Acting Defense Chief Cleared of Accusations of Ethics Abuse

Acting Defense Secretary Patrick Shanahan got a boost in his bid to get the permanent Cabinet job on Thursday when the Pentagon’s inspector general decisively cleared him on charges that he had used his federal office to go to bat for his former employer, the major contractor Boeing Co.

A 44-page report from the watchdog team led by acting IG Glenn Fine concluded that “the allegations were not substantiated, and that Mr. Shanahan fully complied with his ethics agreements and ethical obligations regarding Boeing and its competitors.”

The probe had been demanded by Senate Democrats, including Elizabeth Warren of Massachusetts and Richard Blumenthal of Connecticut, as well as the nonprofit Citizens for Responsibility and Ethics in Washington. Shanahan had denied any improprieties at a March 14 Senate Armed Services Committee hearing, and expressed support for a full probe.

Charges included the notions that Shanahan inappropriately discussed a classified matter, steered a Defense official to visiting a Boeing flight simulation facility, and met inappropriately with inventor and space travel entrepreneur Elon Musk, a Boeing competitor.

In a sample allegation, Shanahan—who worked at Boeing for 31 years—tried to force the commandant of the Marine Corps, Gen. Robert Neller, to buy Boeing F/A-18s Super Hornets, and threatened to cut other Air Force programs unless the Air Force Chief of Staff, Gen. David Goldfein, supported buying Boeing F-15Xs Eagle fighters, the IG noted.

But the IG “found no evidence that Mr. Shanahan pressured Gen. Neller or the Marine Corps to buy Boeing F/A-18s. We likewise found no evidence that Mr. Shanahan threatened to cut Air Force programs unless Gen. Goldfein supported purchasing Boeing F-15Xs. We concluded that Secretary [Jim] Mattis made the fighter mix decision, and that Navy, Air Force, and [Office of Cost Assessment and Program Evaluation] officials made the decisions on which specific types and numbers of aircraft to purchase,” the report said.

Nor did Shanahan make comments, as press reports suggested, promoting Boeing and maligning competitors such as Lockheed Martin Corp. or its CEO, the report said. “While Mr. Shanahan did routinely refer to his prior industry experience in meetings, witnesses interpreted it, and told us, that he was doing it to describe his experience and to improve government management of DoD programs, rather than to promote Boeing or its products,” the IG found. “Shanahan shared his aircraft industry experience as an industrial engineer and supply chain manager to highlight best practices, decrease costs, and increase performance for the DoD’s benefit, not to promote Boeing or any specific aircraft.”

The comments addressing Lockheed Martin, the investigation found, “were directed at holding contractors accountable and saving the government money, consistent with his duties as deputy secretary of Defense.”

The comment from one witness about the troubled F-35 aircraft, in which Shanahan reportedly called the plane “f—ed up,” were actually about the massive and controversial program, the report said. “We determined that Mr. Shanahan’s comments about the F-35 program were substantive, related to the program’s performance, and were consistent with comments about the F-35 program made by other senior government officials,” the IG said. “We determined that Mr. Shanahan only participated in broad policy discussions and not in specific discussions about quantities and types of aircraft to purchase.”

Former Defense Secretary Mattis was interviewed for the report, and he described Shanahan’s role in F-35 policy as:

He was trying to get the program to a point that we can have confidence in the numbers we said we were going to buy. If you say you’re going to buy them and the cost is supposed to go down and each block comes off, and the plant gets more efficient, the supply chain is more efficient is not happening that we say that the cost per flight hour is going to be lower and the cost per flight hour is not going lower then you’ve got a problem. The program is unsustainable.

As for a report that Shanahan’s critique of the F-35 program “angered” lawmakers at a 2018 retreat at the Greenbrier resort in West Virginia, the acting secretary told investigators he had never even visited the Greenbrier.

The report reprinted Shanahan’s ethics agreement and detailed letter to Defense Department alternate designated ethics official Ruth Vetter about his divestment of defense-industry-related financial assets. The IG noted that other officials were aware of the situations in which Shanahan was working under an ethics disqualification.