GAO: More monitoring needed of potential conflicts of interest

Thousands of former Pentagon officers, executives and contracting officials are working for large defense contractors without strong oversight of their potential conflicts of interest, according to a new report from the Government Accountability Office.

Each year, civilian and military personnel leave the Defense Department to take jobs with defense contractors. Senior and acquisition personnel who do so are subject to restrictions, in part to protect against conflicts of interest, such as when a former Pentagon senior official uses former connections at the agency to benefit a contractor.

However, attempts to monitor compliance with those restrictions appear to be inadequate, GAO said. A survey revealed significant underreporting by contractors and substantial potential for conflicts of interest in such employment, GAO said. The watchdog agency recommended that DOD consider additional measures to oversee compliance.

In 2006, 52 major defense contractors employed about 86,000 former military personnel who had left the Pentagon since 2001, the GAO report said. Of that number, 2,435 were former senior officials including generals, admirals, program managers and contracting officers subject to restrictions on post-Defense employment.

Of the employees subjected to restrictions, 1,581 were employed by seven contractors: Science Applications International Corp., 263; Northrop Grumman Corp., 260; Booz Allen Hamilton Inc., 243; L3 Communications Holding Inc., 241; Lockheed Martin Corp., 221; General Dynamics Corp., 207; and Raytheon Co., 146.

When contractors were asked to estimate how many individuals they hired from DOD who were subject to restrictions, they reported about half the actual number, the GAO report said.

"Our analysis found a significant under-reporting of the contractors' employment of former DOD officials," the report said.

Furthermore, based on results reported in an informational survey, GAO found that about 442 former DOD officials may have been employed on contracts related to their former agencies, and nine of those executives may have been working on contracts for which they formerly had oversight responsibilities.

GAO looked at broad survey data and did not investigate specific cases. "While contractors could have employed quite a few former DOD officials on assignments related to their prior DOD positions, there could be appropriate justification for each of these situations," GAO said.

Nonetheless, GAO suggested that the evidence indicates a need for greater oversight.

"We are recommending that DOD consider the relevant recent statutory changes and determine if additional reporting or other requirements should be imposed on contractors to guard against violations of the government's post-employment" rules, the report concluded.