Obama's Gray Man

Tom Donilon has amassed enormous behind-the-scenes power as the president’s national security advisor. But now, as the White House shuffles its foreign-policy team, his critics are sharpening their knives.

For the past few weeks, Barack Obama's foreign-policy team has been grappling with world issues ranging from the urgent to the mundane, be it Syria's virulent civil war, North Korea's provocative threats, the historic visit to Washington by the president of Burma, or plans for a summit with China.

But throughout this period, the senior-most officials of the administration have also been working on another concerted but hidden campaign: to defend National Security Advisor Thomas Donilon against growing criticism from inside the administration and by those who served in the first term, and are now speaking out or quietly settling scores.

"Tom is a key advisor to the president. He has teed up over the course of these years many important decisions for the president and the country. I really appreciate the work that he does," the White House's hard-charging chief of staff, Denis McDonough, who previously served as Donilon's deputy, asserted in an unsolicited phone call to this reporter. "I value Tom's partnership and mentorship."

Asked about what one high-level observer called bad chemistry between him and Donilon, McDonough replied: "I think that's untrue. I spend a lot of time even in my new job with Tom. I have the deepest respect for him, and the chemistry between us is kind of the way the chemistry is between a couple of other Irish-Americans."

Over the past five years, Donilon has amassed enormous internal control over Obama's foreign policy -- indeed, ever more so now, with new secretaries of state and defense still learning their jobs. It is Donilon who, working directly with Obama throughout each day, helps the president decide whether to intervene in Syria, what to do about Chinese cyberhacking, and how to deal with Iran's and North Korea's nuclear programs.

So why the sensitivities over Donilon's role now? The growing controversy about his vast influence illustrates the fact that Obama's foreign-policy team will face a major transition if, as widely reported, he steps down over the next year. Most Washington hands assume the next national security advisor will be U.S. ambassador to the United Nations Susan Rice, although some believe that the job may go to Tony Blinken, now the deputy national security advisor, who was previously Vice President Biden's national security advisor.

Over the past half year, several present and former administration officials have urged this reporter to examine the powerful role Donilon plays as national security advisor, the extraordinarily tight leash he holds over the foreign-policy apparatus, his demanding treatment of staff, and the way he allegedly undercuts or elbows aside challenges to his power. Despite his prominent place at the center of Obama's foreign-policy operation, few news outlets have profiled Donilon, who generally prefers to operate behind closed doors.

Even some of his supporters acknowledge that Donilon's style can be a problem for those who work with and under him. "Morale is not great. He drives people hard, and the president drives him hard," said one of his supporters, adding, however, that extraordinarily long hours simply come with the territory in the White House.

After this reporter called the White House last week to raise questions about Donilon's role and stewardship of the National Security Council, the administration launched a high-level campaign to sing his praises. McDonough and Blinken were merely two of several present or former senior officials who, having been alerted by White House officials about an impending story, contacted me by phone or email on Donilon's behalf, without having being asked. The calls appeared to be highly coordinated, in the sense that in four instances, one official called to respond to a new question or issue raised in a previous phone call.

Donilon himself would not speak for the record for this story (except to deny one specific allegation). Despite the complaints that he is too controlling, he is convinced that his responsibility is to run the internal foreign-policy process on behalf of the president and that he has done just that. He also feels that he has given ample scope for top-level officials to make their views known and to have regular access to Obama.

Indeed, by most accounts, Donilon's problems are not so much with cabinet-level officials. "At the highest levels, it's a pretty collegial group," observed one administration official, who pointed out that Donilon has generally avoided the frictions with cabinet officers that erupted under other national security advisors such as Henry Kissinger and Zbigniew Brzezinski. (Donilon did, however, clash in the early years of the administration with former Defense Secretary Bob Gates, who was quoted in Bob Woodward's book Obama's Wars as having said that Donilon would be a "disaster as national security advisor.") The complaints about Donilon, rather, have come from subordinates who work in the White House and from officials below the Cabinet rank in the State and Defense Departments.

Last fall, as the administration prepared to find a new secretary of state to replace Hillary Clinton, I began a magazine story that was in part about Donilon and in part about the fact that, over the past decades, the roles of secretary of state and national security advisor have changed: Secretaries of state have taken on an ever more public role, while national security advisors have taken on ever greater control over the internal gears of the American foreign-policy machine.

The project was abandoned because, before it could be published, Obama had won the election and appointed John Kerry as his next secretary of state. There was, however, an unusual aftermath. Word had apparently spread through the administration that a story was being written about Donilon. Over the course of several months, a series of present and former officials approached me to ask when an article about Donilon's power would appear and to urge that it be pursued.

"There's a problem there, and it hasn't been told," said one current official of Donilon. In another instance, an official I had never met introduced himself and asked what had happened to the article about Donilon. One source said the National Security staff was "a snake pit."

Donilon's detractors, none of whom would speak on the record, are either now serving or have served in a variety of different institutions: at the State Department, the Pentagon, and in the White House. None of the sources are themselves in line for the national security position, and none appeared to have anything to gain if Donilon were to step aside.

The gist of the complaints is that Donilon burns out personnel with his unending requests for more and more paperwork on the details of foreign policy (he asks for extensive briefing papers, even before a meeting with a journalist) and that Donilon sometimes treats subordinates in a curt fashion, either on his own or through a brusque young aide.

His supporters inside the administration reject that criticism. "I've been here for four years and I haven't seen that at all," said Blinken." "That doesn't fit what I've witnessed. Tom works incredibly hard, and so does the staff, but if there's a family or personal issue, that takes precedence."

Inevitably, Donilon has clashed fiercely with officials from the Pentagon and State Department over control of, and credit for, various aspects of Obama's foreign policy.

Donilon is reported to have had friction with former Under Secretary of Defense Secretary Michèle Flournoy because of her inability to get the secretary of defense and the chairman of the Joint Chiefs of Staff to bring a single, unified position to National Security Council meetings. (Flournoy protested that she had no legal authority to do so, one source said, because the law gives the chairman and the defense secretary separate voices in the deliberations of the NSC.)

In addition, sources said, Donilon had further bureaucratic skirmishes with Gates and Flournoy over Afghanistan and defense policy, with former Assistant Secretary of State Kurt Campbell over credit for the administration's "pivot" to Asia and with former Deputy Secretary of State Jim Steinberg over China. (In addition, Vali Nasr, the former aide to the late Richard Holbrooke, Obama's first special envoy on Afghanistan and Pakistan, blamed Donilon in a recent book, Dispensable Nation, for deep-sixing efforts by the State Department to push for a diplomatic settlement in Afghanistan.)

Some of the complaints about Donilon appear to be unfounded. One story circulating Washington has it that friction with Donilon supposedly caused Steinberg to leave the administration after two years. But Donilon, departing from a background interview, exclaimed, "On the record, Jim Steinberg's departure had nothing to do with me." Several hours later, Steinberg contacted this reporter to back up Donilon's claim. "Before I started the job [in 2009], I told them I'd only stay for two years. I have young kids," he explained. "Nothing that happened [during the Obama administration] had anything to do with my decision."

Another disputed issue is whether Donilon, at the beginning of the second term, bottled up plans for a series of wide-ranging discussions inside the administration to review Obama's foreign policy, examine past assumptions, and set out directions for the next four years.

According to one source with direct knowledge of the administration's foreign-policy operations, there were to be two such meetings: an internal one within the White House, and a second one with representatives of cabinet agencies. However, the source said, the sessions were repeatedly postponed and have never been held. The suggestion was that Donilon dislikes freewheeling discussions with a lot of give-and-take that is beyond his control. Instead, he prefers meetings with a structured agenda, a specific decision at hand and a specific do-list at the end: who should make a phone call to the Russian foreign minister, when should congressional leaders be briefed, which administration officials will appear on the Sunday talk shows.

But one senior administration official -- who, like Donilon, would speak only on background -- insisted that there had in fact been internal review sessions about second-term foreign policy with the White House and national security staff. He said that there was no formal National Security Council meeting with an open-ended discussion on the directions for the second term, because it took considerable time for Kerry and, particularly, Defense Secretary Chuck Hagel to be confirmed -- and by that time, the press of events had taken over.

Donilon believes that he has, in fact, led the way in fostering broad, open-ended discussions of the administration's foreign policy, its priorities, future directions, and possible legacy. Kerry and Hagel each have a regular, weekly meeting with Obama, and the two secretaries also meet together once a week with Donilon.

So why does Donilon engender such sniping among foreign-policy hands? One reason is that, unlike many of them, he has not spent his entire career on the subject. When Democratic presidents have left office, many foreign-policy specialists have gone off to think tanks or academia to continue working on the same issues as when they were in power. Donilon has gone off to private law practice or, for one extended period, Fannie Mae.

Another source of suspicion is Donilon's background in partisan politics. He first rose to prominence as a Democratic political operative, went to work for Jimmy Carter's White House right after his college graduation, and became Carter's delegate-counter at the 1980 Democratic National Convention. (At the Palm, the Washington steakhouse where old pals from the Carter administration still gather for Friday lunches, the question gets asked from time to time: How did a pol like Donilon end up as national security advisor?)

Donilon is sensitive to suggestions that he is a mere political hand, or that he is devoted to the process of foreign policy rather than to strategy. In recent years, he has told interviewers that one of the turning points in his life came as he was leaving the Carter White House to go to law school. At the time, Warren Christopher, Carter's deputy secretary of state, handed him a copy of Dean Acheson's book, Present at the Creation. He read it, and he claims it was the beginning of his long interest in American foreign policy.

That may have been Donilon's Rosebud moment, but it took him quite a while to act on his passion. After law school, he joined Christopher's law firm, O'Melveny & Myers, and stayed active in Democratic Party politics until 1993, when Christopher was appointed secretary of state and Donilon became his chief of staff.

Recalling those days, Mike McCurry, who worked under Donilon at State, said in an interview last fall, "We didn't know shit about foreign policy, and we had to learn quickly... I never saw anyone work as hard as Donilon did. He has a temper. He's very demanding, but he never did anything that was not in the interests of the principal [Christopher] or the department."

After leaving the Clinton administration, Donilon returned to his law firm, but soon left to work, along with other Democratic Party insiders like Jim Johnson and Franklin Raines, in a well-paying job at Fannie Mae -- where, in a single year, 2002, Donilon's total compensation package was $4.3 million, according to the Washington Post. Still, while the Democrats were out of power, Donilon kept a hand in foreign policy as a member of the Aspen Strategy Group, an elite circle of current and former policy makers who meet in Colorado each summer to talk about international affairs.

In 2009, after Obama's election, Donilon returned to foreign policy full time, starting out as the deputy to National Security Advisor James Jones. That job meant that, like previous deputy national security advisors, Donilon was in charge of running a "Deputies Committee" [DC] meeting with representatives of the State and Defense Departments, CIA, and other agencies to coordinate daily operations in foreign policy. The meeting is generally held once a day, but when Donilon was deputy in 2009 and 2010, he sometimes called two or more DC meetings a day -- prompting Gates to grumble privately to an aide that he had served as deputy national security advisor during the end of the Cold War and the Persian Gulf War without needing to hold as many meetings as Donilon.

Jones remained remote from daily operations, and as a result, Donilon, working longer hours, assumed ever-greater power over policy. Few insiders were surprised when, in the fall of 2010, Jones stepped down and Donilon became the national security advisor.

In addition to handling foreign-policy crises, Donilon has been a principal architect of the administration's press strategy on national security. Last year, when Republicans in Congress called for an investigation of the Obama White House's leaks to the press on issues such as cyberattacks against Iran, they singled out Donilon as a likely source, asserting that Times reporter David Sanger both reported the leaked information and also portrayed Donilon as "the hero" of the Obama foreign-policy team in his book, Confront and Conceal. (A senior White House official retorted that this is an old charge that Republicans have been making for the past year without evidence. Sanger has said his information did not come from the White House. There is no indication whether the FBI has sought to interview Donilon or other White House officials about the Stuxnet leaks.)

Donilon also helped craft the administration's foreign-policy message for the 2012 campaign, which sought to counteract the Republican charges of previous presidential campaigns that the Democratic candidate was weak on foreign policy. "This is not a president who's at all shy about the use of force," Donilon said in an interview with this reporter a year before the 2012 election, a point he made in similar wording to other writers.

Despite the authority he has amassed, Donilon has until recently operated mostly behind the scenes, avoiding the role of public spokesman for the administration that past national security advisors, from Kissinger through Berger and Rice, have played. In his first two years on the job, Donilon rarely gave speeches or appeared on Sunday talk shows. Others in the administration say he is nervous as a public speaker and doesn't like the uncontrolled nature of television interviews.

In the last few months, however, he has begun to appear in public more often. He has given major public speeches in New York City on Asia policy and on energy policy. That has given rise to speculation within the administration that he may be creating a higher public profile because he is now thinking about what he will do after he leaves the White House.

Obama's foreign-policy team for the second term remains incomplete until Donilon's successor, who will probably direct foreign policy for the final three years of the administration, is on the job.

The role Donilon now plays, as a holdover national security advisor working with second-term secretaries of state and defense, is a departure from recent history. When Bill Clinton and George W. Bush made wholesale changes in their foreign-policy teams at the start of their second terms, they replaced the national security advisors at the same time.

When Clinton named Madeleine Albright as his secretary of state and William Cohen as defense secretary at the beginning of his second term, he at the same time named Sandy Berger as his new national security advisor. Similarly, after Bush's reelection in 2004, he shook up his foreign policy by replacing Colin Powell and Paul Wolfowitz, appointing Condoleezza Rice as secretary of state -- and at the same time appointed a new national security advisor, Stephen Hadley.

Obama administration officials say privately that one reason Obama did things differently than his predecessors -- keeping Donilon on the job while bringing in Kerry and Hagel -- is that Kerry has no previous experience working in the executive branch, and Hagel has had none since he worked for the Veterans Administration in the early 1980s. Donilon thus was kept on to provide stability.

Administration officials reject the suggestion that without a successor to Donilon, the second-term foreign policy can't gel.

"The beauty of having a second term is that one has an acute sense of how quickly four years goes," McDonough told me. "I can guarantee you that the president is not waiting for anything. I get a sense the team is moving out aggressively. From Secretary Kerry's aggressive travel schedule to Tom's consequential visit to Russia to Afghanistan, and his work on difficult issues such as sexual assault and harassment and taking a hard look at the budget, I do not have a sense anyone is waiting for anything or [that the foreign-policy team] is not gelling."

Exactly when would Donilon leave? White House National Security Council spokeswoman Caitlin M. Hayden recently told Foreign Policy's The Cable, "We don't have any personnel announcements to make at this time, and Mr. Donilon has no plans to depart at this point."

One theory is that he will stay on through Obama's trip to Asia in October, when the president is to attend a meeting of Asian and Pacific leaders in Bali, Indonesia. Donilon views himself as the crafter of the administration's pivot to Asia, and would be able to leave after an event that both carries forward and highlights the new Asia focus.

Another theory is that he will leave even before that. Inside the administration, Kerry and Hagel are already said to be starting to chafe at some of the same White House controls faced in the first term by Clinton, Gates, and others, according to one administration source.

One way or another, if the national security post does finally go to Rice, it will represent no small irony.

A year ago, according to three sources, Donilon promoted the idea that Rice should be appointed World Bank president -- a job she didn't want that would have taken her out of the running for an appointment as secretary of state or national security advisor. (Without addressing Donilon's role, one senior administration confirmed that Rice was one of three prominent figures under consideration for the post; the others were Madeleine Albright and Kerry. Eventually, Obama appointed Dartmouth College President Jim Yong Kim.)

Rice has enjoyed a close relationship to the president dating back to the earliest stages of the 2008 campaign. But if she becomes national security advisor, she will also have a difficult job as something of an outsider to the foreign-policy operation Donilon has been running inside the Obama White House for the past five years.

Her appointment would also represent a departure from recent history. Over the past four decades, when a national security advisor leaves his job, the position has usually gone to the deputy national security advisor. Berger, Hadley and several others, including Colin Powell and John Poindexter in the Reagan administration, all served as deputy national security advisor before rising to the top job. In general, the thinking is that by virtue of his job in running the deputies' committee meetings, the deputy national security advisor is already up to speed on virtually all of the administration's ongoing foreign-policy initiatives, public and covert.

That is the reason some believe Blinken is a logical successor to Donilon. Rice, on the other hand, would represent greater change: She would bring fresh eyes and an outside perspective to the NSC and, in general, to Obama's White House inner circle.

Once the new national security advisor is on the job, she or he will be able to form, along with Kerry and Hagel, the nucleus of the foreign-policy team that will likely oversee America's strategy and overall approach for the final three years of his term.

For now, as Donilon stays on the job, his high-level supporters in the White House stand prepared to mobilize to praise his work and to defend him against criticism.

"Tom has been more critical than ever in making sure that we had a very strong process in place, in providing strategic direction and making sure that everyone is rolling in the same direction," asserted Blinken. "The president felt very strongly that Tom needed to stay and be the quarterback. Tom is the key element of continuity. He's the reason we've been able to get off to a good start in the second term."

Pete Souza/The White House via Getty Images


To Drill or Not to Drill

The coming American oil boom is bad news for Saudi Arabia. How the kingdom responds could very well determine if it survives.

Current trends in the global energy market don't look good for Saudi Arabia. First, the International Energy Agency projected in November 2012 that the United States will surpass the Gulf petrogiant as the world's top energy producer by 2020. Then, last week, it revealed that North America, buoyed by the rapid development of its unconventional oil industry, is set to dominate global oil production over the next five years. These unforeseen developments not only represent a blow to Saudi Arabia's prestige but also a potential threat to the country's long term economic well-being -- particularly in the post-Arab Spring era of elevated per-capita government spending.

But if the kingdom's outlook is decidedly bleak, its official response has been muddled. Within a period of just five days last month, two senior Saudi Arabian officials laid out starkly different versions of their country's oil production plan. In an April 25 speech at Harvard University, Prince Turki al-Faisal, a former head of Saudi Arabia's top intelligence agency and the current chairman of the King Faisal Center for Research and Islamic Studies, announced that the kingdom is set to increase its total production capacity from 12.5 million barrels per day (mbd) today to 15 mbd by 2020, an amount that would easily make it the world's top oil producer once again. But five days later, in a speech at the Center for Strategic and International Studies in Washington, DC, Saudi Arabian Minister of Petroleum and Mineral Resources Ali al-Naimi conveyed an entirely different message, rejecting Turki's statement out of hand. "We don't see anything like that, even by 2030 or 2040," he said. "We really don't need to even think about 15 million."

So what are we to make of this 2.5 mbd discrepancy? Considering the world's dependency on petroleum and the projected growth in global demand for oil, it's certainly not chump change. In fact, 2.5 mbd is roughly equivalent to the entire production capacity of major oil producers like Mexico, Kuwait, Iraq, Venezuela, and Nigeria. Whether or not Saudi Arabia plans to ramp up its production, in other words, is relevant to virtually every household on the planet.

One might be tempted to dismiss Turki's grandiose projection on grounds of technical ignorance and defer to the man who is actually in charge of the country's oil industry. That is certainly one way to read the official inconsistency. But in Saudi Arabia, how much oil to produce is first and foremost a political decision. Unlike Naimi, a petroleum engineer who climbed up the ladder of Saudi Aramco, Turki is a member of the royal House of Saud, and when it comes to politics, his views are not less important. The dispute between the two boils down to a major strategic decision Saudi Arabia will have to make in the coming years: whether to drill more or to drill less.

With no revenues from personal income tax and 40 percent of its 28 million citizens under the age of 15 -- not to mention a male population that is mostly employed in the bloated public sector -- Saudi Arabia is heavily dependent on oil revenues to provide cradle-to-grave social services to its people. And the financial liability has only gotten heavier since the Arab Spring forced the regime to fight public discontent with ever more gifts and subsidies. To make things worse, Saudi Arabia is the world's sixth -- sixth! -- largest oil-consuming country, guzzling more crude than major industrialized countries such as Germany, South Korea, and Canada. With so much of its oil consumed at home, the kingdom has only 7 mbd to export -- even as government expenditures are on the rise.

All this is to say that in order for Saudi Arabia to guarantee its economic viability, it must ensure that the breakeven price of oil -- the price per barrel it needs to balance its budget -- matches the country's fiscal needs. This breakeven price -- the "reasonable price" or, as the Saudi Arabian euphemism has it, the "fair price" -- has risen sharply in recent years. "In 1997, I thought 20 dollars was reasonable. In 2006, I thought 27 dollars was reasonable," Naimi explained in March. "Now, it is around $100 ... and I say again ‘it is reasonable.'"

According to the Arab Petroleum Investments Corporation, the breakeven price is currently $94 per barrel, less than the current spot price for Brent crude. (Iran needs oil to be at $125 per barrel to break even, which explains the feud between Iran and Saudi Arabia within OPEC.)  But absent deep political reforms that create new sources of income, the breakeven price will surely grow. According to Riyadh-based Jadwa Investment, one of the world's most important knowledge bases on Saudi Arabia's economy, by 2020 the breakeven price will reach $118 per barrel. At this point, the Saudi Arabia Monetary Agency's cash reserves will begin to drain rapidly and the breakeven price will soar to $175 a barrel by 2025 and to over $300 by 2030. And this cuts to the heart of the dilemma: In order to balance its budget in the future, Saudi Arabia will need to either drill more barrels and sell them for lower prices or drill fewer barrels -- actively reducing global supply -- and sell each at a higher price.

This is the crux of the Turki-Naimi debate. Both officials understand the centrality of oil revenues to the survival of the House of Saud, but they differ on how best to come up with the money. Turki believes that Saudi Arabia should grow its production capacity in sync with the growth of the global economy. But Naimi, the person who will actually be charged with meeting this goal, prefers to keep capacity as it is and, if needed, even let it slide. If history is our guide, Naimi's way will prevail. Since 1980, as the world economy grew by leaps and bounds, oil prices more than quadrupled in real terms. Yet Saudi Arabia, which sits atop of one fifth of the world's economically recoverable reserves, has barely increased its production capacity.

Another potential explanation for Naimi's reluctance to grow capacity is that he knows what Sadad al-Husseini, the former head of exploration at Saudi Aramco, allegedly told the U.S. consul general in Riyadh in 2007. According to a leaked cable published by WikiLeaks, Husseini said that Saudi Arabia may have overstated its oil reserves by as much as 40 percent, meaning that production at current levels is unsustainable.

If Husseini's claim is true, it means there is only one way for the kingdom to make ends meet: Keep prices high by stalling the development of new capacity while adjusting the production of oil downward to offset any growth in supply emanating from the American oil boom. It also means, contrary to popular belief, that the current rise in U.S. domestic production will have minimal impact on global crude prices, and hence on the price we pay for gasoline at the pump. Oil is a fungible commodity and its prices are determined in the global market. If the United States drills more, Saudi Arabia will simply drill less, keeping the supply/demand relationship tight and prices high.

The Turki-Naimi dispute is not an academic one but one with potentially serious implications for the future of the world economy. Whether or not Saudi Arabia likes it -- and it almost certainly does not -- the global energy market is about to get more competitive. In a competitive market, oil should be supplied by all producers roughly in accordance with their geological reserves and marginal costs. There is something profoundly wrong when the United States, which sits atop barely two percent of global conventional oil reserves, produces more barrels per day than Saudi Arabia, a country with reserves ten times bigger.

Saudi Arabia presents itself as a responsible producer sensitive to the needs of consuming countries. These needs are surely growing. It would only be appropriate for the kingdom to grow its capacity in kind by making additional investments. Should Saudi Arabia decide not to do so, the United States should use its vast reserves of cheap natural gas as a trump card. Once cars and trucks sold in the United States are capable of running on fuels made from natural gas and its products -- whether compressed natural gas itself, liquid fuels such as methanol, or natural-gas derived electricity -- the price of transportation fuel will be determined by free and diversified commodity markets, not decisions made in Riyadh.

A system in which oil consumers are forced to pay a rising "reasonable price" per barrel in order to fund Saudi Arabia's ever-growing fiscal obligations is unsustainable, especially in a time when most cash-strapped countries are looking for ways to reduce their own fiscal obligations. As the world moves gradually toward more reasonably priced methods of powering vehicles, the kingdom would do well to drill into the brains of its people -- and that includes women -- as vigorously as it drills into the ground.