A nonprofit federal government watchdog group is expressing concern with President-elect Barack Obama's pick to become national intelligence director.
The Project on Government Oversight (POGO) on Thursday questioned Mr. Obama's choice of Defense Department inspector general's report and its own investigation, which concluded that Adm. Blair violated financial conflict of interest policies while serving as the head of a defense research institute.
"The basic obligations of public service are undermined when an official has a financial interest in the projects his organization is overseeing," said POGO Executive Director Danielle Brian.
According to the Senate Armed Services Committee raised concerns about possible conflicts of interest. Adm. Blair, after leaving the Navy, became the institute's president while serving on the boards of two defense contractors that worked on the F-22 fighter.
While at the institute, Adm. Blair participated in two reviews of the F-22, including one that endorsed an Air Force proposal to buy the F-22 on three-year contracts rather than one-year contracts. The longer-term contracts would financially benefit F-22 contractors and shareholders by guaranteeing a multibillion-dollar revenue stream for three years.
At the time, Adm. Blair served on the board of EDO, a company that produced missile launch systems for the F-22, and Tyco International Ltd., which made small electronic components used by F-22 subcontractors.
The inspector general concluded in a November 2006 report that Adm. Blair "violated IDA's conflict of interest standards" because he did not recuse himself from the F-22 project, but also found that Adm. Blair's failure to disqualify himself "had no impact on F-22 related work undertaken by IDA."
The report mirrored the results of a POGO investigation, released four months earlier, that disclosed Adm. Blair's financial stake in the defense subcontractor at the time he served with the institute.
The Obama transition team did not immediately respond to a request for comment Thursday night on POGO's concerns.
Adm. Blair, 61, faces confirmation hearings in the Senate, where he is expected to be questioned about the conflict of interest investigation.
The Associated Press reported that Adm. Blair got rid of his interest in EDO in August 2006 by donating his common stock to a charity that benefits military families. In July 2006, after the Senate Armed Services Committee questioned his board memberships, he took himself out of any IDA studies that could create conflicts.
But rather than resign from the defense contractors' boards, he resigned as both president and trustee of IDA on Sept. 11, 2006.