The Project On Government Oversight (POGO) Blog

Under the Radar: Human Trafficking in Iraq Reconstruction Efforts

Last Thursday the House Oversight and Government Reform committee held a hearing on allegations of waste, fraud, and abuse at the new United States Embassy in Iraq where multiple whistleblowers reported that the contractor in charge of the project, First Kuwaiti, engaged in human trafficking.

These allegations confirm a June 2006 State Department Report and Department of Defense investigation that found "widespread" abuses by contractors working in Iraq that included: "illegal confiscation of TCN's [third country national] passports; deceptive hiring practices and excessive recruitment fees; substandard living conditions; and circumvention of Iraqi immigration procedures" (see page 21 of 295). 

One of the whistleblowers was Rory Mayberry, a former subcontractor for First Kuwaiti.  In his testimony, he described his plane flight to Baghdad that led him to believe that 51 Filipino nationals had been kidnapped to work on the Embassy (a video of Mayberry's testimony is available here).  A foreman at the site, John Owens, gave a detailed description of the deplorable working conditions--ranging from poor pay and insufficient basic needs (like shoes and gloves) to verbal and physical abuse.  He also testified that he too believed he witnessed human trafficking (video of Owen's testimony available here).

The GAO has recently released two reports on combating human trafficking crimes.  Both reports stress the need for improvement, recommending that U.S. agencies enhance collaboration and monitoring of the problem.  Currently, information on this problem relies heavily on the private sector self-reporting instances of abuse, which is a far from effective tool to try to eradicate this problem.

H.R. 369 also hopes to shed more light on this problem by requiring the Department of Justice Inspector General to submit to Congress a report that would include "investigations of abuses alleged to have been committed by contract personel."  In January, POGO urged regular audits of contractors to assure compliance of human trafficking regulations.

-- Mandy Smithberger

Democrats Caving on Earmark Reform

Here’s the view below of one Senate aide who has reviewed the new negotiated language (pdf) of the bill. In our own analysis, Section 521 4(a) through 4(c) appear to allow Committees to avoid having to disclose earmarks to the public at least 48 hours prior to vote on the bill. Section 521 12 allows earmark rules to be waived by “joint agreement of the Majority Leader and the Minority Leader of the Senate.” After all, there’s nothing more bi-partisan than bringing home the bacon!

-- Beth Daley

A Little Nuclear Freaky in Tennessee

Following last week’s news that a contractor walked out the front door of another nuclear facility in Tennessee with nuclear enrichment pipes, here’s today’s news below: It looks like the driver of a stolen car crashed into the gate of the Y-12 nuclear weapons plant and ran away on foot. Why was he not pursued? We’ve run across situations at other facilities where guards at nuclear weapons sites are not allowed to pursue an intruder if they leave the premises. Of course, wouldn’t want guards to abandon the front gate, but by the time the police arrive, an intruder could be gone. Not sure yet if that is what happened here.

-- Beth Daley

FDA – Failing the Grade

On July 17th, the House Committee on Energy and Commerce held a hearing regarding the Food and Drug Administration’s (FDA) food safety inspection program. Specifically, the sub-committee on Oversight and Investigations wanted to know if FDA has the capacity to secure the safety of the country’s food supply. When asked to rate the performance of the FDA in this crucial task, none of the FDA agency employees gave more than a 5, with 1 being the lowest and 10 being the best.

But what is more alarming than this assessment is FDA’s response to internal criticism. Two days after the hearing, Margaret Glavin, the assistant Commissioner of FDA’s Office of Regulatory Affairs (ORA), issued this office-wide email (pdf) criticizing the witnesses. In the email, Ms. Glavins seem to suggest that somehow the witnesses’ testimonies have somehow undermined and discredited the work of the entire agency. In addressing the email to her staff, she says: “I know that many of you were disappointed, and perhaps even angry, at this erroneous assessment.”

Never mind the fact that these witnesses were required to give their opinions under oath, but even if their assessment were “inaccurate”, shouldn’t Ms. Glavins make a case for her position instead of trying to pit these witnesses against their colleagues? And if their assessment is indeed accurate, then Ms. Glavins has much more important things to do than go after employees that make the agency look bad.

Rep. Dingell (D-MI) and Rep. Stupak (D-MI) have already sent a letter (pdf) to FDA Commissioner Andrew von Eschenbach to take disciplinary action against Ms. Glavins.

It is sad to see senior officials create agency in-fighting when they should be focusing their attention on the real problem at hand: protecting our food supply.

-- Michael Zhou

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

Senators Question Backroom Boeing-Air Force C-17 Talks

Several publications reported today on a July 20, 2007 letter to Secretary of Defense Robert Gates from Senators John McCain, Edward M. Kennedy and Tom Carper regarding their "concerns that the policies, practices, and procedures governing acquisition may have been violated recently in the C-17 Globemaster program, which cost taxpayers an average of $278 million per aircraft."  The C-17 is built by Boeing and, yet again, the Air Force seems to be led by its nose by that gargantuan defense contractor.  Thankfully some Senators are rightfully pursuing the best interests of the taxpayer by digging in to find the truth.

-- Nick Schwellenbach

POGO Misconduct Database Contractor In the News

Last week, POGO launched an updated version of its Federal Contractor Misconduct Database, a compilation of misconduct committed by the top 50 federal contractors. Just days later, one of those contractors, San Diego-based SAIC (Science Applications International Corporation), made headlines when it announced that it had put about 580,000 uniformed military personnel and their families at risk for identity theft by sending their unsecured personal information over the Internet.

SAIC provides a variety of technical services to federal agencies and the military, including administering TRICARE, the health benefits program for the uniformed military services, retirees and their families. The company said that personal information, including names, addresses, Social Security numbers, and various health information, was placed online through an unencrypted channel while being processed pursuant to TRICARE. SAIC assured the public it was taking steps to notify and assist the affected beneficiaries, launched an internal investigation to determine how the security lapse occurred, placed several employees on administrative leave, and initiated a program to determine the changes in policy and operations necessary to avoid similar lapses in the future.

Those interested in learning more about SAIC are strongly encouraged to check SAIC’s profile in the misconduct database. A quick glance reveals a company with a checkered history, including several instances involving allegations of defrauding the government. Donald Barlett and James Steele provided a rare inside look at SAIC in the March 2007 issue of Vanity Fair in an article that characterized this rapidly-growing, yet largely unknown, federal contractor as “Washington’s $8 Billion Shadow.”

-- Neil Gordon

Cut to FCS in House Approps Bill

A brief follow-up to my Future Combat Systems (FCS) post from last week...

The House Appropriations Committee met in full Tuesday July, 24th and called for cutting research and development funds for the Army's Future Combat System by $433.8 million. The cut represents roughly half of the $867 million proposed in the original House Defense Authorization Bill (H.R. 1585).

The House defense appropriations subcommittee recommended similar cuts in its own markup of the bill last week. According to a Government Executive article, subcommittee Chairman John Murtha said the budget request was just too expensive at a time when the Army must fund urgently needed equipment in Iraq and Afghanistan.

"It's not ... one of my favorite programs," Murtha said. "It's not that I don't see the point. I just that I don't think we have the money to do it."

-- Jesse Ferrantella

Luthi to be Interior's new minerals director

When it comes to managing the nation’s mineral resources, no one does it better than the leadership from Wyoming. At least that seems to be the White House’s opinion. On Monday, Dept. of Interior Secretary Dirk Kempthorne named Randall Luthi, former speaker and majority leader for the Wyoming House of Representatives and most recently deputy director for the US Fish and Wildlife Service, as the new director of the Minerals Management Service (MMS).

The previous director, “Johnnie” Burton, was also from Wyoming and in addition to working for an oil and gas company there, had also served as director of the state’s Dept. of Revenue. She resigned from her post at MMS in May after facing a mountain of criticisms for failing to effectively manage the nation’s oil and gas leases.

Luthi is perhaps most well-known (read “notorious”) for his efforts to de-list Wyoming wildlife thus allowing them to be hunted. Two of Luthi’s main targets were grizzlies and wolves and, after becoming deputy director for the US Fish and Wildlife Service, he had to recuse himself from the issue due to pending legislation. The Billings Gazette summed up Luthi’s perspective on the Endangered Species Act:

During the Clinton administration, Fish and Wildlife was run from the "top down" with government officials in Washington telling states what to do with their land, Luthi said.

The Bush administration has been more open to listening to the states, he said.

Republicans should do all they can to prevent animals from being listed as endangered, because once they are, it is hard to get them delisted, he said. Listing animals as endangered is the "death nail," he added.

And landowners should be allowed to have whatever species they want on their land, Luthi said.

So was it Luthi’s fine stewardship of natural resources that made him eligible to be MMS director? To be sure, he’s certainly qualified for the position, having served in a leadership role in one of the largest mineral-rich states and two posts at Dept. of Interior. Yet In the final count, VP Dick Cheney’s name on your resume can’t hurt either.

-- John Pruett

9/11: Principle versus Compensation

To some close observers of the September 11th civil litigation that is still underway nearly six years after the horrible terrorists attacks in 2001, comments in late June of this year by Judge Alvin K. Hellerstein were not just shocking and disrespectful, but reflected the lack of accountability that September 11th families have long battled. 

More specifically, some 9/11 victim families are seeking to learn through the discovery process what, if any, role the airlines and the Federal Aviation Administration (FAA) played in weakening security to make air travel faster and more convienent.  These particular families decided to pursue litigation for accountability reasons, rather than simply be content with the payout from the 9/11 Victims' Compensation Fund. However, Judge Hellerstein continues to press for resolution through settlements without discovery. 

While explaining his thoughts on principles versus compensation in support of his push for settlements, Judge Hellerstein said on June 25 this year, "It is very crass and it probably will come back to be critical of me, but there is an expression that is sometimes very useful, 'Money is the universal lubricant.'  It makes it easier to go on with one's life."

Judge Hellerstein further explained his view, "Somehow we need to get past September 11, 2001 as a country and individually for all clients, and I would like to bring about that possibility as best I can, as efficiently as I can in a short a period of time as I can." (a snippet of the transcript can be found here)

Former Boston Logan airport FAA security official Brian Sullivan, who is a close observer of the 9/11 families; cases, said in response, "We are a country founded on principles.  The remaining 9/11 plaintiffs seek justice through discovery and a trial.  To assume that compensation can dissipate their principles, and ease their pain, is an assumption the judge shouldn't make.

"Al Qaeda and their Islamic Fundamentalist Extremist brethren are fanatically dedicated to their cause.  If money can compromise our principles, they have us defeated before we've even begun to fight," he added.

Also at issue, complicating discovery in court are information security barriers--notably use of the Sensitive Security Information (SSI) label--that the FAA and the Transportation Security Administration (TSA; an inheritor of many of the FAA's records) have thrown up, frustrating access to information.

Sullivan also said, "The Sensitive Security Information designator is supposed to be used to protect information in the interests of national security, not as a shield to cloud government and/or airline negligence and incompetence....This has complicated and obfuscated the process, as the plaintiffs continue to battle for information in disovery and has been the main reason liability trials have been delayed for going on six years."

-- Nick Schwellenbach

The Future of Future Combat Systems

Included in the Senate Armed Services Committee’s defense authorization report for fiscal year 2008, is the following language regarding the Army’s behemoth modernization effort known as Future Combat Systems (FCS):

Consequently, the committee is concerned about the most recent restructure, which now eliminates or defers four of the systems and stretches the field of FCS Brigade Combat Teams over a longer period of time. The committee believes this decision was purely a result of budgetary concerns, and does not reflect either a change in requirements or programmatic difficulties.

But immediately following these concerns, in the very next sentence in the same paragraph, the Committee’s Authorization bill says this very contrary statement to prior one:

The committee believes FCS is a well-run program which is well within cost and schedule parameters of the earned value management system.

Confused? You should be. How can a program defer or eliminate 4 of its 18 systems, and stretch out its combat teams over a longer time period because of deemed budgetary concerns, yet then be classified by the very same committee making these statements as a “well-run program which is well within cost and schedule parameters?” The sentences just do not fit together logically, which makes you wonder how they can appear together, and be used to justify the Committee’s most recent demonstration of support for the full $3.6 billion requested for the FY2008 FCS budget.

What I do not understand is how the Committee can find the latest programmatic restructuring “troubling,” and call any proposal to reduce or stretch out the FCS program “extremely short-sighted,” yet still support the full funding for an Army plan for FCS that has met repeated schedule delays and program modifications. Does it make sense to expect that these setbacks and evolutionary changes will simply disappear if they support the status quo in funding?

To be fair, the Senate Committee on Armed Services has supported a few modest changes to the FCS budget. It has recommended an additional $90 million to develop Armed Robotic Vehicles (ARV), which was a casualty of the most recent program deferrals. It has also supported an additional $25 million to “accelerate development of the FCS active protection system.” But will $25 million suddenly jump-start a $162 billion program, and is adding $90 million to develop a deferred technology the best way of making FCS accountable for its schedule delays and cost overruns? If more money is appropriated to address ARV, the Senate Committee is essentially saying that they are willing to spend more on a program that, based on its most recent restructuring, plans to deliver far less.

Regardless of the justification for these decisions, it seems that FCS will come under increasing scrutiny from Congress over the next month. The House has already passed its defense authorization bill, which proposes an $857 million cut in FCS, which far exceeds any previous cut they have proposed for the program. There may be a showdown when the two chambers convene to negotiate in conference committee, especially due to competing priorities such as MRAPs (Mine Resistance Ambush Protected vehicles) and the needs of our troops in Iraq and Afghanistan.

Perhaps this is the year FCS will be scrutinized closely: can we afford to keep funding a program that has met such difficulties without calling for a thorough reassessment of goals and expectations?

-- Jesse Ferrantella

Contract Employee Arrested in Security Breach at Nuke Site

Agents with the Federal Bureau of Investigation arrested an employee at Oak Ridge National Laboratory (see update below) earlier today for trying to sell classified uranium enrichment materials to what he thought was a “foreign country.” The employee has been identified as Roy Lynn Oakley of Roane County, a former contract worker with Bechtel Jacobs at the East Tennessee Technology Park.

Today’s arrest was part of an FBI sting operation that began after agents raided a house in January searching for stolen materials from the lab. ABC News reports that another arrest was supposedly made several months ago. An AP source has stated that Oakley does not appear to be connected to any terrorist organizations and, according to NBC sources, he was primarily motivated by money.

POGO released a report last year which determined that Oak Ridge National Laboratory [update: again the arrest actually occurred at the nearby East Tennessee Technology Park] lacked some of the most basic security measures and also lacked a clear plan for strengthening security. In 2005, as part of a broader nuclear reorganization proposal, POGO recommended that Oak Ridge should be “de-inventoried of all Special Nuclear Materials.

Oakley’s breach of security is only the latest in a long series of lapses at the nation’s nuclear laboratories. You can read a list of past security issues since the Wen Ho Lee incident below the fold.

-- John Pruett

Update: Roy Lynn Oakley was an employee with Bechtel Jacobs and had worked at the East Tennessee Technology Park until earlier this year. The Park is located in Oak Ridge, Tennessee but is not a part of the Oak Ridge National Laboratory. It was formerly named the K-25 site and was used during the Manhattan Project to enrich uranium for nuclear weapons. Since then, it served as a nuclear power center and was shut down in 1987. A process of "reindustrialization" began in 1996 to clean up the site and transform it into a new uranium enrichment facility and business park for private industry.

Update 2: Frank Munger with the Knoxville News Sentinel has reported new information on the case. A US District Court document obtained by the Sentinel reveals that Roy Oakley had been a maintenance worker for Bechtel Jacobs until caught in the FBI sting operation on January 26. According to the article:

“Mr. Oakley was assigned to break up rods with his hands into small sections to be thrown away,” the document filed in U.S. District Court said. “The rods were not radioactive and, broken into pieces, had no apparent use except to be disposed.”

The rods were associated with the former uranium-enrichment operations at the plant, and Oakley took three to five of the broken rods to his home and later decided they might be of interest to another country.

The French Embassy in Washington, D.C., reportedly turned down Oakley’s offer, but at some point later Oakley got a call from someone purported to be an official at the embassy. It turned out to be an FBI agent, the document said.

Negotiations over a plea agreement subsequently failed and the US attorney's office secured an indictment. When Oakley arrived at the US Probation Office in Knoxville today, the news media was already waiting for him, which led Oakley's attorney, Herbert Moncier, to accuse the Justice Department of leaking the story.

Update 3: The Justice Department has issued a press release (pdf) announcing that, following Oakley's arrest today, he  has been formally charged by a federal grand jury in the Eastern District of Tennessee with two counts of violating federal law. Oakley is scheduled to appear before a US Magistrate Judge in Knoxville on July 19.