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By DANA LIEBELSON
Sure, the fat severance bonus Northrop Grumman paid lobbyist Thomas MacKenzie right before he left to work for the House Armed Services Committee may have been a reward for a job well done. However, that doesn’t keep the cynics among us from wondering if the company was hoping the cash might also help MacKenzie remember his old friends fondly.
Lee Fang at Republic Report found this week through a recently filed ethics disclosure form that in 2011, Northrop awarded MacKenzie a $498,334 bonus, worth almost as much as his $529,379 annual salary. MacKenzie got the money right before he left to go work as a congressional staffer under Committee Chairman Rep. Buck McKeon (R-Calif.).
At his new job, where he’ll be working on many issues that could affect his former employer, MacKenzie will earn about $120,000 per year.
“The sheer size of the bonus appears extraordinary,” Sheila Krumholz, executive director for the Center for Responsive Politics, told POGO. “A reasonable person might wonder if the bonus was paid to compensate the pay cut, with the expectation that he will work for Northrop Grumman on the inside.”
Krumholz adds that we don’t know whether such a large bonus is routine for Northrop Grumman because that information isn’t public. While she notes that private sector experts who take pay cuts to work in public service should be applauded, there is an appearance of a conflict of interest in this case because of the large severance and bonus.
According to Fang, “Lobbying disclosures show that MacKenzie was part of a team that lobbied on over fifty weapons systems, including many of the programs he now oversees as a staffer under McKeon.”
But MacKenzie’s real value to Northrop may come when and if Rep. McKeon and other congressional leaders decide how $500 billion in across-the-board defense cuts are made. It’s no secret that major defense contractors are freaked out about this “doomsday” scenario and are beefing up their lobbying efforts as a result.
While we don’t know whether the looming doomsday had any sway over Northrop’s decision to award MacKenzie a bonus, as POGO Investigator Ben Freeman points out, “investing half a million is chump change if even a fraction of cuts are directed away from Northrop Grumman.”
In any case, the timing of the bonus is certainly curious. Laura Peterson, a senior policy analyst for Taxpayers for Common Sense says “even if the bonus was for work already performed, its timing creates the appearance of an incentive to represent [the contractor’s] interests.”
This isn’t the first time that a former lobbyist has been awarded a conveniently timed bonus. UBS Americas lobbyist Jason Cole, who left in 2009 to work as Rep. Jim Himes’ (D-Conn.) chief of staff, received a bonus from his former employer that was paid out over three years—extending into his time on Himes’ staff.
“Given the lack of corporate transparency and the huge disparities in compensation between public service work and industry, I would not be at all surprised if there were other cases” Krumholz said.
There’s already been some action taken on this story: Sen. Richard Blumenthal (D-Conn.) is demanding that Northrop explain to Congress and U.S. taxpayers why the bonus occurred, according to The Connecticut Post.
“I'm concerned about the integrity of the Defense Department budget if it is tainted by any whiff of a payoff,” Blumenthal told the paper.
But according to POGO Director of Public Policy Angela Canterbury, it’s not all on Northrop or MacKenzie—Congress needs to fix the law. Canterbury said there are some restrictions on executive branch employees, including President Obama’s Ethics Pledge, which bans appointees from working on issues on which they lobbied or for the agencies they lobbied for two years.
“But remarkably, there are zero restrictions on congressional staffers working on legislation that could benefit their former employers or clients,” Canterbury said. “It is unquestionably unethical, but it appears to be legal. Congress needs to stop this revolving door which serves self-interests and harms the public interest.”
Dana Liebelson is POGO's Beth Daley Impact Fellow.