Obama to name former Procter & Gamble CEO head of troubled veterans affairs administration

By Steve Holland

WASHINGTON (Reuters) - President Barack Obama has chosen former Procter & Gamble Chief Executive Bob McDonald, an Army veteran, as his nominee to be the next secretary of veterans affairs, a senior Obama administration official said on Sunday.

Obama's announcement of McDonald, 61, will be made this week, possibly on Monday. If confirmed by the Senate, McDonald would be tasked with repairing the Veterans Administration after widespread evidence of delays in military veterans getting healthcare at VA facilities.

The announcement is to come days after a White House review found significant and chronic failures across the board at the Veterans Administration and evidence that a "corrosive culture" prevails.

A senior administration official said Obama was attracted to McDonald by his corporate background and military service. He would succeed Eric Shinseki, who resigned late in May after the depth of the VA's problems became clear.

McDonald is the former chairman, president and CEO of Procter & Gamble, having retired a year ago after 33 years with the Fortune 500 company, where he started as a brand assistant in 1980 and rose through the ranks.

He served on the McKinsey Advisory Council, the Singapore International Advisory Council of the Economic Development Board, and on the boards of U.S. Steel and Xerox Corp.

Officials believe his lengthy tenure at P&G prepares him well for a huge agency with management challenges in providing services to more 8 million veterans a year. At P&G, he oversaw more than 120,000 employees, with operations around the world, selling products in more than 180 countries.

MILITARY BACKGROUND

Having graduated in the top 2 percent of his class at the U.S. Military Academy at West Point, McDonald served in the U.S. Army as a captain, primarily in the 82nd Airborne Division, and received the Meritorious Service Medal.

"Bob is an immensely gifted and caring individual. That was evident to me when we first met as cadets at West Point, over 40 years ago," retired Major General James "Spider" Marks said in a statement. "He came from a military family, and knows the challenges from living them."

American Express Chief Executive Ken Chenault, who served on the P&G board during McDonald's time there, called McDonald a strong manager who knows how to make large organizations work effectively.

"Bob has a deep, personal commitment to serving our country that is as strong now as it was during his days at West Point. He's an excellent choice to set the right course for the Veterans Administration at a difficult time," Chenault said in a statement.

Corporate colleagues of McDonald repeatedly cited his management abilities in grappling with large and complex organizations.

"Prior to retirement, he navigated Procter and Gamble through the difficult post-financial-crisis years, where he expanded business in developing markets and made substantial progress improving the efficiency of the company's internal operations," Boeing CEO Jim McNerney said in a statement.

Xerox CEO Ursula Burns said McDonald had been on the Xerox board since 2005 and had provided expertise that was helpful during the company's 2010 acquisition of Affiliated Computer Services Inc, a deal that doubled Xerox' workforce and shifted its business.

The White House review, which was conducted by senior Obama aide Rob Nabors, said the agency's 14-day scheduling standard for new patients to receive care was arbitrary, ill-defined and misunderstood.

Obama accepted the findings on Friday by Nabors and acting Veterans Secretary Sloan Gibson, who said: "We can and must solve these problems as we work to earn back the trust of veterans."

(Reporting by Steve Holland; Editing by Peter Cooney)