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Obama lauds former CEO as right choice to fix VA

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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." 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 Eric 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, in an interview. "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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  • perfect
    maybe getting someone from the private sector that understands business to run a gov program will benefit...only if he's given complete authority. so lets make the argument that private companies are evil and we need the gov to provide for us by getting a ceo from private company. now if we can hire more private sector ceo's to run healthcare, fix its website, and lead our inept irs....or a more common sense approach would be to allow private sector to provide services rather than force dependability on gov programs. The IRS is well beyond fixing.

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  1. to mention the rest of Molly's experience- she served as Communications Director for the Indianapolis Department of Public Works and also did communications for the state. She's incredibly qualified for this role and has a real love for Indianapolis and Indiana. Best of luck to her!

  2. Shall we not demand the same scrutiny for law schools, med schools, heaven forbid, business schools, etc.? How many law school grads are servers? How many business start ups fail and how many business grads get low paying jobs because there are so few high paying positions available? Why does our legislature continue to demean public schools and give taxpayer dollars to charters and private schools, ($171 million last year), rather than investing in our community schools? We are on a course of disaster regarding our public school attitudes unless we change our thinking in a short time.

  3. I agree with the other reader's comment about the chunky tomato soup. I found myself wanting a breadstick to dip into it. It tasted more like a marinara sauce; I couldn't eat it as a soup. In general, I liked the place... but doubt that I'll frequent it once the novelty wears off.

  4. The Indiana toll road used to have some of the cleanest bathrooms you could find on the road. After the lease they went downhill quickly. While not the grossest you'll see, they hover a bit below average. Am not sure if this is indicative of the entire deal or merely a portion of it. But the goals of anyone taking over the lease will always be at odds. The fewer repairs they make, the more money they earn since they have a virtual monopoly on travel from Cleveland to Chicago. So they only comply to satisfy the rules. It's hard to hand public works over to private enterprise. The incentives are misaligned. In true competition, you'd have multiple roads, each build by different companies motivated to make theirs more attractive. Working to attract customers is very different than working to maximize profit on people who have no choice but to choose your road. Of course, we all know two roads would be even more ridiculous.

  5. The State is in a perfect position. The consortium overpaid for leasing the toll road. Good for the State. The money they paid is being used across the State to upgrade roads and bridges and employ people at at time most of the country is scrambling to fund basic repairs. Good for the State. Indiana taxpayers are no longer subsidizing the toll roads to the tune of millions a year as we had for the last 20 years because the legislature did not have the guts to raise tolls. Good for the State. If the consortium fails, they either find another operator, acceptable to the State, to buy them out or the road gets turned back over to the State and we keep the Billions. Good for the State. Pat Bauer is no longer the Majority or Minority Leader of the House. Good for the State. Anyway you look at this, the State received billions of dollars for an assett the taxpayers were subsidizing, the State does not have to pay to maintain the road for 70 years. I am having trouble seeing the downside.

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