Trump's Pick for a Top Army Job Works at a Weapons Company — And Won't Give Up His Stock

Trump s nominee for under secretary of the Army Michael Obadal retired from a career in the Army in then spent the past two years working for Anduril the ascendant arms maker with billions of dollars in Army contracts If substantiated to the Pentagon post often described as the chief operating officer position at the largest branch of the U S military Obadal plans to keep his stock in Anduril according to an ethics disclosure reviewed by The Intercept This is unheard of for a presidential appointee in the Defense Department to retain a financial interest in a defense contractor disclosed Richard Painter the top White House ethics lawyer during the George W Bush administration Painter explained that while the arrangement may not be illegal it certainly creates the appearance of a conflict of interest Under the norms of prior administrations Painter explained nobody at upper echelons of the Pentagon would be getting anywhere near contracts if he s sitting on a pile of defense contractor stock Obadal has been a senior director at Anduril since according to his LinkedIn profile following a nearly -year career in the U S Army While the revolving door between the Pentagon and defense industry is as old as both of those institutions federal law and ethical norms require employees of the executive branch to unload financial interests and relationships that might create a conflict of interest in the lesson of their duties Obadal s April financial disclosure letter filed with the Office of Ruling body Ethics states Upon confirmation I will resign from my position as Senior Director at Anduril Industries and forfeit his right to unvested stock options But crucially Obadal says he will retain his restricted stock units that have already vested i e Anduril stock he already owns That means he will continue to own a piece of the company whose valuation has reportedly increased from billion when Obadal joined to billion the present day on the strength of its military contracts and stands to materially benefit from anything that helps Anduril Related Trump s Balloting Is Also a Win for Tech s Right-Wing Warrior Class In his ethics letter Obadal says he will not participate personally and substantially in any particular matter that to my knowledge has a direct and predictable effect on the financial interests of Anduril Industries unless he s given permission by his boss the secretary of the Army Don Fox former acting director of the Office of Administration Ethics reported The Intercept Obadal s Anduril shares could pose a clear conflict of interest if he is endorsed The general reason an appointee would be allowed to maintain a potentially conflicting interest is because divestiture is either not viable or highly impractical Anduril is privately held meaning shares in the company can t be rapidly disposed of on the stock sphere But Painter the Bush-era ethics lawyer suggests that Obadal could liquidate his stake in Anduril through the lively secondary domain in its shares In the Bush years we d just say You re not going to the Pentagon disclosed Painter Fox explained that if Obadal adheres to what s in his ethics agreement and recuses himself from anything that touches Anduril he will stay in compliance with federal law That s going to be a pretty broad recusal added Painter who speculated He s going to have to recuse from any weapons systems that might use Anduril equipment anything having to do with contracts even competitor companies Fox who spent decades as a lawyer at the Air Force and Navy speculated that a vast recusal from budgetary matters is feasible but he s going to have to be really scrupulous about it to the point of literally leaving the room whenever Anduril its capabilities or those of its competitors are discussed Once we get into areas that involve hardware and program I d say don t even be in the room he mentioned At a really senior level people are not only looking for what you say but what you don t say Fox added It poses a crucial jeopardy to him personally of overcoming that line no matter how scrupulous he may be William Hartung a senior research fellow at the Quincy Institute for Responsible Statecraft who focuses on the U S arms industry describes the situation as the very definition of a conflict of interest given the vast business interests between Obadal s current and new employer The fact that the administration and the Congress have accepted this arrangement is a commentary on the sad state of ethics in Washington an indication that too various of our elected officers won t even try to take procedures to make it harder to engage in corrupt practices Hartung added As its second-highest ranking civilian at the Army Obadal will have considerable sway over what weapons the Army purchases what technologies it prioritizes and when and how the U S wages war Having a former employee and current shareholder in that position may prove lucrative for Anduril as the company seeks to add to its billions of dollars of federal contracts In the past year alone during Obadal s time at the company Anduril disclosed it was taking over the Army s Integrated Visual Augmentation System a troubled billion scheme intended to provide soldiers with augmented reality goggles and selling the Army components for its rocket artillery systems and a fleet of miniature Ghost-X helicopter drones Anduril is also working on the Army s TITAN system a truck-mounted sensor suite and an experimental U S Army s Robotic Combat Bus scheme Last year DefenseOne disclosed that the Army s unfunded priorities tech wishlist included million in research and growth for Anduril s Roadrunner-M drone interceptor Obadal described that jet-powered bomb drone in a LinkedIn post as revolutionary The White House declined to comment on the ethics agreement and referred The Intercept to the Office of the Secretary of Defense which also declined to comment and referred The Intercept to the Army which referred The Intercept back to the White House Neither Anduril nor Obadal responded to a request for comment Related Defense Tech Startup Founded by Trump s The greater part Prominent Silicon Valley Supporters Wins Secretive Military AI Contract Even amid a rightward turn for the tech industry Anduril stands out for its MAGA-alignment and closeness to the Trump administration of its top executives and investors In December the New York Times published Trump s transition association offices were crawling with executives from defense tech firms with close ties to Mr Trump s orbit including Anduril The month before Anduril co-founder and longtime Trump booster Palmer Luckey described Bloomberg he was already in touch with the incoming administration about impending nominees I don t want to throw any names out there because I would be happy with all of them The post Trump s Pick for a Top Army Job Works at a Weapons Company And Won t Give Up His Stock appeared first on The Intercept