The White Stuff

SYNOPSIS: The administration is unwilling to admit its fallibilty, and this country suffers for it

I don't know if anyone has done a calculation, but it's obvious that the Bush administration has appointed a record number of corporate executives to high-level positions, often regulating or doing business with their former employers.

The administration clearly doesn't worry about conflicts of interest, but you don't have to posit outright corruption to wonder. For example: The secretaries of the Navy and Air Force are both lifelong defense-contractor executives. Won't they tend in the nature of things to believe that what's good for General Dynamics is good for America? Indeed, defense stocks have soared, partly because Wall Street analysts predict that profit margins on future contracts will be far higher than was considered appropriate in the past.

But there's a further question. Many of the business executives recently appointed to government positions first entered the private sector after prior careers in the Reagan and Bush I administrations. As Sebastian Mallaby put it in The Washington Post, they are "political types dressed up in corporate clothing: people who got hired by business because they knew government, then hired by government on the theory that they knew business." (Dick Cheney is the quintessential example.) So are they really good businessmen, or are they just crony capitalists, men who have lived by their connections?

Consider the case of Thomas White, secretary of the Army, a former general who became a top Enron executive in 1990. His behavior in office has raised eyebrows. He did not follow the rules about disposing of stock options; he and his wife are alleged to have taken a military jet to Aspen on personal business; and he sold $12 million of Enron stock shortly before the company's implosion, though he says that no inside information was conveyed in the 70-plus phone conversations he had with his former colleagues. But this stuff which would have led to multiple investigations had he been a Clinton appointee is actually secondary.

The really important information about Mr. White is that the enterprise he ran, Enron Energy Services, was a fraud a money-losing operation dressed up to appear highly profitable through deceptive accounting. It is possible though implausible that Mr. White was duped by his subordinates, that he honestly thought that he was doing a great job. But that only makes him a fool rather than a knave.

Stories about Mr. White's questionable behavior at his current job have emerged only recently, but it has been apparent for months that he was a Potemkin executive: all facade, with nothing behind it. Given that he was hired for his supposed business skills, this means that he is like a surgeon general who turns out never to have finished medical school.

So why does this administration, which is waving the flag so hard its arms must hurt, leave the Army the Army! in the hands of a man who is, at best, a poseur?

One theory I've heard is that Mr. White can't be fired: that there are facts about the administration's relationship with Enron that it doesn't want to come out, and that Mr. White knows where the bodies are buried.

My preferred explanation, however, is that Mr. White has been protected by the administration's infallibility complex. In case you haven't noticed, this administration never, ever admits making a mistake; even when it makes a policy U-turn, it tries to rewrite history to pretend that everything is still going according to plan. One recent example involved foreign aid. First the administration came out with a miserly proposal; faced with outrage from the rest of the world, it doubled its offer. But it claimed, to an incredulous press corps, that there had been no change in plan, that the proposal had simply been badly presented.

If Mr. White is forced to leave, however, it would be hard to deny that in hiring him for his supposed business skills the administration was suckered, in much the same way that Enron's investors were suckered. And so he remains.

It's not hard to see why the administration hired Mr. White: on paper, his qualifications looked pretty good. But the fact that he is still in place is very bad news. Maybe there are some dark secrets here; or maybe it's just arrogance and lack of moral courage. Either way, this is no way to run an army or the country.

Originally published in The New York Times, 4.12.02