WASHINGTON – A company helps companies manage global risks and the political and procedural specifics of Washington. The other is a mutual fund with a particular interest in military contractors.
Advisory firm WestExec Advisors and mutual fund Pine Island Capital Partners consider themselves strategic partners and have an overlapping list of politically connected officials – including some of the best-known names of President-elect Joseph R. Biden Jr.’s team and others who are responsible for high-level contributions be considered.
Now the Biden team’s links to these in-depth management units are introducing their first test of transparency and ethics.
The two companies are examples of how former civil servants use their expertise, connections, and access for business and other interests without, in some cases, disclosing details about their work, including the names of customers or the way they are paid .
And when these officials return to government positions, as the WestExec and Pine Island-affiliated Democrats are now, they bring with them questions about whether they might prefer or give them special access to the companies they’ve worked with in the private sector. Those questions aren’t going away, say ethics experts, just because officials sever ties with their companies and customers, as the Biden transition team says its candidates will.
WestExec founders include Antony J. Blinken, Mr. Biden’s election as Secretary of State, and Michèle A. Flournoy, a leading candidate for Secretary of Defense. WestExec members include Avril Haines, Mr. Biden’s election as director of the national secret service. Christina Killingsworth who is Assistance to the elected president in the organization his household office in the White House; Ely Ratner, who helps organize the Biden Transition at the Pentagon; and Jennifer Psaki, an advisor on Mr. Biden’s transition team.
WestExec did not respond when asked for a list of its customers. According to those familiar with the arrangement, that includes Shield AI, a San Diego-based company that makes surveillance drones and signed a contract worth up to $ 7.2 million with the Air Force earlier this year to provide artificial intelligence tools that aid drones in combat missions.
At the same time, Mr. Blinken and Ms. Flournoy have served as advisors to Pine Island Capital this month raised $ 218 million including for a new fund to finance investments in military and aviation companies.
Pine Island Capital was on some sort of buying frenzy that year and bought the weapon system parts maker Precinmac and a company until recently known as Meggitt training systems and now known as InVeris, which sells computer-simulated weapons training systems to the Pentagon and law enforcement agencies.
Another person listed as a member of the Pine Island team is Lloyd J. Austin III, a retired Army general who is also being considered as Secretary of Defense, according to someone familiar with the selection process.
Pine Island also works with Richard A. Gephardt, the former House Majority Leader, and Tom Daschle, the former Senate Majority Leader, both Democrats, and Don Nickles, a Republican who chaired the Senate Budgets Committee and is now the Executive Director of a lobby company with dozens of large corporate clients.
Ms. Flournoy, who served as Secretary of Defense for Policy during the Obama administration and Assistant Secretary of Defense during the Clinton administration, has other business relationships that could overlap her role if Mr. Biden selects her to head the Pentagon.
she is a Board member at Booz Allen Hamilton, a global company that has signed billions in federal contracts, including a deal signed in 2018, to provide cybersecurity services to six federal agencies. This firm paid her about $ 440,000 In the past two years, most of them have received stock awards.
republican have already signaled that they intend to assist WestExec in confirmation hearings for Mr. Blinken and other candidates with links to do so.
And Mr Biden’s team has been pressured by the left and government watchdogs to outline steps to minimize corporate impact and conflicts of interest that marked President Trump’s tenure from the start.
These groups fear not only that Mr Biden’s advisors could shape government policy in such a way that companies that have paid their companies could benefit, but that the companies could become magnets for those seeking access in the Biden administration.
At the very least, according to these critics, Mr. Biden must demand that his team fully disclose all financial relationships and customers, dispose of all investments, and ensure that his employees withdraw from decisions that may benefit their previous business interests.
“We want to make sure that they are not obligated to anyone and that any decisions they make are beyond reproach,” he said Mandy Smithberger, Director of the Project on Government Oversight, a nonprofit group that investigates federal spending and conflicts of interest.
A spokesman for Mr. Biden said in a statement that if they had not already done so, Mr. Blinken and all other agents who were partners of WestExec and Pine Island would leave the companies, sell their ownership interests and “get it right” ” Customer information.
“Joe Biden has pledged the most ethical government in American history, and every cabinet member will adhere to strict ethics and all disclosure requirements,” said spokesman Andrew Bates. Mr Blinken was saying goodbye to Pine Island and WestExec as early as August when he joined the Biden campaign full-time.
However, Mr Biden’s interim office did not say that all customers would be disclosed – and did Ethical rules Allow incoming federal officials to withhold customers’ identities if the agreements are subject to confidentiality agreements.
WestExec cited such agreements in a statement explaining why some of its clients would not be disclosed to the New York Times.
“In general, many of our customers require us to sign nondisclosure agreements, which are standard business practices to protect confidential information,” WestExec said in a written statement when asked for a list of its customers who do business with the Pentagon or State Department. “We are legally and ethically bound by these agreements.”
Mr Biden’s interim office said Mr Blinken received “permission” from customers to reveal their identities, but did not say that all customers would be disclosed.
WestExec was founded in 2017 to provide “unique geopolitical and political expertise” to companies searching for “external factors and relationships that affect business” in Washington and around the world.
The company said it “does not lobby, act as an agent for foreign clients, or work for any government or state-owned company.”
The transition of the president
The co-founders – Mr Blinken, Ms. Flournoy, Sergio Aguirre and Nitin K. Chadda – had worked in foreign policy and national security posts under President Barack Obama. The company has clearly emphasized these connections and has shown a large photo of Mr Blinken in the Situation Room of the White House with Mr Obama on its website.
The company became something of a repository for prominent national security and foreign affairs officials from previous Democratic administrations, who could help attract customers while they waited to rejoin the next Democratic administration.
Two former government officials listed as employers on WestExec – Former Assistant Secretary of Defense Robert O. Work and Former Assistant C.I.A. Director David S. Cohen – recently came to Mr. Blinken to brief Mr. Biden and Vice President-elect Kamala Harris of what the new administration called “National Security Planning”.
And former Obama adviser Lisa Monaco, who it was listed as client It is believed that WestExec is considering a position in the Biden Administration.
Mr. Biden’s team has downplayed some of its consultants’ connections with WestExec. While the company listed both Ms. Haines and Ms. Psaki as WestExec directors, a transition official said they had spent relatively little time with the company, with Ms. Haines serving as a consultant and Ms. Psaki serving as an outside contractor.
WestExec’s business plan accommodates the revolving door between the influence industry and the government by providing services that draw on government expertise without triggering lobbying laws requiring officials to disclose their customers’ identities or specific issues to the government .
Registering as lobbyists would also have limited the ability of WestExec officials to work for the Biden transition, creating rules prohibiting participants who campaigned for the transition last year from participating in the transition, if it was because, they get exceptions.
The Biden administration is expected to impose restrictions on ex-lobbyists, and if it follows the Obama administration’s lead, it will also prevent the appointees from influencing their ex-lobbyists Agency for two years after leaving the government.
The side effect of the restrictions on Obama lobbying was that what critics termed “shadow lobbying” increased. Corporations advised clients on doing business in Washington, including managing bureaucracy and referring to officials overseeing potentially lucrative contracts. While the consultants may not be officially committed to securing the business, their connections and knowledge make them valuable.
Mr Bates said Mr Blinken did not advise clients on how to get federal contracts and that most of his work has been in geopolitical risk assessment.
But WestExec website offers case studies of how it has helped customers without identifying them by name. For one thing, the company says it helped a billion dollar American tech company and an American pharmaceutical company grow sales in East Asia by “protecting against US-China trade tensions.”
In two other cases, WestExec said it had helped companies promote artificial intelligence-related services – an increasing priority for national security and intelligence agencies in the US and around the world.
Mr Biden has indicated that his administration intends to do so spend a lot of money on research with artificial intelligence, a recommendation in a report published last year from a think tank owned by Mrs. Flournoy.
WestExec said in one of its case studies that it helped an “artificial intelligence analytics firm” secure “critical pilot programs with multiple national security agencies.”
Another WestExec customer, Shield AI, was founded in 2015 by a former member of the Navy SEALs to use artificial intelligence to protect service members and civilians. It won one $ 1 million contract from the Department of Defense in 2016 before the Air Force contract was signed that year for up to $ 7.2 million.
A Shield AI official said WestExec played no role in securing government contracts awarded to the company.
Wired Magazine reports Last month, Ms. Flournoy helped Shield AI develop guidelines for the use of artificial intelligence that incorporate human judgment, quoting her as saying, “The Department of Defense doesn’t want to remove people. It wants to make people better.”
WestExec has also reportedly represented Windward, an Israeli artificial intelligence company The American perspective. Windward representatives did not respond to requests for comment.
Pine Island is similarly optimistic about artificial intelligence. in the the S. filing from SeptemberThe Department of Defense has been predicted to prioritize “rapid technological advances” in artificial intelligence and other high-tech areas.
The stock sale in November – at least so far overall $ 218 million – is used to set up what is called “Blank check company“That’s ready to buy a new target, likely in the military or aerospace sectors, the company’s records say.”
According to a Pine Island spokesman, Mr. Blinken had left Pine Island before raising money for the new fund. Ms. Flournoy “remains a member of the company,” the spokesman said in a statement on Friday.
Pine Island said that there is no contractual relationship with WestExec but that WestExec provides “analysis, insight and expertise” to it.
If anything, interest in the company’s services in Washington’s influence industry has increased interest in WestExec’s connections with the new administration, lobbyists say. They say WestExec is already seen as a one-stop shop for insights into how Mr. Biden’s team is approaching issues that matter to deep-seated corporate interests.
WestExec’s name comes from the small street between the West Wing of the White House and the Eisenhower Executive Office Building, where other senior White House officials work. The company’s name, it is said, “is literally the path to the Situation Room.”
Michael D. Shear contributed to the coverage.