Ex-security officials rake it in

WASHINGTON — Dozens of members of the Bush administration's domestic-security team, assembled after the 2001 terrorist attacks, are collecting bigger paychecks in different roles: working on behalf of companies that sell security products, many directly to the federal agencies the officials once helped run.

At least 90 officials at the Department of Homeland Security or the White House Office of Homeland Security — including the department's former secretary, Tom Ridge; the former deputy secretary, Adm. James Loy; and the former undersecretary, Asa Hutchinson — are executives, consultants or lobbyists for companies that collectively do billions of dollars' worth of domestic-security business.

More than two-thirds of the department's most senior executives in its first years have moved through the revolving door. That pattern raises questions for some former officials.

"People have a right to make a living," said Clark Kent Ervin, the former inspector general of the department, who now works at the Aspen Institute, a nonpartisan public-policy research center.

"But working virtually immediately for a company that is bidding for work in an area where you were just setting the policy, that is too close. It is almost incestuous."

Federal law prohibits senior executive-branch officials from lobbying former government colleagues or subordinates for at least a year after leaving public service. But by exploiting loopholes in the law — including one provision drawn up by department executives to facilitate their entry into the business world — it is often easy for former officials to do just that.

Michael Petrucelli, for example, who was once acting director of citizenship and immigration services, moved within months of leaving his post in July 2005 to a job in which he lobbied the Coast Guard, another unit of the department, to test a power-supply device made by his new employer, GridPoint.

In their new roles, former department officials often command salaries that dwarf their government paychecks. Carol DiBattiste, who made $155,000 in 2004 as deputy administrator at the Transportation Security Administration, earned more than $934,000 last year from ChoicePoint, a Homeland Security Department contractor she joined in April 2005, the same month she left the agency.

Ridge, the former secretary, stands to profit now that Savi Technology, a maker of radio-frequency-identification equipment that the department pushed while he was secretary, is being bought by Lockheed Martin. He was appointed to the Savi board three months after resigning from the department and has been compensated with an undisclosed number of stock options Lockheed presumably will need to buy back.

In the coming weeks, Ridge said, he plans to open his own domestic-security and crisis-management consulting firm.

The shift to the private sector is not without precedent in Washington, where generations of former administration officials have sought higher-paying jobs in industries they once regulated.

But veteran Washington lobbyists and watchdog groups said the exit of such a sizable share of an agency's senior management before the end of an administration has few modern parallels.

"It is almost like an initial public offering in the stock market," Scott Amey, general counsel at the Project on Government Oversight, based in Washington, said of the booming domestic-security market. "Everyone wants a piece of it."

A smooth transition

For two years, Hutchinson, a one-time U.S. senator and a current candidate for Arkansas governor, served as undersecretary for border and transportation security, supervising the 110,000 employees charged with guarding the nation's borders, ports and airports. His transition from public service to the business world could serve as a primer for others.

Hutchinson began his negotiations to enter private industry months before he resigned. On March 2, 2005, the day after he officially left the department, he began work at Venable, a Washington law and lobbying firm that represents major domestic-security contractors such as Lockheed Martin.

Federal law bars executive-branch officials from negotiating for a future job with companies they oversee. Hutchinson complied with this provision by signing a waiver in December 2004, vowing to be "disqualified from participating personally in any particular matter that would have a direct and predictable effect on Venable."

Benjamin Civiletti, chairman of Venable, made clear why Hutchinson was attractive to the firm.

"Asa was not only present at the creation of this vast new security infrastructure," Civiletti said when announcing Hutchinson's appointment as director of the firm's domestic-security practice. "He was one of the chief architects and implementers."

Hutchinson was soon representing clients including Intelligenxia, a data-mining software company seeking domestic-security business; ImmuneRegen BioSciences, a pharmaceutical company that sells anti-radiation drugs; and Global Computer Enterprises, which wants to expand its computer-software and systems sales to the department.

Working with Hutchinson at Venable was Alison Williams, his special assistant at the Homeland Security Department, who was not senior enough at the agency to be subject to the one-year lobbying ban.

Hutchinson also opened a business in Arkansas, his home state, starting Hutchinson Security Strategies. Again, he enlisted a former department aide, Betty Anderson Guhman, who, like Williams, was not subject to the one-year lobbying ban.

Guhman said she interacts regularly with Homeland Security officials on visits to Washington, as she did recently, meeting with W. Ralph Basham after his nomination as commissioner of customs and border protection.

Hutchinson said the presence of his business partners at these meetings was not meant to circumvent the lobbying ban. "When I am not at a meeting," he said, "I am not at the meeting."

Nine months after leaving the department, Hutchinson moderated a private briefing and reception in Washington for senior domestic-security officials and industry representatives given by Saflink, a Bellevue, Wash., manufacturer of fingerprint and other identification technology.

The event focused on two transportation-security programs that Saflink intended to bid on and that Hutchinson, who had been named to Saflink's board, helped create at the department.

Thanks to the participation by Hutchinson and others, the briefing achieved its goal of "solidifying Saflink's position as a leader in this area in the minds of key government decision makers," Glenn Argenbright, Saflink's chief executive, said in describing the event to industry analysts.

Hutchinson said he was convinced the session did not violate the lobbying ban. "A panel discussion forum is not lobbying by any standard whatsoever," he said.

The biggest potential for profit among Hutchinson's ventures appears to come from his role as an investor in Fortress America Acquisition, a domestic-security investment firm for which he also acts as an adviser.

The company raised $42 million last year by selling stock through an initial public offering. Hutchinson, before the stock was sold publicly, bought 200,000 shares for $25,000. At Friday's trading price the stock was worth more than $1.2 million. (He cannot sell those shares for at least two years.)

Given the demands of running for office, Hutchinson chose not to renew a one-year contract with Venable in March.

What troubles Amey of the Project on Government Oversight are not the lucrative paychecks earned by former officials such as Hutchinson, but what he sees as an effort to disregard the spirit of the lobbying ban in pursuit of those rewards.

"It is a dirty way to get around the conflict-of-interest and ethics rules," Amey said. "It is legal. But is it appropriate? I don't think so."

What the law says

The law that governs the so-called post-employment life for federal officials was enacted in 1962. It prohibits senior officials from "any communication to or appearance" before their former government department or agency on behalf of another for one year from the date they leave their job.

There is also a lifetime ban on communicating with anyone at the department in connection with "a particular matter" in which the former official "participated personally and substantially."

A separate law prohibits certain former federal employees, such as program managers or contracting officers, from accepting a job with a company they supervised for a year afterward if a contract involved exceeded $10 million.

Robert Coyle, the designated ethics official for the Homeland Security Department, said former department executives were almost universally honoring the rules. "We can argue about what the law should be," Coyle said, "but let's not tar people with misconduct because they are doing something that is permissible." Such instances in the agency's short history show the law often does little to prevent former officials from moving quickly to lobby the government on domestic security on behalf of their new bosses or clients.

Perhaps the biggest loophole was created in late 2004 at the request of senior department officials.

The Office of Government Ethics approved a request by the department to split it into seven components for the purposes of the ethics rules. Once in the private sector, most former department officials were prohibited for one year from lobbying the same component where they once worked.

That meant that Petrucelli technically complied with the ethics rules, even though he left the Homeland Security Department and within months started pitching GridPoint products to the Coast Guard. The reason: The Coast Guard is not part of the component that contained Petrucelli's former agency, Citizenship and Immigration Services.

Tom Blank's swift move into the private sector was made possible by a different loophole. Blank became vice chairman of the lobbying firm Wexler & Walker Public Policy Associates two weeks after leaving the Transportation Security Administration in September 2005, where he had been the No. 2 official.

He set up a new practice within the lobbying firm, representing an association of contractors, including Lockheed Martin and General Electric, that planned to bid on an airport-checkpoint-security program he had helped create while at the agency.

In his new role, Blank also helped draft proposed technical standards for the checkpoint program that were submitted to his former subordinates at the security administration.

Blank pointed out that ethics rules allowed former officials to work behind the scenes in many areas where they were previously involved. He said he honored the one-year lobbying prohibition by having another partner at Wexler & Walker sign the document turned in to the Homeland Security Department.