New Pentagon chief under scrutiny over perceived Boeing bias

By ELIANA JOHNSON and DAVID BROWN

Concerns about Patrick Shanahan's Boeing ties have re-emerged since President Donald Trump said he may be running the Pentagon ‘for a long time.'

Acting Defense Secretary Patrick Shanahan's private remarks during his 18 months at the Pentagon have spurred accusations that he is boosting his former employer Boeing, people who have witnessed the exchanges told POLITICO — fueling questions about whether he harbors an unfair bias against other big military contractors.

Shanahan, who spent 31 years at Boeing before joining the Pentagon in mid-2017, has signed an ethics agreement recusing him from weighing in on matters involving the mammoth defense contractor. But that hasn't stopped him from praising Boeing and trashing competitors such as Lockheed Martin during internal meetings, two former government officials who have heard him make the accusations told POLITICO.

The remarks raise questions among ethics experts about whether Shanahan, intentionally or not, is putting his finger on the scale when it comes to Pentagon priorities. They also call new attention to a recent decision by the Pentagon to request new Boeing fighters that the Air Force has said it does not want — a request that Bloomberg has reported came after "prodding" from Shanahan.

Concerns about Shanahan's ties to his former employer first surfaced during his confirmation hearing to be deputy secretary, but they have re-emerged since President Donald Trump said last month he may be running the Pentagon “for a long time.”

In high-level Pentagon meetings, Shanahan has heavily criticized Lockheed Martin's handling of the production of the F-35 fighter jet, which is expected to cost more than $1 trillion over the life of the program, according to one of the two sources, a former senior Defense Department official who was present.

Shanahan, this official said, called the plane “f---ed up” and argued that Lockheed — which edged out Boeing to win the competition to build the plane in October 2001 — “doesn't know how to run a program.”

“If it had gone to Boeing, it would be done much better,” Shanahan said, according to the former official.

As the Pentagon's No. 2, Shanahan repeatedly "dumped" on the F-35 in meetings, calling the program "unsustainable," and slammed Lockheed Martin's CEO, Marillyn Hewson, according to the second source, a former Trump administration official. "'The cost, the out-years, it's just too expensive, we're not gonna be able to sustain it,'" this person said, quoting Shanahan.

The former Trump official said Shanahan "kind of went off" about the F-35 at a retreat for Republican lawmakers last year at the Greenbrier resort in West Virginia. This angered several members of the delegation who had home-district interests in the F-35 program, the former official said.

"He would complain about Lockheed's timing and their inability to deliver, and from a Boeing point of view, say things like, 'We would never do that,'" this former official said.

Shanahan is the first Pentagon chief to come purely from the private sector since the 1950s and has virtually no government or policy experience. He became the acting Defense secretary Jan. 1, following former Secretary Jim Mattis' resignation over Trump's abrupt decision to pull U.S. troops from Syria and begin drawing down from Afghanistan. He has signed an ethics agreement barring him from weighing in on any matters involving his former employer, the Pentagon's fifth-largest contractor in 2017.

Shanahan's experience at Boeing is “his only reference point," the former Trump administration official said. "He doesn't have a lot of other experiences to draw on. He owns it in a powerful way because he doesn't have the military experience, he doesn't have the experience in government. So when he talks about those things, he's very forceful."

His remarks about the F-35 stand in stark contrast to those of the president, who regularly praises the stealth fighter despite initially slamming its high costs.

The F-35 program, while experiencing a number of setbacks, technical delays and groundings throughout the years, is generally considered to be on the mend. The Air Force and Marine Corps variants have been declared ready to deploy, and the Navy version is expected to reach that point as early as next month. And unit costs have come down for all three variants as the plane matures.

Trump has praised Shanahan's ability to cut costs, calling him a “great buyer.” He is now among the candidates the president is considering as a permanent replacement for Mattis.

Asked for comment, Shanahan's office released a statement saying he is committed to his agreement to stay out of matters involving Boeing.

“Under his ethics agreement, Mr. Shanahan has recused himself for the duration of his service in the Department of Defense from participating personally and substantially in matters in which the Boeing Company is a party,” his office said.

Full article: https://www.politico.com/story/2019/01/09/defense-patrick-shanahan-boeing-pentagon-1064203