BA Boeing Co

By Nancy A. Youssef and Gordon Lubold 

The Defense Department Office of Inspector General has concluded that acting Defense Secretary Pat Shanahan didn't seek preferential treatment for his longtime former employer, Boeing Co., while serving in government, removing a major hurdle to his formal nomination to the post.

The investigation focused on Mr. Shanahan's conduct during meetings and other events he attended as deputy defense secretary, including those touching on equipment and procurement matters. In particular, complaints centered on discussions involving the F-35 combat aircraft built by Boeing competitor Lockheed-Martin Corp. and the KC-46 Pegasus tanker designed by Boeing.

"We determined that Mr. Shanahan did not make comments promoting or favoring Boeing," part of the 43-page report read. "Rather, Mr. Shanahan shared his aircraft industry experience to highlight best practices, decrease costs, and increase performance, not specifically to promote Boeing or any specific aircraft."

The Office of Inspector General report added: "We also concluded that Mr. Shanahan did not make comments that specifically disparaged Boeing's competitors, including Lockheed Martin and its CEO. We determined that Mr. Shanahan's comments were directed at holding contractors accountable and saving the Government money, consistent with his duties as deputy secretary of defense."

President Trump could nominate Mr. Shanahan within days to be the permanent defense secretary, U.S. officials said, although they stressed it remains unclear what Mr. Trump will do. Mr. Shanahan became acting secretary of defense in January following the abrupt departure of Jim Mattis, who resigned as secretary over policy differences with Mr. Trump.

The Pentagon's inspector general initiated the investigation last month after several complaints, including one filed on March 13 by Citizens for Responsibility and Ethics in Washington, an independent watchdog and advocacy group, citing news reports in charging that Mr. Shanahan during meetings had made statements promoting his former employer before subordinates.

The inspector general's report said one complaint came from an attorney for the Senate Armed Services Committee and several others were from the office of Sen. Elizabeth Warren (D., Mass.).

While finding no evidence of wrongdoing, the investigation shed light on the numerous mechanisms put in place for Mr. Shanahan to avoid a possible conflict of interest, a step commonly taken when a defense contracting executive takes a high-level post at the Pentagon.

Secretary of the Air Force Heather Wilson voiced concern about Mr. Shanahan holding a December 2018 meeting with SpaceX founder and Chief Executive Elon Musk, given that his company competed with Boeing on a launch-vehicle contract. Mr. Shanahan sought an ethics opinion beforehand and thus didn't violate ethical standards, the inspector general found.

"Secretary Shanahan has at all times complied with his Ethics Agreement, which screens Boeing matters to another DoD official and ensures no potential for a conflict of interest with Boeing on any matter," Mr. Shanahan's spokesman, Army Lt. Col. Joe Buccino, said.

The inspector general report was based on reviews of 5,600 unclassified documents, 1,700 classified documents and interviews with 34 witnesses, including Mr. Shanahan, nearly every top service chief, the secretaries of the Air Force and Navy, the chairman and the vice chairman of the Joint Chiefs of Staff and Mr. Mattis.

Mr. Mattis is quoted defending his former deputy's approach to the job, saying: "I didn't pay him to be a shrinking violet when it came to saving the government money."

The findings were reached relatively quickly, as some investigations by the inspector general's office last for months. Mr. Shanahan was briefed on the inspector general's conclusions late Wednesday, officials said.

If nominated, Mr. Shanahan still faces a confirmation vote in the Senate, where some members have expressed concern over his limited policy experience as a decadeslong industry executive.

Mr. Trump, while believed to favor Mr. Shanahan as a defense chief, also has maintained that he enjoys the flexibility of having individuals serving in acting capacities.

Mr. Shanahan is the longest-serving acting defense secretary in the department's history. He served previously as deputy defense secretary for 17 months.

Write to Nancy A. Youssef at nancy.youssef@wsj.com and Gordon Lubold at Gordon.Lubold@wsj.com

(END) Dow Jones Newswires

April 25, 2019 14:32 ET (18:32 GMT)

Boeing (NYSE:BA)
Gráfico Histórico do Ativo
De Mar 2024 até Abr 2024

Boeing (NYSE:BA)
Gráfico Histórico do Ativo
De Abr 2023 até Abr 2024