Former Boeing Exec Shanahan Out at Pentagon, Former Raytheon Lobbyist Esper Steps In

THE PENTAGON: In another unexpected turn in an administration full of surprises, President Donald Trump tweeted today that Acting Defense Secretary Patrick Shanahan was bowing out of the running to take the job on a permanent basis, and Army Secretary Mark Esper would take over the job in an acting capacity. Esper’s close partner for the last two and a half years, former Army Chief of Staff, Gen. Mark Milley, is already Trump’s nominee for the chairman of Joint Chiefs of Staff.

Shanahan’s ouster caps a tumultuous five-month tenure that came after Defense Secretary Jim Mattis resigned in protest on Dec. 31. Shanahan worked to gain the trust of Capitol Hill to some success in recent weeks, but a series of damaging stories about his management, and personal issues pertaining to his divorce, helped sink him

Esper, like Shanahan, comes to the Pentagon from the defense industry, something which was a source of tension for Shanahan as he sought to distance himself from Boeing, where he had spent three decades as an executive. While Shanahan occupied executive suites, Esper worked as a lobbyist for Raytheon from 2010 to 2017, pitching former Capitol Hill colleagues on Raytheon programs and working to influence the annual defense budget. The Hill recognized Esper as one of Washington’s top corporate lobbyists in 2015 and 2016.

Shanahan’s ties to Boeing were problematic. By contrast, Esper has already survived the nomination process to become the Army’s top civilian and apparently avoided entanglements with his former employer.

But Congress and watchdog groups will likely take a harder look at Esper’s lobbying past and demand he recuse himself from any decisions having to do with the giant defense contractor. In some ways that might prove more difficult than Shanahan’s Boeing recusal. Rather than making airplanes or ships or large weapons platforms, Raytheon has made much of its business making components, such as radars, that fit inside other companies’ platforms, giving the company a much wider reach across the entire military than Boeing enjoys.

Esper also brings a load of Congressional experience to the job, having worked as a top staffer in both the Senate and House Armed Services Committees. He was also a senior policy advisor and legislative director for then-Senator Chuck Hagel, a moderate Republican who would later take his own turn as President Obama’s Defense Secretary.

As Army Secretary, Esper has overseen the massive overhaul of how the service buys equipment, helping slash outdated and underperforming programs to make way for future investments in leap-ahead technologies aimed at countering Russia and China. Esper was nominated just as then-Army Chief of Staff Milley was preparing to roll out the biggest reorganization of the Army bureaucracy in 40 years, creating a new Army Futures Command to pursue six high-priority technologies. Though Esper was only formally confirmed after Milley announced the new strategy, he became a leading and enthusiastic spokesman for the new command and the Big Six, including controversial programs to build new long-range missiles. At the same time, Esper’s Hill experience and business background helped soften the hard-charging Gen. Milley’s rougher edges and moderate some of his outbursts of enthusiasm — for example, when Esper emphasized the importance of evolutionary improvements and mature technology after Milley called for tenfold leaps in capability.

Esper, along with his undersecretary Ryan McCarthy — the obvious candidate for acting Army Secretary — has worked much closer than most preceding civilian leadership teams with the service’s top uniformed leaders, Gen. Milley and then-Vice Chief of Staff James McConville, who’s now Chief. The four men collectively scoured the Army budget and quizzed subordinates in a series of infamously grueling “night court” sessions and found $33 billion in savings over 10 years, ruthlessly cutting lower priority programs to fund the Big Six priorities. Esper funded — and championed — new technologies from high-tech infantry rifles to long-range hypersonic missiles, while staunchly defending unpopular cuts to big programs like Boeing’s CH-47 Chinook helicopter, which first saw service in Vietnam.

An Esper-Milley team at the top of the Pentagon, even temporarily, would be good news for the Army’s priority programs. That said, both men would be under pressure to avoid favoritism and would probably get tough on the Army in areas they did not see progress — something they showed their ability to do in the budget purge.