Ernst Works Across the Aisle to Prevent Chinese, Russian Influence in National Security Contracting

WASHINGTON – U.S. Senators Joni Ernst (R-Iowa) is teaming up with Democratic Senators Gary Peters (D-Mich.) and Maggie Hassan (D-N.H.) to call for increased and additional internal oversight by the federal government into contracts with national security consulting firms, specifically to prevent consulting firms from holding contracts with the United States while advising Russia, China, and other countries of concern.

The senators today introduced the Combating Obstructive National Security Underreporting of Legitimate Threats (CONSULT) Act, which streamlines policies across government agencies to identify potential conflicts of interest within consulting firms or government contractors and permit those conflicts to disqualify firms from being awarded national security contracts.

Click here or on the image above to watch Senator Ernst’s remarks on the bill.

“America’s adversaries, like China and Russia, are aggressively working against our national security interests; so why then would we allow government contractors closely tied to these adversaries to advise our military and Pentagon officials? At the very least, this is a clear conflict of interest, but more seriously, it could pose a threat to our national security,” said Senator Joni Ernst. “The U.S. is playing a dangerous game; it’s past time we put safeguards in place to ensure no firms hired by the federal government are working simultaneously to support the agenda of our adversaries like China and Russia.”

The CONSULT Act is also supported by outside organizations, including the Project on Government Oversight (POGO), Citizens for Responsibility and Ethics in Washington (CREW), and Transparency International.

"The organizational conflict system was watered down through the years and places burdens on contracting officers to identify, mitigate, neutralize, or avoid OCIs,” said Scott Amey, General Counsel, POGO. “This bill will help officials by requiring certain disclosures, including beneficial owners, at the award process and during a contract to ensure that companies with ties to foreign adversaries aren't getting national security information and federal dollars."

"The United States frequently pays private businesses millions of taxpayer dollars to take on high-value national security projects," said Noah Bookbinder, President of CREW. "In order to ensure the integrity of the services these businesses provide to our country, it is critical that we protect these contractual relationships from the reality or even the appearance of conflicts of interest. That's why CREW is happy to endorse the CONSULT Act, which would, among other things, make organizational conflicts grounds for denying a contract, and make any failure to disclose a serious conflict grounds for debarment of a contractor."

"The U.S. government has designated the fight against foreign corruption as a core national security interest," said Scott Greytak, Director of Advocacy for Transparency International U.S. "To that end, it's important that U.S. officials have the information they need to know whether taxpayer dollars could go to organizations working for, and helping to legitimize, corrupt foreign governments. The CONSULT Act is a straightforward transparency measure that would empower U.S. officials with this information and help ensure we're maximizing our efforts in the fight against foreign corruption."

Background:

The CONSULT Act comes after reports surfaced that the consulting firm McKinsey & Company was providing strategic advice for state-owned companies in China and Russia on militarization efforts while also being awarded national security contracts by the United States. These adversarial Chinese and Russian entities include a handful that have been blacklisted by federal agencies. The militarization and industrialization issues they were advising on included providing strategic advice for the internment camps against Uyghurs, the creation of artificial islands in the South China Sea, and the Russian Kremlin-linked defense sector.

Specifically, the CONSULT Act would:

• Develop a government-wide policy and guidance to mitigate and eliminate organizational conflict of interests relating to national security.
• Require consulting firms to disclosure any potential organizational conflict of interest with certain entities, such as beneficial ownership, active contracts, contracts held within the last five years, and any other relevant information with foreign adversarial entities or governments.
• Allow for these conflicts of interest to be grounds for denial of a contract, or for the suspension and debarment of a contractor.
• Require the Federal Acquisition Regulatory Council (FARC) to update federal acquisition regulations for implementation.

Countries in which doing business qualifies as a conflict of interest include: China or any Chinese state-owned enterprise; Russia or any Russian state-owned entity; any state sponsor of terrorism (Iran, North Korea, Syria and Cuba); and other countries that have been engaged in a project that has been declared a crime against humanity by the Secretary of State. If a firm discloses that they have previously, or are actively engaged in business with these countries, they could be denied a new contract. If firms fail to disclose these relationships, they could be suspended from a current job or banned from federal contracting altogether.

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