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Every Issue of The Monthly to your door: Subscribe Online Respond to this Article Washington Monthly Home Page July/August 2002 The 'Gate-less Community In any other administration, Bush's scandal- plagued Army secretary, Thomas White, would be history. But the rules have changed By Joshua Green One Wednesday morning in late May, Army Secretary Thomas White arrived late at his ornate Pentagon office, the strain of a breakfast meeting with the Joint Chiefs of Staff still visible in his face. Not quite one year into the job, he was suffering through one of the rockiest tenures for a service secretary in decades. As the highest-ranking Bush administration official to have worked at Enron Corp., he had been dogged by critics since January. Lawmakers from both parties had gone after him for failing to comply with an ethics agreement to divest himself of Enron stock after he'd promised to do so. A list of his contacts with Enron officials since taking office, submitted at the request of Rep. Henry Waxman (D-Calif.) to determine if he'd traded on insider information, had turned out to be incomplete: White had claimed 29 contacts; it proved to be 84. In the midst of all this, he had taken a military jet to close the sale of his $6.5-million ski home in Aspen, prompting an investigation by the Defense Department's inspector general. Both The New York Times and the Los Angeles Times had called on him to resign. As if that weren't enough, Defense Secretary Donald Rumsfeld had, without consulting White, eliminated the Army's prized Crusader artillery system. And when Army talking points surfaced on Capitol Hill immediately thereafter, warning that "a decision to kill Crusader puts soldiers at risk," White's departure had seemed imminent. Things were about to get even worse--his old business unit, Enron Energy Services, had been tied to price-fixing during California's energy crisis, and White had just learned that Sen. Byron Dorgan (D-N.D.) would call him to testify before a Commerce Committee panel. But first, duty called. White arrived to find a film crew and a swarm of tweedy officials from the National Science Center on hand to celebrate an educational "partnership agreement" with the Army. With weary resignation, he ushered the scientists in, gamely posed for grip 'n' grin photos, and with practiced efficiency, dispatched the group with handshakes and "U.S. Army" tie tacks. When the crowd was gone, White removed his suit jacket, rolled up his sleeves, and collapsed into a chair to discuss his predicament, looking every bit like a man under investigation by the FBI, the SEC, and an inspector general. "Never having held a Senate- confirmed job, you tend to forget the complexity of the environment," he confessed, resuming an earlier conversation. "Obviously, against the background of Enron and all the public interest in that, that's probably made it even more challenging." Though White retired from the Army as a brigadier general in 1990, he still speaks in the cadence and idiom of an officer. But with his thinning gray hair, pinstriped suits, and silk ties, he has come to resemble a business executive--one pummeled by bad news and giving more than passing thought to the possibility of stepping down. "It's a subject of daily conversation with my wife and I," he reflected, sipping a Diet Coke. "Is this all worth it? Your family is not used to seeing your name on the front page of the newspaper in a less- than-complimentary way. The question is, are you still an effective spokesman for the Army? Do you feel like your voice is heard in the department? Or do you get to the point where the distractions are just too great?" When I'd first met him some months earlier, White had been addressing the Enron situation for the first time to a passel of handpicked reporters. Though candid and straightforward, at times even displaying a flash of Rumsfeld's brio, he conceded to reporters that he'd discussed the Enron connection with Rumsfeld and had retained a private attorney, and then pointedly addressed the topic on everyone's mind: "If I ever get to the point where the Enron business represents a major and material distraction...then I wouldn't stay." Most in the room-- perhaps even White himself--assumed this to be the groundwork for an impending resignation. Yet several months, and a couple of scandals later, here we were. To the amazement of many, White not only remains in his job; he seems ever less likely to depart. In early March, as the drumbeat was building for White's resignation, his press officer had called me with an enticing proposition: to travel with the secretary, attend private press conferences, and engage in a series of one-on-one interviews. Any Washington insider understands that such arrangements have symbiotic value. In exchange for special access, I was to be an instrument of White's resurrection--it was tacitly hoped that my portrait of a man on the job would help "change the story" surrounding him. But after having spent time with White and his staff over the past months, as scandals have flared up and receded, one odd fact about the secretary stands out above all else: Perhaps no one is more surprised that Thomas White is still around than Thomas White. As his example testifies, the culture of scandal that dominated political Washington in the 1980s and 1990s has undergone a swift and radical shift. Under George W. Bush, acts that not long ago would have constituted firing offenses can now be ridden out. This shift has happened so suddenly that most of establishment Washington hasn't quite figured it out. But the Bush administration has, and as with every other political opportunity that has come their way, they are exploiting it masterfully. Rules of Disengagement There traditionally have been two kinds of Washington scandal. The first involves an actual violation of the law, like the Watergate burglary, and carries clear consequences--jail time, fines, disbarment. The other embraces those far more common, though more ambiguous, transgressions that fall short of outright felony but still constitute betrayals of the public trust--conflicts of interest, abuses of power, sleeping with one's secretary, or similar activities that bring disgrace to public office. The penalty for such ethical breaches is often no less prescribed than it is for actual crimes: decorous resignation, voluntary or otherwise. Washington has adhered to this unwritten code for as long anyone can remember. Consider Harold Talbott, the secretary of the Air Force under President Eisenhower. In 1955, Talbott got caught using official Air Force stationery to conduct business for his consulting firm, and referring contracts to an engineering firm in which he was a partner. Talbott maintained-- accurately--that he had broken no law. Yet the appearance of impropriety was impossible to ignore. Eisenhower didn't hesitate to oust him. Three years later, Eisenhower's chief of staff, Sherman Adams, was caught accepting the gift of a vicuna coat from a Boston industrialist seeking to curry favor with the administration. Although Adams was a most trusted member of the president's inner circle, he, too, had to resign. Throughout all the changes in Washington since then, the political world has more or less hewed to this rule of scandal. Indeed, with the flurry of post-Watergate ethics laws, and intensified media competition over the last couple of decades, the trend has been toward less tolerance, not more. Had White made his missteps in any previous administration, he most certainly wouldn't have lasted. In 1993, for example, Roger Altman, the deputy Treasury secretary under Bill Clinton, was forced to resign after failing to fully disclose the number of contacts between the White House and Treasury over Whitewater. Shortly thereafter, David Watkins, a White House administrator, resigned a day after it came to light that he had taken a government helicopter to play golf. Such strictness wasn't limited to Democratic administrations. John Sununu, President George H. W. Bush's chief of staff, was forced out after he was found to have used a government vehicle to attend a rare- stamp convention. But something changed when George W. Bush became president. The current administration has not lacked questionable behavior: Karl Rove met with Intel executives in the White House even as he held a significant amount of Intel stock; Deputy Interior Secretary J. Stephen Griles, a former coal-industry lobbyist, intervened in an energy- exploration dispute on behalf of former clients; Dick Cheney met repeatedly with energy company officials who appear to have had a strong hand in formulating the administration's energy policy; and, of course, there is White. Yet each retains his job. Eighteen months into Bush's term, his only appointee to resign under a cloud is Michael Parker, the former civilian chief of the Army Corps of Engineers, and not over allegations of corruption, but for what this administration views as the one true deadly sin: disloyalty. (Parker publicly criticized the president's budget.) By contrast, two years into the Clinton administration, 10 political appointees had resigned; under the elder Bush, eight; under Reagan, 13. What has changed isn't so much the conduct of officials, but the standards by which they're judged. The "new tone" that George W. Bush brought to Washington isn't one of integrity, but of permissiveness. The White Stuff On the morning of June 19, White was visiting the Army's 10th Mountain Division in Fort Drum, New York. We had flown up on a Gulfstream G-5 (the Army's Air Force One) so that White could be briefed by troops just returned from Operation Anaconda in Afghanistan. As the lights dimmed and the PowerPoint display began, the crunching heavy-metal chords of Metallica's "Enter Sandman" suddenly cascaded from speakers overhead, a fitting accompaniment to a testosterone- driven presentation. White was in his element. Fluent in the language of military acronyms and eager to flaunt it, he interrupted nearly every sentence with pointed questions. Among the roomful of soldiers, unaccustomed to service secretaries with such expertise, the respect was palpable. Afterward, one of them pulled me aside, leaned in close, and earnestly declared, "Secretary White is the shit." White is more popular with the troops than any secretary in recent memory, a fact that stems from his unusual background. Because the law dictates that the armed services are directly under civilian authority, service secretaries generally fit the mold of men such as White's predecessors Togo West and Louis Caldera, drawn from the world of business, law, or politics with only a tangential connection to the uniform (and are often viewed unfavorably within the Army as a result). White, on the other hand, is a soldier through and through. Born in Detroit in 1943 to a bus driver and a homemaker, his military career had an inauspicious beginning. By his own admission, he wasn't a rigorous student. When, at the suggestion of an uncle, he applied to West Point, "it took me three times to sneak in the back door," he recalls. His lackadaisical attitude carried over into the academy. Much like Sen. John McCain (R-Ariz.), he was a hard-drinking, fun-loving iconoclast with little regard for rules and procedure--something he takes great pleasure in revealing. "I was not what you'd call a model cadet," he admits; and, like McCain, he finished near the bottom of his class. It wasn't until he graduated in 1967 that his professional prospects improved. He served two tours in Vietnam with the 11th Armored Cavalry Regiment, where he proved himself in combat, opted to make a career of the Army, and rose quickly through the ranks. White served in posts across the United States and Europe, eventually returning to command the 11th Cavalry in the mid-1980s. From there, he went to the Pentagon to the Joint Chiefs of Staff, ultimately serving as Gen. Colin Powell's executive officer and becoming the first in his West Point class to attain the rank of general. Ask the secretary's staff why he has managed to survive and they'll note, among other things, the advantage his military record affords the administration. Besides being Army secretary, White is the Defense Department's point man on homeland security programs and the acting assistant secretary of defense for special operations and low-intensity conflict. Yet it was his private-sector experience, not his service background, that Bush touted upon choosing him, as part of his campaign to run the Pentagon more like a business. Moreover, Bush's Defense Department hasn't been terribly interested in accommodating the career military. Many of Rumsfeld's civilian subordinates at the Pentagon never served in uniform, and as a group are widely loathed by the brass for scrapping weapons such as the much-maligned Crusader in the interest of "transformation." White may not have been responsible for the pro-Crusader talking points, but his loyalty to the Army certainly hasn't endeared him to Rumsfeld. For all his success, White had become demoralized by 1990. He agonized over the painful downsizing that appeared inevitable following the demise of the Soviet Union, and told Powell that he was contemplating retirement. "There will be other wars," Powell countered. "That's just the nature of the beast." But White, who had other concerns, was not persuaded. "The Army told me I could look forward to moving just about every year," he explained. "Family-wise, with three children, I thought it was the right thing to do, so I headed off to the private sector." Surprising nearly everyone, White ended his 23-year Army career, retiring on July 1, 1990. Exactly one month later, Saddam Hussein invaded Kuwait, sparking the Gulf War. Soldier of Fortune The specter of Enron is never far removed from Thomas White these days, evident in the jitteriness of his press aides, the low profile he's adopted since January, and even in the unlikely choice of a painting of the American Museum of Financial History that hangs outside his office. As White tells it, he went to Enron purely by accident. At George H.W. Bush's inaugural in 1989, he bumped into John Wing, an old West Point buddy, who was working in the newly deregulated energy market building electrical power stations. Wing invited his former classmate to join him at the new Texas power company, and the day after he left the Army, White went straight to work. "I never put a resume together. I just kind of walked in the door." He had no particular expertise that fitted him for the job. Instead, White says, "I thought I could bring leadership to an organization that was rapidly growing." White worked in various capacities during his 11 years at Enron, eventually becoming vice chairman of Enron Energy Services, which specialized in energy privatization, and was, like the rest of the company, committed to remarkably aggressive growth. Enron executives who worked under him say such zeal frequently eclipsed economic judgment, and EES signed contracts it had no clear ability to fulfill. In several cases, it actually paid out as much as $50 million to secure contracts with companies like IBM as "a show of faith." One reason for the recent criticism of White is that EES had a practice of booking the profits from these multi-year deals up front, allowing executives like White, whose bonuses were tied to performance, to collect millions of dollars before the company had realized any actual profit. Such practices entailed considerable losses. But, as whistleblower Sherron Watkins testified to Congress, EES was under tremendous pressure to show a profit in 2000, which led White's retail division to hide $500 million in losses by dubiously shifting it to the wholesale division, leaving its balance sheet with a profit of $105 million--but one only concocted by creative accounting. "Nobody with a straight face could say EES was making money," says a former EES official, who still works in the field and requested anonymity. "It had been hemorrhaging money every quarter since its inception." Still, in 2001, White received more than $31 million in salary, bonuses, and stock. "White was paid primarily from incentive-based compensation packages," charges Tyson Slocum, research director for the watchdog group Public Citizen. "Therefore, his salary was being inflated by the fraudulent accounting practices that EES was implementing." Despite media pressure, White has not yet had to explain the particulars of his service at Enron. But he may have to soon. EES was recently implicated in price fixing during the California energy crisis. And Sen. Dorgan, whose subcommittee is investigating the issue, has announced that he'll call on White to testify sometime in late July. White has adopted a Ken Lay style of defense. "There is a certain sense of betrayal that activities were permitted in the corporation--the off-balance- sheet partnerships and all the rest--that were highly damaging," he told me. "My business unit was retail energy, which has nothing to do with wholesale trading [the unit connected with price fixing], yet I'm the guy who's being called to testify in front of Sen. Dorgan's committee because I'm the senior most public official that will appear in front of a microphone. That's frustrating." But while those who worked for him in EES don't believe that he was as guilty of wrongdoing as were Lay or Jeffrey Skilling, neither do they accept his professions of ignorance. "White's a good guy," said one official who worked under him at EES. "But at the end of the day, he's a guy who, to be blunt, was never qualified to be a senior executive in the private sector. He was a congenial, pleasant man, but showed no real capability or desire to learn the details or the facts of the deals we were working on. He was openly referred to by the staff as 'Mr. Magoo.'" Said another EES employee: "He was not that dialed in. Organizationally, he's just a mess." And though White has denied that he was ousted, both he and EES chairman Lou Pai were replaced in 2000 by a management team that staffers say was brought in explicitly to clean up the bad deals that were losing EES so much money. Furthermore, even given White's lack of interest in specifics, former employees say it is impossible that the vice chairman of EES could have been unaware that something was amiss. "If the company was losing money every quarter, how did it magically turn around and make a $100-million profit?" wonders one. "Being a nice guy doesn't absolve you of responsibility." The debate over White's culpability boils down to a simple proposition that is likely to be put to him-- repeatedly--before the Commerce Committee: Either he knew of the malfeasance at Enron and was therefore complicit, or he was ignorant of it and therefore lacked any claim to the business acumen that putatively justified his hiring as secretary of the Army. Republican Rabbis So if it isn't business skill or military experience that explains White's unlikely endurance, what is it? What has changed about Washington that allows a serial scandalizer to hold onto his job? One reason may be that, in this administration, enriching oneself while one's business goes bust isn't necessarily frowned upon. The president himself made a small fortune selling his failed oil company to business friends of his father. The vice president reaped tens of millions of dollars for engineering a disastrous merger at his former company, Halliburton. Indeed, Bush, Cheney, and White are all part of a culture of "crony capitalism" whose resurgence has been quietly accepted in Washington, a culture in which a stint in the private sector is valued mostly as a ticket-punching exercise that allows one to get rich, ride out the time between government jobs, and demonstrate that one really isn't a creature of Washington. To dump White would risk raising questions about this entire way of life. Another reason that people like White now survive scandals is the extraordinarily self- protective web of contacts and understandings that supports the current administration. When White chose to pursue the secretaryship, one of his first calls was to his old boss, Colin Powell. "The personal networks that underlie all of this-- the character and tightness of those networks--has everything to do with [White's survival]," says G. Calvin Mackenzie, a professor of government at Colby College who has co-written, with Michael Hafken, a forthcoming book on executive-branch malfeasance, Scandal Proof: Do Ethics Laws Make Government Ethical?. "If you have a Îrabbi' watching over you"--an old term of art for a sponsor and protector- -"if you're somebody's guy, then you're much better fortified against an attack. If people start rattling your cage and your rabbi can protect you, you stick around longer." Current and former Pentagon officials report that even those eager to see White go are conscious of his standing with Powell and the difficulty this poses to removing him. On a broader scale, this dynamic helps to explain why so few Bush officials have been forced out. Both Clinton and Reagan struggled to assemble reliable staffs in part because their party had been absent from power. "But when Bush was elected, there was a whole team ready to be brought in off the sidelines," says Ed Hughes, who worked in Clinton's counsel's office. By contrast, says a former top Clinton official, "The early Clinton years were the original amateur hour. There was no understanding of how you protect your own people, so they simply got jettisoned." Yet another reason--obvious, when you think about it--is that the Bush administration is the first in more than 25 years that doesn't have to contend with the independent-counsel law, which Congress let expire in 1992 (reviving it in '94 to pursue Hillary and Whitewater) and again in '99. Between 1979, when the first independent counsel was appointed to investigate alleged drug use by President Carter's chief of staff, Hamilton Jordan, and 1998, when the last was named to look into charges of influence peddling by Clinton's labor secretary, Alexis Herman, independent-counsel investigations prompted scores of resignations (though significantly fewer convictions). It's hard to imagine that Enron would not have prompted such an investigation, or that an independent prosecutor wouldn't have targeted White, if for no other reason than to extract evidence to use against his superiors. Even in the absence of independent-counsel inquiries, administration officials in questionable positions have often been forced to resign by aggressive congressional investigations. But here, too, something fundamental has changed. The Republican- controlled House has no incentive to pursue members of the Bush administration, and the Democratic-controlled Senate appears to lack the nerve. At the height of February's congressional chest-thumping over Enron, when lawmakers announced 13 different hearings on the matter, no one had the temerity to demand White's testimony; Dorgan only summoned him in July. And those Democrats who are investigating White don't pretend to match the Republicans' doggedness against the last administration. "Part of it is that we've been on the other side of this, we've seen the way the Republicans treated the Clinton administration," says a Democratic House aide. "Every minor allegation that came out, whether substantiated or not, was followed by a firestorm of people calling on administration officials to resign." To date, not a single Democrat has so called upon White. So it isn't hard to understand the confidence with which White's staff views Sen. Dorgan's hearing. "If they want us to come up there and explain how energy markets work, the secretary would be happy to give them a lesson," says Charles Krohn, White's top press aide. That White has lasted so long is also partly explicable by the fact that Bush operates in a different media environment. The sharpest calls for White's resignation have come from "liberal" editorial pages like those of The New York Times, which would have sent earlier administrations scrambling, but which this one is willing (often gleefully) to ignore. And after hyping Clinton scandals for eight-plus years, the establishment press has so diluted the currency of corruption charges that more and more people simply ignore them. The Bush administration also enjoys broader leeway because it is free of the "vast right- wing conspiracy"--the subsidized scandal-mongering, talk radio, and attack journalism that has no equivalent on the left to fetishize White's travails as conservatives did those of Vince Foster and Webster Hubbell. White and his colleagues have also benefited from media preoccupation with other stories. "Scandals become big stories when there's no news competition," says Mackenzie. "The biggest occur at the slowest news times." And though White's troubles, and especially Enron's, have received considerable attention even in the midst of war, the steady flow of important news from elsewhere in the world obviates the sort of blanket scandal coverage that forces an administration to act. Post-Scandal Zeitgeist There is one more change in Washington that the Bush administration has exploited--a gift from Bill Clinton. For while early in his presidency Clinton may have unwittingly accelerated the scandal culture by too readily sacrificing officials who had come under fire, in his second term he demonstrated, during the Lewinsky flap, that steadfastly refusing to bow to his opponents can pay off. Bush has applied this lesson to his own style of governance, strengthening a protectiveness he showed as governor of Texas. "There is an element of pridefulness at work that doesn't acknowledge or permit these things to come into play," says Bruce Buchanan, a political science professor at the University of Texas in Austin. Even these changes in the culture of Washington scandal, however, don't fully explain White's continuing presence. At some point, won't he become too big a political liability? I put that question to one of his closest aides, who told me an amazing story: During a trip to West Point on June 1, Bush pulled White aside for a private talk. "As long as they're hitting you on Enron, they're not hitting me," said Bush, according to this Army official. "That's your job. You're the lightning rod for this administration." Bush may benefit from keeping White in the job, but White's ability to perform it has clearly diminished. And he himself has said he would step down if he could no longer function as the public face of the Army. But since January, he has declined interview requests from every major network. "Whenever he opened his mouth, they'd write about Enron," explains Col. Joseph Schroedel, White' s executive officer. "He was having a hard time getting the Army's story out. So he stopped talking to the media." White is the most obvious beneficiary of the new, post-scandal Zeitgeist. But he's probably not the last. Indeed, if he survives, he'll establish a precedent. It's difficult to see why future appointees would feel compelled to resign if White doesn't have to. If the old Washington culture sometimes forced good people out for minor infractions, the new one tips the balance the other way. And for the current administration, that is very good news. Joshua Green is an editor of The Washington Monthly. 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