For years, it has been common practice for federal contractors to hire former government officials. And in many cases, such hires make sense given the expertise that former government officials can bring to a contractor seeking to better understand how decisions are made inside government.
On rarer occasions, however, federal contractors have become the subject of unflattering attention after hiring former government officials due to the nature of the contracts drawn up for those former officials and, in some cases, the background of the individuals involved. Watchdog groups sometimes claim that these hires taint the contract bidding process and jeopardize the integrity of critical government agencies.
Big Tech is no stranger to controversy in this arena. In 2015, Microsoft was awarded nearly $200 million in defense contracts from the Department of Defense. That same year, a former Navy Rear Admiral, who had served both as a Commander as Commander of the Naval Supply Systems Command and Chief of Supply Corps, was brought on as a general manager for the company’s new Cloud supply chain, prompting questions about appropriateness of the hiring.
In 2018, Google came under fire after news emerged that it had enlisted former Obama administration officials to facilitate the procurement of lucrative defense contracts. Reports showed that WestExec Advisors—a consultancy made up of individuals who had held prominent positions within the Obama administration—had been created to leverage connections in both Silicon Valley and the Pentagon, with the goal of streamlining the awarding of these contracts to their clients. WestExec worked with Google to land several major contracts, including coveted work on Project Maven, which was tasked with designing artificial intelligence systems for drones.
Then there’s the case of IBM, which has drawn similar scrutiny for their hirings of former government employees. Between 2009 and 2016, the company hired at least four high-ranking military officials. The individuals—who included officers from the Geospatial Intelligence Agency, the Navy and the DoD—all joined IBM within months of their resignations from their previous positions. And the timing of the new hires coincided with the awarding of a $65 million defense contract to IBM in Afghanistan at a time when the tech company was not generally associated with defense contracting work.
But these stories are not new – nor do they only involve American companies. Agility, the Kuwait-based logistics company, and one of the biggest recipients of DoD contracts in the MENA region, has continuously benefited from lucrative contracts and strong relationships in Beltway policymaking circles.
In 2005, Agility was investigated by federal authorities after it allegedly acquired advance copies of a DoD request for proposal. Later, in 2009, the company was indicted on criminal fraud charges for overbilling the DoD approximately $375 million as part of a contract to supply American troops in the Middle East with food and other essential supplies. Following the indictment, the company admitted to criminal conduct, gave up claims it valued at up to $249 million and agreed to pay $95 million as compensation to the U.S. government.
Throughout this period, the company hired former U.S. defense officials to help secure new contracts or extend the terms of existing agreements. In 2009, Agility named former US Ambassador to Iraq John Negroponte to its board of directors. In his new role, Negroponte was tasked with helping extend Agility’s existing defense contract. And in the years leading up to Negroponte’s appointment, Agility also hired the former director of the Defense Logistics Agency (DLA)—which had awarded Agility its existing contract— to head a group that was also involved in negotiating for contract extensions. Following both hirings, and despite already having an agreement with a competitor to take over the contract, the DLA abruptly canceled the agreement and extended its contract with Agility.
And Agility is by no means alone. KBR—an American engineering, procurement and construction company—for example, has also drawn attention for some of the problematic hirings it has made from the public sector. In 2017, the company appointed a former Air Force Lieutenant General to serve on its board of directors. The general, Wendy Masiello, had served as Director of the Defense Contract Management Agency prior to her retirement where she oversaw the bidding process for thousands of contracts worth $6 trillion. Coincidentally the company received over $1 billion in new contracts the same year Masiello was appointed to her new role at KBR.
For many, the U.S. government’s relationship with contractors should focus on ensuring the stability of existing contracts and streamlining the contract bidding process—particularly when these agreements have national security implications. But this may prove difficult as more attention is drawn to issues of misconduct, unethical hirings and favoritism in the awarding of critical work.
Issuance of green bonds will strengthen the international role of the euro
Eurogroup ministers discussed the international role of the euro (15 February), following the publication of the European Commission's communication of (19 January), ‘The European economic and financial system: fostering strength and resilience’.
President of the Eurogroup, Paschal Donohoe said: “The aim is to reduce our dependence on other currencies, and to strengthen our autonomy in various situations. At the same time, increased international use of our currency also implies potential trade-offs, which we will continue to monitor. During the discussion, ministers emphasized the potential of green bond issuance to enhance the use of the euro by the markets while also contributing to achieving our climate transition objective.”
The Eurogroup has discussed the issue several times in recent years since the December 2018 Euro Summit. Klaus Regling, the managing director of the European Stability Mechanism said that overreliance on the dollar contained risks, giving Latin America and the Asian crisis of the 90s as examples. He also referred obliquely to “more recent episodes” where the dollar’s dominance meant that EU companies could not continue to work with Iran in the face of US sanctions. Regling believes that the international monetary system is slowly moving towards a multi-polar system where three or four currencies will be important, including the dollar, euro and renminbi.
European Commissioner for the Economy, Paolo Gentiloni, agreed that the euro’s role could be strengthened through the issuance of green bonds enhancing the use of the euro by the markets while also contributing to achieving our climate objectives of the Next Generation EU funds.
Ministers agreed that broad action to support the international role of the euro, encompassing progress on amongst other things, Economic and Monetary Union, Banking Union and Capital Markets Union were needed to secure the euros international role.
European human rights court backs Germany over Kunduz airstrike case
The ruling by the Strasbourg-based court rejects a complaint by Afghan citizen Abdul Hanan, who lost two sons in the attack, that Germany did not fulfil its obligation to effectively investigate the incident.
In September 2009, the German commander of NATO troops in Kunduz called in a U.S. fighter jet to strike two fuel trucks near the city which NATO believed had been hijacked by Taliban insurgents.
The Afghan government said at the time 99 people, including 30 civilians, were killed. Independent rights groups estimated between 60 and 70 civilians were killed.
The death toll shocked Germans and ultimately forced its defence minister to resign over accusations of covering up the number of civilian casualties in the run-up to Germany’s 2009 election.
Germany’s federal prosecutor general had found that the commander did not incur criminal liability, mainly because he was convinced when he ordered the airstrike that no civilians were present.
For him to be liable under international law, he would have had to be found to have acted with intent to cause excessive civilian casualties.
The European Court of Human Rights considered the effectiveness of Germany’s investigation, including whether it established a justification for lethal use of force. It did not consider the legality of the airstrike.
Of 9,600 NATO troops in Afghanistan, Germany has the second-largest contingent behind the United States.
A 2020 peace agreement between the Taliban and Washington calls for foreign troops to withdraw by May 1, but U.S. President Joe Biden’s administration is reviewing the deal after a deterioration in the security situation in Afghanistan.
Germany is preparing to extend the mandate for its military mission in Afghanistan from March 31 until the end of this year, with troop levels remaining at up to 1,300, according to a draft document seen by Reuters.
Digitalization of EU justice systems: Commission launches public consultation on cross-border judicial co-operation
On 16 February, the European Commission launched a public consultation on the modernization of EU justice systems. The EU aims to support member states in their efforts to adapt their justice systems to the digital age and improve EU cross-border judicial co-operation. Justice Commissioner Didier Reynders (pictured) said: “The COVID-19 pandemic has further highlighted the importance of digitalization, including in the field of justice. Judges and lawyers need digital tools to be able to work together faster and more efficiently.
At the same time, citizens and businesses need online tools for an easier and more transparent access to justice at a lower cost. The Commission strives to push this process forward and support member states in their efforts, including as regards facilitating their cooperation in cross-border judicial procedures by using digital channels.” In December 2020, the Commission adopted a communication outlining the actions and initiatives intended to advance the digitalization of justice systems across the EU.
The public consultation will gather views on the digitalization of EU cross-border civil, commercial and criminal procedures. The results of the public consultation, in which a broad range of groups and individuals can participate and which is available here until 8 May 2021, will feed into an initiative on digitalisation of cross-border judicial cooperation expected at the end of this year as announced in the 2021 Commission's Work Programme.
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