Trading a Uniform for a Suit

For retired brass, high-paying defense industry jobs beckon

By Douglas Waller

Illustration by Kelsey Dake

When Kenneth Eickmann was a three-star general in charge of the U.S. Air Force’s Aeronautical Systems Center, a defense contractor invited him to lunch. The man’s company was competing for a major weapons contract the general’s center was overseeing, so Eickmann declined the social contact.

Two days later an old friend, a retired general, phoned to get together for lunch. When Eickmann arrived at the restaurant, a surprise awaited him: The contractor accompanied his friend, who, it turned out, also worked for the company. “I never sat down at the table,” says Eickmann, recalling the 1997 incident. He is now retired from the military.

Senior officers once faded away after active duty, says Senator Jack Reed, a company commander in the 82nd Airborne Division during the 1970s. Not now. For many generals and admirals, “professional success no longer means just reaching flag rank,” says the Rhode Island Democrat. The bigger prize is a high-paying defense industry job that comes after hanging up the uniform.

The Government Accountability Office reported in 2008 that 52 U.S. defense contractors employed 2,435 retired generals, admirals, top Pentagon officials, and midlevel bureaucrats who had overseen arms procurement programs before leaving government. Retired officers will likely be even more in demand as defense budgets face cuts and companies hunt for an edge in the competition for once-plentiful contracts.

The defense industry finds retired flag officers useful as rainmakers who contact friends still in the military to try to steer contracts a company’s way. The revolving door is lubricated by what watchdog groups say are weak conflict-of-interest rules, lucrative salaries, and reliance on the military’s deference to rank.

Generals and admirals find the defense industry to be a natural fit for their talents. They’re proven managers, having led thousands and often overseen multibillion-dollar budgets.

For a high-ranking officer, industry’s financial lure can be powerful. Top executives at the largest U.S. defense contractors are paid from $1 million to $11 million a year; the annual base salary for the chairman of the Joint Chiefs of Staff is $243,162.

The top 10 U.S. defense contractors have 30 retired senior officers or former national security officials serving on their boards. Press releases issued by those companies since 2008 announced the hiring of almost two dozen prominent flag officers or senior officials as high-ranking executives.

One of the latest is General James L. Jones, former commandant of the Marine Corps and former national security adviser to President Barack Obama. On Aug. 3, Jones was elected to the board of General Dynamics. Retired Air Force General Joseph Ralston (former NATO commander), Admiral James Ellis Jr. (former head of the U.S. Strategic Command), and Admiral James Loy (former Coast Guard commandant) sit on the board of Lockheed Martin, the largest U.S. defense contractor. L-3 Communications Holdings, the Pentagon’s eighth-largest contractor, has added four senior flag officers to its payroll since 2008, including Richard Cody, a former Army vice-chief of staff who serves as corporate senior vice-president in charge of Washington operations. Jones, Ellis, Ralston, and Loy declined to comment. Cody turned down a request for an interview.

Watchdog groups are troubled by the trend. Are the retired officers “providing an unfair competitive advantage for their private employer that’s based on whom you know rather than what’s in the best interest of the Defense Dept. and the public?” asks Scott Amey, general counsel for the Project on Government Oversight in Washington.

In 2004, Darleen Druyun, a senior Air Force procurement official, was sentenced to nine months in prison after pleading guilty to favoring Boeing in contract negotiations while arranging a post-government job with the Chicago-based aircraft manufacturer.