Walker Takes His Work to Private Sector

Posted February 15, 2008 at 6:44pm

More than nine years after he took the helm at Congress’ watchdog agency, Comptroller General David Walker has decided he can better push his ideals of economic reform in the private sector.

As of March 12, he will be the president of a new foundation whose primary mission is to solve the economic problems of the nation — budget deficits, high foreign debt and “unaffordable” health care among them. These are issues Walker has been vocal about during his time at the Government Accountability Office, and now he is willing to cut his 15-year term short to more forcefully tackle them.

Besides, he argues, his work at the GAO is essentially done. After reaching his goals of producing “a model agency” and helping establish more modern national accounting practices, he said the rest of his tenure would mostly be keeping it all running.

“I’m a change agent. I’m an innovator. I do my best when I have a challenge,” he said. “When you start getting into maintenance mode, that’s not as challenging.”

His aspirations match those of his new partner, Peter G. Peterson. Peterson, the 81-year-old billionaire co-founder of The Blackstone Group, hand-picked Walker to head up his new venture, the Peter G. Peterson Foundation.

Like Walker, Peterson has long decried the unsustainability of America’s budget and sees himself as a force of change. He’s pledged to give the foundation $1 billion in the next few years.

“We almost use the same words,” Walker joked. “It’s rather scary.”

That similarity prompted Peterson to court Walker over the past few months. He first got the idea when Walker gave a speech in November at The Concord Coalition, a nonpartisan group that speaks out against the federal deficit. Peterson helped found the organization, and Walker was accepting its Economic Patriot Award.

In that speech, and in subsequent public appearances, Walker proved to be a “great communicator,” Peterson said.

“He and I are in total agreement that the sustainability challenges that we’re talking about are real and they’re a real threat to the future of our country,” Peterson said. “So we share a very common view of the nature of the challenges.”

Walker and Peterson plan to “awaken Americans” to the danger of an unbalanced budget, along with the problems of “gluttonous” energy use and the threat of the proliferation of nuclear weapon materials. The details still need to be worked out, they said, but the foundation will focus on getting Americans — especially young Americans — to push Congress to work on solutions that may be politically difficult.

“If the solution to the problem is, in the case of entitlements and benefit reforms, a reduction, or if the solution to one of these problems is increased taxes, that’s considered very unpalatable in today’s political culture,” Peterson said. “I’m old enough to remember LBJ. He talked about guns and butter. We’re now guns, butter and tax cuts.”

Walker says it will be a little bit of everything: some lobbying, a few research grants and a lot of informative reports to motivate the public. He expects to hire a few experts but also to make alliances with similar-minded organizations. The Internet will play a big role in gathering support, he said.

It will begin in less than a month, leaving little time for Walker to tie up loose ends. He leaves an agency in the middle of arguably the biggest human capital reform in its history, and a work force that is bitter about a new pay system.

Walker changed the agency over to a market-based, performance-driven system a few years ago, drawing the ire of GAO analysts. In 2006 and 2007, several hundred didn’t receive cost-of-living allowances because of a study that said those employees were paid above market wages.

Analysts were further angered because the system is based on performance ratings that historically have skewed lower for black employees. Walker has commissioned a study to get to the root of that problem.

The controversy was enough to spur the creation of a union. As Walker leaves, that union has yet to negotiate a bargaining agreement and it hopes to get rid of — or at least limit — the new pay system.

Walker maintains that his resignation won’t signal the end to a pay system he sees as fiscally responsible.

“Just because I’m going doesn’t mean the leadership of this agency aren’t committed to a market-based, skills- and knowledge-oriented system. We are of one mind on that,” he said. “Anything other than that is not in the interest of the taxpayer.”

Still, some analysts celebrated Walker’s resignation Friday. One longtime analyst was on vacation and said he still received six excited phone calls in the hour after Walker’s announcement.

“There was a tremendous animosity that has formed toward David Walker so that’s part of the celebration,” he said. “They were tired of him and tired of his penny-wise approaches.”

But in an official statement, the agency’s union acknowledged that Walker is a “strong voice for fiscal discipline and a more efficient and effective government.”

Walker’s No. 2, Chief Operating Officer Gene Dodaro, will take over as acting Comptroller General when Walker leaves. A lifelong GAO employee, Dodaro is known by many analysts, who were positive about his ascension and hopeful about upcoming negotiations for a bargaining agreement.

He might be in charge for awhile. Walker predicted that a permanent head wouldn’t be found for 15 months to two years because of an outgoing president and a laborious process.

That process begins with a Congressional commission made up of leadership and Members from oversight committees and ends with a presidential appointment. Walker said he sent over letters of his resignation early Friday morning.

Rep. Danny Davis (D-Ill.) expressed surprise at Walker’s departure. The two have sparred over the past few months, with Davis holding several hearings on the GAO’s pay system as chairman of the House Oversight and Government Reform Subcommittee on Federal Workforce, Postal Service and the District of Columbia.

“He is tough, well-versed, hard-nosed, a true professional, highly opinionated and has a position on issues that he defends to the hilt,” Davis said. “I trust he’ll be successful.”

Walker admits he has strong opinions. He also has a laundry list of experience in auditing and fiscal reform, spending the decade before coming to the GAO as a partner at Arthur Andersen LLP, handling human capital service practices. He’s also written two books (one on retirement, the other on human capital) and now sits on a number of committees, including the Independent Audit Advisory Committee for the United Nations.

At the Peterson Foundation, Walker said he will get to use that experience to put forth opinions and solutions, something he hasn’t been able to do at the GAO. While he has tremendous pull as the head of a large watchdog organization, he can’t speak out in support of specific legislation, he said, or be involved in grass-roots efforts.

“I had mixed emotions,” he said. “If I made the decision with my heart, I would have stayed. But I made it with my mind.”