Introduction
Two thousand camels scissor-kicked their way along a 12-mile race track, garnering thunderous applause from the Saudi crowd. It was the 2005 Janadriyah Festival, outside Riyadh, and in attendance was Prince Miteb bin Abdullah bin Abdulaziz and his special guests, a couple from northern Virginia. In addition to the festival, the prince treated Richard and Susan Millies to a musical production, banquets, and first-class flights to and from Washington, D.C. The eight-day trip ended up costing more than $24,000, with Miteb picking up the entire bill.
Why was Prince Miteb so generous to a couple from the Washington suburbs? Mr. Millies worked for the Pentagon as deputy director of the Defense Security Cooperation Agency (DSCA), which runs the program through which foreign governments purchase advanced weapons systems. And therein lies the problem, military watchdogs say, with close relationships and free travel posing potential conflicts of interest. At the time, Prince Miteb was an assistant deputy commander of the Saudi National Guard, and the kingdom utilized DSCA more than any other country except Israel and Egypt. Indeed, from 2003 through 2006, the Saudis bought $4.4 billion worth of training and equipment through the program, according to the Congressional Research Service. Some of those deals stirred controversy, including a 2008 agreement to buy $123 million worth of smart bombs.
Millies has plenty of company at the Department of Defense (DOD). Despite the Pentagon’s big budgets, DOD personnel routinely accept free flights, accommodations, and hospitality from outside interests, according to a Center for Public Integrity analysis of thousands of travel disclosure records. From 1998 through 2007, the analysis found, outside sources paid for more than 22,000 trips worth at least $26 million, sponsored by an array of foreign governments, private companies, and other groups which have business with the Pentagon. The records, submitted originally in paper form to the U.S. Office of Government Ethics, were digitized and sorted in a joint project by the Center and Northwestern University’s Medill School of Journalism.
This privately paid travel has become riddled with conflicts of interest and is in need of stronger oversight and stiffer regulations, say watchdog groups. “This is the kind of behavior that should be barred without a loop hole,” says Winslow Wheeler of the nonprofit Center for Defense Information. Even some of the travelers are cautious of outside sponsorship. “Some foreign sponsors of the travel may hope to acquire influence by sponsoring travel and holding meetings,” warns Judith Yaphe, a Middle East expert at DOD’s Institute for National Strategic Studies who has taken dozens of the trips to Great Britain, Italy, Kuwait, and Qatar.
Regulations governing the travel are subject to interpretation. Both military and civilian DOD personnel are allowed to accept free trips from outside the government to attend meetings, conferences, and similar functions, according to federal rules. But the travel must be related to one’s official duties and in the interest of the government, and it cannot involve direct marketing efforts or pose a potential conflict of interest. Whether travelers always meet these criteria is not always obvious.
Behind the trips is a diverse set of foreign and commercial interests, the Center found. Among the key findings:
- The medical industry paid for more travel than any other single interest – over $10 million for some 8,700 trips, or about 40 percent of all outside sponsored travel. Among the targets: military pharmacists, doctors, and others who administer the Pentagon’s $6 billion-plus annual budget for prescription drugs;
- Foreign governments paid more than $2.6 million for 1,500 trips. The biggest sponsors: U.S. allies Australia, Singapore, and Japan, but the list also includes China, Russia, and the United Arab Emirates;
- Manufacturers of retail goods paid for more than 500 trips, at a cost of about $470,000. Their targets included buyers at on-base retail outlets, which sold more than $12 billion of merchandise in 2007. Among the sponsors: Nike, Skechers, Mattel, and Sony;
- Thousands of the trips were taken to popular vacation spots such as San Diego, Las Vegas, Honolulu, San Remo, Italy, and Jeju Island, South Korea. Among the guests were spouses, who participated in at least 240 of the trips;
- Many of the trips were low-cost affairs; about 25 percent cost less than $500. But a significant number had hefty price tags, with more than 10 percent of them costing above $2,000.
Unusual Deployments
The beaches of Brazil’s Rio de Janeiro and the canals of Venice, Italy, are not exactly typical military deployment destinations. But these were among 1,500 trips taken by DOD employees and paid for by foreign governments from 1998 through 2007. Those traveling ranged from top military brass to the greenest privates.
In the case of Richard Millies, who oversaw DOD’s advanced weapons sales, his Saudi trip was approved by a DSCA ethics officer. Millies did nothing wrong, according to DSCA General Counsel Kay Cannon. “This certainly was unique in terms of its amount,” said Cannon of the $24,000 trip, “but it was thoroughly vetted and approved.”
Millies defends his foray to Saudi Arabia as both needed and beneficial to U.S. foreign policy. The Pentagon, he says, would have paid only for a short visit; his extended week with the Saudis allowed him to build personal relationships and convinced him that the Saudis actively oppose terrorism — something he says he never would have learned while sitting behind his desk. Millies also stresses that Saudi Arabia would hardly have been his pick for a junket. “To tell you the truth,” he suggests, “I would look with a more careful eye at people who were running off to Rome and Paris.”
Millies’ DOD colleagues, in fact, took 140 trips to Rome and Paris. Foreign governments, universities, drug manufacturers, and international political organizations like the North Atlantic Treaty Organization paid for the majority of these trips, the most expensive of which cost more than $12,000.
A number of travelers cited the importance of diplomacy in accepting the trips. “You couldn’t turn around and say we’ll come but we have to pay for it,” says Millies. “Hospitality is very important in Arab cultures.” Some of the trips are simply courtesy visits extended by allied governments, officials stress. In March of 2001, Admiral Dennis Blair, then commander-in-chief of the U.S. Pacific Command, and now director of national intelligence, took a $3,600 trip to China paid for by the People’s Republic of China. “It is customary for a diplomatic or military leader to accept meals and accommodations as a courtesy from the host country when invited for official business,” says Michael Birmingham, a spokesman for the Office of the Director of National Intelligence, speaking on behalf of Blair. “In many parts of the world and especially in the Pacific region, should the guest reject this hospitality, it is considered a personal affront.”
Other officials argue that, despite occasional travel to vacation spots, they are engaged in official business. In 2006, for example, the Italian navy paid for Admiral Michael Mullen and his wife to visit Venice, Italy, for a “Regional Seapower Symposium.” The admiral, now chairman of the Joint Chiefs of Staff, met on various security issues with allied governments, says DOD spokesman John Kirby, and “there was an official spouse program to which Mrs. Mullen was invited.”
Some military watchdogs say it’s impossible for DOD officials to make impartial decisions regarding national security while accepting thousands of dollars worth of travel from foreign governments, especially when the trip includes a spouse and a vacation. “The big deal isn’t the number of dollars, it’s the relationships these people are trying to create,” argues Wheeler of the Center for Defense Information. “Governments and people drool at the idea of getting in the head of people who make decisions.”
Wheeler says DOD money would be better spent paying for travel when necessary and to a certain degree Middle East expert Yaphe agrees. “Tight budgets make travel for foreign area experts difficult and acceptance of outside funding could create the impression of impropriety,” she says. It wouldn’t take much to eliminate even the appearance of impropriety, critics say, and they could be right. The approximately $210,000 spent by foreign governments on travel for DOD officials in 2007 represents .0025 percent of DOD’s $8.4 billion travel budget for that year.
Targeting Military Medicine
The fact that the health care industry paid for about 40 percent of all trips may seem surprising, but medical ethics experts say it makes sense. The billions of dollars spent by DOD on health care are a tempting target for drug companies, device manufacturers, and other medical companies.
The Government Accountability Office found that the Pentagon’s prescription drug spending more than tripled to $6.2 billion from fiscal year 2000 to fiscal year 2006. The money accounts for some two percent of all drug sales nationally, a market expected to reach $15 billion by 2015. As such, the $1.7 million spent by the pharmaceutical companies and medical device manufacturers on free travel for Pentagon personnel may seem a wise investment to health care companies. The industry doled out more than 1,400 trips to DOD doctors, medical researchers, pharmacists, and other health care employees from 1998 through 2007.
Among the top medical device manufacturers or pharmaceutical company sponsors of trips are:
- Johnson & Johnson, 187 trips at a cost of more than $215,000;
- GlaxoSmithKline, 95 trips at a cost of more than $120,000;
- Hologic Company, 37 trips at a cost of more than $102,000;
- Medtronic Inc, 86 trips at a cost of more than $93,000;
- Smith & Nephew, 81 trips at a cost of nearly $90,000.
Representatives of these companies say they follow the law and government regulations closely, paying only for reasonable expenses tied to professional trips or third-party meetings. But industry-sponsored travel has become a hot topic in the medical community. After studies showed that doctors who receive drug company perks were more likely to prescribe that company’s product, the American Medical Association issued guidelines in 2003 stating that physicians should not accept travel and lodging from the industry. Such concerns prompted Admiral Thomas McGinnis, chief of the Pharmaceutical Operations Directorate for DOD’s military health care program, earlier this year to prohibit his direct staff from going on company-paid trips. Still he remains skeptical that pharmaceutical companies have much to gain. “I don’t really know what the hook is, what their advantage is,” McGinnis says. “I don’t see the reason why firms would do that.”
One outspoken critic is Dr. Adriane Fugh-Berman, an associate professor at Georgetown University School of Medicine who has researched industry influence on physicians. Fugh-Berman asserts that the free travel is part of careful planning by corporate marketing departments to subtly manipulate medical professionals into using their products. Medical professionals, she says, “don’t understand the influence that occurs, and I don’t think that they would continue to allow these trips if they knew more about the industries’ real motives.”
Targeting the Exchange
Another major target for industry is the military’s sprawling system of retail exchanges and other on-base stores, which sell billons of dollars worth of merchandise every year. The buyers and managers who decide what products get stocked at bases worldwide have taken hundreds of trips worth hundreds of thousands of dollars from companies jockeying for shelf space.
Federal travel rules prohibit DOD employees from taking trips to marketing events, but more than 450 trips were to product presentation events and paid for by the manufacturer of the merchandise. Nike paid more than $80,000 for U.S. Navy apparel buyers and merchandise managers to take nearly 100 trips, almost all to product line displays. Toy-maker Mattel paid nearly $30,000 for Navy merchandise buyers to take 26 trips, most to view new product lines at the company headquarters in El Segundo, California. Skechers, the shoe company, paid about $17,000 for about 25 trips, and Sony paid about $15,000 for just under 20 trips.
Some buyers took multiple trips year after year, paid for by the same retail manufacturer. William Marx, athletic footwear buyer for the Navy Exchange Service Command (NEXCOM), decides which athletic shoes are sold at navy exchanges worldwide, a $40 million business in fiscal year 2008. Skechers spent more than $4,500 to pay for seven trips by Marx to Manhattan Beach, New York, and Los Angeles, between 2001 and 2005. Marx described these trips as “all work,” meeting with managers and sales reps, and says that Skechers treats NEXCOM like any similarly sized business account.”
Under current rules, buyers like Marx are allowed to accept free travel even to marketing events because it’s their job to receive sales pitches, according to Eric Rishel, senior attorney at the DOD’s Office of the General Counsel Standards of Conduct Office. This relationship does not represent a direct conflict of interest as buyers do not regulate the companies paying for their travel, they only purchase millions of dollars worth of merchandise from them, Rishel said.
“That makes absolutely no sense,” counters Craig Holman, a government affairs lobbyist for Public Citizen, a nonprofit consumer group. Holman sees the industry-paid trips as an extension of lobbying. “The buyers are the ones who are making major purchases,” he says. “This is exactly the conflict of interest that these ethics restrictions are designed to stop.”
Medical staff and retail managers are not the only ones targeted by industry. Credit card company VISA paid nearly $35,000 for the travel of a financial officer and directors of DOD’s human resource data agency. Exxon Mobil Corporation spent more than $33,000 to cover the travel of a chemist, a physicist, airfield pavement evaluators, and several students. General Electric paid more than $27,000 for about 30 trips, including travel to a consumers show case for audio and video electronics buyers.
A Need for Reform?
Industry-sponsored travel became a major issue in Congress in 2006, after the Jack Abramoff and Duke Cunningham lobbying scandals. At the same time the Center for Public Integrity revealed $55 million in lobbyist-paid travel by members and their staff. The Center’s Power Trips investigation documented how those working for Congress often took trips to golf resorts, beaches, and other vacation spots, paid for by business and private interest groups. In response, legislators strengthened the rules regulating Congressional travel paid for by outside sources. The House and Senate passed legislation in 2007 prohibiting members of Congress from accepting travel funded by lobbyists or any entity that retains or hires lobbyists. They also cannot accept paid travel from foreign agents.
But while Congress cracked down, the executive branch, including DOD, did not and remains susceptible to some of the same problems that dogged Capitol Hill years ago, Holman says. Executive branch travel rules allow multi-day trips without review of an ethics committee and let employees [to] take first-class flights with a simple waiver. The decision to approve or deny a trip often falls to individual officers within the traveler’s department and not an independent agency. “As a result we have everyone just doing what they want,” Holman says. “The ethics officers interpret ethics laws the way that suits their boss. How would you like to walk into your bosses’ office and tell them they can’t take a trip to Hawaii?”
Rishel, of the DOD’s Office of the General Counsel, says the current system in fact strikes a fair balance between public oversight and ease of use for DOD personnel. “There is a whole approval process for travel, and in most instances an ethics officer” who reviews the case, he says. “Remember that the main thing that’s happening here is that instead of spending X amount of dollars out of the federal travel budget, you are traveling to something where there has been some identified government need without expending government money.”
But should those free trips exert undue influence, critics warn, the wasteful spending or misguided policies that result could far outweigh any benefit. “You don’t want to start a relationship based on favors from people who want something from the government,” says the Center for Defense Information’s Wheeler. “Even a meal is the first step down that slippery slope, and a trip worth thousands of dollars is much further down that slope.”
Researcher Laura Cheek and Staff Writer Jillian Olsen contributed to this report. Pentagon Travel is a joint project by the Center for Public Integrity and the Medill School of Journalism at Northwestern University.
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