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Ex-P&G chief set to lead VA

Obama plans to announce nominee today

McDonald

– President Barack Obama today will nominate Bob McDonald, a West Point graduate who served as the chief executive of Procter & Gamble, to take over as head of the troubled Department of Veterans Affairs, according to White House officials.

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 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 skewed 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, although 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, N.Y., and served in the Army for five years, achieving the rank of captain in the 82nd Airborne Division before taking an entry-level job at P&G. He is the son of an Army Air Corps veteran of World War II, and his wife’s father was shot down over Europe and survived harsh treatment as a prisoner of war.

“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.”

The VA Northern Indiana Health Care System has medical centers in Fort Wayne and Marion and outpatient clinics in Goshen, South Bend, Peru and Muncie. The Fort Wayne complex employs more than 600 people and reported more than 22,600 patient visits during 2013.

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.

Gen. Martin Dempsey, the chairman of the Joint Chiefs of Staff, graduated from West Point one year before McDonald, and Gen. Ray Odierno, the Army chief of staff, finished up at the academy one year after him. 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.”

How McDonald relates to the younger population of veterans who served in Iraq and Afghanistan – smaller in numbers compared with the overall group of veterans but powerful politically – will be critical. McDonald has maintained his Army ties over the years as a major supporter of the U.S. Military Academy and as a life member of the U.S. Army Ranger Association and the 75th Ranger Regiment Association. He is also a member of the Association of Graduates of West Point, where he established the McDonald Cadet Leadership Conference to address emerging global issues.

Jim McNerney, chairman of Boeing, said in a statement Sunday that McDonald was “an outstanding choice for this critically important position.”

“Prior to retirement, he navigated Procter & Gamble through the difficult post-financial-crisis years, where he expanded business in developing markets and made substantial progress improving the efficiency of the company’s internal operations,” McNerney said.

American Express chief executive Ken Chenault said in a statement that McDonald is a “very strong manager who came up through the ranks with an outstanding track record of dealing with challenges and delivering results. He stays on top of the details.”

McNerney and Chenault both served on P&G’s board when McDonald headed the company.

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.

Still, he has won plaudits from many of his fellow corporate executives and has experience running a global consumer products firm with more than 120,000 employees .

The White House has yet to select a new head for the Veterans Health Administration, but top officials were particularly intent on finding a replacement for former VA Secretary Eric Shinseki, who resigned a month ago.

It is unclear how key Republicans and Democrats on Capitol Hill – many of whom pressed for Shinseki’s resignation – will react to his nomination, although 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.

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