Rumsfeld brings corporate approach to Pentagon Inc.

Even before his first 100 days are up, Defense Secretary Donald Rumsfeld is well along in organizing Pentagon Inc., a modern-day company where ex-pols need not apply, where prized weapons such as the Army's Apache helicopter are suddenly on the budgeteers' chopping block, and where flag officers worry about a second wave of civilian "Whiz Kids" coming in to tell them how to fight wars.

Rumsfeld's team "calls the people from Capitol Hill `Hillbillies,' and doesn't want them in top jobs," said one Pentagon insider. He said that former Rep. Tillie Fowler, R-Fla., was an early casualty of this new approach. Fowler, who had been a member of the House Armed Services Committee, was expecting to become Army Secretary. The Army's top generals thought it was a done deal. But a defense official in position to know said this "Hillbilly" was rejected in favor of a corporate type who had met a payroll.

Fowler was offered a readiness post in Rumsfeld's hierarchy but rejected it as tokenism, Pentagon insiders told National Journal. Fowler did not respond to a telephone query about her status.

The generals and admirals, meanwhile, are nervous. "In meetings between the Rumsfeld team and military officers," said one witness, "you could cut the tension with a knife. None of the uniformed guys know what to expect from the new "SecDef"--the military's shortened term for the Secretary of Defense.

Two four-star generals, one from the Air Force and the other from the Army, confirmed to National Journal that the tension does indeed exist. But they tried to put a positive face on the relationship with the new Defense Secretary by declaring that Rumsfeld is purposely not showing his cards until he gets his team together. Lower-ranking officers said that there is great apprehension within every service about whether Rumsfeld will kill prized weapons programs.

"There's a feeling that each service is going to have to sacrifice something," one high Pentagon official said. The Army right now, for example, is considering cutting back on the remanufacture of Apache attack helicopters at Boeing's plant in Mesa, Ariz., a move that would likely draw fire from Sen. John McCain, R-Ariz. The money saved by forgoing the upgrades would be poured into the Army's next-generation aircraft, the Comanche, which is supposed to be the service's 21st-century reconnaissance and attack helicopter.

To an unprecedented extent, Rumsfeld will run Pentagon Inc. through the Secretaries of the Army, Navy, and Air Force, officials said. If Rumsfeld's candidate search is successful, the service Secretaries will not only act like division vice presidents of a corporation but will have had actual corporate experience. He intends to convene the service Secretaries as a corporate review board when major decisions confront him. Names being bandied about the Pentagon include Thomas White, vice chairman of Enron Energy Services in Houston, for Army Secretary; Gordon England, recently retired executive vice president of General Dynamics in Falls Church, Va., for Navy Secretary; and James Roche, president of Northrop Grumman's electronic sensors operation in Baltimore, for Air Force Secretary.

Rumsfeld is fending off congressional demands that he quickly submit a request for emergency money for the military this fiscal year and that he revamp the Clinton defense budget for fiscal 2002. He argues that those money requests should await his ongoing strategic review of what the armed services need for the 21st century. He bridles at suggestions that Andrew W. Marshall, an old Pentagon hand whose job is to peer into the future and suggest ways to structure the military for it, is doing the review for him. "It's not Andy's review; it's my review," Rumsfeld has said. Rumsfeld is spending much of his own time reviewing various schemes for missile defense, officials said. Some 17 rival proposals have been on his desk, according to Pentagon insiders.

Rep. Norman Dicks of Washington, the second-ranking Democrat on the House Defense Appropriations Subcommittee, told National Journal that he was disappointed to hear that Marshall's findings--not yet made public--are going to contain very general, not specific, recommendations on how to restructure the armed services. Dicks added that Rumsfeld is running out of time to ask for emergency funds to keep the armed forces going through Sept. 30. Dicks is championing a supplemental defense appropriation that would provide the armed services with the $7 billion-plus they told the Senate Armed Services Committee they need for this fiscal year.

Rumsfeld's strategic review, and his desire to find company executives to assist him in running what amounts to the world's biggest corporation, are reminiscent of Robert S. McNamara's goals in 1961 when he became President Kennedy's Defense Secretary. McNamara turned to systems analysts to help him run the Pentagon and reform the armed forces, but generals and admirals came to denigrate these analysts as Whiz Kids who knew little about the realities of the battlefield. McNamara's reform efforts were all but derailed by a skeptical Congress and the Vietnam War.

Asked to foretell the Pentagon's future under the George W. Bush team, a high-ranking Administration official told National Journal: "The Pentagon and the rest of the world are going to be run out of the White House by Vice President [Dick] Cheney and [Deputy Budget Director] Sean O'Keefe," with Rumsfeld their enthusiastic implementer at the Pentagon. "It's already clear that [Secretary of State] Colin Powell and [White House National Security Adviser] Condoleezza Rice are not going to be players" in the transformation of the American military.

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