The War Inside the Pentagon : Defense-Budget Ax Men Run Into Anger, Reprisals

What began for Col. Sandy Mangold as a prestigious Pentagon assignment to recommend cuts in the Air Force’s $20-billion spacecraft and nuclear forces budget ended up a rancorous odyssey through an institution trying to come to grips with an austere future.

Mangold thought the need for huge spending cuts was compelling, but when he advocated canceling programs favored by senior Air Force officials--such as the Milstar satellite system and the Titan IV rocket--an angry general told him: “You are not one of us.”

The world crashed down on the 45-year-old colonel last year, when Air Force investigators received anonymous allegations that he had pressured a contractor to give a friend a job, and had forced a subordinate to house-sit for him.

In a suit recently filed in Virginia state courts, Mangold charged that he was the victim of a conspiracy of Air Force officials and defense contractors attempting to use phony accusations to displace him and thwart his proposed budget reductions.

After the allegations were made, Mangold was reassigned, derailing a career that had received high marks. The Air Force formally reprimanded Mangold earlier this month, but the Pentagon inspector general and Congress have begun looking into countercharges that he was framed.

No matter who prevails, Mangold’s case--and others like it--may signal an unsettling road ahead for an institution some critics say is wracked by enmity and fear. A sharp budget ax is going to fall on sacred programs that escaped earlier, undermining military careers, damaging major industrial corporations and eliminating thousands of civilian jobs.

The stresses of making those cutbacks in programs made obsolete by the end of the Cold War are creating an atmosphere of suspicion and distrust never before seen in the defense business.

The venomous nature of these budget battles is leading some experts and critics to say that rational decisions will be harder to reach, especially at a time crucial to the nation’s defense posture.

“The procurement system has always resisted nonconforming opinions, but in today’s very harsh environment, nonconformists are getting their heads handed to them,” said Loren Thompson, a Georgetown University defense expert. “The system has a way of making you shut up.”

Many officials defend the procurement system. They say the reductions have not diminished its integrity. Darleen Dryun, the Air Force’s deputy assistant secretary for acquisition, said the formal budget process is handling the task of cutbacks well.

“We have a pretty open system within the Defense Department and within the Air Force,” Dryun said. “If somebody doesn’t feel that something is being presented in the right fashion, there is plenty of opportunity to raise that issue.”

Ever since Defense Secretary Caspar W. Weinberger refused to concede one dollar of defense spending after the Pentagon budget peaked in 1985, the agency has been loath to make its own cutbacks. And within each service, officials have staunchly defended their turf.

But the tendency to defend every large program could backfire and force the Pentagon to make even deeper cuts, because so much money will have been spent on designing unaffordable weapons.

A recent study conducted by Pentagon analyst Franklin C. Spinney, a frequent acquisition critic, substantiated this risk. The study found that so much money is flowing into developing big-ticket weapons for the future that just 2% of current aircraft inventories are being replaced each year. As a result, the average combat aircraft, in the long run, could be 50 years old before it is replaced, he said.

When the Pentagon conducted a “bottom-up” review last year to adjust its planning for the post-Cold War era, analysts noted how few major systems were cut and how minor were the adjustments to military forces.

In December, however, Clinton Administration officials discovered a $50-billion gap between defense spending and planned funding over the next five years. The gap resulted from overly optimistic assumptions about inflation and a pay raise Congress had granted enlisted personnel.

To many experts, the episode showed that the Defense Department has yet to confront the reality of smaller future budgets.

“There has been a complete administrative breakdown in this building,” said Spinney, an Air Force analyst for tactical aircraft. “The budget has been predicated on continued growth, but now it is coming unglued.”

While civilian employees such as Spinney have freedom to express such candid views, a military officer such as Mangold can quickly fall from grace for expressing similar opinions. In a memo last year, Lt. Gen. John Jacquish, a top Air Force acquisition official, railed at those who break ranks.

“I suggest it is timely and appropriate to remind our people that there is a time to argue a different approach and a time to accept and support the decisions made within the corporate process by those charged with that responsibility,” Jacquish wrote to his subordinates. “It is only destructive of our process if Air Force people or support contractors advocate their personal opinions outside the corporate process, simply because the decision was not the one they wanted.”

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Jacquish was responding to a report leaked to Congress. It had asserted that the Air Force could save $10 billion by updating the Defense Support Program satellite system rather than continuing to develop a new generation of spacecraft that would warn of missile attacks.

The primary advocate of the lower-cost approach was Col. Edward Dietz, the Defense Support Program manager in Los Angeles. Amid the controversy, Dietz was removed from his job and reassigned another with less responsibility. Engineers at Aerospace Corp., who assisted in writing the report, received unfavorable job evaluations as well.

The Air Force investigated allegations by industry executives and Air Force officers that Dietz’s report was discredited and squelched by senior Air Force officials intent on preserving their new-generation program. That investigation found no wrongdoing, but it revealed serious problems in military acquisition.

In his report, Lt. Gen. Marcus A. Anderson, the Air Force inspector general, wrote that the intense competition for future defense funds “is producing distrust, suspicion, breakdowns in communications and ultimately allegations of impropriety, both from within the Air Force and from defense contractors.”

Capt. Timothy L. Rude can attest to that. Rude, an engineer, was the Air Force manager for advanced guidance systems for intercontinental ballistic missiles in San Bernardino. Rude figured that the end of the Cold War had diminished the need for sophisticated guidance devices.

However, when Rude suggested that less sophisticated systems might suffice, at a savings of $150 million, he rankled his bosses. He further angered them when he claimed they had shifted funds for missile programs in violation of federal law, a charge later substantiated by a General Accounting Office audit.

Rude was drummed out of the service a year ago, he said, on charges that he had sexually harassed a female junior officer, which he denies. Rude claims that senior officers coerced the woman into filing the complaint, which said he had sat too close to her in a restaurant booth, touched her knee and asked her for a date.

“In my opinion, this was a convoluted form of reprisal,” he said. “This whole thing came up a year after I reported the waste, fraud and abuse here. The system has gotten pretty corrupt.”

To outsiders, the idea that military officials and private contractors would resort to making phony allegations may seem far fetched. But when billions of dollars are at stake, players in defense procurement “know how to play hardball,” says RAND Corp. vice president George Donohue.

As a young program manager, Donohue recalled discovering that a contractor was altering test data to conceal problems in a weapon. When Donohue disclosed the falsifications, the contractor used its congressional contacts to brand Donohue as an incompetent novice and a menace to national security, he said.

While he survived the incident, he said he learned that “people in this business are always skating on thin ice. When I hear about these things, I don’t find it terribly surprising that people would make false allegations.”

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Donohue doesn’t suggest that lying is widespread, but he says the pressure is becoming more and more intense. Any government or private organization would have a tough time coping with the depth of cutbacks the Defense Department faces.

Pentagon budgets dropped 17% from their peak in 1985 to 1992, and are projected to decline 27% further between 1992 and 1997. Procurement spending has fallen off even more sharply.

Mangold described the system in a recent interview as being “affected by a cancer.” In August, 1992, two months after he was appointed chief of resource allocation for space and nuclear forces, Mangold dropped his first bombshell: He suggested canceling the $27.4-billion Milstar communications satellite. He argued that it was fraught with inadequacies and unnecessary in the post-Cold War era.

Mangold did not have direct authority to cut any program, but his recommendations went to the most senior Air Force officials and carried significant weight. He managed a staff of 38 colonels and lower-ranking officers who examined 250 programs.

Mangold also questioned the Air Force’s increasing use of nonprofit federal research corporations, such as Aerospace Corp. and RAND, which was costing the service upward of $1 billion annually.

The abrupt end came last June, just days after Mangold had been assigned a second tour of duty as team chief. The Air Force’s inspector general opened a probe into whether Mangold had threatened to cut the contracts of Anser Corp., a nonprofit Arlington, Va.-based consulting firm, unless it hired one of his personal friends, according to interviews with Pentagon officials, confidential Pentagon documents and Mangold.

Mangold’s lawsuit alleges that Anser would have been hurt badly by the cuts recommended. He accuses Anser President John Fabian, Vice President Paul Adler and Lt. Col. James Rooney, a former subordinate on Mangold’s staff, of conspiring to file the false allegations, court records show.

Anser officials would not comment. In legal papers responding to Mangold’s suit, the firm denied his allegations and said its officials had made no allegations against Mangold.

It was Rooney who made the allegation that he was ordered to house-sit, according to Mangold, who denies the charge. Rooney’s apparent motive was his allegiance to the Air Force’s space community, which had targeted Mangold as an adversary, Mangold said. Rooney did not return calls asking for his comments.

Mangold denies that he ever coerced Anser, though he acknowledges that he gave Anser officials the resume of a woman he considered to be qualified for a special job. The woman was never hired, and Mangold said he continued to award contracts to the firm until he was reassigned as a planner in June.

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Pentagon investigators say military officials are not barred from recommending an individual for a job. An ethical breach would have occurred only if he had threatened Anser, something Mangold’s friends called unlikely.

“When he worked for me, he was totally honest and loyal and dedicated,” said retired Air Force Gen. Richard Henry, a former commander of the Los Angeles Space and Missile Systems Center. Mangold was Henry’s aide in the 1980s.

Mangold’s case is also under investigation by Rep. John Conyers Jr. (D-Mich), chairman of the House Government Operations Committee, which expects to hold hearings next month into the Mangold and Dietz cases.

“I was viewed as a pariah,” Mangold said. “I said if we really want to take massive cuts, we all have to take our share. There aren’t any team chiefs coming forward now with radical proposals after they have seen what happened to me. My career has been ruined.”

WHAT THE COLONEL WANTED TO CUT

The Milstar satellite system.

The Titan IV rocket project.

The use of nonprofit research firms.