The Project On Government Oversight (POGO) Blog

Castle Protects Taxpayers

POGO wants to applaud a good government ally.  Representative Mike Castle (R-DE) was outraged when he learned from the GAO that defense contractors are getting paid multi-million dollar bonuses, or award fees, even when they botch their work. What is the incentive to do a job well, if you know you’ll get the bonus anyway?

GAO released two reports detailing waste in the DoD’s incentive/award fee program and placed the programs on the government’s high risk list.  The GAO stated in its March high risk report (pdf) that “DOD cannot ensure that the more than $200 billion it spends annually is used wisely and results in weapon systems and capabilities delivered to the warfighter as originally promised, or that its business practices, such as the fees paid to its contractors, promote good acquisition outcomes.”  DOD responded with a new policy memo on March 29, 2006 stating that “award fee contracts must be structured in ways that will focus the government’s and contractor’s efforts on meeting or exceeding cost, schedule, and performance requirements.”

GAO also published a report (pdf) that stated that the Comanche helicopter, F/A-22 and Joint Strike Fighter aircraft, and the Space-Based Infrared System High satellite system, have experienced billion dollar cost increases, technical problems, and development delays, but the contractors have “respectively received 85, 91, 100, and 74 percent of the award fee made available to date (adjusted for rollover), totaling $1.7 billion.”

Rep. Castle was able to insert and have Congress approve legislation that will prevent contractors from receiving award fees when their performance doesn’t merit a payment.  Section 9016 of H.R. 5631 (the DoD Appropriations Act of 2007; pdf), prevents the payment of award fees to any defense contractor for performance that does not meet the requirements of the contract.  It is ridiculous to think that such a provision is necessary.  In the real world, however, Rep. Castle and many of us have learned that the Defense Department has paid bonuses to its contractors in instances when the job was not done.

Last week, Rep. Castle suffered two small strokes and isn’t in Washington D.C. to receive the accolades that he deserves.  We wish him a speedy recovery and thank him for stopping the government’s practice of rewarding contractors even when they screw up.

-- Scott Amey

Questioning Defense Merger Mania

When the Department of Defense endorsed the United Launch Alliance (ULA)--a joint venture between Boeing and Lockheed Martin for the Evolved Expendable Launch Vehicle (EELV) Atlas V--they justified the decision by citing cost pressures, low vehicle production rates, and low launch volumes that resulted in a collapsed commercial market. In 2004, GAO reported that the federal government will continue to subsidize a significant share of costs until a commercial market emerges and the cost burden shifts to others requiring launch services, with costs that were $13.3 billion over the $18.8 billion baseline estimate at the time. 

It appears, however, that there is a commercial market for the EELV afterall.  A few days ago, Lockheed Martin agreed to form a partnership with Bigelow Aerospace to study the potential for launching passengers on human-qualified Atlas V rockets. 

In March of this year, POGO wrote a letter to the Under Secretary of Defense, Kenneth J. Krieg, opposing the proposed joint venture between Boeing and Lockheed Martin, writing that DoD's allowment of so many mergers "is a clear example of the Pentagon's acquiescence to the defense industry's interests--a practice that is counter to the interests of the American public." As the U.S. Air Force and Boeing prepare to sign a two-year contract for rocket launch support, the Air Force's working assumption appears to be that there is not enough launch business to support two suppliers.  Given the recent commercial deal Lockheed has made with Bigelow, it appears that the justification for ULA--and taxpayers underwriting EELVs--is questionable at best, and quite possibly false.  DoD and the Federal Trade Commission, who will ultimately decide if the ULA merger should be approved, should add the Bigelow deal to the list of concerns POGO has raised when determining if the Lockheed-Boeing merger is in the best interest of the taxpayer.

-- Mandy Smithberger

Interior Dept Auditors Rebel: More Docs

In reference to the post below and the NYT today, here are four additional False Claims Act lawsuits filed in Oklahoma by Interior Department auditors who have become whistleblowers on oil and gas royalties which have gone uncollected: 1 2 3 4 (pdfs). In addition, we are posting letters issued from the State and Tribal Royalty Audit Committee in February 2006 raising concerns about how the method for auditing oil and gas leases changed. These were the letters which were sent out prior to the retaliation happening now. One letter (pdf) went to the Minerals Management Service (MMS) and one (pdf) went to House Resources Chairman Pombo. The perfect storm: Johnnie Burton, Director of the MMS is speaking today (doc) at the Platts Energy Forum usually attended by the news media's top energy reporters.

-- Beth Daley

Oil & Gas Auditor in NYT

In light of today’s New York Times article on Interior Department auditors filing False Claims Act lawsuits, we are making documents on the Bobby Maxwell case available – his amended complaint (pdf) and the court’s response (pdf) to a motion for summary judgment. According to the Times, Maxwell is one of several auditors who have filed suit against oil companies for underpayments on drilling fees, known as royalties. As noted on this blog as well, Interior Department-funded state and tribal auditors have also raised concerns about auditing and are now facing retaliation. In August, members of Congress wrote (pdf) to Interior’s Minerals Management Service expressing concern about the retaliation. POGO submitted written testimony for a House Government Reform hearing last week which outlined these issues and documented how collections from auditing are at an historic all-time low.

-- Beth Daley

Homeland Security's Top CyberSec Post Filled by Lobbyist

In a not unsurprising move, given what often seems like an incestuous relationship between government contractors and the Department of Homeland Security, the newly named chief of DHS' Cyber-Security is a lobbyist, yesterday's Washington Post reported.

The lobbyist, Greg Garcia, will have no trouble understanding the needs of information technology companies since his job has been to represent them for well over a half a decade.  But that's not the question we're concerned about--Will he represent the taxpayers' and the government's interests? 

According to lobbying disclosure forms at the Senate Office of Public Records, Garcia has worked for the Information Technology Association of America, the American Electronics Association, and 3Com.  Previously, he has also worked as a staffer for the House Science Subcommittee on Research, which may have helped him develop contacts which assisted his efforts as a lobbyist.

-- Nick Schwellenbach

LegiStorm Brings More Transparency to Congress

Hill staffers' salaries are now available online at LegiStorm.com.  "I think this will add a health amount of transparency to how Congress spends taxpayer dollars," said Jock Friedly, a former Capitol Hill investigative reporter, who founded LegiStorm. LegiStorm.com is a creation of LegiStorm LLC, a company based on Capitol Hill.  Its sister company, Storming Media LLC, is the leading provider of Pentagon documents, including technical and military strategy papers.  While the information has always been available in printed congressional books, this is the first time that lawmakers' aides salaries are available on the internet.

The Washington Post found that the limit on salaries is approximately $162,000 a year.  The highest-paid staff members work for the House and Senate appropriations committees, where approximately one-fifth make more than $150,000 a year.

First launched yesterday, the site crashed by noon.  Wonkette observed that the site should "revolutionize who-buys-who beers at Hill happy hours."  Some of the lower salaries can be considered factors that might deter the country's best and brightest, while also making the revolving door more appealing for those who choose to work as a Legislative Assistant for approximately $45,000 a year.

-- Mandy Smithberger

FCC reports on Media Ownership Suppressed?

What happened to these two reports?  From Broadcasting and Cable (hat tip: reader A.M.):

As promised, FCC Chairman Kevin Martin is investigating two reports on media ownership--radio and TV--that were created at the FCC but never released.

In a letter to Senator Barbara Boxer (D-Calif.), Martin said that he was making the second report available on the FCC Web site. He also said he would include that report, a 2003 study of radio ownership, as part of the open localism and media ownership proceedings. He did the same with the initial 2004 TV report [pdf].

Martin initially said he himself would investigate why the study had not been released before, but has now agreed to let the FCC's Inspector General look at both, per Boxer's request.

MORE: The AP did a more detailed writeup (free re. req'd) and mentions this tantalizing detail:

A lawyer who worked at the FCC when the report was written said last week that FCC managers ordered the destruction of that report. He is no longer with the agency.

-- Nick Schwellenbach

Retired FAA Special Agent: SSI is Killing Accountability

The Transportation Security Administration's Sensitive Security Information (SSI) pseudo-classification marking is abused by the agency to shield it from accountability, argues one former Federal Aviation Administration special agent.  Brian Sullivan, who worked in FAA security in the New England region before the 9/11 attacks, works with 9/11 victim families to expose how airlines and the FAA skimped on security to minimize delays in getting passengers on planes (post 9/11, TSA was created to handle security).  Some snippets:

TSA’s abusive overdesignation of documents as “Sensitive Security Information” (SSI) is an endless source of frustration to 9/11 family members determined to learn the truth about how their loved ones died, to watchdog organizations determined to hold our government accountable, and to distinguished jurists determined to mete out justice.
...
Fortunately, a solution is at hand. Thanks to the leadership of Reps. Hal Rogers (R-Ky.) and Martin Sabo (D-Minn.), the U.S. House included bipartisan language in Section 525 of the Homeland Security Appropriations Bill that would end TSA’s abuses without preventing the agency from keeping legitimate secrets. Section 525 would:

•Require the release of SSI that is more than three years old and not currently being used to protect the transportation system, unless TSA demonstrates a compelling reason why the release would present a risk of harm to the nation;

•Standardize and justify TSA practices for labeling documents as SSI, and

•Permit a judge overseeing legal proceedings to allow controlled access to SSI in the proceedings, unless TSA demonstrates a compelling reason why the release would present a risk of harm to the nation.

However, the Senate version of the bill would preserve the status quo. So citizens who want to make America safer and hold our government accountable should call their senators and representatives and tell them to demand inclusion of the House’s Section 525 language in the final, unified version of the bill (H.R. 5441).

As Sullivan wrote, the House of Representatives has worked in a bi-partisan way to craft language that would keep SSI from being an unaccountable secrecy stamp, while accomodating the need for secrecy when it is necessary and prudent.  However, the Senate language, likely shaped by DHS and TSA, according to a well-informed source working on the issue, would be a slap in the face to 9/11 victim families and allow the continued use of excessive secrecy to minimize accountability at TSA.

-- Nick Schwellenbach

Kill the Messenger

Airing today on French television is Kill the Messenger, a documentary on FBI whistleblower and National Security Whistleblower Coalition founder Sibel Edmonds. French documentary film makers Mathieu Verboud and Jean R. Viallett have posted an edgy a trailer and information on the documentary on the web. The trailer includes an array of interviews with Edmonds including Ambassador Joe Wilson, investigative reporter Joe Trento and other national security whistleblowers who have worked with Sibel to fight for protections.

-- Beth Daley

Princeton Researchers: Diebold Electronic Voting Machines Are Highly Vulnerable

Bottom line: The integrity of elections may be highly suspect where Diebold electronic voting machines are used, because, according to a team of Princeton University researchers who released a paper yesterday, these machines are extremely vulnerable to manipulation. (hat tip: BeSpacific)

Diebold rebutted the researcher's report last night in a statement.  They argue that the machine and software the researchers examined is no longer used and that "normal security measures were ignored."

A link to the paper "Security Analysis of the Diebold AccuVote-TS Voting Machine" (pdf) by Ariel J. Feldman, J. Alex Halderman, and Edward W. Felten.

The abstract:

This paper presents a fully independent security study of a Diebold AccuVote-TS voting machine, including its hardware and software. We obtained the machine from a private party. Analysis of the machine, in light of real election procedures, shows that it is vulnerable to extremely serious attacks. For example, an attacker who gets physical access to a machine or its removable memory card for as little as one minute could install malicious code; malicious code on a machine could steal votes undetectably, modifying all records, logs, and counters to be consistent with the fraudulent vote count it creates. An attacker could also create malicious code that spreads automatically and silently from machine to machine during normal election activities — a voting-machine virus. We have constructed working demonstrations of these attacks in our lab. Mitigating these threats will require changes to the voting machine's hardware and software and the adoption of more rigorous election procedures.

Their main findings:   

1. Malicious software running on a single voting machine can steal votes with little if any risk of detection. The malicious software can modify all of the records, audit logs, and counters kept by the voting machine, so that even careful forensic examination of these records will find nothing amiss. We have constructed demonstration software that carries out this vote-stealing attack.

2. Anyone who has physical access to a voting machine, or to a memory card that will later be inserted into a machine, can install said malicious software using a simple method that takes as little as one minute. In practice, poll workers and others often have unsupervised access to the machines.

3. AccuVote-TS machines are susceptible to voting-machine viruses — computer viruses that can spread malicious software automatically and invisibly from machine to machine during normal pre- and post-election activity. We have constructed a demonstration virus that spreads in this way, installing our demonstration vote-stealing program on every machine it infects.

4. While some of these problems can be eliminated by improving Diebold's software, others cannot be remedied without replacing the machines' hardware. Changes to election procedures would also be required to ensure security.

-- Nick Schwellenbach

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.

Congress Blinded by that Black Gold

The Interior Department's Minerals Management Service (MMS) has enjoyed a quiet and relatively little- known existence, at least beyond the beltway, and perhaps even just beyond a few oil industry execs and energy enthusiasts.

One of the benefits of primarily dealing with an industry that owns the Congress lock, stock and barrel is that Committees of jurisdiction--namely, the House Resources Committee and the Senate Energy and Commerce Committee--shows near complete disinterest in holding hearings or conducting oversight at all. After all, conducting oversight might actually improve the ability of the MMS to collect billions of dollars in drilling fees from the oil and gas industry, an outcome at odds with the industry's agenda of paying less for the petroleum products it takes from federal and Indian lands. For example, neither one of those Committees held hearings on oil royalty ripoffs, even though federal fraud litigation brought in a $440 million settlement and industry whistleblowers tooted their horns. Ultimately, fixes to the MMS' oil royalty collections were made against the wishes of those Committees' Chairmen.

Thankfully, House Subcommittee on Energy and Natural Resources Chairman Darrell Issa doesn't seem to see things this way. Tomorrow, Issa will hold his third hearing on the MMS' fumbling of deep water leases in the Gulf of Mexico, a mistake which could end up costing the government dearly, by some estimates $20 BILLION in oil drilling fees.

However, in many Washington scandals, the coverup is often much worse than the original crime. That appears to be the salient theme of testimony expected from the Department of Interior's Inspector General Earl Devaney over the MMS foible. According to today's New York Times, on August 3rd, Chairman Issa and House Government Reform Committee Chairman Tom Davis rolled out the red carpet to new Interior Department Secretary Dirk Kempthorne with accusations that Interior has obstructed their investigation as well, saying: "We are deeply concerned that the department may have intentionally withheld critical information from the subcommittee."

-- Beth Daley