The Virtue of the Revolving Door

There is no Predator drone in time for the aftermath of 9/11 without it

In September, Rep. Matt Gaetz theatrically deplored the revolving door during the House Armed Services Committee’s hearing Fielding Technology and Innovation: Industry Views on Department of Defense Acquisition. He asked the witnesses “Do any of you challenge the premise that the acquisition process is corrupted when the senior Pentagon officials and the senior generals involved in these programs then go work for the big five companies?” The 2018 NDAA restricting lobbying activities for recent Pentagon officials didn’t go far enough, he argued—it should also have extended to acquisition activities.

I’m volunteering for the unsavory job of challenging Gaetz’s premise. The revolving door is one of the last rational policies we have in a military-industrial complex beset by own-goals.

Product-led growth is a myth in defense tech. There’s no such thing as your app going viral. And if you manage to innovate and produce something people actually want, beware—you now have a target on your back for threatening to disrupt some program office’s five year plan.

Our defense industrial base more closely resembles European sclerosis than America’s dynamic capital markets. It’s really hard to build a successful defense business, but not for any technical reasons or lack of capital. In America, 10x engineers are in the water. If you talk to any recruiter hiring for defense companies, the most challenging position to fill is the Head of Business Development. There just aren’t that many individuals that know how to scale a business in an industry defined by regulatory capture (e.g., does your company have the right clearances, do you personally know the PEO, did you lobby the right legislators, etc.) Banning the revolving door doesn’t change this reality and would only further hamstring new entrants trying to break in.

But revolving door executives are not magic beans that companies can plant to Jack-and-the-beanstalk their growth (if only it were that easy). According to Senator Warren’s 2023 report attacking the revolving door, Boeing had more revolving door hires than any of the other Top 20 defense contractor—they clearly didn’t hire enough. And the rent-a-general taking a sinecure on a company board is an all too common meme.

To help illustrate that I’m not just shilling for the military-industrial complex, let’s examine a detailed case study of the revolving door operating at peak performance.

Tom Cassidy and the Predator

Without the revolving door, it is unlikely the United States would have developed the Predator in time to eliminate terrorists in the aftermath of 9/11. The world’s first armed reconnaissance drone changed doctrine, challenged what it meant to be a fighter pilot, and sat at the nexus of Title 10 - Title 50 political warfare. In other words, it should have been impossible to sell.

Enter Tom Cassidy.¹

Cassidy epitomized the revolving door. Shortly after retiring as a Navy Rear Admiral, Cassidy joined General Atomics to lead sales. He had 30 years of experience as a fighter pilot and had commanded the Miramar Naval Air Station, home of Top Gun. While his operational experience from six thousand hours in the cockpit was certainly relevant, it came second to his stints in the Pentagon. Cassidy was Director of the Navy’s Aircraft Weapons Requirements Branch and then ran the Tactical Readiness Division for the Chief of Naval Operations. He knew how the Department of Defense bought stuff.

Cassidy reported to Neal and Linden Blue, the brothers who owned and operated General Atomics.² They were savvy and scrappy repeat entrepreneurs, but they had no military background and were unable to sell the concept of drone-as-cheap-cruise-missile in 1991 (no such challenge would exist today!). They pivoted into reconnaissance drones when they acquired Abe Karem’s company, Leading Systems. Karem, a brilliant Israeli immigrant, had spent 10 years toiling on various state-of-the-art endurance drones. In a fine illustration of technology being secondary to go-to-market, Karem had failed to build a successful business. The Blues purchased Leading Systems for pennies on the dollar.

Neal and Linden Blue were able to make some progress on their own. The CIA bought two General Atomics drones for $5 million. This stirred sufficient competitive rivalry with the DoD, causing John Deutch, the Undersecretary for Acquisition and Technology and a fan of Linden’s, to express serious interest in purchasing some of the drones for the DoD’s use.

But as anyone who has worked for even a few weeks in DoD sales quickly learns, grabbing the attention of a senior civilian or general officer is not only insufficient, it can distract from the steps needed for the real sales process. Cassidy, who had worked in a requirements branch, of course knew this. He aggressively lobbied the top aide of the influential Congressman Jerry Lewis to ensure $20mm would be included for an endurance unmanned aerial vehicle (UAV) in the next defense bill. Cassidy also relentlessly cultivated a relationship with the Joint Program Office (JPO) UAV to shape their acquisition strategy and requirements. Within 40 days of the UAV money being appropriated, General Atomics was awarded a contract for $31.7 million to deliver ten drones and three ground control stations, marking its first significant sale to the Department of Defense.

Cassidy’s relationships proved as useful as his understanding of the requirements process. During the Predator’s first operational deployment over the Balkans, Cassidy went on site with users and was shocked to learn they were not watching the video feeds coming off the Predator. Instead, they were pausing the video to print out frames. Cassidy went to the commander in chief of the U.S. and NATO forces in the Balkans and told him the value proposition of the Predator was the live feed and that the intel analysts needed to use it. As Cassidy recalled, “Fortunately I knew the guy, so he agreed.”

And when the time came to arm the Predator with Hellfire missiles—a heretical idea at the time—Cassidy was key to quickly brokering a deal with General Jumper, the Commander of Air Combat Command. The briefing to discuss the timeline and milestones was attended by dozens of people. In what easily could have been a contentious and months-long negotiation, the bonhomie between Jumper, the four star general, and Cassidy, the former two star admiral, allowed Cassidy to arrange an impromptu sidebar from the massive group. They emerged from their private chat with a deal in hand: General Atomics would get $2 million over two months to arm the Predator.

Cassidy possessed no uniquely brilliant technical insights—it was the Blues who pushed for the acquisition of Karem’s mature technology, and Karem managed to build the world’s best drones independent of the revolving door. But Cassidy uniquely accelerated go-to-market in time for America to have eyes and firepower over Afghanistan. Karem’s 10-year old business was anemic, and while General Atomics had managed a small sale to CIA, the likely trajectory of converting that into a full fledged defense business sans the revolving door would have been at least a decade (see: Palantir).

Would the Predator have eventually made it to market without Cassidy? Probably, but weapons don’t get deployed in a vacuum. Weapon-warfare fit, much like product-market fit, is real. When you deploy a weapon matters as much as your ability to deploy it (the Predator is not much use over China). The revolving door helps move things along.

Our People Industrial Base

Cassidy and the Predator is an exceedingly functional example of the revolving door. For every Predator there are hundreds of executives propagating the status quo or actively derailing innovation. But to repurpose a quote from

Shyam Sankar

at the same HASC hearing mentioned earlier “By creating processes that ensure nothing goes wrong, you also create processes that make sure that nothing can go right…and it constrains you to mediocrity. I would gladly accept more failure if it meant that we had more catastrophic success as well.” The Predator is one such catastrophic success.

Much like onerous AI regulation, banning the revolving door would only serve to entrench incumbents. The primes would have their positions protected, and new entrants would be completely helpless, forced to operate under the naive premise that the effectiveness of their product is a sufficiently differentiating variable. For example, Anduril, founded by Gaetz’s brother-in-law, would not have been able to hire their Chief of Strategy, who was the Staff Director of the Senate Armed Services Committee months before joining the company.

The revolving door is a symptom, not a cause, of our dysfunctional military-industrial complex. The root of the issue is that selling to the DoD is extremely specialized and filled with gatekeepers. When the Berlin Wall fell in 1989, only 6% of the Department of Defense’s budget went to defense specialists (e.g., companies with no commercial business). Today, that number has jumped to 86%. Revolving door hires are essential in such an environment. To mitigate their influence, we would need to stop treating the defense industrial base as an island unto itself, completely disconnected from the American ingenuity flooding every other corner of the country.

If I can offer one critique of the revolving door, it’s that it doesn’t seem to work in the other direction as often as it should. Hopefully this changes soon. As the Wall Street Journal recently reported, the “department is considering asking chief technology officers and other senior tech professionals to take up high-ranking positions in the reserves.” Brynt Parmeter, the department’s chief talent management officer, aptly refers to this initiative as creating a people industrial base.

1. Fun Fact: Cassidy’s high school friend was Norm Augustine, who would go on to be the Lockheed Martin CEO and author the infamous Augustine’s Laws.

2. The Blue Brothers purchased GA Technologies from Gulf in 1986. GA Technologies was previously named General Atomic and was a division of nuclear submarine builder General Dynamics Corporation before Gulf bought it. It was then taken over by Chevron following its merger with Gulf Oil. The Blues changed the name to General Atomics (plural) when they bought it. Confusing!