A Lack of Transparency

Hagel’s failure to disclose possible income from foreign sources raises red flags

February 7, 2013

Republican senators are considering a hold of Chuck Hagel's secretary of defense nomination due to concerns that the nominee has not been transparent in response to specific questions about compensation he may have received from foreign sources.

Hagel, a former Republican Nebraska senator, has come under fire in recent days for failing to provide Senate Armed Services Committee (SASC) with detailed documentation about compensation he may have received for speeches he gave and organizations with which he is affiliated.

Hagel’s murky financial entanglements contributed to the committee’s decision Wednesday to postpone a scheduled vote on his confirmation.

A delegation of senators led by Ted Cruz (R., Texas) pressed Hagel yesterday to provide greater information about his financial disclosures, a move that suggests his nomination could be held up indefinitely.

"From his poor performance at the hearing to the questions about his financial statements, and now his refusal to comply with basic standards of transparency, his nomination could be, and frankly should be, in trouble," said one source close to the committee. "Time is not on his side. Now that the vote has been delayed, this could be the beginning of the end."

Hagel indicated in a letter to SASC Wednesday that he does not intend to provide greater details about compensation he may have received from foreign funders, as well as for various speaking engagements.

"The information you seek is legally controlled by the individual entities and not mine to disclose," Hagel wrote. "As a board-member, I have a fiduciary duty that includes the obligation to maintain the confidentiality of non-public corporate information. The information may also be subject to various other legal requirements or contractual arrangements that prohibit its disclosure."

This move is being viewed as an affront to the committee’s responsibility to fully vet Hagel before approving his nomination, which would then go to a full vote in the Senate.

"Failure to comply with the senators' request would make it very difficult to justify ending debate and moving to a final vote," said one senior Republican Senate aide. "If Sen. Hagel refuses to disclose his foreign financial influences over the last five years, that could be the final straw that tanks his nomination."

Past presidential nominees have found their nominations derailed for similar reasons.

"People often forget that [former diplomat] Chas Freeman went down because of his failure to disclose foreign financial influences, not because of his views on foreign policy," said the Senate aide, referring to Freeman’s unsuccessful nomination to a the National Intelligence Council.

Hagel’s refusal to provide the committee greater financial information has prompted a showdown with SASC that shows no signs of being quickly resolved.

Should Hagel’s nomination eventually emerge from the committee there is evidence that once-hesitant Republicans could ultimately embrace the prospect of a filibuster, Senate sources said.

Four GOP senators who signed Cruz’s Wednesday letter have indicated in the past that they oppose a filibuster. Their attaching their names to the letter is being viewed as a sign that opposition to Hagel is mounting.

"The Cruz letter is at this point a gamer changer because it’s no longer about filibustering on the merits of Hagel, but rather about a filibuster to protect the sanctity of the process and the very idea of transparency," said one source involved in the confirmation process.

Republican Sens. John McCain (Ariz.), Roy Blunt (Mo.), Dean Heller (Nev.), and Tom Coburn (Okla.) all lent their names to Cruz’s letter despite stating in the past that they would not support a filibuster of Hagel’s nomination.

Additionally, every GOP member of SASC signed the letter.

"Your refusal to respond to this reasonable request [for more information] suggests either a lack of respect for the Senate’s responsibility to advise and consent or that you are for some reason unwilling to allow this financial disclosure to come to light," the letter stated.

"This committee, and the American people, have a right to know if a nominee for secretary of defense has received compensation, directly or indirectly, from foreign sources," the letter said.

"Until the committee receives full and complete answers, it cannot in good faith determine whether you should be confirmed as secretary of defense," the senators wrote.

Just two Republican senators have publicly endorsed Hagel: Sens. Thad Cochran (Miss.) and Mike Johanns (Neb.).

Johanns' office indicated that he continues to support Hagel when contacted Thursday by the Washington Free Beacon. Cochran’s office did not respond to a request for comment.

Hagel’s financial opacity continues to cause concern among an increasingly vocal cohort of Senate sources.

"Sen. Hagel's failure to provide adequate, detailed responses to several Senators' questions shows his lack of respect for their constitutional duty to advise and consent. It's a little surprising too since he was once in their position," said another GOP aide who is following the process.

"Furthermore, Hagel's performance has lacked professional prowess that the nation should be seeing from someone who is going to be advising the commander in chief and overseeing all our armed forces," the source added. "There are many red flags here, and it's hard not to speculate that he is hiding something from his Republican colleagues and American public."

A filibuster of Hagel’s nomination would be unprecedented. However, at least eight cabinet-level appointees have been subjected to a 60-vote threshold in the Senate over the past years.