal that ‘missed the mark.’ According to the MFR, Mr. Shanahan did not comment on the bid competition.
“Mr. Shanahan told us that he met with Mr. Musk because he ‘thought it would be interesting to talk to him about his views of the future.’ Mr. Shanahan told us that Mr. Musk discussed his view on ‘electrification and autonomy,’ and how he saw ‘that space evolving here in the next 5 years because we have some really critical decisions to make in terms of our logistics system in the Army and the combat vehicles.’ ”
The inspector general’s office said the meeting didn’t violate Shanahan’s ethical obligations.
Shanahan’s spokesman, Lt. Col. Joe Buccino, said that the acting secretary refers any matters relating to Boeing to other Pentagon officials “and ensures no potential for a conflict of interest with Boeing on any matter.” Shanahan himself didn’t issue a statement relating to the report. Instead, he issued a family-friendly tweet relating to “Take Your Kids to Work Day.”
Great to have our families together here at the Pentagon for #TakeYourKidsToWorkDay! Our @DeptofDefense families are the core of the Department and the heart of defense for our freedoms and American way of life. Military service is a family affair! pic.twitter.com/t0xnHlPoOB
— Acting SecDef Pat Shanahan (@ActingSecDef) April 25, 2019
Shanahan has been in charge of the Pentagon in an acting capacity, but he would have to be nominated by President Donald Trump and confirmed by the Senate to take on the defense secretary’s position on a formal basis.