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Loophole Lets Army Rehire 2 Generals

WASHINGTON - The Army used a loophole in federal ethics law to award lucrative contracts to two recently retired generals, departing from its standard practice for hiring senior advisers, according to public records and interviews.

During the past two years, the Army wanted to bring back two former generals, John Vines and Dan McNeill, to advise commanders as part of its "senior mentor" program. But the service's program is run by a defense contractor, Northrop Grumman, and federal ethics law prohibits newly retired senior employees from representing a company before their former agency for one year.

That "cooling off" period is designed to prohibit "acts by former government employees which may reasonably give the appearance of making unfair use of prior government employment," according to ethics regulations.

The Army found a way around the rule. Instead of hiring them as defense company subcontractors, as it does for roughly two dozen other Army mentors, the service contracted directly with McNeill and Vines. McNeill received his contract after the Army wrote specific bid solicitations that applied to him and perhaps a few other retired generals. Vines received contracts without competition, records show.

All told, the Army paid McNeill $281,625 from December 2008 through August 2009, federal records show. McNeill told USA TODAY he also consults for defense firms but declined to name them. He isn't required to tell the Army about them, either.

In mid-2007, records show, the Army awarded three contracts worth $226,285 to Vines, who had retired that January as a top commander. Vines said the contracts included travel expenses. "The cooling off period doesn't seem to make a lot of sense when we have soldiers' lives at stake," he said.

"This flagrantly violates the spirit of the revolving-door rules," said Danielle Bryan, executive director of the non-partisan Project on Government Oversight. "What the Army did instead is create a new door so they could walk right through."

Army spokesman Gary Tallman said the arrangements were perfectly legal and "do not create any . . . clever loopholes."

Now that McNeill and Vines are past their cooling off periods, the Army has returned to its normal procedures and retained them as Northrop subcontractors. Like other senior mentors, their compensation is now hidden from public view.

A USA TODAY investigation has found that a growing number of retired high-ranking officers collect six-figure pensions, make hundreds of dollars an hour as advisers to the services, and earn more working for defense firms. These retired officers, when hired as contractors, are not subject to the ethics and disclosure rules that would apply if they were part-time federal employees.

Under military formulas, Vines and McNeill are eligible for pensions of more than $120,000. Vines' @highest base salary was $209,000, according to military pay scales, and McNeill's was $174,000.

McNeill was the top U.S. commander in Afghanistan from February 2007 until June 2008. In an interview, he said he became a mentor at the request of Gen. George Casey, the Army's chief of staff.

In a statement, Casey said McNeill's experience made him "ideally suited to properly prepare our division and higher-level commanders."

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