Defense secretary nominee Bobby Ray Inman, who pledged to bring a business executive's experience to the Pentagon, presided over a business deal that drove his company to bankruptcy court, The New York Times reported.
As chairman and chief executive of Tracor Inc., a Fortune 500 military contractor, Inman was in charge during a leveraged buyout that eventually landed it in bankruptcy, the newspaper said.Tracor, which has now emerged from bankruptcy and is financially healthy, is considered a casualty not only of Wall Street's excesses of the 1980s but of mismanagement, cost overruns and shrinking Pentagon spending, the newspaper said.
Inman headed Tracor, based in Austin, Texas, from 1988 through December 1989, leaving nine months before the company filed for Chapter 11 protection.
Inman, a retired admiral, told the Times that Tracor's problems had been caused by Wall Street bankers and lawyers, whose excessive fees heaped costs on top of the purchasing price and caused the heavy debt that eventually broke Tracor's back.
But he acknowledged that cost overruns and performance problems reduced Tracor's cash flow, making it difficult to service its debt.
Inman has been nominated to replace Defense Secretary Les Aspin.
White House officials said this weekend that Aspin could be in line to become ambassador to China when he quits the Pentagon next month.