Generals Galore — The world IS watching

On November 12th I wrote a posting (here) about the emerging Petraeus-Broadwell affair which has since then continued to unfold like a slow-motion train-wreck, taking at time bizarre and unexpected twists and turns.

In my previous posting I indicated that the behavior exhibited by General David Howell Petraeus and Ms. Paula Broadwell is totally understandable when viewed through the prism of human instincts, but at same time is totally unacceptable when viewed through the prism of corporate governance (as my friend Marc Fagan likes to say “Totally understandable… completely unacceptable.”) Indeed, as I pointed out in my posting, the issue has a lot to do with lack of corporate governance coupled with an extreme elevation in status in strictly hierarchical organizations, and, for such organizations, abuse of corporate resources for personal gains is to be expected and needs to be combated actively. Most significantly, I suggested that the most efficient — and probably only effective — way to combat abuse on the highest level of the corporate ladder is to simply removing the incentives for abuse, scrapping, for instance, company cars, corporate apartments, and corporate jets. Simply put, removing the toys, makes it less likely that the children will get hurt playing with them.

The military is an arch-typical hierarchical organization, and as such I was not surprised (although I was, of course, disappointed) that the activities of two other generals would come to the surface over the last week.

My interest in this matter is primarily related to the corporate governance issues, and so I will ignore the bizarre twist with FBI-agent-cum-wannabe-whistleblower Frederick Humphries and, mostly, ignore the equally bizarre background of Jill Kelley, a Tampa resident that appears to have run a paper-charity; appears to have attempted to squeeze Adam Victor, a New York businessman, out of $80 million by promising to be able to leverage some level of access to General Petraeus; appears to have spent an abnormal amount of time attempting to ingrain herself with men from the military leadership, and, according to Amy Gardner of the Washington Post, also appears to have had a marked interest in visiting the White House, having lunched at the White House mess twice.

I will also ignore the on-going and increasingly publicized military Article 32 investigation against Brigadier General Jeffrey A. Sinclair, which include a litany of rather remarkable possible charges such as forcible sodomy, threats against victims’ careers, threats to murder a victim and her family, and the transfer of one victim to his unit in Afghanistan for what appears to primarily be sexual purposes.

In total General Sinclair appears to face the potential of being charged with 26 violations of military law, and, although most of them certainly relates to a near-complete failure of corporate governance, including, for instance, a charge of claiming more than $4,000 worth of charges for personal travel as military business and a charge of deleting emails during the investigation, the murder-threat and forcible sodomy charges cast the entire issue in a different light (note that in law forcible sodomy is most often defined as the sexual interaction involving the genitals of one person and the anus or mouth of another, against one’s will, regardless of gender,) and, so, I will not comment further on this issue except to note that, if proven, these charges against General Sinclair may simply show what happens if the excesses of chief executives are not stopped early on, and, therefore, the case against General Sinclair really is as much an issue about the credibility of the military’s approach to corporate governance.

This issue comes to the forefront when it is considered that there is no minimum punishment or sentencing guidelines in the military court system, and, therefore, General Sinclair, if convicted, can face punishment ranking from none (he can get convicted but not punished) over forced retirement (also, effectively, amounting to no punishment) and dismissal through life in prison, and, so, the military has a unique opportunity to, for better or worse, signal to its rank and file how important an issue corporate governance really is.

With all this being said, let’s take a look at the two generals whose behavior have come our attention over the last week.

General John R. Allen

General John R. Allen

General Allen – Hardcore general and communications addict

First General John R. Allen, the U.S. Marine Corps general who replaced General David Petraeus as commander of ISAF (International Security Assistance Force) and U.S. Forces Afghanistan (USFOR-A), a really big deal, and was on the line to be confirmed for the position as commander of EUCOM (United States European Command), an even bigger deal, came to the forefront when the Associated Press reported that, for reasons that may never come to light, General Allen, a professional soldier with an excellent education, a stellar battle record, an ancestral story of military service, and strong links to the White House, appear to have exchanged a staggering 20,000 to 30,000 pages of e-mails and other documents with Ms. Kelley between 2010 and 2012.

Now, I am not at all interested in whether Ms. Kelley and General Allen was communicating for mundane or romantic reasons. What I am, rather, is staggered by the amount of materials communicated between these two characters. Giving General Allen and Ms. Kelley full latitude, assuming that we are dealing with the minimum number of pages and the maximum number of days, we would be talking about 20,000 page of communications exchanged over 1,095 days, equivalent to more than 18 pages of communication per day… every day… for three years.

Assuming, for instance, that each communication took three minutes to read or write, a fairly conservative measure, I think, this amounts to General Allen spending one solid hour per day communicating with Ms. Kelley… every single day… for three years.

How that is possible and what one could possible talk about in such verbose manner, I don’t know, but certainly I have to assume that the sheer volume of communications would require Mr. Allen to spend a not-inconsiderable amount of his working day on communicating with Ms. Kelley.

And that is a problem in itself. If we put a person on the payroll and assign them a task, we should be able to reasonably expect him or her to dedicate all their allocated time to resolving the task, and not dedicate any amount of time communicating with people such as Jill Kelley. And, so, we are back to the issue of corporate governance and the need for increased oversight when we deal with individuals higher on the corporate ladder, rather than the decreased vigilance that appear to be the norm.

I am hopeful that the 20,000 to 30,000 communications will show to be a media exaggeration, because the alternative is unacceptable. That being said, the problem remain even if we are talking about 3,000 communications, reflecting a 10 fold-exaggeration. In fact, even if we are talking about 300 communications, I would question if a United States top-level military officer could reasonably interact 300 times with a (apparently rather indiscreet) socialite without it raising serious questions about his character.

General William E. Ward

General William E. Ward

General Ward — From exotic vacations to retirement via demotion

The second General to make the headlines was William E. Ward, the former head of United States Africa Command, another big deal.

General Ward, in a bizarre case of corporate idiocy, remained on active-duty for 17 additional months after his retirement pending the outcome of a special investigation related to excessive use of taxpayer money while stationed in Africa.

This week it was reported by Associated Press that after the 17 months investigation, General Ward was finally stripped of one of his star, meaning that his retirement would be not as that of a four-star general (a really big deal, and, also, corresponding to $30,000 increase in retirement pay compared to the retirement pay of a three-star general.)

The outcome of the investigation, as perhaps best summarized by Lolita C. Baldor of the Associated Press, was spectacular, detailing excessive abuse, lying, and using tax-payer resources for the benefit of himself and his wife:

“A report by the Defense Department inspector general found that Ward used military vehicles to shuttle his wife on shopping trips and to a spa and billed the government for a refueling stop overnight in Bermuda, where the couple stayed in a $750 suite. The report detailed lengthy stays at lavish hotels for Ward, his wife and his staff members, and the use of five-vehicle motorcades when he traveled to Washington.

The report also said Ward and his wife, Joyce, accepted dinner and Broadway show tickets from a government contractor during a trip during which he went backstage to meet actor Denzel Washington. The couple and several staff members also spent two nights at the Waldorf Astoria hotel.

Other charges were that Ward often extended his overseas trips — particularly those to the U.S. — for personal reasons, resulting in “exponential” increases in costs.

Although the report included responses from Ward to a number of the allegations, investigators often found records and statements that contradicted his explanations. At one point, Ward defended the Bermuda layover, saying that it came up on short notice, which is why his security team had to stay there longer. The report found records showing that the layover had been planned for at least four days in advance.

A common theme running through the report was Ward’s insistence that his wife travel with him at government cost, even though it was often not authorized and she performed few official duties. It said he also routinely stayed in high-priced suites in luxury hotels rather than in standard rooms or less expensive locales.”

Clearly, this is an example of corporate leadership running amok, and it would be in everyone’s interest to severely punish General Ward. Interestingly, however, in a twist not uncommon in the corporate world, after literally having been nailed for stealing money from the tax-payers for years, General Ward was still allowed to retire with close to to $208,802 a year in retirement pay, although according to Tom Vanden Brook of USA TODAY, he would be expected to pay more than $80,000 in restitution for using military planes and staff for personal business.

Even through he may have to fork up $80,000, at 63 years of age, General Ward can expect to collect millions from the United States tax payers over the next decade and, so, ultimately, he will serve as a text-book example of failed corporate governance and a sterling example to future military leader of how much abuse you really can get away with.

The World is Watching — Blogging as a barometer

As I said in the beginning of this posting, my interest in this matter is primarily related to corporate governance. However, I would be remiss if I did not note that the Petraeus-Broadwell affair is sure to further negatively affect the world’s view of the United States and the United States military, which, frankly, is already not so hot.

I am reminded of this fact in a very direct way, with my previous Petraeus-Broadwell related posting having attracted readers from, among other places, Asia and the Middle East. Over the last three days, for instance the posting attracted readers from Portugal, Argentina, Tanzania, Pakistan, Sweden, Australia, the United States, Peru, the United Kingdom, Yemen, Bahrain, Israel, and Egypt.

The world is watching…. And what it sees ain’t pretty.

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