Double-Dipping

Being a retired general or admiral has certain fringe benefits.

First, there's the pension. A retired Brigadier General or Rear Admiral (Lower Half), with 30 years of service, will collect a monthly payment of $7935, before taxes and other deductions. Factoring in annual cost-of-living increases, that pension will be worth upwards of $3 million, over a 30-year retirement.

There's also the prestige that comes with being a retired flag officer. That rank certainly looks good on a resume (and) coupled with decades of networking and contacts, it opens doors that are simply unavailable to most military retirees.

In fact, those retired generals and admirals (along with their active-duty counterparts) have created something of a cottage industry within DoD. It's called the "Senior Mentor" program, which hires former flag officers to serve as advisors in wargaming, weapons procurement and strategy matters.

The pay, as you might guess, is quite good. A typical mentor is paid hundreds of dollars an hour for his or her services. Additionally, many of the retired officers also consult or work for defense contractors, raising questions about possible conflicts of interest between their relationships with defense firms, and their role as military advisors.

USA Today "exposed" the program last month, and their first article suggested that senior mentors represent a relatively new Pentagon program. But that's hardly the case; during one of my final active duty assignments, I worked for a military wargaming center. Over the course of a typical year, there was a veritable parade of senior mentors who participated in our simulations and specialized training courses for flag officers. They represented all branches of the military and they were well-compensated for their efforts.

Former politicians were part of the program, too. Just months after his retirement from Congress, Former Speaker of the House Newt Gingrich turned up at my base, as a guest speaker for flag officers attending a joint commander's course. Mr. Gingrich also commanded a hefty fee for his appearance. But, in fairness, the former speaker gave a dynamic, two-hour presentation, providing a detailed assessment of various global issues--without notes.

To be fair, the "senior mentor" program has its merits. Outside of the military's "charm school" for newly-selected flag officers (and a few specialized courses after pin-on), there is no program that teaches generals and admirals how to do their jobs. Given those realities, it is often beneficial for new flag officers to interact with retired component and joint commanders, who gained valuable strategic, operational and geopolitical expertise during their careers.

Obviously, that type of expertise doesn't come cheap. Compensation rates for the mentors are roughly based on what they would earn (or actually earn) as senior defense contractors or consultants. But that may be changing.

Responding to the USA Today report, Defense Secretary Robert Gates described the mentor pay scale as "obscene," and ordered an internal review. Mr. Gates is also concerned about potential conflicts-of-interest; according to the paper, at least 130 participants in the mentor program also worked as employees, consultants or board members for defense firms. The defense chief believes the mentors should be motivated by "service" rather than "profit."

But there are some problems with that approach. First, all branches of the federal bureaucracy employ consultants, who earn big bucks for their services. And, if you dig a little deeper, you'll find that many of those hired guns are consulting for the same agency or department they retired from, or once worked for. It's the nature of the business; consulting firms--and their clients--want experts with recent experience in that particular program or agency.

So, a former flag officer usually has a 4-5 window to establish himself (and make big bucks) as a mentor. As they move deeper into retirement, their "expertise" becomes more dated, and of less value to DoD.

But that fact is lost on the media; USA Today reported breathlessly that retired Army General Dan McNeill made $281,000 as a "senior mentor" between December 2008 and August of this year. What the paper fails to mention is that McNeill is a former commander of NATO forces in Afghanistan; as the military debated the "way ahead" in that conflict, McNeill's experience was viewed as particularly valuable. As that war evolves, it's likely that McNeill won't be earning as much as a senior mentor. Of course, he still has a $200,000 pension to fall back on.

Still, there is room for reform within the mentor program. Mr. Gates--and USA Today--are correct in highlighting the potential conflicts of interest facing many retired officers who work as mentors. Simply stated, they should not be on the federal payroll--and that of a defense firm--at the same time. Under those circumstances, it becomes too easy to recommend the systems or services of your company to DoD.

Fixing the problem should be easy: hire the mentors as full-time federal workers, and force them to sever ties with defense contractors. Pay them as members of the Senior Executive Service (SES), which will guarantee them a six-figure paycheck. Those earnings, along with their military pension, should be enough to provide a comfortable lifestyle. Additionally, the full-time mentor cadre would be smaller (and less expensive) than the current "contractor" arrangement.

The second step in the reform process is equally straightforward: implement a mandatory, three-year "cooling off" period for participants in the mentor program. In other words, someone leaving a mentorship post would have to wait three years before signing on as a defense consultant, executive or contractor. Retired flag officers would be forced to choose between employment in the federal sector or the private sector, with none of the "back-and-forth" or "double-dipping" that goes on now. More importantly, the cooling off period would help prevent the conflicts of interest that jeopardize the current mentor program.

There is, of course, a certain irony in all of this. Fifty years ago, men like Admiral Ray Spruance were regular speakers at the war colleges and other military forums. As far as we know, Spruance and other retired flag officers (from that era) never accepted a fee for their services; any compensation from the government was probably limited to their travel expenses.

Sadly, those days are long-gone. Today's generation of retired generals and admirals are interested in maximizing their earning power, and they're willing to take what the market can pay. If Mr. Gates believes he can attract--and retain--mentors at cut-rate prices, he is sadly mistaken. Many former flag officers have expertise needed by DoD and they're entitled to a wage commensurate with professionals in other fields. Institutionalizing the program (and making mentors full-time federal employees) is the best way to access their knowledge and eliminate potential conflicts-of-interest.

One more thing: someone ought to ask Gannett (parent company of USA Today) about the number of former employees and executives who now consult the newspaper division, or one of the company's many TV stations around the company. Those consultants have an enormous impact on what you read in a Gannett publication, or see on their TV outlets. You see, the journalism world has its own "mentors;" they just work under a different job title.