Senate Committee Passes Amendment to Slow Revolving Door Between Industry and Interior

This morning, the Senate Energy and Natural Resources Committee passed an amendment that would expand and strengthen existing restrictions so that all employees of the Department of the Interior with responsibilities under the Outer Continental Shelf Lands Act—not just the highest-ranking employees—would be banned from lobbying for industry for two years after leaving Interior, and also from making lobbying contact with Interior for at least one year.

POGO sent a letter endorsing the amendment originally introduced by Senator Wyden (D-OR) to slow the revolving door, yesterday, along with Citizens for Responsibility and Ethics in Washington (CREW), Fund for Constitutional Government, Government Accountability Project (GAP), Greenpeace, OMB Watch, Public Citizen, Revenue Watch Institute, Sunlight Foundation, Taxpayers for Common Sense, Union of Concerned Scientists, and U.S. PIRG.

But today, an amendment to both slow the revolving door and clarify conflicts of interest, offered by Senator Wyden and Committee Chair Jeff Bingaman, was passed.

As POGO blog readers know, there's a long history of a revolving door between the Department of the Interior and the oil and gas industry. Kudos to Senators Wyden and Bingamen for their leadership in this critical issue.

Find more details on the amendment, which echoes a request from Interior Secretary Ken Salazar, below the jump—and don't forget to check out POGO Executive Director Danielle Brian's statement. 

Interior Starts to Fine BP

In another move to demonstrate that it's more than just a name change at the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEM, formerly the Minerals Management Service, or MMS), BOEM Director Michael Bromwich announced at this morning's House Natural Resources Committee hearing that the Interior Department was imposing a $5.2 million fine against BP America for "false, inaccurate, or misleading" reports for energy production that occurred on Southern Ute Indian Tribal lands in southwestern Colorado. In the hearing, he noted that not only did Interior find that statements were false and misleading, but that they were willfully so.

This is a big deal. POGO investigations and a review by ProPublica have found MMS enforcement actions against companies for royalty under-payments have been few and far between (billions of dollars in underpayments have been primarily recovered through private citizens and whistleblowers suing companies).

POGO applauds BOEM Director Bromwich and Interior for acting upon audit findings, but it is important to note that these findings were initially discovered by tribal auditors, who unfortunately go largely ignored, and according to Interior's press release, were first reported to BP in August 2007. We hope that part of Director Bromwich's reforms will be a thorough review of findings from states and tribal auditors—who must be heard on these issues, and frequently are on the front lines for discovering this waste, fraud, and abuse.

-- Mandy Smithberger

New Podcast: Fun with Inherently Governmental Functions

In case you missed it, a new POGO podcast is now available. In it, POGO Executive Director Danielle Brian makes her podcast debut, discussing recent testimony about private security contractors that she delivered at a Commission on Wartime Contracting hearing.

The hearing tackled the question of whether providing security in combat zones should be considered an inherently governmental function—in other words, a service that should be reserved for government personnel only.

Have a listen, and while you're at it, feel free to subscribe to our podcast via iTunes. Please feel free also to drop us a line with feedback or suggestions for podcast topics. 

DOWNLOAD THE LATEST POGO PODCAST.

-- Bryan Rahija

Image: Curious Expeditions, licensed under Creative Commons.

Morning Smoke: Interior Leadership Weighs in on CLEAR Act before House Committee

Discussion Draft, Amendment in the Nature of a Substitute to H.R. 3534 [House Natural Resources Committee] 

Hearing: "The Role of Derivatives in the Financial Crisis" [Financial Crisis Inquiry Commission]

In U.S. Bailout of A.I.G., Forgiveness for Big Banks by Louise Story and Gretchen Morgenson [The New York Times]

U.S. Negotiators Agree to End TARP to Pay for Financial Bill by Alison Vekshin [Bloomberg]

TARP watchdog says Treasury Department is allowing recipients to judge their own compliance with program rules by Ryan Holeywell [BailoutSleuth]

SEC's Revolving Door Often Spins More Than Once by Asher Hawkins [Forbes]

As CEO Hayward Remade BP, Safety, Cost Drives Clashed by Guy Chazan, Benoit Fuacon, and Ben Casselman [The Wall Street Journal]

MMS becomes BOE. Oh, wait -- BOEMRE by Al Kamen [The Washington Post]

Defense firms publicly back budget effort by Roxana Tiron [The Hill]

U.S. Attorney General Arrives in Kabul [Reuters]

Despite BP corporate code, firm has made political contributions by Carol D. Leonnig [The Washington Post]

One Last Chance to Improve Financial Transparency

In an incredible turn of events, Democratic negotiators have agreed to reconvene the financial regulatory reform conference in order to address Republican concerns over a $19 billion tax on big banks (you can watch the proceedings live on C-SPAN).

The recent death of Senator Robert Byrd (D-WV), followed by Senator Russ Feingold’s (D-WI) announcement that he will still vote no on the bill, means that Democrats are scrambling for support from Republican senators who previously voted for the bill but are opposed to the $19 billion tax.

As the conferees head back to the drawing board, we strongly urge them to consider adding a separate measure introduced by House Oversight and Government Reform Committee Ranking Member Darrell Issa (R-CA) that would dramatically improve data standards for financial reporting.

Rep. Issa has been a longtime proponent of requiring financial regulatory agencies to collect more information from financial firms in a standardized, searchable, and non-proprietary format. Adopting a single data format, such as Extensible Business Reporting Language (XBRL), would vastly improve the ability of regulators, investors, and taxpayers to gather useful information on the financial services industry. For instance, it would allow regulators to receive an early warning when a firm is engaging in risky business practices, and allow taxpayers to keep better track of firms that have received assistance from the federal government.

As the conference began, Rep. Issa offered four amendments that would require financial regulatory agencies to designate standards for the collection of business data. These standards would apply to banks, investment advisers (including hedge funds), insurers, and credit rating agencies (the SEC already collects information from public companies in a standardized format).

At one point, the House conferees unanimously agreed to add one comprehensive amendment with language on data standards that would apply to the entire bill. But this amendment somehow didn’t make it into the committee’s conference report.

We appreciate that the committee agreed to broadcast its proceedings live on C-SPAN, as POGO had recommended. But even with this added transparency, the public still has no way of knowing how or why the Issa amendment was stripped from the conference report during the marathon session last Friday. If Members of Congress are opposed to adopting a standard for the collection of business data, they should come out publicly and say so. Otherwise, there’s no reason for Congress to exclude this commonsense reform from the final legislation.

We applaud Rep. Issa for continuing to push for greater financial transparency—it’s one of many reasons why POGO is honoring him with our Good Government Award. Now it’s time for the rest of Congress to follow suit.

-- Michael Smallberg

"Better Buying Power"

 

No, “Better Buying Power” is not the title of a Sunday infomercial for flipping real estate. It’s the title of a recently released defense memo to the federal acquisition workforce. After years of blaming the budget process, requirements definitions, and the acquisition workforce, senior Department of Defense (DoD) leadership has come to the realization that it must buy better.

Ashton Carter’s June 28th memo states that in addition to buying “to support our forces at war on an urgent basis,” there is “another important priority: delivering better value to the taxpayer and improving the way the Department does business.” Citing the declining budgets and quoting Defense Secretary Gates, Carter adds that DoD must “learn to manage defense dollars in a manner that is… ‘respectful of the American taxpayer at a time of economic and fiscal distress.’”

The plan is to reduce “unneeded or low-priority overhead” and transfer those funds to “warfighting capabilities”—“doing more without more” with the $700 billion spent annually by DoD. According to the memo, $400 billion of those expenditures are on contracts for goods and services. We have all heard the saying “buyer beware,” but now DoD acquisition professionals are learning that the buyer should be aware of bloated overhead and uncover savings by finding genuine competition, avoiding risky contracts types, awarding incentive fees to those that are deserving, and eliminating non-value added costs. Sounds like many of the policy recommendations that Pentagon insiders and POGO have promoted for years.

--Scott Amey

Image: chart from a 1991 memo by Defense Department Analyst Ernie Fitzgerald, explaining how the procurement system rationalized paying excessive costs to contractors.

It's About Time: The House Passes Legislation to Disclose Additional Information about Federal Service Contracts

For too many years, too many administrations have been spending trillions of taxpayer dollars on contracts with private sector providers to perform services that scholars suggest historically were performed by federal employees. This was done without adequate data systems for holding government agencies accountable for outsourcing jobs that all too often involved inherently governmental functions and failed to identify contractors who charged excessive costs, delayed critical work products, and provided unsatisfactory service performance. The main source for knowing about these occurrences has been a multitude of Government Accountability Office (GAO) reports over the past 20 to 30 years (POGO will have more to say about this in a forthcoming report later this summer on its investigation into the state of the federal government’s privatization of jobs that should be performed by government employees).

Finally, Congress has embarked upon legislation that would build upon requirements set forth in the National Defense Authorization Act for Fiscal Year 2008 mandating that the Department of Defense (DoD) publish annual inventories of activities performed each year pursuant to contracts for services, proposing and expanding this requirement to all executive agencies obligated to publish inventories in accordance with the Federal Activities Inventory Reform Act of 1998 (FAIR Act). The House of Representatives sent to the Senate H.R. 5136, its draft of the National Defense Authorization Act for Fiscal Year 2011. Section 850 of the bill includes two significant amendments to the Office of Federal Procurement Policy Act.

The first amendment adds “Sec. 45. Service Contract Inventory Requirement,” which mandates the following critical actions and disclosures: 

POGO and Allies Support Amendment to Slow Revolving Door between Industry and Interior Dept.

POGO and allies just delivered a letter to key Senate leaders in support of Senator Ron Wyden's (D-OR) amendment to the Outer Continental Shelf Reform Act of 2010 (S. 3516). The amendment would go a long way towards slowing down the revolving door, which has been spinning out of control between the oil and gas industry and the Department of the Interior.

As we write in the letter, "The Deepwater Horizon disaster dramatically illustrates the enormity of the risk to our safety, the environment, the economy, and the general public interest by the capture of government agencies by private industry. The revolving door between the oil and gas industry and its regulator is at the rotten core of the lax oversight that led to oil spilling into the Gulf of Mexico."

Specifically, the amendment would:

• Expand current restrictions to ban all Interior Department employees with responsibilities under the Outer Continental Shelf Lands Act from lobbying for industry for two years after leaving Interior;
• expand current restrictions to ban all Interior Department employees with responsibilities under the Outer Continental Shelf Lands Act from making lobbying contact with Interior for at least one year after they leave;

• add a two-year cooling-off period banning former Interior employees from employment with any party that had interests pending before them in their previous year of civil service;

• ban Interior employees brought into the Department from industry from overseeing matters relating to any former industry employer or client for two years; and

• add civil and criminal penalties to violations of these restrictions (which are sorely lacking in current restrictions).

POGO and twelve other good government groups sent the letter to the Senate Committee on Energy and Natural Resources Chairman Jeff Bingaman (D-NM) and Ranking Member Lisa Murkowski (R-AK).

-- Bryan Rahija

NIH Director Continues to Support Embattled Leader of Conflict-of-Interest Reforms

The Chronicle of Higher Education reports that National Institutes of Health (NIH) Director Francis Collins continues to back Dr. Thomas Insel in his role as a leader of conflict-of-interest reforms at the NIH. It's really too bad that Collins puts so little weight on the damning facts about Insel's support of Dr. Charles Nemeroff, one of the most blatant violators of the NIH's financial conflict-of-interest (COI) policies.

-- Ned Feder

Morning Smoke: SEC Agrees to Settle with Aguirre in Wrongful Termination Claim

SEC Settles with Aguirre by Dylan Blaylock [The Whistleblogger]

Affordability, Not Just Appetite, Must Be Designed Into Weapons Programs: Carter by Greg Grant [Defense Tech]

Byrd's Death, Republican Fee Concerns Complicate Finance Bill by Patrick O’Connor and Alison Vekshin [Bloomberg]

Did the Supreme Court Just Declare That a Bunch of Agencies Are Unconstitutional? by Tom Shoop [FedBlog]

Preparing for the Next Big One by Andrew Ross Sorkin [The New York Times]

Drug Pushers in Academia by James Ridgeway [Mother Jones]

Starbucksgate: Obama's Lobbyist/Email Scandal by Nick Baumann [Mother Jones]

More on OMB’s performance reviews by Tom Spoth [FedLine]

Judicial Ethics in the Gulf: Judge Feldman’s Conflicts and DOJ Malpractice [emptywheel]

Ethics Czar Eisen Headed for Prague by Carrie Levine [The BLT: The Blog of the Legal Times]

Hearing: Contracting in Combat Zones: Who Are Our Subcontractors? [House Subcommittee on National Security and Foreign Affairs]

Reason Number 3,484,917 for Enhancing Whistleblower Protections

Over the weekend, The Washington Post published a letter to the editor written by POGO Executive Director Danielle Brian, in which Danielle highlights yet another example of why it's imperative that Congress pass the Whistleblower Protection Enhancement Act.

The Mixed Messages Service? A Look at the Ethics Guidance Provided to MMS Employees

One way to determine whether a problem at an agency is a systemic policy problem or the result of a few bad actors is to look at what kind of guidance its employees received. When the Department of the Interior inspector general (IG) found that Minerals Management Service (MMS) employees in the Lake Charles district accepted football tickets and travel reimbursements, we largely thought that this reflected business as usual at an agency that is overly close to industry. The IG pointed out that accepting these gifts violated the provisions that Gulf employees should have known from annual ethics training:

Federal regulations and agency ethics rules prohibit employees from directly or indirectly soliciting or accepting gifts, including meals, over $20 at one time and $50 per year from a prohibited source. Federal employees are also prohibited from accepting gifts given in association with their official position. They are required to declare gifts and travel reimbursements aggregating over $335 during the reporting period, from any one source, as well as the identity of the source, in an annual financial disclosure report. For travel-related gifts in association with their official position, employees must document the travel itinerary, including dates, and the nature of the expenses.

Only one MMS inspector disclosed receiving gifts and reimbursement. But reviewing Interior's ethics manual, one can almost understand how the MMS employees may not have known that receiving the tickets was wrong. According to the January 2009 version of the Ethics Guide for DOI Employees: