ExecutiveBiz talked with Brian Baldrate, vice president and general counsel of Raytheon’s international and Washington, D.C., operations, about his military background, views on international defense sales and where he sees room for greater public-private sector collaboration.
“A lawyer’s job isn’t to simply weigh in on whether something is legal, but to act as a trusted adviser who understands what the organization is trying to achieve.”
ExecutiveBiz: How has your experience in the military and litigation prepared you for the role of VP of general counsel at Raytheon?
Brian Baldrate: I started my career as a cavalry officer, commanding tanks, which made me operationally focused on accomplishing a real-world mission. When I became a lawyer, first in the military, and then private practice, I realized my job was to similarly help my clients accomplish their missions, even if I need to take them on a different route than they initially planned or envisioned.
That’s true whether your client is a military commander trying to secure a city in Iraq, or a business president trying to negotiate a commercial sale. A lawyer’s job isn’t to simply weigh in on whether something is legal, but to act as a trusted adviser who understands what the organization is trying to achieve and then help accomplish that mission while ensuring operations are carried out in an ethical manner in the organization’s long- and short-term interests.
On the litigation side, my experience has been different, but equally valuable, in helping spot and address risks that our business partners don’t always see. For example, business leaders might hire a consultant who has a close personal relationship with a government official, hoping to get insights into winning more contracts. However, that close personnel relationship — the very thing that the business leader sees is helpful from a sales perspective — will be perceived by a Justice Department prosecutor as a red flag that creates a risk of corruption.
Now, just because hiring a consultant carries risk doesn’t mean the company shouldn’t proceed. It just means that we need to pay close attention to what work the consultant is carrying out, how much we’re paying that consultant and what value we’re getting for her/his work. With that information we can decide whether to go forward, and if something goes wrong, we’re prepared to deal with it because we’ve done our due diligence. It’s the lawyer’s job to use her/his judgment to understand which risks are significant, then help the business develop a strategy to mitigate those risks.
ExecutiveBiz: In dealing with Raytheon’s international business what do you find to be the biggest challenge?
Brian Baldrate: Selling international defense articles and services is a complicated, highly-regulated business. Probably the biggest challenge we face is balancing the interests of multiple parties involved, which change rapidly with current events, and then finding a way to satisfy those legitimate interests. Virtually everything Raytheon sells internationally must be approved by the U.S. government; in many ways our activities are an extension of U.S. foreign policy and national security. The U.S. government decides which allies and partners they want to arm and equip and what form that support takes.
Within the U.S. government there are various competing interests to weigh, whether it’s protecting sensitive technology, mitigating arms proliferation, empowering our allies, addressing human rights concerns or strengthening our industrial base. It’s a complicated interagency process that includes the White House, the State Department, the Defense Department, the Commerce Department and Congress. Within each of those groups, there are many different viewpoints.
In addition, any foreign government purchasing from Raytheon has similar issues and interests it needs addressed. The challenge is how to address all these competing concerns and develop a solution that satisfies everyone.
ExecutiveBiz: ITAR has been in place since 1976 to help protect U.S. national security. What advice would you give smaller companies trying to break into the international military market, about how to best comply with ITAR?
Brian Baldrate: I really encourage companies to embed ITAR compliance into their business processes and make sure their sales and operations teams are fully engaged in ITAR compliance. ITAR compliance is often thought of as something you must do to avoid liability, when it should really be thought of as a critical business discriminator, especially for a small company trying to grow its international business. For example, if a company knows how to get critical technology released from the U.S. government to foreign parties and how to control that ITAR technology, it gives that company a leg up on its competitors.
As a prime contractor, Raytheon has an obligation to not only protect sensitive information ourselves, but to make sure our subcontractors do as well. If we see that a potential supplier has a strong ITAR compliance program, it gives the company an advantage over another potential supplier who doesn’t have the same compliance processes in place. Implementing effective ITAR compliance processes also makes companies far more attractive when they submit proposals to the U.S. government and international customers.
ExecutiveBiz: Where do you see that the public and private sector could work together to improve the federal acquisition process?
Brian Baldrate: Industry is always looking to work with the U.S. government to improve defense trade practices, so we can more quickly and effectively offer our solutions to U.S. allies and partners and support U.S national security. I think a good, recent example of cooperation between the public and private sector was the April issuing of the updated National Security Presidential Memorandum Regarding U.S. Conventional Arms Transfer Policy, which gives guidance on how the U.S. government decides whether to approve international arms sales. This new guidance addressed prior industry concerns by increasing opportunities for direct commercial sales, so companies can more quickly sell directly to foreign partners instead of going through the slower foreign military sales process. The memorandum also eased restrictions on certain unmanned aerials systems sales. While the U.S. has long been a leader in drone technology, other countries have been successfully increasing international market share because of the significant U.S government restrictions previously in place. As these technologies have evolved, the U.S. revised its guidance to loosen unnecessary restrictions.
Additionally, the U.S. government and industry need to figure out a way to modernize and expedite security clearance reviews. While we want to ensure industry has properly cleared employees in place, the current process takes too long. If there is a backlog of hundreds of thousands of potential employees awaiting their clearance, industry can’t do its job as effectively and we lose talent to the non-defense industries. Even worse, the backlog hinders our military’s ability to get the necessary equipment it needs and increases taxpayer costs. I’m hopeful industry and the U.S. government can continue to work together to devise a better system to issue security clearances in a more timely manner.
Before joining Raytheon, Brian Baldrate worked for Gibson, Dunn & Crutcher LLP as a litigation attorney. He also served several years as a federal prosecutor for the U.S Army and detailed to the U.S. Department of Justice.