How Some Retired Military Officers Became Well-Paid Consultants

Nov. 18, 2009 -- WASHINGTON — Six months after Marine Lt. Gen. Gary McKissock retired in 2002, he did what many other ex-military leaders do: He joined the board of directors of a defense contractor, a company doing business with his former service.

McKissock also had a second job. The Marines brought him back as an adviser, at double the rate of pay he made on active duty. Since 2005, the Marines have awarded McKissock contracts worth $1.2 million, in addition to his military pension of about $119,000 a year.

McKissock is one of at least 158 retired admirals and generals the Pentagon has hired to offer advice under an unusual arrangement. Most of the retired officers, one to four stars in rank, have been paid hundreds of dollars an hour by the military even as they worked for companies seeking Defense Department contracts, a USA TODAY investigation found. That's in addition to pensions of $100,000 to $200,000 a year for officers with 30 or more years of service.

MILITARY MENTORS: 158 retired generals consulting for the Pentagon

As "senior mentors," as the military calls them, the retired officers help run war games and offer advice to former colleagues. Some mentors make as much as $330 an hour as part-time government advisers, more than triple what their rate of pay was as high-level, active-duty officers. They earn more — far more, several mentors said in interviews — as consultants and board members to defense companies.

Retired generals have taken jobs with defense contractors for decades, reaping rewards for themselves and their companies through their contacts and insights. But the recent growth in the use of mentors has created a new class of individuals who enjoy even more access than a typical retired officer, and they get paid by the military services while doing so. Most are compensated both by taxpayers and industry, with little to prevent their private employers from using knowledge they obtain as mentors in seeking government work.

Nothing is illegal about the arrangements. In fact, there are no Pentagon-wide rules specific to the various mentor programs, which differ from service to service.

Based on interviews and a review of public records, USA TODAY found:

• Of the 158 retired generals and admirals identified as having worked for the military as senior mentors, 80% had financial ties to defense contractors, including 29 who were full-time executives of defense companies. Those with industry ties have earned salaries, fees or stock options as consultants, board members or full-time employees of defense firms.

• Mentors are paid from about $200 to $340 an hour, plus expenses — many times the rate of pay for active-duty generals, who typically make $170,000 to $216,000 a year, including a housing allowance.

• Mentors are hired as independent contractors and are not subject to government ethics rules that would apply if they were hired as part-time federal employees. They don't have to disclose, either to the military or the public, the identities of their clients. Mentors are not barred from lobbying the same officers they are advising, from advertising their military adviser role on company websites, or from taking commercial advantage of insights gleaned through their government work.

• Mentors operate outside public scrutiny. Although the services have released broad pay rates, most won't say how much individual mentors have been paid, and one, the Missile Defense Agency, declined to release any names. Other services released some names but couldn't say the lists were complete. USA TODAY identified many mentors by scouring military documents and other public records.

• In some cases, mentors also work for weapons-makers who have an interest in the military planning the mentors are assisting. A Marines exercise last year, which explored how to launch operations from ships, employed mentors who also had financial relationships with companies that sell products designed to aid those operations.

"This setup invites abuse," says Janine Wedel, a George Mason University public policy professor and author of a forthcoming book on government contracting. "Everyone in this story is fat and happy. Everyone, of course, except the public, which has virtually no way of knowing what's going on, much less holding these guys to account."

If retired generals advising the Pentagon also are "being paid by somebody who wants to make money off the government, I think it's important the public know that," says Sen. Claire McCaskill, D-Mo., who chairs the subcommittee on contracting oversight. "The reason ... is so the people have confidence that the decisions are being made based on merit, and not based on inside baseball."

Marine Gen. James Mattis is the commander of Norfolk-based Joint Forces Command, which pays at least 34 senior mentors to train active-duty generals and admirals. He confirms that mentors who also work for defense clients may pick up information that benefits their private employer, but he believes that's the only way to ensure that top experts are teaching officers.