Brett Heinz
July 6, 2023
Originally published by Responsible Statecraft.
Weapons companies have recently come under significant scrutiny following a major 60 Minutes story, several reports from the Pentagon, and new proposals for reform from Congress highlighting the ways in which they profit from overcharging the U.S. military for their products. Yet a recent report from the Atlantic Council — one of Washington’s most influential think tanks — is pushing back on that momentum.
The paper advocates for the contracting process to be even more industry-friendly than it is now, which raises questions not just about the report’s corporate sponsors, but also their outsized influence on policy in Washington at the expense of public interest.
The Atlantic Council, a nonpartisan think tank with a long history of informing foreign policymakers in the nation’s capital, recently formed a “Commission on Defense Innovation Adoption” to “help spur a new approach to defense innovation.” In April, the Commission released an interim report with 10 recommendations for changes to the policies surrounding the Defense Department’s contracting procedures to “accelerate the adoption of cutting-edge technology from the leading edge of the commercial and defense sectors.”
Late last month, the Commission’s report was endorsed by a coalition of 13 Pentagon contractor executives in a letter led by the CEO of Applied Intuition, a technology-focused firm founded in 2017 that profits from several contracts with the U.S. military. The letter specifically endorsed recommendations from the Atlantic Council report that would most benefit the signatory companies, claiming that such changes “will enable America’s most innovative organizations to step up support for DoD.”
The letter, directly promoted by the Atlantic Council itself, argues that a failure to make these weapons industry-friendly changes will have dire consequences for U.S. national security: “Our competitors will continue to gain ground on the technological battlefield, and we will squander the advantages that accrue from the freest and most innovative marketplace on earth.”
The Defense Innovation Adoption Commission’s members describe themselves as having “decades of service between us in government, the private sector, and capital markets.” Digging deeper into the commissioners’ records in the private sector quickly unveils potential conflicts of interest. The Commission includes a list of nine “industry commissioners,” all of whom represent companies that contributed funding to the Atlantic Council last year; their collective contribution was somewhere between $810,000 and $1,625,000.
Eight of these nine companies are also listed as official “Sponsors” of the Commission, including the “Foundational Sponsor” Booz Allen Hamilton, a top U.S. government contractor. In addition, four of the “industry commissioners” represent companies that also signed the letter promoting the report’s findings.
Several of the contractors linked to the Commission have played a particularly active role in the project: donating to the think tank, sponsoring the Commission, selecting a representative to serve on it, and signing the letter promoting the Commission’s interim report. Prominent among them is Applied Intuition. Next is Palantir, a billion dollar company whose business strategy and privacy violations have been highly controversial.
The other two are Primer, a company focused on military applications for artificial intelligence, and SnowPoint Ventures, a venture capital firm invested in technology and robotics. Primer has also promoted the report on its website. Both have highlighted the Commission’s work on their websites.
In addition, despite the report’s emphasis on leveling the playing field for smaller contractors, there are two corporate giants with their fingerprints all over it: Raytheon and SAIC. The Commission’s co-chairs are Mark T. Esper —a former Raytheon lobbyist and defense secretary during the Trump administration — and Deborah Lee James — President Obama’s Air Force secretary and a former SAIC executive. Other commissioners include at least three figures with ties to Raytheon (two former board members and one current board member), two former officials from SAIC, and an advisory board member of a trade group that represents both companies. Raytheon and SAIC are both donors to the Atlantic Council.
The heavy influence of private contractors on the Atlantic Council’s Commission raises questions about whether the Council’s policy recommendations serve the interests of the think tank’s funders or whether safeguards are in place to prevent such conflicts of interest.
“The problems with think tanks researching national security matters with money from national security players is that it compromises independence, despite protests to the contrary,” said Mark Thompson, national security analyst at the Project on Government Oversight. “There are so many reports like this because that’s where the money is. Winning in Afghanistan, Iraq, or Vietnam wasn’t about ‘technological and military’ advantages, because the U.S. held all those cards. Rather, it was about launching wars without the required declaration from Congress, and then retreating when Americans grew fed up with the costs in blood and treasure.”
SAIC and Raytheon did not respond to requests for comment. Atlantic Council spokesperson Richard Davidson told Responsible Statecraft that the organization is “proud” to have included industry representatives as part of the Commission’s stakeholder cohort and that generally speaking, donors are required to agree that the Atlantic Council maintains independence when reaching its conclusions, including those from the Commission’s report.
“Executing the Commission’s mission, of ensuring the Department of Defense can adopt new technology in a timely manner, requires drawing on the practical expertise of people who have worked in the executive branch, Congress, and industry,” he said. “We actively sought insights from our commissioners when conducting research and analysis, but the content of the report and its recommendations remain at the sole discretion of the report’s authors.”
Though the report itself contains a wide assortment of detailed policy changes, the promotional letter from business leaders focuses on just four of the 10 sections, each of which promote policies they would stand to benefit from.
One such proposal is to increase resources for the Defense Innovation Unit (DIU), a Pentagon office based in Silicon Valley tasked with “accelerating the adoption of commercial and dual-use technology. …” The DIU has already partnered with several of the companies sponsoring the report, and even promoted Applied Intuition’s work with the Atlantic Council. Another proposal highlighted in the report is to create a $250 million fund to “scale operationally relevant technologies” owned by Pentagon contractors.
Another recommendation endorsed by the contractors is to “enhance” the Small Business Innovation Research program by making it friendlier to their companies. Under this proposal, grant funding would shower private contractors with “more-flexible contract vehicles” which are immune from traditional safeguards, have “no limits on dollar size of procurement,” and grant access to non-competitive contracting opportunities. In addition, firms that receive the majority of their funding from venture capital investors like SnowPoint Ventures would become eligible for the program for the first time.
Lastly, the contractors endorsed a plan to “provide more than $20 billion in additional procurement funds” to “fuel a broader market for leading technology firms,” treating tech firms and “nontraditional defense companies” more like “small and disadvantaged businesses,” increasing public subsidies for them, and exempting many large contracts from Cost Accounting Standards which keep contractors in check. One of the ways that this proposal defines success is that “[a]t least ten” contracts worth more than $50 million should go to nontraditional defense companies — a category which just so happens to include signatories like Applied Intuition and Palantir.
Despite its prestige and influence in Washington, the Atlantic Council has a history of blurring the line between the interests of its funders and the institution. The think tank’s “Intellectual Independence Policy” states that it “does not adopt or advocate positions on particular matters” and emphasizes its “independent control of the content and conclusions of any products resulting from sponsored projects.” After the organization was forced in 2013 to reveal hidden funding sources which had been absent from its website, it sought to further clarify this position: “…we’ve always placed the integrity of our work above the preferences of our funders.”
Yet, when addressing wealthy donors, the Council takes a very different tone. Their “Corporate Members Program” encourages major companies to “[w]ork with us to develop sustainable, cutting-edge solutions.” Promotional documents from the think tank invited corporations “to contribute to Council research, participate in Council task forces and strategy sessions, partner with the Council to publish reports and issue briefs, and explore their areas of interest.” Those contributing more than $250,000 a year to the program include weapons industry giants like Raytheon, General Atomics, SAAB, and Airbus. On at least one occasion, internal emails show that the Council actively reached out to the Pentagon on behalf of a defense contractor donor.
While controversy surrounding the Council’s finances generally focuses on its funding from foreign governments, corporate donors have also used their influence to shape its priorities. In 2014, the Atlantic Council worked closely with FedEx to promote a trade deal which would have directly benefited the shipping company. A document outlining the partnership said that it aimed to “[s]trengthen educational outreach… to members of Congress and the European Parliament,” as well as to “[p]reempt potential criticisms” that the deal “would only benefit ‘big business.’” (FedEx is among the 50 largest companies in the United States.)
The conclusions of the resulting report aligned closely with FedEx’s own lobbying efforts. The U.S. government then used the report as a talking point during the negotiation process, without any mention of its corporate backing.
Weapons contractors benefiting from a government system that purchases unneeded services, consistently overpays for them, and fails to insist on accountability in the process are under increasing public scrutiny. The Atlantic Council’s report is just the latest example of a Washington think tank appearing to prioritize the interests of these companies which also, coincidentally or not, happen to be their institutional funders.
“It used to be that the appearance of impropriety or undue influence was enough to keep much of official Washington business in line,” adds Thompson. “These days, not so much.”
Applied Intuition, Primer, Palantir, SnowPoint Ventures, and Booz Allen Hamiliton did not respond to requests for comment.