By JAKE WIENS
As the General Services Administration (GSA) conference scandal continues to unfold, with new and shameful evidence of government waste and misconduct emerging seemingly every day, the spotlight has once again turned to the important work of Inspectors General (IGs), the federal government's independent watchdogs.
The scandal, which was first uncovered by the GSA IG, has led to the resignation of GSA’s top official, the firing of several more GSA employees, and continued criminal and congressional investigations into the matter. That the GSA IG published a report with such obvious political implications highlights the significance of IG independence and credibility, two qualities POGO has argued become diminished when an IG is led by a temporary, rather than a permanent official.
But unfortunately, IG leadership positions at many key agencies have been vacant for years. One of the current vacancies is at the Securities and Exchange Commission (SEC), which failed to prevent many of the abuses involved with the financial crisis. The SEC IG position became vacant when David Kotz resigned in January following a tenure marked by hard-hitting investigations, including an evaluation of how the SEC missed the $50 billion Bernie Madoff Ponzi scheme. Kotz’s leadership earned the admiration of Congress and groups like POGO, but caused tension with some current and former SEC officials who had grown accustomed to operating without scrutiny.
POGO put five questions to Kotz on his tenure as SEC IG and the impact on oversight caused by IG vacancies.
POGO: Why is IG oversight important?
David Kotz: The GSA example demonstrates that a watchdog is needed to protect the American people’s interests and tax dollars from waste, fraud, and abuse. IGs identify significant cost savings in every agency and department. They also ensure that employees are not engaged in misconduct or violations that further erode the people’s confidence in government.
POGO: Ten IG offices, including the SEC IG office, currently lack permanent leadership. What implications does that have for oversight?
DK: I believe it can have serious implications. One is simply not being able to utilize the full effect of one’s office in an acting capacity. Permanent IGs are needed to keep careful watch on the actions of agencies and departments.
POGO: As the financial crisis unfolded, David Kotz became a household name (at least inside the beltway and in financial circles). With such a small staff, how were you able to have so much impact?
DK: We worked very hard and had an extremely dedicated team. We understood the importance of the work we were doing and operated in a very efficient manner. We also decided to audit and investigate the most critical issues facing the SEC and did not shirk from our responsibilities simply because our findings may have led to criticism of the agency. We felt it was important to let Congress and the public know where there were failings and believe that our work led to significant improvements in the SEC.
POGO: Is there anything you would have done differently as SEC IG?
DK: Overall, I would say, no. In the position of Inspector General, there will always be folks who are not happy with what you find and people who do not believe in accountability and in acknowledging mistakes when they happen. While I always think about ways to handle things better in particular cases, I am very proud of all of our work. Before we made any finding, there was a tremendous amount of analysis and review, and we never issued any report that was not based upon a strong evidentiary basis. Moreover, while folks were sometimes not happy with particular findings, no one ever came forward with any evidence that we overlooked or interpreted incorrectly.
POGO: Anything else you want to share with POGO’s readers?
DK: While being an IG is no easy task and it is often viewed by many in the federal government as a “thankless job,” it can be very rewarding and I would encourage all those who want to make a difference and believe in accountability, to assist these efforts in ensuring an effective and efficient government.
Jake Wiens is a POGO Investigator
Image via the SEC OIG.