January 29, 2009 / 10:10 PM / in 10 years

Obama Pentagon nominee draws fresh Senate fire

WASHINGTON, Jan 29 (Reuters) - The top Republican on the U.S. Senate Finance Committee raised a fresh challenge on Thursday to a former Raytheon Co (RTN.N) lobbyist nominated to be the deputy secretary of defense.

Sen. Charles Grassley of Iowa, in a letter to White House budget chief Peter Orszag, said he could not fathom President Barack Obama’s nomination of William Lynn, let alone a waiver he was granted from newly ordered ethics standards that Obama issued as one of his first acts in office.

The waiver for Lynn in effect “gutted the ethical heart” of Obama’s crackdown on the traditional Washington “revolving door” between government and contractors, Grassley wrote.

Lynn, the Pentagon’s chief financial officer for four years under former President Bill Clinton, currently is a senior vice president at missile-making Raytheon, which posted more than $10 billion in prime Pentagon contracts last year.

As a registered Raytheon lobbyist for six years, mandatory reports showed Lynn had sought to persuade Congress and the Pentagon on a “very broad range” of Defense Department programs and issues, Grassley wrote.

Financial disclosure records show Lynn is to receive a Raytheon defined benefit pension of $4,300 per month starting Jan. 1, 2019. The same form shows he would be forfeiting Raytheon-awarded shares, not yet “vested” or available for sale, which could have been worth as much as $500,000 were he to stay with the company.

A staunch Senate champion of accountability, Grassley asked Orszag, who had issued the Lynn waiver in the U.S. “public interest,” to spell out the criteria used in doing so. He also asked for a White House accounting of any “inherent conflicts of interest” that Lynn would face at the Pentagon.

In a related development, Sen. John McCain, the top Republican on the Armed Services Committee and Obama’s opponent in the November election, voiced disappointment with Lynn’s response to McCain’s request this week for details on how Lynn would meet conflict-of-interest rules if confirmed.

At issue, McCain wrote in a letter to Lynn dated Thursday, was an accounting of the issues on which he had lobbied on Raytheon’s behalf “that would raise concern with the American public if you took action on them, or any other issue that could impact Raytheon.”

If confirmed by the Senate, Lynn would work as the Pentagon’s top operations manager, with the final approval authority on most if not all contract, program and budget decisions.

Defense Secretary Robert Gates, a Bush administration holdover, has praised Lynn as the best candidate for the job.

Obama’s new policy requires appointees to recuse themselves from work related to their former employer or clients, as well as from matters or issues for which they lobbied in the previous two years.

Although granted a waiver from this standard in the “public interest,” Lynn would be subject to previously existing Executive Branch rules that would require him to seek approval for one year to take part in any decision involving a prior employer.

The Project on Government Oversight and other private watchdog groups also have argued that Lynn’s confirmation would undercut Obama’s new anti-“revolving door” broom.

“This isn’t just a question of a personal financial interest, but loyalties developed from having been an advocate for a particular company,” said Mandy Smithberger, a POGO national security investigator. As deputy secretary of defense, she said, he would have an enormous impact on his former employer’s bottom line. (Reporting by Jim Wolf; editing by Matthew Lewis)

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