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Eugene McDaniel enlisted in the Aviation Cadet Program of the U.S. Navy on March 16, 1955, was commissioned an Ensign on August 19, 1955, and was designated a Naval Aviator at Corpus Christi, Texas, in October 1956. After completing advanced training at NAS Corpus Christi, Texas, Ensign McDaniel flew the A-1 Skyraider with VA-65 at NAS Oceana, Virginia, from October 1956 to December 1960, and then with VA-42 at NAS Oceana from December 1961 to March 1963. Following Carrier Air Traffic Control (CATC) School at NATTC Glynco, Georgia, Lieutenant McDaniel served as Assistant CATC aboard the aircraft carrier USS Independence (CV-62) from September 1963 to May 1965. His next assignment was as an A-6 Intruder pilot with VA-35 at NAS Oceana, from May 1965 to November 1966, and then deployed aboard the aircraft carrier USS Enterprise (CVN-65) from November 1966 until he was forced to eject over North Vietnam and was taken as a Prisoner of War on May 19, 1967.

Commander McDaniel was released during Operation Homecoming on March 4, 1973. He was briefly hospitalized to recover from his injuries at Portsmouth Naval Hospital in Portsmouth, Virginia, and then served with Medium Attack Wing ONE at NAS Oceana from July 1973 to April 1974. His next assignment was as a Joint Warfare Plans Officer on the staff of the Commander in Chief, Atlantic Fleet, at NAS Norfolk, Virginia, from May to November 1974, followed by ship command training before taking command of the combat stores ship USS Niagara Falls (AFS-3) in July 1975. Captain McDaniel next attended Senior Officers Management Training at Arco, Idaho, from November 1976 to April 1977, and then served as Commanding Officer of the aircraft carrier USS Lexington (CVT-16) from May 1977 to November 1978. His final assignment was as Director of the Navy/Marine Corps Liaison Office with the U.S. House of Representatives from December 1978 until his retirement from the Navy on January 25, 1982. After retiring from the Navy, Red McDaniel founded the American Defense Institute and served as its President until his retirement in 1999.
- Navy Cross
- Silver Star (2)
- Legion of Merit (2)
- Distinguished Flying Cross
- Bronze Star (3)
- Prisoner of War Medal