Bloomberg News

Panetta Lets Ex-Missile Defense Chief Keep His Rank

January 03, 2013

Defense Secretary Leon Panetta allowed the former director of the U.S. Missile Defense Agency to retire at his current rank rather than demoting him after the Pentagon’s inspector general criticized his management style.

Lieutenant General Patrick O’Reilly stepped down Nov. 19 as agency head and after 38 years of Army service, including four as a West Point cadet, at the three-star rank.

“Secretary Panetta has determined that LTG Patrick J. O’Reilly” served “satisfactorily in the grade of lieutenant general and should be retired at the grade,” Pentagon spokesman Navy Lieutenant Commander Nathan Christensen said yesterday in an e-mailed statement.

O’Reilly “was transferred to the retired rolls effective Jan. 1,” and Army Secretary John McHugh “concurred with this decision,” Christensen said.

Panetta wrote a letter of reprimand for O’Reilly’s file saying the defense secretary disapproved of his management and conduct at the Missile Defense Agency, according to a defense official who asked not to be identified discussing the personnel matter.

Missile Defense Agency spokesman Richard Lehner said in an e-mail that O’Reilly has “said he would not talk with any reporters.”

The Missile Defense Agency is responsible for developing, fielding and upgrading the nation’s ground- and sea-based missile defense programs. Its top contractors are Boeing Co. (BA:US), Lockheed Martin Corp. (LMT:US), Raytheon Co. (RTN:US), Northrop Grumman Corp. (NOC:US) and Orbital Sciences Corp. (ORB:US)

‘Low Morale’

O’Reilly’s treatment of subordinates hurt the agency, according to a May report by the Pentagon’s inspector general. Witnesses testified that his “leadership style resulted in a command climate of fear and low morale,” it said.

Demoting O’Reilly from three-star to two-star status would have been a career embarrassment and reduced his retirement pay.

The law requires that in order to retire at the three- and four-star level the secretary of defense must certify to Congress that an officer has served on active duty satisfactorily.

The inspector general recommended that McHugh consider “appropriate corrective action” against O’Reilly, because he “engaged in a leadership style that was inconsistent” with military ethics regulations, according to the report by the watchdog office dated May 2 and released in July.

In comments contained in the inspector general’s report, O’Reilly disputed its findings, questioning the objectivity and accuracy of witness testimony and denying that he engaged in many of the practices described.

The inspector general said “multiple witnesses testified that LTG O’Reilly yelled and screamed at subordinates in both public and private settings, such as video teleconferences and staff meetings.”

Although one employee told investigators O’Reilly’s approach “helped ensure people were prepared and had their facts straight” during meetings, his style “was detrimental because staff could not withstand that type of pressure for long periods,” the inspector general’s investigators were told.

To contact the reporter on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net


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