Whistleblowers Convene in the District, Lobby Policymakers for Reform

By DAHNA BLACK

Members of the whistleblower community gathered in the courtyard of the Steven R. Mott House last Monday and Tuesday for the 2011 Washington Whistleblower Assembly, entitled "A Conference for Accountability." The focus of this year's Assembly, spearheaded by the Government Accountability Project (GAP) and co-sponsored by POGO and other allies, is part of a larger advocacy effort to protect and increase whistleblower protections.

National Security Agency whistleblower Thomas Drake was honored as the keynote speaker. Drake blew the whistle on a failed multi-billion dollar intelligence program called Trailblazer. The Justice Department originally prosecuted Drake under the Espionage Act for allegedly leaking classified information, charging him with ten felony counts. But the Department’s misguided case against him collapsed in June, and Drake pleaded guilty to a misdemeanor charge of exceeding authorized use of a computer. At the Assembly, Drake said the need for better protections for whistleblowers is greater now more than ever. “Whistleblowing has become a hazardous occupation free of hazardous duty pay," Drake said.

Robert MacLean, a former Federal Air Marshal (FAM) and Transportation Security Administration (TSA) whistleblower, received a “Profile in Courage Award” during the Assembly’s closing ceremony. In 2003, MacLean blew the whistle within the Department of Homeland Security. After he was ignored, he went to the media to disclose an attempt to remove air marshal coverage of long distance, “high-risk” flights amidst heightened warnings based on intelligence that terrorists were planning on hijacking planes and flying them into U.S. East Coast targets. In 2006, the TSA fired MacLean, and said that he disclosed information marked as “Sensitive Security Information” (SSI), though it was not marked as such at the time or communicated in accordance with SSI policy. MacLean lost his retaliation case before the Merit Systems Protection Board in July. The federal Office of Special Counsel said the Board's ruling would "chill would-be whistleblowers." MacLean has said he plans to appeal.

How Much Will "Tour Normalization" for U.S. Troops in South Korea Cost Taxpayers?

By DANA LIEBELSON

As the Pentagon struggles to prevent its budget cuts from breaching  $450 billion over ten years, legislators are putting costly U.S. military initiatives under new scrutiny. One such project, which was targeted recently by Rep. Mike Coffman (R-CO), is the construction of a multi-billion dollar U.S. military base in South Korea. Although it's unclear exactly how much the construction project will cost U.S. taxpayers, it still merits a closer look.  

The construction project is part of a broader Department of Defense initiative to extend the tours of duty of U.S. soldiers in South Korea from one year to three years—an initiative called “tour normalization.” With these new longer assignments, families can accompany service members. The Army reported in April that 850 families had already packed their bags.

"While I certainly understand the value of minimizing the separation of our service members from their families whenever possible, I believe we should suspend the plan to change the tours of duty in South Korea and save the planned $13 billion in military construction cost," Rep. Coffman told AOL Defense. 

The $13 billion cited by Coffman comes from a May 2011 Government Accountability Office (GAO) report, and it’s the cost of constructing more than a thousand new structures, including family housing, health care facilities and schools at U.S. Army Garrison Humphreys. That same report however, also pegs the cost of extending the tours of duty and moving thousands of dependents to North Korea to be an additional $5 billion by the year 2020, and about $22 billion by the 2050—numbers not mentioned in Coffman’s budget cut proposal.

Morning Smoke: A Tale of FOIA Frustration with DHS

MORNING SMOKE

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.

Open Government

Don't Call Us, We'll Call You: Tales of DHS FOIA
Andrew Medici, The Federal Times

Judge OKs Suit Over State Department FOIA Handling
Josh Gerstein, Politico

Lobbying Issues

DOJ Asked to Investigate TransCanada Lobbyist
Ed Brayton, The Washington Independent

Good Government

DOJ Inspector General: Yeah, We Were Wrong About Those $16 Muffins
Ryan J. Reilly, Talking Points Memo

Financial Oversight

SEC Changes Tack on Enforcement Strategy
Jean Eaglesham, The Wall Street Journal

SEC Concedes Challenges in Credit-Rating Probes
Sarah N. Lynch, David Henry and Andrea Shalal-Esa, Reuters

Fast TARP Exit Meant Less Capital for Some Banks: U.S. Audit
David Lawder, Fox Business

National Security

Cohen: Cuts Need Not Hobble U.S. Military
Marcus Weisgerber, Defense News

Navy, Marines Eye JSF Dough to Keep F-18s Flying
Carlo Munoz, Aol Defense

USMC: Cuts Force Business to Change
Michael Hoffman, Defense News

Contract Oversight

SAIC, Others Pay $22.7 Million to Resolve Contracting Case
Grant Gross, PCWorld

Public Health

Military Continues Off-Label Drug Use, Despite Concerns
Bob Brewin, NextGov

Bailout Watchdog Questions All $5.8 Million of Simpson Thacher's Legal Fees

By MICHAEL SMALLBERG

As a taxpayer, you have to love a watchdog report with a chapter heading that reads:

"SIGTARP Questioned All $5.8 Million of Simpson Thacher's Legal Fees Because Simpson Thacher Did Not Provide Any Description of Work Performed or Any Receipts for Expenses"

That's from a report issued yesterday by the Special Inspector General for the Troubled Asset Relief Program (SIGTARP).

At the request of Senator Tom Coburn (R-OK), the SIGTARP reviewed the Treasury Department’s oversight of five law firms that received more than $27 million to provide legal services for Treasury’s bailout programs. In April, the SIGTARP released an audit finding that Treasury’s inadequate oversight of one firm, Venable LLP, had created an “unacceptable risk” that taxpayers were being overcharged. Yesterday’s audit focused on Treasury’s oversight of its contracts with the other four firms: Simpson Thacher & Bartlett LLP, Cadwalader Wickersham & Taft LLP, Locke Lord Bissell & Liddell LLP, and Bingham McCutchen LLP.

Treasury’s Office of Financial Stability (OFS), which oversees the TARP, has paid these four firms more than $25.5 million in legal fees and expenses. The SIGTARP reviewed $9.1 million of these fee bills, and found that $8.1 million (89 percent) should be called into question because there was no way to determine the reasonableness of individual hourly charges and expenses.

The bills often contained:

• No descriptions of the work performed;
• Vague descriptions of the work performed;
• Descriptions of more than one task in the time entry (“block billing”);
• Expense charges without adequate support; and
• Administrative charges not allowed under the contract.

The “most striking example” came from bills submitted by Simpson Thacher:

Simpson Thacher billed OFS $5.8 million in fees and expenses with bills that provided no detail whatsoever as to the work performed. Further, Simpson Thacher did not provide any receipts, or adequate documentation, for its expenses as required in one of its contracts, and billed for expenses under another contract that did not allow expenses. SIGTARP questioned all $5.8 million in fees and expenses OFS paid to Simpson Thacher. Without knowing what specific work was included in the charges, OFS could not have determined whether the fees and expenses the firm was paid were properly allocable to the contract, allowable pursuant to financial regulations, and reasonable, which are the requirements of the Federal Acquisition Regulation (“FAR”).

Move Over, FAPIIS--POGO Freshens Up Its Contractor Misconduct Database

By NEIL GORDON

The federal government's largest contractors have paid $25.3 billion in fines and penalties for everything from A to Z: from improper accounting practices to selling the government defective Zylon body armor. These and more than 1,400 other misconduct instances can be found in the Federal Contractor Misconduct Database (FCMD), which has now been updated with fiscal year 2010's top 100 ranking.

The top 100 features 7 new contractors, including international accounting firm Deloitte LLP, package delivery company United Parcel Service (UPS), and linguistic services provider Mission Essential Personnel. The FCMD now includes misconduct information on 160 of the federal government’s largest suppliers of goods and services.

The top 100 contractors received $276 billion in contracts last fiscal year, accounting for slightly more than half of the $536 billion in contracts awarded that year. As of today, these 100 contractors have accumulated 821 misconduct instances. Thirty-eight of the top 100 have zero or one instance, a reminder that misconduct need not be accepted as a cost of doing business with the federal government.

As has occurred in the past, the USAspending.gov data on which the top 100 ranking is based contains errors. Therefore, you will see double listings for Booz Allen Hamilton, Lockheed Martin, and Northrop Grumman.

Among the instances you will find in the FCMD:

Wartime Contracting Commission Comes to an End, Congress's Work Just Beginning

By DANA LIEBELSON

Congress will officially close the curtain on the Commission on Wartime Contracting (CWC) tomorrow, after a three-year investigation that revealed the U.S. has wasted at least $31 billion in Iraq and Afghanistan over the past decade on contracting. Now, the torch of responsibility is being handed to Members of Congress, who must decide whether or not the government will continue to squander taxpayer dollars.

The CWC was created in the spirit of the Truman Committee, which went on hundreds of fact-finding missions and saved billions of taxpayer dollars during World War II. The initial legislation for the modern-day CWC was introduced by Senator James Webb (D-VA) and Senator Claire McCaskill (D-MO), with strong backing from POGO, which was given the opportunity to review the bill.

Back in 2007, POGO wrote that the bi-partisan, eight-member Commission would make “great strides towards holding accountable those who have been responsible for waste, fraud, abuse, and mismanagement of wartime contracts.” Nick Schwellenbach, POGO’s Director of Investigations, said at the time: “I don’t envy them, but a group of thoughtful, empowered people need to tackle [this] mess.”

New Video: Background on the Bad Business Report with Scott Amey

By ANDRE FRANCISCO

As the government increased spending on contractor goods and services from $200 billion to $500 billion a year, POGO began looking at how that money was spent. Recently we release our Bad Business report that debunks the myth that contractors are cheaper than federal employees. In this video, POGO's Scott Amey gives some background on the rise of federal contractors and how POGO came to do the Bad Business report. For more videos, check out our Youtube page where you can subscribe to be notified about all our new videos.

Andre Francisco is a POGO Communications Associate

Follow @andrefrancisco

Morning Smoke: Volcker Rule Gets a Boost from Rogue UBS Trader Scandal

MORNING SMOKE

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

A Rogue to the Rescue: UBS Scandal Reinforces Need for Strict Volcker Rule
Jesse Eisinger, ProPublica

Dudley Proves This Isn't Your Father's New York Federal Reserve
Caroline Salas Gage, Bloomberg

CFTC Will Face Scrutiny Over Speculation Curbs at Senate Panel on Oct. 6
Silla Brush, Bloomberg

Banks Object to CFPB Sharing Data with States
Carter Dougherty, Bloomberg

Contract Oversight

DoD Leaving Millions Behind in Iraq, Afghanistan, GAO Says
Carlo Munoz, Aol Defense

Contingency Contracting Overwhelms DoD Staffing, Data Tracking
Matthew Weigelt, Federal Computer Week

Money In Politics

Limits Tighten for Lobbyist Gift-Giving
T.W. Farnam, The Washington Post

Government Oversight

US Watchdog Finds TARP Paid Questionable Legal Fees
JoAnne Allen, Reuters

National Security

White House Seeks More Pentagon Budget Cuts
Andrea Shalai-Esa, Reuters

Defense Experts Counter GOP Report: Budget Cuts Won't Bring on New Draft
John T. Bennett, The Hill

DoD and Unemployment
Leah Fae Cochran, The Will and the Wallet

Boeing's Delay on $2 Billion Warthog Contract Draws Senate Cut
Tony Capaccio, Bloomberg

Bipartisan Group of Reps. Urges Super Committee to Curb Defense Spending

By MIA STEINLE and BEN FREEMAN

Support of defense spending reduction is gaining momentum on the Hill and in one of the country's most prominent newspapers. Less than a week after Representative Ed Markey (D-MA) circulated a letter urging $200 billion in nuclear weapons spending cuts over the next ten years, a bipartisan group of six representatives is calling for the Super Committee to curb spending on defense programs by billions of dollars.

Representative Barbara Lee (D-CA) is joined by three Democrats--Barney Frank of Massachusetts, Gwen Moore of Wisconsin and Rush Holt of New Jersey--and two Republicans--John Campbell of California and Ron Paul of Texas--in a letter that will circulate on the Hill until Friday, seeking support and signatures.

The letter comes on the heels of Monday’s excellent New York Times editorial, which calls for reassessing a defense budget, “ill suited to America’s 21st-century military needs.”

Echoing both this and Markey’s remarks, the representatives noted that U.S. defense spending is based on outdated notions:

The continued reliance on Cold War weaponry and conventional tactics two decades after the fall of the Berlin Wall and the collapse of the Soviet Union makes little strategic or fiscal sense.

The letter supports reducing the U.S. nuclear stockpile (an idea we lauded last week); auditing the Pentagon to reduce waste, fraud and abuse; and generally reducing defense spending.

Notably, the letter highlights overspending by service contractors, which have been responsible for wasting between $30 and $60 billion in Iraq and Afghanistan. Since 2000, the Department of Defense has spent more than $1.5 trillion dollars on service contractors, with the annual cost to taxpayers nearly tripling. We at POGO, along with Taxpayers for Common Sense (TCS), recommend reducing service contractors by 15 percent, which will save taxpayers at least $300 billion over the next ten years. Our 15-percent proposal is also supported by the likes of Representative Tom Coburn (R-OK) and Representation Ron Johnson (R-WI).

The letter also points to a number of plans from across the ideological spectrum, drawing on proposals from the Sustainable Defense Task Force, the Simpson-Bowles Commission and Larry Korb, former assistant secretary of defense in the Reagan Administration. POGO and TCS also are asking for sensible cuts to wasteful spending in the budget requests from the Pentagon and other national security budgets that taxpayers simply can't afford.

It’s heartening to see a letter that incorporates ideas from across the ideological spectrum, and we thank Lee and the other representatives that have signed on for taking the lead on this critical taxpayer issue. As the Super Committee deadline looms ever closer, we urge lawmakers from both sides of the aisle to join them.

Update: The deadline for signatures has been extended to the second or third week in October, according to Representative Lee's office.

Mia Steinle is a POGO Investigator. Ben Freeman is POGO's National Security Fellow.

Follow @miasteinle

Follow @BenFreemanDC

Morning Smoke: America's Shadow Contractor Government Costs $320 Billion a Year

MORNING SMOKE

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.

Contract Oversight

America's $320 Billion Shadow Government
Louis Peck, The Fiscal Times

Boosted by Jordan, Oil Company Overcharged U.S. Military for Fuel in Iraq
Ryan J. Reilly, Talking Points Memo

Injured War Contractors Sue Over Health Care, Disability Payments
T. Christian Miller, ProPublica

POGO Wants More Safeguards in DoD's One Offer Proposed Rule
POGO

National Security

Pentagon Cuts General and Flag Positions to Reduce Top-Heavy Force
Gretel C. Kovach, Sign On San Diego

Interrogated by the State Department
Peter Van Buren, Salon

Revolving Door

Former Budget Staffer Hits the Revolving Door
National Journal

Financial Oversight

Freddie May Have Spared Banks, Cost Taxpayers, Watchdog Says
Lorraine Woellert, Bloomberg

Brockmeyer Named Head of SEC FCPA Unit
Joe Palazzolo, The Wall Street Journal

Analysis: Auditor Defense May Have Holes in Deloitte Case
Dena Aubin and Andrew Longstreth, Reuters

Nuclear Energy

Dominion Says Seismic Vibrations Tripped Reactors
Michael Martz, Richmond Times-Dispatch

New Features Added to Government's Contractor and Grantee Responsibility Database

By NEIL GORDON

Almost six months have passed since the public debut of the government's contractor and grantee responsibility database, the Federal Awardee Performance and Integrity Information System, or FAPIIS. POGO was initially less than thrilled with FAPIIS, but we were optimistic that it would improve over time.

Although the public FAPIIS website still has the same drab, clumsy overall look and feel–and still provides no user guide–POGO is pleased to see the addition of two new user-friendly features. The most noticeable new feature is the “Get All Awardee-Entered Proceedings Information” button on the bottom of the search screen. Given that there was already a button for quick access to all government-entered information, this addition seemed like a no-brainer. Clicking this button retrieves an Excel-exportable list of “Convictions / Findings of Fault” and “Other Acknowledgements of Fault” instances for all contactors and grantees. No longer do you have to guess where civil/criminal/administrative misconduct records reside for a contractor like Lockheed Martin, which has hundreds of listings in FAPIIS. In addition, search results now contain direct links to the contractor’s or grantee’s FAPIIS listing, which spares you having to constantly navigate back to the search page.

POGO quickly found contractor-entered data for several contractors in our Federal Contractor Misconduct Database, including Bechtel, Chugach Alaska Corp., Honeywell International, IBM, Lockheed Martin, Novartis, SAIC, and United Technologies. Unfortunately, the quality of this data leaves much to be desired. For example, here’s the description provided by Honeywell for one “other acknowledgement of fault” instance:

Federal Reserve Transparency Round-Up

By MICHAEL SMALLBERG

Tracey Greenstein wrote a timely article for Forbes last week lamenting the media's "inscrutable brush-off" of a Dodd-Frank-mandated Government Accountability Office (GAO) report on the Federal Reserve's emergency bailout programs.

Over the past few months, we've learned a great deal about the Fed’s extraordinary initiatives to stabilize the financial system during the financial crisis, thanks to the GAO audit, records obtained through a Freedom of Information Act (FOIA) lawsuit, and data released by the Fed under a Dodd-Frank requirement. Meanwhile, advocates of Fed transparency are pressing on in their efforts to obtain information about other Fed activities that have historically been shrouded in secrecy.

Here are some of the most important developments in recent months.

Transaction Data

Section 1109(c) of the Dodd-Frank Act, introduced by Senator Bernie Sanders (I-VT), required the Fed to publicly disclose the basic details of the emergency assistance it provided between December 2007 and July 2010 in response to the financial crisis. This disclosure requirement covered the alphabet soup of broad-based programs authorized by the Fed—including the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (AMLF), Term Asset-Backed Securities Loan Facility (TALF), Primary Dealer Credit Facility (PDCF) and others—as well as the Fed’s liquidity swap lines with foreign central banks, purchases of agency mortgage-backed securities, and assistance provided to individual firms such as Bear Stearns and American International Group (AIG).

The Fed posted this information on its website in December 2010, giving the public the ability to download data on more than 21,000 transactions made during the covered time period.

The data release identified the recipients of some $3.3 trillion in Fed assistance. We learned, among other things, that six European banks, including UBS, Dexia, and Barclays, were among the companies that sold the most debt to the Commercial Paper Funding Facility (CPFF); non-financial companies such as Harley-Davidson and McDonald’s also received significant assistance in short-term loans provided through the CPFF; and the Fed’s liquidity swap lines provided assistance to central banks in Mexico and South Korea. Even the wives of Wall Street titans were able to secure assistance through the TALF.