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Top defense oversight staffer received $1.6 million payout from Lockheed Martin

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A former executive for the Pentagon’s top defense contractor collected $1.66 million in salary, consulting fees and retirement pay from two top defense contractors last year before becoming the Republican chief of staff for the Senate Armed Services Committee in February.

The appointment is the second by a Republican member of either the House or Senate Armed Services committee to provoke criticism from independent groups that consider it a conflict of interest.

Ann Elise Sauer, who was appointed to her present job by Sen. John McCain, R-Ariz., worked for more than a decade as a vice president and lobbyist for Lockheed Martin before leaving in Jan. 2011, according to a financial disclosure she made to the Secretary of the Senate in April.

In 2011, she was paid a salary and bonus totalling $660,390, deferred compensation of $769,574, and $232,872 labeled as “retired pay” on the financial disclosure form. Lockheed is the Defense Department’s largest corporate contractor, earning $28.3 billion, or 61 percent, of its sales from the department in 2011, according to the company’s annual report.

Sauer then worked as a consultant and analyst for BAE Systems, earning $55,000 from the firm, according to her financial disclosure form. BAE is the Pentagon’s ninth largest contractor.

The Project on Government Oversight’s Ben Freeman said Thursday that Sauer’s appointment to the principal Senate committee tasked with overseeing all military spending and contracting creates a huge conflict of interest.

“$1.6 million — that gives a lot of reasons to remember your former employer,” said Freeman, who specializes in defense contracting issues for POGO. “When you’ve been working for a company for 10 years and then just last year you got $1.6 million, I have to think that affects your decision making.”

Sauer’s LinkedIn page shows she served on various McCain political campaigns from 1998 through 2008. This won’t be her first turn on the Armed Services Committee; she worked there as a professional staff member in the late 1970s. She then worked as a legislative assistant and legislative director on McCain’s staff in the 1990s.

In an emailed statement, McCain spokesman Brian Rogers said Sauer’s appointment as Republican staff director on the Armed Services Committee is on a “stop-gap, temporary, one-year basis.” He also noted that, although she received $1.6 million in compensation last year, Sauer holds no stock in Lockheed Martin.

Her former employer has repeatedly drawn the ire of government watchdogs, most recently for its work on the problem-plagued F-35 and F-22 jet fighters. The Center wrote in June about the latest of those troubles, including $1 billion in cost overruns on four early production contracts for the F-35; it is the single most costly military program in U.S. history. A spokesperson for Lockheed Martin did not return request for comment on Sauer’s appointment.

Sauer is not alone in taking a key job — and a major pay cut — to work on Capitol Hill helping oversee federal contracts with a former employer. Last year, when Northrop Grumman lobbyist Thomas MacKenzie joined the House Armed Services Committee, he held between $100,000 and $250,000 of stock in his former company, according to his own financial disclosure to the House Clerk.

Claude Chasin, the committee spokesman, did not immediately respond to questions about the appointment. But Robert Lee Simmons II, staff director of the House Armed Services Committee, told a reporter for Hearst newspapers in June that MacKenzie, who runs the staff for the subcommittee on seapower and projection forces, is "the kind of person we would want to have in his job. We are lucky to have Tom."

Craig Holman, a lobbyist at the nonprofit watchdog group Public Citizen, had a different view. He told both POGO and the Center that “it’s not uncommon for a senior K Street lobbyist to have a quarter of a million dollars tucked away in stock. But it is uncommon for someone who is a congressional staffer. This poses a very serious conflict of interest.”

 


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