By Phil Stewart
WASHINGTON (Reuters) - Senator John McCain warned President Donald Trump on Thursday against nominating any more defense industry insiders to top Pentagon posts, as his committee questioned an executive from Lockheed Martin Corp (NYSE:LMT) about potential conflicts of interest.
Concern over the close relationship between the Pentagon and arms manufacturers has existed for decades but appears to have intensified under Trump. He has drawn scrutiny for filling posts throughout his government with high-ranking executives. The latest example was his naming this week of former pharmaceutical executive and lobbyist Alex Azar to become Health and Human Services secretary.
McCain, chairman of the Senate's armed services committee, said he was troubled by the number of Defense Department nominees drawn from the defense industry. He said he would oppose any more such nominations after John Rood, Trump's pick for the Pentagon's No. 3 job, who appeared before the committee on Thursday.
"From this point forward, I will not support any further nominees with that background," McCain said in a statement.
Rood ran into trouble during the hearing over his nomination to become undersecretary of defense for policy. As a Lockheed senior vice president, Rood's job is to expand the company's international business.
Democratic Senator Elizabeth Warren pressed him to say if he would recuse himself from discussions with U.S. allies that could benefit Lockheed, the largest U.S. defense contractor with business in 70 countries.
Rood said he did not intend to participate in talks about the sale of Lockheed products but did not give the "yes or no" reply sought by Warren, triggering a charged exchange with the committee.
McCain joined Warren in demanding a direct answer and warned Rood that otherwise, he was "going to have trouble getting through this committee."
'DUCKING THE ANSWER'
McCain told Rood to submit his response in writing "because obviously you are ducking the answer here."
The uproar came a day after the Senate confirmed Trump's choice for Army secretary, Mark Esper, who was a top executive at Raytheon, another U.S. defense industry giant. He committed to recusing himself from matters tied to Raytheon.
Trump's Pentagon also has officials who previously worked at Boeing (NYSE:BA) and Textron (NYSE:TXT) Systems.
U.S. arms manufacturers like Raytheon, whose shares have risen more than 30 percent since December, are expected to benefit in the coming year from an increase in defense spending.
The Pentagon says it has 38 unfilled positions for civilian defense leadership roles that require Senate confirmation, and at least 23 nominees whose names have already been submitted to the Senate.
It was unclear from McCain's remarks whether he would oppose any of the already-announced nominees, although he seemed to be warning about future Pentagon picks.