Contractor ethics plan quashed in House-Senate negotiations

A Senate plan to officially identify former Pentagon officials who go to work for defense contractors was quietly zapped as the fiscal 2006 defense authorization bill moved out of conference committee last year.

The removal of the provision from the defense bill that would have required the defense companies to report the names of former members and military officers to benefit from government contracts signals the problems likely ahead in changing ethics rules for both lawmakers and lobbyists.

The Senate Armed Services Committee approved in May a provision requiring companies with defense contracts over $10 million to send an annual report to the Pentagon with the names of former defense officials or military officers who received compensation from the contractor.

The ethics plan was approved unanimously by the Senate last November in its version of the defense authorization bill. The proposal also required a review of ethics issues raised by private contractors who perform duties similar to government functions. The House bill did not have those provisions.

As the House and Senate were packing for the Christmas and congressional holidays, the contractor disclosure provisions silently disappeared in a House-Senate conference committee. The conferees approved the $491.5 billion military bill without the contractor ethics rules.

Contractor disclosure apparently got scrubbed after the Pentagon raised objections, according to one top Senate staffer involved in the talks.

The department apparently felt "there were too many people covered" by the provision, and there also was resistance by the House during a short conference meeting prior to the lawmakers' departure for the holidays.

While lacking disclosure provisions, the bill signed into law in January does contain some new reporting requirements.

A House Armed Services Committee aide noted the final bill requires the GAO to review efforts by the Pentagon to assess areas of vulnerability to fraud, waste and abuse.

If the GAO sees a need for contractor reporting, "it's something we'll look at," said the House Armed Services aide. A Senate Armed Services Committee staffer said disclosure issues might surface again.

At the time last year when the Senate considered the disclosure scheme, revealing which former officials work for defense contractors seemed a modest effort at transparency.

It followed numerous recent reports about a "revolving door" between former government officials and firms doing government business.

One of the most notorious cases involved Darleen Druyun, a high-ranking Air Force procurement official overseeing Boeing Co. air tanker negotiations at the same time she was discussing a top Boeing job for herself.

She pleaded guilty to conspiracy charges and was sentenced in 2004 to nine months in prison.

The original Senate contractor disclosure plan was prompted in part by Paul McNulty, former U.S. attorney for the eastern district of Virginia, who testified before the Senate Armed Services AirLand Subcommittee last April that he found limited reporting made it difficult to identify ethics violations and corruption by former Pentagon officials who work for defense contractors.

McNulty, who handled defense corruption and terrorism cases, is now awaiting Senate confirmation as deputy U.S. attorney general.