At Long Last, Congress Passes IG Reform Act

After more than a year of wishin' and hopin' and plannin' and dreamin'...at long last both houses of Congress have passed the same version of H.R. 928, the Inspector General Reform Act of 2008.  Final passage came per unanimous votes in the Senate on Wednesday the 23rd, and in the House on Saturday the 27th.

The bill began life as legislation originally drafted by Rep. Jim Cooper, (D-TN), but twisted through numerous permutations on its way to passage.  Although one version passed the House last October by a vote of 404-11, it contained several provisions that Republicans in the Senate as well as the White House just could not swallow, including a seven-year term limit for IGs and a strict provision that IGs could only be dismissed for good cause.  Sen. Claire McCaskill (D-MO) was instrumental in keeping the bill alive and negotiating the necessary changes, along with Sens. Lieberman (I-CT), Collins (R-ME) and Kyl (R-AZ) on the Senate side, and Reps. Henry Waxman, (D-CA) and Cooper (D-TN) on the House side.  Lieberman and Waxman chair the relevant committees.

But even though this final version has been reluctantly agreed to by the administration, we are told that we should expect one of the President's inimitable "signing statements," whereby he signs a piece of legislation while simultaneously stating his disagreement and/or intent to ignore certain provisions contained therein.  We understand that the signing statement for this bill will continue to object to provisions requiring more transparency in IG budgets--something that OMB has in the past complained would trample unconstitutionally on the President's executive powers.

Another interesting fillip on final passage of the IG bill concerns a subject that POGO has been pushing since at least July 2007:  the need for all IGs, but particularly the OIG at the Defense Department, to have access to their own dedicated and independent legal counsel.  The problem mostly pertains to smaller IG offices, but we had been stunned to learn that ever since the creation of the Pentagon's IG shop, the Inspector General's counsel had always been beholden in some respect to the Office of General Counsel of the Department.  In other words, the Secretary's lawyer, the person whose job it is to make the department look good--not necessarily to do right--has been the ultimate boss of the IG's lawyer.  We found that inherent conflict unsupportable in any agency, but particularly one in which so many billions of the taxpayers' money are susceptible to fraud and other misconduct.

While Congressional staffers inserted special language into the defense authorization bill (Sec. 907) to make sure that DOD's IG has independent legal advice, Section 6 of the IG bill made sure that every IG will "obtain legal advice from a counsel either reporting directly to the Inspector General or another Inspector General."   Notwithstanding the passage of these two legislative provisions, we learn today that last Tuesday, the Deputy Secretary of Defense, Gordon England, by purest coincidence, ordered that the IG's Office of General Counsel will no longer be "under the authority, direction and control of the General Counsel of the Department of Defense."  It's a bit amusing that this situation had existed for twenty years but suddenly had to be changed, "effective immediately," the day before the Senate approved final passage of the IG bill and four days before the House did so.  Or maybe it was the kinda stubborn thing that just took two pieces of legislation plus one executive order to change...whatever, we're glad.

POGO has blogged elsewhere about important provisions of the defense authorization bill, but here are the most important provisions of the IG Reform Act in addition to the counsel issue:

• The President must notify both houses of Congress of his reasons at least 30 days in advance before removing or transferring an IG.

• The pay of all IGs is raised to be in line with other senior agency officials; however, IGs will henceforth be forbidden to receive any cash bonuses or other awards.

• The establishment of the Council of IGs on Integrity and Efficiency.  This provision combines and makes statutory the two existing councils previously set up by executive order to coordinate the activities of IGs.  And unlike the existing councils, the new one will be chaired by an IG elected by his or her peers, although a senior OMB official will retain some semblance of control as the "executive chair."  The new council's mission is to "address integrity, economy, and effectiveness issues that transcend individual" agencies and to increase the professionalism and effectiveness of IG personnel with training academies for auditors and investigators.  Importantly, a funding stream is identified to enable the Council to perform its

• The Council on IGs will submit a slate of qualified candidates to the President or agency head when an IG vacancy

• Within the IG Council, the establishment of an Integrity Committee to handle allegations of wrongdoing aimed at IGs or their top staff members.

• More budget transparency is achieved by the requirement that the President's budget submission to Congress include a separate statement of the IG's budget request, along with the amount requested by the President for funding of the IG's office, along with an amount for IG training and a separate amount for support of the Council of IGs. Furthermore, if an IG concludes that the President's budget request is inadequate to support the needs of his office, he may include such comments in the package that goes to Capitol Hill.

• IGs' subpoena power is specifically expanded to include access to electronic and tangible items, and it's made clear that all IGs may recover funds defrauded from their agencies under the Program Fraud Civil Remedies Act.  Similarly, all IGs would now have clear law enforcement authority.

• The bill further requires a "direct link" on the website of every agency to its IG's webpage.  The link must be "obvious and facilitate accessibility" to the IG's site. All public IG reports must be posted within three days of release and must be "searchable and downloadable."  There must also be a clear link for individuals to report fraud, waste, and abuse anonymously.

-- Beverley Lumpkin

Comments

[Ken Huffman]

Aside from IG term limits, much of this bill is a disgrace. It's the product of a clueless congress that continues to fully fail the taxpayer and this nation.

[vj]

This law is great news for the oversight community. These are some of the improvements needed in the IG system. One major one not covered is the audit method used by IG's and other government agencies. They seem to only audit after the fact, and some only do it for big dollar findings to generate newspaper headlines (like SIGIR). Government auditors need to get away from 50 year old financial and compliance audit methods "after the fact", and start doing front end operational auditing like practiced by Certified Internal Auditors. The idea is to have experienced operational auditors walk through new program and spending systems at the BEGINNING and fix control problems instead of waiting 2-3 years to find costly mistakes after the fact. SIGIR (Special Inspector General for Iraq Reconstruction) mostly looks at older programs to get headlines, They didn't review front end systems at the beginning of Iraq reconstruction spending. I know - I was there in Iraq 2004-2006.
Vance Jochim
www.FiscalRangers.com
Former Chief Auditor for the US advisory group to the Iraqi Commission of Public Integrity.