The Pentagon agreed yesterday to study tightening its rules governing retired officers and civilian employes who go to work for defense contractors, but Deputy Secretary of Defense William Howard Taft IV told a Senate Armed Services subcommittee that "current law works well to attack real conflicts of interest."
Taft agreed with subcommittee chairman Sen. Dan Quayle (R-Ind.) that the so-called revolving-door practice "created an appearance of impropriety" that could undermine public confidence. For that reason, he said, retirees should be barred from taking jobs with companies to work on contracts or weapons systems over which they had supervisory responsibility in government.
Taft said he had heard of "less than 10" such cases but added that the Pentagon's inspector general office "has a fair number of allegations on their hot line, and they are routinely investigating them."
Under questioning from Sen. Carl Levin (D-Mich.), Taft said reports filed last year with the Pentagon by the roughly 2,200 retirees on defense contractors' payrolls had not been reviewed to count such revolving-door cases. Taft said he would order an inquiry and report its results to the subcommittee.
Levin asked that the study note how many retirees immediately went to work for firms they had supervised, indicating that they had discussed the jobs while on active duty.
"If we find this is a frequent case, it would be a cause for concern," Taft said. In that situation, he added, a "narrowly crafted prohibition . . . where we have not severely limited opportunity for employment . . . that's the type of approach I would favor."
Even there, however, Taft said he was "reluctant to support [changes] that impose real substantial costs and limit opportunity for employment" for those leaving military service.
Levin pointed out that the present Pentagon form that retirees fill out when hired by a defense contractor does not require them to report whether they worked on that contractor's contracts. Taft said that procedure should be changed.
The subcommittee also heard from Thomas G. Pownall, chairman of Martin Marietta Corp., one of the nation's largest defense contractors. Pownall said it was "unfortunate and grossly unfair to imply, as has been done, that people who once worked for the government and now are working in industry have taken advantage of their position . . . to achieve improper personal gain."
In an exchange with Levin, Pownall said he saw nothing wrong with Martin Marietta's carrying on "discussions" about future employment with an officer who supervised its contract work as long as it did not involve "negotiations" over a job.
Levin had asked the same question of Taft, who said such employment discussions "raise questions, and in every instance should be investigated" when the officer does not remove himself from continued work on that company's contract.
Levin did not ask Pownall about Martin Marietta's hiring in 1983 of the commander and deputy commander of the Air Force representatives at the company's Denver facility, a case developed by his staff and mentioned in his prepared statement on the hearing.
After the hearing, Levin said he "wanted to keep it a discussion of principles" rather than making Pownall defend himself.
Pownall said later that the hiring of the two Air Force officers had been cleared with top Air Force generals and that neither was working on contracts they had supervised while in service.