President Barack Obama on Monday intends to nominate Robert A. McDonald, the former chief executive of Procter & Gamble, to be the next secretary of Veterans Affairs, a White House official said Sunday, betting that a global corporate officer can turn around a government health system that has been rocked by allegations of mismanagement and cover-ups of long patient waiting times.
The unorthodox pick of a retired corporate executive whose former company produces iconic household products such as Tide detergent and Charmin toilet paper — rather than a former military general — underscores the serious management problems facing the agency, which is charged with serving more than 8 million veterans a year.
On Friday, White House deputy chief of staff Rob Nabors submitted a report to the president finding “significant and chronic system failures” and a “corrosive culture” at the Veterans Health Administration, which has come under fire for false record-keeping in an effort to cover up the long waits it has imposed on former soldiers seeking medical care.
In recent years, the job of VA secretary has been filled by retired generals, medical professionals or politicians. McDonald’s background is a significant departure, though he and his wife have deep family ties to the military. McDonald graduated in the top 2 percent of his class at the U.S. Military Academy at West Point, New York, reaching the rank of captain before taking an entry-level job at P&G.
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“The choice suggests a real focus on customer satisfaction, as opposed to what you might get from a retired general or medical leader,” said Phillip Carter, who follows veterans issues for the Center for a New American Security. “It is probably a wise choice given the concerns right now of veterans.”
Rep. Jeff Miller, R-Fla., chairman of the House Veterans’ Affairs Committee, said McDonald faces the daunting challenge of trying to turn around a VA “under a specter of corruption that may very well surpass anything in the history of American government.”
“In order to pave the way for serious and substantive reforms that will help VA to effectively deliver the care and benefits our veterans have earned, he'll need to root out the culture of dishonesty and fraud that has taken hold within the department and is contributing to all of its most pressing challenges,” Miller said. “Quite simply, those who created the VA scandal will need to be purged from the system.”
Miller, who has complained about VA’s failure to respond to his committee’s requests for information, said the new secretary also will need to focus on “solving problems instead of downplaying or hiding them, holding employees accountable for mismanagement and negligence that harms veterans, and understanding that taxpayer-funded organizations such as VA have a responsibility to provide information to Congress and the public rather than stonewalling them.”
McDonald, 61, graduated from West Point in 1975, and is about the same age as most of the most senior generals in the Pentagon with whom he will have to work closely in the coming years. McDonald and acting VA Secretary Sloan Gibson, who is expected to serve as his deputy, were West Point classmates.
“McDonald is right in the sweet spot of the current four-stars in the Pentagon,” Carter said. “He’s got that social connective tissue with them. The VA is more like a big business than a military organization, so his background probably makes him more qualified to run the VA than a retired general officer.”
“This is definitely a surprising pick,” said Paul Rieckhoff, CEO and founder of Iraq and Afghanistan Veterans of America. “McDonald is not a name that was on anyone’s radar over the last few weeks. His branding background may prove helpful because there are few organizations in America with a worse reputation toward customers than the VA right now.”
But Rieckhoff added that because McDonald has “been away from the military for quite a while, he'll have to move quickly to show he is committed to and understands the post-9/11 generation of veterans.”
McDonald stepped down from his post at P&G in May 2013 amid some controversy. Analysts reported at the time that large investors and some employees were losing confidence in his ability to expand the company in the face of increasing global competition.
The Wall Street Journal and other business publications also reported that McDonald had come under fire for the time he spent serving on an array of corporate boards.
Still, he has won praise from many fellow corporate executives for his experience running a global consumer products firm with more than 120,000 employees.
If he is confirmed by the Senate, McDonald will face a beleaguered $154 billion-a-year department whose major functions are stricken with a combination of operational and technological dysfunction; serious morale problems exacerbated by what administration officials now acknowledge is a corrosive management culture and hostility to whistle-blowers; and a lack of trust among many veterans.
The most severe and politically sensitive problem is the scandal over falsified waiting lists that last month led to the ouster of the department’s top two officials, including former VA Secretary Eric Shinseki.
The waiting-list controversy revealed that veterans in many places faced long delays for appointments — delays that were hidden by administrators and scheduling staffers who were under pressure to convince their bosses that patient wait times were typically no longer than 14 days.
It is unclear how key Republicans and Democrats on Capitol Hill — many of whom pressed for Shinseki’s resignation — will react to his nomination, though several are likely to welcome the selection of someone with extensive business experience.
The House and Senate are negotiating legislation that would make it easier to fire senior VA officials, while the FBI has opened an investigation into whether VA hospital administrators knowingly lied about wait times for veterans in order to receive performance bonuses.
Information from The Washington Post, The New York Times and the Tribune Washington Bureau is included in this report.