WASHINGTON -- On July 7, 1992, Sean C. O'Keefe's first day as Navy secretary, Adm. Frank B. Kelso II, chief of naval operations, walked into his office in the Pentagon and said, "For the good of the naval service, I am prepared to resign."
Mr. O'Keefe replied: "For the good of the naval service, I want you to stay. You owe it to the institution to put this behind you."
At the center of their blunt exchange was the 1991 Tailhook scandal, a shameful chapter of sexual harassment against Navy women who were made to run a gantlet of pawing males at an aviators' convention in a Las Vegas hotel.
This week, the scandal overtook Admiral Kelso again. A military judge ruled that Admiral Kelso was at the scene, witnessed the bawdiness and then tried to protect himself from blame by manipulating the investigation.
"This is the same bad movie playing out all over again," Mr. O'Keefe said when he learned of the judge's accusation against an officer he described as "the straightest arrow I have ever met."
Embarrassingly for the Navy, its senior operating officer stands accused of the same sort of offenses as the midshipmen accused of cheating at the Naval Academy in Annapolis -- dishonesty and cover-up.
The service, shaken when Tailhook broke and forced the resignation of H. Lawrence Garrett III as Navy secretary, is stunned again by the scandal that won't go away.
The dilemma: Should Admiral Kelso stay or go?
The admiral acknowledged having attended the convention -- one of 34 admirals and Marine Corps generals who did -- but has denied witnessing any of the episodes during which 83 women were molested.
Those, like Mr. O'Keefe, who know Admiral Kelso well say they cannot believe he would lie to hide his complicity, or misuse his power to protect himself. Thus, they argue, an innocent man should not have to resign or be dismissed.
They also question the military judge's finding, which implicated Admiral Kelso -- who is charged with no offense -- while clearing three aviators of assault.
Should step aside
Some not so closely associated with Admiral Kelso tend to think he should step aside, ending the Navy's torment over an incident that reinforced its image as a crude, male-dominated service.
Lawrence J. Korb, a former assistant defense secretary who heads the Center for Public Policy Education at the Brookings Institution, said, "What does it do for the young kids in the Navy?
"You have had a military judge basically say that he doesn't believe the [chief of naval operations]. If what that judge says is true, he is not good for the Navy in the short term, not good for the Navy in the long term and certainly not good for the country. He ought to resign from sheer embarrassment."
But Admiral Kelso has not offered his resignation to Navy Secretary John Dalton, who had sought it in October, after deciding that Admiral Kelso had failed to show proper leadership at the convention.
Admiral Kelso heard through a newspaper report of Mr. Dalton's move to oust him, and he won the support of Defense Secretary Les Aspin, who overruled Mr. Dalton.
The judge's ruling this week has landed the issue on the desk of the new secretary of Defense, William J. Perry, who will have the last word on the admiral's future. According to officials close to him, Mr. Perry has not yet addressed the issue.
Admiral Kelso, 60, has let it be known that he is resisting an ignominious end to a 38-year career that has taken him to the top of his service and is due to end in honorable retirement June 30.
"If he resigned, the perception would be that he has quit because this is true," said another admiral who spoke to Admiral Kelso after the judge's finding. "It is for the good of the Navy right now for people to know we have a person of integrity, honor and a great leader."
The admiral's fate could be shaped by a decision today by Vice Adm. Paul Reason, the Pentagon's Tailhook investigating officer, whether to recommend an appeal of the decision of Capt. William T. Vest Jr., the military judge who this week acquitted the three aviators but implicated Admiral Kelso.
Admiral Reason was put in charge of the Tailhook investigation by Admiral Kelso. Captain Vest found that this selection was driven by "primarily personal" interests of Admiral Kelso, who, Captain Vest said, had "manipulated" the initial investigation and used such "unlawful command influence" that the cases against the three aviators had to be thrown out.
Captain Vest disqualified Admiral Reason from further Tailhook involvement, except to allow the admiral to accept his decision or to appeal it by today. Captain Vest also permitted the admiral to order administrative punishment against the three aviators, such as letters of caution.
Should Admiral Kelso resign or be dismissed, there is unlikely to be much delay in appointing a successor. Three admirals -- Jeremy M. Boorda, commander in chief of U.S. naval forces in Europe; Charles R. Larson, commander in chief of the U.S. Pacific Command, and Paul David Miller, commander in chief of the U.S. Atlantic Command -- have been interviewed for the job by Mr. Dalton in anticipation of Admiral Kelso's scheduled retirement.
That Admiral Kelso has an outstanding Navy record is beyond contention. He commanded the 6th Fleet and directed the 1986 counter-terrorist bombing attack on Libya. He is credited with changing the Navy from a service designed to fight a sea war with the Soviet Union to one ready for regional conflicts.