“The Department of Defense Office of Inspector General has decided to investigate complaints we recently received that Acting Secretary Patrick Shanahan allegedly took actions to promote his former employer, Boeing, and disparage its competitors, allegedly in violation of ethics rules,” the statement said.
Shanahan, who spent more than three decades at Boeing before joining the Trump administration in 2017, has denied favoring Boeing during his time as deputy defense secretary — the No. 2 post at the Pentagon, which oversees acquisitions, procurement and technology development across the military.
The probe comes as the former Boeing executive hopes to receive President Trump’s formal nomination to serve in the Defense Department’s top post and replace Defense Secretary Jim Mattis, who resigned in December.
It is unclear how the investigation will affect his prospects of receiving the nomination and winning Senate confirmation.
Lt. Col. Joe Buccino, a spokesman for Shanahan, said the acting secretary welcomed the inspector general’s investigation and would fully comply with the probe.
“Acting Secretary Shanahan has at all times remained committed to upholding his ethics agreement filed with the [Department of Defense],” Buccino said. “This agreement ensures any matters pertaining to Boeing are handled by appropriate officials within the Pentagon to eliminate any perceived or actual conflict of interest issue with Boeing.”
The investigation comes after the government accountability organization Citizens for Responsibility and Ethics in Washington (CREW) sent a letter to the inspector general saying that, according to news reports, Shanahan appeared to have “made numerous statements promoting his former employer Boeing and has disparaged the company’s competitors before subordinates at the agency.”
CREW cited news stories saying Shanahan had criticized Lockheed Martin, a chief rival to Boeing, and had urged the Pentagon to buy more Boeing-manufactured F-15X fighter jets in defiance of Air Force acquisition preferences. The Washington Post has not independently confirmed those reports.
In the Pentagon’s budget request to Congress this month, the Air Force proposed buying eight upgraded versions of the F-15, which would mark the first time it has bought the plane since 2001. Pentagon plans call for additional purchases of the aircraft in coming years.
Shanahan called suggestions of favoritism “just noise” during his first news conference as acting secretary in January. He rejected the notion that his criticism of the F-35 — which is made by Boeing rival Lockheed-Martin — amounted to a bias.
“I am biased towards performance,” Shanahan said. “I am biased towards giving the taxpayer their money’s worth. And the F-35 unequivocally I can say has a lot of opportunity for more performance.”
Upon entering the Pentagon as Mattis’s deputy in 2017, Shanahan signed an ethics agreement that required Boeing matters to be handled by another Pentagon official, an effort to avoid potential conflicts of interest with his longtime employer.
Sen. Richard Blumenthal (D-Conn.) asked Shanahan during an appearance before the Senate Armed Services Committee last week whether he would welcome an inspector general probe into his conduct regarding Boeing while at the Pentagon. Shanahan said he would.
“In his recent Senate Armed Services Committee testimony, Acting Secretary Shanahan stated that he supported an investigation into these allegations,” the Defense Department inspector general said in its statement Wednesday. “We have informed him that we have initiated this investigation.”
Sen. Jack Reed (R.I.), the top Democrat on the Armed Services Committee, called the probe “a serious matter.”
“Acting Secretary Shanahan said he supports an investigation into these allegations and indicated he will cooperate,” he said. “This administration has a history of trying to thwart reviews of potential misconduct and ethics violations. I stand ready to support the Inspector General’s efforts and hope they will proceed in a timely manner.”
A spokesman for Boeing said the company respects and adheres to Shanahan’s decision to recuse himself from all matters involving the company. He declined to comment further.
During his time at Boeing, Shanahan ran the company’s commercial aviation division, overseeing the turnaround of the 787 Dreamliner, and managed the firm’s missile defense unit. He also served as general manager of Boeing Rotorcraft Systems, which produces the Apache, Chinook and Osprey aircraft for the U.S. military.
In recent days, Shanahan has also faced questions about crashes of the Boeing 737 Max 8, because he worked in the firm’s commercial aviation division.
A senior defense official familiar with Shanahan’s career there said he had profit and loss responsibility for airplane programs already in production, but those under development, such as the 737 Max, fell to another Boeing executive.
“I firmly believe we should let the regulators investigate the incidents, and I would just say my heart goes out, condolences to the families and employees involved in the Lion Air incident in the Ethiopian airline incident,” Shanahan said last week during his Senate testimony.
Aaron Gregg contributed to this report.