Feb 01, 2012
Bureau Proposes Consumer Database for Credit Card Complaints, POGO and Allies Say Yes!
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By DANA LIEBELSON
Hungry? Check out Yelp, where you can read restaurant reviews straight from the mouths of diners. Need a hotel room? Hop over to TripAdvisor, where vacationers report which rooms have ocean-side views, and which have cockroaches. Looking for consumers' credit card complaints so you can choose a reputable company? You're out of luck, buddy.
But that might soon change: on Monday, POGO joined Consumer Action and other allies in comments sent to the Consumer Financial Protection Bureau (CFPB), supporting the agency’s proposed publicly accessible online complaint database.
There is already a model for the government to follow when it comes to making complaints about a product available to consumers. The Consumer Product Safety Commission has a searchable online database for complaints about the safety of products, similar to the one proposed by the CFPB. But SaferProducts.gov doesn’t include credit cards or other financial products. The CFPB’s proposal would allow people to use other consumers’ first-hand experiences with credit card companies as a tool to make smart financial decisions.
The public comments—which were signed by consumer, civil rights, privacy, and open government groups, and members of Americans for Financial Reform—give suggestions as to how this database can inform the public of complaint details without putting an individual’s personally identifiable information at risk.
From the comments:
Morning Smoke: Brokers Still Making Blunders Despite Fines
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Where there's smoke, there's fire. POGO's Morning Smoke is a collection of the freshest investigations, scoops, and opinions related to the world of government oversight. Have a story you'd like to see included? Contact POGO's blog editor |
Financial Oversight
Fines Fail to Stop Some Broker Bloopers
Suzanne Barlyn, Reuters
CBO: TARP Spending Will be $61 Billion More in Fiscal 2012
Corey Boles and Jeffrey Sparshott, The Wall Street Journal
SEC Chairman Faces Bellwether Vote
David S. Hilzenrath, The Washington Post
How the Fed Presidents' Assets Stack Up
Binyamin Appelbaum, The New York Times
Swiss Turn Over Encrypted Bank Data to U.S. Prosecutors
Reuters
Whistleblower Issues
AF Mortuary Whistleblowers Retaliated Against, Special Counsel Finds
Andy Medici, Federal Times
Open Government
Helping the House Advance Data Transparency
Jim Harper, Cato @ Liberty
Watchdogs Say Transparency Efforts Fall Short
Eugene Mulero and Kristin Coyner, Roll Call
Contract Oversight
Military Health Care Carrier Hit with $10 Million Fine
Kelly Kennedy, USA Today
USDA Backs Off Controversial Labor Rule Targeting Contractors
Matthew Weigelt, Washington Technology
National Security
Wrongly Installed Ejection Seat Parachutes Ground 15 F-35s
Jeff Schogol, Defense News
$30 Billion in 25 Years: Celebrating the Silver Anniversary of the False Claims Act Overhaul
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By NEIL GORDON
Yesterday, there was a belated celebration of the 25th anniversary of the False Claims Amendments Act of 1986. The Department of Justice marked the occasion with remarks by Attorney General Eric Holder, Assistant Attorney General Tony West, and Members of Congress, and a panel discussion entitled "$30 Billion, 25 Years: The False Claims Act in Review" featuring department officials and outside experts.
The federal False Claims Act is a law that imposes liability on persons and companies who defraud federal government programs: Medicare and Medicaid, national security programs, federal housing, disaster relief loans, and agricultural subsidies. The law allows private persons (whistleblowers) to file legal actions called qui tam lawsuits on behalf of the United States to recover taxpayer money lost to fraud, waste, or abuse. POGO blog readers might recall that the Department of Justice announced in December that it has recovered more than $30 billion in judgments and settlements under the Act since 1986, with last year bringing in more than any other year.
The 1986 amendments, sponsored by Senator Chuck Grassley (R-IA) and Representative Howard Berman (D-CA), strengthened the Act’s qui tam provisions by creating incentives for whistleblower lawsuits, such as increasing the amount of money successful plaintiffs can recover. Grassley and Berman were also instrumental in the passage of the second major overhaul of the Act, the Fraud Enforcement and Recovery Act of 2009.
For those interested, this document shows federal fraud recovery statistics from 1987 to 2010. Some of those fraud cases can be found in POGO's Federal Contractor Misconduct Database, which now contains at least 168 False Claims Act instances, accounting for $8.4 billion in fines, penalties, and settlements.
The False Claims Act actually dates back to the time of President Abraham Lincoln, who urged Congress to tackle rampant Civil War contracting corruption. Congress passed the False Claims Act (commonly known as the “Lincoln Law”) in March 1863. I guess that means we’re in for a big 150th anniversary celebration next year.
Coincidentally, 2011 marked the 25th anniversary of another anti-fraud statute. The Program Fraud Civil Remedies Act (PFCRA)—the so-called “Mini-False Claims Act”—was enacted in 1986 to enable the government to handle smaller fraud claims (less than $150,000) through a more streamlined administrative process. However, a report issued last week by the Government Accountability Office found this statute is rarely being used: five agencies referred a total of 141 PFCRA cases to the Department of Justice over five years. One agency, Housing and Urban Development (HUD), was responsible for 96 percent of those cases.
Neil Gordon is a POGO Investigator.
Image via the Justice Department.
Heritage Foundation Arguments In Defense of the F-35 are Faulty
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By NICK SCHWELLENBACH
Last week, Heritage Foundation defense analyst MacKenzie Eaglen published a post on the American Enterprise Institute's blog decrying the Pentagon's plan to slow down its purchases of the Joint Strike Fighter--something a high-level group of Pentagon officials recommended in a report POGO made public last month. She reveals perhaps her top motivation early on in her short post, warning against "delays [to] the Joint Strike Fighter, by far the most important program to the health of the American defense industrial base."
She adds in her next sentence that “it is truly schizophrenic for the President to be jeopardizing the health of America’s defense industrial base.” I suppose she believes the Pentagon should continue to hand out blank checks to its defense contractors. Lockheed Martin, the prime contractor for the JSF, is a funder of Heritage, according to a Counterpunch article by four veteran defense experts.
But later in her brief post she attempts to scare the reader:
Cutting edge programs such as the Joint Strike Fighter… are all critical programs for a Pacific oriented Pentagon. … Most reckless of all is the Secretary’s decision to cut six tactical aircraft squadrons. A 2009 RAND study has the United States losing an air war over the Taiwan Straits due to an overwhelming Chinese advantage in numbers of aircraft. As our aircraft inventory goes down, this bleak future will only become more likely.
She is right. A smaller force structure would make it more difficult for the U.S. to fight China in a war over Taiwan, especially given their numerical and geographic advantage (the shorter distance they have to fly means more sorties can be generated over the contested area). The problem for the U.S. is a large force is unaffordable given the inordinate per unit expense of weapons like the F-35 Joint Strike Fighter. Lockheed claims that they will get the price down eventually, and the Pentagon assumes somewhat similarly, but some experts are skeptical the price will come down radically.
But the qualitative “advantage” of the F-35 isn’t what Eaglen might assume either given her support for the plane and her mention of the RAND study. What she may not know is, in 2008, briefing slides examining a potential U.S.-China conflict over Taiwan in light of lessons learned in air combat in the past by RAND analyst John Stillion leaked out. What was perhaps most explosive about his analysis was his criticism of the F-35, which would likely be the U.S. tactical aircraft workhorse in the scenario he analyzed.
Continue reading "Heritage Foundation Arguments In Defense of the F-35 are Faulty" →
Jan 31, 2012
CBO: Feds Paid More Than Similarly Educated Private Sector Employees
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By SCOTT AMEY
Yesterday, the Congressional Budget Office (CBO) released the study "Comparing the Compensation of Federal and Private-Sector Employees." The study doesn't compare similar occupations, but instead looks at compensation for employees with similar education levels.
CBO found that, overall, “federal workers tend to be older, more educated, and more concentrated in professional occupations than private-sector workers,” and, on average, are paid 16 percent more than similar employees in the private sector. However, that trend occurs mostly in the lower education levels. Public servants with advanced degrees were paid 18 percent less in total compensation than the private sector.
POGO found a very similar disparity (a 20 percent higher total compensation rate for federal employees) in our Bad Business report. However, I have been waiting to hear more from the Office of Personnel Management (OPM), which argues that feds receive lower pay when education and occupation are considered.
Continue reading "CBO: Feds Paid More Than Similarly Educated Private Sector Employees" →
Representatives Show Support for Whistleblower Robert MacLean's Final Appeal
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By DANA LIEBELSON
| MacLean takes oath as a U.S. Border Patrol agent. |
POGO has long been a supporter of whistleblower Robert MacLean--for good reason. Thanks to Bob, Americans can feel safer stepping on an airplane. In 2003, the Transportation Security Administration (TSA) attempted to remove air marshals from "high-risk" flights when there was a heightened intelligence warning of hijackings. MacLean, an air marshal himself, disclosed this dangerous cost-cutting plan. As a result, he was fired.
Now, MacLean only has one more chance to appeal the ruling made by the Merit Systems Protection Board (MSPB), which wrongly decided in July that his case did not constitute retaliation. As POGO has pointed out before, this ruling was flawed for several reasons, and MacLean deserves all legal protections afforded to a whistleblower.
Representatives Carolyn Maloney (D-NY) and Dennis Kucinich (D-OH) plan to send a friend of the court brief to MSPB that defends MacLean’s retaliation claim. POGO is also encouraging other Members of Congress to do the same, and calling on our readers to get in touch with their Members of Congress about this issue.
MacLean was retaliated against in part because of a policy loophole that essentially amounts to ex post facto law. Like many whistleblowers, MacLean tried to make the disclosure inside his agency but was rebuffed, so he went to the press. Three years later, TSA marked his disclosure—which was an agency-wide, unencrypted text message—as Sensitive Security Information (SSI). TSA then retroactively charged MacLean for mishandling this newly-marked text message by delivering it to the media.
Continue reading "Representatives Show Support for Whistleblower Robert MacLean's Final Appeal" →
Challenges Looming in Iraq for State Dept. as Security Contractors Set to Double
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By ANDRE FRANCISCO
U.S. soldiers are leaving Iraq, but as many as 18,000 contractors are staying behind to run and protect the Green Zone, the world's largest embassy complex. The contractors are being overseen by the State Department, which does not have a good history of contract oversight. POGO Investigator Jake Wiens lays out some of POGO's worries in the video above, and POGO Senior Writer Beth Schulman's op-ed on Other Words delves into the possibility of coming problems with contractors in Iraq.
If the past is prologue, we should be nervous. The State Department's track record managing overseas contractors ranges from spotty to downright awful. As Americans focus more on the 2012 elections and other domestic concerns, it would be far too easy to ignore the glaring need for oversight in Iraq.
A bipartisan study by the Commission on Wartime Contracting in Iraq and Afghanistan found that the U.S. government did a terrible job of managing private contractors in conflict zones. "At least $31 billion, and possibly as much as $60 billion, has been lost to contract waste and fraud in America's contingency operations in Iraq and Afghanistan," the commission reported to Congress last fall. "Much more will turn into waste as attention to continuing operations wanes, as U.S. support for projects and programs in Iraq and Afghanistan declines, and as those efforts are revealed as unsustainable."
POGO will continue to closely watch both the contractors and those who oversee them to highlight problems that arise.
Andre Francisco is POGO's Online Producer
Morning Smoke: How the Bank Lobby Owns Washington
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Where there's smoke, there's fire. POGO's Morning Smoke is a collection of the freshest investigations, scoops, and opinions related to the world of government oversight. Have a story you'd like to see included? Contact POGO's blog editor |
Money in Politics
Auction 2012: How the Bank Lobby Owns Washington
Dan Froomkin and Paul Blumenthal, The Huffington Post
Senate Votes to Move STOCK Act
Seung Min Kim, Politico
Contract Oversight
Obama Calls Again for Capping Government Contractor Pay
Ed O'Keefe and Marjorie Censer, The Washington Post
The Risky Business of Post-War Contracting
Beth Schulman, Institute for Policy Studies
National Security
Parachute Issue Grounds Some Lockheed F-35 Jets
Andrea Shalal-Esa, Reuters
Analysts Call for LCS-1 Redesign
Michael Fabey, Aviation Week
Pentagon Punts on Major Program Cuts
Marcus Weisgerber, Federal Times
A-10 vs. F-35: The Air Force's Latest Budget Bungle
Adam Weinstein, Mother Jones
Financial Oversight
SEC Taps New Interim Inspector General to Replace Kotz
Sarah N. Lynch, Reuters
Stanford Fraud Case Puts Old Friends at Odds
Clifford Krauss, The New York Times
Open Government
Agencies are Likely to Miss 2013 Declassification Deadline
Steven Aftergood, Secrecy News
Whistleblower Issues
If Mitt Romney Believes in Whistleblowers, What about the WPEA?
Shanna Devine, Government Accountability Project
Jan 30, 2012
Why Accountability is Important
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Click here to join POGO's Un-Do Influence campaign: a movement to end the undue influence that powerful corporate interests have on our federal government. |
By NICK SCHWELLENBACH and DANIELLE BRIAN
Interior Department employees taking money and gifts, rigging bids, and literally being in bed with the oil industry go unpunished. A Food and Drug Administration (FDA) official screening for conflicts of interest allows an academic, who has been paid by the manufacturer of a drug known to cause unnecessary deaths, to sit on a federal advisory panel and advise that the drug stay on the market. The Army fails to pursue refunds from a major defense contractor whom the Pentagon Inspector General says overcharged the Army by millions. The Securities and Exchange Commission (SEC) fails to discipline its own employees for inappropriately shutting down enforcement cases after being contacted by former colleagues who work for the companies being investigated.
In these examples, the private sector is benefitting, perhaps inappropriately. But can you blame them? While it’s no excuse for wrongdoing, let’s be honest: The business of business is to make money, but it’s the government’s business to protect the public’s interests.
In the four cases mentioned, the government’s failure to act contributes to a culture of impunity.
At the Interior Department, the Office of Inspector General (OIG) found numerous ethical lapses among as much as one third of the employees in the now defunct Minerals Management Service (MMS)’s Royalty-in-Kind (RIK) program. Several MMS employees “socialized with, and received a wide array of gifts and gratuities from, oil and gas companies with whom [the program] was conducting official business,” according to a memo sent from the Interior IG to the head of the Department. For instance, Gregory W. Smith, the former director of the MMS office in Lakewood, CO, was paid “over $30,000 for his work in marketing Geomatrix [Consultants, Inc.] to various oil and gas companies, most of whom, because of their business relationships with RIK, were considered prohibited sources,” according to an OIG investigative report. Another Senior Executive, Lucy Dennett had “manipulated the contracting process from the start” by setting up sweetheart government contracts for friends leaving the government—such an egregious abuse the IG called it “a culture of ethical failure.” The OIG referred evidence against Smith and Dennett to the Justice Department, which declined to prosecute.
Then there’s the FDA, which allowed a Stanford professor to sit on an FDA advisory committee in December 2010 on the safety of drugs like Bayer’s Yaz and Yasmin oral contraceptives, despite that professor’s very recent history (as of November 2010) of paid advisory work for Bayer to advise the company on Yaz and Yasmin. Paula Hillard, the Stanford professor, said she disclosed all relevant information to the FDA, but that the FDA did not determine she had a conflict of interest. Hillard voted in favor of Bayer’s drug when it came down to a vote by the FDA committee. The vote was close—15 to 11—with Hillard and three other committee members with industry ties voting in favor of the drugs.
Continue reading "Why Accountability is Important" →
Morning Smoke: Pentagon Lost Track of Nearly $2 Billion of Iraqi Money
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Where there's smoke, there's fire. POGO's Morning Smoke is a collection of the freshest investigations, scoops, and opinions related to the world of government oversight. Have a story you'd like to see included? Contact POGO's blog editor |
National Security
Pentagon Can't Account for Nearly $2 Billion in Iraqi Funds
Sara Sorcher, Government Executive
F-35: Out of Altitude, Airspeed, and Ideas - But Never Money
Chuck Spinney, Battleland
Marine Questions Value of STOVL Jets, Harrier and F-35B
Bob Cox, Sky Talk
Congress in Battle Over F-35 Program
Rob Hotakainen and James Rosen, The News Tribune
Public Health
FDA Staffers Sue Agency Over Surveillance of Personal E-mail
Ellen Nakashima and Lisa Rein, The Washington Post
Open Government
Slow Responses Cloud a Window Into Washington
Matthew L. Wald, The New York Times
Financial Oversight
Mortgage Task Force has Fancy Name, but Will It Get Tough?
Gretchen Morgenson, The New York Times
A Modern Pecora Commission Could Right Wall Street Wrongs
Barry Ritholtz, The Washington Post
Freddie Mac Bets Against American Homeowners
Jesse Eisinger and Chris Arnold, ProPublica and NPR News
Deutsche Bank Faces a Series of Damaging Lawsuits
Der Spiegel
Exiting Watchdog Sees Flaws in SEC's Rulewriting
Sarah N. Lynch, Reuters
Revolving Door
Justice Department Official to Join Davis Polk Law Firm
Peter Lattman, The New York Times
Jan 28, 2012
Hold that Revolving Door! Four-Star General Coming Through
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| Photo of Gen. James Cartwright from USA.gov |
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Click here to join POGO's Un-Do Influence campaign: a movement to end the undue influence that powerful corporate interests have on our federal government. |
By DANA LIEBELSON
The revolving door that carried former Department of Defense honcho William Lynn III to a well-paying job with an Italian defense contractor keeps on spinning – now Gen. James Cartwright, who retired as the nation’s second-highest ranking military officer in August, is following Lynn into the private sector.
Cartwright is joining the Board of Directors at Raytheon, a major U.S. defense contractor. Earlier in the week, DRS Technologies named Lynn as its chief executive officer. (Coincidently, before Lynn was tapped as deputy defense secretary, he was a top lobbyist for Raytheon.)
“General Cartwright's deep understanding of defense and broad experience in military operations and matters of national security will be of great value to our Board," Raytheon Chairman and CEO William H. Swanson said in a press release.
Well, Cartwright certainly has a deep understanding of defense: He’s a four-star general with 40 years of service in the Marine Corps, including four years as the Vice Chairman of the Joint Chiefs of Staff. But then there’s that sticky “great value to the Board” comment. And that’s where the problem with the well-oiled revolving door that leads from the Pentagon to the defense industry rears its ugly head.
It’s absolutely reasonable to wonder if Cartwright was eyeing a cushy job with Raytheon during his last years of service. Did that influence any decisions he may have made in regards to Raytheon, which receives billions in taxpayer dollars through federal contracts? Even if it didn’t create any conflicts of interest, the appearance that it could have is why the revolving door chips away at the public’s confidence in government.
As POGO pointed out in its 2004 “Politics of Contracting” report, “a contracting system where current and former public servants use their positions for private gain means powerful private corporations can rig the system in their favor.”
Continue reading "Hold that Revolving Door! Four-Star General Coming Through" →
Jan 27, 2012
FOIA Friday: The Fracking New York Times - How Industry and the Government Reacted to an Expose
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FOIA FRIDAY |
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This week's document: Internal emails from the Department of Energy's Energy Information Administration responding to a New York Times article on fraking. Document dates: June and July, 2011 Every Friday, POGO will strive to make one document available that we or others have obtained through the Freedom of Information Act (FOIA), especially documents that have not previously been posted online. Some of these documents will be more important than others, some may only be of historical interest— although relevance is in the eye of the beholder. POGO is doing this to highlight the importance of open government and FOIA throughout the year. |
By MIA STEINLE
In the aftermath of last summer’s damaging New York Times investigation into fracking—a method of shale gas drilling lauded by investors—industry and the Department of Energy (DOE) went into damage control mode.
Internal department emails obtained by POGO through the Freedom of Information Act give insight into how DOE’s Energy Information Administration (EIA) responded to the first story from Ian Urbina’s “Drilling Down” series for The Times. The story itself helped bring the fracking debate into the public consciousness, by making public internal industry emails and DOE documents, which showed skepticism about fracking’s promises as early as 2009.
The EIA emails obtained by POGO show that agency employees were displeased with The Times investigation, which revealed, among other things, industry emails from 2009 comparing shale gas investments to Ponzi schemes. The Times noted that, just one year prior, residents of Fort Worth, Texas, were promised almost $28,000 per acre for drilling leases—but many never received such high royalty checks.
The emails also show that employees from the fracking industry—from investment banks, consulting firms and energy companies—and EIA employees emailed each other Urbina’s article and press releases, written by both EIA and industry employees, that were critical of the article.
One EIA economist sent fellow agency employees a press release from natural gas producer Chesapeake Energy Corp. (CHK), which called The Times investigation “inaccurate” and “misleading.” The EIA economist wrote, “This is only my opinion, but I concur with CHK’s findings.” Another EIA employee forwarded the CHK press release to fellow employees, noting, “Here is a rebuttal from a company my nephew works at. Just for amusement.”
It’s no wonder industry hit back hard against Urbina’s story, considering how much they’re betting on fracking and the natural gas market. Another Urbina story also brought to light the dependence EIA has on industry data. As that story notes, EIA “relies on research from outside consultants with ties to the industry. And some of those consultants pull the data they supply to the government from energy company news releases.” So perhaps it shouldn’t come as any surprise some EIA employees, who’ve depended on industry for their view of fracking’s potential, might be taking industry’s side. And if industry indeed has made some rosy assumptions, this is troubling.
