Placing his other hand on my arm, he said gently, "Don, you are not going to like everything in this."

I asked why.

"Because I placed responsibility for our failure to get a SALT agreement on you and Brezhnev," he replied.

I smiled. "Well, Mr. President," I said, "I can live with that."

CHAPTER 17

The 1976 Defeat.

The year 1976 saw not only the two hundredth anniversary of the Declaration of Independence but also a surprisingly close presidential election. The attraction of a virtually unknown candidate for the Democratic nomination for president, Jimmy Carter, resonated with many voters in a way that it might not have in any other year. His simple promise, "I'll never lie to you," appealed to a country still furious over Watergate and Vietnam.

Gerald Ford, despite being burdened by the characterization of his tenure as the Nixon-Ford presidency, had become a solid, decisive executive. He was no longer the surprised occupant of a shattered, discredited presidency that he had to rebuild. Now it was his office, and he wanted to keep it.

Reagan's run for the Republican nomination continued to gain traction. He was winning a number of states and putting Ford on the defensive. At one point, the President's close advisers considered the possibility that President Ford might lose the Michigan primary. It was never discussed publicly, of course, but if Ford were rejected by Republican voters in his home state, the embarra.s.sment could leave the President little choice but to consider dropping out of the race. Fortunately Ford won the Michigan primary convincingly.

Ford and Reagan then engaged in a series of primary duels, each in search of the magic number of delegates needed to clinch the nomination. By the time of the Republican National Convention in Kansas City, where one of the two would be nominated, it looked like Ford would win, and the process of selecting a replacement for Rockefeller began.*

For the third time in three years, I found myself being discussed for the vice presidential nomination. Ford again asked me to fill out the extensive paperwork, including the dozens of pages of disclosure forms required for background and financial checks. I knew well that I made no more sense as a running mate for Ford than I had the last time he'd considered me.

Some weeks before the Republican convention, my mother sent me a newspaper article that indicated that the medical therapy of choice for tonsillitis in the 1930s was radiation treatment, which could lead to cancerous thyroid tumors. She told me that I had been radiated for tonsillitis when I was a child. After I read the article, I showed it to the White House doctor, who examined me and said he saw no problem. Several weeks later, as I was shaving, I noticed a bulge in my throat. Knowing that it could be a malignant tumor, I decided to schedule surgery before the Republican National Convention was to begin on August 16, 1976, further eliminating me from serious vice presidential contention.

I was at Bethesda Naval Hospital recovering from the surgery when d.i.c.k Cheney called me from Air Force One. He and the President were on their way to the Kansas City convention. Because of the operation, I wasn't able to talk yet, so Joyce took the call. d.i.c.k asked how I was doing, and then pa.s.sed along a message from the President.

"Tell Don that we're going to win the nomination and keep him in his job," Cheney said. It was a graceful way to tell Joyce and me what I already believed. I was not going to be Ford's vice presidential choice. His selection turned out to be a friend from my days in Congress, Bob Dole of Kansas.

At the convention, President Ford defeated Governor Reagan on the first ballot by 117 votes. A narrow victory for a sitting president, but it was preferable to the alternative.

With the economy in recession, the pardon of Nixon still a sore point, and a long, heated primary campaign just over, Ford started the fall campaign behind the Democratic candidate, Georgia's governor, Jimmy Carter, by thirty points in the polls. This was just two years after many of the most prominent political reporters and experts in Washington had proclaimed the then likely Ford-Rockefeller ticket as virtually unbeatable.2 But Ford wasn't giving up. With the a.s.sistance of Cheney, a Texas politico named Jim Baker, and the excellent campaign team they put together, Ford battled his way back into contention. But Ford wasn't giving up. With the a.s.sistance of Cheney, a Texas politico named Jim Baker, and the excellent campaign team they put together, Ford battled his way back into contention.

On September 23, 1976, in Philadelphia, Ford and Carter met for their first presidential campaign debate. Most voters thought Ford won that encounter. He seemed knowledgeable and likable, while Carter appeared vague on the issues.3 It was on foreign policy that the second debate, and perhaps the election, turned. During the encounter, reporter Max Frankel began to ask Ford a question, "Mr. President, I'd like to explore a little more deeply our relationship with the Russians.... We've virtually signed, in Helsinki, an agreement that the Russians have dominance in Eastern Europe..."

"There is no Soviet domination of Eastern Europe and there never will be under a Ford administration," the President declared.

Frankel was visibly startled. "I'm sorry, could I just follow-did I understand you to say, sir, that the Russians are not using Eastern Europe as their own sphere of influence in occupying most of the countries there and making sure with their troops that it's a Communist zone?"

Ford would not back down. "I don't believe, Mr. Frankel, that the Yugoslavians consider themselves dominated by the Soviet Union," he said. "I don't believe that the Romanians consider themselves dominated by the Soviet Union. I don't believe that the Poles consider themselves dominated by the Soviet Union."4 I understood what Ford was thinking. Every year during the Cold War, members of Congress would commemorate Captive Nations Week. This was an opportunity to express America's solidarity with those who lived in nations trapped behind the Iron Curtain. Ford, along with other congressmen representing districts with large numbers of Eastern European immigrants and their families, would recognize Captive Nations Week by describing the nations in the Eastern Bloc as being captive to the Soviet Union, and by adding that we refused to concede that those nations would be permanently subjugated. "Permanently" was the operative word Ford had left out in his response to Frankel in the debate. Without the context of Captive Nation's Week, it came across as if the President was naive about foreign policy, and that he did not know or would not admit that the Soviet Union was subjugating the Eastern Europeans, of which he was of course well aware.

I immediately knew it was a disaster. I called Cheney and urged him to get the President to correct himself fast. Apparently Cheney and Scowcroft had already tried repeatedly but failed. The next day, Ford agreed to issue a clarification, but the damage had been done.

Two weeks later a Pentagon public relations fias...o...b..ought the Department of Defense to the center stage of the campaign, if only briefly. I had formed a close working relationship with the chairman of the Joint Chiefs, General George Scratchley Brown, who had a distinguished military career.* But unlike many military officers who reach high posts in the Pentagon, Brown had little patience with bureaucratic procedures and little political polish. He tended to say what he thought, including things that, on reflection, might have been better left unsaid. But unlike many military officers who reach high posts in the Pentagon, Brown had little patience with bureaucratic procedures and little political polish. He tended to say what he thought, including things that, on reflection, might have been better left unsaid.

In April 1976, Brown had what he a.s.sumed was a private conversation with a cartoonist. He mused that the Shah of Iran, a U.S. partner, had an insatiable appet.i.te for weapons because he had "visions of the Persian Empire." He said that the military capabilities of Great Britain were "pathetic," with nothing more than "generals and admirals and bands." Brown gave a few other choice opinions, including some offensive comments about U.S. support for Israel. Many months later, a few weeks before the presidential election, his remarks made their way to the press. I winced when I read them.5 Jimmy Carter demanded that Brown be reprimanded. Ford called me and said we needed to decide quickly on whether to keep Brown or fire him, making it clear he leaned to the latter.6 "Let me try to handle it," I said. "Give me one more news cycle, and I will see if I can put this behind us." I called in Brown and told him that the President and I both believed the things he said had been inappropriate, but that Ford had given me a brief opportunity to see if I could help the situation.

I proposed that we go down to the Pentagon press room and give a brief statement, making clear that we understood the comments were regrettable. Brown agreed and we headed to the lion's den.

I told the Pentagon press corps that General Brown's comments were inappropriate, and that "the absence of a reprimand should not be taken as an endors.e.m.e.nt of obviously inelegant phraseology."7 Brown stepped forward after a reporter asked, "Is there any suspicion at all in your mind that there may be something political about the timing in all this? What do you think?" The reporter posed this question since Brown's comments had not appeared in the press until six months after he said them, right before the presidential election.

"I'm not in a position to judge," Brown replied. "I do think it's a little strange..." I had no idea what Brown was about to say next, but I had a sinking feeling it wouldn't do him any good. So I stepped up next to him, put my arm around him, and with a big smile I said, "He's not in a position to judge, he's exactly right, I agree with him completely."8 General Brown and the a.s.sembled reporters broke out in laughter. And with that, I ended our press conference, and the General and I made our escape. The story died, George Brown remained as chairman of the Joint Chiefs of Staff for the remainder of his full term, and a fine officer's career was not tarnished by an early dismissal or presidential reprimand.

On the night before the 1976 presidential election, Joyce and I attended a dinner at the home of the legendary publisher of the Washington Post Washington Post, Kay Graham. Another guest at the dinner was the Democratic National Committee and Carter campaign chairman, Bob Strauss. As the evening drew to a close, the Strausses and the Rumsfelds were leaving the dinner at the same time.

"You know, Don," Bob said, "the only thing worse than losing tomorrow would be to have it go on one more day."

I knew what he meant. The election contest-from the beginning of the Reagan challenge to the general election fight against Carter-seemed to have gone on forever.

It was not until the early hours of the morning after the election that NBC finally declared Governor Jimmy Carter the winner. The closeness of the result-two percentage points in the popular vote-made Ford's loss even more painful. After campaigning tirelessly, the President's voice gave out on election night. As a result, Betty Ford had to read his telegram of congratulations to President-elect Carter, with the Ford family gathered around them.9 I felt terrible about the election loss-for a friend and a fine leader. I had no doubt that Ford would have proven to be a superb president in the next four years if he'd been elected. His margin of defeat was so narrow that almost anything might have changed the outcome. I couldn't help but wonder what might have been if he had made a fresh start when he first came in with visible high-level personnel changes that would have established a distinctive Ford presidency in the public's mind, or if Ford had selected someone other than Rockefeller as vice president, or if the Nixon pardon had been handled differently. Or what if he had achieved a politically expedient SALT agreement with the Soviets? Or if he had avoided the mistake about Soviet domination of Eastern Europe in the debate? But that was not how Gerald Ford thought. He looked forward, not back.

On November 5, 1976, three days after the election, Ford held a cabinet meeting. "I don't want any eulogies," he said. "We had a good team, and I was proud of you." Ford said we had an obligation to the American people to carry on the same efforts until his last day in office, on January 20, 1977. After about thirty minutes, the meeting ended with a round of warm applause.10 Gerald Ford could be proud of his tenure as president, brief though it was, for many reasons. He was an honest, open, hardworking statesman who had the qualities the nation desperately needed to exorcise the ghosts of Watergate and Vietnam. He was a steady commander in chief during the Cold War who pushed for greater defense investment. The presidency as an inst.i.tution was in jeopardy after Nixon's resignation, and Ford had righted the foundering ship of state. Backlash over the Watergate scandal might have resulted in hasty, unwise restrictions on executive powers that could have had lasting adverse repercussions for our country, but President Ford prevented that from happening. He preserved the integrity of the office and handed it intact to his successor.

As saddened as I was over Ford's loss, I was more troubled by the man who would replace him. Jimmy Carter, a one-term governor from Georgia, would become president of the United States. On November 22, 1976, President-elect Carter asked to meet with me at Blair House, across Pennsylvania Avenue from the White House, to brief him and his national security team on defense matters.11 Although I believed Carter was an intelligent man, and one who cared about the country, I worried that he seemed not well prepared for the presidency. Although I believed Carter was an intelligent man, and one who cared about the country, I worried that he seemed not well prepared for the presidency.

At our meeting, the Georgia governor was pleasant, and I saw a few flashes of his famous grin. He opened our meeting with a list of items he wanted to discuss, including the budget, decisions pending at the Defense Department, and an a.s.sessment of the military balance and trends.12 Throughout the meeting Carter relied on notations on a piece of paper in front of him. There was little extemporaneous give-and-take. Throughout the meeting Carter relied on notations on a piece of paper in front of him. There was little extemporaneous give-and-take.

At one point Carter asked a question about how he would know a ship was moved once he ordered it. It struck me as unusual in that this was a man who had graduated from the Naval Academy. I explained the process of issuing an order to the chairman of the Joint Chiefs who would then pa.s.s it down through the relevant commands and then down to captain of the ship. He asked again, "But how can you be sure it actually has moved?" I told him the first time it doesn't move, you fire those responsible. It was a strange exchange, suggesting a president focused more on details than strategy. It also seemed to signal someone with reservations about the military.

After the meeting, I told my staff that the President-elect was going into the toughest job in the world, and even though it might be tempting, I did not want them discussing anything about our meeting for a period of time. I thought Carter deserved a fair shot at success in his new responsibilities.

On December 10, 1976, I had a second meeting with the President-elect. He asked to come to the Pentagon to meet with the Joint Chiefs of Staff. He brought with him Senator Walter Mondale, the vice presidentelect.

We provided Carter and his designated national security team with a topsecret briefing on Soviet capabilities. Our briefing had given many people, including a number of Democrats, considerable pause about the Soviet Union and its intentions. But if the briefing had a similar effect on Carter, he hid it well. After the session was over, the President-elect asked that I stay behind for a few minutes, along with Chairman Brown and the members of the Joint Chiefs.

When the room was cleared, Carter told us with a sense of excitement that he had received an "unprecedented" communication from the Soviets about their interest in an arms-control agreement. What led Carter to consider the contents unprecedented he did not say. Carter then informed us that he wanted negotiation rather than confrontation with the Soviet Union. The President-elect asked the members of the chiefs to give him a detailed appraisal of the flexibility he would have in negotiations with Brezhnev.13 While I thought it appropriate that he was so straightforward with the chiefs about his intentions, focusing on how much the United States could concede to the Soviets struck me as worrisome, especially in light of the briefing he had just received. While I thought it appropriate that he was so straightforward with the chiefs about his intentions, focusing on how much the United States could concede to the Soviets struck me as worrisome, especially in light of the briefing he had just received.

My impression of Carter in action was of a new president determined to change much of what had been done in the Nixon and Ford years. It seemed his approach would be that faucets on were to be turned off, and vice versa. It was not an uncommon start to a new administration but it could be costly for the country if carried to an extreme. An example of this tendency was Carter's prompt canceling of the B-1 bomber program, the construction of which I authorized as one of my final acts as secretary of defense. This supersonic, swept-wing replacement for the aging, workhorse B-52 bomber carried a high price tag, but its flexibility and its capability to serve our country's needs for many decades convinced me it was a sound investment.*

Soon after Carter's inauguration, Joyce and I went with d.i.c.k and Lynne Cheney on a brief vacation on the island of Eleuthera in the Caribbean. After the hectic years following our meeting at Dulles airport in August 1974, we were starting to unwind. It was a pleasant transition for us all. We played tennis, boated, and spent time in the sun talking about life. Cheney grilled steaks and made chili.

After a long and tumultuous journey, we were out of government and unemployed. Our thoughts turned to the future. Though President Ford urged me to stay involved in politics, I was ready to move into the business world.15 d.i.c.k was thinking about a number of possibilities, including elective office. The only thing I knew for sure was that Joyce and I were heading home to Illinois. d.i.c.k was thinking about a number of possibilities, including elective office. The only thing I knew for sure was that Joyce and I were heading home to Illinois.

PART VII

Back to Reality"Washington, D.C. is sixty square miles surrounded by reality."-As quoted in Rumsfeld's Rules

Riyadh, Saudi ArabiaNOVEMBER 18, 1983 Saudi Arabia's King Fahd was one of the forty-five sons of Ibn Saud, modern Saudi Arabia's founder. Fahd had ascended to the throne only a year earlier. One of the wealthiest men in the world, he received me amid plush furnishings, floors of marble, and walls etched in gold.

I had been the CEO of G. D. Searle & Co., a pharmaceutical company, for nearly five years when I took a leave of absence to serve as President Reagan's Middle East envoy. In that capacity I went on a mission to the Kingdom of Saudi Arabia, where I sought the ruling family's a.s.sistance on the crisis in Lebanon.

As we began our official talks, the Saudi king's servants brought tea out to us in the ornate formal throne room. I had quickly learned on my trips to the region that it was wise to ration my tea intake during these long meetings, and after a sip, I held my small cup aside.

After a few moments I looked up to find King Fahd staring at me with a puzzled look. He had noticed I wasn't drinking my tea, and like a good Middle Eastern host wanted to make sure it was to my liking. He thought I might want a sweetener.

"Canderel!" he called out, his arms thrust upward, accentuating his exuberance. My worlds collided.

Canderel was the European brand name for Equal, the tabletop sweetener produced by Searle that seemed like it had consumed much of the last five years of my life. Searle had waited for close to a decade for approval from the U.S. Food and Drug Administration to be able to market it. Now I was being offered it in a royal palace many thousands of miles from Searle headquarters in Skokie, Illinois.

Prince Saud, the young, Princeton-educated member of the royal family who was the new foreign minister, rose from his chair and walked over with a small dispenser of our company's new product.

I suspect King Fahd had no idea of my connection to the sweetener. But with a smile on his face, he said that his wife had him use it in his tea. The king, a large, joyful man, proclaimed proudly that he had slimmed down by several kilos as a result. His still sizable presence shook as he said it.

I don't recall what I said in response, but I certainly remember what I thought. I would have given anything for a video of the scene to use as a commercial. It would have been an award winner.

G.D. Searle was again becoming a healthy presence in the industry, thanks in part to the no-calorie sweetener in Equal and Canderel that over time became broadly known as NutraSweet. But it had only happened after a long period of legal uncertainty, as well as a revised business strategy. We restructured the company to position Searle back on an upward path. When I arrived there in the spring of 1977, the company's future was anything but bright.

CHAPTER 18

Searle's Sweet Success.

G. D. Searle & Co. began in 1888, when a Civil War veteran and pharmacist, Gideon Daniel Searle, started a small company with a chemist in Chicago. Nine decades later, the business had become a global conglomerate. It had developed an impressive number of products: Dramamine, Metamucil, and Aldactone, as well as Enovid, the first ma.s.s-market oral contraceptive that would become known simply as the Pill. The company's rise into a major conglomerate had proved challenging. By 1977 the company had experienced weak earnings for eight straight quarters. Its stock price had fallen sharply, hitting a low of $10.75 per share, about half of its price a year earlier. a.n.a.lysts wondered if its future was a long, downward slide. That concern had a way of getting shareholders' attention.1 So too did the choice of a new chief executive officer that year. Of all the people that the Searle board of directors could have selected to come in as the first non-family CEO, they chose a relatively young former public official with no background in the corporate world, let alone pharmaceuticals.

At the company's annual meeting where I was introduced to the shareholders as the future CEO, a middle-aged woman stood up.

"My name is Ethel Shapiro; I am a shareholder," she said. She noted that commentators were observing that little in my past experience made me a likely savior for the struggling pharmaceutical company.

"Mr. Rumsfeld," she asked bluntly, "why are you worth the $250,000 annual salary you will be receiving as CEO?" The amount was significant, to be sure. It was, in fact, four times what I had made as secretary of defense.

It was a fair question, and I suspected other shareholders might have been wondering the same thing.

"That sounds a lot like my mother," I replied, and many in the room laughed. As it happened, my mother was surprised by my decision to accept the Searle position. She believed I had established myself in government and wondered why I would want to get involved in an industry I knew little about and that had such obvious risks. She knew drug companies were often involved in complex and costly lawsuits. Searle, in fact, was at that moment undergoing a federal investigation into the accuracy of its research. Legal charges against the company had been filed and others were pending.

In answer to Mrs. Shapiro, I observed that I had not set my salary; the Searle board of directors had. I added that I was confident the board would have many opportunities to review my performance over time to determine whether I deserved that level of compensation. And I told her I would do my best to earn it.

It had not escaped my attention, or the Searle family's for that matter, that I had no relevant business or pharmaceutical industry experience. But I had been involved in managing large, complicated, international enterprises. Perhaps the deciding factor for the Searle family was my disinclination to shy away from making the tough choices that would be needed to get the enterprise on an upward path. The family knew me. Back in early 1962, not many people thought a twenty-nine-year-old with no experience in elective office could win a seat in Congress against a large field of more seasoned opponents. But Dan Searle did.

I, in turn, believed in Searle. Taking the reins of the pharmaceutical company was an opportunity to help develop products of value to people. My father, in particular, would have considered it honest and worthwhile work. There was some press speculation that I might be considering a run for the U.S. Senate from Illinois in 1980. To signal the seriousness of my commitment to the company, and to refute the speculation, I signed a five-year contract with Searle, even though the board of directors had not asked me to do so.

My time at Searle was a formative experience for me, unlike any challenge I'd ever faced before. It is in essence the story of a former government official unfamiliar with the daily workings of the business world finding his way. With the help of a superb team, I took the reins of a troubled company with great potential and developed a strategy to turn it around. We moved quickly to tighten budgets by reducing staff. We sold off ent.i.ties not related to what we decided were our core businesses. We decentralized decision making and rigorously measured our progress against our goals.

Setting goals was the most important task we faced, because it forced us to decide what our priorities were. We also needed broad agreement on the priorities among the directors and senior managers so that everyone was pulling in the same direction. It was critically important to ensure that those goals and priorities were known throughout the organization.

When I arrived at Searle, one of the first things we did was to put together several task forces with a mix of employees, board members, and thoughtful people from outside the company to examine what I had decided were the key problem areas of the company's operations. They then offered specific recommendations. I knew Searle needed changes, but I didn't want change for change's sake. I needed to make sure the changes we were considering were the right ones. And I needed to make sure we could achieve broad support in the company to move forward with the changes.

After the review was complete, Searle's senior management and I agreed on our top priorities: focusing the company on its core businesses and laying the foundation for future growth. To achieve our goals, we decided we would trim excess layers of management and sell off subsidiaries that either were peripheral to Searle's mission or were unlikely to produce significant results. We resolved to work with the federal government to try to determine the fate of one especially promising product, aspartame. And we would invest significantly in research and development to ensure there would be more products in the pipeline in the years ahead.

Over my eight years at Searle, I became a believer in the rule that "What you measure improves." A corollary rule in the military is that "You get what you inspect, not what you expect." We needed to select the key metrics for each of the company's divisions that would be indicative of the company's long-term performance. While our goals included improving our earnings per share, leading to a higher stock price, the priorities we selected and measured had to be ones that would move us in the right direction. We decided to hold our own feet to the fire by publishing these metrics in our annual report so our shareholders could see our goals and how well we were doing in meeting them. Either our indicators were getting better or they weren't, and if they were, it would eventually be reflected in our company's overall value.

One of the single most important tasks of a senior executive is to recruit and rely on the right people. A rule I had observed was that "A's hire A's; B's hire C's." I've seen terrible organization charts that worked because of the people involved and impressive organization charts where the enterprise struggled because of the people involved. At Searle, I was looking for people who brought knowledge and expertise different from mine. I favored candidates with high energy and a sense of humor because I knew we'd be working long hours in a tough environment.

The senior management also needed to work well as a team. We could have the brightest, most capable people in the world, but if there was no commitment to the company's broader mission, their talents would not be enough. I learned that lesson as a midshipman on the USS Wisconsin, Wisconsin, when the battleship ended up stuck on the New Jersey sh.o.r.e. A dozen tugboats tried to push the when the battleship ended up stuck on the New Jersey sh.o.r.e. A dozen tugboats tried to push the Wisconsin Wisconsin free. One tug would hit the ship, then another. It wasn't until all of the tugboats were organized in a coordinated effort that they put their bows against the hull of the battleship and pushed it free. free. One tug would hit the ship, then another. It wasn't until all of the tugboats were organized in a coordinated effort that they put their bows against the hull of the battleship and pushed it free.*

At Searle, two people stand out as leaders of our team effort. I invited John Robson to serve as Searle's chief operating officer. Robson had played a critical role in my congressional campaigns, was an accomplished lawyer, and also had public service experience as chairman of the Civil Aeronautics Board, among other appointments. He took the lead in legal and regulatory affairs and I trusted his judgment implicitly. I invited John Robson to serve as Searle's chief operating officer. Robson had played a critical role in my congressional campaigns, was an accomplished lawyer, and also had public service experience as chairman of the Civil Aeronautics Board, among other appointments. He took the lead in legal and regulatory affairs and I trusted his judgment implicitly.

I also turned to Jim Denny, a man I'd known in college who was serving as the treasurer of Firestone Tire & Rubber Company. Denny's name appeared on a list of three candidates for the important position of Searle's chief financial officer from an executive search firm I had engaged. To my surprise-since I wasn't eager to hire an acquaintance-he turned out to be the unanimous choice for the job. Given my modest business background, I made sure Denny's office was close by. Not a day went by that I didn't step over to ask his advice on business questions. Robson, Denny, and I were so engaged in what we were doing that we tended to overlook the traditional niceties of an executive suite. We were perhaps too informal for some directors who, as Denny later put it, "expected more than ham and Swiss on rye with cole slaw for their board meeting lunch."2

The board of directors, too, saw changes. A few of its members had joined when the company was still a family-oriented enterprise, rather than a global conglomerate. I worked to ease some members off the board, particularly those who were also in Searle's management, in favor of experienced outsiders who could bring the company a fresh and broader perspective.*