Acting Defense Secretary Patrick Shanahan speaks at the Center for Strategic and International Studies in Washington, Wednesday, March 20, 2019.

Acting Defense Secretary Patrick Shanahan speaks at the Center for Strategic and International Studies in Washington, Wednesday, March 20, 2019. AP Photo/Andrew Harnik

Acting SecDef Under Investigation for Boeing Ties: Pentagon Watchdog

DOD's inspector general is looking into allegations of a conflict of interest that surfaced at a Senate hearing.

The Defense Department’s inspector general confirmed on Wednesday that it has launched an investigation of acting Defense Secretary Patrick Shanahan on whether he has made decisions overly favorable to his former employer, airline industry giant Boeing.

A spokeswoman for acting IG Glenn Fine released a statement saying the watchdog “has decided to investigate complaints that we recently received that Acting Secretary Shanahan allegedly took actions to promote his former employer, Boeing, and disparage its competitors, allegedly in violation of ethics rules. In his recent Senate Armed Services Committee testimony, Acting Secretary Shanahan stated that he supported an investigation into these allegations. We have informed him that we have opened this investigation.”

Joe Buccino, a spokesman for Shanahan—who is among several candidates to be permanent Defense chief—promised full cooperation. “Acting Secretary Shanahan has at all times remained committed to upholding his ethics agreement filed with the [Defense Department],” Buccino said in a Wednesday statement. “This agreement ensures any matters pertaining to Boeing are handled by appropriate officials within the Pentagon to eliminate any perceived or actual conflict of interest issue with Boeing.”

A Boeing spokesman referred queries by Government Executive, a Defense One sister publication, to the Pentagon’s statements.

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The allegations of a conflict of interest—which surfaced at a March 14 Senate Armed Services Committee hearing—were detailed in recent news reports and a March 13 letter to the IG by the transparency nonprofit Citizens for Responsibility and Ethics in Washington.

Noting Shanahan’s 30 years at the airplane maker and short government experience, the critics cited Shanahan’s alleged assertions during Pentagon meetings that “Boeing would have performed better than its competitor Lockheed Martin had it been awarded a DoD fighter jet contract,” the CREW letter said. “It was also reported that Shanahan prodded DoD to increase funding for Boeing-produced fighter jets in next year’s budget despite the Air Force’s preference for an aircraft produced by Lockheed Martin.”

CREW Executive Director Noah Bookbinder said, “Ethics rules make clear that government employees cannot abuse their offices to promote a private company, much less work on official matters involving their former employer.” He added, “We don’t know whether Shanahan had direct involvement in decisions affecting Boeing, but even the appearance of bias raises serious concerns and potential ethics violations.”

Two prominent Democrats on the Armed Services panel weighed in to welcome the probe. “Scrutiny of Acting DoD Secretary Shanahan’s Boeing ties is necessary—as he agreed with me in a recent hearing. In fact, it’s overdue,” said Sen. Richard Blumenthal, D-Conn., in a tweet. “Boeing is a behemoth 800-pound gorilla—raising possible questions of undue influence at DOD, FAA, & elsewhere.”

Sen. Elizabeth Warren, D-Mass., added her own tweet: “When I heard reports that @ActingSecDef Patrick Shanahan may have worked to promote his former employer @Boeing, I took action and investigated. Government officials should work for the people – not big defense contractors.”