Ringing the Brass

Rising to his feet in the Senate last week, Illinois Democrat Paul Douglas took out after the Pentagon and its defense contractors. Said Douglas: "The system of defense procurement has led to great abuse. And when companies hire former officers to negotiate with their former fellow officers, the abuses are magnified." With that, Douglas released figures showing that 88 of the nation's 100 top contractors employed no fewer than 721 ex-officers with the rank of colonel and up. Douglas said darkly that there is grave suspicion that many of these men were hired as influence peddlers to assure fat contracts: "They didn't hire those 721 merely for their military knowledge."

Douglas' blast was the latest in a series of angry rumblings in Congress over the role of retired and resigned military men in business. Three weeks ago New York's Representative Alfred Santangelo offered a harsh amendment to the Administration's $39 billion military appropriations bill for fiscal 1960: no funds could be used for contracts with any company that had hired general officers who had been on active duty within the last five years. The amendment was defeated by only a narrow (147 to 125) margin. Shortly after, the House's watchdog Armed Services Investigation Subcommittee fired off 840 questionnaires to 100 leading contractors and 200 individuals, asking whether any business had been "solicited"' by former military men. Said Chairman F. Edward Hebert, who promises a full-scale investigation early next month: "The big names better come to protect themselves. If not, they'll become suspect. If you enlist brains for the sake of brains, there is nothing wrong. But if you enlist names for the sake of contacts, that is wrong."

Listening to the barrage last week, the defense industry kept mum publicly. Privately, it reacted with surprise--and considerable anger of its own. In Pittsburgh, Reserve Army Colonel Willard Rockwell, who once took time off from running his three manufacturing companies to serve briefly as an assistant to the Defense Secretary, ridiculed the whole thing. Snorted Rockwell, whom Representative Santangelo listed as "suspect": "The White House has bought eleven of our Aero Commander planes. I can't even sell one to the military. How's that for influence?" When it comes to pressuring for contracts, he charged that the real big leaguers are in Congress itself. "Every time some Congressman wants a contract for a hometown favorite, the Pentagon is supposed to jump." Businessmen noted that Representative Santangelo himself complained that New York was not getting its fair share of contracts; the West Coast was getting all the gravy.

Brains v. Brawn. The retired military man in business is nothing new. The Civil War's Generals George McClellan, Nathan Bedford Forrest and P.G.T. Beauregard all became railroad presidents--Beauregard so much of one that he wrote Robert E. Lee: "You would suppose that I had never done anything else all my life." Today's list of soldier-executives reads like a Who's Who of the Pentagon: Douglas MacArthur, chairman of Sperry Rand Corp.; Walter Bedell Smith, vice chairman of American Machine & Foundry; James Doolittle, chairman of Thompson Ramo Wooldridge's Space Technology Laboratories; Omar Bradley, chairman of Bulova Watch Co.; Lucius Clay, chairman of Continental Can. Said Lieut. General Leslie R. Groves, wartime boss of the A-bomb project and now a Remington Rand vice president: "If we ever get to the absurd situation where an officer can't get a job, the only other possible solution could be to shoot him and be done with it."

Businessmen grant that abuses may occur from time to time, that some ex-officers are not above trying to persuade military pals to okay a contract. To be above suspicion, General Motors is reluctant to hire any retired brass. The companies that do hire them deny any large-scale influence peddling. Most procurement officers are dead set against doing any such favors, and corporations are too frightened of Congress to try. Furthermore, the Pentagon is protected by its vast bureaucracy. No one man or group can hand out a contract. As one defense-industry executive says: "The system is cumbersome. But it has integrity. There are hundreds of people at scores of levels who have to be sold before they go into buying a weapons system."

On-the-Job Training. The ex-soldier in business is usually not a salesman but a planner, technician or administrator. His job often has little or nothing to do with military work. Four-star General William Hoge, former commander of Army ground forces in Europe, is currently board chairman of Interlake Iron Corp. which has no defense contracts. Ford Motor Co.'s Irving ("Red") Duffy, a West Pointer and onetime U.S. Army colonel, gets $221,000 annually for running four manufacturing divisions, none of which does much military business. As executive vice president of Arthur D. Little, Inc., recently retired Lieut. General James Gavin bosses all nonadministrative work in an outfit whose military business amounts to barely 20% of its gross.

The aircraft companies make no bones about the fact that they compete for military men. Douglas has 15 colonels and above on its payroll, North American has 27, Boeing 30, General Dynamics 54, Lockheed 60. The work these companies get from their officers is much more than mere lobbying. The ex-officers are highly trained technicians who not only can help on current military projects but can keep their companies from wasting money on prospective projects that they know have no military value.

The two men responsible for the nation's ICBM program are both ex-Air Force officers. Convair's Atlas team is headed by J. R. ("Jim") Dempsey, 37, West Pointer and onetime Air Force lieutenant colonel; Martin's Titan group is bossed by Howard Merrill, 38, a former Air Force captain. Both men made their reputations after going into industry, not before. They recognized, as do many career officers, that promotions are slow in peacetime, and a bright young man can often do better for himself--and in some ways, better for his country--by putting aside his uniform for businessman's blue. But in Congress, the talk was of legislation to put a check rein on military men, possibly by forbidding retirement pay for anyone employed by a defense contractor. Compared to the overall number of executives, there are relatively few military men in industry, and even fewer in top jobs. The great bulk of the nation's defense work is performed by civilians. If Congress uncovers abuses, it might indeed be well to write some ground rules of employment. But the lawmakers should also be careful that in the process they do not hurt the U.S. defense effort by denying it the services of many experienced and able workers.

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