Obama Pick for Pentagon No. 2 Stalls Amid Lobbying Concerns

News in Balance:

WASHINGTON, Jan. 23, 2009 -- On January 8, President-elect Barack Obama appointed William J. Lynn III, senior vice president of government operations at Raytheon Co., to become the No. 2 official at the Defense Department.

The 55 year old Lynn is a former Pentagon comptroller and Senate staffer. He was a registered lobbyist for Raytheon from 2003 through June 2008, according to the Obama transition team.

Under an executive order signed January 21, lobbyists must wait two years before accepting positions at federal agencies they have lobbied. The order also bans federal employees from accepting gifts and appointees from accepting jobs from lobbyists, and it requires greater transparency of government documents.

Wednesday an asterisk was added a to the new rule by the president's spokesman, Robert Gibbs, who said, "Even the toughest rules require reasonable exceptions."

"Our waiver provisions are designed to allow uniquely qualified individuals like Bill Corr [nominated as deputy secretary at the Department of Health and Human Services] and Bill Lynn to serve the public interest in these critical times," Gibbs said. When asked by reporters Thursday about the waivers, Gibbs said only "a very limited number" will be issued.

No such equivocation was apparent earlier Wednesday, when Obama said: "If you are a lobbyist entering my administration, you will not be able to work on matters you lobbied on, or in the agencies you lobbied, during the previous two years." The order, he said, "represents a clean break from business as usual."

As a lobbyist, Lynn worked on Pentagon budget matters including contracting policy, the military's use of space, missile defense, munitions and artillery, sensors and radars and advanced technology programs. Raytheon is one of the military's top contractors, doing $18.3 billion in U.S. government business in 2007.

On January 22 a government watchdog group, the Project on Government Oversight (POGO), asked Obama to withdraw Lynn’s nomination because it apparently violates the new rule.

"President Obama should not compromise his standards and the effectiveness of the Department of Defense by allowing a top defense industry lobbyist to receive a waiver from these standards," POGO Executive Director Danielle Brian said in a statement.

Senate action on Lynn's nomination stalled on Thursday after lawmakers realized he may require an exemption from the administration's own lobbying rules.

Sen. Carl Levin, D-Mich., chairman of the Senate Armed Services Committee, said the panel wants to determine what the waiver will say and if the new rules will force Lynn to remove himself from decisions critical to the management of the department.

Defense Secretary Robert Gates said Thursday he had requested Lynn be appointed as his deputy and that an exception to the lobbying rules be made. Nevertheless, Gates said, he understands Congress needs more information before it will feel comfortable with the appointment.

Late Thursday, the Obama administration sent Congress the details of the waiver, said an Obama spokesman, who declined to provide further detail.

When Levin was asked by reporters whether relying on waivers weakens the administration's desire to get tough on lobbyists, the Democratic senator said "I don't think it helps to reinforce the intent of it."

Democratic Sen. Claire McCaskill, a former Missouri state auditor and a strong Obama supporter, questioned Lynn about his turns through the revolving door of government and industry.

Other Democrats said they were concerned but wouldn't stand in the way.

Sen. Jim Inhofe, R-Okla., a senior member of the committee that votes on the appointment, hasn’t called for a hold, but was quick to press for more details about how the appointment fits with Obama’s rules.

"While I announced my support for Mr. Lynn’s nomination, the announcement of the new ethics executive order is puzzling given that Mr. Lynn was openly questioned by Sen. McCaskill on his role as a lobbyist for Raytheon during his hearing," Inhofe said.

Scott Amey, general counsel at POGO said, "It seems as if the Obama administration took five steps forward with its order on openness, transparency and ethics, but when you look how it is going to be applied, if it is riddled with lobbyists who have received waivers, it has pretty much made the ban toothless."

The Deputy Secretary of Defense functions as the chief operating officer for the department, making calls on roughly $200 billion in spending. Lawrence Korb, a military expert, estimated that Raytheon, Lynn's former employer, was involved in about half of that business.

"It certainly does not bode well for his effectiveness in the job," said Korb and added the apparent conflicts Lynn would face as Deputy Secretary "is something they should have thought about."

(Report from Pentagon and commercial media sources.)

Related Sources:
Obama Picks Defense Lobbyist as Pentagon No. 2
AP FACT CHECK: Exceptions made to anti-lobbyist rule
AP: Pentagon nomination stalls
Federal Computer Week: POGO urges Obama to withdraw Lynn's nomination
ABC News: Obama Pentagon Pick Blasted

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