Lawmakers tried to hash out details of the Army’s transformation plan during an open hearing again on Thursday, as the defense-industry executive nominated to be the service’s undersecretary took questions at his confirmation hearing.
Anduril employee Mike Obadal, who retired as an Army colonel in 2023, appeared before the Senate Armed Services Committee a week after his former service released a plan to slash programs, civilian and senior military positions, and more—and did so with no advance notice to Congress, whose support is needed if the proposal is to move ahead.
There are “a number of topline issues, that now we need to get into the second level of detail, on Army transformation,” Obadal told Sen. Gary Peters, D-Mich., whose state is home to the Army’s ground combat vehicle research lab.
The Army has said it wants to stop buying Humvees and Joint Light Tactical Vehicles, the latter of which is also used by the Marine Corps.
“And this is the work over the next several months that we have to do, not only internal to the Army, but with the other services, the combatant commands, and importantly, with Congress, to understand, what are the effects on the facilities?” Obadal said.
The Army will also be subject to Defense Secretary Pete Hegseth’s directives to cut between 5 and 8 percent of the civilian workforce, along with 10 percent of general and admiral billets in addition to 20 percent of four-star jobs.
Neither the services nor the Pentagon have said how those cuts will be determined or how the process is proceeding.
“What bothers me about the approach that’s being taken in the Pentagon, and frankly, in some other agencies, is that it starts with a number and then works backward,” Sen. Angus King, I-Maine, said during the hearing.
Obadal said that he agrees with the concept of doing “reduction drills” on a regular basis, and that the Army should start with the demand from the combatant commands and the force structure it needs to meet those deployment requests.
“It should start with, ‘How are we doing and where are the positions that we could consolidate or eliminate?’ Not working toward an arbitrary number,” King said. “Do you see what I’m saying? I hope that you will resist, in the Army, a mandate to say ‘you’ve got to reduce by 8 percent’. That’s, almost by definition, not a rational way to approach the problem of increasing efficiency.”
Obadal’s selection represents a shift in the revolving military-to-industry-to-civilian-leadership door. Many past top Army civilians have come from traditional contractors like Raytheon and Lockheed Martin, but Anduril is a next-generation firm out of Silicon Valley, and the Army is one of their most sought-after customers.
“I mean, the concern is, just this past week, the Army announced its transformation initiative, and a huge amount of that is geared towards drones and other things that Anduril, your former company, or your current company, is neck-deep in,” Sen. Elissa Slotkin, D-Mich., said during the hearing.
In an April 11 ethics disclosure, Obadal declared that he would not divest his holdings in Anduril if confirmed. The Intercept, which first reported on the disclosure, later discovered that he holds other defense-industry stocks as well.
“This is unheard of for a presidential appointee in the Defense Department to retain a financial interest in a defense contractor,” Richard Painter, the top White House ethics lawyer during the George W. Bush administration, told The Intercept.
Sen. Elizabeth Warren subsequently sent a letter to Obadal: “If confirmed, you must resolve these conflicts and divest your financial interests in Anduril.”
At the hearing, Obadal did not say whether he will divest himself of the equity he holds in Anduril, but said he would follow the Office of Government Ethics’ guidelines, which would prohibit him from participating in any procurement decisions involving Anduril, and would defer to the advice of the Pentagon’s general counsel once sworn in.
“I don’t have an inherent problem with the transformation,” Slotkin added. “I just have a problem with the idea – the perception to our troops that their leaders can do things that they themselves cannot, that their leaders might be able to enrich themselves, or get away with security clearance violations, that they themselves cannot.”
