Shanahan’s Bid for Top Pentagon Job on Hold

Patrick Shanahan’s nomination as U.S. defense secretary, once considered a lock, now could be slipping away.

The White House seems to be souring on the former Boeing executive amid an ethics investigation and a series of lackluster performances on Capitol Hill, where one former U.S. official said he appeared “dazed and confused” by lawmakers’ questions.

But the White House may have no viable alternative to lead the Pentagon, which has been under Shanahan’s acting stewardship since former Defense Secretary James Mattis resigned in protest of President Donald Trump’s decision to withdraw U.S. troops from Syria. In other words, Shanahan may yet get the job by default.

The biggest obstacle to Shanahan’s nomination as permanent defense secretary is a Defense Department Office of Inspector General investigation into his alleged bias toward Boeing, where he worked for 30 years. The inquiry is expected to delay the nomination by up to two months, said one source with knowledge of internal White House discussions.

“The [inspector general] investigation has really thrown them for a loop. It has really derailed the process of sending his credentials to the Hill for consideration,” the source said. The Senate has a long-standing precedent of waiting to take up a nomination until such inquiries are completed, according to a congressional source.

The investigation was driven by a complaint from a watchdog group that Shanahan favored Boeing and in internal meetings repeatedly derided Lockheed Martin, the company’s chief rival for U.S. defense contracts.

When he took the No. 2 job at the Pentagon in July 2017, Shanahan signed an ethics agreement recusing himself from any matters related to Boeing. So far, no concrete evidence has emerged to show he broke that agreement. But Boeing has scored several major victories over the past year, clinching three multibillion-dollar contracts for major Pentagon aircraft programs—despite huge delays in delivering a new tanker fleet to the U.S. Air Force.

Most recently, Defense Department leaders persuaded the Air Force to include a new version of Boeing’s 1970s-era F-15 fighter in its latest budget request, meaning it will compete for limited resources with Lockheed’s new F-35 fighter.

Shanahan’s ethics investigation into alleged favoritism toward Boeing comes as the aerospace giant is itself facing intense scrutiny over two fatal, back-to-back crashes of its new 737 Max 8 jetliner and subsequent grounding of the entire global fleet. Shanahan oversaw a different aircraft while at Boeing, and was at the Pentagon by the time the 737 Max 8 moved to production, but the White House is wary of the optics of nominating the former head of Boeing commercial airplanes at a time when public confidence in the company is at an all-time low.

Boeing isn’t the only thing casting a shadow over Shanahan’s prospects. Twice in the last month, Shanahan has testified before House and Senate committees and underwhelmed lawmakers. That’s another reason the White House is losing enthusiasm for Shanahan, said the first source, as well as three current and former U.S. officials.

“He did not instill confidence,” the first former U.S. official said. “He didn’t get any hard questions, and he still seemed dazed and confused.”

Senate lawmakers pressed Shanahan during the March 14 appearance for details about a particularly pressing issue—which military construction projects the Pentagon will take money from to build a portion of Trump’s long-promised wall on the Mexican border. Shanahan promised to deliver a full list to lawmakers by the end of day. It didn’t come.

Sen. Jack Reed, the ranking Democrat on the Senate Armed Services Committee, was livid.

“Tonight, the Acting Secretary of Defense informed me he is unable to keep his commitment to share the list of what will be cut to pay for the vanity wall,” Reed said. “This unacceptable series of evasions should trouble members of Congress, regardless of political party.”

Republican Sen. James Inhofe, the chairman of the Senate committee, previously compared Shanahan unfavorably to Mattis. But he has since clarified that he would be supportive if Shanahan were nominated for the permanent spot. When asked in a brief interview on Capitol Hill if he thinks the president should nominate Shanahan for defense secretary, Inhofe responded affirmatively.

“My major concern has always been that we need to get the secretary of defense out of the acting position because [that] is not effective,” Inhofe said. “Temporary doesn’t work.”

One administration source said the congressional opposition is being led by Inhofe’s committee staffers.

But Shanahan’s saving grace may be the fact that there are no other acceptable candidates willing to take the job.

At least four potential candidates approached about the post demurred, Foreign Policy reported in February. Air Force Secretary Heather Wilson seemed to throw her hat in the ring early this year but abruptly announced her resignation in March. Army Secretary Mark Esper, Navy Secretary Richard Spencer, former Sen. Jim Talent, and the Pentagon’s chief weapons buyer Ellen Lord have been mentioned as candidates, but it’s not clear that any of them have sufficient star power to get the president’s nod.

David McCormick, the co-CEO of the global investment firm Bridgewater Associates, is still in the mix, according to the administration official. But two former U.S. officials told FP that McCormick, who worked in the George W. Bush administration, does not want the job.

The president, for his part, seems in no hurry to nominate a permanent Pentagon chief. In response to a question on whether he plans to name a new secretary soon, Trump said: “I’m very happy with Pat Shanahan. I think he’s done a really great job.”

But Shanahan is now the longest-serving acting defense secretary. Experts say having an acting official in such an important post comes at a cost, especially when many top positions in the Defense Department are still unfilled.

“The challenge of course with an acting [defense secretary] is no one knows how long they will actually be around,” said Mara Karlin, a nonresident senior fellow at the Brookings Institution, noting that Shanahan can’t move forward with filling the many empty posts in the Pentagon until he is in the job permanently.

The timing is especially bad because the Pentagon is in the midst of defending a substantial budget request on Capitol Hill and is trying to get multiple officers confirmed to new positions. At the same time, the Defense Department is also trying to defend the president’s decision to divert funding for military construction to build part of a border wall—a move that is extremely unpopular in Congress.

“A confirmed [defense secretary] just has more clout, period,” Karlin said. “More clout within the Pentagon, more clout on the Hill, more clout on the National Security Council, and with the American public.”