Here’s an intriguing detail from the new 685-page tome on Donald Rumsfeld, Bradley Graham’s By His Own Rules: The Ambitions, Successes, and Ultimate Failures of Donald Rumsfeld: Several Rumsfeld associates say the defense secretary didn’t order any cuts of major weapons programs early in his tenure because of financial stakes he held in the defense business.
Rumsfeld valued his personal fortune at between $50 to $210 million at the beginning of the Bush Administration. The problem was many of the securities he held were in companies that did business with the DOD, which could put Rumsfeld in violation of government ethics rules.
So Rumsfeld had to divest some of these assets — a whole lot of them, it turned out. And during that process, which went “slowly,” Graham reports, Rumsfeld simply put off canceling any major weapons programs, a move some on his staff apparently expected him to make. Rumsfeld’s specific thinking is unclear.
Graham writes: “Several of Rumsfeld’s associates saw the secretary’s inclination to put off big cuts early on as a direct result of his own financial situation.”
Now, it’s not entirely clear here whether Rumsfeld was worried his policy decisions would cause his stakes to gain or lose value, or if he just wanted to avoid any conflict of interest. But whatever his reasons, it sure seems like a bad way to make decisions about the national military budget.
Here’s how Graham describes the episode:
Until Rumsfeld had things all figured out, he appeared reluctant to move ahead with any major decisions on weapons programs. For all his bluster, Rumsfeld was at the same time strikingly averse to risk, even though the cancellation of a major problem could have underscored the seriousness of his transformation agenda.
Several of Rumsfeld’s associates saw the secretary’s inclination to put off big cuts early on as a direct result of his own financial situation. Rumsfeld had taken steps to sell interests he had in firms that did business with the Pentagon so as to avoid any appearance of a conflict of interest. During his Senate confirmation hearing in January 2001, Rumsfeld had said he owned “a large number of investments and activities that would have to be characterized as ‘conflicts’ were they to be maintained during service as secretary of defense” and had promised to divest them.
But the divesture process was going slowly because a considerable amount of Rumsfeld’s wealth was in private partnerships and closely held corporations that were difficult to sell. Under the circumstances, Rumsfeld told associates he was hesitant to take significant action on defense acquisition programs.