President Obama intends to nominate West Point graduate Robert “Bob” McDonald — most recently chairman of Procter & Gamble, a Fortune 500 company — as secretary of the embattled Department of Veterans Affairs, wracked by a scandal of systemic delays in health care.
President Obama will announce he is replacing the retired Army general who was running the VA with a former Army captain—swapping four-star salutes for business smarts. The pick suggests just how tough the VA assignment is, and an acknowledges that the sprawling bureaucracy of 300,000 doesn’t always salute when it’s given orders.
Obama picked the right guy to clean an agency tarnished by accusations that its managers repeatedly gamed VA records—potentially leading to the deaths of some veterans—to help VA officials win annual cash bonuses. Early in his career at P&G, McDonald managed the company’s Tide detergent business, before heading to Canada and then Asia to run the company’s laundry and cleaning operations. The White House leaked news of McDonald’s nomination, expected Monday, and said his business skills and military background make him the right choice.
Paul Rieckhoff, chief of the Iraq and Afghanistan Veterans of America, suggested McDonald’s corporate background could be an asset. “His branding background may prove helpful,” he said. “There are few organizations in America with a worse reputation with its customers than the VA right now.”
Knowing consumers—and what they want—is key, he explained: “You’re going to create better loyalty, more indispensability, and as a result of that you will have a higher market share.”
He’s going to need all the business savvy he can muster, assuming Senate approval, in his new job. When McDonald left P&G, it had annual sales of about $84 billion, half of the VA’s annual budget. The Congressional Budget Office estimated earlier this month that the reforms the Senate wants to make in providing veterans with better access to health care could double the VA’s annual $44 billion health-care budget.