WASHINGTON — One agency helps corporations navigate international dangers and the political and procedural ins and outs of Washington. The opposite is an funding fund with a specific 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 related officers — together with among the most distinguished names on President-elect Joseph R. Biden Jr.’s crew and others into consideration for high-ranking posts.
Now the Biden crew’s hyperlinks to those entities are presenting the incoming administration with its first check of transparency and ethics.
The 2 corporations are examples of how former officers leverage their experience, connections and entry on behalf of companies and different pursuits, with out in some instances disclosing particulars about their work, together with the names of the shoppers 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 would possibly favor or give particular entry to the businesses that they had labored with within the personal sector. These questions don’t go away, ethics specialists say, simply because the officers lower their ties to their corporations and shoppers, because the Biden transition crew 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 manage the Biden transition on the Pentagon; and Jennifer Psaki, an adviser on Mr. Biden’s transition crew.
WestExec didn’t reply when requested for an inventory of its shoppers. However based on folks aware of 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 Power this 12 months 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 corporations, amongst different targets.
Pine Island Capital has been on one thing of a shopping for spree this 12 months, buying the weapons system elements producer Precinmac and an organization till lately referred to as Meggitt Training Systems and now referred to as InVeris, which sells computer-simulated weapons coaching programs to the Pentagon and legislation enforcement companies.
One other particular person listed as a member of the Pine Island crew is Lloyd J. Austin III, a retired Military basic who can also be into consideration for protection secretary, based on an individual aware of 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 Price range Committee and is now the chief government of a lobbying firm with dozens of major corporate clients.
Ms. Flournoy, who served as underneath secretary of protection for coverage in the course of the Obama administration and as an assistant secretary of protection in the course of the Clinton administration, has different enterprise ties that would overlap together with her position if Mr. Biden selected her to run the Pentagon.
She is a member of the board at Booz Allen Hamilton, a world agency that has billions of {dollars} in federal contracts together with a deal signed in 2018 to offer 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 crew has confronted pressure from the left and government watchdogs to stipulate steps to reduce the type 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 gain advantage corporations that paid their corporations, 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 crew totally disclose all monetary relationships and shoppers, divest any possession stakes and make it possible for his aides recuse themselves from any choices that would profit their earlier enterprise pursuits.
“We wish to make it possible for they don’t seem to be beholden to anybody else and that any choices they make could be past reproach,” mentioned Mandy Smithberger, a director on the Challenge on Authorities Oversight, a nonprofit group that investigates spending and conflicts of pursuits at federal companies.
A spokesman for Mr. Biden mentioned in a press release that, if confirmed, Mr. Blinken and some other appointees who had been companions in WestExec and Pine Island would go away the corporations if that they had not already achieved so, promote their possession stakes and make “correct” shopper 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, mentioned. 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 in need of saying that every one shoppers could be disclosed — and ethics rules permit incoming federal officers to withhold the identities of shoppers if the preparations are topic to confidentiality agreements.
WestExec cited such agreements in a press release explaining why it could not reveal a few of its shoppers to The New York Occasions.
“As a basic matter, lots of our shoppers require us to signal nondisclosure agreements, that are a normal enterprise observe to guard confidential data,” WestExec mentioned in a written assertion, when requested for an inventory of its shoppers that do enterprise with the Pentagon or State Division. “We’re legally and ethically sure by these agreements.”
Mr. Biden’s transition workplace mentioned Mr. Blinken was “acquiring permission” from shoppers to reveal their identities however stopped in need of saying that every one shoppers could be disclosed.
WestExec was created in 2017 to supply what its web site calls “distinctive geopolitical and coverage experience” to corporations searching for to navigate “exterior elements and relationships that have an effect on companies” in Washington and around the globe.
The corporate mentioned that “it doesn’t foyer, doesn’t act as an agent of international 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 Ok. Chadda — had labored in international coverage and nationwide safety posts underneath President Barack Obama. The agency has prominently highlighted these connections, that includes a big picture on its residence web page of Mr. Blinken within the White Home Scenario Room with Mr. Obama.
The agency grew to become a holding pen of kinds for distinguished nationwide safety and international coverage officers from earlier Democratic administrations, who may assist entice shoppers 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 lately 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 put up within the Biden administration.
Mr. Biden’s crew 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 mentioned that they had spent a comparatively restricted period of time working with the agency, with Ms. Haines serving as a marketing consultant 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 shoppers’ identities or particular points earlier than the federal government.
Registering as lobbyists additionally would have restricted the flexibility of WestExec officers to work for the Biden transition, which enacted guidelines barring individuals who had lobbied within the final 12 months from serving on the transition, until they obtain waivers.
The Biden administration is predicted to introduce restrictions on former lobbyists, and if it follows the instance set by the Obama administration, it is going to 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,” through which corporations suggested shoppers on learn how to 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 information make them priceless.
Mr. Bates mentioned Mr. Blinken didn’t advise shoppers on learn how to get hold of federal contracts and that the majority of his work was on geopolitical danger evaluation.
However WestExec’s website supplies case research of the way it has helped shoppers, with out figuring out them by title. In a single, the agency signifies it helped a multibillion-dollar American know-how firm and an American pharmaceutical firm increase gross sales in East Asia by “safeguarding in opposition to commerce tensions between the U.S. and China.”
In two different instances, WestExec signifies it helped corporations promote providers associated to synthetic intelligence — an growing 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 suppose tank created by Ms. Flournoy.
WestExec, in one in all 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 shopper, 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 received a $1 million contract from the Protection Division in 2016 earlier than securing its Air Power contract this 12 months value as much as $7.2 million.
A Defend AI official mentioned WestExec didn’t play a task in securing any authorities contracts awarded to the corporate.
Wired magazine reported final month that Ms. Flournoy helped Defend AI develop pointers for synthetic intelligence use that incorporate human judgment, quoting her as saying that “the Division of Protection doesn’t wish to take away the human; it needs to make the human higher.”
WestExec additionally has represented Windward, an Israeli artificial-intelligence firm, based on 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 fast technological developments” in synthetic intelligence and different high-tech specialties.
The inventory sale in November — which raised, at the very least to this point, a complete of $218 million — is getting used to arrange what known as 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, based on a Pine Island spokesman. Ms. Flournoy “stays a member of the agency,” the spokesman mentioned in a press release on Friday.
Pine Island mentioned that it has no contractual relationship with WestExec however that WestExec supplies 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, based on lobbyists. They are saying WestExec has already come to be seen as a go-to agency for perception on how Mr. Biden’s crew will strategy problems with significance to deep-pocketed company pursuits.
WestExec’s title comes from the small avenue that runs between the West Wing of the White Home and the Eisenhower Govt Workplace Constructing, the place different high White Home officers work. The agency’s title, it factors out, “is, fairly actually, the street to the Scenario Room.”
Michael D. Shear contributed reporting.
