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Friday, Jul 25, 2014
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Obama lauds former CEO as right choice to fix VA


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WASHINGTON — President Barack Obama sought to turn the page Monday on a humiliating chapter in the history of the Veterans Affairs Department, tapping former Procter & Gamble CEO Robert McDonald to take over the sprawling agency.

A former Army captain, McDonald would bring a blend of corporate and military experience to a bureaucracy reeling from revelations of chronic, system-wide failure and veterans dying while on long waiting lists for treatment. His selection reflects Obama’s desire to put a tested manager in charge as the White House calls for a top-to-bottom overhaul of the VA.

“What especially makes Bob the right choice to lead the VA right now is his three decades of experience building and managing one of the world’s most recognizable companies,” Obama said at VA headquarters. “In short, he’s about delivering better results.”

McDonald, a graduate of the U.S. Military Academy at West Point, was not likely chosen because of any past support for the president. He donated to Republican Mitt Romney’s 2012 campaign to unseat Obama and has funded numerous other Republicans, including House Speaker John Boehner.

Joined by his wife and adult children, the 61-year-old said he planned to put veterans at the center of everything the VA does — a bureaucratic twist on the old adage that the customer is always right.

“At the VA, the veteran is our customer and we must all focus all day, every day on getting them the benefits and the care that they have so earned,” McDonald said. “That’s the only reason we are here.”

Urging the Senate to confirm McDonald quickly, Obama reiterated his call for Congress to grant the VA secretary more authority to fire senior leaders if necessary. He said some of those responsible for falsifying patient records have been fired and more may be punished, adding that the scandal has “outraged us all.”

“This is not going to be an easy assignment. Bob knows that,” Obama said.

The VA operates the nation’s largest integrated health care system, with more than 300,000 fulltime employees and nearly 9 million veterans enrolled. But the agency faces intense scrutiny amid reports of nationwide treatment delays that were whitewashed by VA employees.

Last week, the White House released a scathing report Obama commissioned that charged the VA with “significant and chronic system failures” in the nation’s health system. The report also said the VA is battling a corrosive culture of distrust, lacking in resources and ill-prepared to deal with an influx of new and older veterans with a range of medical and mental health needs.

As outrage over the revelations snowballed, Obama dispatched top adviser Rob Nabors to investigate and report back on what must be fixed. Obama said he planned to keep Nabors at the VA temporarily during the leadership shift, and he praised Sloan Gibson for doing an “outstanding” job as acting VA secretary after Erin Shinseki resigned.

McDonald’s selection surprised veterans groups, who said his name hadn’t been on anyone’s list of likely candidates. Unlike Shinseki, a retired four-star general, McDonald has spent most of his career in the private sector.

“We think he does have the skillset,” said Tom Tarantino of the Iraq and Afghanistan Veterans of America. “He has excellent branding background, which is helpful because there really isn’t an organization that has a worse brand or reputation right now than the VA.”

McDonald appears headed for easy Senate confirmation. Both parties have urged Obama to fill the vacancy quickly so that the agency overhaul can begin in earnest. His nomination drew rare bipartisan praise.

“I think his management skills are just what the VA needs right now, given the fact it’s been plagued by chronic mismanagement for a number of years,” said House Veterans’ Affairs Committee Chairman Jeff Miller, a Florida Republican. “I’ve seen nothing in the background that I have seen that would preclude his confirmation.”

Still, the circumstances of McDonald’s departure from P&G are likely to draw scrutiny. He resigned amid pressure from investors who fretted publicly that McDonald hadn’t boosted the company’s performance. On one particularly brutal conference call to announce quarterly earnings in 2012, a Citigroup analyst rapped McDonald for failing to deliver and blaming everything but himself.

“Let me be clear: It is my fault. I am the CEO of the company. I do take responsibility,” McDonald said in response.

His resignation notwithstanding, McDonald’s former colleagues praised him as a strong manager with a dedication to public service. “He is a master at complex operations,” said American Express CEO Ken Chenault, who served on P&G’s board. At P&G, whose brands include Tide and Crest, McDonald oversaw a workforce exceeding 120,000 employees and annual sales of more than $84 billion.

Sen. Bernie Sanders, I-Vt., who chairs the Senate panel that will consider the nomination, said he’s reserving judgment until he hears McDonald’s plans to fix the VA first-hand next week. In particular, Sanders said he wants to know whether McDonald supports temporarily contracting out services to private medical providers to reduce waiting times.

In tapping a businessman rather than a decorated general or health care leader, Obama is pulling from a playbook he’s used before when faced with a major crisis requiring a near-total agency reboot. When healthcare.gov crashed and burned last year, Obama tasked management consultant Jeffrey Zients with leading the rescue effort, then nominated his budget director, Sylvia Mathews Burwell, to take over after then-Health and Human Services Secretary Kathleen Sebelius resigned.

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