Managing the departments: Grades for Bush's Cabinet secretaries

Many Cabinet secretaries are politically well-connected and influential in the Oval Office. But what about their ability to run the huge departments they are responsible for managing? National Journal assessed the management skills of President Bush's appointees in its Jan. 25 special issue.

Colin Powell, State Department
Grade: A

When Colin Powell assumed the helm of the State Department, most observers agreed it was acutely underfunded, understaffed, and demoralized after years of often-acrimonious bickering with former Senate Foreign Relations Committee Chairman Jesse Helms, R-N.C, and his staff. And former Secretary of State Madeleine Albright had relied heavily on her own tight-knit group of political appointees during her tenure, doing little to boost the morale of the career Foreign Service officers.

Little wonder that State Department employees held a mass rally to greet Powell on his first day on the job, during which he pledged to focus as much on leading and managing the department as on serving as the president's principal foreign-policy adviser. Indeed, bucking up the morale of his dispirited troops played directly to a strength identifiable throughout Powell's career: an easy sense of command and an instinct for motivating and winning the loyalty of subordinates.

Foreign Service officers at State still talk about President Bush's early visit to the building in preparation for his first state visit to Mexico. Rather than have a senior political appointee or ambassador brief the president, as would have been customary, Powell had the desk officers in charge of the Mexican account address Bush directly. On such small gestures hinge the intangibles of morale and esprit de corps.

"When Powell came to the State Department, it was essentially hollowed out from a decade of downsizing," said John Naland, president of the American Foreign Service Association in Washington. "He's led a sustained effort to increase its funding and staffing. More importantly, he has the leadership skills to make every State Department employee feel like a vital part of the team," Naland said. "Recruitment for the Foreign Service is now breaking records. So I would put Powell as easily the best leader and manager State has seen since George Shultz, who created the Foreign Service Institute. As far as the Foreign Service is concerned, Powell has been an absolute standout."

Paul O'Neill, Treasury Department
Grade: D

At Treasury, Paul O'Neill hoped to replicate the managerial successes he'd scored at Alcoa-which have been immortalized in a Harvard Business School case study. But although he achieved some of his narrow objectives, he appears to have failed at what was arguably his primary task: building a strong and influential agency. Indeed, during O'Neill's tenure, morale suffered and the agency's influence waned.

As at Alcoa, he succeeded in reducing the time needed to finish the department's year-end accounting from five months to three days, and he made strides in reducing the number of employee workdays lost to injuries.

But some staffers found O'Neill's obsession with safety-including the so-called "neatness checks" in which O'Neill personally inspected offices for offending piles of paper-an odd priority for a Treasury secretary facing such pressing economic challenges.

Employees reacted even more negatively to O'Neill's insistence on replacing some Treasury's offices with cubicles. The goal was to promote teamwork and efficiency and to break down administrative hierarchies. Although the policy had been hailed as a brilliant innovation at Alcoa's sleek new state-of-the-art aluminum-and-glass headquarters on the Pittsburgh riverfront, it caused major unhappiness at Treasury.

Besides contesting the merits, career employees complained that the decision was forced on them, despite the pretense of consultation. "It was supposed to be unhierarchical, but it ended up being even more hierarchical," said one political appointee who has since left the department.

Similarly, some former Treasury aides say that this administration has relegated the career staff to the sidelines, a marked change from previous administrations. "There's a sense that this administration has made all the decisions at the top and does not consult or use lots of staff," said the departed appointee.

Of course, not all of Treasury's morale problems were of O'Neill's making. For example, the source of unhappiness for the department's law enforcement workers-in the Secret Service, U.S. Customs, and the Bureau of Alcohol, Tobacco, and Firearms-is their impending transfer from the home of Elliot Ness to the new Department of Homeland Security.

But perhaps the most serious and pervasive morale problems at Treasury derived from the steady stream of O'Neill-engendered controversies. A case in point, says one former Treasury employee, was O'Neill's initial refusal to place his assets in a blind trust. "This was in marked contrast to his predecessors, who were acutely aware of the need to protect the stature of the Treasury secretary, of not creating unnecessary negative stories."

Donald Rumsfeld, Defense Department
Grade: C

Donald Rumsfeld, like Robert McNamara, who took over the Pentagon in 1961, has been throwing out whole shelves of Pentagon heirlooms, including old war plans, command-and-control arrangements, and organizational structures. That, in itself, is not all bad. But in doing all of this housecleaning, said a senior Pentagon executive, Rumsfeld and his team have not been civil. And their behavior has undercut their effectiveness and polarized the building.

Tending to three huge Pentagon budgets at once, as Rumsfeld has to do-spending the last one, selling the current one, and planning the next one-is a job hard enough to overwhelm any Defense secretary. But if a Defense secretary cannot harness the building-the civilian bureaucrats, the military leaders, and especially the Joint Chiefs and their staff-then the whole thing can run off course.

"You have to strategically lead the building," said the senior executive. "Some of the senior people on the Rumsfeld team still haven't mastered the budgetary process or the regular dialogue you have to have with the uniformed military leaders and the leadership of the Congress. And the continuous dialogue has got to be two ways. I give Rumsfeld a C grade for running the building, because of his awkwardness in the budget."

Loren Thompson, a defense industry consultant who heads the Lexington Institute in Arlington, Va., and keeps in close touch with Pentagon civilians and military officers, said, "Rumsfeld's management style has been too exclusionary. The key decisions tend to be made in too small a circle. His team has yet to come up with a good management model for the building-one that would allow stable and continuous oversight of key issues. There seems to be an ad hoc quality to things."

A flag officer no longer working at the Pentagon, but still plugged tightly into it through almost daily contact with generals and other leaders, says that there really are two Don Rumsfelds-"Mr. Outside and Mr. Inside."

On "Mr. Outside, I give him high marks," said the flag officer. "He's very persuasive on TV. He comes across as a take-charge guy who knows what he's doing. He has the confidence-building ability that [former Defense Secretary Caspar W.] Weinberger had."

But "Mr. Inside" is not so good, said the officer. Rumsfeld has given too much power to a few civilians whom the military doesn't like-particularly Steve Cambone, whom the flag officer described as "a very intelligent, abrasive son of a bitch." Rumsfeld "won't let the armed services play in his game."

Moreover, all of the services resent the fact that Rumsfeld doesn't take their advice, doesn't like opposition, and "tends to appoint as his senior military advisers people who won't buck him. It appears to me he doesn't want a take-charge military guy," said the flag officer. "He wants a guy who rolls his way. And that's what he selected."

The current chairman of the Joint Chiefs of Staff and the vice chairman, the officer said, are not the kind of men to stand up to Rumsfeld the way Colin Powell did when he was Joint Chiefs chairman. "Colin Powell would disagree with the secretary, when he was chairman of the Joint Chiefs. He had some knock-down, drag-out fights with the Defense secretary and, I'm sure, the president. And you need guys like that."

John Ashcroft, Justice Department
Grade: C

On Sept. 10, 2001, John Ashcroft refused to endorse the FBI's request for $58 million in counterterrorism funding and $64 million in state and local counterterrorism grants. Nevertheless, Ashcroft's post-9/11 decision to reorganize the Justice Department and the FBI to focus on the prevention of terrorism was bold. He's clearly molding the department in his image. But, by many accounts, morale among staff lawyers is low.

Ashcroft runs his department much like a Senate office. He entrusts a small circle of aides with enormous responsibility. He has been very involved in vetting presidential appointments to key posts within his realm.

"They've asked for our opinion. And almost without exception, we've come up with candidates that [they] have felt good about," said Deputy Chief of Staff David Israelite. Ashcroft worked hard to persuade the White House to pick FBI Director Robert Mueller, whom even Democrats hailed as a strong selection.

Bush's picks, such as top policy aide Viet Dinh, are now gung-ho members of Ashcroft's tight little team. But the picture outside that inner circle is less rosy. Seasoned lawyers, some with experience dating back to the Nixon era, have left Justice in frustration.

"Morale is worse, in the sense that there's a pervasive feeling among many career people that they have been shut out of important decisions and their advice and experience has not been valued," said one staff lawyer. A number of complaints come from the Civil Rights Division, where career lawyers are said to be marginalized and dismissed by politically connected younger lawyers.

Ashcroft says he has relied on many career lawyers in the Criminal Division to help in his crusade against terrorism, and on career lawyers in the Civil Rights Division to investigate voting-discrimination charges in Florida. He pointed to the department's track record with Supreme Court cases and on terrorism: "When you have that kind of success in the department ... that's what builds real professionalism, success, public service. That builds morale, and morale is high."

Yet some of his underlings are upset that Ashcroft has overturned decisions by U.S. attorneys for seemingly political reasons. The attorney general has ordered prosecutors to seek the death penalty in at least a dozen cases in which they had recommended a lesser sentence. "That would be unheard-of under [Attorney General Janet] Reno," said one insider.

There is also grousing that political appointees are being slotted into jobs traditionally reserved for career staffers. The new assistant attorney general for administration, for example, is the former president of a small Christian school in Florida. And Ashcroft has decided to personally oversee the formerly apolitical Attorney General's Honors program. But these moves argue both for and against the attorney general's effectiveness as a manager.

Ashcroft has identified the FBI and the Immigration and Naturalization Service as badly in need of revitalization. The INS is now the Department of Homeland Security's headache. And the jury is still out on the tonic Ashcroft has prescribed for the FBI. Under Ashcroft's direction, Mueller released an FBI reorganization plan in May that shifted resources slightly toward terrorism-prevention-upping its portion of the budget from 18 percent to 22 percent. Top FBI officials still fret that field offices are slow to change their ways. Mueller recently fired off a memo blasting "bureaucratic intransigence."

Some local police departments report no improvement in the FBI's coordination efforts. Baltimore Police Commissioner Edward Norris told Congress, "We're in charge of protecting our cities, and right now, we're not getting any information to do so." Mueller countered that, on the whole, the department's joint terrorism task forces are "working exceptionally."

Perhaps predictably, the most persistent criticism of Ashcroft's management comes from within. "Ashcroft knows that he will never be loved within the Justice Department," Turley said, likening the situation to working among a thousand ex-wives. "But he also knows that it doesn't matter. He doesn't have to be loved."

Gale Norton, Interior Department
Grade: C

Through no fault of her own, Gale Norton has gotten sucked into the quagmire surrounding the Bureau of Indian Affairs Trust Fund, which has absorbed a surprising amount of her department's energy. American Indians claim that over the past century, the federal government has squandered billions of dollars in oil, gas, and timber royalties from their tribal lands.

Both Norton and her top deputy, J. Steven Griles, have been distracted by the trust fund problems, which have resulted in Norton's being found in contempt of court and in the department's being forced to shut down its Web site for more than two months. Department officials are trying to reorganize the bureau and conduct a historical accounting of trust accounts to solve the problem, but Indian groups doubt that the actions will be sufficient.

Beyond the trust fund headaches, insiders say, Norton mishandled last year's water crisis at Oregon's Klamath River, where a drought exacerbated the water wars between farmers and wildlife groups. Her handling of that crisis resulted in a massive salmon kill.

Environmentalists also criticize Norton for allowing expanded use of snowmobiles in Yellowstone National Park, although some Interior career staffers give her credit for crafting a compromise.

The White House made sure it could press its pro-industry agenda at Interior by filling many of the department's top slots with industry lawyers or trusted conservatives. As a result, this department, which once had an aggressive land-preservation focus, has quickly shifted to an ambitious land-development agenda. In response, environmental groups have filed a host of lawsuits challenging departmental decisions and, in some cases, tying regulators' hands.

Behind the scenes, Norton's top aides have been actively monitoring career staffers to make sure that preliminary scientific assessments err on the side of industry, if they err at all. That second-guessing by political appointees has disillusioned and demoralized some of the department's career scientists and lawyers.

In early 2002, for example, Norton forced the U.S. Geological Survey to reconsider a study indicating that drilling in Alaska's wildlife refuge would substantially harm wildlife. The revised study predicted that the impact of drilling would be minimal.

Ann Veneman, Agriculture Department
Grade: B

USDA insiders say Ann Veneman's accumulated experience in various jobs in the Agriculture Department equips her to use the skills of career professionals to the maximum-although some have said she prefers the company of J.B. Penn, undersecretary for farm and foreign agricultural services, and her deputy chief of staff, Kevin Herglotz, to that of other political appointees. Lobbyists say the secretary's future may depend on implementation of the farm bill, which requires most farmers to sign up for the administration's programs.

Veneman has said she is proud of the department for implementing such a big bill so quickly, but recent reports suggest that farmers are slow to sign up because the regulations are so complex.

"Once the farm bill went to USDA for rule-making, the lawyers descended and decided every farmer in the world was a crook," said one unhappy state agriculture commissioner who is a Republican.

But Veneman's critics and friends both say that her future could be brighter than her past. One agribusiness executive acknowledged her poor relations with farmers, but said, "I think she has the potential to pull her grade up. We are now entering trade negotiations, the policy hurdle that is her forte."

Donald Evans, Commerce Department
Grade: A

The Commerce Department is a famously disparate collection of government agencies, concocted in its current form in 1970, when President Nixon awarded the functions of the National Oceanic and Atmospheric Administration to Commerce in order to punish Interior Secretary Walter Hickel for speaking out against the Vietnam War.

Commerce enforces some trade laws, but it defers to the U.S. Trade Representative's office in negotiations. It shares responsibility for controlling military-related exports with other agencies, and it has a telecommunications agency and a minority-business agency that take backseats to the Federal Communications Commission and the Small Business Administration.

Managing these different kingdoms smoothly is an important part of a Commerce secretary's job, and Donald Evans has excelled at it. Like Bush, he manages by delegation, and says, "The most important job I have around here is selecting the people who are going to be part of this team."

Although Commerce has frequently been a dumping ground for lackluster political employees, Evans has done very well at surrounding himself with highly respected aides. Deputy Secretary Samuel Bodman, a former CEO and engineering professor whom Evans calls "my chief operations officer," has the expertise to handle the science at the National Oceanic and Atmospheric Administration and other technology-related agencies. Trade Undersecretary Grant Aldonas was a respected Senate staffer and a leader of the presidential transition team who was actively courted by other Cabinet secretaries. Vice Adm. Conrad Launtenbacher gets high marks for managing NOAA.

By getting good assistants and giving them independence, Evans has raised morale at Commerce among career employees who know that their work and their decisions will not be unaccountably second-guessed in the secretary's office. Some of the highest praise comes from former Clinton administration appointees at Commerce. Everett Ehrlich, former head of the Bureau of Economic Analysis, said Evans has supported a costly overhaul, launched under Clinton, of the government's methods for calculating economic growth.

Despite Evans's background as an oilman, former NOAA Administrator James Baker says the secretary fought hard to get a more forward-looking policy on global warming early in the administration. And he continues to use the expertise and research resources of NOAA to inch the administration toward a policy that could recapture U.S. leadership on global warming.

"I'm convinced that Evans wants to do more than just avoid this issue," as others in the administration want to, the former Clinton appointee said. NOAA employees are involved with an issue of international urgency and believe that their work is being taken seriously, Baker said.

Elaine Chao, Labor Department
Grade: C

Chao says she inherited a department that had a "chaotic" decision-making process. "It was a very-to be charitable-freewheeling environment," she said, adding that such a management style created a "silo effect," in which people worked on their own projects without effective coordination. She has imposed a far more structured operating style.

Kathleen Harrington, assistant Labor secretary for public affairs, said that Chao's approach has succeeded in involving career employees in decision-making. "There was a morale problem [in the Clinton administration], and the policy-making process had gone to seed," Harrington said. "How the budgets were developed was very much dictated by the front office. There is a real emphasis now on reaching out and reaching down."

Chao requires that a policy-planning board review major regulations and initiatives. Critics contend that the board actually slows down decision-making (as seen in a delay on ergonomics guidelines) and that it imposes ideological litmus tests. "There's a real struggle, for anyone who wants to get anything done based on the merits, running into the ideology at the secretary's level [as well as having to satisfy] the White House," said Peg Seminario, the AFL-CIO's director of safety and health. Deputy Labor Secretary D. Cameron Findlay denied that the board is "a political body" and insisted that it has lots of input from career employees.

Meanwhile, some members of a federal employees union at Labor are furious at what they see as Chao's efforts to force them to renegotiate their contract. She has declined to give them an increase in a Metro transit subsidy-from $65 to $100 per month-that other federal employees received last year. This nasty spat hasn't helped morale, although some folks said morale was poor in the last administration as well.

In addition, Labor Department Solicitor Eugene Scalia, who received a recess appointment from Bush last year and would have had to face a difficult Senate confirmation battle this year, decided to resign rather than face that fight, especially after Chao did not follow his legal counsel on a high-profile case recently, several sources said.

Tommy Thompson, Health and Human Services Department
Grade: A

When Tommy Thompson arrived in Washington, HHS was generally thought to be operating efficiently. To Thompson, however, the status quo is unacceptable. He seems quite determined to be an innovative secretary who leaves the department better than he found it. "I abhor the status quo," Thompson said in an interview. "If you're not living on the edge, you're taking up too much space."

Early on, Thompson streamlined HHS's computer, personnel, and bookkeeping systems. He also changed the name of the Health Care Financing Administration to the Centers for Medicare and Medicaid Services and got more information out to seniors; HHS even bought TV ads featuring actor Leslie Nielson.

Perhaps Thompson's biggest success was in getting HHS's geographically splintered agencies to coordinate more effectively. "Tommy has changed the nature of the organization," Shalala said. "I can't judge his effectiveness, but his priority is to centralize things." Under previous administrations, the Centers for Disease Control and Prevention in Atlanta, the National Institutes of Health in Bethesda, Md., and the FDA in Rockville, Md., operated fairly independently. Thompson's "One Department" initiative has fostered better lines of communication, contributing to the fight against terrorism.

Meanwhile, across the hall from his office, Thompson has created a $3.5 million state-of-the-art command center. It combines ground and satellite communications and backup systems to ensure that HHS officials can communicate with federal, state, and local officials in the event of an emergency-and even if the rest of the building is contaminated with a bioagent.

In light of all the changes at the department, a few HHS staffers argue that there's a reason to leave some things as they are. Others complain that some career staff are underused because Thompson relies heavily on his own inner circle of aides. But most staff members appear to be energized.

Mel Martinez, Housing and Urban Development Department
Grade: C

HUD has a reputation for chronic mismanagement. In late 1994, then-Secretary Henry Cisneros was forced to slash the department's workforce almost by half just to keep the department alive. His successor, Andrew Cuomo, worked to streamline the gutted agency and was able to move many of its functions off the General Accounting Office's list of programs at high risk for abuse and mismanagement. Nevertheless, Martinez inherited a mess: Many of the department's programs don't have enough employees to run them, and about half of its workforce will be eligible for retirement in the next few years.

Martinez put his deputy, Alphonso Jackson, in charge of fixing things. Jackson says he expected problems but didn't know the problems could be traced to "no management." He's trying to push power back into the field offices, clarify chains of command, and institute a new program to bring in gifted young employees to learn from-and eventually replace-aging workers. He has also sunk energy and resources into streamlining and modernizing the Federal Housing Administration. After years of neglect and frustration, career HUD employees are warily welcoming the attention from the top.

But the department still stumbles through enormous snafus in program management. And it compounds its errors through poor communication.

The Public and Indian Housing Administration is particularly afflicted and has been having problems cutting checks, balancing its books, administering its programs, and sending out clear letters to constituents. Policy changes, say public housing authorities, need to be communicated instead of enacted without warning, because the result has been missing checks, piecemeal notices, and last-minute changes in regulations. "They either don't understand the programs or they're trying to destroy them," says a frustrated former HUD official. "They're either incompetent or malicious."

Norman Mineta, Transportation Department
Grade: B

With its different agencies that oversee every mode of transportation-such as the Federal Aviation Administration, the Federal Highway Administration, and the Federal Transit Administration-the department may seem like a bureaucratic zoo. But things appear to be running smoothly. For instance, transportation has received high marks on an Office of Management and Budget scorecard that measures a department's progress in meeting the president's management initiatives.

Also, top aides to Norman Mineta, especially Deputy Secretary Michael P. Jackson, have earned high praise. While Mineta serves essentially as the chairman of the board, Jackson is the chief operating officer, with a hand on almost all of the high-profile issues: the TSA, Mexican trucks, and Amtrak.

There have been complaints that Jackson is spread too thin, making it hard for the department to address all of its many tough issues. But Jackson dismisses such criticism, saying he relies on many less-visible staffers to handle key matters.

Within the administration, said Nicholas E. Calio, former White House director of legislative affairs, Mineta and Jackson "are viewed as worthy of sainthood, they are such good soldiers, and they are very good at their jobs. They know how to get things done."

Inside department headquarters, however, Mineta has received minor criticism for not being as accessible as he should be to career bureaucrats. Employees note that a handful of top aides around Mineta serve as a barrier between the secretary's office and the rest of the department. These bureaucrats note that Rodney Slater, Clinton's last transportation secretary, was much more accessible.

John Flaherty, Mineta's chief of staff, attributes this perception to Mineta's busy work schedule since 9/11. "I think Norm's level of activity has been so intense," he said. "It's not a barrier; I think it's a question of priorities." Spencer Abraham, Energy Department
Grade: C

A Harvard Law School graduate who is described as a quick study, Spencer Abraham took on a colossal task when he walked through the doors at the Energy Department. "The department's far-flung mission is daunting, to say the least," noted former Deputy Energy Secretary Elizabeth Moler, now a lobbyist for a Chicago-based electricity firm. The Energy secretary is responsible not only for domestic energy programs but also for nuclear weapons development facilities and for expensive hazardous-waste cleanup programs at current and former nuclear arms plants.

Abraham's lack of experience in energy issues initially made it difficult for him to get his arms around the department's problems. Career staffers throughout the agency say that Abraham has tended to isolate himself with a core group of political appointees, who have been slower than the higher-ups in past administrations to reach out to the rest of the staff for help and advice.

Management woes have continued to beset the national research laboratories, and critics say Abraham has been slow to tackle the problem. During the Clinton administration, the labs were rife with scandal over mismanagement and spying allegations. During Abraham's tenure, whistle-blowers at the Los Alamos National Laboratory disclosed evidence of fraud and national security breaches. In early January, under pressure from Abraham, the University of California, which runs the lab, fired two top Los Alamos officials. Abraham says he plans to make the labs a priority in the coming year.

Abraham has also had his hands full in dealing with the National Nuclear Security Administration, the semi-autonomous Energy Department agency that Congress created in 1999 to run the nuclear weapons complex. Accused of being overly bureaucratic, that agency is undergoing a long-awaited reorganization. Insiders say Energy officials are still struggling to establish a working relationship with the agency.

Roderick Paige, Education Department
Grade: D

By most accounts, morale at the Education Department is low. Career staffers, including some who have served under previous Republican presidents, complain that the department's political appointees shun them and have stripped them of some of their responsibilities. "The agency runs, on a day-to-day basis, on career people. If you eliminate them from the equation, you eliminate some wisdom and historical perspective," said one career bureaucrat.

Some staffers also complain that Paige is rarely accessible from his perch on the department's seventh floor, and they say that he and the other political appointees don't listen to them. Moreover, employees say that there's a divide between Paige's people from Houston and Bush's people from Austin-and that the Houstonians seem to have little influence inside the department. Others note, however, that the secretary is visible working out in the department's gym and that he has a monthly lunch with a handful of selected employees.

Paige says he believes the department is running smoothly. When he inherited the department, he says, complaints about employees' stealing money and abusing credit cards were common. Those things have stopped, Paige says. He attributes the gripes coming from the career bureaucrats to unhappiness with change.

"We represent a change from the earlier administration," Paige said. "There have been some very scarce complaints, I think, about some of the changes that ... have reduced the amount of freedom that some people have had in making policy."

Anthony Principi, Veterans Affairs Department
Grade: B

Anthony Principi took office promising results: In his confirmation hearings, he pledged to process veterans' disability claims faster and shrink the backlog of unresolved applications, then estimated at 500,000. After two years of cutting red tape and adding staff, the secretary has it down to about 330,000. So while Principi has not slain the claims-processing dragon, he has winged it.

But there is another, bigger dragon right behind it: the waiting list for Veterans Affairs health care, still 260,000 long. Until the White House let him restrict enrollment this month, Principi improvised. He banned local VA officials from advertising until they could treat the patients they had already attracted. And he sent his assistant secretary for legislative affairs, a wheelchair-bound, Bronze Star-wearing Vietnam veteran named Gordon Mansfield, out on an undercover mission to apply for care at eight VA clinics. ("Put on your oldest jeans," Principi told him.) Mansfield was wait-listed at six clinics. So Principi ordered severely disabled veterans to the head of the line-a controversial measure.

Now that the White House and Congress have given him the tools he asked for, the pressure is on Principi to fix the problem. That is especially true because, before he can implement his new deal with Medicare, the VA must meet Medicare's standard of less than a 30-day wait for appointments-a long way from the current wait of six months. Meanwhile, Principi is preparing a plan to shut down underused VA facilities in some regions and move the savings to overburdened ones elsewhere. The political and managerial battles these initiatives are likely to ignite will be the true test of his skills as secretary.

Tom Ridge, Homeland Security Department
No grade given

Around 8 p.m. on New Year's Eve, to show his support for the folks who are keeping watch on America's borders, Ridge stopped by the windowless round-the-clock homeland security watch center in the District of Columbia, where Coast Guard officers take turns looking out for unexpected threats. This hands-on and open approach to his workers has earned Ridge loyalty from aides and employees.

His day-to-day management of his 100-person White House office, though, has left some outside his shop wondering whether a 145,000-worker department is more than Ridge can effectively manage. Experts working with the Office of Homeland Security say that Ridge's transition operation from office to department has been hobbled by poor planning. Ridge acknowledged that he didn't initially manage the transition. But, he added, "my involvement has escalated in time."

Still, one expert who consults with the new department said that Ridge allowed the donating departments to do transition planning largely on their own, which in many cases meant that the departments hoarded their most qualified people while offering their second-stringers to the agencies slated for the merger. "There was no adult supervision," the expert said.

Insiders say that Ridge works well with aides he picks, but not as well with those he inherits or with those the White House gives him. Ridge, however, adamantly denies that charge. In any case, as appointments roll out for the new department, Ridge's role appears to be more consultative than commanding. Ridge's new deputy, Gordon England, who is leaving his post as Navy secretary, was the recommendation of Defense Secretary Donald Rumsfeld, for example. "I had some voice in the selection process," Ridge said.

Winning over his workers in the field may prove even tougher than shaping his management team. From immigration officers to Customs and Border Patrol workers, morale in the agencies Ridge will take over has not been the best, as workers have endured a couple of years of mixed policy and budget signals and considerable uncertainty. Said one Customs agent who works on the northern border: "We have terrible morale."

George Tenet, Central Intelligence Agency
Grade: B

Stories abound of George Tenet using his considerable personal charisma and common touch to win the affection and loyalty of people in the intelligence community. There's Tenet and his wife tirelessly greeting the agency's rank and file-to the extent of remembering most people's first names-at the annual Christmas party; Tenet attending the funeral of a former Intelligence Committee colleague who committed suicide; Tenet going undercover with the help of the Covert Operations makeup department to attend a party as an old man, much to the host's surprise; Tenet somberly clearing a briefing room of foreign visitors and then laughingly informing a colleague that his zipper was down.

Within an agency where morale was hurt severely in the 1990s by a series of scandals and intelligence lapses (including, most notably, the 1994 Aldrich Ames spying debacle), Tenet's leadership and sense of humor are widely credited with rekindling a much-needed sense of esprit de corps.

"Tenet gets higher marks than any director I've known for improving the internal morale of the agency," said one longtime CIA operative. Said another knowledgeable source: "Tenet instinctively understands the little touches that endear leaders to their people. He's very well liked personally at Langley."

Despite generally excellent marks for managing the CIA, Tenet suffers somewhat from a grade of Incomplete in one of the key initiatives undertaken during his tenure: breaking down the institutional firewalls that have stymied intelligence cooperation between the CIA and FBI, particularly in the fields of counterespionage and counter-terrorism. Partly as a result of the post-Aldrich Ames reforms, for instance, both the FBI and CIA began cross-trading senior personnel to serve in each other's counter-terrorism units.

In a prescient interview with National Journal in 2000, Tenet referred to those reforms. "I think the Ames case was the jumping-off point in taking cooperation between the FBI and CIA seriously, because it proved that we could no longer tolerate petty bureaucratic jealousy and turf wars in dealing with threats to American security," said Tenet. "We also wanted our people to understand that, when it came to dealing with these transnational threats, the fortunes and efforts of both agencies would rise and fall together."

Yet in the months leading up to the September 11 attacks, CIA counterterrorism experts failed to share with the FBI the names of Qaeda terrorists that they knew to be in the country, including two involved in the fateful hijackings. Likewise, the FBI somehow failed to share with the CIA a field agent's worried observation that Qaeda operatives were training at U.S. flight schools.

As George Tenet correctly foretold, in the war on international terror, the fortunes of agencies, their leaders, and the nation they serve can rise or fall on such details.

Christie Whitman, Environmental Protection Agency
Grade: D

By reputation, the Environmental Protection Agency has a strong, entrenched bureaucracy dedicated to implementing the nation's bedrock environmental laws. Under President Clinton, Carol Browner tapped the career staff to push the president's mandates. Whitman hasn't endeared herself to the department staff, nor has she whipped it into line to further the Bush administration's aims.

Agency staffers say they have little or no contact with Whitman, who has surrounded herself with a cadre of her former New Jersey aides who treat her-as one EPA career official describes it-like "the queen of the Meadowlands." It doesn't help agency morale that Whitman prefers to be called "governor" instead of "administrator."

Prime evidence that Whitman is disconnected from the agency emerged in June when the EPA submitted a report to the United Nations that concluded that human activity is causing the Earth's climate to change, despite Bush's earlier assertion that the science on global warming is still uncertain. Whitman said she had been unaware of the report until after it was issued.

Whitman has shifted her agency away from enforcing federal pollution laws and toward giving states more control over environmental programs. As governors, she and Bush supported giving states a bigger role in handling environmental laws, and the shift is backed by many in industry. But scaling back federal enforcement has triggered several high-level EPA resignations and demoralized many at the agency.

Lois Shiffer, head of the Justice Department's Environmental Division under Clinton, said, "The laws require strong and effective environmental protection. And EPA seems to have taken a step backward on that."

Mitch Daniels, Office of Management and Budget
Grade: A

For years, the annual budget fights between the Clinton administration and the GOP-led Congress meant that OMB had to concentrate on the budget side of its job, and not on the management side. Daniels receives high marks for attempting to find a balance between the two.

In its first budget, the Bush administration gave federal programs red, green, or yellow grades, reflecting how well the program was managed. This year, the administration is doing a more systematic job by instituting a standardized evaluation of many programs. Daniels is "very interested in management," said OMB Deputy Director Nancy Dorn. "Whereas this job has so many demands at a different level, it's easy to forget about the management aspect governmentwide."

Daniels agreed that it can be difficult to refocus agency attention on management. "One of the least-natural acts is for a political appointee in the U.S. government to spend much of their time and energy and talent actually making the day-to-day business work better," he said.

Daniels began his tenure with a distrust of career OMB employees, but he has since come to appreciate their expertise and loyalty. Still, some bruises caused by the initial jostling remain. Although Gary Bass, executive director of OMB Watch, has been critical of OMB's deregulation agenda, he praised Daniels for establishing an open rule-making process by making many documents available on the Internet. "He deserves a pat on the back for strengthening citizen engagement," Bass said.

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