Ret. Gen. Lloyd Austin, president-elect Biden’s nominee, for defense secretary, has pledged to recuse himself from decisions involving Raytheon [RTN] where he has served on the board of directors, for at least a year if confirmed to lead the Pentagon.
Austin, the former U.S. CENTCOM commander, also stands to receive up to $1.7 million in payments from Raytheon as he divests his shares in the company in preparation for his new position, according to new documents filed with the Office of Government Ethics.
“In the event that an actual or potential conflict of interest arises during my appointment, I will consult with an agency ethics official and take the measures necessary to resolve the conflict, such as recusal from the particular matter or divestiture of an asset,” Austin writes in the document.
Bloomberg News first reported Austin’s financial disclosure forms, which also detailed plans to shutter his Austin Strategy Group consulting firm and resign from another board position with a Booz Allen Hamilton [BAH] advisory board, where he will also recuse himself from decisions related to the company for at least a year.
Following his retirement from the military, Austin joined the board of United Technologies Corp. in September 2016 and then a director on Raytheon’s board when the companies merged in April 2020.
“In addition, for a period of one year after my resignation from Raytheon, I will not participate personally and substantially in any particular matter involving specific parties in which I know Raytheon is a party or represents a party, unless I am first authorized to participate,” Austin writes.
The document notes that Austin pledges to divest of his financial interests in Raytheon by no later than 90 days after his confirmation.
Austin also indicates that his payout could range from $750,000 to $1.7 million and will be based on the closing price of Carrier Global Corporation and Otis Worldwide Corporation, two offshoot companies from UTC’s merger with Raytheon.
The ethics filings arrive as the Senate Armed Services Committee has announced plans to hold Austin’s confirmation hearing on Jan. 19th (Defense Daily, Jan. 8).
Austin, however, he must receive a congressional waiver because he has not been out of the military for the required seven years, with the Senate Armed Services Committee holding a hearing Tuesday on “Civilian Control of the Armed Forces” and the House Armed Services Committee set to hear from the retired general on Jan. 21 before the Senate votes on his confirmation.
Biden’s decision to pick Austin, who would be the first Black Secretary of Defense if confirmed by the Senate, has faced scrutiny from some lawmakers over concerns for having a recently retired general leading the Pentagon and his defense industry ties.