A spokesman for Shanahan said the acting secretary "has recused himself for the duration of his service" at the Defense Department "from participating in matters in which the Boeing Company is a party," reports Defense News.
Shanahan spent 31 years of his career with the Chicago-headquartered defense contractor before being appointed deputy secretary of defense in July 2017.
Shanahan's nomination to deputy secretary required a Senate hearing that ultimately forced him to recuse himself from matters involving Boeing in the deputy role as well.
Lt. Col. Joe Buccino, a spokesman for the deputy secretary at the time, told Bloomberg Government on December 21, 2018, that "the Department's legal advisors have a screening process to ensure that Boeing-related issues are not routed to Mr. Shanahan. While the details of the Department's FY2020 budget request remain pre-decisional, the screening process was in place throughout the budget review to ensure that any DoD programmatic decisions impacting Boeing were neither made nor influenced by Mr. Shanahan."
Shanahan became acting secretary of defense on Monday, when retired General James Mattis concluded his final day as defense secretary. Shanahan's achievements in the private sector include helping to get Boeing's 787 Dreamliner into production and leading the company's Missile Defense Systems and Rotocraft System divisions, according to the Defense Department.
— Shannon Pettypiece (@spettypi) January 2, 2019
The Pentagon is to submit a budget request to Congress on February 4.
The Pentagon and Washington have attracted some criticism from watchdog groups who say there is a revolving door between the Defense Department and the private sector. For instance, when Mattis was head of US Central Command, he advocated for the military to buy blood-testing products from Theranos, the board of directors of which he later became a member.
The Project on Government Oversight (POGO) found 645 instances of retired senior officials, members of Congress and senior legislative staff becoming lobbyists, board members or executives at Boeing or other major contracting firms over the past decade, according to a November report.
The American defense establishment is "skewed by undue influence" as a result of public officials gaining favor with private companies in hopes of landing a high-paying position there down the road, the report said. "Many of the instances do, however, show the revolving door spinning out of control due to ethics laws that are insufficient to protect the public interest," Mandy Smithberger, director of the Straus Military Reform Project at POGO, wrote in the report.