President Bush on Tuesday named a retired Army lieutenant general and executive of a firm that earns most of its revenue from federal veterans programs to head the troubled Department of Veterans Affairs.
The nomination of Dr. James B. Peake, 63, a decorated Vietnam veteran who was the Army’s chief medical officer for four years, was announced by Bush in the Roosevelt Room of the White House. If confirmed by the Senate, Peake will replace James Nicholson, who stepped down Oct. 1.
Peake will insist on “the highest level of care” for veterans, Bush said, adding that the retired lieutenant general, thanks to injuries suffered in Vietnam, “understands the view from both sides of the hospital bed.” He said Peake would be the first physician and the first general to be named to the cabinet post. Peake’s mother and father served in the military medical system.
Peake is the medical director, chief operating officer and a director of QTC Management, a Diamond Bar company that under two current contracts with the VA performs thousands of physical exams per year on veterans seeking disability assistance. Under one contract alone, QTC could earn more than $1 billion in fees for performing those exams through 2008.
Recently, QTC won a smaller contract for $4.6 million per year to examine veterans in Louisiana and New Mexico. Bids for yet another contract covering six cities, including St. Louis, were due by Monday.
Emily A. Lawrimore, a White House spokeswoman, said Peake would “sever all ties to QTC to avoid any conflict of interest.”
Anthony J. Principi, who preceded Nicholson as VA secretary, serves as QTC’s chairman and previously was its president. He also recused himself from any actions relating to QTC during his tenure, which ended with his resignation in early 2005. Principi, who also is senior vice president for Pfizer, the drug company, sent letters of endorsement for Peake’s nomination to leaders of the Senate Veterans Affairs Committee, which will be voting on his nomination.
In addition to the contracts with the VA, QTC has won contracts with the state of California and the U.S. Department of Health and Human Services. The VA contracts, however, account for more than half of its revenues.
Peake’s appointment comes as the veterans agency is trying to recover from widespread criticism for poor care provided to some veterans returning from Iraq and Afghanistan. Peake’s predecessor also faced an outcry over the theft of an agency laptop computer containing personal records of thousands of veterans. The computer was later recovered, its contents apparently untapped.
“Fundamentally, I am a soldier,” Peake said in brief remarks. He added that “there’s a lot of work to be done” and referred to the VA’s current disability system as a relic from 1945.
A West Point graduate, Peake was awarded a Silver Star, a Bronze Star and a Purple Heart for his service in Vietnam, where he was wounded twice. After attending medical school he continued his career in the Army, serving at military hospitals in Washington, Texas and Hawaii.
He was named the Army’s surgeon general in 2000 and retired in 2004 to serve as vice president of Project Hope, a nonprofit international health foundation. He joined QTC last November.
Though Peake stepped down from his post more than two years before the current controversy, his role as the Army’s chief medical officer for four years is not likely to escape scrutiny, as a member of the Senate Veteran Affairs Committee made note.
In a statement following the announcement, Sen. Patty Murray (D-Wash.) said, “Given Dr. Peake’s past posts running the Army healthcare system, he will have serious and significant questions to answer about failed preparations for our returning wounded warriors.”
Noting recent “horror stories” about poor care of returning veterans, Murray said, “I will want to know what role, if any, Dr. Peake played in the failures of the system.”
As to whether he bore any responsibility for conditions at Walter Reed Army Medical Center, Lawrimore, the White House spokeswoman, said that the Army’s 187 medical facilities “performed superbly” while he was surgeon general.
A spokesman for Murray said the senator also will be questioning Peake about his involvement with QTC.
“Given the senator’s concern about the privatization of VA services, Gen. Peake’s history at QTC is certainly something she will be asking questions about as the confirmation process moves forward,” said Murray’s press secretary, Matt McAlvanah.
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Dr. James B. Peake
Experience: Chief medical director and chief operating officer, QTC Management Inc., 2006-present; chief operating officer and executive vice president, Project Hope, 2005-06; Army surgeon general and commander, U.S. Army Medical Command, 2000-04, when he retired with rank of lieutenant general.
Education: B.S., United States Military Academy, 1966; M.D., Cornell University, 1972; graduate, U.S. Army War College, 1988.
Source: Associated Press