Jimmy Carter 
Politics
Naval Gazing
In four years Texan John Dalton has distinguished himself as U.S. Secretary of the Navy— though it hasn’t all been smooth sailing.
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In 1979 Dalton served as the national treasurer of Carter’s reelection campaign, and he met Bill Clinton for the first time while raising money in Arkansas. Even though Carter lost the election, before leaving office he appointed Dalton to a seat on the Federal Home Loan Bank Board, the now-defunct body that used to regulate the savings and loan industry. By 1981, however, a number of Reagan appointees had joined the board, and Dalton decided it was time to leave Washington. He returned to Texas to run the real estate division of the San Antonio—based Gill Companies, and three years later he went into business for himself, buying the Seguin Savings Association. Dalton, like many other businessmen at the time, believed in the unstoppable progression of the price of oil and land, and his S&L loaned a lot of money on the assumption that the local economy’s fantastic expansion would continue unchecked. It did not, of course, and in 1988 Seguin Savings was declared insolvent. Newspaper reports put the cost at $100 million (though Dalton says the figure is closer to $15 million), and federal regulators cited him for gross negligence. “I lost just about everything I owned,” said Dalton. “It was what I refer to as my character-building experience.” It was the nadir of Dalton’s career. After the S&L debacle, he opened a San Antonio office for a Dallas merchant banking firm, and in 1991 he left to join the San Antonio office of Stephens, Inc., a well-known investment banking firm based in Little Rock.
We stopped our interview when the Secretary’s plane landed in Dallas, and he resumed his schedule. After lunch Dalton was whisked over to the Bell Helicopter plant, halfway between Fort Worth and Dallas, where a large crowd of employees was waiting. Once again Dalton took the opportunity to display his trademark ability for ceremony and old-fashioned politicking (and for repeating himself). “The men and women of our armed forces count on you, and you deliver,” Dalton told them. “That is your well-deserved reputation.” The Secretary noted that he had helped salvage funding for the V-22 Osprey, a unique hybrid aircraft built by Bell that is half helicopter and half airplane. At the end of his speech, Dalton donned a dark green jumpsuit, a gold helmet, and big black boots to take a test ride in a demonstration model of the V-22. He climbed into the craft on a nearby runway, and as photographers fluttered around it like hummingbirds at a feeder, he gave them a prolonged thumbs-up.
After Dalton’s flight, it was time for us to leave. Again the Secretary pumped the arms of the politicians and the businessmen assembled on the tarmac and slipped each notable a stamped coin. As I watched the ritual once more, it came to seem an apt metaphor for the modern Secretary of the Navy: dispensing money and attention in a fashion that keeps people happy.
Speaking on the phone a week later, Dalton explained how he surmounted the demise of his S&L and returned to Washington; as in so many cases of political alchemy, the catalyst that effected the transformation was money. Dalton had become friendly with Henry Cisneros as they had worked to support various statewide Democratic candidates, and when Bill Clinton decided to run for president, Dalton served as the Bexar County finance chairman for his campaign. Cisneros was asked to help form Clinton’s administration, and he spoke to Dalton about the possibility of returning to Washington. “I told him I would be interested in something meaningful,” said Dalton. “Henry said, ‘Well, the Cabinet is pretty well spoken for. Is there anything else that would interest you?’ I said, ‘Yes, the one thing I’d be interested in is being the Secretary of the Navy.’”
Masochistic as it may seem—Tailhook was already front-page news—Dalton said he wanted the job because he felt that the Navy’s reputation was being unfairly damaged by the scandal and that the institution needed a defender. However, Dalton’s reaction to Tailhook has been the most controversial aspect of his tenure, largely because some uniformed officers maintain that he has not done enough to defend the Navy against its critics. Shortly after being appointed, Dalton called for the resignation of Admiral Frank B. Kelso II, then the chief of naval operations, the top uniformed officer in the Navy. Kelso, a 37-year veteran who was vocal in urging that women in the military be provided with greater opportunities, had attended the infamous convention of the Tailhook Association, a group of aircraft-carrier aviators, in Las Vegas. Kelso was never accused of witnessing any inappropriate behavior, but because he had been there and arguably should have exercised better leadership, Dalton sought to force him out of office. Secretary of Defense Les Aspin subsequently reversed Dalton’s recommendation, and Kelso kept his job until his retirement six months later. Clinton appointed Admiral Mike Boorda to replace him.
While Kelso escaped relatively unscathed, other high-ranking officers, such as Commander Robert Stumpf, weren’t so lucky. Stumpf, a popular Gulf War hero, used his F-18 to fly to Nevada, where he attended a Tailhook party in Las Vegas that featured two strippers. Apparently because of an innocent bureaucratic snafu, no record of Stumpf’s appearance at Tailhook was noted in his personnel file, as required by Congress, and in 1994 the Senate Armed Services Committee approved his promotion to captain without knowing about his appearance at the convention. When Navy officials discovered the mistake, they notified congressional leaders, and Dalton wrote a letter backing Stumpf. Senators Strom Thurmond and Sam Nunn announced that they now opposed the promotion, and Dalton responded by removing Stumpf from the list of officers to be promoted and initiating a lengthy review to determine what should be done. Stumpf left the Navy in the middle of the review. And on May 16, 1996, the Navy, already reeling from the effects of these inquiries, had to face a shake-up of an entirely different order: After news organizations threatened to reveal that Mike Boorda had inappropriately worn certain decorations, he committed suicide.
In the wake of Boorda’s death, uniformed personnel who vigorously resented what they viewed as Congress’ interference became even more vocal in their complaints. Many thought Dalton should have done more to bring an end to the protracted investigations and protect outstanding officers from having their careers derailed. But rather than directly butting heads with congressional leaders, Dalton prefers to defend the Navy by subtle cheerleading. This is not to say that Dalton has entirely neglected substance for public relations; after conducting a thorough inquiry into recent instances of sexual harassment, he instituted a policy that attempts to curb alcohol abuse, which he feels is at the root of many recent problems.
Nevertheless, cynics in Washington believe that much of the time John Dalton spends barnstorming the country on behalf of the Navy is also time spent barnstorming the country on behalf of John Dalton. According to this view, serving as Secretary is a means of borrowing honor, even in the post-Tailhook era, because a stint as Secretary of the Navy is supposed to cleanse Dalton of the stain associated with having owned a failed S&L. Dalton will presumably leave his post at some point with an immaculate reputation, ready to enter the private sector at some suitably elevated level or run for office in Texas. He could well make a strong showing in a statewide race; he has the résumé and the fundraising chops, if not the name recognition, to compete with top Democrats like Garry Mauro, Dan Morales, and John Sharp. But not surprisingly, Dalton is holding his cards close. In February at a breakfast meeting of state legislators in Austin, I asked him about his ambitions, and like a true politician, he replied, “Right now I’m concentrating on being the best Secretary of the Navy I can be, and that’s a full-time job. I really don’t know what I’ll do when I leave this job.”
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