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.

May 1997By Comments

JOHN DALTON, THE SECRETARY OF THE NAVY, returned to his home state of Texas on a blazing hot day last fall to preside over the commissioning of the U.S.S. Gonzalez. The destroyer was named for Sergeant Alfredo Gonzalez, who grew up in the Rio Grande Valley town of Edinburg, joined the Marines, and was sent to Vietnam. He was killed there after fighting with such valor that he was posthumously awarded the Congressional Medal of Honor. Nearly the whole town of Edinburg came to the naval base at Ingleside for the ceremony, including his mother, Dolia, who had raised him on her own. Twenty-nine years after her son’s death, Dolia still cries when she talks about it, and she broke down at the microphone. Afterward Dalton read aloud a letter to her from President Clinton: “All Americans owe a debt to you. With the commissioning of this ship, we hope to pay a small portion of that debt.”

With its mix of patriotism, politicking, and pageantry, the dedication was a vintage Dalton moment, and it showed why this is the perfect time for a person like him to be the Secretary of the Navy. The job, a civilian post appointed by the president, has been more ceremonial and more political following post—World War II reorganizations of the Department of Defense. Control of military operations—such as the movement of vessels and the firing of weapons—was placed in the hands of uniformed officers, while the civilian leader retained control over personnel, budget, and training. A large part of Dalton’s job also involves lobbying Congress and the public. As if fate were conspiring to push the nature of the job even further in that direction, since the 55-year-old Dalton took over in 1993 the Navy has been consumed by a series of fire storms: the Tailhook sexual-harassment scandal, the suicide of chief of naval operations Mike Boorda, and cheating among midshipmen at Annapolis. “I was troubled by the fact that I knew the Navy was better than it was being portrayed in the news,” says Dalton. For him, politics is not a dirty word; he was a key fundraiser for the Democratic party from the mid-seventies until he accepted his post as Secretary. And the ceremonial aspects of the job clearly come naturally to him. If Dalton lacks the charisma of a Colin Powell, the worst that anybody says about him is that he is bland (Dalton is famous among the Washington press corps for giving the same speeches over and over again). But then again, blandness can serve as an antidote to scandal. In other words, Dalton seems well suited to the increasingly politicized role he has taken on. This may in part explain why, even though his record isn’t spotless (he once owned a savings and loan that failed), his tenure has led to persistent rumors that he intends to come home to Texas one day and run for office.

After the commissioning of the Gonzalez, Dalton and his entourage boarded an airplane to fly from Ingleside to San Antonio, where he was scheduled to address the local chapter of the World Affairs Council, a nonprofit group that studies foreign policy. During that flight and a subsequent hop to Waco, Dalton told me about his upbringing. He grew up in Shreveport, Louisiana, where his father was a trainmaster for the Kansas City Southern Railway Company. He attended the Naval Academy because of his admiration for the Navy football team and his uncle Roy Bale Dalton, a highly decorated Navy pilot in World War II. After graduating from the Academy in 1964, John served on the U.S.S. Blueback, one of the last diesel submarines used by the Navy.

In 1965 Dalton applied to the prestigious nuclear submarine program. Following a rigorous screening process, he was assigned to the U.S.S. John C. Calhoun, where he was responsible for the vessel’s nuclear reactor and propulsion system. But he didn’t like the work. “I wasn’t any good at being a nuclear engineer,” he said. “I’m not that technically oriented, and this was highly technical stuff. I was able to get through, but it was a struggle.”

But Dalton soon discovered something he was quite good at: playing the stock market. In 1969, deciding that he enjoyed investing more than engineering, Dalton left the service to get his master’s degree in business administration from the Wharton School of Finance and Commerce at the University of Pennsylvania, one of the country’s top MBA programs. From there he went to work selling securities for the Dallas office of the investment banking firm Goldman, Sachs. That was the beginning of his career as a businessman, which, many years later, would lead him back to the Navy.

We landed in Waco, and Dalton broke off our conversation. He was visiting the Raytheon E-Systems’ Airborne Systems Division, where he was scheduled to address the employees, greet some local politicians, and meet with a group of businessmen. Dalton met the business contingent first, then hustled over to a large hangar where a crowd of Raytheon employees was assembled. “The men and women of the armed forces count on you, and you deliver,” Dalton told them. “That’s your reputation.” After his speech we headed back to the airplane, which was waiting to take us to Dallas, where the Secretary would have lunch with some up-and-coming power brokers and dinner with Mayor Ron Kirk. As he said good-bye, Dalton shook hands with the Raytheon executives and local politicians, handing each one a large coin stamped with the flag of the Secretary of the Navy.

Once we were settled into our seats again, he resumed the narrative of his career. In 1975, while at Goldman, Sachs, Dalton met Jimmy Carter, who was in the middle of what appeared to be a Hail Mary pass attempt at the White House. They had a lot in common; both were Southerners, both had attended the Naval Academy, and both had served on nuclear submarines. The Democratic party apparatus in Texas had firmly aligned behind Lloyd Bentsen, so when Dalton offered to assist with Carter’s campaign, there was plenty of room on the bandwagon. Dalton worked to get Carter on the ballot in Texas and raised money for him.

After Carter won the presidency, he tapped Dalton to be the president of the Government National Mortgage Association, better known as Ginnie Mae. Dalton was only 35 years old. “Frankly, I was not qualified for that job,” he said. “All I knew about the mortgage business was that I had one.” But he learned fast, visiting Capitol Hill as often as he could. Networking was one of his skills: Dalton liked making new contacts and watching their value grow. It was the human equivalent of investing in the stock market.

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.”

Related Content