RECORD OF PROCEEDINGS


      IN THE CASE OF:


      BOARD DATE:            26 May 2005
      DOCKET NUMBER:   AR20040010425


      I certify that hereinafter is recorded the true and complete record
of the proceedings of the Army Board for Correction of Military Records in
the case of the above-named individual.

|     |Mr. Carl W. S. Chun               |     |Director             |
|     |Mrs. Nancy L. Amos                |     |Analyst              |


      The following members, a quorum, were present:

|     |Mr. Melvin H. Meyer               |     |Chairperson          |
|     |Ms. Seema E. Salter               |     |Member               |
|     |Ms. Susan A. Powers               |     |Member               |

      The Board considered the following evidence:

      Exhibit A - Application for correction of military records.

      Exhibit B - Military Personnel Records (including advisory opinion,
if any).

THE APPLICANT'S REQUEST, STATEMENT, AND EVIDENCE:

1.  The applicant requests that his retirement grade be restored to
lieutenant general (LTG) with full pay and benefits effective 1 May 2004.

2.  The applicant states that the procedural and substantive errors in his
case amounted to a denial of fundamental due process that resulted in his
service as a LTG not being fully and fairly considered.

3.  The applicant states that in May 2001 he was nominated for a second
position as a LTG.  The Chief of Staff of the Army (CSA), with the
concurrence of the Secretary of the Army (SA), selected him to serve as the
Director of the Objective Force Task Force (OFTF).  On 28 June 2001, he
became the Director, OFTF and served for almost 3 years until his
retirement on 1 May 2004.

4.  The applicant states that, on 20 March 2003, an Army Criminal
Investigation Command (CID) special agent arrived unannounced at his hotel
room to conduct an interview.  The agent informed him in very general terms
that he was under investigation, apparently because he and possibly members
of the OFTF were alleged to have misused a government contractor.  He had a
second and final interview in June 2003.  He cooperated with the
investigation on both occasions to include providing CID access to both his
computers and e-mail.

5.  The applicant states that, on 4 April 2003, CID contacted the
Department of the Army Inspector General (DAIG) with allegations that he
had an adulterous relationship with a female contractor, that he improperly
allowed a contractor to perform inherently governmental functions, and that
he improperly allowed a personal services contract.  CID also contacted the
Army Audit Agency and requested an audit of OFTF expenditures with emphasis
on contractual actions and travel.

6.  The applicant states that, on 25 April 2003, the SA resigned and the
Under SA, Mr. B___, became the Acting SA.  On 11 June 2003, the CSA retired
and the Vice  CSA (VCSA), General K___, became the acting CSA.  Both key
senior leader positions within the Army were being filled with temporary
personnel until  1 August 2003, when General S___ assumed duties of CSA.

7.  The applicant states that, on 31 July 2003, he submitted his request
for retirement with an effective retirement date of 31 December 2003.

8.  The applicant states that, on 3 October 2003, he received a Memorandum
of Concern (MOC) from the VCSA approving the results of the DAIG Report of
Investigation (ROI).  The VCSA stated in the MOC that it would not be filed
in his personnel records.  According to the DAIG, the allegations of
adultery were unsubstantiated but the allegations that he allowed a
contractor to perform inherently governmental functions and that he formed
a personal services contract were substantiated.  Sometime in the
summer/fall CID requested a third interview and access to his Public Key
Infrastructure (PKI) protected (encrypted) e-mails.  He refused until CID
would provide him with copies of his two previous interviews along with the
allegations against him the CID was investigating.  They refused to do so.
However, his lawyer was informed that there is no plan to initiate criminal
actions or other adverse action due to the CID investigation.

9.  The applicant states that, on 3 March 2004, he received orders dated 1
March 2004 transferring him from the Director, OFTF to the General Officer
Holding Detachment effective 1 March 2004.  Later that day the new VCSA
informed him of the action with no information on the status of his
retirement but with a promise to facilitate his retirement.  He was
notified that after 60 days in the Holding Detachment he would revert to a
Major General (MG).

10.  The applicant states that, on 14 April 2004, he was informed by the
VCSA that the CSA was reviewing his retirement application, the DAIG ROI,
and the MOC in making a retirement grade determination.  He was given 7
days to respond to any unfavorable aspect of the ROI.  He received a
redacted copy of the DAIG ROI and submitted his response, addressing how
that redacted ROI reflected on his leadership, judgment, and the resulting
command climate while he served as Director, OFTF.

11.  The applicant states that, on 26 April 2004, he discussed his
retirement with the General Officer Management Office (GOMO).  GOMO told
him the decision of the Acting SA would be sent to the Secretary of Defense
(SecDef) and the SecDef had 7 days to respond if he chose to reverse the
decision.  On 29 April 2004, the VCSA notified him that the Acting SA had
determined that his 5 years of service as a LTG had not been satisfactory
and that the Acting SA had determined his retirement grade to be MG.
Additionally, he was to outprocess from the Army the next day in order to
retire that weekend.  A number of people told him the decision was based on
the DAIG ROI and the MOC and had nothing to do with an ongoing CID
investigation.

12.  The applicant states that he was never given the opportunity to
respond to negative information which would ultimately affect his
retirement nor personally discuss the circumstances, process, and decisions
with the individuals passing judgment.  The DAIG investigation used
uncorroborated opinions, rumors, and impressions not based on fact from a
small number of disgruntled officers within the OFTF to conclude that the
command climate was poor.  Had the DAIG conducted a thorough investigation
on the question of his leadership, judgment, and the resulting command
climate, it would have revealed that his leadership style and the command
climate of the Task Force was very favorable.

13.  The applicant states that an IG investigation is a fact-finding
examination by a detailed IG into allegations, issues or adverse conditions
to provide the directing authority a sound basis for decisions and actions.
 A fact-finding examination should not determine credibility based upon the
number of statements with a common theme; it should weigh the statements
based upon the witnesses' access to the facts.  Statements from the
executive officers and deputies who knew his policies and how business was
really conducted should have carried greater weight than those statements
containing opinions and hearsay.  Several relevant members of the OFTF were
not interviewed by the DAIG.  Investigators asked for names of those who
would have a gripe and then proceeded to interview those individuals.
Statements from other individuals would have revealed opposing views and
that a systematic and methodical destruction of the OFTF was conducted by a
few individuals who were unwilling to dedicate the time and effort required
of the mission.

14.  The applicant states that, as the senior general officer responsible
for the organization, he was only interviewed once by the DAIG and never
given the opportunity to respond with the facts to any of the opinions of
the few disgruntled officers.  Further, the DAIG investigation was not
intended to be a command climate survey.  It is unfair for the Acting SA to
then use this report which contains inaccurate and incomplete information
for a purpose that was not intended.  The limited nature of the
investigation created a skewed and inaccurate picture.  It is unfair to use
this inaccurate and incomplete report to serve as the basis for his grade
determination.

15.  The applicant states that the MOC did not afford him due process.  It
was the VCSA's judgment that the offenses only merited an MOC, the minimum
tool available.  It was not intended to become part of his military record
or to be used in making personnel decisions about him and it should have
been destroyed upon his departure from the OFTF.  Although not part of his
official record, the MOC was later used as a basis of grade determination
in violation of Army Regulation 600-37, paragraph 3-1, which states that
decisions will be based on a review of official personnel files.  If the
intent was to use the MOC to take adverse action against him, he should
have been given notice of the underlying facts and afforded the opportunity
to comment before it was issued.  The Acting SA erred in considering the
MOC.

16.  The applicant states that he was given inadequate time to prepare a
substantive response to a retirement grade determination.  The Army was
aware of his planned retirement since 31 July 2003 with a requested
retirement date of 31 December 2003.  At no time was he given an
explanation of when he could expect to retire.  It was not until 13 April
2004, while on convalescent leave recuperating from surgery, that GOMO
informed him of the Acting SA's intention. He was given one week to obtain
a copy of the redacted ROI and submit comments on any aspect of the ROI.
In reality, he was encouraged to submit his response by Monday, 19 April.
Because of the intentionally short suspense, he was prohibited from
providing information on his overall service as a LTG.  The Acting SA did
not consider his entire service as a three-star general.  He now provides,
at Enclosure M, Tabs 1 through 41, statements by credible witnesses who can
testify to his service and character as a three-star general.

17.  The applicant states that the decision to retire him as a two-star
general seems to be an extreme adverse reaction motivated by his
association with the prior CSA, his professional assessments on the need
for additional troop strength, and other issues that run counter to the
SecDef.  He was placed in the position of Director, OFTF to advance Army
Transformation by the former CSA, General Sh___.  Prior to his departure,
General Sh___ had fallen into disfavor with the Office of the Secretary of
Defense over Army endstrength.  Many things attributable to General Sh___
were eliminated.  He (the applicant) was viewed as a spokesperson for the
former CSA and therefore was not accepted.  His inability to accept
politicization of the General Officer Corps was also unacceptable.  He
became, in effect, persona non grata.

18.  The applicant states that his actions were not misconduct and they did
not stem from any wrongful behavior on his part.  At worst, they were
technical violations of vague policies.  This is not the kind of action
that warrants a loss of grade at retirement and the subsequent adverse
consequence.  The policies regarding contractors were written when
contractors were only performing the role of defense competitors for
supplies and equipment; not providing services or technical expertise.  The
Army has been using contractors for the last decade on the battlefields of
Saudi Arabia, Afghanistan, and Iraq.  To say they are not performing
"inherently governmental" duties would be a falsification of truth.  The
Army must recognize the role of contractor support in today's Army and
change their policies accordingly.

19.  The applicant provides the documents listed as enclosures A through Y
(except that enclosure O is missing).

COUNSEL'S REQUEST, STATEMENT AND EVIDENCE:

Counsel makes no additional statement.

CONSIDERATION OF EVIDENCE:

1.  After having had prior service, the applicant was commissioned and
entered active duty on 3 April 1969.  He was promoted to LTG on 1 August
1999 and served as the Commanding General, First U. S. Army.  He received a
Legion of Merit (Fifth Oak Leaf Cluster) for the period 1 August 1999 to 21
June 2001 for his exceptionally meritorious service in this position.

2.  On or about 28 June 2001, the applicant was selected to serve as the
Director, OFTF.

3.  On 4 April 2003, the DAIG received potential allegations against the
applicant from CID.

4.  On 31 July 2003, the applicant requested release from active duty
effective  31 December 2003 and placement on the retired list 1 January
2004.

5.  The DAIG ROI Executive Summary, dated 23 September 2003, showed that
the allegation the applicant had an adulterous relationship with a female
contractor was unsubstantiated.  The Summary noted that the appropriateness
of the applicant's relations with a female contractor was questioned by
several witnesses.  However, the great majority of witnesses, even those
with a poor opinion of the female contractor, testified that they had never
observed any inappropriate behavior between the applicant and the
contractor.  Several witnesses testified that they worked in close
proximity to both and were sure that nothing inappropriate was going on.
The witnesses who believed there was an inappropriate relationship offered
no compelling evidence other than rumors.

6.  The DAIG ROI Executive Summary showed that the allegation the applicant
improperly allowed a contractor to perform inherently governmental
functions was substantiated.  It quoted Office of Federal Procurement
Policy Letter 92-1 which stated that not all functions (i.e., "inherently
governmental functions") may be performed by contractors.  Prohibited
functions included those activities that required either the exercise of
discretion in applying government authority or the making of value
judgments in making decisions for the government such as – the
determination of agency policy, the determination of Federal program
priorities or budget requests, and the direction and control of Federal
employees.

7.  The DAIG ROI Executive Summary noted that numerous witnesses testified
an OFTF contractor performed inherently governmental functions and the
applicant facilitated and condoned her actions.  Witnesses testified the
OFTF contractor had the authority to approve and disapprove actions and
other witnesses testified she did not formally possess that authority.  The
contractor felt empowered to change actions, to include reorganizations of
the OFTF and actions already coordinated with the Army staff, without going
back to the governmental author of the action.  The applicant testified
that the contractor's job description more accurately depicted his own
duties and that the job of the OFTF contractor was to facilitate the
execution of his duties.  Numerous witnesses testified the contractor
routinely provided taskings to governmental employees, both military and
civilian.  She criticized military members on their duty performance.
Documentary evidence of the contractor's e-mail captured her tasking
government employees to perform certain actions.

8.  The DAIG ROI Executive Summary showed that the allegation that the
applicant improperly allowed a personal services contract was
substantiated.  The Summary noted that the government was normally required
to obtain its employees by direct hire under competitive appointment or
other procedures required by the civil service laws.  Obtaining personal
services by contract, rather than by direct hire, circumvented those laws.
An employer-employee relationship under a service contract occurred when,
as a result of the contract's terms or the manner of its administration
during performance, contractor personnel were subject to the relatively
continuous supervision and control of a government officer or employee.

9.  The DAIG ROI Executive Summary noted that the applicant testified his
executive officer and noncommissioned officer in charge performed similar
functions for him as the OFTF contractor and that the contractor had
performed "aide-like" functions while traveling with the applicant (the
Army contract called for the delivery of general technical and
administrative support).  Virtually all witnesses, to include the
applicant, testified that he was the OFTF contractor's only day-to-day
supervisor.  The applicant testified that he did not have anyone on the
OFTF who could have done the contractor's job.  The Summary noted that his
lack of confidence in his military subordinates was inexplicable as there
was evidence, through below-the-zone promotions and selection for commands,
that the OFTF had quality officers.  Evidence collected reflected the
officers assigned to the OFTF were some of the best in the Army, were hand
picked, and were considered the best in their field.

10.  The DAIG ROI Executive Summary also noted that several witnesses
stated that the increased use of contractors on the Army staff, many of
them retired military, hired for their expertise, led to situations such as
that found in the OFTF. The applicant, despite several assignments on the
Army staff, testified he did not know what a personal services contract was
and had received little training in the use of contractors.  That was a
potentially systemic issue within the Army staff that required education of
senior leaders on what roles and duties contractors were legally allowed to
perform.
11.  The VCSA, General K___, gave the applicant an MOC dated 26 September
2003.  General K___ noted that he approved the DAIG ROI which substantiated
allegations that the applicant improperly allowed a contractor to perform
inherently governmental functions and improperly allowed the creation of a
personal services contract.  As a result, the climate of his organization
suffered and his actions demonstrated a lack of judgment.  Specifically,
the contractor had the authority to approve and disapprove actions within
the OFTF, thereby making value judgments and decisions for the OFTF and
determining OFTF policy.  He allowed her to make decisions regarding budget
requests and policy and overall OFTF strategy.  By allowing her to
disseminate his directives and to lead government employees in completing
projects and briefings, he improperly granted her implicit authority to
supervise government employees.

12.  General K___ also noted that the applicant improperly created a
personal services contract by virtue of his relationship with that
contractor.  He was the only person to supervise her.  He directed all of
her work on a continuous day-to-day basis and evaluated her performance.
The contractor served in a role similar to that of a deputy director,
executive officer, or aide – positions normally filled by government
employees.

13.  By letter dated 6 October 2003, the DAIG notified the applicant that
they had completed an investigation into allegations against him.  They
concluded the allegation that he had an adulterous relationship with a
female contractor was not substantiated but concluded the allegations he
improperly allowed a personal services contract and improperly allowed a
contractor to perform inherently governmental functions were substantiated.
 He was informed he could request a copy of IG records under the Freedom of
Information Act (FOIA) and under Army Regulation 20-1.

14.  Orders dated 1 March 2004 assigned the applicant to the Holding
Detachment, Office of the Chief of Staff, U. S. Army with a reporting date
not earlier than 1 March 2004.  The additional instructions noted that the
move was in conjunction with an anticipated retirement.

15.  By memorandum dated 14 April 2004, the VCSA, General C___, informed
the applicant that the Acting SA had carefully reviewed his retirement
application and the adverse information attributed to him during his tenure
as Director, OFTF.  He was informed that the memorandum served as his
notice that the Acting SA also intended to consider the DAIG ROI and the
MOC in making his determination as to the highest grade in which he served
satisfactorily.  He was given the opportunity to comment on any aspect of
the ROI.  The Acting SA specifically solicited any comments he might have
on how the ROI reflected unfavorably on his overall leadership, his
judgment, and the resulting command climate during his tenure as Director,
OFTF.  He was informed the DAIG would provide him a redacted copy of the
ROI with fewer deletions than he was previously provided to assist him in
the preparation of any response he might submit.  He was requested to
submit his response no later than 21 April 2004.

16.  By letter dated 15 April 2004, the DAIG's office provided the
applicant a supplemental response.  He was informed that information was
still being withheld that was exempt from the mandatory disclosure
provisions of the FOIA.  He was also informed that an excerpt from the CID
ROI remained redacted because the DAIG did not have the authority to
release such information.

17.  By memorandum dated 19 April 2004, the applicant responded to the
VCSA's 14 April 2004 memorandum.  He stated he honestly believed that he
never knowingly disobeyed regulations or policies.  Given the resources and
critical timelines, he chose mission accomplishment over personnel
management and he believed that was the real issue that led to the
investigation.  He retained approval authority on all actions related to
the contractor in question but accepted that he may have unknowingly
breached policy in some areas.  She was never authorized nor did she ever
forward any action or decision without his approval.  She never had the
authority to approve or disapprove actions, nor did he require personnel to
work through her.  She offered personal recommendations that some may have
misinterpreted as "approval authority."

18.  The applicant stated that he used the contractor's expertise to
facilitate his Congressional activities.  She drafted Congressional
correspondence and testimony, but only with his guidance and approval.  She
did not make decisions regarding budget requests and policy.  He personally
retained the budget policy function and was careful to keep his executive
officer in the decision-making loop for budget requests.

19.  The applicant stated that, if he had realized that having a contractor
as a Special Assistant would create the perception of a personal services
contract, he would have placed someone between them for reporting purposes.
 He realized now that having her report to him directly may not have been
the best approach although it was the most efficient.  Both his Deputy and
Chief of Staff positions were filled by transient personnel who lacked
experience at that level of the Army.  She worked directly for him since he
felt he did not have the luxury of hierarchical layers of personnel,
formalized procedures, or time.  Even then, he spent many long arduous
hours mentoring and building consensus with members of the Task Force.
When that did not work, he had no alternative but to continue to rely on
his Special Assistant.

20.  The applicant stated that he believed other factors led to the
investigation that should be considered in order to understand the findings
of the investigation. The very nature of creating a Task Force to transform
the Army made the assumption that the existing organizations could not do
the job.  That meant there was limited acceptance of the Task Force.  In
his view, the OFTF was a temporary organization so he chose to design it
with the flexibility to reorganize as often as necessary.  When he arrived
in June 2001, the Task Force was at best a loose assortment of personnel.
He worked to fill it with quality people but soon the Global War on
Terrorism took priority for personnel replacements.  As such, its staffing
achieved at best a transient nature, in turn placing an extremely demanding
workload on a select few stable government and contract personnel in order
to achieve results.  He structured the organization on individual merits
and placed emphasis on the individual to produce.  Those capable of
producing results emerged.  He now realizes that some could not understand
or accept his methods of leadership.

21.  The applicant stated he served almost five years as a LTG, two years
honorably and successfully as the Commanding General, First U. S. Army.  In
his position as Director, OFTF, the Task Force accomplished its assigned
missions and was successful in providing the Army leadership at the time
and the succeeding leadership with options for the future.  He believed he
served honorably and successfully in that position for 33 months.

22.  Orders dated 26 April 2004 released the applicant from assignment and
duty effective 30 April 2004 and placed him on the retired list on 1 May
2004 in the rank of Major General.

23.  The applicant provided 41 statements of support from current/former
high ranking (military/civilian) government officials.  He provided a
synopsis of their statements.  Extracts from several of them are listed
below:

      General (retired) Sh___, former CSA:  He asked the applicant to
accept another LTG assignment although he had planned on retiring.  He
finds it difficult to understand how the Army, having gone to unprecedented
levels in outsourcing military and non-military functions in which even
tactical-level operational decisions are being made daily by logistical
contractors in Operation Iraqi Freedom would view the findings of the DAIG
as serious enough to substantiate a reduction in grade or to deny him an
opportunity to present his appeal to the military leadership of the Army.

      General (retired) K___, former VCSA:  As VCSA, the SA delegated to
him the authority to adjudicate all non-criminal investigations and their
findings involving general officers. His intent with the MOC was to tell
the applicant he did something wrong, fix it, and move on.  He had no
intent to file the MOC officially and considered the matter closed.

      General (retired) R___, consultant and former Commanding General,
Training and Doctrine Command:  He was on the OFTF Advisory Board and met
periodically with the applicant and his staff.  The applicant sought from
the CSA whatever manpower was available and then asked and received
contractual support required to do that job.  His handling of the team was
outstanding.

      Doctor T___, Director, Defense Advanced Research Projects Agency:  He
worked with the applicant on a daily basis from June 2001 through April
2004.  The reason for the applicant's reduction – using a contractor to
perform an inherently governmental function – is not the current policy of
the Department of Defense (DOD).  DOD policy is to outsource as much as
possible and hire contractors to perform administrative functions under the
guidance of a Government person.  If the Army policy is not following DOD's
desires for outsourcing, it should be brought to the Secretary's (of
Defense?) attention.

      Colonel K___, former Chief of Staff and Division Chief, OFTF:  The
applicant made effective use of all 72 members of the OFTF by focusing on
each member's expertise and strengths rather than on their status as Active
Duty, Department of the Army civilian, or contractor.  He also often formed
ad-hoc teams of experts, which consisted of Active Duty, Department of the
Army civilian, and contractors although led by Army colonels, to work
specific aspects of the Task Force.  The result of his management was a
highly volatile yet extremely effective organization.  The applicant's
reliance on the contractor [in question] for briefings and Congressional
actions was absolutely necessary – no one else on the Task Force was able
to meet his exacting standards in those areas.

      Mr. S___, former Deputy and Division Chief, OFTF:  He had intimate
knowledge of the contracts, contractors, and contract administration yet he
was never interviewed by the DAIG.  The applicant's control over the
contractors was done within the regulations.  Today they are fighting a war
where contractors are providing direction to military personnel.  Some
would label that "inherently governmental duties" while others would say it
is reality where they have antiquated contractor policies and guidelines
that do not reflect reality.  Since he was never interviewed, he can only
suspect the witness statements used to justify the allegations were from
personnel on the Task Force who were dissatisfied due to the nature of the
Task Force.

24.  In the processing of this case, an advisory opinion was obtained from
the Chief, GOMO, Office of the Chief of Staff.  That individual noted that
the Acting SA examined the applicant's case in extraordinary detail before
making his decision.  His examination included but was not limited to a
thorough review of the DAIG ROI, the applicant's overall service, and his
19 April 2004 response.  After the most careful consideration, he exercised
his authority under the provisions of Title 10, U. S. Code section 1370 and
his prerogative under the provisions of Army Regulation 15-80 to determine
his retirement grade without referral to an Army Grade Determination Board.


25.  The Chief, GOMO provided a summary of the issues in the applicant's
case. He noted the Acting SA determined that the last grade in which the
applicant had served satisfactorily was MG and, accordingly, he would be
retired in the grade of MG effective 1 May 2004.  The Acting SA's decision
was based on the substantiated DAIG allegations and the fact that, beyond
the allegations, the ROI also reflected negatively on his overall
leadership and revealed an adverse command climate that was a direct result
of his misconduct.  The Acting SA informed him that his decision was not
based, in any way, on a then-ongoing grand jury (sic) (probably intended to
say CID) investigation pertaining to him.

26.  The Chief, GOMO stated that the Acting SA also informed the applicant
that the SecDef was notified of the Acting SA's decision to approve his
retirement in the grade of MG.  The acting SA notified him that unless,
within 3 duty days, the SecDef decided otherwise, his retirement would be
effective 1 May 2004.  The SecDef did not decide otherwise.  The Acting SA
had not recommended that the SecDef certify he had served satisfactorily in
the grade of LTG.  The SecDef concurred with the Acting SA and,
accordingly, did not certify that he served satisfactorily in the grade of
LTG.

27.  The Chief, GOMO stated their review revealed that, although not
required by statute or regulation, the applicant was afforded the
opportunity to comment on any aspect of the DAIG ROI and informed that the
Acting SA intended to consider the DAIG investigation in making his
determination as to the highest grade in which he served satisfactorily.
On 19 April 2004, the applicant submitted matters for the Acting SA's
consideration.  The Acting SA considered his response and concluded that he
did not serve satisfactorily in the grade of LTG based on his performance
as Director, OFTF.

28.  The Chief, GOMO stated that, although the Acting SA had mentioned the
MOC to the SecDef, he had based his decision on the underlying misconduct.


29.  The Chief, GOMO stated that the applicant contended he was given an
"intentionally short suspense" to respond to the Acting SA.  The Chief,
GOMO stated that, first, neither statutes nor regulations required that he
be afforded any additional opportunity to comment on the action.  Second,
he did not ask for an extension of time to respond.  The Chief, GOMO also
stated that the applicant provided no evidence to support his assertion of
a conspiracy behind the Acting SA's decision to retire him in the grade of
MG.

30.  A copy of the advisory opinion was provided to the applicant for
comment or rebuttal.  He responded that he did not expect a fair and
impartial review of his retirement appeal by GOMO since they were the
responsible organization for processing his retirement with procedural and
substantive errors.  He was twice recommended for service in, and served
in, two positions as a LTG.  He had performed satisfactorily in his first
position as a LTG or he would never have been confirmed by Congress for a
second position.  His entire performance as a LTG was not considered by the
Acting SA prior to making the determination to retire him as a MG.  The
VCSA's 14 April 2004 memorandum mentioned only his tenure as Director,
OFTF.  He was not permitted to address his entire performance as a LTG in
his reply to the Acting SA.

31.  The applicant stated that it was remarkable that GOMO would cite Army
Regulation 15-80 to justify the Acting SA's actions yet overlook other
regulatory guidance in that same regulation.  This regulation also states,
"…determination will be based on the soldier's overall service in the grade
in question."  The regulation goes on to define unsatisfactory service, and
his service as a LTG does not fit any of the categories listed.

32.  Title 10, U. S. Code, section 1552 states that the Secretary of a
military department may correct any military record of the Secretary's
department when the Secretary considers it necessary to correct an error or
remove an injustice…such corrections shall be made by the Secretary acting
through boards of civilians of the executive part of that military
department.

33.  Army Regulation 600-37 (Unfavorable Information), paragraph 3-1 states
that personnel management decisions will be based on (1) review of official
personnel files; (2) the knowledge and best judgment of the commander,
board, or other responsible authority.  (Both favorable and unfavorable
information regarding the Soldier concerned will be considered).

34.  Army Regulation 600-8-24 (Officer Transfers and Discharges), paragraph
   6-1d states that an officer serving in a position designated by the
President and in the grade of LTG or General may retire in the highest
grade held while on active duty.  However, the SecDef must certify in
writing to the President and Congress that the officer served on active
duty satisfactorily in that grade (Title 10, U. S. Code, section 1370(c)).
Paragraph 6-1g states that, where there is sufficient unfavorable
information to establish that a retiring officer's service in his or her
current grade was not satisfactory, the officer's retirement application
may be referred, under the provisions of Army Regulation 15-80, to the Army
Grade Determination Review Board (AGDRB).

35.  Army Regulation 15-80 (Army Grade Determination Review Board and Grade
Determinations), paragraph 1-5 states that the SA retains the prerogative
to accomplish discretionary grade determinations without referral to the
AGDRB. The SA retains sole authority to make discretionary grade
determinations in cases involving general officers.  Under the provision of
section 1370(c), Title 10, U. S. Code, in the case of an officer who is
requesting retirement in the grade of general or LTG, the SA may retire
such officers in one of those grades only after the SecDef certifies in
writing to the President and Congress that the officer has served
satisfactorily on active duty in the grade of general or LTG.

36.  Title 10, U. S. Code, section 1370(a)(2)(A) states that a commissioned
officer above major shall be retired in the highest grade in which he
served on active duty satisfactorily, as determined by the Secretary of the
military department concerned, for not less than three years.  Section
1370(c) states that an officer who is serving in or has served in the grade
of general or LTG may be retired in that grade under subsection (a) only
after the SecDef certifies in writing to the President and Congress that
the officer served on active duty satisfactorily in that grade.  If there
is potentially adverse information concerning the officer and such
information has not previously been considered by the Senate during a
nomination process, the SecDef shall personally determine whether to
certify the officer served satisfactorily (section 1370(c)(3)(C)).

37.  Office of Federal Procurement Policy Letter 92-1, "Inherently
Governmental Functions," Circular Number A-76 Supplemental Handbook,
Appendix 5, dated    23 September 1992 (obtained from the Defense Logistics
Agency's website) establishes Executive Branch policy relating to services
contracting and inherently governmental functions.  Its purpose is to
assist Executive Branch offices and employees in avoiding an unacceptable
transfer of official responsibility to Government contractors.  The
background noted that contractors, when properly used, provide a wide
variety of useful services that play an important part in helping agencies
to accomplish their missions.  Not all functions may be performed by
contractors, however.  Just as it is clear that certain functions, such as
the command of combat troops, may not be contracted, it is also clear that
other functions, such as building maintenance services, may be contracted.
The difficulty is in determining which of the  services that fall between
these extremes may be acquired by contract.  Agencies have occasionally
relied on contractors to perform certain functions in such a way as to
raises questions about whether Government policy is being created by
private persons.

38.  Office of Federal Procurement Policy Letter 92-1, Circular Number A-76
defines an "inherently governmental function" as a function that is so
intimately related to the public interest as to mandate performance by
Government employees.  These functions include those activities that
require either the exercise of discretion in applying Government authority
or the making of value judgments in making decisions for the Government.
Governmental functions normally fall into two categories:  (1) the act of
governing, i.e., the discretionary exercise of Government authority, and
(2) monetary transactions and entitlement.

39.  Circular Number A-76 was revised in 1999 to implement the statutory
requirements of the Federal Activities Inventory Reform Act of 1998.  The
background noted that the competitive enterprise system is the primary
source of national economic strength.  In recognition of this principle, it
has been and continues to be the general policy of the Government to rely
on commercial sources to supply the products and services the Government
needs.  The definition of an "inherently Governmental function" remained
the same.  The Circular will apply to all executive agencies with certain
listed exceptions, to include the Department of Defense in times of
declared war or military mobilization.  However, there is no evidence the
applicant was authorized to use this exception.

40.  The revised Circular Number A-76 also stated that it does not
authorize contracts which establish an employer-employee relationship
between the Government and contractor employees.  An employer-employee
relationship involves close, continual supervision of individual contractor
employees by Government employees, as distinguished from general oversight
of contractor operations.  It also states such a personal services contract
is not proper unless expressly authorized by Congress.

DISCUSSION AND CONCLUSIONS:

1.  The applicant's contention that he was never given the opportunity to
respond to negative information nor personally discuss the circumstances,
process, and decisions with the individuals passing judgment has been
considered.  However, he was informed by the DAIG on 6 October 2003 that
they had completed an investigation into allegations against him and what
their conclusions were.  He was informed he could request a copy of IG
records.  Even if he was not given the opportunity to respond to the DAIG
investigation at that time he had time in which to frame a response (even
based on an ROI that was redacted more than the ROI offered him in April
2004), if ever required.  As a general officer, that foresight should have
occurred to him.

2.  The applicant's contention that the DAIG investigation used
uncorroborated opinions, rumors, and impressions not based on fact from a
small number of disgruntled officers to conclude that the command climate
was poor has been considered.  However, it is noted that the DAIG
investigation included documentary evidence of the contractor's own e-mail
that captured her tasking government employees to perform certain actions.
Those taskings were contrary to guidance outlined in Office of Federal
Procurement Policy Letter 92-1 and no statements from the executive
officers and deputies who "knew his policies and how business was really
conducted" could have outweighed that hard evidence.

3.  The applicant's contention that the DAIG investigation was not intended
to be a command climate survey and it was unfair for the Acting SA to then
use this report for a purpose that was not intended has been considered.
However, it appears a reasonable reading of the DAIG ROI by the Acting SA
surfaced the fact the OFTF did have disgruntled employees, due in part at
least to the applicant's improper use of the contractor, which reflected
unfavorably on his overall leadership and the resulting command climate
during his tenure as Director, OFTF.  It is disingenuous of the applicant
to expect the Acting SA not to act on that reasonable reading.  As a
general officer, it is implausible to believe that if he had obtained
knowledge from a routine IG inspection of one of his units that reflected
unfavorably on that unit's commander that he would not have called that
commander to task on the issue.

4.  The applicant's contention that the MOC did not afford him due process
and it was not intended to become part of his military record or to be used
in making personnel decisions about him has been considered.  His partial
citation of Army Regulation 600-37, paragraph 3-1 is noted.  However, it is
noted that he fails to cite subparagraph 3-1(2) of that regulation, which
states that personnel management decisions will be based on the knowledge
and best judgment of the commander, board, or other responsible authority.
Even if the Acting SA had not known about the MOC, he was aware of the
underlying bases for which the MOC was given.  His knowledge could not be
made to disappear even had the MOC not existed.  There is no evidence that
the MOC was used to take adverse action against him.  The evidence shows
the substantiated findings of the DAIG investigation was used to make the
grade determination.

5.  The applicant's contention that he was given inadequate time to prepare
a substantive response to a retirement grade determination and that he was
not permitted to address his entire performance as a LTG in his reply to
the Acting SA has been considered.  He states that it was not until 13
April 2004 that GOMO informed him of the Acting SA's intention and he was
given one week to obtain a copy of the redacted ROI and submit comments on
any aspect of the ROI.  However, for the reason cited in paragraph 1,
DISCUSSION AND CONCLUSIONS above, he could have had that DAIG ROI as early
as October 2003.  It is also noted that the VCSA's 14 April 2004 memorandum
did not deny him the opportunity to comment on his entire service as a LTG.
 He knew his comments were going to be used to determine his retirement
grade.  As a general officer, he could have used his initiative to make any
comments he believed would have reflected favorably on his service as a
LTG.

6.  The applicant's contention that the Acting SA did not consider his
entire service as a three-star general has been considered; however, he
provides no evidence to support that contention.  It is inconceivable to
believe the Acting SA was not aware that the applicant's position as
Director, OFTF was his second LTG position or that he did not know the
applicant was selected for the position due in part to the excellent job he
performed as Commanding General, First.     U. S. Army.

7.  However, the applicant's circumstances could be compared to a Master
Sergeant with five years time in grade.  During his first four years as a
Master Sergeant he performs his duties in an exceptional manner.  In his
fifth year, he has a lapse of judgment that causes him to be reduced in
grade to Sergeant First Class.  He is allowed to retire, but it is
determined that the highest grade he satisfactorily held was Sergeant First
Class.  That is in part because, as a Master Sergeant with five years time
in grade, he "should have known better."  The applicant, as a LTG with five
years time in grade and despite the successful mission accomplishment of
the OFTF, should have known better than to let his judgment (concerning the
contractor) slip to such a degree.  The primary difference in these two
cases being, as a commissioned officer, the applicant could not be reduced
while serving on active duty.

8.  The applicant contends that the decision to retire him as a two-star
general was motivated by his association with the prior CSA, his
professional assessments on the need for additional troop strength, and
other issues that run counter to the SecDef.  However, he provides no
evidence to support this contention.

9.  The applicant's contention that his actions did not stem from any
wrongful behavior on his part and, at worst, were technical violations of
vague policies has been considered.  His contention that the policies
regarding contractors were written when contractors were only performing
the role of defense competitors for supplies and equipment has been
considered.  His comments, in his 14 April 2004 memorandum, that if he had
realized having a contractor as a Special Assistant would create the
perception of a personal services contract, he would have placed someone
between them for reporting purposes is noted.

10.  It is understood that Office of Federal Procurement Policy Letter 92-1
itself recognizes it is difficult to determine what contract services are
permitted and what services, as "inherently Governmental functions," are
not.  It also
recognizes that agencies have occasionally relied on contractors to perform
certain functions in such a way as to raise questions about whether
Government policy is being created by private persons.

11.  It is also noted, however, that Office of Federal Procurement Policy
Letter 92-1 was revised in 1999, just two years before the applicant was
appointed as the Director, OFTF.  Since the applicant was unfamiliar with
working with contractors and had not received contractor training, it would
have been reasonable to have expected him to have contractor policy
researched by his administrative staff.  These two policy letters were not
difficult to discover on the Internet.  The applicant states that the Army
must recognize the role of contractor support in today's Army and change
their policies accordingly.  However, contractor policy is set by Federal
authorities, not by the Army or the Department of Defense.

12.  In his rebuttal to the advisory opinion, the applicant stated it was
remarkable that GOMO would cite Army Regulation 15-80 to justify the Acting
SA's actions yet overlook other regulatory guidance in that same regulation
(i.e., that "…determination will be based on the soldier's overall service
in the grade in question.").  Army Regulation 15-80 states that the SA
retains sole authority to make discretionary grade determinations in cases
involving general officers.  As noted in paragraph 6, DISCUSSION AND
CONCLUSIONS above, the applicant provides no evidence to support his
contention that the Acting SA did not consider his overall service in
grade.

13.  Title 10, U. S. Code, section 1552 permits the Secretary of a military
department to correct any military record of the Secretary's department
when the Secretary considers it necessary to correct an error or remove an
injustice.  The specific correction the applicant is requesting is not a
matter within the Army's jurisdiction.  Title 10, U. S. Code, section
1370(c) states that an officer who is serving as a LTG may be retired in
that grade only after the SecDef certifies in writing to the President and
Congress that the officer served on active duty satisfactorily in that
grade.

14.  The Army Board for Correction of Military Records cannot correct a
Department of Defense record.  At best, it could correct the records to
show that the Acting SA recommended the applicant be retired as a LTG.
However, for all the reasons noted in the DISCUSSION AND CONCLUSIONS above,
it does not appear that such a correction would be appropriate.

BOARD VOTE:

________  ________  ________  GRANT FULL RELIEF

________  ________  ________  GRANT PARTIAL RELIEF

________  ________  ________  GRANT FORMAL HEARING

__mhm___  __ses___  __sap___  DENY APPLICATION

BOARD DETERMINATION/RECOMMENDATION:

The evidence presented does not demonstrate the existence of a probable
error or injustice.  Therefore, the Board determined that the overall
merits of this case are insufficient as a basis for correction of the
records of the individual concerned.




            __Melvin H. Meyer___
                    CHAIRPERSON




                                    INDEX

|CASE ID                 |AR20040010425                           |
|SUFFIX                  |                                        |
|RECON                   |                                        |
|DATE BOARDED            |20050526                                |
|TYPE OF DISCHARGE       |                                        |
|DATE OF DISCHARGE       |                                        |
|DISCHARGE AUTHORITY     |                                        |
|DISCHARGE REASON        |                                        |
|BOARD DECISION          |DENY                                    |
|REVIEW AUTHORITY        |Mr. Chun                                |
|ISSUES         1.       |129.04                                  |
|2.                      |                                        |
|3.                      |                                        |
|4.                      |                                        |
|5.                      |                                        |
|6.                      |                                        |


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