The Project On Government Oversight (POGO) Blog

Davis, Bowen, and Hindsight

Last year, when news started to break that Special Inspector General for Iraq Reconstruction (SIGIR) Stuart Bowen was being accused of mismanagement, we wrote a blog that said:

"Not surprisingly, Virginia Republican Tom Davis has also opened an investigation into Bowen as well. Probably few individuals have better undermined Tom Davis' agenda of handing out goodies to defense and IT contractors than Stuart Bowen  who has exposed billions of dollars in contractor pilfering. We can hear the squeals of glee from here."

My tone clearly suggested that Rep Davis' interest in probing Bowen's alleged wrongdoing was misguided, and was fueled only by pique at Bowen's revelations of contracting waste, fraud and abuse in Iraq, rather than a genuine concern for good government.  It is true Davis has been the self-styled Representative to the contractors, and his acquisition reforms have set the taxpayers  back billions. But, while Bowen's good work probably didn't make him man-of-the-hour in Davis' mind, it does look like the SIGIR may need to clean up his own act.

As the months have passed, and as I've learned more lately from insiders about the charges that are the subject of an ongoing grand jury investigation, it appears Bowen and his Deputy Ginger Cruz really have turned the SIGIR shop into an unhappy home for the auditors and investigators who are all about saving the taxpayer money. In fact, the issue that continues to irk people there most (other than their emails being spied on) is the brazen abuse of per diem policy by some at SIGIR that allows staff to receive premium pay if they go to Iraq for 42 days.  The explosion of 43-day trips resulted in huge overtime benefits. The Washington Post found that:

"At least 30 SIGIR employees charged between 800 and 1,400 hours of overtime and compensatory time in 2006-- p to almost nine months of additional work stuffed into the year. Thirty-seven others charged between 200 and 725 hours of overtime and comp time.'The number of hours didn't wash,' said a senior SIGIR official. 'It's physically and mentally impossible to work that many hours.'"

So, in the end, I thought it was important to point out that on this one--along with his call for the removal of Special Counsel Scott Bloch and his support of whistleblower protections--Rep. Davis was barking up the right tree. The SIGIR needs to live up to the high standards it holds for others.

-- Danielle Brian

"Government Ill Executed"

Professor Paul Light wrote a great piece in Wednesday's Washington Post that should be required reading for this year's presidential candidates.

Light argues that the next president, be he a Republican or a Democrat, will inherit what Alexander Hamilton called a "government ill executed."  Over the past six months, for instance, America has seen her tomato crops contaminated, "toxic trailers, counterfeit Heparin, aircraft groundings, veterans' care, missing warheads and unrelenting contract fraud," among other troubles.

But the next president will also have to tackle the daunting task of organizing the White House's more than "64 discrete titles, including associate deputy secretaries, deputy associate undersecretaries and assistant assistant secretaries."  And don't forget the ever increasing role of contractors in Washington: this workforce "has grown from an estimated 4.4 million contractors in 1999 to 7.6 million today."

Light concludes that the presidential candidates must look at these problems not as anomalies, but as a "pattern of desperate concern."  With the retirement of the baby boomers from government, the time is right for the next president to reform the bureaucracy and create a more effective federal governing body.  Change is imperative not only for the next president's approval numbers, but for America's well-being.

-- Sebastian Ramirez-Brunner

GAO to Examine Livermore Lab's Security

Yesterday, Reps. John D. Dingell (D-MI), Chairman of the House Committee on Energy and Commerce, and Bart Stupak (D-MI), Chairman of the Oversight and Investigations Subcommittee, tasked the Government Accountability Office (GAO) with investigating the Department of Energy's (DOE) handling of security at the Lawrence Livermore National Laboratory (LLNL).

TIME Magazine reported in May that mock terrorists who tested Livermore's security succeeded in two separate scenarios at stealing simulated special nuclear materials and detonating an improvised nuclear device on the spot. In his press release, Rep. Dingell referred to the recent training exercises:

In April of 2008, the Department of Energy's Office of Independent Oversight evaluated safeguards and security at Lawrence Livermore and the results were troubling…The evaluation identified serious problems with equipment, staffing and training. Given that this facility houses significant quantities of nuclear material, this alarming state of affairs is completely unacceptable in a post 9-11 world.

As a way to alleviate this dire security situation, which threatens the seven million people who live within a 50-mile radius of the lab, POGO determined in an investigation released in March that weapons-grade weapons-quantity special nuclear material could and should be removed safely from Livermore by March 2009. Thus, POGO is especially interested to learn what the GAO finds from the Committees' request:

…that GAO identify LLNL's current plans for de-inventorying Category I and II special nuclear material from the laboratory and evaluate the possible alternatives that would allow LLNL to accelerate this process.

In a recent meeting with a high level National Nuclear Safety Administration (NNSA) official, POGO was puzzled to hear that the removal timeline couldn't be accelerated because the lab faces a shortage of staff who can safely package the materials due to recent layoffs. We are told by NNSA that de-inventorying is a priority. So why did they allow Livermore to lay off the key people who know how to do this work?

-- Ingrid Drake and Peter Stockton

Cutting the W88 - The Right Target

The House Energy and Water Appropriations Subcommittee has taken a step toward sanity in the U.S. nuclear weapons complex. The Subcommittee is now saying that there is no more money for building plutonium pits, which are at the core of the W88 warhead that is carried aboard U.S. nuclear submarines. The Department of Energy (DOE) had planned to produce between 10 and 50 pits annually over the next four years at Los Alamos National Laboratory (LANL).

Before it was made public, the Albuquerque Journal obtained a copy of the Subcommittee's report, which states that the weapon "serves obsolete Cold War concepts rather than current or future needs." In addition, DOE kept making the pits even when their viability and safety were questionable.

Early this year, POGO learned that LANL asked for 72 waivers for the pits manufacturing specifications. LANL claims everything is fine because the National Nuclear Security Administration (NNSA) accepted all of the 72 proposed changes. Yet, sources told POGO that NNSA has no capability to independently evaluate the impact of each of the 72 waivers on the eventual reliability of the pits. For its assessment, NNSA is totally dependent on the design lab (LANL).

Today during the markup, Subcommittee Chairman Peter Visclosky (D-IN) called DOE's project management "abysmal." Given that 90 percent of DOE's work is doled out to contractors, more than at any other federal agency, POGO looks forward to more rigorous oversight of the weapon's complex.

As the Los Alamos Study Group points out:

The House Appropriations Committee, in actions subsequently endorsed by the House as a whole by tacit acceptance or wide margins, has either zeroed or deeply cut pit-production-related construction at LANL every year for the last 5 years.…Over this same 5-year period, these funds have been restored in whole or in part as a result of negotiations with the Senate, led by Pete Domenici on the Senate side.

However, the story is not over yet, as the Senate has not voted on the appropriations bill. It is our understanding there will not be a FY 2009 bill, but a continuing resolution. When the bill is marked up early next year, LANL's "St. Pete" Domenici (R-NM) won't be around, as he's retiring.

-- Peter Stockton and Ingrid Drake

Senator Proposes Solutions to Contracting Fraud

An article appearing in the June 24th issue of Politico proposes steps towards eliminating waste and fraud in defense contracting.  The authors, Sen. Bernie Sanders (I-VT) of the Senate Budget Committee and William Hartung of the New America Foundation, focus on two problems with the contracting system: the "revolving door" employment of former federal officials by contractors, and the government's use of private employees who participate in considering bids.

The authors write that the revolving door is a concern for two reasons.  First, ex-officials working for contractors can use their contacts and influence at their former agencies to gain support within the government for their employers' bids.  In a recently released report on which POGO has previously commented, the GAO estimates that as many as 400 former government employees may be working on contracts with their former agencies.  Second, some government employees may favor certain contractors with the goal of securing jobs with those companies in the future.  In an extreme case, an Air Force contracting official was convicted of fraud for securing jobs at Boeing for herself, her daughter, and her son-in-law while she was in charge of negotiating a $20 billion lease with the company.  This case was one of several examined in a 2004 POGO report on the revolving door, "The Politics of Contracting."

While concerns about the "revolving door" are raised relatively frequently, the participation of privately contracted employees in the contract-awarding process is discussed far less often.  Sanders and Hartung write that the GAO found that more than two-thirds of the defense agencies it surveyed had key offices with more private contractor employees than government workers, who are subject to conflict-of-interest rules that do not apply to contractors' employees.

Sen. Sanders and Mr. Hartung propose to require reporting of post-government employment, so lobbying of agencies by former employees can be tracked, and to extend conflict-of-interest laws to private contractors involved in the Pentagon decision-making process.

Fraud in defense contracting is a serious concern.  Last week, POGO commented on a letter sent to the Department of Defense Inspector General by Rep. Henry Waxman (D-CA), Chairman of the House Oversight and Reform Committee, in which Rep. Waxman estimated that 7,000 contracts totaling $190 million, or about 4% of all defense contracts, may be criminally fraudulent.

Encouragingly, several government agencies are looking at changing their contracting practices. In place of hiring private contractors, the Department of Defense plans to receive assistance from the Department of Interior and the General Services Administration to help run its contracting operations.  In the meantime, DoD, GSA, and NASA are soliciting public comment on contractor employees' conflicts of interests through July 17th.  Instructions for submitting comments can be found here. One would also hope that the newly formed bi-partisan Wartime Contracting Commission, which POGO has been supporting since last year, will succeed in reforming defense contracting.

-- John Cappel

CORRECTION: The IG report and Rep. Waxman's estimate pertained only to defense contracts for commercial and miscellaneous payments in Iraq and the Middle East related to the global war on terrorism.

Weeding Out the Liberals: Screening for the Right Kind of Bias at DOJ

The Offices of Inspector General (OIG) and Professional Responsibility (OPR) at the Justice Department released the results of a joint investigation yesterday looking into allegations that applicants to the Justice Honors and Summer Law Intern Programs (SLIP) were screened according to ideological and political affiliations. In 2002, politically-appointed senior officials were tapped to serve on the Screening Committee, mostly replacing career employees as members. Participation among political appointees in the application process was robust in 2002 and 2006, after waning in the interim.

According to the report, Esther Slater McDonald, a member of the 2006 Screening Committee, voted against candidates whose essays contained liberal "buzzwords" such as "environmental justice," and "social justice." Particularly troubling is the fact that McDonald was called to serve on the committee after joining the department only a month earlier.

Also at fault is Michael J. Elston, chief of staff to the deputy attorney general, who served as head of the 2006 Screening Committee. Elston failed to give Ms. McDonald specific guidance on how to sift through applications, and took no action when other senior level employees expressed concern that the application process had become politicized rather than merit-based.

Attorney General Michael B. Mukasey released a statement denouncing such practices, and has pledged to follow the recommendations outlined in the report. He also pointed out that the department revamped its hiring process for the SLIP and honors programs last year.

And sorry to break the news, but both McDonald and Elston have escaped disciplinary action after resigning from Justice in 2007.

We often lament the loss of the best and brightest grads to the private sector, and this latest report serves as further indication that the government is losing out big time. However, this time it is not due to a wage disparity. Instead, the Bush administration has decided that academic excellence and a passion to serve our government falls just short of the hiring standard. One must also steer clear of radical notions such as "social justice."

-- Kelli Baldwin

Press Report: Pentagon to Blow Off GAO on Tanker Finding?

DefenseTech reports on what surely will grab the attention of Boeing's congressional allies:

Senior Pentagon and Air Force officials who have read the full 67-page report about the tanker bid by the Government Accountability Office think they can still grant a contract before the end of the Bush Administration. John Young, the Pentagon’s acquisition czar, has reportedly drafted a letter for the four congressional committees that oversee defense spending and policy informing them of the Pentagon’s decision to go ahead and award the contract to Northrop Grumman.

There have been reports that the GAO ruling on the tanker contract could add two years or more to the contract award, something that has greatly concerned Air Force leaders eager to start building new tankers after almost a decade of trying.

"Their finding is that the full document is quite different from the summary," issued last Wednesday, said a source familiar with the issue. The source said Air Force leaders believe much of what was challenged is “procedural” and can be resolved without rebidding the deal.

As you likely know, the GAO's redacted decision came out today. 

-- Nick Schwellenbach

The GAO's Redacted Decision on Boeing's Tanker Protest

Here is the Government Accountability Office's redacted version of their decision (pdf) on Boeing's protest of the Air Force's award of the KC-X refueling tanker contract to Northrop Grumman and EADS.  I haven't read it yet.  Here's the publicly released version of Boeing's protest (pdf).

-- Nick Schwellenbach

E-Discovery Training Cancelled

A training session for employees of the troubled Office of Special Counsel has been canceled after POGO and TPMuckraker pointed out its absurdity.

In another bizarre twist in the ongoing and increasingly strange saga of the Special Counsel, Scott Bloch, OSC employees were to be schooled in e-discovery today by none other than the Department of Justice. It is rumored that DOJ canceled. Bloch's musings in a speech today to staff included anecdotes about Serpico, Silkwood, Paul Revere and Socrates. Bloch frequently uses over-the-top hammy anecdotes causing more than a few people to cringe.

In May, the FBI raided the office and person of Bloch, in relation to his alleged destruction of computer files and documents sought through e-discovery by the Office of Personnel Management.

With a possible indictment hanging over his head and 17 of his employees subpoenaed to appear before a Grand Jury about his possible obstruction of justice, we can only imagine how surreal today's events at the OSC staff retreat have been.

-- Beth Daley

The Continuing Saga of the Munitions Maven from Miami Beach

Last March, POGO blogged about the incredible case of Efraim Diveroli, the 22-year-old defense contractor who allegedly engaged in improprieties on a $300 million U.S. Army contract to supply the Afghan government with rifle and machine gun cartridges. According to a lengthy investigation published on March 27 in the New York Times, Diveroli and his company, AEY Inc. (a company his father founded less than ten years earlier as a printing business), had allegedly supplied the Afghan government with defective ammunition, some of which had been illegally obtained from China.

Last week, a federal grand jury in Miami indicted AEY, Diveroli, and three others -- David Packouz, 26, AEY's vice president; Alexander Podrizki, 26, AEY's Albanian agent; and Ralph Merrill, 65, a business associate of Diveroli -- on 71 counts, including charges of conspiracy, fraud and false statements related to 35 shipments of ammunition for which the Army paid more than $10 million. The government alleges the defendants conspired to remove the "Made in China" labels from crates of ammunition and tried to pass them off as Albanian. If convicted, the men could face up to either five or ten years in prison per count.

In a related development, Rep. Henry Waxman (D-Calif.) recently heard a claim that the U.S. ambassador to Albania, John L. Withers II, approved a scheme to remove evidence of the illegal Chinese origins of an ammunition shipment AEY supplied to Afghanistan, and that State Department officials tried to conceal this information from Waxman's Committee on Oversight and Government Reform, which is holding a hearing this week on AEY's contracts. Waxman made these startling revelations in a letter to Secretary of State Condoleezza Rice.

Waxman's letter concludes with a request to conduct transcribed interviews with Withers and five other Albanian embassy officials before July 11, which is the same week Diveroli and his associates are scheduled for arraignment.

The saga of the Miami Munitions Maven meanders on.

- Neil Gordon

New Wartime Contracting Commission Members Named

The press office of Senator Jim Webb (D-Virginia) today announced the names of seven of the eight panelists on the Commission on Wartime Contracting.  POGO has long supported this concept and is glad to see its progression into becoming reality. 

Now the work really begins and not a moment too soon.  Unlike the congressional foresight shown during World War II, where at the onset of war the Senate created the original Committee to Examine the National Defense Program (more popularly known as the Truman Committee), this new Commission begins its work about six years after our major conflicts abroad began.  It does have some help: Inspectors General, such as the Special Inspector General for Iraq Reconstruction and the Defense Department and State Inspectors General, and other oversight personnel like those at the Government Accountability Office, Defense Contract Audit Agency and Defense Contract Management Agency provide insight into the last several years.  But even with this firepower - at its current level it is woefully inadequate - the massive level of contracting has led to a situation where there may be potentially thousands of criminal procurement fraud cases, according to House Oversight and Government Reform Chairman Henry Waxman (D-California).

Those commissioners are (the first four are the Democratic congressional picks, the last three are the Republican congressional and President Bush's choices):

Just Us Grants: Byrning Those Who Play By the Rules

Yesterday, POGO released "Getting Byrned by Justice: Favoritism in the Department of Justice Byrne Discretionary Grant Program."  The report reveals that the Department of Justice (DOJ) awarded at least 13 Byrne Discretionary Grants in FY2007 without evaluating them through the peer review process, essentially giving them special treatment.  Even more alarming,  the report goes on to detail conflicts of interest between two of the grantees and DOJ appointees in the offices awarding the grants.

The report was referenced in a story by Carrie Johnson in yesterday's Washington Post.  Johnson wrote, "...POGO, a watchdog group, McCaskill and current and former Justice Department employees have raised questions about the prestigious Byrne grant program, which dispatches a huge amount of money each year to groups that battle crime."

Following the release of our report, Sen. Barbara A. Mikulski (D-MD) wrote a letter to Sen. Claire McCaskill (D-MO), saying  "I too am appalled that the DOJ may have played favorites with competitive grants. I find this especially troubling at a time when we are fighting for more funding for Byrne grants for communities who are facing rising crime and fiscal hardships." 

In light of yesterday's House Oversight and Government Reform hearing on "Grant Making Practices at the Department of Justice," our report is especially timely.  Although the hearing focused exclusively on grants awarded by the Office of Juvenile Justice and Delinquency Prevention (OJJDP), our report should open the door for further investigations by Congress.

Today's Washington Post had a follow-up story referencing both yesterday's hearing and POGO's investigation into the Byrne grant program.

-- Jake Wiens

UPDATE: Jake is scheduled to appear on Federal News Radio (WFED) at 4:00 p.m. today to discuss our investigation.  Click here to listen to a live webcast of the show.