Philip Kensinger, a retired three-star general is criticised by the U.S. Army for his mistakes, which occured after Army Ranger Pat Tilman's friendly-fire death.
Tillman's death attracted widespread attention because he left a lucrative U.S. professional football career to join the Army after the Sept. 11 attacks.
The Army referred to a special panel whether retired Army Lt. Gen. Philip Kensinger should also have his rank reduced.
Army Secretary Pete Geren told a Pentagon news conference that Kensinger was "guilty of deception" and had deceived investigators.
"It's a perfect storm of mistakes, misjudgments and a failure of leadership," said Geren in announcing his decision after an investigation into Tillman's death.
Kensinger headed Army special operations.
The general bore the brunt of the punishment. Nine other officers were criticized but not punished.
The panel will decide whether Kensinger should be stripped of one of the three stars a lieutenant general wears. A demotion would reduce his retirement pay and other benefits.
Geren said he considered recommending a court-martial but ruled it out. "I looked at many factors," he said.
Kensinger, he said, "compromised his duty."
"He failed to provide proper leadership to the soldiers under his administrative control. ... He let his soldiers down," Geren said. "General Kensinger was the captain of that ship, and his ship ran aground."