WASHINGTON — One agency helps firms navigate international dangers and the political and procedural ins and outs of Washington. The opposite is an funding fund with a selected curiosity in navy contractors.
However the consulting agency, WestExec Advisors, and the funding fund, Pine Island Capital Companions, name themselves strategic companions and have featured an overlapping roster of politically linked officers — together with a few of the most outstanding names on President-elect Joseph R. Biden Jr.’s group and others into account for high-ranking posts.
Now the Biden group’s hyperlinks to those entities are presenting the incoming administration with its first check of transparency and ethics.
The 2 companies are examples of how former officers leverage their experience, connections and entry on behalf of firms and different pursuits, with out in some circumstances disclosing particulars about their work, together with the names of the purchasers or what they’re paid.
And when these officers cycle again into authorities positions, as Democrats affiliated with WestExec and Pine Island at the moment are, they bring about with them questions on whether or not they may favor or give particular entry to the businesses they’d labored with within the non-public sector. These questions don’t go away, ethics specialists say, simply because the officers lower their ties to their companies and purchasers, because the Biden transition group says its nominees will do.
WestExec’s founders embody Antony J. Blinken, Mr. Biden’s choice to be his secretary of state, and Michèle A. Flournoy, one of many main candidates to be his protection secretary. Amongst others to come back out of WestExec are Avril Haines, Mr. Biden’s pick to be director of national intelligence; Christina Killingsworth, who’s helping the president-elect organize his White Home price range workplace; Ely Ratner, who helps set up the Biden transition on the Pentagon; and Jennifer Psaki, an adviser on Mr. Biden’s transition group.
WestExec didn’t reply when requested for an inventory of its purchasers. However in line with individuals conversant in the association, they embody Defend AI, a San Diego-based firm that makes surveillance drones and signed a contract worth as much as $7.2 million with the Air Drive this yr to ship synthetic intelligence instruments to assist drones function in fight missions.
On the identical time, Mr. Blinken and Ms. Flournoy have served as advisers to Pine Island Capital, which this month raised $218 million for a brand new fund to finance investments in navy and aerospace firms, amongst different targets.
Pine Island Capital has been on one thing of a shopping for spree this yr, buying the weapons system elements producer Precinmac and an organization till not too long ago often known as Meggitt Training Systems and now often known as InVeris, which sells computer-simulated weapons coaching techniques to the Pentagon and regulation enforcement companies.
One other particular person listed as a member of the Pine Island group is Lloyd J. Austin III, a retired Military common who can be into account for protection secretary, in line with an individual conversant in the choice course of.
Additionally working with Pine Island are Richard A. Gephardt, the previous Home majority chief, and Tom Daschle, the previous Senate majority chief, each Democrats, in addition to Don Nickles, a Republican, who was chairman of the Senate Funds Committee and is now the chief govt of a lobbying firm with dozens of major corporate clients.
Ms. Flournoy, who served as below secretary of protection for coverage throughout the Obama administration and as an assistant secretary of protection throughout the Clinton administration, has different enterprise ties that might overlap along with her function if Mr. Biden selected her to run the Pentagon.
She is a member of the board at Booz Allen Hamilton, a worldwide agency that has billions of {dollars} in federal contracts together with a deal signed in 2018 to supply cybersecurity providers to 6 federal companies. That firm paid her about $440,000 within the final two years, a lot of it inventory awards.
Republicans have already signaled that they intend to bore in on WestExec in affirmation hearings for Mr. Blinken, and different nominees with hyperlinks to it.
And Mr. Biden’s group has confronted pressure from the left and government watchdogs to stipulate steps to attenuate the form of company affect and conflicts of curiosity that marked President Trump’s tenure from the beginning.
These teams fear not solely that Mr. Biden’s aides may form authorities insurance policies in ways in which may benefit firms that paid their companies, but in addition that the firms could become magnets for access seekers within the Biden administration.
At a minimal, these critics say, Mr. Biden should demand that his group totally disclose all monetary relationships and purchasers, divest any possession stakes and be sure that his aides recuse themselves from any choices that might profit their earlier enterprise pursuits.
“We need to be sure that they don’t seem to be beholden to anybody else and that any choices they make can be past reproach,” stated Mandy Smithberger, a director on the Mission on Authorities Oversight, a nonprofit group that investigates spending and conflicts of pursuits at federal companies.
A spokesman for Mr. Biden stated in an announcement that, if confirmed, Mr. Blinken and another appointees who have been companions in WestExec and Pine Island would depart the companies if they’d not already completed so, promote their possession stakes and make “correct” consumer disclosures.
“Joe Biden has pledged probably the most ethically rigorous administration in American historical past, and each cupboard member will abide by strict ethics guidelines and abide by all disclosure necessities,” the spokesman, Andrew Bates, stated. Mr. Blinken already took a depart from Pine Island and WestExec as of August, when he joined the Biden marketing campaign full time.
However Mr. Biden’s transition workplace stopped wanting saying that each one purchasers can be disclosed — and ethics rules enable incoming federal officers to withhold the identities of purchasers if the preparations are topic to confidentiality agreements.
WestExec cited such agreements in an announcement explaining why it will not reveal a few of its purchasers to The New York Occasions.
“As a common matter, lots of our purchasers require us to signal nondisclosure agreements, that are a normal enterprise follow to guard confidential info,” WestExec stated in a written assertion, when requested for an inventory of its purchasers that do enterprise with the Pentagon or State Division. “We’re legally and ethically certain by these agreements.”
Mr. Biden’s transition workplace stated Mr. Blinken was “acquiring permission” from purchasers to reveal their identities however stopped wanting saying that each one purchasers can be disclosed.
WestExec was created in 2017 to supply what its web site calls “distinctive geopolitical and coverage experience” to firms in search of to navigate “exterior elements and relationships that have an effect on companies” in Washington and around the globe.
The corporate stated that “it doesn’t foyer, doesn’t act as an agent of overseas principals and doesn’t work for any governments or state-owned enterprises.”
The Presidential Transition
Its co-founders — Mr. Blinken, Ms. Flournoy, Sergio Aguirre and Nitin Okay. Chadda — had labored in overseas coverage and nationwide safety posts below President Barack Obama. The agency has prominently highlighted these connections, that includes a big photograph on its residence web page of Mr. Blinken within the White Home State of affairs Room with Mr. Obama.
The agency turned a holding pen of types for outstanding nationwide safety and overseas coverage officers from earlier Democratic administrations, who may assist entice purchasers whereas ready to re-enter the subsequent Democratic administration.
Two former authorities officers listed as principals at WestExec — the previous deputy protection secretary Robert O. Work and the previous deputy C.I.A. director David S. Cohen — joined Mr. Blinken not too long ago to transient Mr. Biden and Vice President-elect Kamala Harris on what the incoming administration described as “nationwide safety planning.”
And the previous Obama adviser Lisa Monaco, who had been listed as a principal by WestExec, is believed to be under consideration for a publish within the Biden administration.
Mr. Biden’s group has performed down a few of its advisers’ ties to WestExec. Whereas the agency had listed each Ms. Haines and Ms. Psaki as WestExec principals, a transition official stated they’d spent a comparatively restricted period of time working with the agency, with Ms. Haines serving as a advisor and Ms. Psaki as an out of doors contractor.
WestExec’s marketing strategy accommodates the revolving door between the affect business and authorities by providing providers that draw on authorities experience with out triggering lobbying legal guidelines that will require its officers to reveal their purchasers’ identities or particular points earlier than the federal government.
Registering as lobbyists additionally would have restricted the power of WestExec officers to work for the Biden transition, which enacted guidelines barring contributors who had lobbied within the final yr from serving on the transition, except they obtain waivers.
The Biden administration is anticipated to introduce restrictions on former lobbyists, and if it follows the instance set by the Obama administration, it’ll additionally bar appointees from lobbying their former agency for two years after leaving the federal government.
The Obama lobbying restrictions had the aspect impact of spurring an increase in what critics have referred to as “shadow lobbying,” during which companies suggested purchasers on how one can do enterprise in Washington, together with navigating the forms and pointing them to officers who oversee probably profitable contracts. Whereas the consultants could not formally foyer to safe the deal, their connections and data make them priceless.
Mr. Bates stated Mr. Blinken didn’t advise purchasers on how one can acquire federal contracts and that the majority of his work was on geopolitical threat evaluation.
However WestExec’s website offers case research of the way it has helped purchasers, with out figuring out them by identify. In a single, the agency signifies it helped a multibillion-dollar American expertise firm and an American pharmaceutical firm develop gross sales in East Asia by “safeguarding in opposition to commerce tensions between the U.S. and China.”
In two different circumstances, WestExec signifies it helped firms promote providers associated to synthetic intelligence — an rising precedence for nationwide safety and intelligence companies in america and around the globe.
Mr. Biden has indicated his administration intends to spend heavily on artificial intelligence research, echoing a suggestion in a report issued last year by a assume tank created by Ms. Flournoy.
WestExec, in one in every of its case research, says it helped an “synthetic intelligence analytics agency” safe “key pilot applications with a number of nationwide safety companies.”
One other WestExec consumer, Defend AI, was based in 2015 by a former member of the Navy SEALs to make use of synthetic intelligence to guard service members and civilians. It gained a $1 million contract from the Protection Division in 2016 earlier than securing its Air Drive contract this yr value as much as $7.2 million.
A Defend AI official stated WestExec didn’t play a job in securing any authorities contracts awarded to the corporate.
Wired magazine reported final month that Ms. Flournoy helped Defend AI develop tips for synthetic intelligence use that incorporate human judgment, quoting her as saying that “the Division of Protection doesn’t need to take away the human; it desires to make the human higher.”
WestExec additionally has represented Windward, an Israeli artificial-intelligence firm, in line with The American Prospect. Windward representatives didn’t reply to requests for remark.
Pine Island is equally bullish on synthetic intelligence. In the S.E.C. filing from September, it predicted that the Protection Division “will prioritize speedy technological developments” in synthetic intelligence and different high-tech specialties.
The inventory sale in November — which raised, not less than up to now, a complete of $218 million — is getting used to arrange what is named a “blank check company” that’s sitting prepared to purchase a brand new goal, possible within the navy or aerospace sector, the corporate filings say.
Mr. Blinken had left Pine Island earlier than it accomplished elevating the cash for the brand new fund, in line with a Pine Island spokesman. Ms. Flournoy “stays a member of the agency,” the spokesman stated in an announcement on Friday.
Pine Island stated that it has no contractual relationship with WestExec however that WestExec offers it with “evaluation, perception and experience.”
If something, the eye to WestExec’s ties to the incoming administration has elevated curiosity within the agency’s providers in Washington’s affect business, in line with lobbyists. They are saying WestExec has already come to be seen as a go-to agency for perception on how Mr. Biden’s group will method problems with significance to deep-pocketed company pursuits.
WestExec’s identify comes from the small avenue that runs between the West Wing of the White Home and the Eisenhower Government Workplace Constructing, the place different prime White Home officers work. The agency’s identify, it factors out, “is, fairly actually, the highway to the State of affairs Room.”
Michael D. Shear contributed reporting.
