GAO Says Bajagua Project Has Many "Unresolved Issues"

A report released by the Government Accountability Office (GAO) last Thursday substantiated many of POGO's findings from our 2006 report on the Bajagua project.

The GAO report detailed numerous aspects of a questionable sweetheart deal to use federal funds to pay a private U.S. company, Bajagua, LLC, for a wastewater treatment plant in Mexico.  Bajagua's proposal faces numerous technical, regulatory and financial challenges.

The report found "that the Bajagua, LLC project includes more unresolved issues than the [South Bay International Wastewater Treatment Plant] upgrade, such as the need to obtain over 30 permits, approvals, and concessions from both U.S. and Mexican authorities; the need to resolve significant issues in its draft fee-for-services agreement with the USIBWC; and other legal and technical issues which could delay its schedule."

The Bajagua project would cost an estimated $200 million more in taxpayer dollars over twenty years than an alternative proposal put forth by the government.

All in all, the GAO's report confirms that the Bajagua project is a stinky deal that is bad for taxpayers and the environment of Southern California.

In 2007, POGO's report also generated investigative pieces in the Wall Street Journal and San Diego Magazine.

-- Nick Schwellenbach

Hon, I'll Be Late for Dinner

The Department of Transportation IG has announced that it will be conducting an audit of the Transportation Technology Innovation and Demonstration (TTID) program, whose objectives include providing more comprehensive real-time traffic information to federal, state, and local governments and travelers.

Questions have been raised by POGO, as well as by Senator Hatch (R-UT) and Representative Weiner (D-NY), about the program's integrity--specifically, the virtual lock that Traffic.com has on the contract, even though legislative changes made back in 2005 by Hatch and Weiner were supposed to open up the program to competition.  POGO has questioned the federal oversight of the program and whether it is benefiting one company rather than the public.  On October 15^th we wrote to USDOT Secretary Peters urging an investigation into the management and oversight of the program, and we're pleased that the IG has now announced its audit.

The TTID program was designed to help ease traffic congestion in U.S. cities by assisting in the deployment of an expanded transportation surveillance infrastructure, and by providing traffic data from newly deployed sensors to government transportation agencies and commercial traveler information providers.

Sounds confusing, but if it helps get me home from work faster, I'm all for it.  Unfortunately, the virtual stranglehold that Traffic.com has on the really useful real-time data in this program makes me think that it is an example of a contractor lining its pockets rather than promoting the public good.

Traffic.com has spent money on lobbying Congress (2001-2005 and 2005-2006), and is linked to many former senior level Executive and Legislative Branch officials.  I realize that lobbying and knowing people isn't illegal, but neither is having checks and balances in our government system and questioning public servants.

-- Scott Amey

Roger's Ruminations Part I: The Thoughts of a Former Corporate Salesperson to the Federal Government

This is the first in a series of commentaries by a former corporate salesperson responsible for their company's sales to the federal government who shall go by their nom de plume, Roger.  They grew disgusted with the way the revolving door and the ensuing favoritism it breeds has undermined the intent of government contracting -- to harness the strength of the private sector for a fair price to serve the public interest.  Instead, Roger contends that the revolving door contributes to the best-connected, but not always best-qualified, companies getting contracts with dramatically negative consequences for the taxpayer.  --POGO

Rule #1: Pay no attention to the solid gold door

Maybe you got as excited as I did to see John Edwards make stopping the revolving door in government an issue in this year’s Democratic presidential primary campaign. But then did you get disappointed when he then started to talk about the revolving door ONLY in terms of government employees who go on to become lobbyists?

Sure, it would be outstanding to stop the revolving door between government and lobbying firms, but that's really only a small part of the problem.  The scope of the revolving door is much broader, and not well understood outside of the Beltway.  And to most people in Washington itself, the practice is so widespread and so entrenched, it’s rarely questioned, though its scale and pervasiveness is of only recent historical vintage.

For those of us who have ever tried to get our foot in the door in Washington, and have not worked for the federal government know, the greatest problem with the revolving door—or the golden door if you pass through it—is when government employees move into a much higher paying position with a government contractor. Did I say it out loud? Did I break the code?

Trust me, I’ve seen it and its effects.  I’ve been a salesperson for a company that tried to work with the government on numerous occasions, and more often than most people realize, government decision-making is dominated by the interests of the best-connected companies.  It’s not always as blatant as the Darleen Druyun-Boeing tanker lease scandal, where the Air Force’s top acquisition official swung a sweetheart deal Boeing’s way in exchange for jobs she negotiated for herself, her daughter and son-in-law.

  Countless numbers of lower level government employees with power to sway procurement decisions get hired by the same companies they deal with and, for some of these employees, they see their government job as a stepping stone to a more lucrative position in the private sector.

And when you call up a government agency, there’s good chance you’re not even talking to a government worker, but to a contractor employee. Even other Govies don't know exactly who they are talking to.  Even when they email you from a government email address, they still might be employees working for a major company with a profit motive.  It’s an insidious infiltration by contractors into the heart of government decision-making, into the DNA of government itself.

The Government Contractor Mafia, they have there own language, winks, hand signals, and friends on the inside who help them - hoping one day to be tapped, just like the fraternity it is. They laugh at the outsider naive to the real ways of Washington.

"Maybe you should go to the seminar that the SBA gives, they might be able to help you," they so helpfully advise you.  But how can my company compete, when our entrenched competitor sits in a cubicle on the other side of the temporary wall from the government decision maker -- or worse when the competitor is the consultant to the government whose job it is to recommend a new solution?  Sure, I can call on the potential buyer once a week and check in, but how does that compete with being the person who has coffee breaks through the day with the buyer?  Yep, that happened...even as I was trying to give away our technology to that government agency for free.

Rep. Wicker's Unmanned Aerial Pork

On March 22, 2007, Rep. Roger Wicker (R-MS) requested, in a letter to the chair and ranking member (pdf) of House Appropriations, an earmark for a little-known aerospace company to develop an unmanned aerial vehicle (UAV) project in his district. The company, Aurora Flight Sciences, has been growing rapidly and now looks set to expand further, in part a result of their cozy relationship with Rep. Wicker. The congressman himself may soon get a promotion as well. With the recent announcement of Sen. Trent Lott’s (R-MS) retirement at the end of the year, some speculate that Mississippi Governor Haley Barbour is likely to appoint Rep. Wicker to replace him until a special election is held next November.

The earmark in question ultimately appeared in the FY 2008 Defense Appropriations bill with support on the Senate side from Sen. Lott and Thad Cochran, according to data compiled by Taxpayers for Common Sense. Listed under Army Research, Development, Testing & Evaluation (RDT&E), it designated $6 million for Aurora’s Orion High Altitude Long Endurance UAV, which is currently under development in collaboration with Boeing’s Phantom Works office.

Additional research reveals that Rep. Wicker and Aurora have benefited each other for some time now. Aurora funded a plane flight (pdf) in 2005 for Rep. Wicker from their headquarters in Manassas, VA to Starkville, MS. Then during the 2006 elections, Aurora was the top contributor to Rep. Wicker’s campaign, giving a total of $13,000 according to Opensecrets.org. Last but not least, Rep. Wicker’s former chief-of-staff, John Keast, left the congressman’s office in 2006 to work for Cornerstone Government Affairs, where, as of August, he’s been paid $60,000 to lobby Congress on defense appropriations for Aurora.

Aurora’s Orion project began last year at Mississippi State University’s Raspet Flight Research Lab in Starkville, MS. At that time, the company also began construction of a new production facility for Orion UAVs at the Golden Triangle Regional Airport in nearby Columbus, MS. The production facility opened in May of this year and Reps. Wicker and Chip Pickering spoke at the ceremony.

Aurora has won three multi-million dollar federal contracts over the past six months, as pointed out by Rep. Wicker in an Aurora press release last month. At least two, and possibly all three, relate to the Orion project and were awarded by the Army’s Space and Missile Defense Command and the Air Force Research Laboratory.

In addition to the earmark, contracts, and production facility, Aurora has also recently expanded its high-level staff. In June of this year, Dan Brady joined the company as VP of Aerostructures. He formerly worked as a director at Vought Aircraft Industries, managing activities related to Bell and Boeing cargo aircraft (most likely the V-22 Osprey), and prior to that, Brady worked at Northrop Grumman. Last month, former Commander of US Special Operations Command (SOCOM) and Army General Bryan “Doug” Brown joined Aurora’s Board of Directors. General Brown had retired from SOCOM earlier this year.

Aurora Flight Sciences, headquartered in Manassas, VA, has facilities located in Virginia, West Virginia, Massachusetts, and Mississippi. According to their most recent contract filings with the Federal Procurement Data Service (FPDS), Aurora has 267 employees and annual revenues of $32,000,000.

-- John Pruett

Top Defense Contractors Thank Congress for Their Hard Work

Stephen Trimble, on his blog The Dew Line, has compiled a fairly comprehensive list of campaign contributions received by members of congress from 7 of the top defense contractors. The list also includes "political action committees" receiving contributions. Trimble found that the combined total equaled roughly $3 million for the first half of this year. It's also eye-opening that a majority of congressional members, regardless of party affiliation, have received contributions from at least one or more of these 7 contractors. The complete list can be downloaded here in Excel format.

Here's Trimble's list of the top 10 individual recipients. All of them are Democrats except for Sen. Collins.

1. Rep. Silvestre Reyes
2. Sen. Carl Levin
3. Rep. Steny Hoyer
4. Sen. Jack Reed
5. Rep. Joe Courtney
6. Rep. James P. Moran Jr.
7. Rep. John P. Murtha
8. Rep. Ike Skelton
8. Rep. Bennie G. Thompson (tie)
9. Rep. James Clyburn
10. Sen. Susan Collins

On a related note, ABC's The Blotter reported earlier this year on the large increases in contributions that Democrats have received from special interests since becoming the majority party. The post also links to a table of PAC contributions to committee chairmen.

-- John Pruett

Deepwater: Government is in Deep

Reuters and other outlets report that Deepwater contractors actually had the nerve this week to send a letter (pdf) challenging the Coast Guard’s legal authority to pursue a $100 million refund for the eight patrol boats which have been deemed unsalvageable. Lockheed Martin and Northrop’s primary defense is “I told you so,” saying that it disclosed the “issues” on forms it provided to the government – known as DD250s – when the boats were delivered. Following that logic, contractors can deliver whatever they want to the government, no matter how defective, as long as they note there are a few unresolved “issues” at delivery. That doesn’t pass the laugh test.

Unfortunately, it seems Lockheed Martin and Northrop have the government over a barrel. A move last week in the House to reign in their status as the lead systems integrators on the $24 billion Deepwater contract faltered. Under the lead systems integrator model, contractors manage and oversee themselves, a model which was embraced in the 1990s, and has now led to a string of disastrous contracting failures including Deepwater. In a House Committee on Transportation and Infrastructure markup on HR 2722, the Deepwater Integrated Reform Act, Representative Steve LaTourette prevailed on a motion to allow the contractors to keep the contract for as much as another four years. Of course, it is probably just a coincidence that Representative LaTourette’s wife, Jennifer Laptook-Latourette is Vice President of a lobbying firm which represents Lockheed Martin.

Representative LaTourette adopted the industry line that the Coast Guard will not be able to assemble the team it needs to manage the Deepwater contract in a timely way. While the Coast Guard could assume the control of the contract sooner if they are capable, the onus will be on them to wrest the troubled Deepwater contract out of Lockheed and Northrop’s clutches.

-- Beth Daley

 

Update (July 5th):

Former Lockheed Martin employee Michael DeKort who saw the foibles of the Deepwater contract first hand points out that many of the problems were NOT mentioned in the DD-250s as claimed in the letter. According to Mike:

--Low Smoke cables - were mentioned and had a waiver. However, the Coast Guard Inspector General found that the waiver should not have been issued.

--Environmental failures - were never in the DD-250s even though we knew well before delivery of any of the boats. I can prove Lockheed Martin and the Coast Guard knew and kept it out of the DD-250s (I specifically asked for it to be in there). Several years later the Coast Guard drafted a waiver that they still say the Coast Guard should sign.

--TEMPEST - all the failures were not mentioned.

--Cameras - blind spots not mentioned.

Conyers Strips Out Key Ethics Provision

I’m depressed. I really thought ethics reform was going somewhere. Then the House Judiciary Committee slapped me in the face. They stripped a provision in their “ethics reform” package that would have extended the ban for Members of Congress and their staff becoming lobbyists from one year to two.

The reason? Chairman John Conyers said he opposed the ban because it would hinder his ability,”to attracting and retaining top flight staff.” What an INSULT to the dozens of Hill staff I know, let alone Members of Congress, who have absolutely no interest in becoming a lobbyist.  They are there because they love public service. Aren’t those the kind of people we should be attracting to the Hill, rather than those planning, in advance, to cash in on their contacts to become lobbyists?

There is still a chance to re-insert this revolving door ban on the House floor. Let’s hope they get a clue as to the message voters sent in the last election.

-- Danielle Brian

The Nomination of Baroody: "Putting the fox in charge of the henhouse"

The NY Times reported yesterday that Michael Baroody, Bush nominee to head the Consumer Product Safety Commission (CPSC), not only worked as a senior lobbyist for the National Association of Manufacturers (NAM) but also received a severance payment of $150,000. This “extraordinary payment” was not part of his standard compensation package and highly unusual for an employee leaving voluntarily.

Next Thursday, the Senate Commerce, Science, & Transportation Committee, chaired by Sen. Inouye, has scheduled a hearing to consider Baroody’s nomination, but his confirmation is likely to be a battle. Committee member Sen. Nelson and Senate Majority Whip Durbin have already placed a hold on Baroody’s confirmation and have called on Bush to select a new candidate. Nevertheless, there’s a chance that the President will wait until Congress goes into recess next month and then appoint Baroody without Senate approval.

Regardless of Baroody’s severance package from NAM, the mere fact that he lobbied for the largest trade association under CPSC’s purview should be enough to automatically disqualify him as a candidate to lead CPSC. When called upon to make a decision that favors the public yet negatively affects his former employers, one must question whether he would side with the public good.

Furthermore, as 8 consumer groups have pointed out in a recent white paper (pdf) opposing Baroody’s confirmation, the CPSC is already facing problems in its mission to protect consumer safety:

CPSC’s job today is more challenging than ever. There are more than 27,000 deaths and more than 33 million injuries each year associated with consumer products under CPSC’s jurisdiction. However, since the 1980s, the Commission has been slowly starved of staff and resources. While there has been an exponential increase in consumer products since its creation more than 30 years ago, CPSC’s staff is projected to be cut to 401 full time employees (FTEs) this year – which would be an all-time low and less than half the number of people employed by the agency in the 1970s. Additionally, in real dollars, its budget has plummeted.

With someone like Baroody at the helm of this struggling agency, it’s safe to say that he would do little to strengthen it. The consumer groups list three reasons (pdf) why this would be the case:

He has not demonstrated a commitment to protecting the public from risks to safety;

He oversaw efforts to weaken the CPSC and to undermine safety proposals pending before the Commission as one of the top two executives at the National Association of Manufacturers,

Faced with product safety and public health issues, Mr. Baroody has consistently favored reducing business costs at the expense of consumer protection.

-- John Pruett

Will Congress Slow Their Revolving Door Next Month?

If there’s one area of legislation that members of Congress have more difficulty with than any other, it’s creating stringent ethics rules to govern their own actions. Yet according to Speaker Nancy Pelosi and Democratic Caucus chair Rahm Emanuel, their long-awaited ethics and lobbying reform package will make it through the House by the end of May.

WaPo blogger Paul Kane commented earlier this week on the proposed reforms:

Emanuel said the House would have a bill on the floor "in short order," possibly next week. There are still several issues that members are resisting: forcing firms to reveal how much in campaign donations they bundle from their lobbyists and clients to lawmakers; disclosure by public relations firms of grassroots efforts at lobbying that doesn't involve direct contact with Congress and therefore isn't currently disclosed; and an extension of the cooling-off period forbidding members and senior staff from lobbying on Capitol Hill.

Ironically, the main sources of disagreement in the House cited by Kane are the same provisions that public interest groups have agreed are necessary. According to CQ Today, new revolving-door restrictions in particular may face House attempts to weaken them, despite the fact that the Senate has already approved tough language in January:

The Senate has endorsed rules that would require members of Congress to wait two years before directly lobbying their former colleagues, and House leaders have indicated their support. But the Senate bill went further, prohibiting any lobbying “activity,” meaning that former members would not be able to even help lobbying shops influence legislation during the period in which they were refraining from making contacts themselves.

Some House members have balked at the stricter definition, saying it would prevent them from being employed at a lobbying office or law firm even if they did no direct lobbying, according to Democratic House aides involved with the legislation. “Members are pushing back on this . . . It may not be in the House bill,” said Craig Holman, a lobbyist for the watchdog group Public Citizen, who has helped Democratic staff craft the legislation.

Nevertheless, stricter revolving-door rules are much needed, as emphasized this week by former House committee staffer Mark Zachares’s guilty plea for corruption related to the Abramoff scandal. Public Citizen’s online site dedicated to congressional ethics reform also provides information (pdf) on why the new revolving-door provisions are necessary.

Assuming that the Democratic majority lives up to its promises, voters will be able to breathe a sigh of relief on Memorial Day and reflect on how the “culture of corruption” days in Congress are over. Now let’s see it happen.

-- John Pruett

The Influence Dream-Team's Neverending Nightmare

Another Abramoff casualty has pled guilty, Mark Zachares. The AP's Pete Yost reports on a cozy relationship between Zachares and Abramoff. According to AP, Zachares would provide "Abramoff contact information for prospective businesses that would be affected by the creation of the Homeland Security Department" under a "'two-year plan' in which Abramoff would build a homeland security lobbying practice that Zachares ultimately would join." Zachares did this while working for House Transportation and Infrastructure Committee for Chairman Don Young. Zachares is not the first aide connected to Don Young to be implicated in the ever-expanding Abramoff scandal. Duane Gibson also worked for Representative Young on the House Transportation and Infrastructure Committee but ended up as a deputy for Abramoff at his Greenberg Traurig lobbying firm. That sounds eerily familiar.

Gibson was part of the tight knit lobbying Abramoff team. James Grimaldi of the Washington Post noted in 2005 that "Members of that influence dream-team continue to collect hundreds of thousands of dollars as registered lobbyists, often lobbying for former Abramoff clients -- unimpeded by the taint of scandal and revelations of suspicious deal-making in the brash and sometimes salty e-mails exchanged with Abramoff." [Full disclosure: Gibson led a falacious House Resources Committee "investigation" into POGO following our defeat of legislation to prevent collection of fair market royalties for oil industry drilling on federal lands.]

-- Beth Daley

A Contracting Dog Fight

The 110th Congress is fulfilling its promise to reign in the federal contracting system. Contractors and their hired guns are fighting back, criticizing everyone from Rep. Waxman to the SARA Panel to anyone who mentions the words "acquisition reform." The phrase "acquisition reform" appears to have gone full circle.

During the mid-1990s, POGO criticized the reforms (FASA, FARA, and SARA) that led to the current pro-contractor system that is in place. Unfortunately, despite POGO's efforts, there was little debate on many of the reforms because they were created by Rep. Tom Davis (R-VA) who chaired the influential House Government Reform Committee and who is supported by contractors (pdf) (Rep. Davis has a long history of being in bed with contractors). In fact, although some major contracting bills were proposed in the 109th Congress, very few received the attention that they deserved.

Acquisition reform is back, however. The change in congressional leadership and some recent investigations have ignited a huge firestorm with numerous contracting bills working their way through Congress.

H.R.1362: "Accountability in Contracting Act"

Sponsor: Rep. Waxman, Henry A. (D-CA)

Purpose: The bill would increase competition, limit abuse-prone contracts, and increase contract oversight. An Amendment (H. AMDT. 48) sponsored by Rep. Michael Castle (R-DE) requests a study of whether federal conflict-of-interest laws should apply to contractors and federally funded research and development centers (FFRDCs).

Action: Passed by the House 347 - 73 and Referred to the Senate Committee on Homeland Security and Governmental Affairs

Contracting associations (pdf) say that the oversight protections go too far. The White House (pdf) "strongly opposes" the bill. A dog fight is on the horizon and it will be interesting to see who wins - the taxpayers or the contractors.

Other contract-related bills that are before Congress, include:

S. 674 / H.R. 369: "Transparency and Accountability in Military and Security Contracting Act of 2007"

Sponsors: Sen. Barack Obama (D-IL) and Rep. David Price (D-NC)

Purpose: The bills would require accountability and enhanced congressional oversight for personnel performing private security functions under certain federal contracts and subcontracts.

Action: Referred to relevant Committees in the Senate and House

H.R. 984: "Executive Branch Reform Act of 2007"

Sponsor: Rep. Henry Waxman (D-CA)

Purpose: The bill would require certain Executive Branch officials to report lobbying contacts and increase prohibitions of the revolving door between the government and the private sector.

Action: Ordered to be Reported (Amended) by Unanimous Consent.

S. 606: "Honest Leadership and Accountability in Contracting Act of 2007"

Sponsor: Sen. Byron Dorgan (D-ND)

Purpose: The bill attempts to eliminate war profiteering, prevent fraud, prevent contractors with a pattern of overcharging or violating laws from receiving future contracts, increase competition, and tighten ethics laws and regulations.

Action: Referred to the Senate Committee on Homeland Security and Governmental Affairs

S. 680: The "Accountability in Government Contracting Act of 2007"

Sponsor: Sen. Susan Collins (R-ME)

Purpose: The bill proposes to improve the acquisition workforce, increase competition in contracting, increase accountability for purchase cards, interagency contracts (which are on GAO's High Risk Series [pdf]), and task/delivery orders, and extends the qualifications of Inspectors General.

Action: Referred to the Senate Committee on Homeland Security and Governmental Affairs

POGO applauds Congress' efforts to improve the way that the government buys nearly $400 billion worth of goods and services each year and hopes that Congress realizes that it must do a better job accounting for the drastic increase in contract spending (xls).

-- Scott Amey

DHS Closes a Conflict-of-Interest Loophole

The Office of Government Ethics, at the request of the Department of Homeland Security, yesterday announced that senior officials leaving the agency would no longer be able to lobby any part of DHS for one year.  This move closes a large loophole in the agency's ethics rules that had allowed senior officials leaving one directorate or section of DHS to lobby other sections of the agency immediately after leaving the agency's employment.

Each year government agencies may request that OGE add or remove a conflict of interest prohibition that applies to positions within or components of an agency. Agencies, including DHS, DoD, Commerce, Energy, Health & Human Services, and Justice have claimed that some of their agency components are so distinct that there is "no potential" for former senior officials who left for the private sector to use "undue influence or [receive an] unfair advantage based on past Government service."

Prior to the DHS rule change, senior officials leaving the Directorate of Emergency Preparedness and Response, the Directorate of Information Analysis and Infrastructure Protection, the Directorate of Science & Technology, the Federal Law Enforcement Training Center, TSA, the Secret Service, and the Coast Guard were exempt from the one-year lobbying ban and could immediately lobby other parts of DHS. Sound confusing? It is and it's another reason why Congress needs to turn its attention to improving the integrity of the federal government. The new rule takes effect June 6, 2007.

-- Scott Amey

Is This a Stickup?

Climb aboard, the train is leaving the station! Family members are being hired up by railroad interests facing an overhaul of rail safety rules.

"Like every other industry, we felt it was important to have representatives from both the Democratic and Republican side," said Peggy Nasir, spokeswoman for the Association of American Railroads, which hired Shuster, Lipinski, and Sante and Michael Esposito. "We are meeting all the standards we need to meet for lobbying."

The lobbyist hires to which Nasir is referring are: Former Representative Bud Shuster of transportation pork barrel fame and father of sitting Congressman Bill Shuster (R-PA) on the House railroads subcommittee, Former Representative William Lipinski and father of sitting Congressman Daniel Lipinski (D-IL) also on the subcommittee, and the father and brother of majority staff director of the subcommittee, Jennifer Esposito.

An investigation by USA Today last year found that “in 2005 alone, appropriations bills contained about $750 million for projects championed by lobbyists whose relatives were involved in writing the spending bills.” That’s a lotta dough! And makes a few of us wonder, is this a stickup?

-- Beth Daley

Former Interior Secretary Norton Joins Shell Division

News media report that former Interior Secretary Gale Norton will become general counsel of a division of Shell oil company. Shell, one of the largest producers of petroleum products on federal lands, recently signed a deal with the Interior Department which forces it to pay up for some of the gas royalties it had mistakenly not been charged. Shell and other oil companies have unfairly pocketed between $900 million and $2 billion so far because of the incompetent failure of the Department to pursue royalties owed the taxpayer. Norton resigned in March 2006 following revelations concerning her role in the Jack Abramoff scandal. Norton angered the Department of Interior Inspector General after failing to address ethics charges against former deputy interior secretary Steven Griles' who allegedly provided favors to Jack Abramoff's clients while negotiating a job with his lobbying firm.

-- Beth Daley

Abramoff Plied Congress with Box of Chocolates

Tom Delay was the intended recipient of a $250 box of Godiva chocolates, one of the gifts lobbyist Jack Abramoff prepared to give for the holidays in 2001. Jeff Smith of the Washington Post reports on that and many other gifts that were either "forgotten" or deemed of "negligible value" by Representatives and their staff who received them. His article does suggest that the rules for gifts to members of Congress ($50 or less) may be regularly flouted or simply ignored. This week, House Majority Speaker-elect Nancy Pelosi promised to ban lobbyist gifts and meals.

-- Beth Daley

Over 1,000 Gov Employees Snared by FBI for Corruption

Wow.  The magnitude of public corruption uncovered by the FBI so far is astounding.  Part of FBI Director Robert Mueller's prepared statement before the Senate Judiciary Committee:

Public corruption is a betrayal of the public’s sacred trust. It erodes public confidence and undermines the strength of our democracy. Unchecked, it threatens our government and our way of life. That is why it is our top criminal investigative priority.

Over the last two years, the FBI has convicted more than 1,060 government employees involved in corrupt activities, to include 177 federal officials, 158 state officials, 360 local officials, and more than 365 police officers. In FY 2005 alone, the Public Corruption Program saw a 25% increase in public corruption cases investigated, resulting in 890 indictments, 759 convictions, and 2,118 cases still pending. There are 622 agents currently working public corruption matters, an increase of 264 since 2002.

As you may know, we've followed some of these cases here on the POGO blog. 

-- Nick Schwellenbach

Crisis Management Revolving Door (or is it Revolving Door Crisis Management?)

Mark Corallo, formerly with the House Government Reform Committee, and Barbara Comstock, a former Justice Department spokeswoman "and expert opposition researcher," have joined forces to create crisis management firm Corallo Comstock.

Corallo has also worked as chief spokesman for the Justice Department, and Karl Rove during the Valerie Plume scandal.  Comstock represented Tom DeLay, Jerry Lewis, and Scooter Libby during their ethics troubles.  Currently, Comstock is also a consultant for former Massachusetts Governor Mitt Romney's political team in anticipation for his presidential bid.

-- Mandy Smithberger

New Turn in FBI Investigation into Weldon

Former Representative Curt Weldon tried to cut U.S. aid to Moldova in a ploy to regain $2.5 million that a family friend lost in an investment deal gone bad, according to  a little-noticed article in the Philadelphia Inquirer. Weldon used his perch to personally help his friend – John J. Gallagher – on several other occasions. Gallagher, in turn, appears to have helped Weldon’s daughter Karen Weldon find clients in Russia. Gallagher’s relationship to the Weldon’s has apparently become a topic of the FBI’s corruption investigation. The Inquirer article follows a New York Times piece a few weeks ago on Weldon’s efforts to help Italian arms makers get U.S. defense contracts. Corruption of the kind being investigated in the Weldon case has is part of a larger effort which has revealed that “wrongdoing by public officials at all levels of government is deeply rooted and widespread.”

In January, the public will find out how the Democratic-run Congress intends to address this with new ethics legislation. Meanwhile, House Majority Speaker Nancy Pelosi’s former chief of staff turned lobbyist warned that big business is in trouble with the Democrats…that is unless they “ramp up their public relations efforts.” Gee, that sounds like a not-so-nuanced pitch for business.

-- Beth Daley

Lobbying Firms Switch Political Gears

Corruption scandals paved the way for Democratic ascendancy. Those scandals exposed in part how Republican Hill staffers and members of Congress sold their access and power for private gain to defense contractors, Indian tribes, and anyone who would pay top buck.

Now incoming House majority leader Nancy Pelosi plans to overhaul Congressional ethics and limit lobbyist influence on the hill. Yet those plans haven't seemed to damper K Street's enthusiasm for switching political gears by hiring up former Democratic hill staffers. Do the lobbying firms know something we the people don't?  This just in from Time Magazine:

Lobbyists who couldn't get a meeting are suddenly a hot commodity. "I've gotten a lot of calls from headhunters in the last two months," says Florence Prioleau, a lobbyist who has maintained close ties with her former boss, New York's Charles Rangel, incoming chairman of the Ways and Means Committee. Pelosi's former chief of staff, George Crawford, has just been hired by Amgen, a biotech company, to represent its interests with the new Congress. Toby Moffett, a former Democratic Congressman from Connecticut now with the Livingston Group, says he recently told a Republican lobbyist desperate to hire Democrats that he had two options: "One is to go after [congressional] staff members who are thinking of leaving, maybe someone with tuitions to pay. The second is to overpay for people who weren't thinking of leaving."

-- Beth Daley

The Democratic Congress: Will Rhetoric Match Reality?

Over the Thanksgiving break, both the Washington Post  and the New York Times ran stories that are so important we wanted to make sure no one missed them while in their post-Turkey tryptophan haze. The issue they both addressed is the growing evidence that the Democrats who are about to be back in control are beginning to act a lot like the Republicans have in the last several years.  One element of this: Perpetuating the dynamic that existed under the Republicans, lobby shops are hiring Democratic staffers in order to maintain their influence on the Hill.

The newspaper Roll Call reported in May 2003 (paid subscription req'd) that Rep. Steny Hoyer (D-Maryland), who was just voted House Majority Leader, had his "Own 'K St. Project'" with help from Rep. Nancy Pelosi (D-California), the incoming Speaker of the House:

In an effort to counter the GOP's vaunted "K Street Project," senior House Democrats are quietly reaching out to Democratic lobbyists in the business community to re-establish ties that have withered since the party lost control of the House nearly a decade ago.
...
Hoyer, who is considered more centrist than others in the Democratic leadership, leads the effort. But each of the three Democratic leaders, including Minority Leader Nancy Pelosi (Calif.), plays a role.
...
"Hoyer has taken a page out of the Republican playbook," said one Democratic lobbyist involved in the effort. "This is a huge step from the previous leadership by recognizing that the business community can be allied with Democrats on some issues.

An incoming committee chairman told me privately that he has is concerned that his party was stooping to the same pattern of pandering to corporate interests in order to regain power. Well now they have it. Should we be surprised they are now following the same path created by Hoyer and Pelosi?  That said, the Democrats still have time to prove they are not as distracted by campaign contributions as the Republicans they have beaten.

In the perhaps single most venal example of a “public servant” cashing in on their time in government, former Republican House Energy and Commerce Chair cum-drug industry lobbyist Billy Tauzen is working overtime to preserve the crappy Medicare prescription drug deal he stewarded for his future employer.  His deal prevents the government from negotiating cheaper prices (i.e. smaller profits for his clients) for Medicare recipients. He and the drug industry are scrambling to buy up as many Democrats as they can to help represent them against idealistic Members of Congress who might actually want to advance the public interest.  This is the first test of the Democrats. Are they going to accept Tauzen’s siren calls to the dark side?

POGO believes the inappropriate influence of the drug industry over public health policy is one of the most important issues facing our country. As a result, at our strategic review last year, we decided to create a new program area of our investigations called “Public Services” which will investigate the corruption and other misconduct in the health care, transportation, housing and other public service agencies.  If you’re aware of any evidence of corruption in these areas, please contact us. Help us make the new Congress as ethical as they claim they’re going to be.

-- Danielle Brian

Churning Congress Fuels Revolving Door

The Revolving Door is in a tailspin:

• John Mashburn, former general counsel to Sen. Judd Greg (R-N.H.) and then-Senate Majority Leader Trent Lott (R-Miss.) will be working at Womble Carlyle Sandridge & Rice, a North Carolina law firm, as a Senate rules specialist.  "The Democrats were very good at using the rules...to at least having their side of an issue aired," Mashburn told the Washington Post.  Mashburn also worked for then-Sen. John D. Ashcroft (R-Mo.) and then-Rep. Tom DeLay (R-TX).
• Others at the firm: former Democratic governor James Hunt, former chief of staff for then-Sen. Jesse Helms (R-N.C.) Jimmy Broughton, former chief of staff for then-Sen. John Edwards (D-N.C.), and former aide to then-Sen. Lloyd Bentsen (D-TX).
• Boston Scientific Corp. hired Brenda Becker, Vice President Cheney's assistant for legislative affirs, to begin work in January as senior vice president for global government affairs. Becker also worked at the Commerce Department and the Blue Cross and Blue Shield Association.
• After Thanksgiving, Former White House Office of Management and Budget press secretary Scott Milburn joins APCO Worldwide as vice president.
• Kevin Kayes, chief counsel to Sen. Harry M. Reid (D-NV), will shortly join Quinn Gillespie & Associates.  Kayes has also worked for Sen. Robert Byrd (D-WV). The firm is also home to David Hoppe, a former leadership aide to Sen. Trent Lott (R-MS).

-- Mandy Smithberger

Big Murtha

Democrats rode to power last week with promises of “honest leadership and open government.”  It is therefore disconcerting to learn that Speaker-elect Nancy Pelosi has recommended Rep. John Murtha (D-PA) to be the new House majority leader .  Her decision to support Murtha has raised concerns that the era of “Duke” Cunningham ethics will continue in a Democratic Congress.

Although best known for his vocal opposition to the American presence in Iraq, Murtha has also cemented a position as one of the most aggressive backdoor deal-peddlers on the Hill, (in)famous for his ability to deliver Congressional Democrats’ votes in exchange for lucrative earmarks .   

Citizens for Responsibility and Ethics in Washington (CREW) has been closely following Murtha’s troubling track record (pdf) .  The organization even granted Murtha a “dishonorable mention” on its list of the twenty most corrupt Members of Congress .  His place on the list is certainly not unwarranted:

• Murtha helped steer over $95 million to the PMA Group, a defense lobbying firm that was founded by his former senior staffer and whose clients rank among his top contributors.
• In a 2004 defense appropriations bill, Murtha earmarked over $4 million for AEPTEC Microsystems, a wireless networking company that has employed the services of Murtha’s brother and a former staffer at KSA Consulting .
• Murtha helped secure a spot for Rep. Alan B. Mollohan (D-WV) as the ranking Democrat on the House Ethics Committee.  Mollohan, a shoo-in candidate for CREW’s top-twenty list (pdf) , had to resign from the Committee in April 2006 amid accusations that he hid assets on his financial disclosure forms and designated millions in earmarks for businesses run by his friends and business associates.

Murtha claims that Congressional ethics will be strengthened under his leadership.  From today’s Washington Post article: “Wait until you see the ethics package we support and we pass,” he said.  “No meals, no trips, nothing. I support it 100 percent.”

We certainly hope that the new Democratic leadership delivers on its promise.  But as Murtha says, we’ll have to just wait and see.    

-- Michael Smallberg

New Study: US More Corrupt, "No Room for Complacency"

A new study finds that U.S. corruption has dramatically worsened in the past two years. Also, that Iraq has plunged to the bottom of the list and now ranks at 160 out of 163 countries in terms of corruption. According to highlights from the just-released Corruption Perceptions Index (CPI):

"Countries with a significant worsening in perceived levels of corruption include: Brazil, Cuba, Israel, Jordan, Laos, Seychelles, Trinidad and Tobago, Tunisia and the United States...While the industrialised countries score relatively high on the CPI 2006, we continue to see major corruption scandals in many of these countries. Although corruption in this context may have less of an impact on poverty and development than in developing countries, these scandals demonstrate that there is no room for complacency."

Although the study is interesting, it leaves much to be desired with its recommendations. Emphasis is put on the role of professional societies in policing corruption among their members with sanctions and stronger anti-corruption codes. Professional societies are usually the last to reign in bad behavior, especially if it lines its members pockets. For example, less than 4% of complaints (pdf) filed against lawyers in the U.S. resulted in discipline.

Transparency International, which authored the ambitious study released yesterday, has done excellent research in the past which made the case for the kinds of measures and recommendations which would seriously tackle corruption.

 

-- Beth Daley

Tip of the Hat to Ken Silverstein

Ken Silverstein has been a dogged investigator into Representative Curt Weldon’s (R-Pennsylvania) connections to lobbyists, including Weldon's own daughter. McClatchy reported on Friday that the FBI has mounted an investigation into many of the issues raised in Silverstein’s 2004 reporting. To keep up to date on Silverstein’s latest finds, visit him at Washington Babylon.

-- Beth Daley

No More Conflicts for Admiral Blair

As some of you may have heard, Admiral Dennis Blair has stepped down as president from the Institute for Defense Analyses (IDA).  This resignation comes as no surprise given the difficult months he has endured since IDA took part in a Business Case Analysis for the F-22A Raptor Multi-Year Procurement (MYP).

IDA and Admiral Blair came under fire late July amid POGO’s investigation that discovered Admiral Blair sat on the Board of Directors of EDO corporation, a subcontractor of the F-22A program.  When asked if he took part in the report, Admiral Blair admitted direct involvement in IDA’s finding that a MYP contract between the government and Lockheed Martin would save taxpayers approximately a quarter of a billion dollars according to Washington Post.  The Government Accountability Office (GAO) and the Congressional Research Service (CRS)  flat out disagreed with IDA’s findings according to their testimonies before the Armed Services Air Land Subcommittee regarding a MYP of the F-22A.  CRS and GAO both agree that the F-22A is not ready for MYP legally and financially.  The GAO explains in their testimony that the cost of an MYP of the F-22A could result in a loss of upwards of 1.7 billion dollars due to unreported Air Force termination costs.  Yet after a massive lobby effort by Lockheed Martin, the amendment passed.  Hopefully the conferees currently reviewing the Defense Authorization Bill will take this into account.

The possible resignation or firing of Admiral Blair highlights a recommendation included in  POGO’s report entitled  “Preying on the Taxpayer, The F-22A Raptor.”  Our fourth and final recommendation to was to “Apply federal conflict of interest laws to federally funded research and development centers.  These organizations are fully funded by the federal government and should be required to meet the same ethics standards as federal agencies.”  The possibility that Admiral Blair’s interactions with EDO corporation tainted the report by IDA and the possibility that there may have been a possible conflict of interest is for the Board of IDA to determine.  But this entire issue hopefully could have been avoided if FFRDC’s fell under the same conflict of interest rules as federal employees.  To require FFRDC’s to uphold the same standards as the federal government would benefit every party involved with their work.  The government would be ensured that the results of these organizations would not be tainted.  Taxpayers would benefit with the knowledge that our lawmakers are conducting their business with information provided by an independent and unbiased organization.  And finally, the FFRDC’s would maintain the ability to be a resource in which their highly regarded work would never be tainted by situations similar to what IDA is dealing with now.

Stamping out conflicts of interests is a positive step for all.

UPDATE: Thanks to Joe Quimby for pointing out the designation change for the Raptor.

CSI Meets Earmarks

One of the frustrations of challenging pork in Congressional spending is the fact that members of Congress can attach spending provisions to must pass bills anonymously. Those spending “earmarks” have skyrocketed in recent years. At the same time, a variety of scandals involving defense contractors making bribes, sometimes with political campaign contributions, have revealed the extent of corruption plaguing the secret earmark system.

Now Citizens Against Government Waste, the Heritage Foundation, the Sunlight Foundation and others have now come up with a brilliant strategy for challenging secret spending and holding Congress accountable for runaway spending. They’ve posted 1800 earmarks in a database online and asked citizens to join their CSI team to find out who made the earmarks. Citizens can add information about the earmarks to the database. To join in the fun, start here.

Senator Tom Coburn has taken on heroic efforts to challenge earmarks and set up an informational tool kit for citizens here.

-- Beth Daley

What's New on POGO.ORG?

If you didn't see them, POGO fired off a few letters late last week.  One was sent to the chairman and ranking member of the House intelligence committee urging the public release of an unclassified report on disgraced Rep. "Duke" Cunningham's contracting/earmarking shenigans on the committee.  The other was sent to the director of the Office of Management and Budget concerning the appointment of a contractor lobbyist to fill a vacancy that should be filled by someone from the public accounting profession or from academia.  The board with the vacancy in question helps determine how contractors account for their costs.

Check them out.

-- Nick Schwellenbach

Wilkes Speaks, the Times Bites

There's something both illuminating and disappointing about Sunday's New York Times piece on Brent Wilkes, in which the elusive unindicted Duke Cunningham co-conspirator finally speaks to the media of his choice. On the one hand, the piece is unsparing in its description of the House Appropriations Defense Subcommittee as a body where the shakedown of contractors is a way of life. Here, the Times does a great job of providing some essential context and filing in some critical gaps, as well as fleshing out the activities of Bill Lowery. (We also liked the part about Tom DeLay crony Ed Buckham orchestrating the “going away present” to George Nethercutt.)

On the other hand, the Times'  handling of Wilkes seems a bit too gentle.

Look, we understand the game:  Using the front page of the New York Times to send a loud, clear signal isn’t anything new, and if you’re in a position where goading prosecutors to hone in on other parties--ones whom you might make a great witness against, provided you get some kind of favorable deal--is to your advantage, no better places to do it than the Times. But in sitting down with Wilkes, the Times (or anyone else) should feel some obligation to not let its scoop become a soft-focus, pulled-punches affair.

In setting up the piece, the Times says that Wilkes decided to talk with the paper to “rebut false assertions about him by prosecutors and the news media.” Those “false assertions” are, however, never actually spelled out. Indeed, when many with an interest in this case I’ve talked to read that line, all said they were expecting to see Wilkes finally address (a) reports about his alleged hiring of hookers for legislators; (b) the well-substantiated positions of both Pentagon and Congressional elements that work performed by Wilkes’ ADCS’s in Panama was utterly unnecessary and benefited no one but ADCS; (c) Wilkes’s apparent love of opulence as derived from defense contracts and (d) concerns about the propriety of at least one CIA contract Wilkes had that came out of the CIA Frankfurt support base then run by Wilkes’s longtime best friend Dusty Foggo.

Regarding (a), there’s nary a word to be found anywhere in the story. As for (b), you’d never know from the Times piece that everyone from Senator John McCain to a deputy undersecretary of Defense to  Pentagon Inspector General called bullshit on Wilkes’ Panama business. As good as it gets is, “At his peak, Mr Wilkes controlled a dozen companies whose work included digital document storage. The federal government was his chief customer, and he spent up to 30 weeks a year in Washington courting congressman and agency procurement officials.” 

Again, just a small businessman working hard in a flawed system to bring home the bacon.

While the San Diego Union-Tribune and others have reported in expansive detail on Wilkes’ gusto for the high life, here the full extent is: “Wilkes built a headquarters…with a 450 seat banquet hall where Cirque de Soleil preformed at a birthday party for his wife Regina” and “he crossed the country on private jets”. Indeed, without citing any specific report, Wilkes lawyer Nancy Luque tells the Times that “the image of Mr Wilkes as a swaggering deal maker was a caricature. ‘He had his life in Washington and then his real life,” Ms Luque said. “His real life was his family, his friends and his business.”

Time out. As reams of reportage has ably demonstrated to date, Wilkes’ family, friends and businesses were inextricably intertwined---and inextricably intertwined with his “life in Washington”. Indeed,  Wilkes’ rise had as much to do with him establishing himself as a high-profile player at home in San Diego, as well as Washington. Earlier this year we spoke with Peter Mueller, a San Diego attorney (and, small world, Pearl Jam lead singer Eddie Vedder’s stepfather), who was Brent and Regina Wilkes landlord between 1997 and 1999, when the Wilkes’ rented a very nice house from Mueller in the tony Lomas Verdes Estates neighborhood for about $4000 a month.

According to Mueller, in those days, 13291 Lomas Verdes Drive--popularly known as the “Hummer House” on account of the large black Hummer parked out front--was not known for quiet family get-togethers. “They’d have parties, which were probably the beginning of his connection-building,” Mueller recalled.  “At some parties there were very large tents in the back yard--when we’d drive by we couldn’t miss it. Sometimes they’d have as many as ten limousines parked out in front.”

But if one is really going to consider Luque’s assertion and the Times’ deferential soft-pedaling, one must revisit a section from one of the Union-Tribune’s Pulitzer Prize-winning pieces on Wilkes that covers not just his time spent in Washington, but also in San Diego, Hawaii and Idaho.  We note with particular interest the subhead:

Lavish living

The money from Panama and other ADCS contracts – ranging from Gateway computer systems to military sound technology – helped fund a heady lifestyle for Wilkes and his associates.

In 1999, Wilkes and his wife bought a $1.5 million home in the Poway hills. He soon bought a second home: a $283,500 town house in the Virginia suburbs near Washington, D.C. During his visits to Washington, he made his rounds in a chauffeur-driven Mercedes. At the Capital Grille, a favored hangout of legislators and lobbyists, he rented a personalized wine locker with his